The Legacy of Warren Buffett, Bucky Moore, Katherine Boyle, Aditya Agarwal, Molly O'Shea, Augustus Doricko

31:25And so he was like, and the retention rate is 95%. And so I think it's a good business. That's amazing. And it became a fantastic investment for him. And a lot of people were pointing out that if you pull out Apple from the Berkshire Hathaway investment returns, it then underperforms the S &P 500 but that's kind of odd because Apple's in the S &P 500 so maybe you should pull it out of that too but it's kind of like interesting but at a certain point it does raise an interesting question is like people originally pull out the power law outcome out of any investor's portfolio it's kind of the nature of these things yeah but I mean just to kind of steel man that criticism the the flip side is um what what service were you paying Warren Buffett for in the 70s or the 80s.

32:15It was like, go find some company that's maybe the stock isn't even publicly traded and operate that company extremely efficiently, reinvest all the cash flows, all these different things. And, and Apple feels like, well, anyone could just buy Apple. Yeah. And so, um, certainly, you know, I think, I think Apple outperformed. yeah but at the same time i'm happy to pay somebody two and 20 if they just only invest in and in this case you're not you're not paying two and twenty there's no there's no fees no but in general it's like that that is what somebody is paying a manager to say like i will pay you yeah uh two and twenty to buy public equities yeah because i think you're gonna just buy the best ones yeah not buy the bad ones yeah and that's the and i mean the real the real benefit is like he's been trimming that apple position going into the crazy year that we've had so far.

33:07He's not just buying and holding. You know, you remember, I mean, this was last year, the first time that they announced they were selling. Yeah. Last year, there started to be some articles about the growing cash pile at Berkshire Hathaway, which sits closer to$350 billion now in cash. Yeah. So Berkshire started selling in Q1, Q2, and Q3 of last year with the most significant sell-off happening in q2 which reduced their stake by nearly half so i mean i remember at the time people were somewhat coping and just being like oh like the business is just getting complicated they're getting it wrong you know yeah yeah of course the market because you know they've just held it a long time yeah they're probably not actually bearish yeah they're not actually calling the top yeah successfully for the seventh time in a row oh it's great yeah um Anyway, I like this investment principle, the circle of competence.

34:03Invest only in businesses you truly understand. Buffett and Munger stay within industries where they have knowledge and insight, and they put anything outside the circle in a too tough pile to avoid. Venturing beyond your competence or into overly complex ventures is a recipe for mistakes. Knowing your limits and saying no often is just as important as spotting opportunities. This idea that it is okay to grow the circle of competence, become competent in other areas, but don't step out with a circle of confidence because you will be smacked. Yeah, just going back to their, when they were selling.

34:37So the stock actually, they started selling in Q1. The stock rose from$165 a share in the beginning of Q2, the entire period where they were really selling and actually ripped that quarter up to 230 and going all the way to 250 by December and then ultimately has just been down since. So it just shows the conviction in that, you know, it's not like they FOMO'd back in once, you know, once they were like, oh, the stock's actually ripping. Maybe we sold too early. It's like, no, we're going to be, you know, right in the fullness of time. I like this. There's a bunch of interesting, memorable quotes we should go through.

35:18All I want to know is where I'm going to die, so I'll never go there. Iconic line. Consider how hard it is to change yourself and you'll understand what little chance you have in trying to change others. This whole idea of like they meet people where they are. A bull market is like sex. It feels best just before it ends. Euphoria. It's honestly a crazy line from Buffett. He had like a few too many Coca-Colas. The secret to being successful in any field is getting very interested in it. I couldn't excel in anything in which I didn't have an intense interest, passion. You excel when you truly love the subject or work.

35:56That's 100 % accurate. Here's another good one. We don't try to change people. It doesn't work well. We accept people the way they are. Yeah, smart. And this is a lesson you only have to learn a couple times. I think founders hiring people or even investors hiring people. You mentioned this with some investments where you were like, okay, the founder's bad at this one thing, but I'm good at that. so I can change them into being good at the thing that I'm good at. And it's like often that's not the case. Yeah, or more so you hire somebody to do a specific thing and there's only, you can help somebody go from, my experience, you can help somebody go from like great to excellent.

36:35It's hard to take somebody from okay to great, right? And so accepting people the way that they are and then sort of trying to really be honest about whether they can get where they need to be is important. Yeah, I like this. Wall Street never changes. The pockets change. The suckers change. The stocks change. But Wall Street never changes because human nature never changes. It's great. There's a kind of interesting overview of his career in 25 key moments. So he reads The Intelligent Investor in 1949. That's so long ago. Discovers Benjamin Graham's philosophy of value investing. And this forms the foundation of his approach.

37:22In 1951, he visits - Yeah, real quick, the article in the journal earlier, he's talking about, the author is talking about how Buffett's edge is the information that he has. And I would almost argue that Buffett's edge is the experience that he has. Because there's one thing to read about financial turmoil 30 years ago. and you can understand like why it happened pretty well, but it's a very different thing to viscerally feel it and then have that inform your future decision-making. And Buffett at this point done 60 plus, you know, shareholder annual AGMs, right? And, you know, being able to actually have 60 years of experience to draw on where he was viscerally feeling what was happening in the industries that they're in just gives you an intrinsic advantage, right?

38:14Sometimes you actually have to experience something to really learn the lesson. And he certainly has experienced the full spectrum of investment experiences. Yeah, 100%. So in 1951, he visits GEICO headquarters, learns firsthand about insurance float and low-cost moats, gets excited about insurance. In 1956, he launches the Buffett Partnership Limited, starts managing outside capital using Graham's principles, rapidly outperform the market. he begins buying Berkshire Hathaway shares in 1962 he spots this deep value opportunity in a dying textile mill and builds this stake ended up being his biggest regret yep uh takes control of Berkshire Hathaway in 1965 buys enough shares to oust management turning it into his investment vehicle uh buys national indemnity entering entering the insurance market in 1967 it's crazy like each one of these is like a three-year journey but but because it's an 80-year career or something, or 60-year career.

39:13We're like condensing it down so quickly. So he enters insurance, unlocking the float model that would fund decades of investments. He closes his partnership to focus on Berkshire in 1969, returns the capital to investors to avoid speculating an overheated market. 1972, he acquires See's Candies, learns to pay up for great businesses with pricing power, shifting his investment philosophy instead of just finding these really, really beaten down stocks he's okay paying a reasonable price for a truly great business invest in the Washington Post in 1970 Washington posters the Washington posters bought a world-class media business at a bargain and became close with Katherine Graham yeah and I forget when we were talking about this wasn't he notorious for really marketing like he would take a position and then he would actually effectively go on roadshows like doing media around only around the stock so yeah yeah he's like I'm gonna own my distribution yeah he's He's like, retail?

40:08Let's talk about See's Candy. Let's talk about See's Candy. Let's talk about Geico Insurance. Armies of retail investors on board. Certainly early to that. He rescues Geico from collapse in 1976, buys shares and joins the board to help steer his favorite insurance firm back to health. He names Charlie Munger vice chairman in 1978. And this was a formalization of his most important partnership and philosophical sounding board. He shuts down the textile business in 1980. 1985, acknowledging failure, but it frees up capital, which completes Berkshire's transformation into this holding company. Buys the Coca-Cola stake in 1988, makes a$1 billion bet on a timeless consumer brand that became one of his biggest long-term wins.

40:50Stepped in to lead Salomon Brothers in 1991, takes an emergency control of the scandal-ridden firm, saving its reputation and stability, but ultimately not a great financial outcome. Issues Berkshire Class B shares in 1996, created low-cost access for smaller investors, and blocked Wall Streets from misusing his name, because I think there were probably some sort of aggregation SPV, essentially, on it, because the shares were getting so expensive. Acquires General Rhee in 1998, expands Berkshire's global insurance reach through, though later admitted, early integration challenges. He avoids the dot-com bubble in 1999 to 2000, refused to chase fads, preserving capital and credibility as others crashed.

41:33Pledges$31 billion to philanthropy in 2006, history's largest charitable donation, primarily to the Gates Foundation, his buddy. Bax Goldman Sachs and GE during the crisis in 2008, stabilized markets by investing when fear was highest. Bought Burlington Northern Railroad in 2009. This was the biggest acquisition of all time for Berkshire, betting on America's long-term economic growth. Railroads aren't going anywhere. They're not making any more of them. funded Bank of America. You had a post yesterday that was fascinating. This is crazy. Your local city, Pasadena, was estimating that it would take 400 years?

42:10500 years to put all of the electrical power lines underground. So they said the phase one is 100 years and phase two is 400 years to put them underground. Isn't that crazy? That's longer than America's been around. America is, what, 250? They're 300 years old now, going on 1776, right? Yeah. It's like a crazy, crazy amount of time. Imagine writing that with a story. I hope they put on clown makeup. Oh, you think in decades? We think in centuries. Our plans are measured in centuries. So he funds Bank of America during 2011 slump, injects$5 billion, gains a massive stake. Then he invests in Apple in 2016.

42:49This is the iconic investment. $36 billion of Apple. Now it's Berkshire's most valuable holding. He promotes Abel and Jane as vice chairs in 2018 and starts quietly initiating the leadership succession process. Names. And then, of course, in 2021, he names Greg Abel as the future CEO. And then in 2025, he announced retirement as CEO. And so that is the legacy of Warren Buffett. And we will continue talking about him this week. Hopefully, we'll get David Senro and some other folks on the show. But we are joined by our first guest of the show, Molly O'Shea, host of the Sorcery podcast. Welcome to the stream, Molly.

43:26How are you doing? Molly, it's great to have you. You are live. You are live. Okay, one second. We are working to get Molly. I want to have her on, but we'll talk to you about Linear in the meantime. Linear is a purpose-built tool for planning and building products. Meet the system for modern software development, streamline issues, projects, and product roadmaps on Linear. Just do it. We use Linear at TBPN. as you know we treat our media products like regular software products in terms of the way that we build them in terms of trying to make them better every single day the best evidence of that is our live stream overlay which we are always rolling out changes to and if you have any feedback for it let us know and we'll get those issues slotted into linear so thank you to linear for supporting the show and uh did you watch miami f1 i did not i had food poisoning i was it was absolutely brutal um uh yeah yesterday i didn't get a chance to watch either i did throw on a little bit of the uh a little bit of an older season of drive to survive and i'm starting to get back into it but it's hard yeah f1's f1's tricky to follow bodybuilding is much easier to follow yeah i think it's really the only well there's there's very little space in your brain for anything other than bodybuilding.

44:50Yes, exactly. So it's like anything that you would watch is competing with reruns of the Arnold. Yes, yeah. Historically. They really do need to do, I mean, full Drive to Survive level production on the next Arnold. Maybe that could be us. I mean, that is like Sam Sula's channel, basically. It's like that. It's just Drive to Survive for bodybuilding, basically. But we wanted to have Molly on the show because she is a good friend and has done a bunch of interesting things. but she posted over the weekend venture funds as F1 teams. Red Bull is Founders Fund. McLaren is Thrive. Mercedes is Sequoia.

45:27And Ferrari is Kostla. And we're going to debate this with her, see how she breaks it down and if we have any different takes. She says Red Bull Racing is Founders Fund. Why high conviction, unapologetically bold and driven by generational talent. Verstappen is Peter Thiel. Traits relentless, unconventional, and power-focused. I feel like for Red Bull, you got to go with a venture fund that's not in venture because Red Bull is like not a car company. Yeah, that's interesting. So I almost feel like you should go with like In-Q-Tel or Cotu, Cotu, Crossover for sure, Tiger maybe. Or maybe, is there an actually decent corporate VC arm?

46:12I mean, I guess OpenAI. Yeah, they probably have one of the better performing corporate funds. We have a really good corporate fund. As of late. But I haven't seen much from like, I mean, I guess Google Ventures has done pretty well, GV, although they've kind of spun out now. Yeah. I think Stripe has probably made some good balance sheet investments over the years. They're in RAMP. I've heard Okta randomly does a decent amount of corporate investing. They have some fund vehicle, or they're doing it off the balance sheet as well. Oh, wow. Well, if you're looking for a new bed, get an 8sleep. Go to 8sleep.com.

46:52Slash TVPN. Five-year warranty. I actually had such a brutal night. So it really picks up on when you're sick. Free shipping. It does. And for me, I got eight hours and 57 minutes of sleep, but I had a 77, which is well below my typical. 98. Let's go. There we go, John. Back in the game. Back in the game. Get away from it for a week. Came back. The consistency was terrible, but I slept a ton. eight hours 40 minutes let's go i was in bed but nine last night wow fantastic fantastic kind of put up some big numbers this week um anyway hopefully we can get molly back in the studio we will see how we doing just figuring out audio okay she can't hear us um let's see we will try and route that in um let's do some timeline in the meantime uh little timeline did you see uh Mark Zuckerberg went on Theo Vaughn and they kick it out.

47:45I didn't realize this was the opener to the whole episode. But Theo Vaughn says, you drink coffee, man, or no? And Zuck goes, no. Theo Vaughn says, really? I mean, you've had it, right? And Zuck says, I have. I just hate anything that messes with, I don't like any kind of chemicals or anything. My sister gives me such a hard time about that. She's like, you're just sitting there raw dogging reality. Theo Vaughn says, wow. That's a great line. And then, but it got spicy on the timeline because Memnon of Rose says, let's be real. Mark Zuckerberg's sister did not tell him he was raw dogging reality.

48:19And Mark Zuckerberg's sister, Ariel Zuckerberg says, I 100 % said this to him. You know, never deleting this app moment by Shweta. Anyway, I think we got Molly. Let's bring her back into the studio. We'll ask her if she's had coffee or if she is raw dogging reality today. Let's see. Molly, are you there? I'm here. Are you raw dogging reality or are you caffeinated today? I've had about five matchas and two espressos. Wow. Wow. Yeah. Potentially into that 500 milligram range. Yeah. Which is. That's junkyard dogging reality. Yeah. Yeah. That's just consuming everything. Maxing. Maxing. Did you have a rough time like with, you know, going to the East Coast last week?

49:02I think for me personally, given my caffeine intake when I go. It was brutal. When I go through a time change like that, just everything gets messed up. How did you do? Horrible. I've been up since 4 a.m. every morning. That's a good thing. That's a good thing, though. Yeah, that's good. Just cranking content. Yeah, just Ashton Hall mode. Ashton Hall maxing. Yeah. No, I think it's time you have to do one of the... I think you need to do the Ashton Hall for tech video. I think you should basically start tomorrow morning when you wake up at 4 and just do it. Yep. Anyway. I'll try my best. It's great to have you on the show, finally.

49:37long overdue um there's a bunch of stuff to run through we have limited time unfortunately but maybe we'll maybe we'll make Augustus wait you know a couple minutes extra and just hang out we're already covering your f1 uh firms as uh or sorry f what inspired it what was the reaction what do you think you got right what do you think you got wrong and then we'll go into the other less iconic F1 teams. Take some shots. Well, uh, so all of this started because I got a nice tip from someone who might be on the inside. I can't share much more than that, but I was given a tip because I've done these before where I've compared the VC funds to something like the Coachella stage.

50:20I did this for sorcery like years ago and it went so well, but this was at like zurp funding and like zurp environment so it was like softbank was in it and tiger and like it was just so much more clear who the stages would be and now now we're dealing with f1 because there's only a couple contenders and we just have to we've got to see who's gonna win uh going back to the coachella which fund was the do lab i gotta ask the do lab oh my god that's a good one i forget I've never been to Coachella You've never been to the Doolab? Honestly, that's extremely bullish That's extremely bullish that you've never been, to be honest I've never been to Coachella You sweet child Doesn't know what the Doolab is But who do you have as a Doolab?

51:07I gotta know And then Sahara And then we'll move on to F1 I mean, let me pull this up While you're pulling that up There are some midfield teams that someone broke down Williams is Greylock The fifth most winning team in history didn't keep the top talent or scale, so fell behind. Alpine is BCV, a Bing Capital Ventures. Storied brand across racing categories. PE, consulting. Strong veteran lineup. Couple wins in podiums in recent years. Decagon, Craya. Younger guys, largely untested, no clear succession. I love AlphaTari as YC. Battleground for young talent. Produces some of the best drivers, but sees limited return for Stappen, Sains, Gastly.

51:48Plays an important role in the startup driver ecosystem. And Aston Martin is SoftBank. One man behind it all. Lawrence Stroll, Masayoshi Sohn. Tons of money and big deals. No significant results to speak of. Brutal. Brutal. Anyway, yeah, break us down the Coachella landscape. And then I thought I'd put it in terms that folks that are more familiar with bodybuilding could key off of. okay so for do lab okay yeah this this one was just scrappy bootstrapped companies for people in stealth for the main stage we had is tiger edition co2 a16z and sequoia crossovers oh so it's basically the lineup yeah okay it's uh the big show headliners hard to compete expensive rounds and then for for outdoor theater which is just as experienced arguably more fun artist friendly we had first round benchmark pair and index okay okay yeah uh sahara sahara which is also like amazing very large loud and a little bit more out there founders fund soft bank general catalyst lust lux craft um let's see goby i can see delian playing uh the sahara stage right around like six o 'clock, just really, you know, peaking, basically.

53:16Yeah, peaking. Well, yeah, I mean, I've never been to Coachella. I barely get to watch F1. I really only follow, the only sport I follow is bodybuilding. So I did my own kind of version of this, mapping the top venture capital firms to professional bodybuilders. So I'll give you a rundown, and I'm sure you're familiar with bodybuilding, so you'll be able to give some feedback and tell me how I did. So for Sequoia Capital, I have Arnold Schwarzenegger. I mean, this one, obviously, it should be. Obviously. Great documentary. Sports, the industry's gold standard early. Sequoia, Apple to Airbnb hit list, and Arnold's seven-time Mr.

53:51Olympias. It became the blueprint that everyone studies, right? Yeah. Andrews and Horowitz. This one should be obvious. Dorian Yates, of course. Yeah. Each burst in with radical mass, you know, software eats the world, media blitz, six straight Olympias. They kind of reset what scale and intensity could look like. for Founders Fund. I mean, this is a no-brainer. Phil Heath, Precision Obsessed Moonshotters, Teal's Contrarian Bets, Heath's Near Flawless Symmetry, both racked up seven crowns while dividing the crowd. A little controversial, Heath. Kleiner Perkins, Ronnie Coleman, obviously. I mean, everyone's going to guess that one.

54:28Of course, of course. You know, their 1990s Titans that went maximalist. Yep. KP's.com era supremacy, Mears Coleman's eight title, Yeah Buddy. that pushed sheer size and later paid for it in surgery and turnover. Accel, you got Lou Ferrigno. Lux Capital, you got Jay Cutler. Of course. Probably makes sense. Of course. He's a methodical grinder, just like Lux. They've been at it for a long time. Lux Deep Tech Persistence and Cutler's Dogged Prep finally dethroned the champ, showing steady focus beats Flash. Lastly, we got Nat Friedman. He's the up-and-comer. He's the Sam Sulek of Venture. like people have been saying that for a long time many people have been saying that yep so i i think that will put you know the venture funds in terms that really anyone could understand because a lot of f1 analogies that just don't really land with like our audience at least bodybuilding is very american whereas f1 is very european right it is um what what else is on your mind molly how how was uh what was your reaction to last week we obviously uh were uh in dc as well did you have any major takeaways any anything you know that you're following uh after the event you got some palantir merch i got some palantir merch um became friends with iliano there got introduced to sham got a private tour of the office on friday or the next day um some amazing works they got there but i think like the biggest takeaways and i'm still seeing this but the the biggest theme from the event was the u.s first china and we're seeing that because delian's still posting about it he's posting through it for sure he is he is um yeah an interesting one i i we'd heard some light chatter about uh the tiktok deal potentially getting closer to a resolution but there being a general uh unhappiness with how it was getting sort of resolved so So not sure how much we can share, but that was one takeaway for me.

56:24It's like in the midst of this like massive trade war and in all this talk about U.S. China, one of the sort of key issues that should be completely bipartisan and and we should be acting extremely intensely around. It seems like we're going to miss the mark on. So I think consensus is that there will be a group of financial investors that come into to the company and own a stake, and then Oracle will do the data management and kind of the cloud infrastructure, but it won't fully leave control of the CCP, which is maybe not the best outcome. I've been advocating for just giving all of TikTok to Truth Social.

57:03I think that would be something that everyone could really rally around. Might destroy it, might, but it's definitely gonna get approval from the top dog in Washington. He'll be happy to have a new asset. that. What can you tell us about working at a family office, how it differs from working at a VC firm? You've obviously worked in both places. What's different and how are family offices positioning themselves these days in venture? Is it just like tag along rounds or are they trying to lead rounds? What are you seeing in the family office landscape? Good questions. Many questions. I think the biggest difference is the time horizon on deals and the thinking.

57:44So instead of - It's more permanent capital? Yeah, it's permanent capital. You're thinking evergreen. You're not confined to four years for investing. It's not like you have to stop investing after two and a half years and start raising and going out to fundraise. Instead, you're thinking long-term. You can actually be a little bit more thoughtful instead of playing the rat race of competitive rounds. You can pick companies and go deeper with them, have longer term relationships. It's just like it's a much different game because it seems much more rational. You I think my biggest my biggest thought and reflection after leaving institutional VC was just like how much it's thwarted by fast decision making.

58:31If you have to consistently confined to, oh, I've got to do this many deals a year, you have to do this many per fund and and allocate X amount of capital, then it really constrains like your judgment and how you think about what you want to do. So yeah, I mean, it's great because you can operate with clarity. You don't have to waste your time with tons and tons of meetings. You can actually just focus on the power law winners. Yeah. And that, that means, you know, effectively, you know, identifying a company early, not necessarily being able to invest in that moment for some particular reason, but just saying like, hey, it doesn't really matter.

59:07We want to get in at some point. Let's continue to build a relationship. Whereas I think oftentimes VCs have a specific window. Unless you're a big platform fund, you have a window where you can make an investment work, but then you can't even do an SPV into the company necessarily if you weren't in one of the earlier rounds. And so having that timeline flexibility to be like, okay, we can have 10 plus billion dollar outcomes now. It really doesn't matter if we get in at$100 million or we get in at$500 million post. It's also just, it's much more flexible capital. It's not like you're confined to an X amount of percentage that you need in equity or check size.

59:47Like you can get in whenever and whatever makes sense. Then you can also put in your own capital and then raise the rest through SPVs and make a larger round. So there's many different dynamics. It's much more friendly. You dropped an interview with Bucky Moore. he's going over to Lightspeed we're having him on the show later uh what was the question that you know you were too afraid to ask because it doesn't meet sorcery's brand standard but you know it's anything goes here when we're live so we can put him on the spot what did he ask you to like edit it out and then we'll ask him that live I will say I I passed all compliance my biggest question that I wanted to ask him was what was the deal like did you get your carry bought out i asked this you gotta listen to the interview so you get the answer i'm prepping my show yeah but i asked him like how does it work transitioning um large partner from another fund going to another right like there's a lot of tied up carry there's board positions yeah it's very complex like what was that process like and we walked through it i mean he was very open i was quite surprised it was an awesome interview that's very cool um what what else did you talk to him about um uh that we could maybe dig in deeper when he hops on the stream in an hour um ask him about his view on asi ask him about pricing dynamics for tier ones and tier twos he doesn't like that branding but um you think that more is like tier three but he wants that he wants to be labeled as a tier three so you can have that dog yeah that dog inspiration to grow harder as soon as your label is tier one you just it's like a breach i've peaked yeah um and then i would also i would ask about global pools of funding he was open about that um and yeah yeah he's he's big into raising money from pyongyang right uh north korean money is usually in his funds he does a lot of spvs with uh somebody out there is not gonna not gonna understand the north korean uh Sovereign World Fund.

1:01:51Yeah, we'll have some fun with him. Last question before you go. What should they do with Alcatraz? Everyone's been debating it in tech. I want to get everyone's take on it today. Should they become Y Combinator? Put a monument on it? Bring back the jail? Keep it as a tourist destination? What's your pick? I want to keep it. I know I want to bring it back as a jail, but I want to keep it open for tours. Okay, so you can tour the prisoners. Oh, crazy. Crazy. That'd be very chaotic. that would be extremely chaotic somebody was running i forgot who it was i forgot who it was i think it was sheil was saying that like the reason that it was shut down initially was that uh uh there there you could only have like 300 prisoners and like due to being on an island it was like extremely expensive reacts the cost to actually house them so it was just like doesn't really actually make sense um but uh i liked i mean if i was in if i was in jail i'd probably choose the island jail right i mean that that doesn't seem like a bad place to be i don't know have you been have you done it's pretty miserable actually it's so bleak it's always super foggy out on the water kind of see everything but i don't know yeah pretty terrifying anyway we'll see what happens with it we'll be tracking it i'm i'm in favor of putting you know letting y combinators set up shop i like the y strategy you know it's pmm4 die 2.0 yeah yeah yeah y combinator is the y combinator of y combinator it's true as many people have said but put it on an island Anyway, thanks so much for stopping by Molly.

1:03:17Yeah, this was great, Molly. Have you back on soon. Congrats on all the progress. Bye, guys. Thanks. See ya. Let's bring in Augustus Dorico from Rainmaker. I got the gong ready. I think we got some breaking news from Augustus. Yeah.

1:03:36We had a chance to sit down with Augustus in D.C., get the update from him. I loved that his business is cloud seeding, making it rain, and he somehow tied it into the AI race to develop more data centers. And it wasn't complete nonsense. Like it actually made sense. Where's the water going to come from? Yeah, yeah. It's a big question. Anyway, we're always excited to have him on the show. In the meantime, we should take him. Here he is. Let's bring him in. Let's do it. How are you doing, man? What's up? Boom. Look at that contact. I'm glad. it's a it's a size gong occasion rainmaker just raised or just announced its raise of 25 million dollars for our series a fantastic congratulations let's go 25 million uh uh give us the breakdown on the deal who who's in okay yeah so it was led by lower carbon so that was uh ryan orbook and uh clay clay dumas um chris saka founded the fund they're really interested in adaptation tech now, right?

1:04:43Like in the face of severe weather and change of climate, how do we build technologies that can make us more resilient, right? So more resilient to drought, more resilient agriculture, more from cloud seeding is one way to facilitate that. And so they were stoked. Naval Ravikant, sage philosopher king of tech bros everywhere. He was in, I think, just because we We went for like a really long romantic walk in Manhattan Beach one time. And then Greg Bernstein from Ace Cap, Sovereign's Cap, some really great Christian mentors and leaders for me. And then Drover Ventures as well. Drover Ventures, William Clark, great dudes.

1:05:21So that was the deal there. Talk about what the process was for the Rays. Because from what I know, this is being announced now, but got done a while back. It was, from everything I heard, an extremely competitive process. What were you really looking for in that lead check?

1:05:45Yeah, I'll tell you that, and then I'll show you all of the crazy shit that we've been working on with the money since we actually did raise it, because that's the more exciting part. What we were interested in then was technical sophistication. Cloud seeding, unlike even a lot of deep tech, is an inordinately complicated business. You need to be really good at weather modeling, at airsole chemistry, at radar, at a bunch of other electronics. Meteorological radar is crazy unto itself. The avionics of the drone, boutique anti-icing systems, new chemistries for new cloud seeding agents. And so here is some of the stuff that we had to diligence our investors on, whether they'd be able to understand what went into building novel meteorological radar.

1:06:28To be clear, behind you is all renders, right? Yeah, this is a great CAD model. So anyway, in 6 ,000 square feet, which is nuts, we've started high-rate production of our drones, which are anti-icing capable drones. They're the only class 1 UAS in NATO that can fly in severe icing. And so this is one of our ELISAs right here. So it has thermal anti-icing systems, ridiculously difficult to engineer airsole dispersion system that tunes the particle size that you're emitting into the cloud exactly as you wish. And then over here, I can't even begin to show you this. Actually, that's probably proprietary.

1:07:16I won't show you our boards, but here's some more material going into some more drones. Here's the next unit of our radar that's going to Argentina, our second international deployment. So I'm pretty stoked about that. here is all the proprietary uh radar stuff because we had to design our own boards um and then on the other side of the house is like our novel chemistry work um that uh by the way i'm taking this out of erin slodov's playbook just like walking around the factory love it that's the fun stuff that's going on yeah so uh i mean talk about the use of funds it seems like you're buying a lot of stuff hiring some people what's the breakdown probably doing mostly like founder led growth and sales, but where is the money going generally?

1:08:03Yeah, so I would say it was probably something to the effect of like 30-30-20-20. So 30 % of all the money that we raised is dedicated to designing our own meteorological radar and atmospheric sensing platform. So that platform is called Eden. That is radar, LIDAR, long wave infrared, aerosol probes, pressure, temperature, humidity probes, and anemometers. It's one of the more, if not the most sophisticated and low price point atmospheric sensing systems on the market in the world right now. And the lead time is only five weeks instead of nine months. Yeah. And out of curiosity, did you try to buy that off the shelf initially and then realize that you had to build it yourself?

1:08:49What did that look like? Because that feels like its own product line, although it doesn't sound like you're selling it to individually yet. Yeah. So basically everything at Rainmaker, I am grateful and happy to be making money and eventually returning capital for our pre-seed investors. But our thesis initially was like, well, we're going to use off-the-shelf radar, off-the-shelf drones, off-the-shelf chemicals, off-the-shelf weather models, and just be like a really good systems integrator. And then we got punched in the face like 100 times and decided we had to vertically integrate everything.

1:09:23So tried to buy that radar COTS, but there's one guy in Germany that makes them for 51 grand and they take nine months, if not 12 months to get there. Our system is about five times more cost effective, more affordable, and the lead time is five weeks. So we did that. About 30 % of the funds went to designing Elijah, our class one UAS that's capable of anti-icing. That was a big thing that about 10%, 20 % was for novel research to fancy probes so that we could detect the right conditions in cloud, validate our effect. And then the remainder went to GA, you know, fighting Florida, fighting for bigger budgets, that sort of thing.

1:10:06Talk about acquisitions going forward. I mean, we've seen, I mean, Andrew, just to announce another acquisition, it seems like in defense tech and hard tech, there are assets that can be, you know, you can create more value if you roll them into a larger, more agile, more founder-led organization. Are you looking at that? Have you done it? Are you thinking about it in the future? How do you think about building versus buying everything? Yeah. So one of the really strategically important things that Rainmaker or planned to do from the outset was roll up the existing cloud seeding market. If you look at the market as it stands, it ostensibly doesn't exist.

1:10:46There's like a few legacy operators that are kind of cowboys that blast clouds randomly and states or municipalities or even like Saudi will pay for it because they're so desperate for water. They're willing to try anything, even if it's technically unsophisticated. We bought North American Weather Consultants, which was a old school cloud seeding company out of Utah, out of Salt Lake City. Did so with Project Finance, which was great. Shout out to my finance director, John Madigan, killer. And then we injected our tech into it. The organization was extraordinarily well run there. We've retained everybody because they're great operators.

1:11:22But we injected our tech, upsold that, have been getting better yields because of it, more transparent reporting to our customers. I think that we'll continue to roll up the existing market. I also think that there's a lot of novel probe and material science companies that Rainmaker's targeting as well. So anywhere where we can inject our tech or just accelerate growth by deploying stuff faster and at a better margin is part of the plan. How much pushback did you get initially around people that were like, I love the idea of what you're doing, but I don't see, but like, I'm trying to find comps in the market and I can't find any, is this a market?

1:12:00And I'm assuming your answer was like, well, the tech didn't exist and we're actually creating the market. But what was your, you know, was that your kind of primary answer there? It seems kind of obvious in hindsight that there could be a technological sort of barrier between the demand for something like cloud seeding and the ability to actually deliver on it. Yeah, absolutely got pushback on that. Like a lot of what we had to say was like, well, this is actually deep tech and frontier tech. Sorry, there's no comp. Like, do you want to participate in something net new or not? And so our investors were really solid about that.

1:12:43But the thing that I did say, which has pros and cons looking back is, you know, SpaceX is like a launch services provider for now. We're a cloud seeding services provider. we rather than get stuff to orbit as a as a function of our service we build all of the hardware we operate all the hardware and then get precipitation down on the ground i think over time we'll probably trend more towards an exorbitantly high margin utility just because cloud seeding water is the cheapest water that you can produce but also we'll start buying up land too and then look very strange maybe more like monsanto or a hedge fund alcatraz is in the news uh what's the coolest thing we could possibly do with alcatraz what's your pick for the next move with alcatraz i think uh to to catalyze more conspiracy theories putting heat on us we should put a huge emf array like harp there the one the san francisco bay what would that do we don't know we don't know yet we're going to find out.

1:13:49Maybe last question, but what's the revenue mix look like right now? Because I only know, last investor update I saw from Rainmaker, I was pretty blown away by the traction. But talking generally, where does the revenue come from? Is it local governments, states countries private you know industry etc yeah so first of all jordy you'll find out soon but uh we've doubled our realized revenue since our last investor update wow there we go yeah and um so i would say about what's the math 85 86 is domestic the rest is international um and then another about 75 % of all the domestic revenue comes from state governments.

1:14:40So, um, departments of natural resources, departments of agriculture, uh, the remaining 25 is small municipal or ski resorts that need more snow. Very cool. Very cool. Very cool. And when you, when you, uh, last, last question, when you talk to these end customers, I'm at, do you, are you feeling like, I'm assuming you're feeling the product market fit where they're like, please do this. Like we need this. And I'm assuming at no point were they like, oh, I don't, you know, why would we want more precipitation? But maybe talk about how those conversations go. Someone made a really salient quote tweet of Gary Tan's post of like the gif of the whatever bouncy ball game where like when you hit PMF, everything runs away.

1:15:25Yeah. Like deep tech is not like that at all. Deep tech, the demand is like so obvious from the jump. People have been desperate from the very beginning when we didn't even have a drone to fly, saying like, hey, if you can figure this out, we would love to buy more rain and buy more snow. It was just a matter of getting to the point where we actually had an operable system. And everything changed for us in October 2024 because we picked up the entire company, moved it to a rural hamlet in Oregon to do more intensive testing. And then everything really accelerated. And we got the system ready and to a point where we could sell it.

1:15:57And people are desperate for more water. So that's been straightforward. amazing cool great having you on congrats to you and the whole team on the milestone and i can't wait for the next investor update we'll see you soon godspeed guys thanks godspeed uh up next we have bucky moore moving over to light speed shaking up the industry huge many people have been saying this was a maxed out maxed out contract for sure i texted him as soon as he told me you've been going absolutely maxed out i'm super excited to chat with him he has been on a podcasting road show. Yep. Road show for sure. He's been making the rounds.

1:16:36Making the rounds. That's great. What else do we say? Anyway, let's bring him in to the studio and talk to Bucky more. How you doing, Bucky? There he is. Oh, man. Great to be here with you both. Fantastic to have you on the show. Welcome to the Temple of Technology. Yeah, give us a lot of break time. My awkward stop today. And then I promise I'm done going on podcasts. Oh, yeah. You've been on quite the tour. Honestly, roadshow. Roadshow max. Four podcasts a day for the next 40 days. Yeah, you should just keep doing them all. Just wind up on like Hawk Tua. Yeah, yeah. Why is Bucky on Bill Maher today?

1:17:11That doesn't make any sense. Yeah, you shouldn't be able to listen to a podcast in the month of May without having Bucky join, at least for five minutes. I want to get confusing with the politics. Do Tucker, but then do Pod Save America. And no one knows where your politics align. Just talk about early stage venture, right? Yeah. But I'm particularly excited to be here today because I think you guys have been hitting on some really big ideas in this podcast just in the past couple of weeks alone. I'd love to just kind of riff on those a little bit with you because I think they're so important and I want to encourage you guys.

1:17:38And so what's the first one? The first one that comes to mind for me is this sort of make hotel gyms great again. That's right. Moment you guys are having. This is a really important discussion. It's not being had anywhere but here. there's clearly a hole in the market where someone needs to build an insurance product that allows for those folks hitting leg day on Friday to max out at above 500 pounds. It's just not happening out there. So this is a big problem. I'm glad you're talking about it. It's a big market failure. It's the kind of thing that maybe it's not a venture. It's not a place that venture dollars should go, but maybe a group of investors should say like, hey, for the good of America, there needs to be a company here.

1:18:16I think everything's venture now. There will never be enough venture dollars. I think we need to put this firmly in the venture bucket and then do 20 more. I think it could be a fit in one of these sort of AI turnaround funds that are being spun up by a lot of the big platforms. It's just got to happen, right? It's gone on for way too long and all of us travel a lot and we need to be dialed in, especially as professional yappers like VCs and podcasters. Yeah, maybe we just boycott all travel until the dumbbells get up to 100. The economy will collapse. We'll start to have a conversation at 100 and then go from there.

1:18:47We'll start the negotiation at 100. Yeah, like a trade war, a real standoff between the capital allocators and the luxury hotels. This is key. So I think it's our cross to bear, and I just wanted to say I'm glad you guys are talking about it. Yeah, I feel like there's an early stage bet here. You get some AI powered, you put cameras in the gyms, and then the underwriting is based on the form of the average gym goer. And so if you just have like mass monsters in there all day, they're just throwing around the 100. No one's getting injured. Take those insurance rates down. There was an infamous list.

1:19:19Commodity hardware, off-the-shelf AI models, it's doable. It's doable. There's an infamous list, VCs for Kamala. Yes. What if we had VCs for dumbbells? We could throw that up today. I think we could get 100 signatures in 24 hours. I'm clear how much overlap there is between those two lists, but it's a good idea. It's a big tent. It's a big tent. The mass monsters. It's a big tent. It's a big tent. Yeah, get them all in there. Why not? And look, I think before we talk shop, I also just have to make sure I really reinforce the what you guys are doing here really trying to turn la and more broadly southern california into the silicon valley of media like this is a this is a gargantuan effort but a very important one and i think you have this foundation emerging over in malibu where you have these esteemed podcasters like the rick rubens the andrew huberman's the jordy hayes is kind of settling in so it feels like you're well on your way the center yeah okay go ahead i just think it's important that we dream a little bigger than that, right?

1:20:15In the sense that Southern California is the closest thing to the Amalfi Coast that we have in America. You look across the Catalina, it's our Capri. It is. There's no super yachts. There's no luxury experience. Like we got to fix this. And so I just want to encourage you guys to keep going on that and keep pushing. And I think it'll lead to some really great things for what I think is all three of our hometown of Southern California. Yeah, I mean, the natural evolution is, you know, potentially, we had 100 % tariffs on foreign films get potentially announced yesterday. I don't know how real it is, but I mean, a natural next step would be, you know, 200, 300 % tariffs on foreign podcasts.

1:20:51Yeah. And to really kind of like, you know, generally I'm a free trade guy, but when it comes to podcasting, you know, I want to support domestic podcasting. We were in Ojai this weekend and we noticed that it was just devoid of high finance and there wasn't a single Goldman Sachs office or high frequency trading operation there. And so we announced our campaign to save Ojai. and bring finance to Ojai and really get the cubicles there, get the stimulants flowing, get these folks to work hard and really save Ojai. But we should do that for Catalina. We should save Catalina from the problem of boats under 50 feet.

1:21:26Yeah. Because it's a big problem out there. And fishing is notoriously unreliable. You might have a good year, have a lot of yield, and then you might have a down year, whereas hedge funds figure out a way to generate alpha in any market condition. Stock the ocean with new fish to hunt. And related to this, Augustus was talking a little bit about what to do with Alcatraz, right? I mean, who isn't a mega yacht owner in San Francisco that wouldn't want to bring their boat into the San Francisco Bay and enjoy what Alcatraz has to offer? So I think there's another dimension we can kind of take the Alcatraz conversation that sort of aligns with what Catalina has in terms of its potential.

1:22:03So there's a lot of good work to do here. And I just want to say, I appreciate you spearheading this effort. Yeah, there was kind of a controversial post from, what was it, Christina? uh over at bain capital right she was saying that uh alcatraz should be a four seasons resort where you pull up in a fancy water taxi to white lotus style not a federal prison but i mean a lot of people were firing back being like this would obviously be better as like an amman and instead of a water taxi you should be pulling up in a super yacht i haven't heard of a vc going to a four season in about a decade yeah uh but what is your these places have a lot of potential yeah yeah what what is your top pick for for alcatraz uh re revitalization i'm not sold on the idea of reopening the prison anyone who's taken a tour of alcatraz realizes it doesn't look like the rock uh the movie that is which is which is very disappointing if you're a fan of the rock in that shower scene where it all starts but uh i think this i think this five-star destination in the making idea that christina floated again up leveling the four seasons to the Amon up-leveling water taxis to super yachts.

1:23:07Like, I think this might be the best idea, at least floating out there right now. I like the idea of turning it into, um, what are the, what are the regions in the Mediterranean that like don't, or not, not Mediterranean Caribbean that don't really have any financial sort of rules. Like, yeah, yeah, yeah. So if we turn it into a place that VCs could generally solicit, it should be the Puerto Rico of the Bay. Yeah. And if you go there, but you have to spend six months and a day on the Island. Yeah. If you I mean, we're trying to ensure the crypto industry. So, you know, all those folks living their life in Puerto Rico right now, this might be the answer.

1:23:40So keep pushing these big ideas. Somebody's got to do it. And I think you guys are doing a really good job. Yeah, I love it. Amazing. How's your first real day on the job today, right? Yeah, change doesn't happen often in this industry. So it's been really exciting. It kind of feels like the first day of school or something where I'm just meeting a bunch of people I've never met before getting up to speed on how we do things here. And there's a lot of similarities in how the firm operates relative to where I was at Kleiner Perkins. But given the global footprint and just the scale of the firm, there's a bit more process that we use to run our operations here that I'm kind of getting used to.

1:24:17But super excited about this opportunity. I mean, I think it's just such an incredible time to be investing right now. And given we're kind of in the midst of this super cycle, I'm just really, really excited to kind of hit the ground running here at Lightspeed and make the most of the opportunity in front of us. And it's a pretty big change in terms of like your actual focus, because I always thought of you as like the growth guy at KP and now you're early stage. Is that right? Is that a correct characterization? So Everett would be the growth guy at KP, but I think what's unique about KP is we all, we preside over the growth and venture bonds together.

1:24:48So every investor makes growth investments, every investor makes venture investments. And for me, my roots have always been early stage. I love pounding the pavement, going to Stanford, figuring out who that next postdoc is that's going to start a company, figuring out who those amazing people inside of these juggernaut companies like OpenAI and Anthropic are kind of those next great founders. And I think the tension for me has always been like, how do you put your best foot forward on early stage while also running growth? Stuff down. And so here, what I'm really excited about is we've got a dedicated growth team and I can really go back to focusing on those early stage points of where I started.

1:25:19And that was a big, big driver for me about why I was so excited about this opportunity. Is there some sort of like, how would you define the delineation between growth and early stage at Lightspeed specifically? Is it like certain round size, certain valuation, certain just like you're getting out an Excel model for the first time. So the growth guys have Excel installed and the early stage team hasn't touched it in years. Yeah. I mean, I think that's a fair depiction of it in the sense that if there's real venture risk to a company's standing in terms of like a total loss of capital as a possibility, there isn't a ton of repeatability and revenue generation or how they put product in customers' hands, I think that feels a lot more like a venture type of investment.

1:25:58Whereas if there is that sort of repeatability, which for certain companies, especially in AI, can come very early in their life, given just the market pull that we're seeing, setting aside quality of revenue in that whole debate, you're starting to see more and more that these companies become growth stage companies very quickly. So I think what I'm really excited to focus on here at Lightspeed is like, how do we get into those companies as early as possible? Because they can be six, seven months old, and suddenly it's a growth stage opportunity, you've kind of missed the opportunity to get that venture exposure that really does, at the end of the day, drive a lot of the returns for this industry, at least historically.

1:26:28Yeah. What is the shape of like these AI companies and where they fit between growth and venture? Because I saw some firms were putting open AI at 27 billion in venture, which wound up being like a venture style bet. Like it could have kind of zeroed with all the complexities around. You're investing in a nonprofit at that point. Like it does have binary risk. But again, it's like almost 10X or something. It's been like a venture style return very quickly. On the same time, you have a lot of these very hyped AI companies that are maybe rappers would be the negative critique. They're generating a lot of revenue, but everyone's worried about churn and durability of that revenue.

1:27:04It reads like a growth stage company, but maybe it's more of a venture bet. How are you seeing the AI landscape kind of break down? Yeah. So to the question about open AI and that being a venture bet, I think it's even more clear today that the investors that participated in that round, again, there's a lot of dilution that comes along the way. But if you look at it just on like a multiple evaluation basis, there is absolutely a venture-like return to be made at that round. And that's going to make a lot of funds that went in big there. I think with respect to your second question about just like how these wrapper companies sort of fit into this box.

1:27:34The first thing I'd say is I think it's becoming clearer when you look at the mature companies that were once referred to as wrappers, like the Harveys, the Cursors of the World, they're getting a lot fatter in terms of like how much of the tech stack they own themselves and how much differentiation you can argue that they build in. So an example in Cursor's case is like they've been very public about like the people they want to hire are people that can help them train models. Why is that? Well, the cost that they have to pay to the model providers, as we all know, is non-trivial, hence this wrapper distinction being a bit pejorative in nature.

1:28:02And so what I think you're going to start to see happen is that these breakaway companies that were once AI wrappers, once riding on top of the existing frontier model companies are going to get a lot fatter in that sense and start routing as much of the queries that their users have to models that they can control and own and customize for that use case. So that's one trend that I'm seeing. But I think to your point about the quality of revenue, the capabilities that these products bring, especially those that have a prosumer adoption motion, are just so alluring and magical that everybody's going to try it.

1:28:29And not everybody's going to stick around. Not everybody's going to stay with that product and they might go to another. But from my perspective, I don't think as much about that because I just think the pull for these is so extraordinary that over time, you can think of that as a bit of a marketing cost. and the quality of the revenue at steady state, especially as these products get brought into larger companies, go from kind of credit card swipes to invoicing customers, you're going to see that these companies look a lot like traditional enterprise software businesses. But in theory, they're going to grow and compound at much, much larger scales.

1:28:57How do you think about the competitive dynamics and differences between B2B sort of enterprise-focused agents and consumer agents from my point of view in evaluating a lot of consumer agent businesses lately, a lot of my thinking comes down to, okay, this is not necessarily explicitly on Anthropics or OpenAI's roadmap, but I can imagine six months from now, they just sort of like immediately enable something like this. Where on the enterprise side, when you look at businesses like, for example, like Harvey, something like that, it's like, okay, there's a ton of functionality and features that to me feel like there's much more of a long-term kind of like value proposition and moat here.

1:29:40but I'm curious to hear how you think about the differences. So I agree directionally with everything that you said. And with the caveat that I'm not a consumer investor, it just, it intuitively looks to me as though a consumer agent is only useful when it can do everything from planning my kid's birthday party to booking the flight, everyone's favorite example, to really just like automating away all these tedious tasks that I would otherwise be clicking through websites to accomplish. And I just haven't seen a consumer agent that can really do that in a holistic sense yet. And I think someone will figure it out.

1:30:09And I think that someone will most likely be one of the frontier model providers because this is just such an important use case for them to get right to kind of maintain that core consumer mindshare that they have today. So on the consumer side, my bet is on the model providers, but I just haven't seen anything that really lives up to the product that I would be compelled to use. And I think like one distillation of that is like the moment you ask it to do something and it can't do it, you just get a little frustrated and it breeds distrust and you kind of move on and go back to doing it your way.

1:30:35So that's sort of where I see consumer today and where I see it going. The enterprise side, on the other hand, is much, much more interesting to me because I think you can create a tremendous amount of customer value by going narrow. So you mentioned Harvey. There are companies obviously doing this in co-gen and trying to abstract away parts of the software engineering process. There are some really interesting companies that are kind of going after like the people that use Datadog, for example, and helping automate the human intuition that goes into munching through all that data when your software breaks.

1:31:01There's obviously a ton of stuff happening kind of more on like the process automation side of the back office that like a financial institution or large enterprise would have. So I think we're already seeing those products like hit runaway trajectories. And the reason for that is because like the products work and they do a simple job really, really well. And I just think that's a lot harder to deliver on the consumer side in a way that's compelling. So my sense is the inflows that we see into like agent investing will be very heavily concentrated on the enterprise side. And I think that those companies are going to get very, very big for the obvious reason that they're starting to chip away at human labor budgets rather than tool budgets.

1:31:33And I'm seeing that with my own eyes today. Like, I feel like I'm seeing the future every day when I meet these new companies that can just, they just have superhuman capabilities in terms of some of these enterprise tasks they're automating. Yeah, that makes sense. What is your take on like the wrapper meme? It felt very, it felt like a VC psyop basically to me in the sense that like a lot of VCs were like, hey, maybe there's some wrappers out there that they might get steamrolled, but they're going to be fantastic lifestyle businesses for a few years. And then we had the windsurf rumor about, you know, kind of a pretty fund returning result if that deal goes through.

1:32:10And so it feels like is the windsurf acquisition potentially like an Instagram moment where it kind of unlocks like a new mindset around the ability to go and build businesses in AI and it won't be totally winner take all or like the category as a whole will be, there will be monopolies, but not just one. There will be pockets of value all over the place. Credit to Bucky too, Windsurf angel investor. Really? Very nice. Proud angel investor before it was Windsurf. And I have to give credit to my former partner, Lee Marie, for leading that investment at Kleiner Perkins. She's amazing. And it's a really special company.

1:32:47So what I'd say about the Windsurf rumors, if true, to me, what it foreshadows is this notion that there will be probably more chips to fall, not just in co-gen, but also just more broadly in these core categories of agentic work that the model providers are going to want to get into. OpenAI famously said anyone who's an investor in a company called Glean is not allowed to invest in OpenAI anymore. Glean is an enterprise search product that kind of does retrieval over all of your business data and incorporates it into the model so you can gain intelligence from that. To me, that's indicative of them looking at that piece of turf as something that they want to occupy.

1:33:18So to the wrapper-sci up question, I would completely agree. And you need to look no further than all the top funds voraciously trying to invest in as many of these companies as possible to know that that's a style. That said, I think the scaffolding of why these companies are very, very interesting to me is that ultimately the way you do retrieval of all this enterprise kind of first party data is what makes these products like good versus great, right? And so in a sense, if you look at Windsurf versus Cursor, Windsurf has figured out some tricks as to how to essentially pass the model better context and in doing so generate better outputs for their users.

1:33:50And what that to me says is that like really the IP of these companies is going to largely be around how they do that retrieval and how they bring that data into the model at the right time and in the most efficient way. So I think, and given Cogen is the most mature category, you're kind of getting to see how that plays out. So I think what you're going to start to see is like A, the winning companies, like be it illegal or Cogen or any of these other categories that we've been talking about are going to be the ones that figure out the best set of retrieval steps to give the models optimal context.

1:34:15And then coming back to what I said earlier, I think these companies are going to look a lot fatter than the wrapper name might indicate over time. And again, you're seeing this with Cursor, Windsor. If these companies are really out there trying to take more and more of the stack on versus just being dependent entirely on a Frontier model provider, I think it's safe to say the same about Harvey. They recently published a really interesting blog post that kind of showed the architecture of their app in terms of how it interacts with the AM models. And what you see very quickly is it's a lot more than just a wrapper.

1:34:43And so I think the trend is only going to continue. And it's why I think, you know, we at Lightspeed are very bullish on this, this form factor of company. And I think you're going to see a lot of activity from us there over time. From how have you personally evaluated, you know, businesses that are looking to eat into effectively labor spend through rolling up businesses versus companies that are looking to get into that on a ground up basis. And I don't have a ton of context on Harvey's business, but from what i would guess right now it maybe looks more like a sas business today but over time it could look like more like it you know it's sort of eating more of the of the value chain like what salesforce did where they where you they comped on per ticket closure as opposed to just pure yeah results results basically results but i'm curious yeah just just this nature of you know ground up, you know, new software businesses that are leveraging AI versus this sort of buy and, and build on top of strategy?

1:35:47Yeah. So I think this question is sort of being answered collectively by the industry, like as we speak, as in like, there's a lot of chips on the table around this notion of like, Hey, what if we go and buy the BPO in India and inject AI into it? Or what if we go and, you know, buy the homeowners association, administrators of businesses all over the world and inject AI into those. Yeah, just an idea off the cuff I had. And then on the other end, you're seeing companies like Harvey that are saying, no, the right way to do this is kind of to deliver like AI native value in the form of a co-pilot like product.

1:36:16And then over time, you start to chip away at the labor spend and bring more automation to there. The first thing I'd say is that I think one of the mistakes that a lot of investors have made looking at these companies early is seeing the product as it was like then and not imagining how fast it was going to get better. Part of that is obviously just the models getting better. And I think just like when you have like logarithmic rates of improvement, it's just really hard for the human mind to like intuit that and look forward and actually feel like confident in, okay, this is what it's going to look like a year from now.

1:36:42So for example, I think it's fair to say that if you met Harvey at, you know, C or series A and you saw the product, you'd say, I don't know if there's like a lot here. It's hard for me to see how this is going to be like a daily active use for the average lawyer. But what's happened is that product has gotten so much thicker and more capable to some degree because of better models, to another degree because of the in-house engineering work they're doing around how the information is retrieved and delivered to the end user. That product is just a totally different beast than it was a year or two ago.

1:37:08I think you're starting to see that reflected in the growth rate and more importantly, the product engagement of these products. That's one point on that end. I think with these turnarounds, I haven't spent a ton of time digging into these. I think my high level concern would be, one, do the people that know how to bring the AI into these products know how to run the BPO or the call center operation or the community association administrator? I just think these are kind of oil and water like DNAs. And it feels a little bit like Doge coming into the U.S. government and telling all these people what to do.

1:37:40I think there's going to be some friction like that. But on the other hand, having that existing distribution and scale is really, really powerful. So I can see how there'll be a lot of enterprise value created by these. if they can kind of manage that DNA mismatch that I foresee being an issue. So if you're asking me, I'd much rather invest in the AI native company. One, and the other thing I'd say is that if you're the AI native company, say competing with the company that's transforming itself around AI, what I see out there right now is that there's sort of a board and CIO level mandate to just adopt as much AI as possible.

1:38:10And they look at it almost as existential as if like their business is going to perish if they don't do this right. And more immediately, they're going to get fired if they don't do this right. And I think if you can, And what I see with the best companies, like you could say this about Windsurf, you could say this about Glean and some of the other companies that I've been somewhat close to, is that if you can get mindshare with the CIOs, there's this mimesis that plays out where then the next one has to buy it and the next one has to buy it. So I think really being first and being looked at more of as like a true pioneer of the space rather than like a company that's being competent about how they bring AI into their existing products.

1:38:40It's just a much, let's just say, sexier position to be in when you're going and talking to CIOs and CEOs of these really large corporations. And so that's the side of the fence that I'm more inclined to bet on as an investor. Makes a ton of sense. Let's talk about outcomes. I think in 2021, 2022, especially early 2022, everyone was writing to lots of$10 billion outcomes. That was maybe the general sentiment. You shared recently that you're thinking about trillion dollar outcomes now. is the right framing as sort of a scaled platform fund to be thinking about making sure that you're in the handful of companies that over time can be trillion-dollar businesses versus just expecting tons and tons of these$10 billion-plus companies?

1:39:32Yeah. So just to reiterate my position there that you mentioned, what I see happening right now is there are companies that seem to be scaling into market opportunities at a rate and scale that we just really haven't seen before. They can actually convince me that there will be companies that cross trillion-dollar valuations in the private markets. Of course, many companies have done this. I shouldn't say many, but some of the great household name companies have done this as public companies and a lot of the value has been created there. Obviously, now these companies are staying private longer, they're growing faster, and therefore, I think it's not unfathomable to think of an open AI or a SpaceX, you know, getting to this place where we're talking about trillion dollar companies in the private markets.

1:40:09So what does that mean for the venture business? What it means is there's even more headroom in this later stage investing part of the business that the mega platforms operate in that to generate alpha there that I think just wasn't there before. So that's hard for me to ignore personally. And I think why these mega platforms like Lightspeed are in a really unique position to capitalize on that. I think there's an obvious question as to, you know, are these companies a point in time thing or are they more foreshadowing of more of these to come? I think that's something that we're kind of figuring out as an industry and watching.

1:40:38But my instinct will be that just the problems and the ambition of the problems that founders are going after these days are just so like fundamentally massive that I think we will just see much, much bigger outcomes aligned with those companies that succeed at going after these like really fundamental problems like space travel, like intelligence, for example. And then I think with respect to the$10 billion outcomes, I mean, look, you're still going to see a tremendous number of those. I think that these AI app companies are, the large platforms are going to be very acquisitive of these companies.

1:41:09I think you're going to see things like Moveworks, which ServiceNow announced, or the WindSurf rumors that OpenAI and WindSurf are having conversations around. I think there's a lot more of this to come. And so I think the venture business will still be driven by those outcomes. But I think when we have these trillion dollar outcomes, even if they're few and far between, mean, it just completely distorts and changes the shape of the industry. And I think that the mega platforms are well aware of that and architecting their setups with that in mind. Yeah, in many ways, you know, these these bigger companies would prefer to avoid, you know, four or five rounds in a row that are predominantly random SPVs with hundreds of underlying shareholders, you know, that are then all trading those positions over time.

1:41:51And it's very chaotic if you could just have, you know, if you could get the majority of your cap table around a single dinner table for a few more rounds, you might be more inclined to stay. Sure. Last question. Any lessons from Warren Buffett? He's transitioning out of Berkshire Hathaway. Obviously a very different style investing from early stage venture. But at the same time, if Lightspeed keeps scaling AUM, who knows? Anything's possible. Yeah. So I guess the thing, whenever I think about Warren Buffett, and I think technically Charlie Munger said this, but I sort of think of them as one in the same for all the lessons that they share.

1:42:30The one that I always come back to is this notion of the too hard pile, right? And so what the too hard pile refers to is when they see a business that someone is trying to pitch them on being a really compelling investment, if it doesn't necessarily fit in the box of like their circle of competence and their ability to underwrite that business, like with an unfair advantage, it goes in the too hard pile, even if it ends up being a great investment. And look, I think venture is all about exceptions. But at the same time, I think knowing your strengths in terms of how like the type of people that you can read and work with, the types of markets that you can understand, the type of companies that you can start to really like dream with and kind of look out forward and have a sense and intuition of what they can be.

1:43:06There's this notion of a too hard pile in venture there, where I think sometimes the mistake that venture investors will make is they'll run after things that they don't actually understand, either at the personal level or the market level. And what I think I really learned in the 11 or so or years I've been doing this is like, there is a notion of a two hard pile adventure and just like sticking to your strengths and really being open-minded, but at the same time, like understanding your core strengths that you can anchor on as a picker. And so that, that would be my answer. That's great. Great answer.

1:43:31Well, thanks so much for stopping by. Congratulations on your job. Come back on again soon. We love personal needs here. We really appreciate you hopping on. We'll talk to you soon. Thank you for having me. Bye. And next up we have Catherine Boyle from Andreessen Horowitz, the pioneer of American dynamism. One of the top coinages of the last few years. Yeah, for sure. And more relevant than ever. In some ways, mission accomplished. I mean, last week in DC, it was American dynamism on display, right? That's right. Everyone is a believer. And the question is, where do we go from here? And that's what I'm excited to dig in with her today.

1:44:12Catherine, welcome to the stream. How are you doing? Thanks for having me. It's about time. I'm so happy to be here. Long time listener, first time caller. Great to have you. With the flag in the background. Yes, fantastic. Where should we start? I'm curious about just a state of affairs with the American dynamism movement. The project feels like it's maybe time to rest on our laurels. What do you think? We've achieved American dynamism. It feels like it. Yeah. Yeah. But I mean, seriously, it feels like it's broken through. It's mainstream. Cultural victory may be coming before actual victory.

1:44:50Sure, sure, sure. In that American dynamism is almost mainstream now, at least in the venture world. Yes. But job's not finished. Job's not finished. So what are the key asks in D.C. from Silicon Valley right now? What are the top projects? Where should tech be focused in terms of the American dynamism project broadly? right now. Totally. So it's nowhere near finished. I mean, this is like three or four years into a 30 year project, which is always good when you have those sorts of aims. And I'd say it's even longer than that. When you think of defense 1.0, it started around 2015, 2016. You know, it sort of has become this very large movement.

1:45:30But I'll tell you, like, last week was a huge, huge week for American dynamism inside of the DOD. And the news sort of got buried in tech land. But it was It's probably one of the biggest things to happen in the first 100 days of the Trump administration. The Army announced what they're calling their Army Transformation Initiative. It was with Secretary Driscoll, General George. They actually went on Fox and Friends, which was like a huge deal that they actually went public with it. And they said it's been way too long. Like we have so many platforms we want to modernize. We want to divest from technologies that are no longer useful.

1:46:04We want to modernize the force. We want to make sure that we get rid of civilian jobs that are not important anymore. We want to make sure we are not having wasteful spending. I mean, it was sort of like, you know, what I had read in NBC after it came out, they said like the army is doging itself. I think the real story of what the army is doing and kudos to them because they truly are the first mover is there are people inside of the DOD who have been saying these things for years, pounding their head against the wall, saying they want acquisition reform, saying they want to work with startups, saying they have to have new platforms that come in and actually support the needs of the warfighter.

1:46:41And they've been pounding their head against the wall with little results. And so when you have a Doge effort going on in Washington and an administration that really wants to see, you know, the waste disappear, it allows for those people who are really forward thinking like General George and like Secretary Driscoll to come forward and say, hey, we're going to do this ourselves. We're going to pick out the new technologies that we need. We're going to get rid of things like Humvees that we haven't needed in 20 years. we're going to figure out what is actually useful useful for the army and we're going to do it ourselves.

1:47:09So it was a huge week. I think it was probably one of the most it was reported, but it didn't get sort of the praise from, from technology that it should have. Like this is an extraordinary movement that I think has really been a long time coming. And it's something that a lot of the early American dynamism companies have been pushing for, for a long, long time. So congratulations to the army. Yeah. So can you give me a little bit of a, it's better to doge yourself than get, than get doged. Always doge yourself. Doze yourself. Yeah, can you give me a little bit of a tour of the market map of the beneficiaries of this transformation?

1:47:40Obviously, everyone knows the Palantirs and the Andurals, but I imagine that there are tons of pockets of value and projects that need to be overhauled. Is it mostly drones, weapon systems, vehicles first? Or are there other areas that companies that you talk to are focused on in this transformation process? Totally. So, I mean, in the early days, that's what's been called out. So it's, you know, it's early UAVs that were developed 20 years ago. They're not relevant post-Ukraine war. I mean, it's actually sort of, I don't want to say comical because it's not funny. But when you think about the fact that the Humvee was developed in 1980, it went into production in 1985, and that the army said in 2004, this actually isn't useful for us anymore because there's this new type of warfare called IEDs and we're not going to use it.

1:48:25And these are still in production in 2025. And so that's a perfect example. And I think they're sort of, you know, they're showing certain programs that are so long overdue that they're not to be changed. But I think it's also smaller things like, you know, the program of record was developed when you had to build out these very, very large platforms and you had to plan years and decades in advance. And when someone won a program, it was understood that they were going to run that program for decades. And now the Army has ways to acquire things where technology is changing at a pace and at a speed that really needs to have a genuine competition every year, every couple of years.

1:49:03And so that really benefits all startups. That benefits all, you know, incoming emerging technologies that are going to serve sort of the fight of the future. So in some ways, I think it's, you know, they have specific call outs that they're pointing to now. But there's definitely, this is great news for startups because what it's showing is that there is actually the will inside the DoD to change things bigger than just, okay, we're going to give you a small conference. Is there any movement on procurement reform? I remember I watched this hilarious movie, Pentagon Wars, all about the development of the Bradley fighting vehicle.

1:49:41And it's a very funny movie, but everyone has a different requirement. They all get put together and becomes this kind of platypus of a vehicle that is part tank, part troop transport, all these different problems. Part of the benefit of modern technology is that we do develop platforms and things like Anduril's Ghost can do ISR and also do munitions and a whole bunch of things. There are projects that do need flexibility, but is there a cultural shift around moving away from exquisite systems or just when folks in defense tech say we need procurement reform, what are they really talking about in 2025?

1:50:23Yeah, well, I think they're talking about different things because I think what this initiative is going to do is it's going to allow the Army, and I think there'll be a lot of replicas of this as well. I think other branches will look at this and say this is a great idea. Instead of being locked into a program for decades, they're going to be able to say, actually, we would love to use that capital for something new. We would love to recompete that program. We would like to be able to be better capital allocators because now their hands are tied. And I think when you talk to people who are just in normal business, not in defense world, and you say, hey, if you had to make a decision about a purchase that's going to last for 10 years and get no updates and you would not be allowed to change it, what would you do?

1:51:03we would say that's insane. Like, how is a CEO going to say they're going to acquire technology for their company that they're going to use for 10 years and there's going to be no software and updates, no nothing. And if it's not working, you can't get rid of it. You're told you can't get rid of it. I mean, that is literally what the DOD has to deal with. And so I think what's great about this initiative, again, it's one, the fact that the army is going public says that they mean business and that they have air cover to do this. But I think that the meta story that we're going to tell ourselves is, you know, Doge has been very public in the last week of what they're doing.

1:51:37There's been some pushback on, you know, why are you working on IT systems? You know, everyone has sort of their favorite Doge meme of why it's not working. But the story of Doge, I think when we look back even in a year, is going to be that it gave extraordinary air cover to reform in every department. And the first example inside the DoD, this is the biggest example in the last 100 days, to see General George out there saying like, this is what we need to do. And we committed and we're going public because we are so committed, which doesn't usually happen. I just think it speaks volumes and tech should be celebrating.

1:52:07This is a big, big day for everyone in the American dynamism ecosystem, for every defense company that's been fighting for this for a long time. Yeah. And for all of this to be, to actually achieve those sort of 30-year goals or execute against that 30-year plan, things need to be bipartisan. People need to realize we You want efficiency and innovation across every branch. I'm curious on the investing side, I'm sure you have this painful experience all the time where you meet companies that probably are going to be great businesses, are good for America, but maybe aren't a fit for venture. What's your sort of updated thinking on understanding if something can be a great, important business versus something that can truly be a generational outcome?

1:52:53yeah one of the one of the biggest mistakes i see investors make is trying to predict tam um so so you know early early days of andrel a lot of people you know didn't want to look at andrel because of ethical reasons or because they were worried about being involved in defense but there was another meme that was going around which is almost comical now which is well it's kind of a small town right like a border security company like oh they're selling to dhs department of homeland security doesn't really have that big of a but like like these were real things that people said that are hilarious now, you guys can imagine.

1:53:27So it's like, I think it is very difficult to predict a growing markets, eventually what some of these incredibly important technologies are going to be worth. But I agree with you, there are some examples of companies that might not be, you know, standalone businesses, but will ultimately, you know, Endrel's done a very good job of acquiring businesses that aren't going to be these venture outcomes, but work, you know, very well within their platform. But I think in some ways, there's always surprises with companies that were initially passed on or people were very skeptical of their TAM in the early days.

1:53:59And then you look back and you see just how much they've grown or how much the product has shifted or how important the platform actually is. Yeah. How have you been kind of reacting to ignoring the politics of it all, but reacting to the trade war in many ways? like when you have these like big geopolitical, you know, events playing out that doesn't necessarily mean start to make a lot of venture investments because venture investments take a long time to play out and it's very hard to predict the future. Are you seeing new opportunities related, you know, to the events of the last month? Are you still just, you know, continuing?

1:54:40Like I imagine when you guys invested in Hadrian, you weren't like betting on a trade war in two years or something like that, right? But how do you think about timelines and is the benefit of sort of thinking in that 30-year timeline that you're kind of able to broadly ignore or not place too much focus on the headlines of today and just think about what America needs in the long run? Yeah. No, I mean, I would say my bias as a very early stage investor is to not think about the immediate time frames. These are very long cycles. You know, you can sort of you can sort of see trend lines, but it's hard to know what actual events are going to happen, obviously.

1:55:22So I think even when we made the investment in Hadrian, as you called out, there was a movement towards reindustrialization and towards investing in manufacturing that was early and nascent. But if you were hearing the signs or spending a lot of time in D.C. or even, you know, both sides were very focused in Washington on how do we think about, you know, investing in America, reindustrialization, How do we bring back manufacturing? So it didn't feel like it was, you know, it felt like it was a message that was being heard then. It's just, of course, been accelerated. And I think truly, if you if you think about kind of the next 10, 20 years, reindustrialization is going to be a very important theme.

1:55:57So so, you know, it can feel like like everything is hot right now or feel like we're in the middle of something. but ultimately I think we're again in this like very very early you know three or four years into a 30-year journey of this this sort of you know it took it took decades for globalization to really hit its peak and now we're sort of seeing the pendulum swing again and so you're going to see a lot of companies that are built in the next few years that become generational companies. Yeah how do you think about the kind of broader market map of American dynamism? Obviously Anderil is like just a great case study in the American Dynamism thesis.

1:56:34But at the same time, as you go through the American Dynamism website, you can go back to like the moon landing and the development of the iPhone as like examples. At the same time, there's this question about like the anduril of X is anduril potentially. But then that doesn't always come true if you're talking about something that's truly outside of their purview in consumer or in, you know, Flock Safety or Hadrian, and these companies are not competitive, but maybe fit in the thesis. How are you seeing the investing landscape of American dynamism kind of evolve as more people come into the category, but then think outside the box and address different issues?

1:57:15I mean, I've seen even like some education stuff kind of fit the broader thesis. So how has that evolved over the last couple of years? Yeah, we define it as companies that are actively supporting the national interest. So it is a very simple definition and founders have different interpretations of what it means, but there's common themes. And actually, this goes into why we decided to have a separate fund, why we decided to build out the platform. It's because these companies need something entirely different than a true enterprise or a true consumer company. And when we looked back at our early portfolio of Shield AI, Andrel, Astronus, these companies that were sort of what I would call space and defense 1.0, Yep.

1:57:54We'd sort of like put them in the enterprise category as though they're like no different than a company that's selling business software to the Fortune 500. Right. It doesn't make any sense. They have totally different needs. You know, Andrew famously said that they had a lobbyist on staff on week one. There's things that companies need that our view is that we could build a platform to help support these companies, namely in Washington, understanding who their buyers are on the BD side, which is a very difficult kind of role to hire for inside of early stage startups. but then also understanding kind of the Washington game, which is very important for companies to understand if they're going to be selling directly to the federal government.

1:58:30Now, you mentioned education, and there's a lot of companies in our portfolio, too, that are selling to state and local. And that is a totally different sales motion. You know, that is something where, you know, a company like Flock Safety has sort of rewritten the rules of how you sell directly to a police force or how you even follow what I would call kind of like a second city strategy of not going to the biggest cities, but going to these smaller municipalities and getting a lot of, you know, almost circling a big city with the suburbs around it and kind of getting a lot of momentum from the citizens.

1:58:59But all these companies have very similar needs and sort of things that they have to think about early rather than later. And we've now seen enough of sort of the early success stories and public safety and, you know, aerospace, defense, like sort of these sort of generational companies that came up in the last several years that the boom that's happening in these categories, many of them want to replicate those playbooks and have, I think, with a lot of success. Yeah. Can you talk a little bit about almost like lobbying as value add for venture capital? I remember I was running an Andreessen back company a decade ago and there were, I met the CEO of McDonald's through Andreessen at some happy hour and there were trainings on B2B sales and PR and all this stuff but there was no concept of regulatory or lobbying but I imagine that's a piece of it but it's at the same time you need to eventually staff your own government affairs team.

1:59:53How are you working with early stage founders to get them up and running in Washington? Yeah, well, I mean, there are a lot, I would say a lot of the founders that we backed are very, I would say sophisticated in their knowledge of who they need to be meeting with or the types of companies or the types of people they should be meeting with the types of companies. we're actually, I would say, even more successful in doing that's really important is making all that knowledge public. You know, we make our playbooks public. You know, my partner, Layla, who runs our go-to-market in DC, she wrote this incredible glossary of things you need to know if you're even going to approach a venture capital firm about, you know, about a defense tech company.

2:00:32Like, these are the acronyms. These are all the acronyms you could possibly hear in a conversation with the DOD. And it's things like that where we do want to make that public and we want to help educate the ecosystem and i can tell you like you know five or six years ago the number of venture capitalists who understood the difference between contracting you know the different types of contracting vehicles uh that understood the names of you know of different um you know people on the appropriations committee these these things that are now sort of i'd say taken for granted um were not well known um and so i think that's a huge part of it too is really helping the ecosystem get up to speed um helping companies sort of speed run that early stage process if like you can ask any dumb question and we're going to help you with it.

2:01:11But then there is also something to be said of, it is much easier to get a meeting with certain people if you are at a dinner that's sponsored by a group of people who are always in Washington. I mean, we have a Washington office now. We are fully staffed in terms of both Republicans and Democrats and people who work on both sides of the aisle, people who specialize in DODs, people who specialize in certain types of the DOD. And I think that is like a very important thing to be able to say, okay, you need to meet with X, Y, and Z people, or you need to understand the glossary before you can even begin to have those conversations.

2:01:42Do you think defense tech is now mature? It's oversaturated. I was joking with Jordy that I think world peace is like maybe six months away. And then I'm going to start poaching top defense tech talent to build the next generation of advertising optimization. Because I think that we just got to get them back in the ad. next company you know it yeah yeah yeah uh but i mean uh but but i mean seriously like it does that would be the most you know the open ai you know agi is always six months away world peace is defense tech founders need to just go like yeah just two more two billion more and like world peace yeah um but i mean there is a serious question here like uh there i i know some people who are like just so excited that they're jumping into things but but you know being even i'm not not even in the industry, but I'm a little bit more tapped in, and I'm like, there are already seven companies working on that exact thing.

2:02:35I don't know if this is the best time. Is it worthwhile to steer these incredible hackers, these great entrepreneurs, maybe towards the more tangential hard tech problems? What I see with what BasePower is doing is like, it's hard tech, it has defense roots, but it's not directly something that's on Anduril's roadmap. what advice are you giving to kind of the entrepreneurs that are like in between things thinking about serving the national interest but not necessarily putting themselves on a collision course with a you know multi-billion dollar founder mode company so so i'll say deterrence is the constant project right so like your whole like the meme of maybe six months away from world peace yeah of course it's uh like i actually think that was part of the problem in the 90s right like like seriously that was not it'd be over yeah democracy well the end of history End of history.

2:03:26We've flourished and we don't need to be working on these things. So it is very important that we've gone back almost to the roots of the DoD saying like, hey, actually, we remember what it's like to be a country at war and we need to be constantly focused on the next technologies. We need to be focused on deterrence. thinking of it as deterrence because we want to prevent war, but we have to be continuously building. So from that perspective, I think we're, again, we're only a few years into this real movement of Silicon Valley caring about working with the DoD. And I hope that it's a 30-year project.

2:03:56I think that's what we all really should be focused on is making sure it's a 30-year project and even longer than that. But to your point, what I think is so interesting about companies that are founded out of Andrel or out of SpaceX, we've done an analysis where we looked at all of the founders who've left SpaceX, you know, in the last, say, 10 years. And there's hundreds of companies that have been formed in just wildly different sectors, whether it's, you know, radiant nuclear, working on nuclear energy, you know, Castellian, which is in our portfolio, and they're building hypersonic weapons.

2:04:26I mean, some of the best founders are trained, I always say they go to the school of Elon Musk, they learn manufacturing, they learn production. And then they want to take that to something that, you know, is pretty low hanging fruit, They want to make sure that they're competing against the incumbents of yesterday who have not modernized their production, who've not modernized a lot of the technology that they're working on. And so I think you see that with a lot of the, yes, there are some extremely crowded fields, but then there are also areas of defense that are really just boring and completely untouched.

2:04:56And you're seeing founders realize that too, that it's not something that's interesting to any of the existing companies and it's low-hanging fruit. and it'd be interesting to work on that. Or they're interested in being a tier one supplier. We have a number of companies that are really focused on the supply chain aspect of defense and their partners to Andrel and their partners to SpaceX and other companies in the ecosystem. So you really are seeing founders understand that question in a very sophisticated way and say, okay, we're going to go after the parts of the supply chain or the things that the DoD needs that no one is focusing on.

2:05:28And that's been exciting to see too. Can you talk about M &A in defense tech broadly Andrew Roll's done this very well. Saronic announced a deal last week, uh, acquiring Gulfcraft. Um, that feels super significant. I'm, I'm curious, you know, how you advise founders kind of broadly when, when thinking about that, we actually had Augustus on from Rainmaker earlier who had acquired a company in his space, but when's, when's the right time to be, you know, thinking about that as, as somebody in defense tech and, um, yeah, what, what kind of opportunities do you think make the most sense? Totally.

2:06:05Well, I think, I mean, both Anderil and Saronic, I mean, they have incredibly unique stories in terms of where they're operating and sort of what they need to do in order to grow and scale. And they've done it at a speed that is just incredible, right? Like they have very sophisticated teams that know a lot about acquisition. I'd say for earlier stage companies, like it's, you know, we're seeing more companies that are potentially interested in doing that. It can speed up. It can speed up innovation. It can speed up being able to work with certain customers, that's for sure. If you're acquiring a certain capability so that you can sell to a major prime, that's something we've seen more of too, which is interesting and exciting.

2:06:44I don't think we were seeing that several years ago, and now we're certainly seeing companies experiment with that. But when you said actually M &A, I actually thought you were going towards something that I think is actually more likely to happen in the future that hasn't happened in a long time. When you look at these existing prime companies, the big five say, they've really only acquired companies that have not raised any venture dollars, right? Like they don't acquire companies that are kind of seen as these bleeding edge companies to shore up their capabilities. And my instinct, you know, we're talking about Army Transformation Initiative, we're talking about a government that's becoming far more sophisticated and a DOD that's becoming far more competitive, right?

2:07:19It hasn't been competitive for decades. And now you're seeing all of these startups come in. My prediction, if we're looking five, 10 years out, is that the companies that have not been acquisitive for the best engineers and the best technologists and these capabilities that they need are going to find that as their only solution. And I think we could potentially even see another Last Supper situation, which of course in the 90s was the famous case where the government came to all these primes and said, you have to merge, you have to have kind of forced mergers and acquisitions because the budget's going to decrease.

2:07:50And of course, that was probably the wrong strategy given sort of the results that came out of that. But I do think it is something that I would not be surprised if in five or 10 years, you're seeing the existing primes that have been around in many cases for 100 years saying we have to work with these startups in a much more tangible way. And you could see a highly acquisitive ecosystem that people don't necessarily kind of write into their kind of thesis today. How would you, how do you think about leadership at the individual primes? And, you know, people over the last few years mean Boeing has been dragged through the dirt by pretty much everyone.

2:08:26But I think of it as a great, in the fullness of time, it's a great company. I ain't going. Yeah, John is so loyal. I'm pro-Boeing. I think he'll never fly out of it. He'll never fly out of it. As a white-collar worker, you don't risk your life very often. When I go on a business trip and I step on a 737 MAX, I'm locked in. No, and I mean, I just look at it as China would love to have a company that was actually competitive with Boeing. Totally, yeah. It's a hugely strategic asset. Yeah. But I'm curious, do you think that, you know, any of the primes, you know, and every now and then you'll see a prime release a video that's like clearly like they hired a marketing agency and said, like, make us like an Andrewle movie, you know, and then they put it out.

2:09:09But how do you think about, do you see that the leadership at the primes? Well, Lockheed Martin invented artificial intelligence, remember? Yeah, they came out last week and claimed that they invented artificial intelligence. They basically just said, you're welcome. You're welcome. Yeah. By the way, you're welcome. But I'm curious, do you have conversations with them? Even though it's not an opportunity for venture capitalists necessarily, it would be great if they were highly functioning in the American interest. And then you have the program that was spun out of, was it Microsoft? Microsoft to Android.

2:09:46Oh, yeah, the HoloLens. Yeah, sorry. So I think there's probably more kind of even spin out opportunities where new companies can create value on top of existing. programs. Yeah, I think, you know, Palmer and actually Brian Schimpf has done an incredible podcast on this where he talks about sort of what happened at these primes and why things sort of went by the wayside. And it's partially because they really stopped focusing on research and development. They didn't really need to. There was no real competition. And they kind of recognized that, you know, they would always get paid by the government to do new things.

2:10:16You know, again, like it's sort of this confluence of factors that led us to be, I don't know, really complacent. And I went back actually last night and was reading the first few pages of The Kill Chain by Christian Brose, which again, it's like it's reading it. It was written, I believe, in 2019. Things have changed so dramatically in terms of the conversation. But it's like going back in a time warp and saying, wow, like in 2019, people really didn't care that Boeing was collapsing or that there were these private or these public companies that were doing no research and development because it didn't matter.

2:10:43Right. That was pre-war in Ukraine. It was sort of, you know, in some ways it was security theater. Right. Like we don't actually have to remain secure. where we just have to pretend we're secure. And so I think there is this new sort of wake up call where a lot of these companies are going to say, one, if we can't recruit the engineers and do the research and development in-house, we're going to have to acquire it. So again, that's why I think you're going to see a lot more acquisitions over the next several years because I think a lot of these companies are really going to have to change. But two, like these initiatives inside the DOD that are now getting real steam, that is going to force incredible competition that has not existed, even in the last 10 years and we've all been investing in American dynamism.

2:11:20So I'm actually much more hopeful and excited about where I think the world is going because I genuinely believe that a lot of these players have sort of woken up and are looking for solutions because now they know they have to. Yeah. A while ago, I was talking to Trey about just the lack of the deeper supply chain, specifically in drone motors. Like there are no small drone motor manufacturers in the United States. They're almost all made in China. And that feels like, oh, there's almost a startup idea there, but I don't know if it's a venture idea. There's actually a drone motor company in Washington.

2:11:54They outsourced some of their supply chain recently. That feels like almost like we need an American dynamism private equity fund to just turn those companies around. They're not gonna be these power law, $100 billion companies, but they might produce 20 % returns more reliably and there's maybe no venture style, zero loss of capital risk. Do you think we need a American dynamism for private equity? Is that something Andreessen would do at some point? I mean, you're kind of in every asset class now, so anything's possible. But is there a flip side to the venture model within investing in the national interest?

2:12:31Well, I certainly think we've invested in some companies that are focused on component parts. We're invested in Amca. I know that Jay was on recently. So there are more and more companies that are figuring out ways to do this. And again, those are the examples of companies that are, you know, much more focused on how do we, you know, how do we acquire companies? How do we make it, you know, make them, I would say, tech forward, but also think about like how quickly we can get into the supply chain and some of these larger primes. But I think you're, you know, you're seeing a lot of innovation around the edges on this.

2:13:01And you're probably going to see more and more founders who recognize that if that's where the real problem is, they're going to build there and they're going to build in the best way that suits them. So yeah, it does seem like there's almost like a way to turn something like MP materials. We were talking about like you wouldn't think like, oh, yeah, venture is suitable for like mining at all. But like now there's a couple of mining companies that are figuring out how to inject enough technology to make it potentially a venture scale opportunity, which is interesting. Do you have anything else?

2:13:29I have a couple more. I got a I got a totally switching gears. But you had a post recently that I that I liked. It was I'm committed to doing whatever the opposite of gentle parenting is. and I wanted to ask you if you found any Lindy books on parenting, anything that's sort of resonated that you're implementing. John and I both have similar aged children, and I always have this sort of concern around you want to experiment with parenting and try new things and maybe not just take exactly what the mainstream media says is the right way to do parenting, but then you know your your children have one life you know you want to to not uh run you're not trying to run a b tests you know on there i have three boys so i employ what i call the snake pit strategy which is you lock them all in a room and then it's just a snake pit and they just like wrestle and you know if there's damage they'll heal and that's fine right way to do it well i followed up that tweet with the tried and true true irish uh irish strategy which is the hay method you just shout hey and it creates loud yeah hey hey hey you know it works like there's something about the word hey where your sons actually turn around and listen to you but uh but sadly i you know there there aren't like any books like old-timey books that i found that that actually teach i would say uh the best way to to you know to to train children or to to child rear but you know it's it's interesting i always think that grandmothers kind of know best so if there's a grandmother in your life anywhere um they remember how it used to be done and how effective it was and it was you know probably harder in the olden days too so it's like basically just ask grandma like grandma plug uh i would plug free range kids um all about this the like our society has moved towards like don't let the kids just run around in the neighborhood they could get kidnapped there's so many bad things that could happen there's been a lot of fear mongering from the media and so that's kind of led to kids turning in in inside becoming inside kids staying on the iPads or whatever.

2:15:29But there's this movement in the free range kids to just be like, yeah, actually like you're six, you can ride a bike, like ride your bike to the park. And that will enforce the society to maintain safety. I need to find the repeat of parenting. Yeah, that's the next alpha. Yeah, my problem with the grandma method is that my mother and mother-in-law just wanna let the kids do exactly what they wanna do. You wanna two cookies? Good, you want three cookies? So maybe they're right. Maybe that is Lindy. Maybe it is Lindy. I'm the great grandmother, right? Like the one who remembers how tough it was.

2:16:04Yeah, that's right. I want to get your reaction to Warren Buffett. Obviously, he stepped down over the or announced his transition at Berkshire Hathaway this weekend. What do you take away from Buffett's legacy as an investor? It's obviously a very different type of investing, but there's so many interesting lessons there from company building to investing to everything else. what was your reaction? Yeah, you know, I'll take a little bit of a different take because I was watching the, you know, the annual meeting last year and there was this moment that happened and I actually wrote about it and a piece on friendship and founder friendship where he was doing his usual, you know, going through company analysis and then he just kind of forgets where he is and says, Charlie.

2:16:47And everyone stopped. It was like, you know, I think I think I cheered up seeing it because he was so in his zone after so many years of working together, he had forgotten that Charlie had passed. And he's almost embarrassed about it, but I thought it was the most beautiful moment because one of the things I don't think we talk enough about in Venture World is founder friendship. And I mean like deep, deep friendship, not like, oh, we went to college together and we were friends or whatever, we're gonna start a startup together. I mean, those people who like work together decades and decades out, I actually think this is why family businesses often work better where even if you look like the Collison brothers, it's like they've sharing resources, you know, since childhood, since they can remember.

2:17:24And like, there's something about just the going through life with someone suffering with someone understanding how to like, you know, end someone's sentences that leads to these just incredibly rich and beautiful companies. And I think if you know, if we did an analysis and Andreessen Horowitz and just looked at the companies that were true outliers, I think there would be stories of these people are like brothers, brothers and sisters and and and Earl certainly this right like it's, you know, the founders there were DARPA challenge together like their first day of college, right. So it's in some ways, there's something about just having these deep relationships that span the test of time where you're on a journey with someone and it's real like Aristotelian friendship, not like faux friendship, but true love.

2:18:07And clearly you saw that with them. It's just a remarkable thing how they were able to kind of be true brothers and kind of, you know, each other's better half throughout their business career for as long as they were. It's amazing. Last question. What should we do with Alcatraz? oh you know i i love all i love all the ideas of turning it into a casino but i haven't seen that one i like i was saying i was saying tax haven and and no no general solicitation rules so you can like go out there no quiet period sell your angel lock-up periods just unfettered libertarian capitalism out there that sounds good but there is something about bringing it back in its original form you know it's like there is something about these buildings that that the the president likes to restore into their former glory.

2:18:49And so if Alcatraz is the case, like to keep the historical details accurate, you can kind of see where it's coming from. He's definitely a historicist in that regard. Okay. Well, thank you so much for joining us. This was fantastic. Yeah, this was great. Come back on again soon. Thanks for having me. Have a good one. We'll talk to you soon. Bye. Cheers. That was fantastic. I hadn't heard the casino idea. She's clearly on a different part of X than I am. Yeah, yeah. Have you heard the casino? I think I saw a little bit of that. Turned into casino? I was thinking if you made it at tax haven, then you could just put casinos on it.

2:19:21True, true, true. Yeah. Yeah. Alcatraz, the home of riverboat gambling. It needs to be either more lawful and become a prison or more lawless and become a gambling haven. It does have like that riverboat vibe of like, you know, being in the bayou, hanging out on the riverboat gambling. It's kind of like international waters. Yeah. Anyway, our next guest is here. Welcome to the stream. How are you doing? Do we have you? Hey. There he is. How are you guys? We're doing great. Would you mind kicking it off with a little introduction for yourself? Yeah, for sure. Hey, everyone. Aditya Agrawal here.

2:19:55I'm the managing partner here at South Park Commons. I've been in the tech industry for about 20 years now. Kind of started off by meeting a very young 19-year-old Mark Zuckerberg in like early 2005 when I just moved out here. Facebook was still working out of the famous house. and you know so kind of meeting a 19 year old Zuck at that point was pretty obvious the dude was special. How old were you at that time? I was 22. Wow okay so you were like three years younger than me but generational founder I should probably join the company. That's great. You know it's funny it's like I kind of joke that I love working for founders younger than myself because I went for working for Zerk too.

2:20:40I then did my own company after Facebook, which then got acquired by Dropbox. So Dropbox's first acquisition. And then I was the CTO there working for a young Drew Houston and a young Arash Wadoshi. Wait, so did you recruit Guido Van Rossum? I did. That's incredible. I personally recruited GVR to come join Dropbox. Creator Python. Wow. Absolutely. And it's interesting, right? BDFL, the benevolent dictator for life of Python. probably the most important programming language in modern history. Yeah, it's interesting you say that because, you know, Python, at that point, Dropbox was probably the most used, I would say, consumer app, maybe actually the most used kind of app in general, written mostly in Python.

2:21:21But most of our, a bunch of our backend and frontend was actually kind of like code gen using Python. And Guido is a legend. I mean, like, I think that the way he has crafted Python, you know, both by himself and at Google and under kind of the Dropbox auspices was just legendary. And it's kind of amazing. It's kind of becoming the programming language of choice for AI as well, right? Kind of like most of the AI programming is actually done all in Python, which is pretty crazy. Wild. Yeah. Best to ever do it. Let's talk about the news because it was hitting the timeline. I think it was Friday.

2:21:55Yeah. New Fund 3. Maybe talk about the genesis of the fund and the series of funds to get where you guys are today. For sure. You know, happy to tell you about SPC Fund 3, that's South Park Commons Fund 3. But maybe, you know, instead of kind of telling you about the fund sequences, talk about why SPC exists, right? SPC was started in 2016 with the simple premise that if you are a talented technologist, do not waste your life kind of tackling small ideas, right? I'd say that there are two big mythologies that we've been trying to bust, if you will. So the first big mythology is that, you know, we all have this mental model of kind of like founders, essentially getting a stroke of inspiration, going up at the top of a mountain and then coming back to us with kind of the promised product.

2:22:42Right. It's a very it's framed as this like solitary hero kind of or heroine kind of act. But our strong premise is that great companies basically come out of insanely high talent density. Right. They come out of places like PayPal, which kind of like kind of show like, you know, what greatness looks like. and then people go out and build things. They come out of places like, obviously, Facebook. Then we have had a bunch of companies out of Google. They're off Spark, obviously. And we also see this greatness occurring in clusters all across us. We see it in elite sports teams. We see it in elite musicians.

2:23:18We see it in essentially academia. So our take was that if you want to start a company, why would you want to go and ideate by yourself? right instead be surrounded by super high talent density people who challenge you like you know very interesting collisions of ideas can happen um and it's kind of a semi-competitive collaborative setting right you want to be surrounded by the best people who are kind of challenging and pushing on your ideas but then you also have a little bit of like you know you're looking over your shoulder being like i want to aspire to the greatness that i see around me right um so that's our first mythology which is that in order to start a company you should be surrounded by great people And the second one, which is maybe it's almost, you know, it's more than a pet peeve for me, which is that there's a generation of founders that argue over the last decade in Silicon Valley, who basically because of the availability, frankly, of early stage seed capital, kind of latch on to the first idea that they think of, right, because they have some idea, somebody gives them like a seed check, and then they think that the idea is good, right?

2:24:20And our take is that actually, instead of just focusing on the first idea that you have, take some time to wander. Let your mind kind of go lateral. Figure out, it's unlikely that the first idea that you have is the best one, if you kind of just think about it from a probabilistic perspective. So our take at SPC is that come spend 6, 9, 12 months with us, wandering, ideating, exploring, tinkering, letting interesting ideas come about. um and in some ways everybody is so focused on scaling the mountain we talk about hyperscaling we talk about scaling the mountain that nobody stops to ask like is this the right fucking mountain like is this the best mountain that you want to go climb Everest has like you know 16 peaks over eight you say the uh the Everest range has like 16 peaks over 8 ,000 meters like which one are you going to pick right like that's a pretty good one right um so k2 because it's the hardest k2 is the hardest in the winter highest fatality rate by sure yeah yeah yeah some founders just want the pain and so they go okay north face during the winter oh yeah uh really quickly what uh the the name uh not south park capital not south park ventures south park commons what's what does that mean it it was a name that was actually chosen by our early members right so our early members in circa 2016-2017.

2:25:41The idea is that it is a meeting place of ideas, right? Like it's kind of formed by the commons, obviously, very famously out of London, but a place where the intellectual public can gather to kind of like, you know, introduce ideas, kind of essentially debate ideas. Some of, you know, some of the folks that we were inspired by back in the day were Benjamin Franklin's Junto Club, right? We actually remain deeply inspired by that, which is it exists in a society to better each other to kind of like towards greatness. So the idea was that SPC, I mean, sure, we have 20 people on staff here. We have a bunch of investors.

2:26:15I think we're awesome. But ultimately, a lot of like the value of SPC is being surrounded by great talent that can all kind of like push each other. So when you come back to the genesis of the fun, right, guys, like in the early days, there was no fun. We framed ourselves as a learning community. We framed ourselves essentially as like an exploration society, kind of the Royal Exploration Society in the 1800s in the UK, with the idea of being that like being a founder is kind of being like an explorer in the early days, right? You're trying to navigate the idea maze. You should be able to like, you know, throw away like the bad ideas in pursuit of the great ones.

2:26:51And then over time, what we realized is that this is actually an interesting model for early stage kind of like company exploration, right? So we would basically provide a place where people would come in. And essentially, it was very hard to get in. We do maintain super rigorous standards for essentially getting in. We put people through multiple interviews, reference checks. So for instance, this year, 20 ,000 people plus will apply to be part of SPC across 250 spots across SF New York and Bangalore. So it is very rigorous to get in. But once people essentially got in, we would kind of have a very vibrant intellectual environment.

2:27:28where we would invite like really interesting people at the frontier of their fields. You know, so for instance, I remember back in 2016 and 2017, a young Vitalik would be like walking through kind of like STC, just talking to people about some of his ideas around distributed systems. We would have GDB and Ilya walking around telling people about kind of what was happening in deep learning. And I know that today these guys are like world famous, but back in 2016, they were still trying to pioneer something that felt a little bit heretical, right? which is this idea that we were about to enter kind of a kind of like a Cambrian explosion of machine learning away from the deep learning winter.

2:28:01So, you know, we have always welcomed the people who are kind of in some ways pushing the boundary. And so it was framed as a learning society. But as people kind of came and spent time in SPC, we realized that they were actually converging on more interesting ideas for, you know, by way of their exploration. So as they started essentially starting companies, Ruchi and I, Ruchi is one of the founders of like SPC, would basically write, you know, angel checks and introduce them to our investor network. But over time, we decided that like, hey, why don't we start a fund to invest in SPC companies?

2:28:37And the fund would also, for instance, the fees coming in from the fund would be used to essentially like provide for staff and also provide for the building that we have in South Park, right? And that fund one was a$55 million fund in 2018. that fund has done phenomenally well. It's kind of going to be in the top 5 % of its vintage of that year. On the backs of that, boom, boom, boom, boom. Is that the money bell? Okay, there we go. The size is gone. And then on the backs of that, we raised another fund in late 2021, which was 135 million fund. That fund is actually outpacing fund. Fund two is outpacing fund one.

2:29:17um and on the backs of that we have just raised fund three which is the 275 million dollar fund to invest across uh across the globe but also specifically the usa and india uh and the model scaling well you know like i'm curious so so i want to get into uh potentially some of the learnings uh the broader learnings for companies uh you talked a little bit about this sort of the unicorn factory, you know, companies come, they get, you know, two to five million dollars. They announce their fundraise, maybe they launch. And that's sort of like this, like, you know, they get then they're on the sort of treadmill, right.

2:29:55And it just speeds up and speeds up. And, you know, hopefully you don't get thrown off of it. At some point you can keep the pace up. But one of the things I've been talking about recently on the show is kind of the how that that timeline can actually end up hurting your business. If you pick an idea, you have a super high profile launch, and then everybody knows you as this company that does this one thing. But maybe in that process, you discover a totally different idea, or it makes sense to pivot. And I'm curious, seeing so many of these companies go from zero to one, and then I'm sure ultimately, oftentimes, pivot into other areas.

2:30:33What is the core advice that you're giving to founders that are joining at the earliest stages SPC, maybe pre-idea, or maybe they only have ideas of an idea to help them avoid that. We had the founder of Cluely on a couple weeks ago, and he's had two, maybe three, four, five super viral moments around what he's doing. And my advice to him was, don't be afraid to basically reinvent yourself just because you know in three months if it's not working as well as it should right and i've gone through this in in in the past myself which is you know going viral before you have product market fit is not always gift and a curse it's a gift and a curse right yeah i mean honestly i mean it's it's i think it's a well phrased question and i think in so far as the question also contains some of the answer right my take is that honestly uh the cheapest time the easiest time uh to kind of do pathfinding and to do pivots is in the earliest days.

2:31:39And in some ways, like, obviously, my point of view is that you shouldn't raise a ton of money, right? Like the first two, three, five million dollars should be easy to raise, right? Like that should be your easiest raise, right? In the sense of like, you have you have you're kind of converging on an idea that is making people excited. What you really want in the earliest days is to have a lightness of being in terms of like making sure that you can actually objectively examine the idea from all sides, right? Like if it's not working, put another way, here's something I often tell founders, your first$2 million of sales should be damn easy, right?

2:32:13Like I think that people often conflate that like, I'm going to go and do hand to hand combat to kind of go and get my first $2 million of sales. It's like, what are you talking about? Like if you have a great idea, that first two, five, it should be easy, right? People should be taking a product that is half baked because it's so resonant. So my take is that like wait around and kind of like keep on kind of like doing big pivots or small pivots until that idea comes into focus, right? Entrepreneurship, like any founder that you talk to that has gone on kind of a unicorn or a decagon journey, it is long.

2:32:45It is super painful, right? Like if you are going to sign up for a super long kind of like game, take the time in the beginning to make sure that it's actually like the right mountain, the right game to play. And I think that, I mean, if you're going to think about it, guys, it makes sense that a lot of trends, I think, at least in our industry, make sense to me when viewed from the lens of like, we are trying to push founders to start things as soon as possible, right? Like, you know, software kind of enables that, like, you know, super low cloud computing costs kind of like enable that. But I think the flip side is something what we have seen is that I actually would argue that over the last 10 years, founders have shied away from a problem that doesn't immediately come into focus, right?

2:33:26If you can't code like V1 in like a month or if it requires like physical atoms, if it requires kind of like talking to anybody that is not over the internet, people tend to shy away from it, right? And my take is that there are actually tons of super interesting kind of problems to tackle if you widen your aperture in the early days. And again, you know, whether you raise like a million dollars or$5 million, I would urge raising less, but ultimately it's kind of about having that mindset of being light in the beginning. because none of your early investors actually care that much if you pivot like five times because the alignment around like biggest, sorry, the biggest outcome is always, is just there.

2:34:03Yeah. How did you think about fund construction with the new fund? Just the nature of venture means that, you know, a handful of companies in the fund will end up, you know, being, you know, maybe an order of magnitude larger than the rest. And I imagine you've learned a lot of lessons from the first couple of funds around, you know, making sure that you're able to participate in multiple rounds and that kind of thing. Yeah, for sure. I mean, I'd say that the first thing that we often talk about is that fund size is an output, not an input variable, right? I think there's a lot of managers in our industry that basically raise a big fund and then come up with a strategy to deploy the fund.

2:34:46And for us, kind of the methodology always has been like fund size is an output of the number of founders that we can serve, the number of people we can have in our community. We strongly believe in that our community is best facilitated when things feel intimate. Right. So this is why, like, you know, none of our spaces in SF, New York and Bangalore are more than like 150 people. And then we kind of have a sense of like how many of these members can each of our kind of like investors support such that we can actually provide them with an amazing, frankly, white glove experience. Like I personally work closely with like 30, 40, 50 founders per year.

2:35:20And that's a fun part of the job, right? So a lot of it is just like, what is the maximum number of people we can support both in the community, but also in an investor basis. And then we kind of back our way into a fund size from that. Frankly, you know, I think that right now we are not constrained. The big thing that we are constrained by is simply our ability to support these founders, not from demand for the product, if you will. right? Like I think that just looking at the numbers in terms of how many people want to be part of SPC, I think we are humbled, I think, by the interest. It also kind of makes sense, guys, in the sense that I think a lot of, one of the really interesting trends for us is that how many second time founders join us, right?

2:36:00Or how many like essentially people who have been early employees at like a stripe or a scale join us. And I think it's because they see the, I think we're kind of spreading a philosophy, which is that if you want to play this repeated game of startups, right, and you want to start companies, like it's better to be surrounded in the early days by super high talent density. I think one of our goals at SPC has always been that startups are hard, but startups create a lot of value. Let us figure out a way to kind of like actually make them more net productive for everyone. So I think that the minus one philosophy is resonating.

2:36:37We obviously want to serve as many founders as we can ourselves. But I also hope that like other people start up Minus One things, you know, and we're starting to see a bunch of, I would say, folks who have similar philosophies, like Minus One, I think has entered the vernacular now, which makes me really proud. So yeah, one side is an output, I actually think we can serve a lot more people as we figure out ourselves how to scale. But more than that, you know, like Minus One is kind of a big thing. It's kind of a big philosophy that makes me proud to be able to share with the world. totally uh you co-founded bezel uh sorry not not bezel bevel bevel uh bezzles were part of the motivation for kind of talking about bevel but yes i did co-found bevel last year yeah uh i would love for you to talk about that and and how it's been um it makes a lot of sense i think one of the biggest complaints people have about different fitness trackers is uh uh the the data is not always consistent right you know your your whoop might tell you a different uh tell you you're walking more than your aura ring or or uh or whatnot and you know having a platform that can pull all that data into a single place and help you understand different trends makes a lot of sense um and uh you know just just the nature of um you know bundling and unbundling but talk Talk about maybe the genesis there and how it's been going.

2:38:02For sure. I think probably a bunch of us six years ago, when COVID first, the lockdowns and stuff started, decided to channel a lot of my pent up energy into going full beast mode on my health, basically analyzing everything, like sleep, fitness, nutrition, body metrics, everything. I started to maintain these super detailed spreadsheets. and these spreadsheets were basically, like I have all of this data collected on a daily basis going back six years. It's kind of stored in a combination of Excel, like Google Sheets and Airtable. And I think everything that you said, like, you know, I would collect data from three different sources, right?

2:38:40I would collect data from my Aura Ring. I also had an early Fitbit. And obviously when Apple Watch came out and some of the data would be like a little bit different and I would basically normalize it. I would also collect a bunch of qualitative data about my own kind of like I would say experience. So when I was talking to Ben and Gray, who are at SPC, you know, they were also essentially going through similar journeys. They've kind of been through a little bit of the ringer in terms of their first startup. And if you were talking about what we wanted out of essentially like a health app, a lot of what we were saying is that essentially, number one, all of these health devices at this point were kind of like offering you like a dashboard of your data, but nothing was really tying it together.

2:39:21I mean, Apple Health is fine, right? Like it's not a bad product, but it's a little busy. And it's kind of like very specific to that ecosystem. So our take was that how do we kind of create a step one, the best place to ingest all of your kind of health data? Because at this stage, it's not just your rings, your watches, it's also your eight sleep mattress. It's also like, you know, everything basically is kind of like creating this health data, which is awesome, right? It's beautiful, because I think it's indicating that consumers care about this. So our take was step one, how do we get all of this into a one place that essentially, is that an 8-Sleep?

2:39:57There we go. Amazing. Yeah, that's a great product, right? Like 8-Sleep. But 8-Sleep gives you a nightly sleep score, as does your Oura Ring, maybe if you wear your watch. So how do we make sense of all of this data into a clean, consistent place, right? And it was a simple proposition. It was one of those classic things. Let's just build what we want. And Ben and Gray are just world-class kind of builders and designers. So they just built something that was beautiful. It was easy to use and we put it out there and it's just been all kind of like crazy organic demand. You know, we're not diverging too many numbers, but you know, we are definitely kind of the, the number of users and kind of paid subs.

2:40:38It's just kind of blown us away. We've kind of been on a tear for the last four, you know, last like six months. um there's there's this i there's this idea that uh once you get to a certain obsession level in health the amount of money that you'll spend on an incremental one percent you know gain in your health is like you know you get to a point where you're you know i did this like nad treatment last year oh yeah but in hindsight was like i think a terrible use of funds but it was like it was like a series of i think it was like six grand over like multiple treatments and i was like i didn't feel anything at the end at the time i was like yeah if this is gonna make me performance yeah if i'm gonna feel like you know five percent more energized during the day it's totally worth it but um that's cool i'm curious uh last thing because i know we have a cutoff here and there's probably a founder you need to chat to uh chat with um what are you seeing uh today at a high level you guys have a unique insight into the the sort of trends and categories that will be probably hot in a year.

2:41:42And you're probably making those investments. Now, you know, I'm sure a lot of the obvious stuff, you know, agents, MPC, that kind of thing. But what's getting a lot of your attention? Probably two areas that I would highlight. And maybe this is, I think both of these are somewhat well understood. Now, the first one is the amount of, I would say, enthusiasm and excitement for stuff around robotics is very real. This is both kind of like building actual robotics, like hardware to kind of building robotics, kind of, I would say, middleware, kind of like think like, you know, end to end stacks for coding on robots, then obviously robotics foundation models.

2:42:23It's hard to say whether it will all translate into usable products over the next three or four years, but over a 10 year horizon, I think that the energy is just substantial, much more so than I've ever seen in my career. And the second one I'd point out is that a lot of the times the conversation around foundation models has really centered around essentially take what we have and throw more compute at it, throw more data at it. But it's surprising to me that a lot of people don't actually take a step back and realize there are lots of smart researchers out there who are building the next generation of algorithmic changes to these models.

2:42:58So there are lots of really interesting, both I would say variants, but also novel takes on, for instance, what would a pure RL-based kind of like model look like, right? If you had to ingest reinforcement learning from day one. So I'm seeing a lot of energy around building the next generation of foundation models. It's a little bit, I would say, still hazy, but it's very exciting because I think that I still think we're at the tip of essentially the innovation we're going to see on top of these core LLM capabilities. Yeah, it makes total sense. I mean, I'm trying to assume we're at the end of history and all the future algorithmic progress.

2:43:33It's so crazy, right? Like everybody assumes that like it's just going to pause and then we're going to scale it up. And I'm just like, no, no, no. There's a ton of like energy around core innovation around the algorithms. That's very interesting. Yeah. Makes a lot of sense. All right. Well, I know we've already had some of your founders on, but let's make sure to get more on. And thank you for coming on and telling the story. And congrats on the new fund. Amazing. Thank you guys. Appreciate it. Cheers. Have a good one. should we rip through some timeline get out of here let's do it started a little bit late it's timeline time hours it's timeline place sound effects i have been missing that sound effect it's so great one i mean last week that's not even the main one that's the different one i want the ashton hall no not that one the ashton hall the ashton you know the one i'm talking about this is the one this gets me so fired up i love this one anyway uh morgan housel friend of the show put a random thread boy in the truth zone.

2:44:30Aaron Richards writes, in 2020, Morgan Housel published his bestselling book, The Psychology of Money. It sold 4 million copies and changed the way we think about money. Now he's predicting the collapse of America. Here's everything you need to know. Beautiful photos from Diary of a CEO. And Morgan Housel comes in and says, I am 1000 % not predicting the collapse of America. Double kill. community note and the actual author of the book telling you that you're wrong um yeah absolutely wild uh try for step it up on x erin richards you're on notice uh the next slop thread you post better be factual what's uh morgan household's late uh the art of spending money uh is his next book i am so excited about it because it's very interesting yeah we gotta have them on regular That was such a fun conversation when we had him on.

2:45:23Yeah, absolutely brilliant thinker. That'll be great. Anyway, we want to take a second to tell you about Vanta. Automate compliance, manage risk, and prove trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program. Go sign up for Vanta. I've used them across multiple companies, and I am excited to be working with them now at TVPN. We got to get Waymo on Vanta. I'm sure that there's a lot of compliance with a business like that.

2:45:59I'm sure they're already on Vanta. That'd be fantastic. Yeah, we'll have to fact check that one. Next post is from Jane Wong. She says, this Waymo almost T-boned a cyclist blowing through a red light at an intersection in San Francisco. Who's in the wrong here? Why isn't the robo-taxing yielding to someone who always has the right of way anywhere and everywhere at all times? But what's interesting is that a lot of people were looking at this and being like, this is incredible performance by the Waymo. Like, it stopped. And the biker kind of came out of nowhere. But Christian Kyle is putting his, you know, bet, his dollars on the gambling table.

2:46:38I don't know what analogy I'm using here. But he says, prediction in 2040, it will be illegal for humans to drive cars. What do you think? I think that day is going to come. Illegal, though? That's going to be hard. I think it will be frowned upon. Frowned upon. Yeah. I mean, it is funny as a car guy. It's not illegal to ride horses. Yeah, true. But it's frowned upon to, it's one of those things, right? So it's technically, I think, legal on most roadways to just ride a bike, right? Maybe not on a freeway. It's frowned upon. But it's frowned upon if you're in like, you know, a 45. Like if you're like expressing your right to cycle in like a highway.

2:47:19In the middle of a freeway. People are like, what are you doing? Like a one lane highway and you're like riding in the middle. Yeah, it's kind of frowned upon. So I can see it being like that. I mean, I do think it will become at some point just so objectively clear that it is dangerous for humans to drive. that there could be plenty of pressure, at least in some areas. I think Waymo's very underrated. Horses also underrated. First off, let's go through the stats. One horsepower. Not bad. That's pretty good. And I was thinking about it. The most jacked horse, probably two horsepower. Yeah, yeah.

2:47:57Maybe even three horsepower. I was going to say, how do you rank? There was journalism was racing on Saturday. against uh who were they racing sovereignty sovereignty one sovereignty moggs journalism again um but uh but yeah i was thinking about this is is journalism really one horsepower is that the right way to think about it yeah or is journalism also getting up into the three or three or four range totally possible also henry ford famously said if i asked people they would have said a faster horse what's wrong with a faster horse if we've been spending the last if instead of the ford motor company it was the ford horse performance enhancing drug company we could have horses up in the 20 horsepower 200 horsepower easily who knows no cocktail gear here's my here's this should be our investment strategy for the day that they get uh humans get banned from driving cars on roads go and buy all these legacy racetracks that haven't really been as you You can go and do a track day all over America.

2:48:58It's popular in some circles. But I think if humans were banned from driving on roads, they're going to hit the track way more. It's going to become the new round of golf. There's actually some track in California that just got bought out by a new investment firm, and they're going to modernize it, build a hotel on it, and build a paddock so you can store your cars there, do all these different things. Was it Buttonwillow? I think it might be. That might be right. It was up for sale and it wasn't that expensive. You know about Thermal Club in - Loosely, but tell the audience. I mean, I don't think it's been an amazing business.

2:49:36Not yet. So far. It didn't work for them, but maybe it would work for us. But yeah, no, it's basically they built a track and then they built a lot of houses that are specifically designed for car enthusiasts. So they have transparent - So you drive in and out. Yeah, they have transparent flooring so you can look down and see. that's great yeah yeah i love it also hackathon project self-driving horse totally doable think about it horse you just need to put a compass gps you literally strap a phone to the horse and then in one tiny servo motor moves the reins to the left to the right you can steer to the horse and little little motors goes kick and the course goes well and all of the tough parts about like the horse yeah yeah yeah yeah yeah yeah the crop the riding crop you could easily automate that but the hardest part about you know waymo is like the fine motor like oh slight object detection you want to scrape you want to look out well horse isn't just going to run into a bicyclist horse is going to see that and you know stop immediately yeah there's an opportunity to do a horse in the loop you know the sort of interim stage where it's not fully autonomous but the horse the horse can take over you basically have an end-to-end neural network running in the horse's brain already it's probably like gpt3 level so you give it some credit could he could could could be frontier could be frontier horses were often on the benchmarks horses have been on the frontier they remain on the frontier frontier model their frontier models in the in the horses i think we're getting somewhere getting somewhere i really do think you could train your horse to just learn your commute and just say hey take me to work i'm going to take phone calls i mean people were doing that for thousands of years.

2:51:15It's so Lindy. Let's bring it back. Let's bring it back. I'm going to daily a horse. I'm going to daily a horse. One horsepower. One horsepower. Oh, it's so good. Anyway, uh, we should we do Sam lesson data is oil. We should just have him on the show at some point. Talk about it. Yeah. Let's, let's have him on the show to discuss it. He's yapping too much on here. I want him to just read it to me. I don't want to read your post. I want you to read it to me well you know what uh sam lesson loves ads ads he likes billboards he loves that billboard and to be honest lesson is going to love when people pivot from american dynamism back to ad optimization it's going to happen and he's going to be ready to fund fund them all yes uh but head over to ad quick out of home advertising made easy and measurable say goodbye to the headaches of out of home advertising only ad quick combines technology out-of-home expertise and data to enable efficient, seamless ad buying across the globe.

2:52:13Get on edquick.com. Just do it. Gary Tan had a funny early Palantir story. He said they were doing some of their first sales meetings for Palantir and team was all under 25 years old at the time. They were staying at the Mandarin Oriental. We said, hey, this is a startup. Why are we wasting money on this? Alex Karp said, the people you're selling to will ask where you are staying and we aren't selling motel 6 software we are selling mandarin oriental software that's a great line it's great apparently joe was still said he was responsible for this a lot of people are going to take this the wrong way and go and stay at the amman but um there's also you know probably other ways to accomplish accomplish this but we we're selling amon giri sports betting podcast um microtransaction riddled riddled mobile app games yes something like that mobile games uh i love this post from solana if we can't do trains we should at least do a big autonomous pod network on a special guard railed 150 mile an hour lane with cars the size of gorgeous sleeper carriages which link up in giant change with elegant bars and restaurants on long-haul drives across the country this is so doable and so beautiful i love it uh i've been big on the tear down the speed limits uh i i firmly believe this is much easier than building new high-speed rail is just take down the speed limit signs and just have an american autobahn and then put it it's incumbent on the individual to drive safely cars are getting way safer they have autopilot now and lane keep assist so if you're on a long drive and you can you can get a car that goes 150 miles an hour for like 50 50k right yeah like plenty of cars have like they go way up there yeah going super fast get like an 05 amg and you're good and you're just cruising and it will actually cut the time the travel time in half you can drive twice as fast you have to get better brakes though yeah they do but uh i think anytime i think beater amgs are where it's at these days anytime you see a car driving double the speed limit in traffic it's always a model three like bro i know the brakes aren't that good but but going to mammoth from la and e63 and like a s63 just bombing can't beat it 160 you get there twice as fast that's a drive and it doesn't require any that's a drive that people have been known to to get there and in you know 60 percent of the time that apple maps you know says i mean it takes it takes uh it takes a lot to build something new in america a lot of permits a lot of eminent domain a lot of regulations a lot of different consultants and legal battles but just having a bounty for hey take down all the speed limit signs it's now an Autobahn?

2:54:55Pretty easy. So good. Pretty easy. Here was the post you were referencing earlier. Wasteland Capital says, it's still amazing that Buffett's crowning achievement was simply buying Apple in 2016 when Apple was already the largest company in the world by market cap. Wow. And just adding and holding on to it. So good. Amazing. So Berkshire with Apple, 174%. The S &P did 168%. But without Apple, they would have been at 142 versus the S &P is 168. But again, people were saying like is it really fair to consider that because you know apple's in the s &p so the s &p would be lower as well but anyway still just like a good pick you know he didn't he didn't he wasn't too dogmatic about like oh i'm just a silver investor like i'm just a you know i mean for a long time he uh he was not anti-tech but he just didn't fully understand it and then at a certain point figured it out you're selling candy in hardware form i like this i like it candy crush device candy crush the c's candy of mobile devices yeah it's great uh this is funny this is a funny uh post for a few reasons it is by unemployed capital allocator and it's a screenshot uh unemployed capital allocator says from a friend a capable analyst the chasm has been crossed oh three is significantly better than i at my job in almost every aspect uh brutal but not surprised so your job is to just analyze a thousand times more companies yeah and then you'll be fine scale it up just do more queries than everyone else yeah i guess i don't know i mean this was interesting i i had this up earlier and it didn't get into the stack but i'll pull it up now is it really that much different than just being like yeah google is is like i mean there were people that were cells in individual spreadsheets calculating all day long excel is you know significantly better than, you know, somebody whose job was just to crunch numbers all day long.

2:56:54And we move forward. We did more work, found more capital to allocate, more things to analyze. Yeah. Yeah. It's funny being like Excel is so much better at multiplication. I kept trying to put this to the, to the AI people that would say like, yeah, there's going to be serious unemployment because of AI. Like, okay, let's actually quantize this. Let's say over under American unemployment by 2020, 30 is you think it'd be over or under 10%. Like we've been at above 10 % before. It's not that crazy to do that high. China's at like 20 %? Yeah, but America's always been routinely at like three and four.

2:57:25And so the question of, you know, will we actually see unemployment? Still an open question, in my opinion. Lots of people talking about, oh, I'm going to stop hiring, but we're not really seeing it in the data. Yeah, China still has urban youth unemployment at 16.5%. Who knows how accurate that is? pull this post up michael i thought it was relevant to the last one this is from the ceo of fiverr okay yeah you know you have to imagine he knew this was going to leak i think anytime a ceo sends a company-wide email that's dramatic they're probably expecting it to leak he says hey team i've always believed in radical candor and despise those who sugarcoat reality to avoid stating the unpleasant truth the very basis for radical candor is care you care enough about your friends and colleagues to tell them the truth because you want them to be able to understand it grow and succeed so here's the unpleasant truth ai is coming for your job heck it's coming for my job too this is a wake-up call it does not matter if you are a programmer designer product manager data scientist lawyer customer support rep salesperson or a finance person ai is coming for you didn't didn't mention podcasts you must understand about people that work at five No, he's talking to his employees.

2:58:40The corporate. The Fiverr's. No, he's talking to corporate at Fiverr. You must understand that what was once considered easy tasks will not... This is the part that's interesting. What was once considered easy tasks will no longer exist. What was considered hard tasks will be the new easy. And what was considered impossible tasks will be the new hard. If you do not become an exceptional talent at what you do, a master, you will face the need for career change in a matter of months. I'm not trying to scare you. I'm not talking about your job at Fiverr. I'm talking about your ability to stay in your profession in the industry.

2:59:10Everyone's been saying this. We've seen like three CEOs at this point send these emails. The part that's interesting is... AI first organization. The part that's interesting here is digging into easy tasks will no longer exist. So if you're a marketing manager and the CMO is like, hey, we should put up a blog post about this regulation. That can now be done instantly. Five minutes. Yeah. instantly it's not sort of a painful research and writing process it's just sort of done for you hard tasks will be the new easy in that hey why don't you generate 20 new ads right and then impossible tasks i think are these more agentic sort of mile you know complex uh sort of milestone based tasks um but overall it's interesting um i'm gonna pull up the fiverr Fiverr is one of those companies that people identify as a company in trouble, just given that a lot of their work is lower skilled.

3:00:12Yeah. Sort of a lot of it was like, oh, illustration, little cartoon or little blog post and that type of stuff seems very - Record a sound bite. Record a size gong sound bite. Yeah. Size gong. Hilariously human in the loop for that one. I think that's Ben's voice, right? Yeah, yeah. Ben is our Fiverr. That's Ben. And he's like, no, no, no, no. It's not even a Fiverr job. It's not an AI job. It's not a Fiverr job. It's a full-time employee job. Yeah, I know. But Ben's like, Ben's like, AI, you're not taking my job. I'm making every soundbite. We tried to use AI for it. And his voice was way better.

3:00:45Still. Ben's built different. He built different, yeah. Advice I always give to founders, be present. Building a startup is very hard. Sometimes you just want to hide. But it's also an incredible ride. Working with and meeting great people, constant growth, endless creativity, and working with this new technology that is changing the universe. Life goes by so quickly. Don't run away from it. We only get to do this once. Take pictures. Take pictures. Look around. Yeah. Once if we're lucky, twice if we're good. Interesting. Be present. I don't know what the, what is the opposite of that? Like, how are you?

3:01:22I guess sometimes you want, you just want to hide.

3:01:55What does that mean? this is one of those things founders you know go through these periods of excitement and euphoria and then pain and that pain is usually like that the classic is you know you have an idea you raise some money you launch it's euphoric yeah and then and then you realize oh yeah it you know the reward for hard work is more hard work yeah and even if you're you know even if you're you know jensen wong yeah the the job is only getting harder speaking of which she met jensen asked what brand his jacket is told me faragamo there we go i'm not surprised uh but you know what's equally exciting and what was the word euphoric euphoric buying a watch on bezel oh i was i was gonna say we missed bezel uh go to get bezel.com buy a watch anyway uh do it uh we we can move on because we can also talk about numeral, which is also euphoric sales tax on autopilot.

3:02:58I mean, it really will allow you to have more time to be present as a founder. Yeah. If you're, if you're getting sucked into sales tax compliance, you're not going to be present growing. Yeah. Experiencing you for spending less than five minutes per month on sales tax compliance. I mean, that's, that's plenty of time hours back that you can be present and just in the moment. Exactly. Full Rick Rubin mode. just vibing vibing vibe entrepreneurship uh what what else is there some uh some deep analysis of grok 3 do you see this it's like uh they're doing deep deeper searching grok 3 and one of the one of the steps that it takes is searching posts by elon musk the information i am looking for just seeing like hey has elon said anything about this let's throw that in the results i mean he does post a lot i mean whatever he's posing is probably relevant it's a good way to find the model on your CEO's beliefs.

3:03:56Not even hiding it. Very silly. Anyway, what else should we talk about? I thought this post from Kari was quoting Didi. Founder of Linear. Didi says every single one of these companies was started by people from one part of the world and it's Klarna, Cursor, Databricks, Zendesk, Spotify, Linear, public.com also oh yeah that's right um scandinavia unity the nordics built different very interesting and of course linear you think it's the weather because it's kind of similar government as the southern states you know italy and and spain and greece but once you're on the french riviera no time to grind you're chilling that's tough you're chilling if you're in the hour days code that's the that's why sf just stays on top it's not because open ai you know bad next trillion dollar company it's it's so yeah it's at times like the fog makes it so hard to want to be outdoors that you just want to create shareholder value yeah people were predicting that because of global warming it would lead to the downfall of san francisco because it would get warmer balminger more people would just be hanging out in delores park all day and portland would become the imagine if ai was being built in portland primarily the the same the ai safety people just oh are you talking about the artificial intelligence company of portland huge alpha there safest agi yeah on earth um this post uh praying for exits a friend of the show We should meet him.

3:05:44We should meet him. We should have him on the show sometime. Actually, honestly, I feel like we can go out on enough of a limb and say it's possible Praying for Exits has been on the show. It's entirely possible. We've had so many guests, it'd still be very hard to nail down. It's entirely possible. This email from Steve Jobs to Bruce Chisholm, who was the CEO of Adobe at the time. Bruce, Adobe is recruiting from Apple. they have hired one person already and are calling lots more i have a standing policy with our recruiters that we don't recruit from adobe it seems you have a different policy one of us must change our policy let me know who steve that's so so hard 64 000 likes prank for exits let's get gigabanger gigabanger no so apparently there was a whole lawsuit surrounding this around how yeah it's illegal.

3:06:38It's like anti-competitive. It's totally anti-competitive. Yeah, you're not supposed to do that. And yeah, it's good for employees, I guess, if you try to, if you can coach and say, hey, you're making, you know, a million dollars at Apple. How would you like to make$2 million? At Adobe, and then it's a bidding process. Yeah. But we have this policy with other podcasts. We do. Yeah. so sue us or don't um alex tap has a story about universal you told me about this i didn't understand this to break it down so um universal anti-venom may grow out of man who let snakes bite him 200 times i hate snakes i'm indiana you had a you had a you had a truly hate snakes you had a snake interaction uh recently that we won't go into gross um scientists identified antibodies that neutralize the poison in whole or in part from the bites of cobras, mambas, and other deadly species.

3:07:38He's 57. Over 18 years, he injected himself with more than 650 carefully calibrated escalating doses of venom. Okay. So he didn't actually let them. Wait, no. He also allowed the snakes mostly one at a time, but sometimes two as in video to sink their sharp fangs into him 200 times. Wow. It's a, yeah, I built the tolerance. This is poison resist. yeah this is what this is what did you in this weekend yeah everyone yeah you just you too much of a thoroughbred you're on the thoroughbred diet if you're on the junkyard dog diet and nothing could i have poison for everything microplastics unaffected so i really i really it really you're you're john's had this running joke on the show for those that haven't heard that like a single inorganic blueberry uh would would cause you to have be sick and you know throw up and and all this stuff and then over this weekend i got food poisoning no one else no one else did yeah except sarah who's who's also also on the thoroughbred diet on the thoroughbred diet so honestly there's something there's something you need to you need to build your poison resistance man yeah yesterday was so brutal and like we were eating like lovely food but there's probably something there that you weren't used to got me ridiculous gnarly this bit of daredevilry one name for it may now help solve a global dire health problem more than 600 species of venomous snakes roam the earth biting as many 2.7 million people killing about 120 000 people and maiming 400 000 others the numbers thought to be vast underestimates brutal yeah so anyways this guy's blood scientists have discovered antibodies that are capable of neutralizing the venom of multiple snake species So anyways, major sacrifice, still kicking.

3:09:21And he says, I'm really proud that I can do something in life for humanity to make a difference for people that are 8000 miles away that I'm never going to meet, never going to talk to, never going to see probably. And I hope he's monetizing this. That's all he went. He really went through the ringer. But it sounds like he enjoyed it. A bit of a masochist. Well, let's go on to Harvard. Their tax exempt status is to be revoked, says Trump. and Sheil, a good friend of the show says, wild impact on our world, hearing from multiple funds currently raising that universities have paused allocations.

3:09:53I had some ideas for how Harvard could get back in the good graces of the Trump administration. Do you have any takes? I think step one is Harvard needs to prove that they're on the side of Trump. They need to add division one bodybuilding, absolutely. You know, they're known for, they have a football team, they have crew, everyone knows, Oh, the Harvard crew team, what's it called? Something on the Charles, head of the Charles. It's really fancy. Crew race. But if they get into bodybuilding, I think that would be a big step forward. They should also get into pro wrestling at the collegiate level.

3:10:30You've never seen NCAA pro wrestling. But Trump has been in many WrestleManias. And if you could go full scholarship to Harvard as a wrestler, junior wrestling, not, not the typical wrestling, but the pro wrestling specifically. Um, I think that'd be, I think that'd be a big step up. Yeah. Anything else that they could do? I think if they go for profit, it might actually wind up. Maybe they don't allocate. Maybe they become, build a high frequency trading option, like start prop trading their own endowment. Why are they outsourcing? I'm sure they're pretty close to that already. they should just start leading series a's yeah just directly just go direct right yeah yeah i mean this this is interesting one um bucky uh shared something recently about how one of the dynamics here is in many ways this will negatively impact net new funds or funds that are getting off the ground because harvard would have already committed for the the major platforms the funds they're in it with for the long haul they're they're making commitments multiple funds out and so this is primarily i i doubt they're reneging on existing commitments so uh don't worry lightspeed a16z general catalyst will will be okay you don't have to worry we're gonna make it through this mark german had some news apple is teaming up with anthropic on a rolling it out internally to employees it could come to third-party developers in the future details and what this means um interesting makes a ton of sense uh i don't know how familiar you are with ios development but it most of it happens within xcode which is not as it's not open source so it's not forkable like vs code and so it like you can't really i think most ios developers if they're really serious they have to use xcode or they get good at xcode and so uh to just not have a cursor competitor or a vibe coding option in that software is like really antiquated it's always been a harder harder ide to use but uh it makes a ton of sense that they would team up with someone for this anthropic probably a good pick so we'll see how it makes a lot of sense uh and there was other news claude is known as one of the best when it comes to programming daria one says nick apple is partnering with anthropic uh very interesting i wonder what the structure of that deal will be because most of like you don't think of xcode as having like a consumption based pricing it's something that just comes pre-installed with a mac look apple's golden goose the app store is getting cooked right now and uh i would not uh you know i i can imagine that apple will find to make uh and anthropic will find a way to make uh plenty of money i mean in the similar vibe coding world the ceo of windsurf uh went on the way if you think about it though like i'm sure that i don't believe that apple anthropic vibe coding you know xcode platform can make up for that what what may end up being a massive drop in app store revenue but it it is pretty funny to think about you know it's like okay like hey developers you're not going to give us our you know uh 30 cut oh we're going to handicap we're going to charge you you know you can use regular xcode but if you want to use ai to code uh it's going to cost you a hundred a hundred thousand dollars a month that's great uh well windsurf ceo uh went on the spotted spotted in two polos sam uh enjoyed the fashion i thought that was a fun little uh easter egg in his podcast i mean i don't know i don't know any any details but i have to imagine that's the kind of move you make when uh you're very close to closing or or i think so or a done deal that doesn't it doesn't seem like a yolo move you know if if the deal were to not go through i don't think the double polo is going to save it right we're talking about billions although he was very muted i don't know if we should read into the shades and hues of the double polo choice but it was nowhere near as as vibrant as sam altman's original double polo maybe maybe it's more like a jobs not finished double polo yeah he's like i'm i'm open to the really bright uh colorways but we're gonna have to let's get to a billion arr first yeah yeah uh we have some personnel news will brown uh he came on the show what last week the week before told us that everything was great at morgan stanley then he completely rug pulled them and dipped immediately now uh will it will it actually known he was gonna take off for a while um and we gotta have him back on when he joins the new company yeah which should be he's been just teasing it out i don't think he's announced So yeah, let me double check.

3:15:11So it's time for a new adventure. The ML research team there has been a wonderful home for the past two years. I've learned more than I ever could have imagined about LLM's markets, responsibility, and how things work in the real world. I mean, he's a very, very interesting poster and always brought a very interesting, unique perspective because he wasn't fully aligned with one of the labs and kind of had more 30 ,000 foot view at Morgan Stanley. And I really enjoyed his takes and excited to continue following him on his career. Total narrative violation that the finance guy wasn't extremely conflicted, but it was fun while it lasted, basically.

3:15:46Anyway, I think that's a good place to end. Thank you for watching. This is a great show. We really enjoyed it. Wait, I got one last post because it is. I'm going to throw it in here. Michael, if you can pull it up. I think it's pretty funny. What is this post? uh vcs trying to figure out who arthur rock they are trying to figure out who he is i invited him on the show anonymously thought he might uh do it we're not sure exactly when he will be able to but i'd love to get him on the show anonymously i would not dox him i respect his so from my friend anish um yeah the funny thing here is he kind of missed uh so arthur rock yeah sort of like misreported oh he did replets revenue okay he he's called them at 40 million of ARR raising it two and a half to three billion yeah which felt expensive yep but then he had to show a follow-up uh graph showing that they added roughly 30 million ARR in a month oh okay okay that's pretty good so he had he he basically yeah I mean that's probably those leaks is that a lot of times they're they're super out of date uh yeah because you're getting you're getting docs that like, oh yeah, they did send me a deck last year.

3:17:01I passed it to somebody, then that day passes to somebody. And then pretty soon it's like eight, 10 months later when that leak is happening. And founders always get frustrated with that because they don't want to share any financials, let alone old financials. And so there's just some horse trading, but. What is this image? Citizens? I don't get the reference. Do you? I don't get the reference either, but you should because you're a big movie guy. Yeah, but not this time. I don't know. Yeah, but it is interesting. uh i've dm'd with uh mr arthur and uh i we we also talked to him about him coming on the show it's just so hard because there's so much incentive for people to try to triangulate sure who he actually is and eventually some schizo is going to do it but for now it's it's very fun maybe there should be a polymarket for it who is arthur rock yes you can list out a couple top candidates yes that'd be fun yes um i have a fun polymarket it's interesting I'm tracking the trade war.

3:17:59And it's at a 19 % chance that there's a US-China trade deal before June. And I said, I honestly believe I could hammer out a trade deal in a weekend if I was in charge. What do you think, Dory? You think we can pull it together? You're good at finding win-wins. Exactly. And that's kind of really what it takes. Step one, Xi Jinping, let's get a lift in. Let's get a lift. See you at six. See you at six. Yeah. Let's do it. Bring some blood. I mean, that's really the chance. Let's do some deadlifts. the right strategy. The other one that's interesting. What else are you tracking? I don't know when, when did this, screenshots, ever, ever since the double polo, the chance of will open AI acquire windsurf before August has just been steadily going up to the market.

3:18:44Oh, okay. The market reacting very positively to the double polo to it. It does feel like if the deal was falling apart, you would be like, I'm not in a real like joking mood. Right. So I feel like the read on the double polo is probably positive. 68 percent but again august like the question that like the date is so important there because that could slip because a lot of people you know a lot of the open ai employees are very are very wealthy now and so they're probably getting ready to go on summer vacation probably usually starts like mid-may and they don't come back until what august september october sometimes a lot of venture capitalists will be out for four or five months it's actually gonna be a big challenge for us at tbpn uh because most of our best yappers are going to be at the amalfi coast for yes five six we might have to we might have to set up uh you know a remote studio in the south of france yeah just to make sure that we have some coverage there a dedicated helicopter to sort of take people between the boats to yep um or or potentially a water-based studio studio would be good a boat would be very helpful.

3:19:48Well, it is fantastic to be back in the studio. It's great. John. And it's going to be a big week for technology. It will be. Anyway, thanks for watching. Cheers. We'll talk to you soon. Bye.