Warner Bros. Discovery Split, Defense Tech Update | David Senra, Katie Haun, Justine Moore, Anish Agarwal, John Lee, Connor Zwick, Trey Holterman, James Cadwallader, Jordan Black, Ayush Sharma

26:36The contract promises Zaslav a target of 15.5 million in equity awards the first year, and seven and a half million annually after that. The amount could rise or fall with performance. He's gonna invest, and they kind of go into the, this is like an incredible amount of detail, but I guess they had to share this with the board, and so it's in the journal now. I'm kind of interested in like how this actually plays out. But anyway, I don't know, we could do a little bit of backstory on Warner Brothers Discovery to kind of set things up to take us up to speed. I mean, it's a really, really old company.

27:12Literally started by brothers. Like Harry, Albert, Sam, Jack Warner began screening motion pictures in mining towns across Ohio and Pennsylvania in 1903. Wow. You don't see many brothers companies anymore. We've completely lost the user last name as the name of the company. Yeah. Meme, that's completely gone. I do think Chris Amidon is bringing this back. Oh, he's doing it? Amidon Heavy Industries. Oh, there you go. That's good. I like that. So that's a good start. I do think that could be the next meta because it allows you to quickly, you know, it attaches some meaning. As an investor, it's like I want to invest in the company that the founder attaches their name to.

28:01I'm putting it all on the line. I'm not just going to like dip on this company because then what I'm interested in. Oh yeah, that company named after me, you know, failed. Yeah, exactly. It's putting it all online. Yeah, it's good. I think it could become a meme. Just like the browser company of San Francisco or of New York and the compute company of San Francisco and the American Manufacturing Company of America. Like there's a whole bunch of those. And we're maybe reaching the end of that meta and a new meta shall emerge. That meta is over. You think so? Do not name yourself the blank. The Media Company of Hollywood.

28:33The Media Company of Hollywood, although you did throw that out at one point as a good name for a C Corp. It'd be disrespectful to the folks who are actually using that name. So in 1923, not far from here in Hollywood, California, they incorporated Warner Brothers Pictures in 1923. So they were grinding for 20 years just showing motion pictures in mining towns. just showing up to some mining town in Ohio or Pennsylvania and saying, you guys want to see a movie? You guys like flicks? Yeah, just like not even incorporated really as like a proper company. 1927, they released the Jazz Singer, popularizes the synchronized sound talkies.

29:14This was the generative AI, the VO3 moment of the day when you could hear sound synchronized with the movie. And this propelled them to major player status. And then you jump forward, 40 years, 1967, Jack Warner sells his remaining shares, Seven Arts by the studio, and the firm is briefly renamed Warner Brothers Seven Arts. In the next three years, parking and services conglomerate, Kindley National acquires Warner Brothers. Just like changed hands a bunch. The Discovery Channel launches in 1985. In 1990, there's a$14 billion merger of Time Incorporated with Warner. This creates Time Warner. and we're going to get to Time Warner in 1996, acquires Turner Broadcasting Systems, Ted Turner's company.

30:03That's CNN, TNT, and Cartoon Network for$7.5 billion. And so now it has a cable portfolio. And then in the dot-com boom, you got to get in on the internet action. And of course, you get to America Online announces it closed$165 billion. One of the best names of all time. It really is a great name, America Online. Yeah. It's fantastic. And I think that the IP is kind of floating around. It's like the Enron IP. You can just launch a corner. AOL.com still exists, but does it really exist? Yeah. So, I mean, I think this was the biggest merger of all time. If I go to AOL.com, I get a ramp ad. Oh, yeah?

30:45So that's cool. Well, time is money. Save both. Save both. Easy to use corporate cards, bill payments, accounting, and a whole lot more all in one place. Go to ramp.com. the official corporate card of the golden retriever. Exactly. So AOL announces a$165 billion merger with Time Warner, forming AOL Time Warner, later judged one of the least successful mega deals in U.S. history. Over the next 10 years, the early 2000s, AOL has dropped from the corporate name. Time Warner ultimately spins AOL off as a standalone company. In 2018, Discovery Communication closes its$14.6 billion purchase of Scripps Network Interactive for HGTV and Food Network, rebrands Discovery Inc.

31:29So they have like a package of cable assets there. Warner Brothers, so in 2018, AT &T completes its$85 billion takeover of Time Warner and renames its division Warner Media. And so Comcast has Universal and AT &T has Time Warner and kind of like the pipes of distribution are also owning the networks of distribution, which also own the shows, which own the content. And this is the nature of the TV media era, basically pre-internet. We haven't seen this with the social networks that much. We've seen like a couple big deals from like Spotify, you know, doing like one-offs. but there aren't as many like, okay, the social network bought like a creator organization that's operating on top of it.

32:23It just doesn't really happen. But maybe in the future, who knows? In 2020, Warner Media debuts direct-to-consumer streaming service HBO Max in the United States, and HBO has a fascinating history too. Disney at one point bought Maker Studios. Do you remember that? For almost$700 million. I wonder if they kept pumping stuff because it feels like the core Disney IP portfolio. Maker at one point had tens of thousands of creators. And I don't know if - It was a true network. Were they thinking of it? I wonder if they were thinking about it like the new - What's that farm team that Disney has where Justin Timberlake came up from and Britney Spears was part of it?

33:07It was like Mouseketeers. Are you familiar with this? No, I don't even know. There was some sort of like child actor farm team that Disney had for a while. They would put different child actors on for like little bits to kind of like audition and they'd get some screen time, but it wouldn't be like they're starring in their own show. And if they did well, they would wind up getting music deals and movie deals and kind of rolling from there. So I could imagine them thinking about that as being like an arm into the next generation of talent, but yeah unclear so make a maker maker maker Studios was absorbed by Disney digital network in 2017 this was a couple years after the acquisition and it effectively is no no longer operating so not be interesting to talk to them and get the post-mortem see what they're up to now so yeah HBO max AT &T agrees to spin off or intermediate one it's that these assets change hands so much But they merge it with Discovery in a$43 billion reverse Morris Trust transaction.

34:10Discovery CEO David Zaslav is tapped to run the combined entity. This is in 2021. Deal closes. Warner Brothers Discovery, or everyone calls it WBD, begins trading on NASDAQ under the ticker WBD. They consolidate HBO Max and Discovery in 2023 into a single streaming platform branded Max. And then responding to brand recognition concerns in 2025. this is May 14th, Warner Brothers Discovery announces Max will revert to the HBO Max name in summer of 2025. And that was like, everyone was saying it's a massive L to what dropped the HBO brand in because they've spent decades building HBO home box office like The Sopranos, Sex and the City.

34:53It used to mean something. It still means something. It meant, it meant, it meant movie quality television. And you turn it on and you're gonna get movie quality content the entire time. And they built that, it was such a premium brand. And then they just were like, yeah, we're not going to use it anymore. It was a mess. I mean, there is the counterfactual, which is like they wanted to put Discovery assets on an app. And so if they put that on HBO and all of a sudden you're going to HBO and seeing like home and garden content or I don't know exactly what's on Discovery these days. But Food Network, you might be like, ah, this doesn't feel like HBO.

35:25It's like diluting the HBO brand. But still, it was a little bit of a mess. And so facing debt and strategic pressures, Warner Brothers Discovery unveils a plan to split the two publicly traded companies into two publicly traded companies by mid-2026. Streaming and studios will be headed by Zaslav and global networks will be headed by CFO Gunnar Weidenfelds. And so this was the big news last week, June 9th or the week before. They're going to split into two different companies. there will be global networks which will be home to CNN TNT, TBS and Warner's dozens of cable channels as well as international holdings global networks will hold 20 % stake in the second entity which Warner is referring to as streaming and studios which they're going to give a different name to and it plans to use earnings from that stake to pay off debt and so it's a little bit of kairatsu happening but they are drifting apart I mean, it'll be interesting to see how these two entities trade once they're independent, right?

36:31There could be more of a growth story around HBO Max, you know, if they continue to want to compete with Apple and Netflix and many other players, Prime, et cetera. The cable division will, you know, it's hard to see what the long-term growth story there, but I'm sure they'll continue to find a way to make money. I mean, the weird thing about this is that, like, the Wall Street Journal has this little infographic about what's in global networks and what's in streaming studios. And in global networks, it's Bleacher Report, cable channels, CNN's planned streaming service. That's, I believe, CNN.

37:09Oh, yeah, they're not calling it. Is that ESPN where their pro streaming service is just called ESPN? What is CNN going to do? Are they going to do CNN Plus? This is the chart, Jordy. So, global networks has Discovery Plus, which I believe is a streaming service. And then streaming in studios has HBO. In addition to HBO Max, I believe HBO is just a channel because they're still selling HBO to cable subscribers as a premium channel. And so even though they are like separating these things out based on whether or not it's streaming or a cable network, it's really more of like a separation around the brands and the IP.

37:46And what I'm seeing is that CNN and Discovery are more like news, reality TV, more ephemeral, less durable franchises, less long lived IP. And over in streaming services, I'm seeing DC, you have Superman, Batman, HBO. There are real assets, Westworld and Sopranos and Game of Thrones, right? Like Game of Thrones could become its own whole world and they do more spinoffs and more movies and stuff. And so it feels more like they divided it along IP lines than really along like technology and distribution lines. but I don't know. Yeah. We'll see. We'll see. We are empowering these iconic brands with the sharper focus and strategic flexibility.

38:29They need to compete most effectively in today's evolving media landscape, Zaslav said in a statement. Riveting. Zaslav is under increasing pressure to boost the company's sagging stock price, which before Monday had dropped about 59 % since the company was created from the merger of AT &T's Warner Media and Discovery Communications. Shares closed down 3 % Monday. S &P Global Ratings, friend of the show, downgraded Warner's debt to junk status earlier this month. It's really such a dig that they just have, you know, it's kind of like how if you're in school, you know, it goes like A, B, C, D, and then they skip E and just do F.

39:07F. Right? It's like they needed to give you that extra, like, you did really bad. And so they could just do like AAA debt, AA debt, A, B, C, D, E, F, G, H, I. They could have it be much more random or just linear. Instead, it's like you go from AAA. Sounds amazing. Sounds really safe. I'm not going to lose my money in AAA. And then junk sounds extremely risky to me. Junk. Anyway, they're going into his pay package again. A significant portion of Warner's roughly$34 billion of debt will live on the balance sheet of global networks, which currently generates more revenue and has stronger cash flow than streaming studios.

39:48So maybe this is more of like a CFO play, figuring out the finances, kind of like the reverse version of what X and XAI did. Warner said it secured a$17.5 bridge loan,$17.5 billion bridge loan from JP Morgan to buy back a chunk of its debt. Yeah, this is the big leagues. You don't go to that VC for, oh, I need a$2 million bridge loan to get me to Series A. You go to JP Morgan and ask for 18 bill. Yeah, it is interesting. you know people love to poke fun over the hbo max max now back to hbo max over the last few years but if you actually look at the full corporate history of these assets it's always been constantly renaming changing things around etc so in many ways it's just a continuation of decades of rebrands and restructuring and mergers and reverse mergers so it's lots of lots of fodder for the journal maybe that's what we're here for uh my my key issue is getting rehearsal uh renewed for another eight seasons for sure 10 seasons yeah it's so good i don't know how you top uh flying a commercial aircraft he has been like changing the direction of that maybe oh oh here here's how it goes full circle.

41:02So Nathan Fielder becomes the CEO of HBO Max. Or the CFO. Yeah. He gets a CPI or CFA. And he actually convinces management and gets sort of a critical mass of shareholders aligned to you know, become just to sort of sell off all the legacy IP and just focus on him. Really just become a personality-led media company that's just centered around Nathan Fielder. And maybe they could go into consulting. You know, you could see, you know, other media companies like Netflix coming to Nathan Fielder saying, how do we, you know, we already have subscribers in every household in America. How do we grow?

41:50and I imagine he'd have some wild ideas around how to catalyze growth. Yeah, I like that he's been able to basically be incredibly impactful at a global scale as a bit. Basically, he's like, wouldn't it be funny if we fixed serious problems with the FAA? And then he goes and kind of makes it funny, but mostly he's just actually doing investigative journalism and like a documentary about aircraft safety. And yes, there's like a layer of comedy over it, but mostly it's just like impactful work and insightful analysis. And yes, I would love to see him do that at Warner Brothers Discovery. Come in and, you know, as a bit, just make it a high-performing growth stock.

42:39Give it a growth story. Yeah, I mean, he could potentially double... Interface with investors. He could potentially double HBO Max's revenue. If he used... You remember when he did this gas rebate? yes yes it was a dollar 75 gas but you had to like take the rebate up yeah you know a mountain yeah so he could do something like that with hbo max which is like you know you can actually we'll give you a you have to sign up for for 50 a month but once you've been a member for a few months if you hike up mount uh everest and you actually put you know this rebate in in the box we'll offer you a free subscription yeah yeah yeah and so there could be some um a lot of different a lot of different strategies I could see him rolling out.

43:17I'd be more interested in his investor relations strategy as CEO. I want to see him like, as a joke, go to Sun Valley. As a joke, go on Squawk Box regularly. As a joke, tell a really convincing story during earnings that excites retail. Turn it into a meme stock as a joke. Yeah, he could do something like he could live stream and day trade with the company balance sheet as a way to kind of just drive retail engagement yes yes yes i i think you got to put him in the boardroom at this point put him in the boardroom for sure he deserves a board seat after the rehearsal we should buy uh since apparently after the whole tesla pay uh ceo uh compensation saga if you own like seven shares of a company you get to you could you could sue so it's possible you know we could buy some shares of warner brothers and start you know uh or sorry hbo um max and start actually lobbying to get uh to get Nathan in the boardroom.

44:14I've been saying this for our buddies who wind up selling companies to public companies. And we always tell them our advice for anyone who does some sort of like acquire, like sells their company to a bigger company. Like your job is not to rest invest. Your job is to become the CEO, put the company back in founder mode. We're half joking, but oftentimes the company that's acquiring you is acquiring you because they're not in founder mode. and you are more agentic and more aggressive and more creative and so you should actually try and get into the boardroom. You should actually try Regardless of what the CEO that bought your company actually wants.

44:51Exactly. It's very likely you know better than they do. Yeah, and I think we as friends should potentially buy some shares in the acquiring company, fire up a shareholder lawsuit and say, hey, put our friend who you just acquired for a couple mil in the boardroom. You got an MVP that's basically benched right now. Exactly. Because they're not in the boardroom. That's the perfect metaphor. That's the perfect metaphor. Well, speaking of MVPs, Ben Thompson, MVP of Stratechery, has a breakdown on his reaction to the news. He says he feels compelled to cover this because as much as he likes celebrating when he gets things right, he also needs to own his L's.

45:32And I'm taking a big one here. He says, I was very optimistic about the idea of combining Warner Brothers and Discovery. And this is what I love about Ben. he's like he really holds himself accountable he gets a lot of things incredibly right i mean nvidia and meta when they were down he was uh laying out really really detailed bull cases but he does it in a way that's not he doesn't issue like a buy rating you know he just walks through the strategy but he still holds himself accountable even though he's like like uh you know he's kind of like the opposite of kramer like kramer's like riffing offering like buy and sell ratings like all the time and then like constantly not afraid to change his mind yeah exactly because he's just going, going, going on the daily basis.

46:10Ben's obviously much more detailed in his analysis, but then also revisits what he's said before. So back when Warner Brothers and Discovery were in the process of that merger, Ben Thompson said there would be increasing bargaining power with MVPD providers. I think that's Netflix. I don't even know. Do you know what MVPD stands for? This is like industry jargon. A streaming package that appealed to the entire household, with a combination of prestige content and top-notch filler. MVPD is multi-channel video programming distributor, which is traditional TV providers like cable, satellite, fiber optic, et cetera.

46:50Okay, so if they go to Comcast and say, hey, in the bundle that you're offering to Comcast subscribers, there's usually like the base tier, the premium tier, and then like every channel possible in like sports package. they would have leverage to say, we want you to push HBO harder and get the upsell for that and give us more of that because otherwise you don't get, you know, discovery reality TV shows or something like that, theoretically. And so, yeah, that's what he's saying is that the streaming package could appeal to the entire household because you get the prestige content, Game of Thrones on the weekends, but then you also get filler content, which he calls, you know, his affectionate term for Discovery-style reality shows.

47:37And so I don't actually know what the top Discovery reality shows are because there's so many different ones. And I know Bravo, I believe, is owned by NBC, and they have a whole bunch of reality shows. I'd love to know what Discovery is working with, but there's clearly stuff on HGTV and other Discovery channels. I imagine they do – doesn't Discovery do like Shark Week? Isn't that the big one? I imagine that's a Discovery thing. I don't know. They have so many. Yeah, they have Deadliest Catch, Mythbusters. Mythbusters, that's classic. Alaskan Bush people. I haven't heard about that one. Dirty Jobs.

48:09Dirty Jobs might grow. Okay. Yeah, so that kind of content is something that you'd be putting on the background, like a laundry TV. Naked and Afraid. Never heard of that? Not interested. That's where, no, no, no. It's not as bad as it sounds. Contestants are dropped into remote wilderness locations with no clothes, food, and water. And must survive for 21 days. This would be great if we could get venture capitalists to do it. I think they could, you know, it's a high risk, you know, move for them to say, I'm going to take my August instead of going to Europe. I'm going to be dropped into the Alaskan wilderness and forced to survive for 21 days on camera.

48:48But they have some grit coming out of that. They'd have some grit and some credibility to be able to say, you know, I've pushed through. I've faced the darkness. I'm in the trenches with you. You might be in a literal trench. Yeah. Muddy and naked and afraid. Yeah. Anyway, Ben Thompson also laid out a reason for optimism, a better advertising offering that extended across linear TV and streaming. But he says his biggest mistake in his analysis, which was not properly accounting for the debt which the new Warner Brothers Discovery was taking on. A mistake that was greatly amplified by the significant rise in interest rates that occurred over the past few years.

49:23Interesting. Although Warner Brothers Discovery's debt is still fairly cheap and is going down, S &P Global downgraded them to junk, thanks in large part to declining linear TV revenues. Interesting. It's important to acknowledge, however, that my reasons for optimism were overstated as well. First, there were serious questions about WBD's MVPD leverage going forward, particularly now that TNT has lost the NBA. Second, there's no evidence that Max's breadth does anything to mitigate churn, which remains among the highest of any of the streaming services. Is that just because it's so expensive and it's like either there's a takeover the world moment with the Game of Thrones, like you gotta be subscribed or else it's like, nah, I can skip it.

50:06I feel like HBO is something that like once a year, I'm open for a few days. They don't have it in them to slop it up. Yeah, I'm not like going to a concert. Netflix is down to slop. They're down to just throw them out at the wall. I mean, although I never watch Netflix. I don't even have it installed because like I just don't, there's very little stuff on there. Like you can't get to Netflix on your TV? No. Wow. I can't get to it on my phone either. You're the last one. Hey, Netflix, I got a guy for you. To be clear, I pay. They're going to be banging on the door. Okay, okay, good. I pay for it.

50:35I'm probably on the most premium tier. Very un-American to not support a great American tech company. So unlike you, I do enjoy the current thing when it comes to cinema and television. But it needs to be take over the world. Everyone is talking about it. And then I watch it. so White Lotus the last thing I watched on Netflix was Squid Game season one really yeah because it was like so important to see it and everyone and it was good I liked it but like what was the biggest show on Netflix this year so far like it's all just background TV to me I feel like I mean I guess F1 Drive to Survive is pretty good but I just haven't had a chance though yeah but even Drive to Survive I don't I would be fascinated to understand their viewership in in late in these later seasons for some of the initial ones.

51:25Yeah. You know what they should do? They should have Design to Survive. Kind of some Figma Spawn Con on Netflix, all about designers fighting for their lives. Mobile app, enterprise, SaaS. Go to figment.com. Think bigger, build faster. Figma helps design and development teams build great products together. Dylan, consider it. Absolute dog. Design to Survive. Design to Survive. if we don't increase the conversion rate on this button by five percent we get thrown into this pit of sharks yeah yeah yeah if it would be this pit of snakes that's actually not the stake with drives to survive like like the stakes are just like all like interpersonal drama like trade deals i would yeah it would be like oh who's poaching who yeah oh this person coinbase reached out reach out one of oh yeah we know we we know the story the u.s army's designers yes and yeah they're pulling them in meta is trying to pull designers in it's a hot market meta just offered 200 million dollars no too much the number is 100 and that's not confirmed by the way it's not confirmed um speculation yeah and then they and then of course they they dropped the they dropped the the HBO name and they went back and forth on that.

52:42There was a funny thing. Compare that to Netflix. Certainly the streaming service is investing tons of money and having differentiated content but the long term goal and by extension the ultimate value proposition for consumers is offering something for everyone all of the time. To be TV in other words but freed from the constraints of geography and time. One subscribes to Netflix not to get a particular show but simply because that is what one does. just as one once subscribed to cable. Can you see the difference? Just think of the tagline. It's not TV, it's HBO. That's not simply a slogan. At least it wasn't, but it will be if AT &T sees the brand's ultimate value as a consumer front end for a de facto Netflix competitor, that is to say TV.

53:24More broadly, if my interpretation of these comments is correct, and AT &T plans to build a streaming service to rival Netflix, well, first, good luck. And second, that is quite a bit higher level of ambition for the Time Warner acquisition than I anticipated was what he said. Okay, maybe I can take the W on this analysis. He says, it holds up pretty well. In the end, the mistake was not so much about combining Warner Brothers and Discovery as it was trying to take on Netflix in the first place. My instincts were right about that. I just wish I'd stayed anchored on that point all the way through.

53:54And if you look at the, I saw somebody being like, oh, whatever happened to Fang? I think we covered this in the show. And it was like, why was Netflix ever in Fang? And it was kind of a good question because like Netflix doesn't have the same just intense power of the hyperscalers and the other trillion dollar tech companies but you look at the stock chart and yeah it went way way down for a little bit uh but it's but it's back up and it's been on absolute tear and for a long time it was the best performing stock in the stock market and I think it's up like millions of percent or something like that like the numbers are insane he's trading at a 57 x uh earnings yeah priced earnings okay what's the market cap 520 billion not bad half a trillion like that's pretty pretty big for something that the narrative was like it's just a streaming service so it's not as dominant as you know google which has the google search and youtube which competes with netflix and cloud platform or Apple which is the iPhone and the gate to Netflix like or Tesla with the car and the humanoid and the self-driving and all this different stuff Netflix was always just an app that you watch stuff on and there were a lot of them for a while and so there was a question about like how how solid would their lead be long term but they have solidified it anyway hopefully they're on Vanta automate compliance manage risk prove trust continuously Vanta's trust management platform takes the 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.

55:30Get on there. Intercom is on there. And you know why I said Intercom? Because SPAC sponsors are reaching out to own at Intercom. No way. And so I highly doubt he would entertain any of that. It seemed like a sort of boilerplate email that they were just blasting out. Wait, did he post this? He posted. He said, we are so effing back. So back. and he posted a screenshot. And anyways, I'm sure, you know, part of being ready to get SPAC'd at any time, you got to get on Vanta. Got to get your - Got to do it. Compliance dialed. And so Bucco Capital bloke, this was actually two years ago back in 2023.

56:10He talks about Warner Brothers Discovery and talks to licensed HBO original series to Netflix. Zaslav strikes again. Corporate financial decisions won out. Selling the future for money today. the HBO streaming's world walled garden is coming down it seems you can already watch HBO on Hulu somehow you can like pay through Hulu and so that's been a thing it was a weird place yeah weird place Hulu's Hulu's an odd story because there's like this crazy joint venture between all the different platforms and then eventually Disney acquired most of it but like it had like all sorts of content never been big into that whole world no you're not a Hulu guy in a hugely surprising move, Deadline understands that Warner Brothers Discovery is shopping some of its HBO library titles to rival Netflix.

56:55And this was kind of the Ben Thompson takeaway, which was that when you have a fixed priced asset, it is often better to auction that off to the highest bidder and not need to sell it to yourself in the form of your own streaming service. Which then if Max already has some of the highest churn of any of these subscription platforms, and then you can get some of the best content from HBO on other platforms, what's going to keep people on HBO? Yeah. HBO Max. It's a good question. But the cash flow should flow directly to them and it should be most efficient because whatever service can monetize it the best could potentially just pay them up front for that.

57:38And again, yes, Netflix has a lot of original productions, Netflix originals and whatnot, but a lot of that is just stuff that they purchased, right? or purchase exclusive rights to, they're not necessarily producing everything there. So Warner Brothers Discovery has been an absolute rollercoaster ride. The stock was up at$75 a share in mid-2021, sort of a top tick of the ZERP era, and then the debt kicked in, and the streaming wars took off, and the rest is history. So the stock's been kind of languishing between 10 and 15 bucks for the last two years. and hopefully they're on to greener pastures now.

58:19Yes. But whatever they're planning, if you're planning to manage a death schedule, you're planning to manage a complex de-merger, you got to get on a linear. It's a purpose-built tool for planning and building products. We're building products, not reverse mergers. I am determined to use linear for everything. Linear should eat everything. Eat everything. It should be the one-stop shop for any planning. It's very adaptable. you can do a lot with it it's a system for modern software development you can streamline issues projects and product roadmaps and they got linear for agents of course they could use it for the development of their streaming platform they have software engineering to do and linear is the perfect tool for them hopefully your agents your various agents are smart enough to ask hey i'd really appreciate i you know i don't ask for much but i'd like to be orchestrated on linear if you could just get me on there.

59:10I just don't know why you're holding back Zaslav from getting a linear installation going to run his office day to day. Well, if they want to compete with Netflix and other, you know, the primes of the world, the hyperscalers, you know, on streaming and real technology, they should absolutely get on linear track. Anyway, there is this fascinating kind of like, I mean, it's a Nathan Fielder style stunt almost. So, Pierre Richelson, who's from Cal.com, is. Fake suing a former employee. Have you seen this whole thing? Have you dug into this, Jordy? This is a wild, wild thing. Yeah, I'm trying to figure it out.

59:50So it seemed really real, but then he posted this joke Google Doc that made it clear that it was a joke. He says, today we are suing Nizi Abhi, zero dot email in the court of Mailifornia, for secretly building an actually pretty good email client while getting paid by Cal.com. Read the full case below and you can kind of dig into it. but it does seem weird because when you dig into it, it's like Amrit, who's the founder, says, happy to announce I will be joining zero.email as a full-time engineer, came across this app some months ago, literally saw it grow up from day zero and Pierre says that cal.com to zero pipeline is two for two and so two people have left Cal to go build this new company.

1:00:35That can be very rough. That can be sometimes looked down upon to leave the organization to build something new but it seems like maybe it's good so shams twally says so i need to work on cal first and then pierce says well the best people don't leave cal so it depends are you good and then uh and then nizzy says didn't cal.com want to acquire zero dot email before i left and then pier quote tweets that and says hey auric at grok what happens if you build a new startup on company on a company device during work hours which to me looked like he was serious yes and john sarah josh sarota says oh shots fired but they're just joshing around the lawyer that submitted the complaint yes uh is named chad esquire love it and and the amount that they that they asked for is like four hundred and twenty thousand dollars and 69 cents something like that but it's weird like it's weird it's this weird like fake stunt to draw attention it's working It got my attention.

1:01:36It was confusing. And you've wanted somebody to build an AI powered email. Maybe I'm going to wind up checking this out. They got me. They definitely got me with all this nonsense. But it really is like the new era of like, you know, content marketing and like going viral. You got to be crazy. Like a fake lawsuit is what is the stakes now to break through. You can't just say, hey, like, you know, this new company is going through. But it seems like they went through YC and they work together and they're probably friends I mean, that does happen all the time. That's always like the good ending when someone spins up and say, hey, I was here for a while.

1:02:10I had a good experience, but I want to go build my own thing. And they get the blessing of the CEO. And usually the founders like, well, angel invest or something like that. So hopefully it really is that narrative. It's a little unclear, but I think that's part of the joke that's going on here. Anyway, whatever they wind up doing, they got to get on numeral sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. Go to numeralhq.com. dot sales tax agi i love it um sam altman's been on a podcast tour he's firing shots at elon musk he says i didn't think elon was going to abuse his power in the government to unfairly complete i regret to say i was wrong about that i genuinely thought he wasn't going to i really i think it's really unfortunate for the country that he would do these things i wish elon would be less zero sum or negative sum so the the battle between the the agi giga chads is raging still although it feels like maybe that like this is coming to a close like like the like they now just have to duke it out in the app layer win in the store like yeah i think if you remember i mean if you remember and elon's out of the government the big winner of the blow up between elon and trump was sam and people that had bought a tesla before elon went crazy right so there were two winners coming out of that.

1:03:29So hopefully. But again, I'm sure there'll be more updates coming down the pipeline around the active lawsuit between both parties. Well, either way, they got to get on Adio. Customer relationship magic. Adio is the AI native CRM that builds, scales, and grows your company to the next level. Newcomer is on Substack. He's an investor in Substack. He's also leaking information about Substack on Substack. It's the Pimp My Ride of Substack scoops. He's the exhibit, right? So he's generated$400 ,000 a year from newcomer paid subscriptions. He's paid Substack$50 ,000. He sells his own sponsorships and Substack doesn't get a cut of that revenue.

1:04:22He also invested$5 ,000 in Substack's crowdfunding round in 2023 as a show of support. And he's a fair-weather friend, constantly agonizing about the huge chunk of subscription revenue that we fork over to Substack. Two friendly tech newsletters, platformer and garbage day, decamped from Substack over a year ago to Ghost and Beehive, respectively. Executives from rival newsletter platforms like Beehive and Kit regularly try to get us to consider jumping ship. subtext app oriented strategy has at times annoyed me as it sometimes asks newsletters do that ultimately he stayed uh what's interesting is that now he he has the he got the scoop that that sub stack might be out raising new funding on the back of a bunch of growth scoop and so it's just a funny dynamic that is uh it's just unique to the new era of like these independent journalists like uh i really is the thing i have to call out and yeah and uh eric should come on the show and talk about this dynamic but he's generating he's netting four hundred thousand dollars a year and paying sub stack fifty thousand dollars yep fraction of that they take like 10 i guess or i guess it's a little bit more 12 and this is the backbone of his business which which you would imagine being on sub stack i would guess helps him generate an incremental fifty thousand dollars a year of revenue and would probably pay for itself yeah certainly i mean yeah there's two ways to look at that cost one is uh so if you went to a more diy platform like ghost that has a lot of the features but you still have to customize it yourself and you're not getting the sub stack team of engineers constantly releasing new products well then you're probably going to wind up paying someone maybe more than 50k a year to you know enhance your ghost installation or like optimize it and get the most out of it.

1:06:12So there's like the cost side of that. You can probably do more and more now with AI and get more leverage out of someone around 50K, probably not right there, but maybe 100K starts to get interesting. If you winds up paying Substack, you know, 2 million in a few years, maybe it makes more sense. But this is kind of one of the interesting, you know, problems that Substack has to play ball with, but they can probably negotiate at a certain point because there is some element of like, hey, you've gotten really big. We'd love to keep you. Why don't we give you a little bit of discount on our take rate so that you don't move off?

1:06:45Yeah, who knows? That can start a crazy snowballing effect, though, where all the top creators, which talk amongst themselves, I'm sure. Yep, totally. But ultimately, he says that he does get recommended. He gets a large number of free signups through recommendations, though. Yeah, that seems good. Those readers convert to paid subscribers at low rates. so um anyways interesting um it'll be interesting to see where substack's new round gets priced i wouldn't be surprised if it was fairly close to their peak valuation but that would actually be great to see them kind of growing into that um whatever their 2021 uh valuation was i think it was like 750 million.

1:07:30750? What's up there? They raised a Series B in April 28th of 2021 at 650 million. Pre or post? Probably post? Post. Okay. So they sold 10%. Oh, not bad. Yeah. Yeah. I mean, the business seems to be like very much sustainable at this point. It seems like it's accidentally profitable. Remember that reporting in the information? And talking to Chris, it seems like things are going really well. Yeah. Just, I guess there is this question of like how can you quantify the impact of substacks features on growth yeah because you like the yeah the question is like they're driving free signups for newcomer um but is it actually driving incremental 50k in profit for him yeah who knows i mean he's selling ads against the newsletter yeah which you know he's able to do he's he's monetizing those free subscribers so Who knows?

1:08:27Who knows? Who knows? Promoted post from public. We haven't done one of these in a while. We're hosting a private screening of one of the summer's most anticipated films starring Brad Pitt and set at 200 miles per hour. If you're a New York-based public member, you can access the exclusive experience and be there on opening night, June 25th. Reply Aston for your chance to win tickets. So if you are in New York and you're on public, reply Aston to this post and head over to the movie screening. It'll be great. him up. Over in defense tech world, Anderil has partnered with Reinmattal, the German defense tech company, Prime, really, to manufacture Barracuda and Fury over there.

1:09:09That's very exciting. And then we also touched on Spotify founder Daniel Ack. Guess when Reinmattal was founded. The way you're saying that makes me think it's like 1650. I'm putting you on the I'm putting on the spot like Tucker put uh yeah what's his name how can you possibly report on the news if you don't know when it was founded this is this is the best bit earlier I have to read it out yeah read the muffin man Tucker do you know the muffin man the muff Ted goes the muffin man the muffin man muffin man no I don't know him personally how can you know anything about Drury Lane if you've never met the muffin man John This is a post from Zach Stewart.

1:09:51This is a real gotcha. Really, really good. Anyways, you can still, I give you permission to comment on Rymantol. Give me the year. Even though you don't know. 1889. I knew it was really old. 1889? Dusseldorf. Okay. I was pretty far off with 1650, but over 100 years. I mean, yeah, that's the same. General Atomic is part of this roll up, and it came out of, I think, General Dynamics at some point. And the founder of the company that competes with Fury for that autonomous program that that they're competing for right now,

1:10:37was the designer of a submarine in the Civil War, or something like that. Like I'm pretty sure that he died more than 100 years before Palmer Luckey was born. That's the cultural difference between the two companies that are competing for this one contract. It's like a fascinating dynamic about how legacy they are. Like it's not just like 50s. If you're in the game for a while, you know, decades after you start the company, your greatest enemy will be born. And then they'll have to grow up a little bit. They'll have to learn the game. And then they're going to come for you. Wild. So, yeah, Spotify founder Daniel Eck is leading a$600 million funding round into German defense startup Helsing.

1:11:20This is kind of more of an Anderle equivalent over in Europe, valuing that four-year-old company at$12 billion. The business makes battlefield AI, drone submarines, and robo-fighter pilots. It's now one of Europe's most valuable startups. And they're using some renders here, John. Renders? Look at this image. They're render maxing. They're render maxing. Are you sure? It is a cool render. Yeah, look at the water there. It's definitely a render. Who knows? It's hard to tell these days. We're beyond the uncanny valley. and so Helsing is expanding from its origins in artificial intelligence to produce its own drones aircraft and submarines as part of the bigger push for locally made and owned defense products for European countries and really companies all over the world crazy it was founded in 2021 by Torsten Ryle a video game entrepreneur Gunbert Scherf, a former German defense ministry official, and Nicholas Kohler, an AI researcher.

1:12:28And they have partnerships with Saab already, as well as Mistral. Yeah, and tons of American venture capitalists in the deal. You got Lightspeed, Excel, and General Catalyst. Connor's cooking. They've raised over$1.37 billion.

1:12:46Daniel X said, the world is being tested in more ways than ever before. That has sped up the timeline for Helsing's financing, XED, pointing in particular to the conflict between Russia and Ukraine where drones and other AI-powered systems have been deployed at scale for the first time. There's an enormous realization that it is now really AI mass and autonomy that is driving the new battlefield. And so, yeah, exciting deal. If they want to get more attention, want to do some hiring, they should get on ad quick. Out-of-home advertising made easy and measurable. Say goodbye to the headaches of out-of-home advertising.

1:13:20I think only AdQuick combines technology out-of-home expertise and data to enable efficient, seamless ad buying across the globe. They make it just about as easy as launching a campaign on Meta or any other ad platform. I love it. Get over there. Check it out. AdQuick.com. We have David Senra coming in the studio in just a minute. In the meantime, if you're looking to go deeper in AI, AI Startup School has been going on for the last two days up at Y Combinator. and Andre Carpathie gave a banger talk and Swix, friend of the show, grabbed pictures of every slide from his talk and reconstituted it into a full slide deck so you can go and read the full talk if you want.

1:14:08And so go check that out on latent.space if you're interested. And we have David Senra in the studio. How you doing, David?

1:14:19Brother, welcome to the show. Now I can hear you. What's going on? What's going on? It's great to see you. How much? How are you guys? Great to see you again. Long time no talk. Long time no talk. Did we talk yesterday or the day before? Yeah, yesterday. Something like that. It's too long. I need it every few hours. Yeah. Yeah. Honestly, between the show and then the hour that we typically talk with you afterward, at some point we should just start streaming it live, get up to five hours a day. This scratches the itch a little bit. Yeah. You guys haven't announced our month-long Extreme Podcasting Summit in Malibu yet.

1:14:55I was going to wonder if you wanted to talk about that. I'm super down to talk about it. I'm excited. I've been inviting other podcasters. Like, you need to fly out. It's going to be summer of podcasting. The entire month. Rob. No, you have to have a podcast to go. Yeah, the summer of extreme podcasting in Malibu, California. I want to create the center for extreme. I think we're going to tip it in Malibu though. Oh yeah. With the people that are coming. Yeah, sure. The weather in Malibu. Come on. No one's like, Hey, come visit Austin in the summer. We need a fresh start. We need a fresh start too.

1:15:29You know, there's something about the mothership where like, I think Austin works because you need to have like all the cross pollination from Kill Tony and random people coming in. Malibu's for monk mode podcasting. Yeah. But it's for, yeah, if you're a comedian and you're friends with Joe Rogan, yeah, obviously moved to Austin. then that's going to be really good for your career. Yeah. But that doesn't apply to us. Yeah, there's been a good crew amassing out there. Break it down for us. What's top of mind for you? Before, I have something. So James from Profound announced their round today. Oh, cool.

1:16:04He's coming on the show later today. Great. David and I are both investors in Profound. They announced a$20 million Series A led by Kleiner with participation from NVIDIA. saga south park commons and sv angel and of course it's hilarious it's hilarious the lineup of and it's like jordy and david yeah yeah it's uh guillermo from versell jordy and david and jordan singer friend of mine snuck in there as well so oh yeah stacked uh they're building an answer engine helping uh teams you know optimize but we'll get into that later but but maybe let Actually, there's a perfect Ramp crossover. I don't know if you guys have heard of this little company called Ramp.

1:16:49Heard of them. So I was actually in New York with James yesterday. And every time, the last few times, I go there every few weeks, and the last few times I've been there, I've made sure to spend time with him. James is a friend of mine. And there's actually a funny way that I met him. So Kareem, obviously co-founder and CTO of Ramp, is a good friend of mine. And the reason I think that Kareem is such a great founder is because he has this like divine discontent with everything that he does. So nothing's ever good enough. The product's not good enough. The go-to-market's not good enough. The sales isn't good enough.

1:17:25Like everything can be improved. And I was at dinner at his house like, I don't know, maybe like two months ago. And this was going on and on about all the things that like need to be improved and things that he thought like he hated or whatever. And I was like, all right, enough of this. Tell me like what you actually like. Who are the founders of the products that you think are great? And one of them was Profound and James. And so I wound up looking James up on Twitter and I found that he followed me. And so I actually followed him back and then we wound up DMing. And I was like, hey, are you in New York?

1:17:53He's like, yeah. I was like, I'll be there tomorrow. He's like, come by the office. And so, yeah, I just thought it was hilarious that Kareem, his bar for excellence is excessively high for people and products. And James and Profound have exceeded that. so that's actually how I met James and why I was invited to invest in that round awesome should we move on to Jimmy let's talk Jimmy break it down for us how did you originally land on Jimmy Iveen as someone to profile that's a question I had for you guys because you guys both grew up or lived in LA for a long time so my interpretation of Jimmy Iveen is like every single person in the music business knows who he is but the average person doesn't were you guys familiar with him at all?

1:18:37Yeah, I was loosely. But I think part of it, when I actually think back, it's like the tech angle, Beats and Apple is probably my introduction to it. But also like reading stories about Dr. Dre, because I was a fan and kind of like the Interscope mafia. Like that was in the news when Dr. Dre was like one of the leading artists at that time. So Jimmy Iovine is easily the top three people that I want to meet. And when people ask me, like, out of all the living entrepreneurs who you want to meet, that usually when I say that, that's surprising. Many people don't know him. I've been fortunate enough to have dinner with two people.

1:19:15One was mentored by Jimmy and worked with him for a very long time. Another person competed directly with him. And the way that people speak about him, there's like an unbelievable level of respect. And just the guy's unbelievably driven, really like relentless. And one of my favorite documentaries. So like, you know this, because I read the same books over and over again. I like read the same quotes over and over again, but I also watch the same documentaries over and over again. And so my favorite documentary is The Last Dance. Obviously, you see what comes up when I text you guys. It's Jordan from The Last Dance.

1:19:47But the second one would be The Defiant One, which I probably watch at least 10 times. And everybody's like, oh, what's the documentary about? And if you go and like look it up, they'll say it's about the long term friendship and partnership between Jimmy Iovine and Dr. Dre that goes back, you know, three decades. It's like, yeah, it's about that. But really, it's a documentary about entrepreneurship. This is like, if you think of founder mentality, think of like the way entrepreneurs think, the way they act. It's like in that documentary. And I've been wanting to do an episode on him forever, but there's just not, there's no books about him.

1:20:13He's never written an autobiography or anything like that. So I was like, you know what, fuck it. I'm just going to watch the documentary again. I'm going to take notes on the documentary and build an outline just like it would for a normal episode. And then I found every single good interview he'd ever done and then transcribed that and then essentially combine all that to use that as like my own book. But I think it's, I'm really interested in these people that are not well known. to like the general population, but everybody in their industry. There's a great line from Warren Buffett where he's like, hey, if you want to learn about an industry, he's like interview every single like top CEO, top executive in the industry.

1:20:45You might have to talk to 20 different companies. And then you always ask him, like, if you had to eliminate one of your competitors, I think he used the example, like if I gave you a gun and you only had one bullet and you could take out any of your competitors, who would it be? And he's like, and Warren's point is like, that's you're going to ask all these people. Usually they're going to arrive at the same question. He goes, that's the guy. that's the guy in his case you should invest in um jimmy is very much so that in the music industry and i just find his i mean there's there's a line in uh he's been like really good friends with bruce springsteen for like i don't know six decades five decades something like that and there's a line that's in the documentary it's also in bruce springsteen's book where bruce was talking about and jimmy has this mentality he's like i didn't want to be rich i didn't want to be famous i didn't want to be happy i wanted to be great and i think that's what really attracts me to to jimmy ivy and in particular people like him is just this relentless drive where he started out with nothing he started sweeping the floor in a recording studio to working with john lennon bruce springsteen tom petty dr dre eminem uh founding one of the most successful record companies of all time then saying hey i got bored of that what am i gonna do next i'm gonna start beats you know growing that starting a streaming service and then selling that to apple for billions of dollars.

1:21:56Like he's just an incredible person. Insane. Did you get much into his, he has a program at USC. Have you covered that at all? My buddy Ben Taft is on the board there. That's at the end of the documentary. That's actually funny. The least interesting parts of biographies because everybody can understand like the struggle, right? It's like you start out, talk about family life, all that trying to figure out your path in your early career. Then you might hit on something and then it's going well and then you take another step back and there's just a whole like climb that everybody can empathize with one of the things that i think should be cut out of arteries completely is the end where they're like i bought a building i'm so rich i donated a building named after me it's like that's just not relatable it's just not interesting so yeah it is covered in the documentary i of course is not going to put that on the podcast but they probably want to talk about that too no that's no you like there's a great line actually let me read this to you um because Here's the funny part.

1:22:54Jimmy is a great storyteller too, which I think is really important. I think above and beyond, yes, we're studying these great entrepreneurs to learn how to build a big business and to take ideas from them. Hey, that idea will work from them. We can use it for us. More important to that is building a business is just part of our lives. It's a huge part of our lives. I'm interested in having an interesting, fun, unique life. I want my kids or my friends long after I'm gone to read the life story of mine and be like, oh, this is a page turner this is actually interesting that is jimmy has incredible stories you know for a five decade long career in um in music and what i like is he intersects with all the other greats so david geffen who is you know one of the greatest i think entrepreneurs investors of all time and somebody it's like really reclusive now and i really wish wasn't i would love to read his autobiography but david geffen started this huge like gold rush because he wound up selling his his record label for like 500 million dollars and i think with stock on it being you know six or seven or eight hundred million dollars and so when that happened all the other people that were record producers just like geffen and jimmy iveen were like oh shit i need to start my own record label and so jimmy goes and david was his mentor and he goes hey we kind of do the same thing but you just made a lot more money than i did should i start a record company and david goes you should definitely do it there's a lot of people in the record industry way dumber than you are and jimmy talks about like that actually giving him inspiration it's like oh wait okay this guy's succeeding not gaffin obviously but other people are succeeding uh and you know they're not it's not just a test of intelligence but there was uh there's all these different record labels start at the exact same time as interscope and somebody in the documentary says this great thing uh where says the reason that interscope was successful versus a lot of other startups at the time was Jimmy was an animal, the most driven and brilliant person at the same time.

1:24:49He was never off and he didn't understand why everybody else wasn't the same way. And so like, these are the kind of people that like, I like to study. These are like kind of people, these are the kind of friends I like to make. These are the kind of people I like to be around. Just like they're fully alive and completely committed to what they're doing. Give me insight into how he transitioned from sweeping the floor to actually engineering and contributing to studio sessions like you you told us that story about i think it was jim cameron like reading textbooks while he was driving was that jim cameron i think uh like there's usually james cameron james cameron yeah what uh what was there's usually like an arc where there's go to where the heat is get in the room with the greats and it seems like he was able to do that by like sweeping the floors and showing up and just being like i will do anything to be in the important place but then there's also this second step of like learn to contribute beyond just floor sweeping because you just fucking nailed it this is exactly what happened so he his first his first two jobs in uh working in a record studio he got fired okay uh the third one he gets set up why this is amazing pro getting fired so yeah well because he's a college dropout so let me i'll just like give you like the 15 minute version interrupt at me whenever you want of the hour-long episode and because it's like and especially because we're all fathers i think this is like really important like the one of the most important relationships between father and son and like if you really think about all the work that i'm doing i'm gonna hit you know the 400th biography read uh in like three weeks or four weeks from now it's like all daddy issues all the way down like you just stacked on top of each other you either want to be like your dad or you fucking hate him and like you're trying to like 400 yeah we got ready please i'll come on uh and it's it's gonna be about the vacuum cleaner guy who i'm obsessed with somebody just pulled up this guy most people would be like oh and for 400 you're gonna do like steve jobs or like elon musk you're like somebody really really powerful vacuums let's give it up for vacuums vacuums that's why he's like go you tell me another guy that has been running his company for 40 years owns 100 of it highly likely i have a friend of mine a guy i actually tried to gave try to I'm gonna take a tangent require because it's a funny story please you know Dyson is 100 % of company I've heard the rumors he's taken out everybody's like oh he's worth 20 billion dollars no bullshit I've heard like five plus billion a year in cash and has for a very long time and so it's like wow that makes Mark Benioff like a chump Mark Benioff sells two million dollars of Salesforce every single day so he's making like six hundred million dollars a year in liquidity but sounds like Dyson's got a - wait he's Dyson retains the equity.

1:27:31Yeah, I know. It's just fucking cash. No, no, no. Don't give me that shit. And so the funny part is this guy I know told me this story where, you know, he's managing ever larger pools of capital and has to keep buying more and more private businesses. And so he can't buy a$500 million business anymore or a$2 billion business. It just doesn't move the needle. And so he gave a very friendly like, hey, would you guys be interested to Dyson to sell? and again i like highly disagreeable people i like people that are obsessed with their product they do it forever it's just like people like us yeah and um that you can't buy there's just no fucking number it's just like i'm not for sale thank you very much uh and so they approached dyson and i'm paraphrasing their response was fuck you this is a family heirloom this is the paraphrase family heirloom this is the paraphrase that's amazing let me let me go back to jimmy though i can talk about dyson forever somebody just pulled a tweet they're like this guy's been tweeting about the vacuum cleaner guy for since 2018 i was like yeah i saw that i saw that post i mean this is great david lore but in 2019 you got like four likes on a post you said like i just i just read my 83rd biography yeah yeah i've slipped some of those in like isn't it like jay gould or something it's like this is a person that only you know about basically and you've done like multiple episodes no so so we like i have very few entrepreneurs living knew about j gold but the reason you should study him is because again i'm always interested in who's influencing the influencers right oh yeah yeah so who is the one that influenced steve jobs right edwin land edwin land i'm sending you edwin land shirts by the way i'll bring it with you so no but the uh j gold thing is interesting and don't and then let me get to jimmy if you want i mean sure show you can do whatever fuck you want but uh the reason i i studied jay gold and i've read a bunch of old books about him is because i'm reading biographies of rockefeller and he was asked like who's the best businessman you know and he said without hesitation jay gold i'm like well that's interesting and then cornelius vanderbilt keep in mind when cornelius vanderbilt died okay he owned five percent of the money supply that's like that's like the gb metric for stripe they're We want to power 1 % of the GDP.

1:29:42Founders need to be more ambitious. They put up the page in the deck. 1 % of the TAM. Try to get 1 % of the money supply. 5 %! You got to start somewhere. 1 % of the money supply. And so when Cornelius Vanderbilt was in his 70s and he was by far the richest person on the planet, he said the smartest man in America was Jay Gould. Jay Gould was like 33. And he had said that because they just went head to head to compete over the control of a railroad and Jay Gold smoked him. And then, interesting thing, then Cornelius Vanderbilt actually sent hired hitmen to kill Jay Gold's partner. He didn't succeed.

1:30:22Yeah, that kind of business was completely different than it is now. But yeah, there's all these interesting stories in these books that nobody reads. That's why I love what I do. And I try to highlight that for people because I'm like, these guys had interesting lives and they arrived they worked on something for 56 years what's the chance that they they built a wonderful business for six decades they didn't come up with any idea that you could use like that's ridiculous so going back to jimmy ivine it's just like so he gets fired uh i forgot the first reason he got fired uh the first time but the second time was they just gave him a 90-day trial and they just didn't think he was good enough they at day 89 he gets sweeps aren't smooth you know you you you're missing there's dust all over the floor the response they said to him was like this just isn't for you working in the music business isn't for you and this happens over and over again like sam walton you know his first manager when he's working at jc penn he said hey guy i know you're interested in retail sorry to tell you you don't have a future here and sam's like okay how about if i become the most successful retail person in history and i'll build a 400 billion dollar fortune how about that like so i i find like i i love when people you know doubt other people and they don't know what they're talking about and they're proven wrong uh but jimmy winds up being fired the first time is really important because then he goes to the record plant the record plan is owned and run by this guy Roy Ciccala who is a legendary engineer the reason this is important exactly you just said John is John Lennon after he was a Beatle wanted to work with Roy Ciccala so nobody will come into the studio on Easter Sunday and Jimmy Iovine is from Brooklyn he's this old school Italian family he gets Roy calls him he's like hey we need help with the studio no one else is coming in you got to come in on Easter Sunday and Jimmy's mom's like you're fucking crazy you know we're having a feast this is church you can't do this and and jimmy says he's 19 he goes i will do anything anything to make this work shows up to the studio roy says good i'm glad you're here i was testing you in the room is jimmy roy sakala and john lennon so he didn't even know john lennon was going to be there he showed up anyway and that was like the reward wow bingo and so he said he goes listen i would do there's a really interesting idea so I actually talked to Daniel Active Founder Spotify about this.

1:32:31And his whole point was just like he's completely like he'll do anything it takes to get information that he feels is helpful. So when Spotify is going through a lot of rough trouble, he'd reach out to other his peers, other tech company CEOs. He says, hey, can I just like shadow you? Because like you say you can run meetings with like 30 people. When I run a meeting, 30 people like it's I don't even understand how you do this. And Daniel's like, there's no ego involved. So he did this with like Mark Zuckerberg. He spent like, I think a few weeks shadowing. He goes, I got Mark's fucking coffee.

1:33:01I don't care. Like I'm there to learn. And so Jimmy Ivey was the exact same way. He says, I did everything they did. Like I took care, I cleaned the equipment. I set up the wiring. I eventually learned how to be an engineer. He goes, I figured out the way that John Lennon was from Britain. He's very particular about how he likes his tea. So I memorized exactly how he wanted his tea. He goes, the way I was about his fucking tea was the way I was about everything. He got so good at making John Lennon's tea that John Lennon wouldn't let anybody else make his tea. So his point was like, man, these guys, their legends are letting you in the room.

1:33:35Just be useful. Sometimes it's running an errand. Sometimes it's making tea. Sometimes it's fixing the drum sound. And then John just felt he could trust him. And so John starts sending him to – he just takes him everywhere. They go to LA together. They're recording in New York together. And it's exactly what you just said, John. It's just like you get in the room and you do whatever you can to stay in that room. Yeah, that makes a ton of sense. I want to talk about his picking ability and how he became immediately successful. You know, Tom Petty, Stevie Nicks, U2, the list goes on. How much of that do you think was a function of just like his innate taste and ability to spot greatness versus just drive and relentlessness and just listening to every single possible artist out there.

1:34:22Yeah, or what is the comp to the venture world where you can be a great venture investor even if your hit rate is like 5 % because it just matters and actually getting into the companies that matter and move the needle and people will kind of forget about a bunch of misses and companies that didn't go anywhere. Okay, you guys know I don't give a shit about venture, so I'm definitely not going to talk about that, but I will talk about how this relates to founders building great products. How about that? because that's the only thing that's actually interesting and matters um so jimmy's idea was the example i used in the podcast where his thing is like okay producers which you know he was an engineer and he turns to producer he goes producers are always like i did this and i did that he's like this is the analogy for venture and founders he's like uh would be producer and musical artist he's like i'll read this to you he goes you're only as good as the artist that you're working with you're only as good as the founder that you're investing in right any producer or any venture capitalist who says, I did this and I did that is full of shit.

1:35:1499 % of what's going on in the studio is the artist. And so his point was, I don't have, he wasn't the founder, right? In this tradition, he's, I don't have the talent. I'm there to do whatever I can. I'm in service of them. And so his whole point is like, if I want to be successful, then I'm going to pick the best possible talent. How do you arrive at that? Well, the thing about excellence and greatness is like, people don't actually know what it is until they get close to it. And so part of this is luck and randomness because bruce springsteen's most important album that he ever makes is born to run okay that's his third album right bruce is still doing it he's one of the top selling artists he winds up becoming a billionaire off his career and everything else but before then his first two albums were not doing well he was not doing well and so uh jimmy is the engineer on that album and he sees firsthand the level of work ethic and dedication that Bruce Springsteen will have to this.

1:36:08And so the way that Bruce was about like a drum sound is the same way that like a Steve Jobs was about every single pixel that's on any device that he's making. And so Jimmy tells the story where it's like, Bruce would stand over me and say one word over and over again. He'd say stick, stick, stick. And what that means is like, hit the drum again because it's not producing the actual sound that I want. It took them three weeks of just in the studio every day, hitting that over and over and over and over again until Bruce got what he wanted. And so once you see it, it's like, oh, and then what happens?

1:36:41Born to Run comes out, winds up being one of the best selling albums of all time. It's just a complete phenomenon. So now he sees the level of craft that John Lennon puts on his work and Bruce Springsteen. Then he starts working with Stevie Nicks, who just came out of Fleetwood Mac, who was a fucking legend. Tom Petty. Then he gets in the room with Dr. Dre 15 years later. You just know it when you see it. how much do you think it was driven by like like the uh casting a wide net and meeting lots of people i'm thinking about like as a founder there's a very different approach to hiring talent if you can think about this in the sense of like hiring talent knowing who to work with then like the bill gates mindset versus the jim simons mindset like i think jimmy's more of a jim's that that's exactly what i was thinking of jim simons his whole thing and i just did an episode on him too right brenson's technologies gives people to know since he just has a money printing machine yeah and and most importantly for this uh renaissance technologies hasn't isn't the business of hiring thousands of people and firing the bottom 20 every year microsoft did that for years there's yeah exactly there's no turn there's no turnover because if you leave microsoft is notoriously high churn and that's by design it's a very different thing if you leave renaissance technologies you your money your personal money comes out of the medallion fund and the medallion fund is a magic money-making machine so you do not want whatever you want to do in life you don't want your money out of the medallion So you will stay there.

1:37:56So when you go and read Jim Simon's biography, that's a great analogy, John. Thank you. It's very similar to how Jimmy picked his talent, where he's just like, this is the most talented person I could possibly work with. And it may take me years to recruit him, but I will do anything. I will go to his house. I'll meet his kids. I'll spend, I'll do whatever possible. And then what happens is then you read up on the people, which I just did for the Jim Simon's episode, on who he recruited. And it's like, they weren't like normal mathematicians or PhDs. Every single person was a mathematician or physicist or PhD working in science.

1:38:23They have like theorems named after them or they like they discovered something in mathematics. They were literally the best of the best. And so like Bono. And again, I think part of this is like pattern recognition. He saw the edge that Bruce Springsteen had. And then he gets introduced to Bono when you at the very early days of YouTube and he sees him perform. He's like, oh, he's got the edge. And so he's like, let's work together. Bono's like, no, let's work together. Bono says, no, let's work together. Bono says, no. And he says that he chased us around the world until we agreed to come to the studio with him.

1:38:53He would not take no for an answer. He happens to you. He is like a virus and he takes over your organs and brains. He just knows that this is going to work out well for both of you. I don't think there's a person alive that won't listen to this Jimmy Ivey episode and get something out of it. And it's just like this relentless pursuit of what you want to do. and his whole thing is like he wasn't a big fan of how the music industry they they they their their metric of success was like total record sold his was like did you make a great album he's like great is success a lot of people sell a lot of albums and they suck if you can make something great first then you'll be able to get more customers more listeners and more everything out but the the primary thing was great and there's a great example of this which i think is really important too and you see this all the time we're at the end of the documentary towards the end uh dr dre had he had all these issues he starts his own record label for the very first time his first two albums he puts out completely flop and jimmy's his partner and jimmy has corporate partners they're like hey you need a fire tray and jimmy and this this is another thing i admire about him he has these lifelong relationships we have been friends for years i hope i hope we're friends for decades you know this is i'm not this is really important to me like these compounding relationships and so they're like you need to fire dre he goes yeah we could do that and we'll save on my salary too because i'm going with him and so what happens they try to fucking fire dre because these idiots that can't do what the artist can do don't know what they're talking about this guy's a generational talent you're like get him off the payroll and what happens jimmy is spending day after day after day doing these listening sessions with dr dre dr j would come over jimmy's house every day they listen and try to find an artist for dr dre to work with jimmy gets his tape of eminem at the rap olympics gives it to dre dre's like what is this right and then they they dre starts working eminem he becomes one of the top 10 selling records uh artists of all time but more important than that jimmy says something that was great because at the very beginning his first like two albums were super controversial there was like protest there was congressional hearings about eminem's lyrics and he goes we weren't looking for like a white controversial rapper.

1:40:59We were looking for great. He's so consistent from day one, from when he's 19 till when he retired at close to 70. Great can come from anywhere. You just have to find great. Congressional hearings are such a success metric. Palmer Luckey told me that. He said the thing he learned from Zuck was that you're not getting dragged in front of Congress because you did something bad. It's because you're being crowned as the victor, essentially. What was Jimmy's approach to financing different deals? How did he think about control it was it possible to i i understand in the record industry there there there can often be like a parent label and then and then you can have a new label under it did you get anything there did that not come up he no like he he actually does like a really interesting deal i mean he may keep in mind so like my metric of success is not like he wound up being a billionaire but that came like way after even if he never did beats to me he'd be unbelievably successful just about the life he lived and like the experience you know you probably made hundreds of millions but with beats he made you know billions uh there one of the things was like what we went especially with like a tech focus is like when he sells i think he sells like 50 percent of his of interscope i forgot to admit maybe to mcaa and it was like for like 150 million dollars so it's like it's a fantastic outcome but when you were talking about three trillion dollar market cap tech company.

1:42:20So it looks small. Um, but, but no, it, finance was not like a, a focus on any of the interviews or any, anything in documentary other than like mentioning random dollar amounts with like taking in partners and stuff. Yeah. Yeah. Uh, on the, on the protests and congressional hearings, uh, did you, it feels like there is something there where, uh, when a founder is successful enough, eventually they have to put on the suit and go to Washington and start lobbying and do something that uh did you dig into any stuff that he was able to do or apply his methodology to even trying to smooth over that situation because it did seem like an existential risk to the rap industry at that time if they were really going to clamp down on explicit lyrics beyond just the the the content warning he he doesn't he doesn't state it like that's part of reason he had to sell like uh he like went with one partner to another because like i forgot what the company he was with but they were like hey like i think it was like underneath com it was like a bigger conglomerate that owned like another label and then under that label was innerscope kind of thing and they're like we have fucking senators calling like we this is such a small part of our business like you have to go elsewhere because like i'm not i have a you know 200 billion dollar cable company or something like this is not it but i but the i think the interesting part here is i think he he's a phenomenal marketer and that's what everybody would keep telling like a relentless salesperson um i think that's one of his gifts but i think he understood that like remember he signed like maryland manson trent resner eminem like uh tupac death road records like literally people were there was they were the rappers were killing each other like that was under inner scope and obviously he didn't want them to shoot each other but his point was with all of this with like this congressional uh protests and you know the the media saying that he's like a smut peddler and everything else like it's good for business and like it's it all this outrage because what happens when we were kids remember i was listening to eminem eminem was like a huge influence on me because i had this like all this like pent-up anger about like my early life and like i i felt i was born into an environment i didn't belong in and i was better than and like eminem was kind of a soundtrack of like yeah like you i feel that way too and so like music is very much like a young person's game so you have like 60 year old congressman or bob dole saying like you should listen to this well as a kid you remember was like being a teenager like oh that makes me more interested i want more of that and he does this too like um with beats so the idea before the streaming service he had the headphones he's like it doesn't make sense for dr dre to endorse anything he had like sneaker endorsement offers and all this stuff and he said there's a great line documentary he goes dre fuck sneakers speakers you should do speakers he's got that like you know high pitched italian twang voice which i absolutely love and so they're like bow the leading at the time in 2006 or whenever this was happening the time the leading uh headphone uh product was bows he's like headphones to put you to sleep i don't want to put you to sleep i want to make you move i want you to get off your ass and so what happens is they made them distinctive so you could tell with the big logo on the on the on the ears what they were right and then he's like our idea my marketing idea is very simple i'm going to put them it with the best musicians on the planet that's going to get everybody to try them and then once you try them you'll stay because it sounds good and then he expanded out to athletes but what he did is he wind up spreading it to the 2008 uh nba olympic team or u.s olympic team the men's basketball team and they it got banned and there was all this coverage because beats wasn't an official sponsor right and so you can't wear them and so they wore them anyways they wound up getting fined and everything else and jimmy's like this is the best thing ever happened to us makes sense uh i mean that's fantastic we could do this all day this is uh always a pleasure uh yeah thanks for having me we'll see you soon uh yeah we cannot wait to next next time we do this it might be in person here we got some plans how are you guys doing how are you guys are you have you are you gonna but if people drop in you like okay guys this is the end of the segment now you have to get up and leave we can do that we're we have some ideas we'll share with you but you just do a whole show with us it's gonna be i can't i can't do three hours of this i can do three hours alone with you guys but not you can do it you know how i talk in three hours if it's live and not edited i'm gonna get canceled you'll be fine you'll be fine you're good you're good we'll bleep out 30 minutes then 45 then an hour then two what did what did they used to do on tv there was like a two minute like remember it was like a delay like a tape yeah yeah we'll need a tape delay for you you're already if i'm gonna swearing like a sailor so we gotta clean that up uh we'll work on that that i mean we're gonna have to we're gonna we're gonna go do the porsche experience center that'll be fun and uh we'll have to get to get some behind the scenes of that i cannot wait to see podcasting senra and a gt3 rs you know just just tearing up the track what was the what was the ferrari that i sent you guys a12 super fast competition competition we gotta do that one awesome we'll talk to you soon david all right guys talk to you up next we have katherine han from han ventures coming in the studio to talk about the stable coin bill the genius bill is slated to pass on the front of the wall street journal today is the guiding and establishing national innovation for U.S.

1:47:41stablecoins. We had her on the show, and yeah, we're excited to talk to her. So welcome to the show. How are you doing, Catherine? What's going on? Hi, how are you guys? We are great. Big 24 hours. Congratulations, I think, are in order, but please get us up to speed on what's actually happening and where things are in Washington. And I love that you called me Catherine. That was my Washington name. I haven't been called that since I used to appear in court. but uh katie let's update the let's update the chiron katie hon so uh thanks for having me on guys actually i literally just walked off a plane i was down at the co2 conference um nice where i was talking to a lot of founders crypto and non uh and everyone loves your show so i'm fantastic happy to be here um well thanks for the time yeah thanks i think congratulations are in order i don't know if i would say that yet i mean first of all the bell pastor senate um great great news Obviously, it's another signal, I think, kind of like I feel like I did when ETFs were approved, by the way, not really by the SEC, although that was the body that formally approved it.

1:48:46But as I said last time I was on your show, guys, make no mistake, the D.C. Circuit, that Article three, that other branch of our government left the SEC no choice. The courts don't always get it right, but sometimes they do. And the courts unanimously in that case said that the SEC had acted arbitrarily and capriciously. So to my mind, the court system is the reason we have ETFs in this country today for Bitcoin and for ETH. And I think of this as a bit a similar thing. Now, here we have another branch of government stepping in. In this case, you have the Senate passing this, introducing this legislation, passing this legislation.

1:49:25Now, of course, the House has to vote on it. and then the president has to sign it into law. So if those two things happen, you can say congratulations are in order for the industry. But I think one thing that is not really being discussed and I hope we can discuss today is there's another very important bill. And I'm not going to slap a percentage on and say which bill is more important, but that's the market structure bill. And to me, that's really the transformational bill for the crypto industry. Okay, so break that down for us. Yeah, so there's one bill stable coin bill, as you just mentioned, that the Senate passed.

1:50:01And one of the things that I loved to see about that is the bipartisan support for that bill, because I think we used to be as an industry pre-political. Brian Armstrong always talked about the industry being pre-political. And I think I don't want it to be the case that this industry is too political on one side or the other. So I really love to see these moments like we saw yesterday in the Senate, where you have a number of Senate Democrats voting in favor of sensible rules of the road. And I think this is a classic example of that. So I'm delighted and I hope the House passes it. But I don't see why we have to choose between just a stablecoin bill and the market structure bill.

1:50:40And the stablecoin bill obviously paves the way for a regulatory framework for stable coins in this country. So that's that. Then there's another bill, the market structure bill. And that kind of will answer or attempt to answer the question of what's a security, what's a commodity. And I know you guys have been covering crypto for long enough. You know this is kind of an age old debate. And, you know, where can there be an enforcement action? Well, the big question is, well, what's a security and what's not? And I think the market structure really goes a long way in answering that question. And that's why I think it's so fundamental.

1:51:14And we've seen courts across the country weigh in on that question. and that's because we don't have legislation. And Gary Kessler said it was also clear and of course it wasn't also clear. Yeah, so what's the timeline there? What are the different players? What do people want out of it? What is the core kind of crypto industry both on the investor side and company side want out of it? And who would not want it to go through at least how the crypto side has it in mind. Look, I think everyone in the crypto industry wants the stablecoin bill to go through and become law. I don't think there's really any question about that.

1:51:57The question is, do you go for both? Someone just described it to me in a sports analogy, and I'll probably fumble that one. But it was like, do you go for the field goal or do you go for the touchdown? And the thing about after a field goal, the other side gets the ball back. And I think Congress really operates in kind of six to 10 year windows. And, you know, it's on their mind, reform, regulatory clarity for crypto right now. And I think the transformational bill for crypto right now is very much that market structure bill. We also want that stable coin bill. And we have this unique moment in time where we have bipartisan support for both bills.

1:52:36So personally, I say go for both of them. And worst case, you end up getting the stable coin bill only. But I do think that's not the most desirable outcome for the crypto industry. I think the crypto industry deserves, especially after years of uncertainty, both a clear message from Congress. I think Congress ought to do its job and pass both bills. And I especially think that because after the Supreme Court last summer, in a case I said that this was the most important case for technology policy, not for just crypto, but for tech policy in decades, was the overturning of the Chevron doctrine.

1:53:11And that takes power kind of away at a high level, away from regulatory agencies and puts it back more in the hands of the courts. And do we want to have another 10 years of litigation percolating up from the district to the appellate court to the Supreme Court on what's the security or what's the commodity in a patchwork of different answers throughout the country? Or do we want Congress to answer that question for us now? And I think it's incumbent for Congress to answer that question now. You asked who what does the industry want? I think people this is a big industry. We say crypto is not a monolith.

1:53:45It's a broad new asset class and stable coins are a very big, important piece of that asset class and a growing piece. As you guys saw, I shared with you the stats, you know, almost a quarter of a trillion dollars. I think you banged the gong for that stat. Locked in supply, growing enterprises across the world, integrating stable coins. You probably saw those announcements from some of the big tech companies in the last few weeks. And I think one thing that everyone's wondering is those ones that haven't yet dived in for stable coins is, well, what are the rules? So this bill that was passed yesterday on the Senate, the Genius Act is so important for that.

1:54:25It's like, here you go. And so what kind of institutional interest will be unleashed once that bill becomes law? I think that's really exciting. What's your, how would you, how do you think about big companies getting excited about stable coins and thinking or institutions and being like, there's a lot of potential here, we should create our own stable coin versus we should just figure out how to leverage this technology? Where do you see the kind of line and opportunities? Well, look, we already have two very dominant stable coins, right, already today. Tether, USDT, and then we have USDC. So clearly, it's not winner take all.

1:55:03I mean, those two are both growing and they both have market share. So we think there will be stable coins like those that will have network effects. But we also think at the same time, there are some businesses that are just so big and just so important. And if they launch their own stable coin, we could also see that too. So I don't think we see a world where everyone, I think we get asked this question all the time, is there going to be a world where every company has their own stable coins? Yeah, we don't think so. We could be wrong, but that's not the view of how we see this evolving. We do.

1:55:35Yeah, we had we had Aaron, Aaron Frank from Lightspeed on earlier, and he was comparing certain companies would launch a stable coin and it maybe would feel like Kohl's cash where it's like, yeah, I don't have any of that, nor do I. I don't have any of that. And that's the thing. If I did, would you want to use it on other platforms? Right. I mean, every bank could launch a Visa network competitor theoretically, but that doesn't necessarily make sense. Yeah. So in your mind, is the broader market structure bill the kind of thing that could catalyze a massive amount of new activity? And from my view, you know, stable coins have been getting adoption.

1:56:11There are a bunch of exciting use cases. We have a public American stablecoin, you know, issuer in circle now. It feels like, yes, regulatory clarity is important there, but having broader clarity around how tokens are treated by, you know, how the government actually views tokens feels like it could catalyze, you know, much more of an explosion in investment activity and new company formation and new use cases for tokens. Is that the right framework? I think that is the right framework Because, like I said, stablecoin is a big, important piece of the pie and very low hanging fruit, by the way, to my mind.

1:56:50But crypto as an asset class is much broader. So when you say, where do the industry players, where are the crypto investors, where do we want to see it? I don't think it's a monolith. I think crypto, as it grows to a multi-trillion dollar asset class, like any multi-trillion dollar asset class, you have different factions. And I think some fairly and some really smart people think, just take this, take this win and move on and don't worry about the rest. And I think that's a little, I see why they might think that if they think that it's this or nothing, but I don't, I think that's a false choice.

1:57:22I think that we can have both. And this is a really opportune moment to have both. And I think the question that has beleaguered the industry really has been the question over securities, commodities, which agencies are going to have jurisdiction. I think that's a bigger question. And I think it would be a real shame if we let this moment go to waste. You know, the irony too. So you have some stable coins or only stable coin companies who are like, yep, genius act and move on. They don't want to get dragged into this broader, kind of a more omnibus package, right? With the market structure legislation.

1:57:57But I think that's a missed opportunity. And I think we'll be sorry as an industry if we don't go for both now. Again, go for the touchdown. And with, you know, I think all of the, like I told you, All of the fundamentals are kind of working all at once together now when I last talked to you guys. And that's very much part of it. So why would we not go for that? So I think some folks who don't maybe have an appreciation for how sometimes, sorry to say, it's slow Congress operates. They've been trying to update the money laundering laws for two decades. And it's like out of sight, out of mind sometimes.

1:58:28And I think we have a really unique moment to press for both here. And the irony is some Democrats who are opposed to market structure, you know, because of potential abuses or who are opposed to the crypto industry, they cite abuses, they cite fraud, they cite speculation, they cite Trump coin. And I get all of those criticisms, but I'll tell you what, had the market structure bill been passed, that would have answered a lot of those questions. The irony is if you would have had the market structure bill, you wouldn't have had a lot of the blowups that you had in the past several years in this industry.

1:59:03Is crypto truly coming home to America? We went through a period where crypto is being pushed offshore. We've heard over the last year that some crypto founders feel like they can come back to the states now, maybe actually have an office stateside. Are you seeing more and more momentum there with some of this positive regulatory movement? Or are you still seeing momentum around places offshore, Singapore, etc.? I think, look, everywhere that you're going to want to develop is going to have some rules that you're going to follow. When I hear founders who say there is no regular, it's often that there is no regulatory regime whatsoever.

1:59:44Sorry, Balaji, if you're watching. But I am seeing that on shoring a bit. We were kind of seeing the off shoring in an unfortunate way. But it's not only regulation that matters. It's hiring top talent. And certainly there's top talent right here in Silicon Valley and other places in the world. I mean, you mentioned Singapore. Singapore has top talent to be sure. But, you know, there's a lot going for the U.S. So we're still very optimistic. And I don't think it but we were getting to a very dangerous point with the crypto industry had the likes of Gensler and others like him been left kind of to just do this.

2:00:21Now, fortunately, the courts were pushing back. So it wasn't a partisan issue. It was just the courts were starting to say, no, you've gone too far. I mean, I lost track now. I literally lost track of how many federal courts of all political persuasions and appointments ruled against Gensler's regime. And not just Gensler, but others like it, where you had very activist regulators who were really far out of their lane. and you saw courts curbing back on that. So I think that was already, we're at a dangerous spot, but the courts were maybe going to save us, but you don't only want to rely on litigation to save you, of course, because then you've already lost.

2:00:58But I think hiring talent is important. I think, you know, access to capital and traditional venture, maybe that's a little different in the crypto asset class. But I think also fundamentally what you have going on right here now with AI, particularly in Silicon Valley, and we've talked a little bit at the early stage about some of the synergies between AI and crypto, because of course, AI creates digital abundance and blockchains are good at enforcing digital scarcity. And I think you're going to see more and more synergies emerge and use cases over time. And I'm not going to say what they are, because, you know, we've seen that before in crypto, a lot of overpromising, under delivering on use cases.

2:01:35So let's just stick to right now we see synergies. There's a lot happening in Silicon Valley, obviously with AI, we think that's going to benefit the crypto industry. And so in addition to regulatory clarity, if you're a founder, you want access to great talent. You want your visa situations sorted out for your employees. You want access to other founders. Depending on what type of company you are, you want access to capital. So I am optimistic about the state of crypto in the US, but also elsewhere. And we invest in companies. We invested in squads. We've announced that. And I know Steppen, one of the founders of squads, watches your show.

2:02:16But Steppen's based right now overseas. And I was just having a conversation with him about how do we get you to come and bring squads to the US. Awesome. Awesome. I want to talk about the longer tail of regulation because it seems like the stablecoin bill is very straightforward, like the least ambiguity there. Then you have the Market Structure Act, and there's a lot more to do there, but I'm sure that there's like riders getting pitched and all sorts of long tail things. Like how much are we actually, like where does the line end between what we're actually trying to define versus what we're still in the exploration phase of.

2:02:58Because you have NFTs, crypto gaming, there's prediction markets. There's so many different crypto applications that trying to kind of do them all at once, maybe that's the right approach. Maybe these need to be handled like after we've done the technological exploration. But what's your view on kind of the long tail? My view on that is no, because we can't have an NFT bill, a bill for bank contracts or that we can't have specific bills. And if you saw, if you think back to the advent of internet, that's not what we had. You know, we had Section 230. It applied broadly to platforms. And I think we need something similar here.

2:03:36So on the one hand, I would say it can't be so specific that it's like, okay, if you're a, you know, events contract platform, it's this rule. And if you're an NFT player, because again, we don't even know yet what will be created really at the end of the day. We've seen some early use cases with product market fit. Obviously, chief example of that is Bitcoin. But what if we had had this conversation, guys, back in 2010? And you said, OK, we've got Satoshi's white paper and there's this thing called Bitcoin. Let's pass some crypto regulation. It would have just been for Bitcoin. And that would have been a mistake because then a couple of years later on the scene, we have ETH.

2:04:12And a few years later, we have Solana. So I think what we need to do, so you don't wait for the end state to have any regulation, right? You don't do regulation by and forth. I can tell you what we don't do. We don't do regulation by enforcement. You don't wait till the end state of things. But nor do you want to get so with such specificity today and do the current state of regulation by the end state of regulation that you can't do either. And so I think what you have are some guiding principles, some generic rules of the road. And really, that's all the market structure bill is. And there's enough clarity that you had Democrats vote for it last time it came up.

2:04:50So it's not like it's so specific. It talks about and I think, look, I think you have people like Hester Peirce, who is SEC commissioner, has written and given speeches on this of what that ought to look like. What is a decentralization test? And those are some guiding principles that you can kind of look at and apply as you think through this legislation. You know, what body ought to regulate it? And and sure, you're going to have some outliers and new technologies emerge that you're like, OK, does this fit neatly in the bill? No, but we have laws for everything in this country with technologies that develop that don't fit neatly in a particular bill.

2:05:26And that's why we have that's why we actually have we don't do regulation by enforcement. We do notice and comment. We do things like advisory opinions. Certain bodies, by the way, do do advisory opinions, not judges. And then if all else fails, you do go and sometimes seek Article three, seek a judicial interpretation. But I think that's like I said, that's kind of the failure state if you're having to go to the courts. But indeed, that's what was happening because we were getting no rules of the road and we were only getting unfair regulation by enforcement. And I say unfair because Gary Gensler basically picked what should have been the best companies, encrypt other poster children for compliance and brought enforcement actions against them.

2:06:08And then the complete spectacular disasters didn't bring anything. So until after the fact. and so I think regulation by and by. We got to have you and Gary on the show to hash it out. I'm sure you guys have had some funny conversations. Thank you so much for hopping on. Yeah, thanks guys for having me. Great having you. Have a good rest of your day. Okay, bye-bye, bye. Up next, we have Justine Moore from Andreessen Horowitz. Incredible map knowledge dropped, a fantastic market map all around AI image, AI video models. We're going to have her take us through it. Welcome to the show. How are you doing?

2:06:48Can you hear us? Can you hear us? Hello. Oh, I can hear you guys now. Sorry. There we go. Hey, I was saying to John, when you dropped your new market map, I was saying, you know, it's a great sign of respect in our culture to drop a new market map and come on the show. So we're honored. I've been incredibly bullish on market maps. I find them extremely interesting and I think they got a bad rep a couple of years ago, but I'm glad that you've stayed the course. We are pro, strongly pro market map. Yes. The people love market maps. It's like you can guarantee a popular tweet if it has a market map in it.

2:07:22Absolutely. And I think people got kind of sick of like, oh, like we know the playbook, we've seen it, but there's a playbook for a reason. It works. So yeah, take us through the latest market map. What are you tracking? How did you decide what to divide it up into and what kind of inspired this moment specifically? Yes. So I mostly do AI creative tools here at A16Z. So I spend like all my time testing all of the image, video, audio, etc. And obviously, the past few months in particular, video has been like the thing. There's been like VO3, obviously, which was a massive moment with adding the audio for the generations.

2:07:58And Hedra around the talking characters, the new Minimax model, the new ByteDance model, SeedDance, which is in the arena already outperforming VO3. So it just felt like a good time to refresh sort of what's going on in the video space. And I kind of formatted this market map just thinking about more from the perspective of a creator, like less in terms of the go-to-market of the company, more just like if you're a person trying to create a video with AI. where would you go for these different use cases so there's first sort of the model like the foundation model companies where it's either text to video or image to video most places do both where they actually take your input generate have their own proprietary model that generates the video for you so that's the the vo's the clings the runways the picas and then there's also now this emergence of what I call like multi-model apps places like um kreia and and flora and visual electric that enable you to run a bunch of models in one place so like if you want to take a single prompt or a single image and see what it looks like in five different models super easily you can do it somewhere like that um and then the other side of this market map is sort of like what happens when you add speech and talking characters.

2:09:20And so some folks do that by like generating a talking avatar from an image where you can eventually have the person move. And other folks do that by taking like a video of a person and then applying lip sync over it and then syncing the audio. So that's sort of the distinction between talking avatars and lip sync. It's interesting that you're in the consumer group because I can imagine that a lot of the talking avatar companies wind up selling to corporations that want to vend in talking avatars, for example. Are you seeing a lot of that? Or, I guess, how rigorous or stringent are founders about, hey, we are trying to build a consumer app, or we're just building a cool technology.

2:10:01And it might land as a consumer product, but it also might land as a B2B play. Most people are not at all rigorous and often don't even know at the beginning. So what we actually saw with the first generation of AI video was it was only researchers making these like magical models and they had no idea what the use cases were going to be. They all just put like a text prompt box in front of the model and then you got an output and like a big company and an individual were using the exact same interface. Now I think we're starting to see more at like what we call the app layer, which is essentially like, how do you productize this?

2:10:34How do you create workflow? And therefore, how do you go into specific verticals. Maybe an example of that is all of the like standalone video ad creation products, so things like Creatify or captions where, or Hey Jen has a product for this too, where you can literally just like paste in a link to your Amazon or Shopify store. It will pull all of the info about your product, your logo, your brand, and it will generate a talking head avatar, like holding your product and describing it. And that's something that like a VO3 or a Kling, the general video model companies won't do today. Yeah. Where are you seeing the strongest, like low churn adoption of these tools?

2:11:16Because just personally, like VO3 was the thing that got me to subscribe to Google Pro Max 25, which we can go into the names and how difficult it is to access these. But other than that, I haven't seen that many where like we've seen the ASMR stormtroopers or something, but it hasn't been clear to me that someone's building like the next Pixar and they're actually thinking about it like Mr. Beast and they're like, I'm building a studio. This is a business. I have ad integrations and I have a content schedule. It's very much in like the testing phase. We see the Studio Ghibli moments go viral.

2:11:50So where is like the true long-term value playing out right now? Okay, on the content creation side, where we are at right now is actually there's a bunch of content agencies. Like, you know, there's a bunch, Wonder Studios, Dream Studios. There's probably like 20 of them now. One called Paracosm. That's really cool. And these are people who are just early adopters of the tools and they're getting hired by brands and ad agencies and entertainment companies to use the tools for them and make content. I think the problem now and what you're describing is like the people at Pixar would have to know how to use the AI video tools and how to set up the workflow.

2:12:31in order to create their next movie using AI. And we're not yet at, like the tools aren't mature enough and we don't have enough people who are working at those entertainment companies who know how to use the tools that it's primarily being done with these external AI native agencies or contractors today. I think like one of the first AI IP we've seen is the Italian Brain Rot characters. I don't know if you guys - No, I don't know this. I haven't seen this - The Italian Brain Rot characters are huge. So I can't even say the names here because They will sound ridiculous, but it's people basically making images of like an animated talking baseball bat and like a ballerina whose head is like a cup of cappuccino.

2:13:10Okay. Okay. And a shark who wears sneakers. Okay. But they're starting to build like a cinematic universe. Oh, it's massive. Yeah. Accounts have like millions of followers. The world isn't ready for Italian brain rot. So is it like decentralized in the sense that like I could just go and participate in this like broader trend? So yes and no. I would say there were a couple accounts that originated the first few characters. And then other people started participating using the hashtags remixing. And then the characters that were good that came out of that sort of bubbled up to become part of the cinematic universe.

2:13:47The canon. They have Bombadero Crocodillo, which is a bomber. He's a crocodile plane that shoots bombs. This sounds like, yeah, yeah, super, super viral. Yes. The kids probably love it. It's wild.

2:14:05Before we go into more of the consumer side, talk to me about some of the more like niche, like B2B use cases. is because I remember when like GPT 3.5 and we got GPT 4 dropped, there were still like a lot of hallucinations, but you saw companies that were just like, yeah, like sure, it's not incredible at writing poetry, but it's amazing at just like converting this messy text to JSON, and they were all of a sudden just running tons and tons of queries. And so I would imagine that in a video workflow, things like what Runway was doing in the old days of just like green screening or the stuff that like artists aren't gonna really get upset about because it just feels like a better, more advanced tool.

2:14:49Are a lot of these companies building tools like that or is all the focus just on like, let's one shot the next Oscar film? Yeah, it's a great question. There's a decent amount of vertical focus. I think also like it's very hard for startups, like if you're not a Google or an OpenAI or whoever to play in the game of like, let's train the largest one shot best video model. So a lot of them are focusing on verticals like Luma, which is a company we've invested in, did this really cool tool where you can upload like a nine by 16 like iPhone style video and you can just say extend and it just basically like outpaints around the existing video and makes it look like, so you can just change the dimensions of your video really fast.

2:15:32Or there's companies like - It's more of just like a practical tool but super useful for a bunch of creators that are filming vertical content probably and they want to distribute in a horizontal format So they just do that. Yes, exactly. That makes a ton of sense. Or something like Higgs field that it has all these really special effects, like motion Laura's essentially. So you can take like an image of a car and just say like, this is like, here's a template of what a car explosion looks like. Make this specific car explode. And then on the B2B side, we've seen a lot around like, how do you scale marketing or L and D or like executive presence type content?

2:16:06So like, you know, tools like Descript now allow you to take a video of someone talking and then change the word that they're saying by changing, like cloning their voice, having the voice say the new word and then doing a new lip dub. New lip sync, yeah. So you could have your CEO sending what looks like a personalized holiday message to like every single customer or something like that. Yep. Or maybe something worse with a phishing scam, but I'm sure we'll get into Casey at some point. What do you think the long-term ambitions of companies like Google with Veo and ByteDance with their model, what do you think they want out of this category?

2:16:43They obviously have a massive edge. I saw Anish was posting about Google's edge or YouTube's edge around IP with Veo. You can generate basic imperfections. What was going on there? It's crazy. The Disney thing. Is that like a real deal or is that just a beneficiary of like some sort of relationship? Yeah, then I want to get a sense of do Google and ByteDance, do they want to be developer tools that just vend into a bunch of these platforms? Do they actually want to own the end customer? What is this market? Is there a generalized market in the long run of just generating funny videos for the average consumer?

2:17:21Or is it going to all be verticalized out where I want to generate ads? I maybe want to generate, you know, customized messages. But I want to understand, like, this is a good overview of all the ways that you can generate content. But, like, how does the market structure evolve? Yes. OK, on the IP question, I have not talked to Google's IP lawyers and I'm not an IP lawyer. But my understanding is Google. But this is legal advice, right? Yeah, exactly. And financial advice, all of the above. Our compliance team is going to love this. Yeah, they're going to love it. Sarcasm. You can – I think my sense is basically when YouTube came about, it was suddenly like all this IP content is on the internet and Google cut deals with a bunch of the IP owners about essentially what can be posted on various Google properties and if that content gets monetized, how it ends up going to the end rights holder.

2:18:11And so that's sort of the working theory right now about like why VO3 can generate IP content and not get sued when a lot of other people are struggling with that. In terms of the market dynamics, it's so fascinating, the question around Google and ByteDance and eventually I think Facebook, I hear, is going to do more in video soon as well. Why they're doing it and what their strategy is. I think first of all, if I'm one of those huge consumer giants, AI is such a massive shift in consumer behavior that if you want to own the interface to consumers, you probably want to own text, image, and video generation as well.

2:18:48and they have the resources in terms of data, like YouTube, for example, is a perfect example of this. They have a ton of compute, they have a ton of money, and they can hire the best researchers to build the best models. I think the question, as you sort of alluded to, is like do they sell those models via API and let other people build the consumer experience on top of them or do they own the end-to-end consumer experience? My honest take on it so far has been like it takes so long in the big company product teams to get stuff done want to get new products out, that the model teams are just shipping the models in pretty basic interfaces, like Google Flow.

2:19:24And then the product teams are going to figure out if they can catch up with some kind of cool new consumer app later. Yeah. Yeah, I mean, I saw that. My question is, what will the market actually look like for the average consumer wanting to generate images and video? Or will it just be something that people default to ChatGPT, because maybe they already have a subscription, or they're fine with the free tier. And it doesn't end up, there ends up being a bunch of different applications on the enterprise B2B side, but then not so many like, you know, core consumer subscriptions on just like cool videos, pictures, et cetera.

2:20:03I mean, it seems like it's a killer moat for Google Cloud Platform to have VO3 as an API, even if Google can't figure out how to productize it fully. It's like, they do seem to have a real moat. I want to get into that about YouTube is obviously an incredible training data resource. You mentioned that there was another company that just surpassed them. Was it Tencent, you said? ByteDance. ByteDance, that's right. So I have a question about that because obviously with CodeGen, GitHub has a lot of public repos that people can probably just scrape. It's also just not that much data. You can probably fit it on a couple hard drives, maybe sneak it out the back and go head a flight and train somewhere in Malaysia or something.

2:20:47You can't do that with YouTube. Like it's just too much data. And so my question is how durable, how much should we be thinking about a durable data moat in video generation for YouTube? Because it seems like something that they could really like clamp down on and would give them a durable advantage. But I don't know, there's so many other ways to attack any of these model developments. Totally. There's a lot of different options. So there's a couple of parts of the data question. The first part is like, what do you own versus what do you scrape? I mean, we've seen companies like OpenAI will scrape YouTube as well to train their models.

2:21:24I think ByteDance also like, you know, here we think of YouTube and Facebook and whatever here in the US, I mean, as being the big host of content. but like there's all these massive companies in China, like ByteDance who have their own, have their own user generated content on like their version of TikTok and their version of YouTube. And I'm sure there's reposts of American videos over there. So it's not like even has a unique flavor probably can generalize pretty well, right? Totally though. Yeah, like I was one of the very early users of all of the Chinese video models when you still had to access them on Chinese apps with Chinese phone numbers.

2:21:58And they were definitely very good at things that were more China-oriented than the US models. That makes a ton of sense. Oh, okay. The other thing that's important to mention on data is in video in particular, it's not just the volume of data. It's also the quality of data and the quality of data labeling. Because essentially, you can't just feed a video into a video model and assume it can understand what's going on and pull out the relevant info. You have to have really sort of dense labels is what we call them or super detailed captions about like, this is this style shot, shot from this sort of camera.

2:22:34The camera is coming from this angle. This is the sort of character. This is how the character is interacting with the background. And that quality data is what drives quality in the video models. And China has really benefited there because there are so many more PhDs than there are here. And it's much cheaper for these companies to hire them to do these dense labels for the video data. Yeah. Well, how does MidJourney fit into all of this now? It's such an interesting company because no venture dollars, this like behemoth kind of quietly hiding in a Discord server still. I saw some examples of video.

2:23:11It looked fantastic. Seemed like they hadn't added audio yet, but how do they fit into the whole piece? Because it seemed like early on they developed a really great feedback loop for the data that maybe wasn't happening with some of the other model providers? Yeah. So the mid journey model came out this morning, um, really conveniently like 10 minutes after I put out my market map without any video because it's not yet available. Um, I was just playing around with it too. It's, it's really cool. They do image to video. Um, and they, and so they don't do text to video, which is actually sort of easier.

2:23:43They can start with their, the super high quality images that they generate on the platform and then animate those. I think they have like a low motion and a high motion setting. Um, from what I've tested so far um it's it's better as sort of like a low motion scenery environment light interaction type thing like you have a photo of a person and you can then animate sort of rain and wind and them walking slowly and it's not as good at like what i call physics heavy world model type things like two cars running into each other and exploding that sort of thing requires um a very, very large and costly, usually like text to video model that is more difficult to train.

2:24:26Whereas mid journey, I mean, I have no idea how they did it. It's a great model. They could have taken one of the open source image to video models and fine tune it on all their own data. Yeah. Yeah. I've noticed VO3 is really, really good with some of that physics stuff, but it still gets confused. Like if a car is driving away, all of a sudden you'll be looking at the front of the car and then the back of the car and it'll get kind of mixed up. But yeah. Are you, as all these different models have progressed, I always remember Brud and Trevor McFedry's and just how early he was to what I think will be this new wave.

2:25:01Is that Lil Mikaela? Yeah, Lil Mikaela, which was basically a CGI influencer. So very early, I think we're going to see a lot more of this. And we've seen some of this to date, but do you expect that to be kind of like a new, a new like how how bullish are you on on sort of like entirely ai creators getting um getting real adoption following turn followings turning into real businesses i'm sure you've you follow a bunch of them already yeah i'm i'm personally super excited about it because it kind of separates um the content from the character like now you know before ai if you were on instagram like you were both the character and the person coming out with the content.

2:25:44And so you had to like look in a way and present yourself in a way and talk in a way that was like interesting to the Instagram algorithm. And now it's like anyone with a good idea can create a compelling character. And so I think some of those are human characters. I've already seen way too many examples in my Reels feed of OnlyFans models who promote themselves with AI avatars of themselves now, which works shockingly well um there's some photorealistic human influencers but honestly some of the more interesting ones are things that could never be influencers before ai so there's one called like raccoon stole my iphone and it's a it's an ai raccoon influencer there's like ai capybara influencers there's like mystical creatures like all of these things that just come out of people's imagination.

2:26:31Competing for Mindshare with Instagram pet pages, you know, dog pages, things like that. Did you have a reaction to Fountainhead? It was the, or sorry, Mountainhead, not Fountainhead. Mountainhead, the movie, the core overarching theme was that basically deep fakes or AI generated content had gotten so good that it was causing global unrest uh did did it did it resonate at all it does feel like i now have you know multiple times a day i'm seeing content online and and it's like getting i we're both in the community notes program so it's like you see content getting community notes one person says it's not real look at this link it was this image they redid it another person says it's real look at this so it's like i just assume that everything's fake and made up unless i see it you know with my own eyes, but I'm curious if you, if you, uh, if it resonated at all with you.

2:27:26So I've not, I largely consume AI slop, so I have not seen the movie. Um, I should watch it soon. You should watch the movie, the motion picture on slop. Yeah. Uh, once they have that, I will watch the full film, but, um, it's so interesting. We talked about this a lot actually with audio models with the last like election cycle. Cause video, I think wasn't there yet to have convincing deep fakes um but audio like there were way less cases of even though you could make really realistic voices cloning candidates and saying things that weren't true there were way less examples than we thought of that actually like impacting any any election in any sort of meaningful way and i think part of it is like things like you mentioned the community notes program where like you have sort of citizen watchdogs on various platforms saying this is real this isn't real running them through various sort of ai detectors but I also think like people are starting to develop more skepticism around everything they see online and whether or not it is real which is probably not a terrible thing yeah I had this take that after effects would be more impactful on the election than AI video because like you can just show a clip of a burning building from 2020 and it's real video but you recontextualize it and say oh you know this the the capital is burning or something and it's from years ago or or just you know speed up a video slow it down edit it out they would do this with various politicians uh you know cut out the ums and uhs and they'll sound sharper add a bunch of gaps and all of a sudden they sound like they're slower yeah it even you know we're here in LA and when all the imagery was coming out of the the protests from a couple weeks ago it was like burning waymos kind of looks like something you generate with vo3 just because it was so symbolic and just such a crazy image and then like make an image of a guy with a Mexican flag riding it, doing burnouts around a car that's on fire.

2:29:20And it's like, oh, that looks like, you know. And even just the way that was photographed, there was like it looked like all of Los Angeles was engulfed in flames, but it was really like one crazy block with a bunch of different angles and then a bunch of different posts. And you drive around and you'd be like, oh, there's not that much going on. See, that's the other interesting thing is like even real footage can be manipulated. Like any kind of story can be manipulated in a way. like ai are you are you seeing uh i think like you know there's exciting uh companies like worldcoin you know doing like proof of human are you seeing any infrastructure players trying to like do anything on like content verification side and like trying to create some sort of mechanism to to prove whether something was like authentic you know actually shot on an iphone right you know proving through the metadata and some type of like public um setting is there any pitches uh from from that side yeah so largely honestly today that has come in two places one is the model companies themselves will often watermark the content in some way like the vo3 generations has a little vo3 11 labs which does the audio they actually have a site where you can upload any audio and it will tell you if it was generated with 11 labs or not that's cool um which which is pretty cool the other um place we've seen development there is for like prominent individuals um like you know celebrities or someone who's there's like value behind their brands and who potentially even might want to monetize it in the age of ai like if you're an actor and you suddenly don't have to you know film go fly back to la when you're filming a movie in australia to tape like five ads for some cell phone brand and you can have your ai avatar generated to do it instead and it looks just as good.

2:31:05Like you might actually want to, you know, have some licensing company that owns your AI licensing rights, whether it's your traditional talent agency or not, um, who can manage that for you. Yeah, totally. Very cool. Well, thank you so much for talking to talk for another hour. I have so many more questions in the, in our doc, but, uh, we'll have to have you back. So thank you so much for stopping by. Thanks guys. We'll talk to you soon. Great chatting. Up next, we have a niche from traversal coming in the studio, kicking off It's our new lightning round. We're getting to every single financing, every single important startup update.

2:31:39Founders back to back. Welcome to the stream. How are you doing? Doing super well. Thank you for having me. Great to have you. Can you kick us off with an introduction? What do you do? Hi. Yes. My name's Anish. I'm one of the co-founders and the CEO of Traversal, where we are basically trying to build an AI site reliability engineer. So when you have software systems, they break and we try to help troubleshoot why they broke and how to fix it. Is the current status of the market entirely human site reliability engineers? Or are there like a suite of tools that are, you know, just not AI enabled enough and you can kind of piggyback on?

2:32:15Yeah. So I'd say the current state of observability, I call it observability 1.0, has been putting a lot of eyeballs on your data. So essentially, the great iconic companies now like Datadog and Splunk and Grafana and Dynatrace. And what they basically did is help they store your data and then help you visualize it through, you know, numerous dashboards. But the toil of actually figuring out for an on-call engineer what happened is what I call dashboard dumpster diving. That's what they still have to do. Right. And there isn't that intelligence layer of actually helping you search through this petabytes of data.

2:32:45I think that's what this new generation of agents and LLMs and some of the research we have done in our PhDs unlocks now. Yeah. Have you been tracking? I mean, it feels like site reliability engineering should be a beneficiary of AI. And yet it feels like we've been seeing more and more outages. Like Cloudflare went down. Google went down. We had another outage while we were doing the show. The whole internet went down. It feels like it's happening more and more. Is that just me being more sensitive to it or more news or I'm just online more? Or are these systems actually getting more fragile?

2:33:15Yeah, I think two things are happening. One is, as humans, we like to push the limits of everything we can do. And so we're always going to be pushing the limits of software systems and they're getting more complex. There's more microservices. And that was happening before the age of LLM powered code agents. Right. And now with everything happening in the world of AI software engineering with Cursor and get a copilot and Winsurf and so on and so forth. I think the amount of code that's being written is going to be like a Cambrian explosion. Right. I think most of it is going to be written by AI systems.

2:33:43And so this is going to get even more complex and less and less is going to be understood by us who are as engineers. And so I think it's going to get even harder to debug things because we don't actually understand what's written and it's more complex. And so I think that's actually going to throttle the use of AI software engineering tools in mission critical systems. Because if I'm head of infrastructure, I'm like, I don't trust this. I'm not going to allow this to affect my core infrastructure. And so I think you need tools, observability 2.0 to help actually be in line with it, I guess. um i feel like finding truly great sres is like a massive challenge like how do you like you know if you can deliver on the product side like how much bigger do you even think like the market is like the market demand for great you know basically effectively you're it sounds like you're wanting to offer productized sre talent um how much how much like demand is out there for for for what you're building?

2:34:42Yeah. So first of all, like we've been trying to hire an excellent SRE and we still haven't been able to. So there's a massive labor market discontinuity where it's just impossible to find fantastic SREs. But I think if I think of the role of an SRE, the way I think about it is like it's all about the health of software systems. And I think of it as like the master hierarchy of needs. So in your level one, you have a heart attack. You got to deal with it right now. And I that's what having a production incident feels like. And that's where SREs have to spend a lot of time where everything else, nothing else matters.

2:35:14Level two is when you have these like constant stream of alerts happening. That's the equivalent of having like some sort of like chronic condition that you have to deal with all the time. And you can't think like a year in advance. And only when you can deal with these things, then you can start thinking about like your long-term health and like life hacking and optimizing your sleep. And that's where I think you can think about the long-term health of a software system, how you would architect it over the next four, five, 10 years. And so I think all of the time right now for SREs is being spent in like having a heart attack and a debilitating condition.

2:35:43What I think they should be doing in the best SREs is thinking about the long-term health of a system. How do I architect the system for the next five years so that it's robust? And I think that's what they want to be doing, but they're forced to be on call all the time. And so I think that's what we want to stop them from having to do and they can spend their time on the more meaningful aspects of their jobs. Talk about the tradeoff between fully agentic systems here versus more of a co-pilot dynamic. Yeah. So I think if I think about it, I think of it as a two by two. So think of the y-axis as the severity of the issue.

2:36:18So you can have alerts that are happening all the time to really complex incidents. And then on the other hand, you have how agentic is it? So close to zero would be you have a runbook. You have some sort of playbook that exists and you have humans or engineers go execute those runbooks. And on the other end, you have where you really don't know what to do. And so you have 50 people in an instant war room trying to figure out what happened. So if I think about for low value alerts, typically you have a playbook or runbook that engineers can go execute. And that's, I'd say, less agentic because you can just kind of the meta workflow is always the same, which is like, look at this dashboard, then look at this logs and correlate between them or something.

2:36:59And on the fully agentic side is when even teams of engineers have no idea how to solve it a priori. And that's where you need to come up with architectures that are truly novel, where it doesn't fall into a pre-existing runbook. And that's, I think, the type of architecture you have to build to deal with the most visible incidents that an enterprise faces. I think that's really been our focus of the company. Last question. I was going to say, are you the first assistant professor at Columbia to raise, you know,$48 million in the first two financings of a startup? Do you have any, is there anybody that's got you beat there?

2:37:33I don't know, but Columbia has been an absolutely wonderful partner. I think they've been very supportive. I think they understand the importance of AI and how, in my opinion, this is the industrial age of AI. So if you want to be a good researcher, you have to be in the weeds learning how these systems work. You can't just be theorizing in a vacuum. And I think everyone, myself and Columbia understands that. So they've been an incredibly supportive institution. And I'm, yeah, I hope that I continue my relationship with them over a long time. That's awesome. Talk about the traction to date. You guys have been in stealth.

2:38:01I'm sure you're going to get a flood of, of inbound interest today, but yeah. Who, who are you guys building and working with so far that you can share? Yeah. So we've been, I can talk about a few that I'm allowed to speak with and some I can't, but they've all been some of the largest enterprises in the world who basically any company that's been, cares about downtime. So those turn out to be companies like infrastructure companies, payments, streaming, financial institutions, because if you go down, your customers feel it immediately. Those have been the customers that we've typically focused on, or they've been attracted to us as well.

2:38:32And we've found that actually, as you go to the larger enterprises, two things happen. One is they actually have all the data, because if you don't have the data, we can't do anything. And so the instrumentation is mature, but at the same time, it's fragmented. You have so many teams, so many different services. And so I think that's where an AI agent that can talk to all these different systems at the same time adds a lot of value. So we have found ourselves more and more pulled towards the enterprise. And yeah, it's deployed in a number of mission critical environments. People are using it every day to help them troubleshoot pretty complex incidents.

2:39:04I think that's what we feel proud of, I'd say. It's great that this product sort of self-selects for really high quality customers that are going to like, you know, once they onboard and they're getting value, we'll probably be customers for years and years and years. Yeah. Um, so, uh, very, very exciting. John, uh, uh, let's, I think it's time to hit the gong. I'm not going to, he's not going to come on the show and $48 million. Congratulations. Fantastic lineup of investors. Uh, Sequoia Kleiner. Great, great group. Yeah. Great group. Fantastic. Thank you for coming on, uh, when you have news and talk congratulations on the milestone have a great rest of your day up next we have john lee from sapphire building uh electric mobility um very excited to talk to him john are you there welcome to the stream how are you doing anything good how are you guys doing doing great what's going on would you mind kicking us off with a little bit of introduction on yourself and the company yeah absolutely uh just a quick background on me i was a former contracting officer in civilian side at Naval System Command Headquarters, where I was in procurements for different systems from NATO sea-sphere missiles to submarine-sonar sensory systems, counter-IED jammers to energy upgrade systems on the DG Navy ships.

2:40:17Left them into Palantir as head of contracts for all of U.S. government, where I helped to increase their revenue and then some of the large contracts there and the over-energy-milliard contracts there. And then went off to do a lot of other helping startups. Most of them are ex-Palantir friends and are trying to get contracts from the U.S. government, helping with the go-to-market side. And then I met with my co-founders to start Sapphire and we're accelerating electrification for defense, starting with some of the deepest IP from the US government, where our first IP is at the Oak Ridge National Lab.

2:40:47It's great to meet you. Yeah. What is the main gating factor in electrification in the military? Is it on the supply side? Is it just on the deployment side? Can you give us some concrete examples of where electric systems can be leveraged for the warfighter? Yeah, absolutely. So right now, absolutely for sure on the supply chain side, there is an absolute shortage of if there is a surge capacity need for us to be able to produce in the U.S. from the cathode to the anode and up and have the vertical integration to be able to do it on our own, there is a lack. So there is a huge push from U.S. government to make sure we onshore or reindustrialize from ground up in terms of that production capacity, especially when it comes to surge capacity.

2:41:35If and when we need it, we need it. And we're lacking behind in their production side. But also we're just behind in the advancement of how the battery cells are evolving and how we need more energy power on the battlefield. It's not interoperable. It's not interchangeable. And there's not enough of it, especially when there's no grid. What are some of the most important weapon systems or just defense systems that are impacted by that? Yeah, absolutely. So it actually goes all the way down from handheld for soldiers and not. So we're talking to Air Force research lab, program manager, and there was an actual case where there was a soldier that's doing an air strike call.

2:42:27halfway through loses battery and the coordinates are still on him and because of that battery loss it uh it was a friendly friendly airstrike fire and that just is not acceptable uh that is such a easy elementary fix um to be able to have a battery management system software that allows us to reserve that extra percent uh it's an advancement that we have not been focused on is something that we need to do. But on top of that is the grid, is to be able to provide a tactical microgrid out at the edge where, hey, if all the power goes out, bring it in. And now we've got a tactical microgrid that's solar power, self-sustaining, that provides an interoperable, also energy source to mobile systems as well as standing systems.

2:43:16And that network availability also does not exist today well. What's, oh, sorry. Talk about the decision to be dual use. I'm sure there was a lot of thinking that went into that. It'd be interesting to get your insight. Yeah, absolutely. That's certainly an amazing question. That was something we've been learning a lot from since the company started. So our core IP technology is out of Oak Ridge National Lab, where some of the nuclear materials were invented. And our C2 has been there for over 20 years. and he's got funded by ARPA-E to work on a silicon nanoparticle that would go into lithium ion batteries.

2:43:53Essentially, if you ever play with water and cornstarch, it creates this thing called OOBLE. It's a very fun project for the kids. It's a non-Newtonian fluid, but we're doing that sheer thickening effect in the battery cell. And that happens immediately upon a bullet hitting the battery or a car crash hitting it. Then it solidifies from liquid to solid, preventing it from crunching up and providing extra structural strength for added safety. And so we started having conversations. We kicked off the company three years ago, raised friends and family around, and kicked off the company, and we were talking to electric vehicles and defense at the same time.

2:44:32And we really wanted to really understand, like what I'm really passionate about is protecting and saving lives. Like I could care less if it's, you know, 10 technologies or 100 technologies do it. like I'm going to protect and save lives. That's where my passion is. When I was working on the counter IED jammers to put into our vehicles in CENTCOM so that the enemies cannot blow up the IEDs under our vehicles as a contracting officer, then it was just kind of a moment where I was like, I couldn't do anything unless what I'm doing is impacting and hoping to protect and save lives. And so we talked to EV companies and they wanted more safety but they also wanted to increase performance and decrease cost.

2:45:17They want it all, right? And so we went to really focus on how do we decrease the cost. So now we're really focused on, we went back to the drawing board on the EV side to say, okay, with our particles, it's a lower cost than the aluminum and steel that's surrounding the battery packs. And so we're looking at how do we decrease the weight to increase performance while having same if not higher safety on the EV side. but that sales cycle is actually I've been working with the government pretty much all my life in defense and I think government was slow but EV could be slower and I was just kind of like wow, if I wait until we have this technology and we keep building it it's not like people will just come and buy it it's just not how it's going to work that's not how we did at Palantir we have a playbook here we don't have to recreate the playbook we're going to go to the end user and figure out what they need.

2:46:12And then we're going to give them what they need. And however the business model fits that is what we're going to create. And so that's the approach we took. Yeah. On the defense side, is this something that you could actually go and build a whole program record around? Or do you just need to be a subprime contractor and vend into some of the larger primes as they build out new systems? Yeah. So we really flipped the entire business model on its head from the beginning, where we say, hey, we've got a core IP. How do we create this? And then, you know, in the traditional sense, you would say, let's build it, let's sell it to another supplier who then supplies it to another system.

2:46:50And the system will sell it to a customer. Instead, we just went straight to the customer. We said, what do you need? And they say, we need an electrical tactical dirt bike that can be deployed out of air, deconfigurable, reconfigurable, and can be parachuted down. When it lands, I don't want it to blow up from that impact. And it has to go, you know, X amount of miles. And it has to carry 350 pounds because we have gear it's not a 180 pound type of bike and that just didn't exist and so we partnered up with the subcontractor with the top dirt bike company and we newly designed a electric dirt bike tactical for AFSOC air combat controllers us as a prime and that was the most important thing we said we're not going to wait for somebody else to sell we're going to own the customer we're going to own the supply chain for it to integrate and become that next next-gen systems in a year 2.0 that we all know is in a dire need.

2:47:41Electric dirt bike for the military just sounds like something straight out of like a COD side mission or something. It's incredible. We're down to test. Yeah. Yeah. At least send us one. We'll go for it. I do not have a I will be burning out around the gong here. Yes. Yeah. Sounds amazing. But yeah, thank you so much for stopping by and telling us about the business. This is fantastic. Awesome. thanks so much for having me. Of course. cheers john thanks for coming on up next we have connor from speak uh language learning program uh let's talk to connor welcome to the stream how are you doing today connor hello hello welcome thanks for having me i was expecting you to come on and say just start talking in a variety of different languages you're not impressing us drop some drop some foreign languages on us uh do you speak any foreign languages?

2:48:33Wow. Great question. Just getting right into it. I mean, I should be able to speak Spanish because I took five years of it in high school and college. And I have the classic story of I learned everything except how to speak, which segues into what we're trying to do. And we finally have Spanish. So, you know, I'm working on it. I'm getting better very quickly. Yeah. Break down a little bit of the history of the company because it's interesting go to market, interesting history, interesting strategy? Sure. Yeah. I mean, for context for everyone, we are trying to build the world's best language teacher using AI.

2:49:06So imagine, you know, a really good tutor, but they're in your pocket available whenever, wherever, thinking about how best to teach you. And it's speaking first. But yeah, the kind of interesting and weird thing about our history is we started this company a while ago, we've been working on it for like eight years at this point, the first few years are really just like AI research into how how we could use AI to build the technology. And and then we realized that we need to go focus on one market. So we spent the next four years or so focusing on a single market, a market that I had literally never been to in my life before, which was South Korea, a market where there's not really how do you pick that?

2:49:43So we we we kind of did a bunch of different, you know, market analyses. We built a free app and we and we like released it in a bunch of countries and saw what kind of trash we had. But ultimately, the thing that was the most convincing to me was I went to South Korea to talk to some of our earlier users and I saw like literal skyscrapers that were filled with English classrooms. And it was just very clear that the country was obsessed over learning English. But there was also way more competition and solutions there than anywhere else in the world. So we really thought like the only way we're going to build something interesting is if we actually build something substantially, like structurally better using technology, like a 10x solution.

2:50:25And that market was going to be the market where we would get the most signal. Because the only way it would work is if we actually built something unique. And, you know, today we are the clear number one leader. We've got about 80 % brand awareness. We've had double digit percentage of all South Koreans try our product. and yeah, it's... Air horns. What's the... Universal. It's the universal language of celebration. It's the real universal language, yeah. It's the Vuvuzela of celebration. What, like, walk me through, like, how much value you're trying to deliver in the product. Like, am I benchmarking this more towards, like, a fun app to noodle on from time to time or, you know, a college-level curriculum that actually will almost guarantee fluency if I work through it?

2:51:12It's really the second. People do become fluent if they use our method. And really the benchmark is these cram schools in Korea that people are spending hundreds of dollars per month on. Or there's private tutors that cost$40 to$80 per hour to study with. And that's really the thing that we're benchmarking against and really trying to surpass in terms of efficacy and enjoyment. I'm trying to think, you guys have raised a lot of money from a bunch of great investors. I was trying to think through how they might think about risk factors to the business. And one of those I could imagine would be real-time translation with AI gets so good that maybe people don't feel the same drive to learn languages.

2:52:01Now, the counterfactual or counterpoint would be something like, you know, robots being much better at chess than humans. Yet, you know, humans still love to play chess. And so I'm curious how you think of that or if that's something that's kind of come up at all and how you would address something like that. It comes up all the time. You know, one term that is in some sci-fi books is the idea of like a babble fish. You put something in your ear, which, by the way, I think will be launched by many companies this year. I mean, Google kind of released that with Google I.O. last month as well. Apple, too, with AirPods a little bit.

2:52:39They teased it at WWDC. Yeah, exactly. So that's going to happen. I mean, we're already seeing this bi-directional real-time audio speech-to-speech technology proliferating. And my response is always, you know, what we're ultimately doing is we're building something that is all about human connection and aspiration. Like the reason people learn languages is because they actually want to be able to connect with other people and they aspire to be someone that speaks multiple languages. And that's the fundamental behavior we're helping with. And so if you think about like the world's greatest translator, like the UN translator that's like highly paid and stakes are high, there's still an immense amount of friction in that interaction.

2:53:21And so especially when you're learning a language because it's, you know, for example, English and it's the language that will allow you to travel the world and talk to anyone or really, frankly, any language. I think that people will still want to do that in the era of really great live translation. And in fact, my contrarian bet, acknowledging I'm extremely biased here, is more people will learn languages, not less, because it will become radically more enjoyable and easy. Imagine you just have your best friend who's teaching you every single day and that person is funny and knows all about you and can talk about whatever you want and make it extremely personalized.

2:53:57I think a lot more people do. Yeah, it's humans like challenges. It's very challenging. It's fun. It's stimulating. Look at chess.com. Yeah. Business is ripping. And chess has been completely solved by AI for years. Yeah. And yet people do it. Talk to me about what's working on the customer acquisition side. I want to hear about the footprint of the business internationally and domestically, and then just kind of like the pricing model and how customers think about actually paying you for the service. Yeah, so I mean, the business model right now is quite simple. It's just a consumer subscription business.

2:54:29We have multiple tiers, and that idea is we can build tiers for the people that are really dedicated and want all the power tools and intelligence behind it. And we do charge a premium. Like it's a little bit more expensive than most other, you know, consumer subscription businesses where we're talking, you know, depending on the market, somewhere around$100 a year to over$200 a year. There's a lot more room there to play and we're just getting started. But the, yeah, I think like size of, you know, business and where we're at today. So, you know, I mentioned South Korea is kind of our bread and butter.

2:55:02That's where we've been up until relatively recently trying to, you know, stay under the radar and just work on building the best possible product. And then we've really started to expand in the last two years or so. And so we're now becoming a very popular brand in Japan and in Taiwan. And we've actually now expanded coverage to over 40 countries around the world in the last few quarters. and just yesterday we have now gone from an English language learning app to a language learning app with the launch of learning Spanish, Italian, French, Korean and Japanese and more languages on the way. A large part of why we're even able to do that is because of all the like agentic AI content creation.

2:55:45Localization has to be like completely one-shottable by most modern LLMs. Like you can just like this is the transformer. It's really good at transforming stuff it transforms things from one language to another it's like the best the like the most bread and butter yeah uh anything else very cool very cool it's fantastic we got to get on there uh my chinese is a little rusty i know how to say what do you know yeah what do you want pijou which is not even factually correct but it generally means i really enjoy beer but it's a good line to have if you're ever uh i don't think we should go to china no but uh it's a good line to have in your back pocket totally totally um i just know booyow don't want if somebody comes up to you on the street i don't want it i know uh what's that mean your eyes are very beautiful oh honestly between the three of us we could we could be dangerous we could we could establish a beachhead tell people to go away compliments some nice compliments so it'd be fantastic we would thrive um yeah come back on yeah when you have news yeah we'll talk to you soon okay Have a good one.

2:56:52Thanks, guys. Bye. Cheers. Really quickly, let's tell you about Wander. Find your happy place. Find your happy place. Book a Wander with inspiring views, hotel-grade amenities, dreamy beds, top-tier cleaning, 24-7 concierge service. It's a vacation home, but better, folks. It's summer. Next up, we have Tenor. Get on Wander. Come in the studio. And before we get to Trey at Tenor, let's tell you about Bezel. Go to getbezel.com. Your bezel concierge is available now to source you any watch on the planet. Seriously, any watch. Get on there. Yeah, Jordy knows the beats of the delivery. Seriously, any watch.

2:57:30How did you sleep last night? I got destroyed. I had a rough. I had a very rough night. I had a very rough night. Honestly, I got a little cocky. I slept really well Monday night. Last night, I only got 6 hours, 17 minutes. I got 5 hours. too the tides have really turned john i know that was truly a generational run i gotta i gotta make it all back tonight i'm sleeping 10 all back in one sleep in one sleep nobody out sleeps me it's the best sleeping 10 hours is actually surprisingly challenging yeah it's almost too much time 25 kids it's brutal uh in other fundraising news applied intuition closed their series F round of fundraising at$15 billion valuation.

2:58:17We had Kaser Yunus on the show at Hill and Valley, an absolute dog. He's going to be running out of, uh, running out of letters soon. I mean, he's got quite a, quite a few to go. What is, I wonder what the latest series letter we've ever, that has ever been done in venture history. Like has, I know people have done F, but have we seen a series K? Have we seen a series S? Like how far down the alphabet has anyone gone ever? I could see someone like a Cluey just raising like$1 rounds, speed running it to get to the series Z. That would be an interesting strategy. I could definitely see Stripe being deep in the alphabet.

2:58:58They've been going for what, almost 20 years now, that business? 2007, 2010? I guess 15 years they've been in business yeah so they could be deep into the deep into the alphabet yeah SpaceX I don't even know if they are numbering or lettering their rounds anymore because some of them are so like yeah they're they're really the tender offer it's a preferred show it's a common stock sale kind of just moves around what were you laughing at there's always stuff to laugh about timeline looking up the timeline what else we got we have our next guest Trey from tenor here we go he's fax maxing hey Trey how you doing the fax man well guys yeah doing well I did that daring to see myself on that screen reverse you know you never picture yourself in mirror image it's horrible yeah it is confusing well thank you so much for joining us can you kick us off with an introduction of the company We've heard TJ Parker teasing and educating us a little bit about this market, but I want to hear from you Yeah, a hundred percent.

3:00:05I mean our solution we work with providers that receive patients Those patients get sent from other providers typically via what's known referrals scripts Doctors terminology doctors, right? And those doctors when they send a patient They'll describe it as like sending a patient to a black hole the patient doesn't get contacted They don't know where they're at and it loses a ton of money actually to those receiving providers that are trying to convert those patients into real visits that end up getting denied if they don't have complete documentation. So it's a whole mess. It's a real problem.

3:00:37And it turns out it all starts at eFax documentation. Over 90 % of these visits originate via eFax documentation. And if you can solve the facts, you can really drive a great outcome for those providers. So that's what we do. So I hurt my knee, I go into my general doctor and they refer me to a knee specialist and at some point there needs to be a whole bunch of faxes going on. Is that just for insurance or for everything? Yeah, so I mean imagine you get sent to that knee specialist and then the knee specialist says, hey I really want to send you to a surgical center. Now the surgical center has to go collect all this documentation to say, okay Coogan, are you, maybe they don't address you by that name, but you know they're going to say, do Do I have enough basically to get past an authorization?

3:01:17Is the payer, the insurance company going to pay for this? Or do I need to basically say, hey, sorry, we don't have complete documentation. I have to send you to PT. In that time frame, weeks go by and you have no idea what the hell is going on. It's super frustrating. I mean, you mentioned e-fax. We've heard a lot about faxes driving the medical industry broadly. What is actually the state of the art in the fax medical world right now? this conversation usually is like it's like a misnomer really when we talk about what most times you hear people talking about facts you should really think like emailed pdfs you should think effects right it's actually very rare nowadays at least as what we see that people are literally going in and like putting the pieces of paper yeah it's it's actually um you know it's more like if you wanted to send um you want to send a patient i'm just going to right click download the whole chart and then i have to send it somehow it's as easy as sending an email it just happens to actually travel on fax wires.

3:02:13Like that's the actual mechanism, the protocol. It's not SMTP, it's fax line. Interesting. And that's important from like a regulatory perspective, right? That's right. And to be honest, it's actually, even that is a little bit overblown in many cases. It's very possible to have a secure email inbox, which we see a lot of as well. It's just kind of a legacy network and that's the one they use. Yeah, that's right. Interesting. How'd you get into this? Yeah. When did you, when did you realize you wanted to drive efficiency in healthcare business process. I, to be honest, I have no, like, I, like, uh, I view like automation is kind of this, like, uh, also sort of this, like a false profit.

3:02:48It's, um, I learned about this from my mom who was sending patients out and she'd say, Trey, it's like, um, it's like sending patients into a black hole. And it, it's not really like automation just so happens to be one piece of the component. And the other big thing is nobody knows how much it costs. Right. So if I tell you, look, it's going to be, if I say, look, it's going to be $300 and you know that right off the bat, you're actually way more likely to show up than if I tell you, look, we're gonna have to determine your costs once you show up, which is what most people do today. And the reason they do that is because then they also have to go and run a check and make sure they understand how much your insurance is going to cover and pay for in the process.

3:03:23So really, we exist to solve the black hole problem. I don't really give a crap about solving the facts. It's just like if you say you're going to solve a problem and the first sort of hurdle is, okay, there's a bunch of unstructured PDF flow. And if we can structure that, we get like a good chance at it. That's sort of how we approached it. Um, no, uh, not, not that much of a student in the game. Talk to me about the scale of the customer that you can sell to. Is this, is this something where like, if you go to like a few networks and you win really, really big, uh, it's kind of like game over.

3:03:53Do you need to go to like every single doctor and the local, like, uh, in a local neighborhood and get them on board? Yeah, so I mean, somewhere in between, to be honest, right? Like there's, you have so much private equity in healthcare that you can, if you think about the size of their markets, they're often consolidating. So those consolidated entities, those are really our ideal customer profile. We do work with a number of health systems, but like... If we're just being honest, it's like if you want to centralize an inbox and really a sales funnel, when you think about the patient funnel is really a sales funnel, you still have to go do it department by department.

3:04:31So there's not like 20 deals to be done. There's probably more like 200 ,000 when you look at like the size of providers because we unfortunately can't work with like two provider shops. But yeah. What's the scale of the business like today? So we're processing, we have 20 ,000 providers sending, right? So they're sending faxes, sending emails. We've got hundreds of providers using Tenor to process. And then we've got millions of patients. Billions of patients. Let's go. Oh, thank you. Fucking hell yeah. So, yeah, man. How much did you raise today? We raised$101 million. That's right. Wow. Let's go.

3:05:19There we go. That's fantastic. How did the round come together? What was that process like? Was it preemptive? Did you guys go out for it? Who did you get on board? All right. Yeah, I got asked. He was just a little bit of background. I literally got lost. So I'm in the Lincoln Center We hadn't like completely unrelated to the fundraising that we had a big prospect customer event in the Lincoln Center tonight Yeah, I get lost five minutes before I want to grab some some food some some nuts and I get lost I'm sprinting to the door. I found it. So I'm like running hot but so to answer your question like Feel I sound really salesy right now to be honest.

3:05:53I'm usually a horrible fundraiser historically horrible fundraiser This came together in like four days. It was like the business. It was 25 mil a day. It's pretty solid. Good run rate. You should have just kept going. Why not? Most of our rounds have been. So we had a partner at Andreessen. I mean, this is kind of like some of the fun shop talk. But, you know, so you have a GP partner on most deals at Andreessen, right? So we had a GP and a partner. Now partner at Andreessen goes and actually becomes a GP over at IBP. Oh, interesting. And what does he do? He was just board observing us for two quarters.

3:06:30We said we're going to hit the thing. And he just calls me up after the quarter ends and is like, so did you do the thing? And I said, yeah, we did the thing. And so we did the round. And then there were a couple of other firms that we just like really respected that were just like, yeah, we're doing the thing. Let's do the thing. And we did it. That's amazing. What's the use of funds like? Is this like R &D heavy, spending a lot on engineering? Are there hard costs in the business? Is it hiring a lot of sales reps? Is there some sort of like crazy payback period where you have to go and install, win a customer, and then you get paid back over like a really long time?

3:07:05Because I imagine like this seems like a pretty low churn product if you can get it installed, but it might be expensive to do that. That's a great, yeah. It's really, it's an expensive deployment period. And so you're looking at an expensive first year, typically speaking. So yes, the traditional, hey, we're gonna keep growing the sales team. That's just been growing off of growth anyways. Sure. But get way ahead of the engineering team. We're launching this product. So like we have these millions of patients, right? And I'll give you like one quick example. It's kind of interesting. You think about the fact that you got sent over to like a, let's say you're sort of having trouble sleeping.

3:07:41You turns out you get diagnosed with sleep apnea. You now are going to get a CPAP. Now you might actually qualify based on all the clinicals you've done because you've been to a sleep doctor. You've been processed through DME. You've been processed through diagnostics. We have all your clinicals. We have your insurance. We can actually suggest to you all these other services, basically, that you qualify, you're eligible for to go and get. And whether that's additional consults, behavioral treatment, pharmaceuticals, things like that. And so we're launching this big network product. And it's a it's a huge lift on the engineering team.

3:08:12And so we've been growing that team really aggressively as well. That makes a ton of sense. It's been an honor to hit the gong for you. It has been an honor. So, Chad, thank you for coming on. Congratulations on the milestone. I have a feeling you'll be back here in the temple with us very soon with how you're talking. So congratulations to you and the team. I was hoping I'd get some credit. I see all these guests come on. I'm a big fan. I saw the jacket. I was going to say, it looked fantastic. Honestly, you wear it. It looks natural. A lot of people put it on. It looks performative. It's like stolen valor.

3:08:44Yeah, so we don't want to draw too much attention if that's your daily, but we appreciate you dressing up for the occasion. Yeah, you look sharp. You look sharp. And just do us a favor and never wear casual clothing in the workplace ever again. Just make this a part of your daily – you're a healthcare technologist. You should be – you should dress the part. You're an executive. You're a businessman. You're a businessman. Yep. We've got Fit Fridays. It's the opposite of Casual Fridays. You have to dress really, really nice going into the office here in New York. Amazing. There we go. I love it.

3:09:13That's amazing. We're doing our part, man. We're doing our part. We appreciate you. Great to see you. Great to chat. Have a great one. Great chatting. Congratulations. See ya. Up next, we got James from Profound coming in the studio. Oh, is there another gong hit coming in? Let's hear it. James, how you doing? There he is. What's going on? Break down the news. What's going on? I got the mallet ready. What's happening? How we doing, guys? Doing great. Well, we've already covered your raise. We've talked with David Senra. We've got the backstory on how David Senra met you and invested. but super excited to have you on to break down the news yourself.

3:09:52Yeah, thanks for having me. Yeah, and congrats on all the TPPN traction as well. It's inspiring just to see your story kind of continue to take the main stage. Thank you. Thank you. We had you on recently. What's happened since? Talk about the new round and then I want to hear about traction and kind of what you're seeing on the product side as well. For sure. yeah I guess since we last spoke it's just been you know a lot of days in the office we moved office we moved across the other side of Union Square New York City the entire team is here in person working very hard we're in office six days a week and yeah I love to hear that as an investor i i'm not gonna i'm not gonna pretend i don't i think you know it's it's it's very exciting i think the the tailwinds are mind-blowing it's you know this is a clear platform shift maybe one of the biggest platform shifts in the history of marketing as hundreds of millions billions of consumers turn away from blue link search and instead talk to platforms like chat GPT and get a response.

3:11:06How your brand shows up, how your products show up, how your services show up in these AI responses is becoming like boardroom level discussion for every brand on the planet. So yeah, we're building Profound as a new age marketing platform to guide marketers, every brand on the planet to this new generative internet and internet where you can talk to it and it talks back to you. I think the closest heuristic would be SEO for AI. But once you start to look underneath the hood, there's a lot of fundamental differences here. These models are opining. They have sentiment. They give opinions. The kids are using chat these days and more like an operating system.

3:11:57And how your brand shows up there is P0. Right. What are some of the big struggles that maybe legacy brands are facing in terms of shaping there? You can imagine it's not something - Are there any canonical horror stories yet? I feel like it's not pretty good stuff. Most of the time I see examples of this, it's always somebody screenshotting like, oh, I nailed it. Like the ChatGPT recommended my brand. But I imagine that there's probably some people that are having rougher experiences. Well, the models are probabilistic. So, you know, you ask the same question 10 times in a row and get 10 different sponsors.

3:12:32So that's kind of the, you know, that's one of the main upsides of using technology like Profound is you get the kind of aggregate response across all of the major platforms. I mean yeah we work with ramp as an example they're an example customer and you know we 7x their visibility in a category where they didn't have much visibility and the way that you do that is by you understand through lots of prompting you understand how the models are talking about your brand your products your industry your competitor and where where they're going in order to answer those questions and then you strategically start creating content for bot

3:13:20oh we got and yeah it's it's it's pretty tractable amazing talk about uh the round who participated uh it's a pretty pretty great list uh i'm biased but uh not david senra like does not really angel invest yeah it's very it's very very rare so uh you got him yeah thanks um yeah it's it's it's cool so it's a you know it's a real kind of like pinch me moment um we're working so kleiner perkins led the round um so ilia fishman's taking a seat on the board um in addition we have uh coastal adventures that's with keith raboy uh nvidia um video Saga Ventures.

3:14:06Sorry. Sorry, didn't let you finish, but had to go. Continue, continue. Saga Ventures. So, yeah, that's Max Altman, Ben Braverman, Thompson Nguyen, South Park Commons, SV Angel, and then a bunch of really great angels. Obviously, the most important being a guy called Geordie Hayes. Yeah. Too kind, too kind. But yeah, give us an update on almost like an investor update, which I won't share. But give us an update on kind of the like, what is, I'm curious what the sales cycle is right now with companies that you're talking to. I imagine this is like a kind of a hair on fire issue where they realize like, hey, we don't know what's going on or things are happening.

3:14:57Is it, is, you know, what does that look like with some of these bigger multinational brands and companies that you guys are working with? Yeah, I think, you know, what the thing, you know, what they're realizing is true is that this platform shift is so big that they need dedicated technology to understand and control how they show up in answer engine outputs. They can't rely on like existing marketing technology, if anything, just purely because the space is moving and evolving so quickly, which I think is really evidenced by the fact that we are able to work. We're working with Fortune 10 brands.

3:15:35So literally some of the biggest brands in the world are using Profound. There's thousands of marketers on the platform now. It's hard to mention logos, you know, as we all know, it's tricky. But, you know, some of the logos that we are able to mention are, so we have brands like MongoDB, Indeed, Mercury, DocuSign, Zapier, Ramp, Plaid, Ro, Workable, absolute squad. Chime, US Bank, Clay, Resend. So yeah, we're working with, that's just the ones we can mention. And yeah, I think these brands are coming to us because we've built the ubiquitous technology in this new category that we're sucking the oxygen out of the room and we're building a better product and And yeah, I think that's a function of a very talented engineering team here in New York, basically.

3:16:36Category leader, working six days a week. The only option would be to try to work seven days a week, but then you risk some major burnout. So better just not compete at all and just let James cook. Just be a customer. Well, thank you for coming on, James. Awesome milestone. And I have no doubt we'll have you back on again soon. Yeah, thanks for having me, guys. I appreciate that. Cheers. Amazing. We'll talk to you soon. Bye. We got back-to-back guests coming in the studio next. We got Warp and Senra Systems. We're going to figure out who's joining first. Senra's coming on first, I believe. Okay, we got Senra Systems.

3:17:13Not David Senra. Not David Senra. We already talked to him. We got Jordan. We got Jordan from Senra. The founder of Senra Systems. Let's bring him in. He is an emerging wire harness manufacturer. We're going to try and get Senra. in the meantime i think we have warp okay let's do warp welcome to the stream how you doing ready there he is sorry sorry for the chaos i told you now back and forth it's live but you're here we're live on tbpn in the ultra dome yes it's great to have you uh exciting exciting day give give everybody some some background uh on you and the company and uh then we can talk about the news yeah yes my name is Ayush I'm the founder and CEO of Warp and as some of you may have seen we are the best way for startups to run payroll handle compliance hire people and do all those fun things we just also announced our 18 million series a let's go I'll let you do the honors let's go wide boom I have a I have a feeling we'll need a bigger gong for warp uh hopefully uh hopefully we get in here before the next round um yeah talk about talk about competing in a in a in a big but crowded category um yeah and maybe kind of the a little bit of the origin stories of of the business as well because yeah um you're relatively new but but clearly making waves yeah totally i mean jordy you've known us from the very early days i think uh and we've been we've been friends and kind of working on this from the very, very start.

3:18:50So I think you've seen that journey, but really what I think about is there's almost like such a high bar today for building incredible products, right? I think a ramp obviously comes to mind where, you know, you start out in this like huge market and you see an incredible like opportunity and maybe it looks like there's all these players, but if you can build an amazing product, if you can give startups, companies, the best product experience, that actually has a lot of demand. So I think on our end, we also saw that there's all these different tools that people kind of piece together for running their company, running payroll, handling compliance.

3:19:26It's very disjoint. It's very manual still today, especially for startups. And if there's one thing that startups hate, like I've done this before myself, is stare at a piece of paperwork from government, like New York Department of Taxation, whatever, and have to do it themselves. And that's just so, so annoying. So we're kind of automating all of that for once, using tons of kind of automation AI behind the scenes to kind of accomplish that. And also just building a really, really amazing product. So I think one of our customers told us this the other day, is that using all these other providers feels like you're using like Bank of America to pay somebody or like TD Bank.

3:20:05But then if you use VORP, it feels like you're using Brex or Ramp or Venmo to pay your friend. And that's the kind of like the qualitative sort of product-like difference that we think about. How much are you thinking about agentic workflows and features versus traditional, you know, SaaS, bread and butter, CRUD, you know, traditional fintech, all that kind of stuff? Yeah, it's a huge part. And I think we're being thoughtful about it. I think there's a lot of players that are just waking up to it and their approach is, well, we're just going to jam some AI buzzwords to sound cool. But I think we have the luxury that we're starting in this almost in this time where all these advancements are happening very, very quickly.

3:20:52So maybe you guys don't know, but my personal background of lectures and computer science specifically focusing on AI back at MIT. And so it was very cool to see some of these things early on, right before they started taking off. And now we have the opportunity to build this in a way that is from the ground up, we can actually like architect this in the right way. So a lot of these manual paperwork, like maybe the customer doesn't even know about them or think about them. I know they're completely abstracted away from them. All the PDF filing, paperwork, taxation, that would typically be their responsibility or their accountants or controllers, whatnot.

3:21:24We can absorb them for the first time. and there's no like middle ground that we have to cross where they're kind of doing it and then it's slightly automated and they're asking some chat UI. I know it's just like fully in the background automated. Where's the growth coming from? I know you guys are growing quickly. You don't have to give us like, you know, the full secret sauce, but how and why are you winning customers over? I think the biggest thing is we have seen tons of founders just telling their friends about us. so if they if if customers using us we target a lot of our you know startup founders a lot of the folks that you would have known of like Rahul from Julius AI and Isaiah from Bland and I think tons of these really cool startups there that are building all these amazing products they have lots of like Twitter presence very online and they'll tell their friends or tweet about us or say something positive and I think that's been a huge driver um so first and foremost just like build an incredible product, people will tell their friends, but also targeting these like very awesome companies that will kind of spread the word.

3:22:26Why is payroll so oligopolistic? I feel like there's like ADP, Paylocity, Paycom, Pay something else in the public markets. Then YC has like three unicorns in payroll. Like I get that there's a lot of money. Yeah. I get that there's a lot of money where the money is, but like, why is there not more of a compounding advantage? Like what's the market dynamic? Is that expected to change or is it just like you can go and win even if you get one percent of the market and that's like fine i think it's definitely more of the latter but at the same time um it's almost like banking right like if you think about banking broadly um how many different banks exist and fintechs exist and they all kind of can win big um even some of the biggest players that are you know obviously like ramp like in the grand scheme of things the market is so so large that even a small portion of that can be huge.

3:23:17And every five to 10 years, it seems like there's some new wave of technology where the consumer behavior shifts enough. So like one thing I think about a lot is the founder expectations have shifted a ton, right? They're used to using tools like Superhuman and Linear for running their teams. And then they go log into like a Salesforce-like junk, you know, like HR hefty thing. And I just kind of hate that. So I think there's some consumer behavior shift. There's also the fact that you can reinvent these things from first principles every five, 10 years. And then it has a big piece of that puzzle too.

3:23:49It almost feels like the opposite. It feels like payroll, it's so cumbersome to rip it out that it's actually a slower turnover. And so as opposed to some of these tools where it's easy to rip them out, if there's really, really great product that's actually better, you're going to take over the market and get everyone to rip it out and replace it very quickly. But payroll system, it's like pulling teeth to get it out of the system. And so like, yeah, I don't like the one that I have, but I'm, I'm not, I'm not going to change or anything. I don't know. It's interesting. Are you thinking about stable coins at all?

3:24:26They've been in the news in the last 24 hours, people have talked about the potential of stables helping. Maybe just like saving you money or earning you more float or something. It seems like most of the payroll companies are pretty mature in terms of like squeezing every penny out of the dollars that they transfer around. But is it a bull case at all or does it change the economics at all? From where we sit, I mean, we haven't seen a ton of requests coming from customers directly, which is the main thing that I try to track. But I think more macro level, it seems like the moment for stable coins is definitely happening.

3:24:58so i i i'm bullish overall but i haven't seen a direct uptick into like payroll especially because i think if you uh especially for u.s focused use cases which is where we are um we do global contractors obviously and that's a smaller part of like what we're doing but for those players it's probably a bigger thing that they need to think about uh for international but i think the one one maybe like take that i have is the u.s uh banking system gets more shit than it actually deserves. It's actually like quite good. The ACHs, the Fedwires, even though they're kind of old and we're stuck with them in some ways that they could be better, they're better than what people realize or give them credit for at least.

3:25:39Is that just because they've been wrapped in APIs so many times that like they're actually pretty easy to develop on or is the actual underlying system evolved and actually gotten better? It's both. I think the rise of fintechs and APIs obviously make a lot of them very easy. But the one, like the interesting thing is, like if you look at India and I grew up in India, my family is still there, UPI, which is mobile wallets, they're actually a huge thing in India. And they basically around from 2015 or so, there was a period where mobile wallets just went vertical almost within like a one year period.

3:26:13And the reason that took off is India was largely a cash-based society. So the delta between going from like cash and change and like counting all of that, immediately the phone wallets and QRs was massive. But in the U.S., you'll never get mobile wallets, not in a true sense. What we do have is credit cards and Apple Pay because there's not enough of a delta. So, like, it's one of those things where the U.S. figured out ACH rails and Fedwire rails and credit card rails earlier than all these other countries that are now just catching up. So they get to kind of leapfrog and go to the next level.

3:26:45But we have some of these things that have actually worked for a while, all these legacy layers of technology, etc., built around it, that we don't get to immediately cross over because there's not enough of a delta. So we will be on ACHs and FedWires for a long time, but they work pretty well. They're Lindy. Lindy. They are. I think Gonghead is in order. Oh, let's do it. Talk about the round. 18 million Series A. 18 million Series A. Oh, my God. We've got Drew Houston, Arash, Kyle Vogt as part of the round. Those are all MIT engineer founders. MIT, YC crew. So YC crew, we tried all the technical folks, some great people joining, and we're super excited and very thrilled.

3:27:34You graduated MIT, right? That's right. No, no, no, no. That's the new bull signal. That's the contrarian move. The contrarian thing is you actually graduate. Don't drop out. Yeah, that's right. That's for all the new outfits. Yeah. Put that to hold on your line. It's been amazing to watch you execute over the years. Fantastic. And I'm excited for the next chapter. We'll talk to you soon. Awesome, yeah. Likewise. Cheers. Next up, we have Jordan from Senra Systems, not David Senra Systems. These are high-quality wire harnesses. Welcome to the stream, Jordan. Hopefully, we can bring you in. I know we had some back-and-forth juggling.

3:28:14but great to have you on there he is we did it welcome to the stream we did it welcome i love i love when we i love when a plan comes together uh would you mind introducing yourself the company and what is a wire harness for those who don't know yeah absolutely i'm jordan black i'm the ceo center systems uh you probably don't know what the hell wire harness is and that's totally fine uh just think of it as like an iphone charger but like a lot more complex like when you lift the hood of your car, you see a bunch of electrical wiring. It just connects any two or more components together. Uh, and everybody hates it because it's entirely manual process to design it entirely manual process to manufacture it.

3:28:55Uh, and it's just a very like bespoke thing that hasn't changed since the cold war. Uh, top applications. I mean, you see it in the car. I seem to remember like the cyber truck changed their wire harnessing and reduced it by like, you know, it went from like 10 ,000 feet of wires to like 1000 feet or so. Is that roughly like the right story or like, give me a more concrete example. Yeah, I think the thing with wiring, the more you have, the more expensive it's going to be. So you put more sensors and computers and thingamajigs around your car or rockets or drones, you're gonna have more wiring and it's become more expensive.

3:29:29So what Tesla did was really kind of minimize the amount of signals they go through. And there's a little more complexity that goes into that too. but it's it's in everything like that's the way you power your coffee maker your rocket drone missile everything else because if you need to connect this thing that needs to send signal or power to this thing over here the only way you're gonna really do it is through copper wire yeah so cars rockets drones planes like what what is the most common product that you're selling your your wire harnesses into is it everything or do you have a specific focus right now we do a little everything but right now it's mainly aerospace and defense and the reason why is because it's very hard to get a high quality wire harness in the space like not to get super morbid but like the reason why like the astronaut side of the apollo mission was there's like a nick on the cable jacket and there's a flammable gas and the whole thing sparked or uh there's a lot of launch failures or launch delays that happen because like they can't get a wire harness on time and it's this hard thing because if you put a wiring in a car it's kind of like it sits there you know it goes through some bad winter sometimes but like when you put it into a rocket or a drone like it needs to withstand crazy environments get beat the hell up and all it goes to space it's in a vacuum it's all over the place and it has to be like very precise in the way it gets built because it's all done by hand today so there's a lot of like inspection and so that's kind of where this like bespoke process on top of the complexity on top of like it being something really niche that nobody really knows about besides myself and the people who work at centera and a very few found people in the U S this is where we're trying to like take all that tribal knowledge, take all that processing and really kind of make a structured output of it too.

3:31:06So yeah. What, what is the key innovation here? Is it automation? Is it robotics, better software, better, just skilled, just caring about it exactly 10 times more than the next person. Giving a damn as you say on your website. I like the high level is like, if any of us ran like TSA tomorrow, we just do a way better job than like it is. And so they're just like caring and just make like kind of just getting rid of all the bullshit that's going into it. But what we're doing from like fundamental portion is like the way large companies today design wire harnesses. They use like Excel spreadsheets and PowerPoint slides and no one's really trained on this thing.

3:31:42And the way it gets built is like with hand tools and like on a wooden table. And so the like software aspect of it is like, we're creating this like industry standard for how wire harness should be designed in like our tool called AMP, where we can take the tribal knowledge we have. And I tell people like, this is how you should design it. Because every time I get a wire harness, I go back and forth to the customer of like, you did this thing wrong. I can't find this part, yada, yada, yada. And then to build it, we're actually using automation and we're using a lot of software processes to make it like a really streamlined effect.

3:32:10Like you both can come to my factory tomorrow and start building a wire harness because it's not the most difficult thing to do in the world. The hardest part is just knowing exactly what steps to do and where to actually perform the process as well. Talk about how the round came together. Did Dylan feel that some sharp elbows elbowing out, you know, the platform side of board table with him? Yeah. How did you guys meet and break down the round for us? Yeah, absolutely. I got introduced to Dylan through one of our investors and I faced time to him. I was, uh, I think a weekend, uh, in Laguna and, uh, all of a sudden we just started hanging out a ton.

3:32:52Um, and I been pitching that we were creating a wire harness design tool, which is the Figma of wire harnessing. Uh, and just to kind of explain what we were doing. Did he scare you and say, well, actually Figma is the Figma for wire harnesses and I'm going to eat you alive. A little bit different, a little bit different. A little bit different. Uh, I've yet to get a Figma designed wire harness to this day, but maybe one day we'll get it. And we spent a lot of time together. And I'll be frank, like I'm obsessed with the guy. I think he's just so intelligent the way he thinks from a product standpoint, how he ran his company.

3:33:28We're taking something so bespoke, like a design tool as well and breaking into this industry that hasn't been changed in a while too. Like it kind of just really resonated with me. And then we were chatting one day and I was like, I'm going to go out and like fundraise. And he's like, I'd like to like put a check in. And I'm like, oh, okay. Like classic made it in Silicon Valley. He's going to write an angel check. And he's like, oh, I like to own a substantial amount of the company in the round. And I was like, oh my gosh. And so it was kind of about to start taking out the fundraise and doing that.

3:33:59And I don't know, it just, it really thought to me of like, we have really great investors on the cap table and I'm just super thankful about that too. But I'm excited to just have someone who can be in the weeds with it and just like actually help grow this company be this kind of like mentor but also just like this company that we want to grow into as well too uh and it's ultimately really exciting and so i was like let's let's do it it's you know no one else can really understand like the uh struggles and also the missions or the obstacles we have to overcome than dylan and we just kind of get each other so um that's amazing what was the final round size 25 million is the the ground size let's go there we go congratulations there we go it's great news well i feel like you'll be back here in the ultra dome very soon very soon we might need some custom wire harnesses we're wiring up lights all over the place there's actually yeah we got extension cords taped to the ground probably not your icp but we got a lot of we'll figure out a way to integrate for sure perfect yeah if you ever need anything uh electrical wiring i'm your guy so fantastic what's the before you go uh how are the the vibes in uh in the gundo uh you're you're got you guys are technically in redondo so i don't know if you claim gundo i'm calling it the dondo no one's don't don't don't don't don't don't don't yeah that's good that seems so obvious now that i can think about it yeah yeah it's um i think the vibes are very high i think everyone's just so excited to build uh it makes complete sense it's not uh like not only center up but just even the companies in this space too of like there's a time to build a time to move fast it's time to build things correctly and i think it's our turn to kind of uh start changing this entire industry which is in the hard tech space uh and i think it's what what percentage of your customers are in southern california right now versus other states international etc i'd say most of our i'd say probably about 80 of our customers are in the u.s or not any of us in southern california all of them are in the u.s um but that's because they like kind of having this supplier this uh face just like i can come next drive over next door and just be able to support them and talk to them as well too so it's old-fashioned I love it yeah well congratulations thank you for coming on very exciting and we'll talk to you soon bye well that is our show today folks we hope you enjoyed the lightning round the deep dives the chat with David Sedra and Center Systems visualizing that that conversation or getting dropped in there and Dylan's like yeah I'll throw in a check.

3:36:46And he's like, cool. Like, you know, 50K, a hundred K. He's like, how about the whole round eight figures? I love it. Um, very cool. It's fantastic. Hopefully we see more of it. It seems cool. No, it makes sense. It's about the different timeline. It's not about the fund or the vehicle that gives you the money. It's about the person. It's about the investor. And it seems like they have an awesome partnership. So very cool. Well, anyway, leave us five stars on Apple and Spotify, and we will talk to you tomorrow. Thank you for watching. Thank you for tuning in. Have a great afternoon. Have a great afternoon.