Building the Physical AI Stack | Travis Kalanick on TBPN

19:33Travis Kalanick:2 million pound machine moving 35 miles an hour off-road. Yeah, dude. This is why you have to jet ski to work. This is the ultimate ATV. So, no, you get in it and you can, you know, you can experience it. I mean, it's not like there's like an amusement park for this, but like I've certainly experienced it where I can get in the machines and check out what's going on. This is like the dump truck with 20-foot tires, essentially. Are any of these companies like acquisition targets where you would be able to come in and say like you're doing a lot of stuff well, but here's all the stuff that you're never going to figure out like us?

20:12I mean, look, I would say the way we think about it is the haulage part of a mine is where most of the vehicles are. And we think of haulage as the cardiovascular system of a mine. So we're obviously very connected to all the other machines, but we don't do all the other machines. So we're like in an ecosystem. So we can work with them where like there's APIs because like if you're doing haulage, you need to know where the other machines are and what their status is. as an example. There needs to be orchestration and coordination there, which is pretty interesting. In terms of acquisition, I have to sort of admit the uber mentality, my mentality, let's just say.

20:56Travis Kalanick:My dune. Yeah, yeah. It's like not, I guess we were different today, but in my world, we didn't acquire shit. We just built. Yeah, that's right. I don't know if I have an opinion yet. I'm not religious about it, But if we feel like we can build something, we do. But sometimes people have differentiated awesome stuff and you're like, let's partner. We're open to it, you know. How would you pitch me if I was a young person, Stanford, CS, new grad, worried about software engineering not being the easy path where I can bounce around from Google and maybe Uber had a cushy job for me? Pitch me on going to the Amazon and building.

21:37Travis Kalanick:And that's awesome. I mean, that's awesome. I thought I just did. I mean, that was the pitch. That was the pitch. Do you think do you think young people are receptive to this pitch yet? Are we about to be receptive? Why should they be receptive? It's really interesting because I only run into the young people that are receptive. Sure. Like I'm not out there pitching like lame sauce dude who doesn't want to work. Sure. Sure. Like I don't end up in the same room. Do you want a job where – do you want a laptop job or do you want to be dropped into a mine in the Amazon and like build science fiction?

22:11This is the thing, right? This is why the Adams thing is cool because you're not dropping a fucking app in the app store. You're like automating a 2 million pound machine going 35 miles an hour carrying gold.

22:30Travis Kalanick:do you do you watch uh you get do you get it there's a lot of profanity happening today i don't know why it's happening but it is let it flow i just wanted to acknowledge it do you do you watch uh science do you do you get inspired by science fiction at all i can i can imagine like watching dune for you as you're just like texting pictures to the team like of course i'm like uh i'm my My fave is Asimov. He's my fave. You know, the iRobot series is just so epic. What is your takeaway from the iRobot series with regard to AI safety, doom generally? Have you ever had moments of maybe we won't figure it out?

23:12Travis Kalanick:Won't figure what out? The alignment problem broadly. Like the iRobot, the three laws of robotics is sort of an elegant solution. It's tested, obviously. But I would love to come back to a world where everyone, both the doomers and the AI builders, agree that, yep, the three laws of robotics will be sufficient. But I mean, in some ways in the series, the three laws don't always work out. Yeah. So I think there's a lot of – I thought there's a lot of nuance to those three laws even though the laws are sort of so simple. I love the intention of those laws. I sort of think of it a little bit differently, which is I have been entrepreneuring for a long time, like a long time.

23:59Yeah. And I have failed. and when I think about why I failed, it's usually because I was building something that nobody liked. So if you build something that people don't like, I don't think you're going to succeed. So how does that relate to your question? He's like, please tell me because I'm not connecting the dots at all. What are you talking about? Well, if you make something that is anti-human, If you make something that doesn't serve people, I don't think you're going to make it. I don't think you're going to make it. And by the way, like, yes, we're using AI to help us make decisions, et cetera.

24:40But what do those AIs really, really want to do almost too much? They want to please us. So I just think if you're not making stuff that humans want, it's not going to work out. And that's kind of obvious, obviously. But I think it keeps going. Yeah. And yes, there's the dangers and the things and the myths. But that's my that's my starting point for how I think about these things. And we can't control all the things. And I do think, of course, you have to have safety situations and there's collisions of like. what do I prioritize first and how do I do it which is I think where Asimov's laws go but instead of writing sci-fi books I'm just doing the thing and I'm making sure the machine stays on the road

25:26Travis Kalanick:and related to that idea of like doing the thing making the machine stay on the road I imagine that your world view is somewhat informed by your contact with reality the fact that you can see the progress of diffusion how long drive-by-wire systems took to roll out and the need for AI to be deployed in like tactile ways that you just see it as more positive sum, there's more opportunity. I feel like you're deploying robots that people want. Right now, robot, I mean, look, there's some point where robots have their own bank accounts and their citizens and all this. We're just not there yet. Sure, sure.

26:06And until we get there, that robot is owned by somebody. and that somebody has a bank account. They are paying based on the value you're bringing them because they like your stuff. So if you are doing things that humans don't like, you're done. And trust me, I've done it. I've built things that nobody liked and it sucked. I don't recommend anybody do it. If you can avoid it, you totally should. On the business model side, what are you doing now in mining

26:39Travis Kalanick:and where do you think it could go over time? Because if you're able to bring in a system that helps someone increase their yield 30 % to 40%, I imagine eventually you just do some type of JV so that your guys have client incentives. Well, look, there's, you know, and the instinct should be how do enterprise software companies do it. Start there. And you guys will know that. Like, you know that. What's the answer? Let's just say you're an enterprise software company. You're making a company more productive. What do you do? Raise prices, subscription. Or the price goes up when you prove that productivity.

27:19So there's baseline. And then based on outcomes, you get a little extra juice. Sure, sure. And you can say—

27:25Travis Kalanick:Or you're always trying to make sure that, like, you want to be producing, creating more value than you're capturing. But there's this sort of cat and mouse game where you're always trying to— You don't want to give away maybe too much value. Totally. But here's the thing. You never go to a customer. I don't care what you're selling. Okay. I don't care if it's enterprise software. I don't care if it's widgets. I don't care what it is. You never go to a customer and say, give me a percentage of your stuff. Yeah. You go to a customer and say, here's the price of our stuff. And if it does really well for you, we think we should get a little more scratch, cashish, stuff, you know, whatever.

28:02You know what I mean? Yeah. Yeah. And it's that simple. don't be crass about it. And, you know, partner with folks. And they're down. They want to win too, you know. It's literally an enterprise. It's an enterprise software style negotiation or approach to the whole thing. Yeah. And the more differentiated your value is, the more you're going to get. Yeah.

28:23Travis Kalanick:What is your process for hiring executives today? Pray. I was hoping you had the Kalanick system to achieve a 99%. No, but why would I tell you? Why would I tell you if you're in? No, but I think you can. This is one of those things you can tell people exactly what you do, and they're not Kalanick, so that doesn't mean they can compete with you. You know, they could, yeah. Okay, so how would I put it?

28:58Look, I think no matter who you go, nobody's nailed executives all the way. it's it's it's weird because what will happen is uh executives talk a fucking awesome game and there's two things you want an executive to do you want them to be able to organize at scale organize and manage at scale lead at scale you also want them to be epic problem solvers the most strategic badass problem solvers alive this is like being left-handed or right-handed And there's very few people that are ambidextrous. But you need that. Now, they're always leaning a little bit one side or the other. The best executives are the ones that are doing both well.

29:41But I have come to the conclusion over my years doing the stuff is the problem solving is the most important thing. If you get somebody who organizes and manages well but cannot solve a problem, they're going to be doing ridiculous stuff in a super organized way. And so that's the, and, and sort of my theory, I, I, maybe there's a couple of theories on how I manage or how I lead is that the only constraint on your imagination is management capacity. Yeah. But what is management capacity? It's really problem solving at scale. Sure. Because if you are doing super well over there, guess what? They're problem solving there.

30:20I can create other awesome problems. Yeah.

30:22Travis Kalanick:Yeah. Like I love creating problems. Sure. Go solve those too. Yeah. But if I don't have the management capacity, then I'm F'd. So the management style that I do is sort of problem solver in chief, which is I take the most impactful problems that are not being solved. And that's on my desk or desk or room or whatever you want to call it. That's where I'm spending my time. So people go, oh, what do you spend your time on? Like it depends what the freaking problems are that matter. And it can change. and that's how I roll. But it means once you have a problem solver in chief mentality, that flows downward.

31:03That means any direct report of mine must be the deputized problem solver in chief and they've got their, because there's only 24 hours in a day. I can only solve so many myself. They have to then take that for their world and do the same thing and then do the same thing to their people.

31:18Travis Kalanick:Yeah. So the bottom line is you've got to prove that these folks can solve actual problems. and aren't just talking the talk. That's the number one. And then on the interview process, simulate what it's like working together so that day one really feels like week two. And day one, you better be excited. So if you're excited day one, after simulating what it's like working together in the interview process, then day one is really week two and you're still excited, you took a lot of risk out of the system. That's all I got for you. I have a question about regulation. Uber famously went city by city.

31:53Yeah.

31:53Travis Kalanick:The AI labs are duking it out over federal preemption. Did you ever have – develop a theory around when federal preemption is better than state-by-state regulation? Do you have a philosophy around this? It seems like the labs go back and forth on what they want. It's hard to see where the chips are falling. Federal preemption is good when you are pro-regulatory capture. Okay. When you want to squeeze others out, you should get federal regulatory bigness going for you. Yeah. Because then you don't have to do the ground game that you went. Well, no, you're squeezing others out. Okay. It's just the whole point is to squeeze everybody out.

32:37Sure. I never did that. Like, we never did that. We basically never, ever proposed or pushed any rule that would be beneficial to us versus somebody else. We always were trying to open up the market and we said, let the best man win. And we just went for it. But I think we got to be careful of some of these closed-weight things that are creating situations where they need to be regulated and they want it. I'd be very – I'd keep an eye on that.

33:16Travis Kalanick:Yeah. Well, you got to have customers that love your product and are willing to write their representatives. When you guys, when you guys, you know, decide to tell your own hacker to hack the thing and then go to somebody, then go to the federal government and say, then go to the federal government and say, dude, we saved the day. Like, you know, you don't have to do this. You guys don't have to do it. On regulation, I'm sure you saw the trial lawyers that are fighting back against autonomous vehicles because they're worried they're going to be too safe. Yes. I'm sure that's not surprising to you.

33:57No. So, look, every bad thing that you see in transport, like systemically, anything in transport that you view as systemically bad was most likely pushed by the trial lawyers and the insurance companies. Wow. Every single bad rule that's weird and dumb, the insurance companies and the trial lawyers were in the game big time.

34:25Travis Kalanick:Where do they align? What do you mean? Well, because trial lawyers, I imagine, want more accidents. Insurance companies are the ones that pay for it. No, no. Remember, insurance companies make margin on accidents. Okay. If there's no accidents, there's no insurance company. They, in a weird way, they love accidents. Because the premiums go up. As long as it's in their actuarial table, they're pumped. Wow. Yeah. Right? What they don't like is accidents they didn't plan for. Sure, sure. But accidents that they plan for, big insurance outcomes they love. Like I remember we went to D.C. and the taxi system, the liability on a ride, if you took a taxi, it might still be this way to this day.

35:12was like$25 ,000 in a taxi. But we went to, we being Uber at the time, went to D.C. and they pushed a$1.5 million policy per ride. Okay? So what does that mean? That means, well, this, you know, accidents are going to happen. We're probably, like, Uber's probably safer. But it just, you think the trial lawyers weren't pumped about that? You think the insurance companies weren't also pumped about that? They can go get up to a million dollars. Because, by the way, the insurance company might be on the other side. Yep. And they're like, oh, there's a one-half-million-dollar bank account here that I can get access to on a random accident.

35:54Right.

35:56Travis Kalanick:What can you share on the transportation side of the business right now? How much is that business in service of mining or food versus like standalone? It's number one. So number one is it's, it's, so I call it wheelbase for robots, which is if you're going to do specialized robots that move and act in the physical world, they're either humanoids, which we're not. I'm not anti-humanoid. I'm just non-humanoid. Specialized industrial robots, right? So that's, it's high scale, industrial scale tasks, which means you would not have a humanoid ever do that. that means you got to be on wheels. So we got to build wheels.

36:38So that means, okay, well, when food, when supply chain is going into our facilities, that's a freight vehicle. We probably should just turn that into a robot that moves stuff and actually interfaces with our facility in a really cool way. When the food is coming out of our facilities, there's probably like a machine that holds food at temperature that's like a box on wheels. I call them autonomous burrito. and it brings it to your home and it costs 75 cents instead of like the$12 per drop that it costs like an Uber Eats or a DoorDash today. So it's serving, remember I'm taking, I'm sort of going through an industry and saying, how do we transform it full stack?

37:23How do we automate full stack that entire industry? So, okay, that's the food thing. Obviously mining's pretty obvious, but you can imagine there's a lot of other machines that move. Like I talked about haulage, but what about like, what about grading the roads, the dirt roads? You got to grade them. That's a machine. What about the, you spray water so there's not a lot of dust all over the place. That's a freaking machine. Like what about the material that ultimately goes somewhere beyond the mine? Well, that's a freight machine. Like there's lots of things moving. You know, I saw something that was like, Think about just forklifts.

38:03I know a company, or remain unnamed, that's spending three and a half, this is on the supply chain side, three and a half billion dollars a year on forklift labor in their facilities.

38:17Travis Kalanick:That probably shows up in the SEC filing if we want to get creative and figure out what company you're talking about. I was saying, but you see what I'm saying? Yeah, big opportunity. If you just solve the forklift problem. Yes, but on solving the problem, what do you think about this distinction between jobs versus tasks? Like a lot of people would have assumed that there would be no more marketing people because the job is just writing marketing copy, but the job is actually much more. Writing copy is one task. I was looking at automated trucking and I found some stat like I think 30 % of truck drivers are armed.

38:53Travis Kalanick:They carry weapons. And so driving the vehicle is one task, but in that job, you are also providing security for that payload. And you are also doing other things, refueling the vehicle, maybe some minor maintenance. And so just the steering and gas and brake pressure is just one task that you're doing. How do you think about that in the context of all this? This really gets to the jobs question, I think. Yes. Which is basically like, okay, well, if I do everything that we are imagining on food, which is I have industrial real estate, which is manufacturing and logistics. I automate the manufacturing, which is production, robotic food, robotic food machines, robots.

39:39And I have robotic couriers. What happens? Food, the price of food goes down. Yeah. Okay. When the price of food goes down, remember, robots don't have bank accounts. when the price of food goes down, what happens? More people have more money. Jevin's paradox. What do they do? You start eating more? You just start having 10 burgers a day. No, that's not what happens. Everyone's going to be fat. This is hilarious. That's not what I'm saying. That's so funny. You're not the problem. That's not what I'm saying. No, what I'm saying is when once you...

40:12Travis Kalanick:Jevin's paradox. I'll take... I was going to get three pizzas. I actually did a burger. I'll take six. You're like, once that's the price. No, no, no. So what happens, you have more money to do other things. But remember that money is only ultimately going to humans. Yes. So it's the things that get automated go down in price. Yes. Which then creates surplus. Yes. To do what? Yes. To do other things. Yeah, this is the ball. So it doesn't always have to be, oh, marketing's automated, but sort of, and there's still people doing it. It's like, whatever, there's going to be a hundred other new things that come out.

40:47because there's this excess of capital and progress continues. Yep, yeah. And as long as humans still have things that we do that robots cannot, it's go-go time, man. It's going to be super prosperity. We talked about the plumber that is paid like LeBron last time. Yeah. It's going to be across a thousand categories. And some categories we don't even know. Yeah. Like we don't even know what they are today. Yeah.

41:11Travis Kalanick:Yeah. You raised$1.7 billion. Why didn't you raise more? That's a good question. I mean— Because last time we were here, you talked about, like, oh, well, if you were doing something and it was easy, you weren't going hard now. Seems pretty hard, but— Look, you have to stop somewhere. No. Even I have my limits. No, it's like—but, like, look, as you can imagine today, my phone's blowing up. I mean, I'm pumped. Like, A16, these guys, we should have done business at Uber. That's right. If we did business at Uber, my 2017 would have been a different year. Yeah. Yeah. Okay? Totally. So that's why I called it unfinished business.

41:53Yeah. And so, but yeah, like my phone's blowing up. Like we're probably just going to do a second. We'll do a second close. Yeah. I figured.

42:06Travis Kalanick:Come back for the second close. Run it back. Run it back. No, I mean, we're not going to do a big announcement on the second close. But like, you know, those people who are texting me and hitting me hard right now. We got room. You know, well, we'll see. We'll see. Depends on what the previous text message is. If you're a homie, if we're not a homie, you should talk to one of my homies. Yeah, I did come away from the last conversation thinking, all right, there's a lot of exciting companies in physical AI. and you could spend years and years and years trying to find all the best teams or you could just give TK a big pile of cash and just say go cook.

42:47Travis Kalanick:And, you know, sometimes the easier route is better. Yeah, and I think there's this thing. Physical AI, people are like, well, is that a humanoid? Is that a world model? And so on this one I sort of dialed the language a little bit and am calling it industrial AI. yeah it's like okay this is a full stack software robotics sensors machinery like a full stack solution to automating an industry and that's kind of how we think about it and it's industrial yeah so it's like heavy atom stuff yeah well thank you so much this was incredible you want to get a signature can we get an autograph sure why not we get something which they can figure it out back there.

43:32Travis Kalanick:Oh, we got a gong. We'd love to have you sign this gong. We'll hang it in the rafters. We want to hang it in the rafters. We're trying to build our museum of business. The museum of business grows one gong stronger today. And we will see you in Austin. Next time you're on your commute, if you see two jet skis moving out of your, you know, out of sight coming in, it's probably us. That's us. If it's not, guys, let me know if you want to learn how to slalom ski. If you want to learn how to wake surf like well. I've only been water skiing once or twice. I go at 7.30. I go at the 7.30 in the morning.

44:09And I'd say half the time I'm out there at 8.30 when I leave the office. That's amazing. I love it. That's what we do. Beauty of summer.

44:18Travis Kalanick:Thank you so much for coming out on the show. Always a pleasure. Thanks for listening to this episode of the A60Z Podcast. If you liked this episode, be sure to like, comment, subscribe, leave us a rating or review, and share it with your friends and family. For more episodes, go to YouTube, Apple Podcasts, and Spotify. Follow us on X at A16Z, and subscribe to our sub stack at a16z.substack.com. Thanks again for listening, and I'll see you in the next episode. This information is for educational purposes only and is not a recommendation to buy, hold, or sell any investment or financial product.

44:56This podcast has been produced by a third party and may include paid promotional advertisements, other company references, and individuals unaffiliated with A16Z. Such advertisements, companies, and individuals are not endorsed by AH Capital Management LLC, A16Z, or any of its affiliates. Information is from sources deemed reliable on the date of publication, but A16Z does not guarantee its accuracy.