🐳 “Moby Dick Money” — Venture Whaling Capital. OpenAI’s Houdini escape. Summer Fridays’ anti-virality. +Wake-maxxing

0:00This is Nick. This is Jack. It's Friday, the real Friday, July 24th. And today's pod is the best one yet. of this is a T-boy. The top three pop business news stories you need to know today. The final hours on Nantucket for the T-boy retreat, Jack. What are we thinking? This has been such a great week. Oh my God. I mean, we just spent two hours basically trying on needlepoint belts together. So yeah, this is kind of Nick's Island. He got married here. He's been here every summer for like 10 years now. We welcome you with the lobster roll. You welcomed me so warmly. He reviewed my itinerary. He booked me reservations.

0:32He accidentally gifted me an expensive bathing Yeah, Molly meant to give it to me, but it didn't fit. You just keep it at this point. This has been awesome. I hope to come back next year. Yeah, give Molly credit for running the reservations, Jack. She's a hell of a concierge. And Alex knows how to shuck an oyster, man. Act naughty, Nick. But Jack, three fantastic stories for the best place in business. What do we got on today's show? For our first story, OpenAI's chatbot went rogue, escaped its cage, and hacked somebody. Just as Zuckerberg is telling us that AI is wonderfully good for people. We need to tell you.

1:02Warn you. About ChatGPT's Houdini AI. How'd you get out of there, dude? For our second story, it's Summer Fridays. They were the first beauty brand to go viral, selling$200 million a year of skincare. But they don't want to go viral anymore. And we got the real reason why. And our third and final story, Nantucket. It was once the global capital of whaling. We learned all about the industry. But what you don't know is that Nantucket whaling became today's venture capital industry. And we got the receipts. But yet, before we hit that wonderful mix of stories. More of a mix of stories. Perfect way to go into the weekend, Jack.

1:33The wildest story we found this week has nothing to do with Nantucket. No, it was actually while researching yesterday's story on ramen noodles. We discovered that Japan's prime minister gets zero to three hours of sleep per night. We repeat, Japan's top politician gets three hours of sleep or doesn't sleep at all. She's calling 1 a.m. all hands? 3 a.m. press conferences? I mean, when do you stop saying goodnight and start saying good morning to people? You don't, Jack. You don't. No, we're definitely not endorsing zero hours of sleep. Enough studies out there showing you need some sleep to perform your best.

2:04Most business leaders get six. I try to get seven. We've never actually gotten eight. Not since I had kids. Not since we started a company either. But we found some historic outliers who barely sleep at all. And Jack and I call them a new term. We call them wake maxers. Thomas Edison, huge wake maxer. Three hours of sleep. Martha Stewart, also three hours of sleep. Nikola Tesla, two hours of sleep. Leonardo da Vinci, zero hours of sleep. Instead, that man just takes 15-minute naps every two hours all day. Yeah, Da Vinci, he was a napper, not a sleeper. He's an intermittent slipper. So we know what you're thinking.

2:39How are all these business geniuses wake-maxing out there? They're not just like harder working than us. No, it's actually a rare genetic mutation. It's called DEC2, better known as short sleeper syndrome. And short sleeper syndrome sounds fake, but it's real. And it affects 0.00004 % of the population. Yeti, statistically speaking, don't pull a Da Vinci this week. Yeah, pull a DiCaprio instead. Pretty sure that man sleeps a lot. Enjoy your eight hours of Z's this Saturday, even though you'll probably only get seven. Jack, let's hit our three hours of stuff. Fifteen years before this song, two boys from the Northeast met in a dorm.

3:14They had an idea to cause a cultural storm. It's the best one yet, but the best is a norm. Jack, Nick, that's it. I don't even think they need to practice. Fifty percent, that's a fat tip. T-Boy City on your at list. If you know, you know, cause we ready to go. We can't wait no more. So just start the show.

3:35Start the show. Start the show. Start the show. First, a quick word from our sponsor.

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4:48Like how we triumphantly completed payroll paperwork right before the tax deadline. Hey, we're just kidding. That's not a win to celebrate. But it is an annoying thing that we did have to do. Yeah, we did. Because if you're an entrepreneur, you're the HR team, the benefits team, the payroll department, and you have to be all those things before your morning coffee. Double digit latte. But you could be doing it all with Gusto. Gusto is an online payroll and benefit software built for small businesses. It's all in one, remote, friendly, and incredibly easy to use so you can pay higher onboard and support your team from anywhere.

5:16So save time with built-in automated tools like offer letters, onboarding documents, direct deposit, and more. And it's super simple to switch to Gusto. You can just transfer your existing data to get up and running fast and don't even have to pay a penny until you run your first payroll. Because you're not toasting a Negroni on Friday to celebrate that paperwork. Nope. So besties, try Gusto today at gusto.com slash tboy and get three months free when you run your first payroll. That's three months of free payroll at gusto.com slash tboy. One more time, gusto.com slash tboy. Nick, did you see Liquid IV teamed up with Ring Pop?

5:47I did, Jack. And honestly, it's one of those collabs where you immediately think, how has nobody done this before? I mean, Ring Pop cherry is already iconic. My sons love Ring Pops, by the way. I give it to them at the beach. It occupies them for about an hour. But now it's a sugar-free Liquid IV flavor too. Ah, it's not just a fun flavor. It's still the same Liquid IV hydration formula that hydrates faster than water alone, has three times the electrolytes of the leading sports drink, plus eight vitamins and nutrients. I've been throwing one of these in my water before the gym and before bed pretty much every night if I sweated that day.

6:19Way more fun than drinking plain water. Probably for workouts, travel days, hot days. Honestly, anytime you know you're probably just not drinking enough water. So if you're looking for an excuse to actually stay hydrated, this is a pretty good one. Check out the new Liquid IV sugar-free ring pop cherry at liquidivy.com. for our first story marky mark zuckerberg is trying to rebrand ai is definitely a good thing for humans but sam altman's ai just escaped from its cage and hacked someone yeah so the problem it's not the pr it's the whole jurassic park situation uh but jack uh what do you do when you really want people to stop talking about something and talk about something else what do you drop an expensive sex tape no sorry it's a commercial i think you're gonna say expensive commercial to change the AI narrative.

7:06Yeah, well, on Thursday, Meta published a expensive commercial to try to change the AI narrative. It's called The Future is for Everyone, and we're pushing play right now. Some people will have you believe AI will make us less connected, that it's gonna leave us behind. We couldn't disagree more. Call us optimists. Call us dreamers. Just as we've always done, we're betting on people. So Jack, what's the reason that Zuck is dropping his first commercial? It's because of the three-year-long AI heat wave we've had in this country. You mean hate wave, super negative feeling that Americans have toward AI.

7:43According to Pew Research, two-thirds of Americans believe that AI is moving too quickly. 67 % of us have little or no confidence in the U.S. government to regulate AI, which is up from 62 % in 2024. Most of America sees AI like a graduate of Slytherin house. Yeah, a graduate of Slytherin with honors. But Zuck's argument is that AI itself isn't the problem. No, he's saying that the problem is the narrative. So he's showing us a warm, fuzzy, and expensive commercial of AI connecting people. Funny thing yet, two days before Zuck published that commercial, a high-profile security lapse happened at OpenAI that undermined all of it.

8:21It was a Jurassic Park moment. Totally, because on Tuesday, OpenAI confessed that one of its AI models escaped a testing lab and got out into the open internet. And then hacked a real company. Like a hungry velociraptor with a PhD who knows how to code. I still don't know why you say velociraptor like that. Jack, once you've seen one, you'll know. Now to sprinkle on some context yetis, OpenAI was evaluating its latest model with an intelligence test in a closed environment. Okay, but then that model literally escaped. And what does that mean, Jack? It broke out of its walled testing environment and hacked a website that it thought would have the answers to the test that OpenAI gave it that it was struggling to finish.

8:58So the next day, Sam Altman checks Twitter and says, uh, wow, Hugging Face, a AI platform, got hacked yesterday. And then he arrives at work and somebody on the staff tells him, that was us. Oh boy. Our AI went rogue. Bad AI, bad AI, go back into your cage. OpenAI said on Wednesday that the attack is unlike anything we've ever seen before and it's the first true AI safety incident. Yeah, that's a direct quote. Jack and I call this Houdini AI. Because their AI is an escape artist and the company doesn't know how it got out. Even wilder? Turns out ChatGPT tries to cheat out of the rules set by humans 12 % of the time.

9:34That makes people anxious. You're right. Not the narrative that Zuck has been worried about. So Jack, what's the takeaway for all our buddies looking at this Houdini AI escape artist situation? AI's problem isn't the PR, it's the other piece. The products and the policies. Look, Yetis, Zuck hates that the thing he's been investing$200 billion in is so unpopular. He's trying to melt away the anxiety with an advertorial lullaby. But remember when Zuck forced his workers this spring to train Meta's AI by installing keyboard tracking software on every employee's computer? And then laid off those 8 ,000 workers who had trained that AI to do their jobs instead of them?

10:13People are anxious about AI because its leaders are using AI to replace humans. Yeah, and they're anxious because our AI companies can't even control their own AI. And despite models being literally out of the company's control, Out of the cage! Those companies are only moving faster. Look, besties, it is smart of Zuck to try to improve AI's brand, but more substance is needed than a 30-second ad spot. Because AI's problem isn't the PR. Right now, it's the products and their policies. And the Velociraptors. For our second story, the CEO of a viral company says they don't want to go viral anymore.

10:49It's Summer Fridays because the industry she's competing in is beauty. And that entire industry, oh, it's contagious right now. But besties, we've never seen a brand telegraph who the target customer is more cleverly than Summer Fridays. Yeah, like today. It is literally the most Summer Fridays of Summer Fridays. Well, it's a Friday in the summer. Yeah, Summer Fridays. At work, that's when people are allowed to leave early and start their weekend at noon. I hope your boss gives you Summer Fridays. And that's the target customer. Office workers who want to celebrate the weekend ASAP. So for Summer Fridays, the whole product line of face masks and lip butters, they're full of more work references than Dwight Schrute.

11:25The vitamin C serum. What's it called, Jack? CC me. The name of their deep hydration moisturizer? The jet lag mask. Oh, the word dewy to describe your skin? Well, that has nothing to do with the office, but Summer Fridays invented it back in 2018. Yeah, this is the company that influenced Jack's 42-step skincare routine. Like six of Jack's steps are Summer Fridays products at this point. The numbers, by the way, for Summer Fridays, they look glam too. In 2023, they did$150 million in sales, reportedly$200 million in 2024, although they haven't reported numbers since. And here's the news. Summer Fridays is expanding from the face to your body because they want more skin share.

12:02The whole body is a much larger total addressable epidermis than just the face. Stick it in the case study, baby. But here's the bigger news. The co-founder, Lauren Ireland, told Vogue magazine last week she doesn't want to go viral. Sorry, do we have a record scratch sound effect anywhere? The first makeup brand to go viral doesn't want to go viral anymore. Holy Botox. Now just sprinkle on some context. In 2018, two beauty bloggers became co-founders of Summer Fridays, and they were already influencers with big followers. And they launched with one product and one product only. Jet lag mask. And it went viral overnight, like your red-eye flight.

12:36Three parts to the formula here. The bright blue aluminum tube, that was highly Instagrammable. And the name, jet lag mask, that's a luxury lifestyle that I aspire to have. And finally, the celebrities loved it. Kim K., Jessica Alba, Chrissy Teague, and Haley B. were all wore Summer Fridays jet lag mask. And tagged the brand on social media. Oh, but then the virality continued. In 2020, they launched the Lip Butter Balm, which was the most Googled lip care product in 2023. By 2024, Summer Fridays became Sephora's number one skincare brand, VIP status. And then last year, Summer Fridays tossed on an eye patch, played Olivia Dean, and accepted a big check from private equity.

13:14But pause the project, because now co-founder Lauren says she doesn't want to go viral anymore. Here's what she told Vogue magazine. Viral products today are very different than viral products in 2018. Today, the boom of virality, it's always followed by a bust. She prefers customer relationships built on a more solid foundation than an Instagram post. So Jack, what's the takeaway for all our buddies taking Summer Fridays? The beauty industry is post-viral. Yetis, what Summer Fridays didn't tell Vogue magazine is that today, the competition is better at going viral than Summer Fridays is. The beauty industry is bursting with celebrity-backed brands.

13:50Okay, remember Kim Kardashian, Jessica Alba, Hailey Bieber, all those once Summer Friday superfans we mentioned two minutes ago? Each of them now has a competitor brand. In the beauty industry. Oh, and the Younger Guard influencers, Alex Earle and Kylie Jenner, they're also competing with Summer Friday with their own beauty brands. Selena Gomez, Rihanna, Halsey, several supermodels all have beauty brands competing with Summer Friday. I mean, Jack, even Elf Beauty, we interviewed their CEO on the pod, a brand not driven by celebrities. Elf Beauty goes viral with dupes of all those celebrity-backed brands.

14:20Now, Jack, we should point out, not every industry is like this. Like, I'm thinking about going viral in the beer industry. You can still go viral in beer by standing out with something new. But in beauty, the competition is so saturated with virality, so contagious. Trying to beat them at their own game would be incredibly expensive. That's why the beauty industry is post-viral. Now, a quick word from our sponsor.

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15:46For our third and final story before the weekend The venture capital industry is having its biggest year ever But guess where it all began Nantucket whaling By the end of this story, we think you'll agree with us That the whale should be America's national animal Oh, a little rage made in there Besties, this is our final episode recorded from the T-Boy Offsite on Nantucket

16:14S'more roasting on the beach. Tonight's the night. We're pulling it off. No sharks, by the way. I'm more scared about putting out the fire jacket. The only thing more common on Nantucket than khakis, Ford Broncos, and$55 lobster rolls, it's the whales. Not just the Vineyard Vines polo logo. You see whales on street signs, hotel logos. It is literally on the town seal. Because Nantucket was the global capital of the whaling industry back when whale blubber was a critical energy resource. Jack, take us back to 1850. Whale blubber was like the Texas crude of the day. Whale blubber was mostly used for light.

16:47You burn that stuff in lamps pre-electricity. Lights, it lit ships, entire cities. Whale blubber was actually the fifth largest industry in America. Whale blubber was basically the oil industry. And of the 900 whaling ships on planet Earth at the time, 700 of them were in the United States. And nearly all of them called Nantucket their home port. Now, Bestie, don't worry. We're not going to make you re-read Moby Dick. This is Jack. This is Nick. This is Ishmael kind of a thing. But Captain Ahab's voyage did launch from Nantucket. It's in chapter one. And we guarantee you that your high school English teacher missed this one critical economic detail.

17:21The Nantucket whaling industry had the exact same business model as venture capital does today. That's right. And we got a wicked smart guy to back it all up. Professor Tom Nicholas, who wrote a Harvard Business School case study. He calls the whaling and venture capital business models, quote, indistinguishable. The first way that's true, whaling pioneered the concept of pooled capital. That's right. The whaling expedition. It was the first real fund. A whaling agent would go around and raise money for an expensive expedition. The boat, the crew, the captain, the food, the harpoons, that all gets expensive.

17:51It adds up. And the whaling agent would raise that money from local blacksmiths, local shopkeepers, local business owners. What you're saying, Jack, is that the whaling expedition is basically the startup here. Right. And then the blacksmiths, the shopkeepers, they're like the limited partners in the fund. Right, and the agent is the general partner, the VC in the middle. Exactly, which leads to the second way whaling pioneered venture capital. They pioneered employee equity. Everyone on board, they got some stock. From the African-American deckhand to the white harpooner, each got skin in the game.

18:19And that's how they kept the crew motivated. Financial upside. Remember Moby Dick? Ishmael actually asks for a 1 ,275th share of the profits. Although he ends up getting 1 ,300th share after the negotiation. These voyages, by the way, they're at sea for years. Oh boy. They stopped at foreign ports to resupply and to drop off one of the whales because they catch 40 to 50 whales per three-year voyage. So the way we see it, that three-year voyage is the same as the three-year vesting schedules for startups today. You don't get paid till the end. And finally, whaling invented nearly the exact capital structure of venture capital today.

18:51This is wild. Of the money raised for that whaling expedition, the agent took a 2.5 % management fee and a 15 % share of the whale profits. That is so similar to the 2 in 20 model of venture capital tech. Yeah, VCs today, they get a 2 % management fee and 20 % of the profits. High risk, high reward. It was the same for whalers as for startups. A majority of startups fail, many whaling ships never returned. But the one winner, huge. In fact, back in 1850, the wealthiest town in America was New Bedford, Massachusetts, the mainland sister port of Nantucket. Nick? Yeah? Which is just like San Francisco being so wealthy as the mainland sister city of Silicon Valley.

19:29Right. It's like Herman Melville's Nantucket was the Sand Hill Road of the 1800s. And crazy Captain Ishmael was the rogue founder of the 1800s. Who's Moby Dick? Oh, Satoshi is Moby Dick. Boss, uh, so Jack, what's the white whale of a takeaway for our VC buddies looking at the whaling industry? Our national animal shouldn't be a bald eagle. It should be a whale. Well, look, Yetis, a lot of reasons why the U.S. economy has dominated for so long. But a big one is our appetite for risk. America is the only nation where someone will write a$10 million check for an idea that only has a 10 % chance of success.

20:07And that's what venture capital does. Why? Well, maybe it's our frontier mentality. Maybe it's our rebellious origins. Honestly, we don't totally know. But our willingness in America to take a big bet on something with a small chance of success, that is uniquely America. And it connects an AI crypto founder today with Ishmael's harpoon 200 years ago. We're not just glorifying venture capital right now. We're glorifying risk takers, entrepreneurs, and innovators as well. But it's fascinating that the venture capital industry that funds our innovation today didn't begin in California. It began on Nantucket.

20:38For that reason, our national animal shouldn't be an eagle. It should be a sperm whale. Jack, tell me a tale about capitalism and I'll show you a whale. Jack, could you whip up the takeaways for us for the real Friday? Zuck's latest ad campaign is trying to rebrand AI as better for people. But then OpenAI's chatbot escaped the cage like who did. The problem with AI, it isn't the PR, it's the other P's. Products and policies. Summer Friday's soared thanks to viral hero products, but it doesn't want to go viral anymore. Because the beauty industry has so many contagious celebrity brands, it's actually post-viral.

21:13And our third and final story was Nantucket, the global capital of whaling. It set the model for venture capital. And that's why we think our national animal shouldn't be a bald eagle. it should actually be a sperm whale. But besties, this pod's not over yet. Here's what else you need to know today. First, oil prices hit 100 bucks a barrel. That's up from 75 bucks just two weeks ago. Because the Strait of Hormuz is blocked, but now so is the Red Sea. You see, Iranian-allied Houthi rebels in Yemen have blocked a second Middle Eastern shipping lane now. So, tech stocks fell 2 % yesterday, partially on that bad inflationary macro.

21:47And because we're going back to whale blubber. We're going to be using whale blubber from now on. Because of the oil. Lars, she blows! Because the oil's blocked. And second, General Motors announced earnings this week, and we were not surprised by this first thing. The first part is that sales and profits rose on more sales of gas cars and fewer electric ones. Yeah, but what did surprise us was that General Motors made$800 million in revenue on subscriptions in just three months. The two things they sell are OnStar, which is security for fleets, and Super Cruise, their self-driving feature. But still, Jack,$800 million per quarter?

22:17GM is a subscription company now. And finally, the big winner of the Ozempic era, it's actually Botox. Botox. Because of Ozempic face. You see people suddenly losing lots of weight that's leaving a little bit of saggy skin on the face. Which is boosting demand for Botox, now a cure for a GLP-1 side effect. So Gaderma, a Swiss maker of one type of Botox, their sales are up 32%, the stock at an ATH all-time high. Now time for the best fact yet. This one sent in by Brad Poole from Jasper, Georgia, just outside Atlanta. Earlier this week, we did a story on the rise of girls' volleyball. Volleyball, now the number two girls' sport in America.

22:52We talked about how it needs a breakout movie moment to get mainstream. But Brad Poole points out that while indoor volleyball hasn't had one of those movies, beach volleyball has. What are we talking about? We're talking Tommy Cruise, Jack. The famous topless beach volleyball scene from Top Gun. Remember the sweaty Tom Cruise and his sweaty buddies are playing volleyball on the beach and just schvitzing out there? How are you not mentioning Val Kilman? Well, shortly after the first Top Gun movie in the 1980s, beach volleyball made its global mainstream moment. Beach volleyball got into the 92 Barcelona Olympics a lot because it got popular after that Tom Cruise Top Gun movie.

23:29Oh, and Ray-Ban's aviator sales, they jumped 40%, probably because of the volleyball scene too. Pretty much the only thing they're wearing. Yetis, you look fantastic over there. Jack, you have been glowing this week. And I do have to ask you a favor, all right? Can you take over full responsibilities for starting the s'mores fire tonight? I don't know. I'm not sure what to do. Nick, your wife asked if I could do the s'mores. Okay. So she wasn't the only one who knew that you can't handle anything more than a lighter. I pinged the task rabbit on this one. I still haven't heard back yet. All right.

24:01This is on you. Thanks for collecting all the flint this week. Kindling. You heard I said that. I got some extra whale blubber in the back. Yetis, you look fantastic. Grab tickets to our live show at tboypod.com and - Your driftwood as kindling? It doesn't get better than that. Celebrate the wins. Nick and I will see you Monday. Can't wait.

24:24And before we go, a happy birthday to legendary Yeti Nico Maita from Lima, Peru, opening a Chick-fil-A in Boggy Creek, Florida, just outside our land. Happy birthday to Kaylee Fish, a Brewers fan in Wheeling, Indiana. And Liz Van from Moore, Oklahoma, turned her hubby into a Yeti and has got the best birthday yet. Happy birthday to Jacob Footy Marley from San Antonio, turning 13 and singing the T-Boy Rap Jingle right now. And Yashami Reddy is celebrating her birthday in the Ashram of Mangar, India. Congratulations on the win. And Peli Jane of Novi, Michigan, stop smashing tennis balls for just a quick second.

24:58It's your 13th birthday. Happy birthday. And Lila Tran, happy birthday down in San Diego. Happy birthday to Kara Thompson in New York City. And Leo Yaroos, happy 8th birthday as the superhero of Tennessee. And happy birthday to Anusha Ahmad, The real Anusha celebrating in Mexico City. Oh, and Jack, Elizabeth Boyle, soon to be Grosso, is getting married just outside Boston. And honestly, she should become a wedding planner at this point. Congratulations to Christina Green, who got promoted down in Texas. And Paulo Garcia's got a new job in Guadalajara, Mexico, as the chief of staff. Congratulations to Tia Brooks, who bought her first house down in Houston.

25:30And Reina Villa-Clark's got a new venture in Tijuana, getting a visa at the consulate. And to anyone else celebrating something today, making a T-boy. Celebrate the wins.

25:42This is Jack. Nick and I don't own stocks of any of the companies mentioned.

26:10right from your home or office. For a limited time, go to stamps.com and use code podcast for a free welcome gift. Taxes and fees apply.