RBA Blows It (Again), Pet Circle Horror Show, Navan IPO Deep Dive, Richo Gone, Mamdani Takes NYC, Luxury Escapes’ Goes to the Beach and Adir turns Quizmaster

25:48Yeah, absolutely. I could give you a quiz. You'll like this quiz. So obviously there was big news in the US on Tuesday their time with the election of Mamdani in New York City. Yes. And so people are very worked up about his Israel views, which are very negative. He thinks Israel should be destroyed. and that it's committed genocide in Gaza, which I'm actually going to touch on in a second with this survey. But actually, I think the reason most people voted for him was because of the stuff that we are now increasingly talking about on this podcast, which is the perception that being rich is becoming a closed shop, inaccessible to younger people in particular, but not just younger people, and that there's characteristics of an emerging aristocracy in the Western world.

26:43and basically the system is being run by insiders for the benefit of insiders and you can't break into it. And Mamdani's platform is pretty much, he's a very proud socialist. His platform is pretty much, we're going to shake down the rich and make stuff free for people with taxpayer funds, including public transport, I think. Maybe some – he wants government, city of New York-owned grocery stores. Yeah. Which are the two most ridiculous policies, the grocery store one, which is just absurd. Which is the – Russian bread line. That's absolutely right. I mean, you're going to be – you know, the thing about the Soviet Union, if you ask people about the Qs in the former Soviet Union, they'll say, you just joined a Q.

27:28You didn't know what was the end of it. It might be toilet paper or potatoes or some bread. Well, whatever it was, you needed it, so you just joined the line. I mean, that's that recipe, right? I mean, it's a bit extreme. What I'm saying is a bit extreme, but like it's ridiculous, right? Yeah, and the rent control we know doesn't work. It makes it more expensive. People don't improve property, so there's less supply, and it makes it more expensive except for the privileged few who can afford it. So two does that. As we said, I think you said it last week beautifully, it's policies that appeal to the poor to make the poor poorer.

28:00All these policies actually help the rich, which is the irony of it all. That's right. So then the question is how much of an issue is this in Australia? And I don't know if you've come across this new institute called the McKinnon Institute. Have you come across that? It's very interesting. I'm surprised you haven't heard of it just because it's you. But basically it was set up by Grant Rule. You know Grant? Oh, the name rings around. What does Grant do? Grant was the founder of Message Media. That's right. And I can't remember how much he sold it for, but it was nine digits. In the 500s-ish.

28:31It didn't start with a one. It was a lot. Yeah. And so he sold it for a fortune. I think Mercury, the PE for Mercury was in there. They made a ton of money. I think like EQT or someone like that bought it. I can't remember exactly who bought it. Yeah, possibly. The Swedes. It was a big amount of money. It was run by, you know, Stuart Marburg. He's a great guy. Grant Rule I knew because Grant Rule was my customer for a while. He was very smart and extremely uncompromising, let's characterize him as. And Stuart, who started NetSpace, the ISP. Oh, yeah. Stuart Marbeck. So Stuart was the first guy I really knew in tech that kind of got rich by selling his business.

29:10Well, what about the Experian guys? I mean, what about, not Experian, Experian bought Hitwise. What about the Hitwise guys? That was first, wasn't it? I think, yeah, but I think this was like, Stuart had built this good business. I knew him well. He was also a customer. Didn't Net Space have an office on like Burke Road or something near Campbell Junction? Is that him? Yes, correct. You're absolutely right. And so he was the first, both Grant, Grant was a customer of a different business and Stuart was like one of my very first customers in my entire business career. And he was like so nice and good to me.

29:40He's a great guy. And he made, I don't know, like tens of millions of dollars from selling NetSpace and then became CEO of Message Media for a year and a half and on the board for seven or eight years. So presumably got a hell of a lot richer as a result of that. And so Grant, with all of this money that he got, he set up this nonpartisan think tank institute to try to educate politicians to become like better and smarter and strengthen liberal democracy in Australia. It's run by Mike Baird, the CEO, former New South Wales Premier. Yeah, I didn't realise Mike was doing that now. Because he went to NAB or something after.

30:17Yep, that's right. That's right. It has Julia Gillard on the board. So it's really non-partisan or bipartisan, we could call it. Both very, I think, excellent leaders as well. Both Mike and Julia are probably two of the cleanest, clean skins coming out of Australian politics in the last 20 years. They just gave the McKinnon Awards to the great Josh Burns and also Julian Lisa for fighting against anti-Semitism for the last year. And so they did a survey and they put out the results. And I'm going to ask you just for percentages. I'm going to say a question. This, by the way, sounds like an outstanding use of science.

30:52I totally agree. That's why I was a bit surprised you shouldn't have heard of it. I think you would really – this is really up your alley. I'm very supportive of this and it's really up your alley. Absolutely. And so this is why it's important. Mamdani, we don't want that in Australia. And the more – I don't know if you've got Elon Musk on your run sheet. You got that on your run sheet? $1 trillion? Elon isn't. All right. Well, the$1 trillion, that is absolute gold for Mumdani, right? That is the food that feeds people like Mumdani. So tell me what percentages you think in Australia, 4 ,000 people were surveyed, what percentage agreed with the following statements?

31:35Mike, you're going to say an answer. Adam, you're going to say an answer, okay? One, violence can be justified for political causes. What percentage of Australians agree with that? Mike? 44. 44 % of Australians think that violence can be justified for legal causes. I think 12%. 9%. All right. Well, that makes me feel better. I mean, Mike thinks basically 50 % of people think you should go out and kill political candidates you don't like. Take the guns away from Mike. No kitchen knives. And 12%. All right. I would have said like three. Okay. There you go. Maybe I'm naive. Okay. What percentage of Australians are satisfied with how democracy works?

32:14You can say to the nearest 5%. You don't have to say 1%. 55. Mike? 70. Well, Adam is sadly right. It's actually 55. So roughly half the population thinks democracy is broken. And so that is why Mumdani gets elected because half the population thinks democracy. I mean, this is alarming. People in Australia should be alarmed because we are heading towards pitchforks. This is not good news. And it's a 4 ,000 random sample of Australians, okay? It's a proper survey. And this is why I hate inflation so much, by the way, because inflation is what drives people to pitchforks. Essentially, that's the worst of the worst.

32:51When you literally can't afford to buy food and can't afford rent and can't afford to fix your car because price is so high and rich people are richer, that's when people grow for pitchforks and justifiably grow for pitchforks. This is why Michelle Bullock and the RBA stuffed up so badly. Well, three more questions. Three more questions. The main reason for voting is to avoid a fine. What percentage? You can just say to the nearest five. You can go for one if you want, 1%, if you're brave. 30%. 40%. So you shouldn't be behaviorally, economically anchored to Adam's answers because it's only 17%.

33:26So what's that? 17 %? Pretty close. One in seven-ish. One in six. Yeah. 16.67%. So one in six people that votes is basically just doing it to avoid a fine. Is that why you do it, Mike? To avoid a fine? mostly? No, I vote because I want to vote. You vote properly. I thought so. It's why I do it. It's why I draw my cock and balls. Yeah, we've heard that before. Never gets old. Like I do. I know. I'm not doubting you. What percentage trusts federal politicians? Mike, you answer first. 10%. 23%. 33%. So it's actually higher. It's 36%. So interestingly, more than a third of people trust federal politicians, which is quite crazily high, isn't it, considering half the people have lost faith in democracy.

34:23Given Scott Morrison was our prime minister for three years. Agree. And the last question, democracy is preferable to any other form of government. So how many people think that we should give up democracy and go for another form of government, e.g. socialism like Mamdani. It's not specifically mentioned. So what's your question? Is your question – because you sort of asked that question in two opposite ways. Is it the first way or the second way? Yes, I'm going to ask it in the negative. I'm going to say what percentage of people thinks democracy is not the preferred form of government? Mark, you go first.

34:56Fifteen. Ten. One quarter of Australians. What? One quarter of Australians. Wow, that's surprising. And so we've got problems. and so part of the problem we have i'm just going to finish on this point because i said i'll you know we've never really spoken about this but this is a podcast that is very much focused on numbers and data and so i just want to speak about this for two or three minutes because one of mumdani's main platforms has been genocide in gaza and so we haven't really spoken about this so i just want to talk about this in numerical in a numerical fact-based sense which is not popular in the Western world at the moment.

35:34So like genocide, that word, like it's basically genus. It's a weird word. It's a mix of two languages. Genus, that's like a Greek word. So that means like a group or a tribe or an ethnicity or maybe a nation, you could call it. And side, that's a Latin word. We know it, homicide, like suicide. It means death. And so this is a word that's been created to mean like killing a group of people or an ethnicity of people or a nation. It's not an old word. Like this word was only coined 80 years ago. It's had its like anniversary of legal use, like literally in, it's from 1945. It was used in the Nuremberg trials to describe what the Nazis did to the Jews in Europe.

36:19But that's why this word was coined. So you understand why people that don't like Jews in Israel are trying to use it against the Jews in Israel now, because they're trying to say, oh, you're, we're going to use the same word that was used for the Nazis. We're going to make you the Nazis. Okay. And so what does it mean? Like, let's talk about numbers. So in Europe, why would they use this word genocide? In Europe, before the Holocaust, there were 9.5 million Jews. And after the Holocaust, there were 3.5 million Jews. So 6 million were killed. That means 60 or 65 % of the entire Jewish population of Europe was killed.

36:59And if you look at somewhere like Ukraine, there were 2.5 million Jews in Ukraine. People don't realize Ukraine was one of the centers of Jews before the Holocaust. There were 2.5 million Jews. 1.5 million were killed by something called Einsatzgruppen. We have to be honest, predominantly Ukrainians, not Germans. And then the rest ran away over the next 60 years, and now there's 30 ,000 Jews in the Ukraine. So that's genocide plus ethnic cleansing. So these are the kind of numbers you talk about when you talk about genocide. And now we can be honest about that. I think the other big genocide we've seen in our lifetime is Rwanda.

37:34That's right. Which was another legitimate genocide. Which was the Hutus killing the Tutsis. Hutus and the Tutsis, yeah. Ethnic groups. And they killed like a much larger number in a number of days and they didn't have industrialised murder. They killed them with machetes and they would kill their next-door neighbours. It was terrible. And so let's talk about Gaza by the numbers. And so this is not to minimise the war in Gaza, the death in Gaza, dead children in Gaza or in Israel for that matter, but we just want to talk about facts on this podcast and about this idea of genocide. So in Gaza – And just on the Rwanda genocide as well before you go on to Gaza because it's relevant.

38:10So you had a million people killed and around 500 – between 250 and 500 ,000 women raped as well. Right. And that million was probably, what, a third to a half of the total population of Tutsis? A bit less, but it was probably a quarter-ish, I think, at the time. Yeah. And the aim was to wipe out the Tutsis. That was the aim of the Hutus. And they were only stopped by the United Nations intervening. But that was short. It was a very short period of time, that genocide. Yeah, absolutely. Months. So they killed that many in months. And so let's talk about the two-year war in Gaza. So in Gaza before the war, there were 2.1 million Gazans.

38:54That's the number of Gazans. I'm going to use numbers from Al Jazeera, who we know is not going to be pro-Israel. Let's use the least pro-Israel numbers outside, I don't know, Iranian state media that we can come up with, okay? Al Jazeera. So Al Jazeera says 150 ,000 Gazans have been reduced during the war. So what's happened to that 100? Well, I thought the Hamas themselves only said like 70 ,000. No, no, no. I'm going to say Al Jazeera, 150, but let's talk to the breakdown of that 150. So that 150 is what? That's 6 % or 7%, right? But 100 ,000 of those 150 were not killed. They've run away from Gaza, according to Al Jazeera.

39:34So they've run away. So now we're left with 50 ,000, which is what Hamas's number is. And like no one's verified it, but let's just take that number. So we know that there were around 30 ,000 Hamas terrorists before October 7, like at October 7, and presumably they've all largely been killed and replaced by some others. And so let's even say be conservative. Let's say 30 ,000 of those 50 or 55 ,000 were civilians. It's a lot of civilians, okay? Like I'm not diminishing the number. I'm just talking about genocide. So 30 ,000 were killed. 30 ,000 as a percentage of 2.1 million is one and a half percent barely one and a half percent let's call it one percent actually in that two-year period of time so my argument is not that it's not tragic my argument is not that the number is okay I'm not passing a comment on that at all I'm against war right like I think we know how this war started I'm not justifying all these civilians being killed.

40:39What I'm saying is in two and a half, in two years, 1 % of the population of civilians have been killed in Gaza. It does not possibly, by the facts and numbers, tick the box of being called a genocide. It can be called a tragedy. I'll just say on that as well, even worse, is that the whole point of genocide is an intentional killing of one particular group. When Israel, in general cases, warned people to get out of the area they were attacking. Clearly, they weren't perfect, but I think you look at military experts who studied this and other conflicts, is this has had one of the lowest civilian to military death rate ever in military history.

41:19So the whole notion that it's genocide is blatant and unadulterated anti-Semitism. There's nothing else. There's no other explanation for it, because every single fact points to it. There's no numerical basis. Nobody could be confused if they knew the numbers into believing this is a genocide. And I'll say a brutal comment in my last two comments, which is presumably if Israel wanted to commit genocide with the relative strength of their army compared to Gaza's vulnerability, there would be 25 % to 50 % of the population killed over two years. Maybe all of the population. They could have killed that in a week.

41:50Forget who. They could have demolished the place in a week. Yes, you're right. And the last point I'll make is this. Lots of kids have been killed in Gaza. I think there's no doubt about that. And so why have so many kids been killed in Gaza? And this is the answer by the numbers. So no one disputes. The NATO, which is full of European countries that do not lie on behalf of Israel, like they all agree that Hamas uses civilians as human shields as part of their operations. Now, that's beyond dispute in like reasonable, rational, fair thinking people. And so the problem is this. you know what percentage of Gaza's population is under 18?

42:31Oh, it's crazy high. Like it's majority, right? 47%. 47 % is under 18. And so notwithstanding some of those 14 to 18-year-old boys are actually in fatigues with automatic weapons fighting the Israelis, even putting that to the side. We know that Hamas prefers to use kids because it looks worse and the Israelis are less likely to shoot. and 50 % of the population is kids. So when civilians are killed in Gaza, there's a better than one in two chance that it's going to be a kid that's being killed. That is the reason that so many of the civilian casualties have been kids, not for targeting, not for whatever.

43:14And so the takeaway I would say from this is no one who's honest could look at these numbers and say, this fulfills the definition of genocide. No one can look at this and say, it's not a tragic situation that these children have been killed in Gaza. But fundamentally, this was a war that was started with a horrendous invasion and terror act. And it's tragic. And thank goodness it's come to an end. But we have to say that those people, like Mamdani, and like what the Albanese woman at the UN. Francesca Albanese, the heretic anti-Semite. Yeah. Who have made their entire platforms virtually, that there's a genocide in Gaza.

43:57They are doing it deliberately dishonestly to stoke anti-Semitism. Yeah, to stoke anti-Semitism. Anybody who claims, like, neither of us are massive fans of Netanyahu, Bani, Stretch. I think there's some stuff he probably got right during this, but a lot of stuff he got wrong. And we're certainly no apologists for the, even worse, the right-wing defence minister, I forget the names, Smotrich. Ben Gavir, there are some people in the Israeli government that you and I would say are repugnant. and do not belong in the government of a liberal democracy. Absolutely. But nonetheless, to accuse this thing of being a genocide is nothing less than unadulterated antisemitism.

44:36When you peddle this myth of genocide, which is nothing but pure offence, you can be critical of Netanyahu all day and I'd support that, but to claim it's a genocide is weaponising antisemitism in its most disgusting form. Anybody who makes this claim is a disgrace and has no place in modern-day society. And the reason that I tie this all back together to this survey and Mamdani and maybe to Richo's passing is because all of this reporting and dishonesty about Israel and genocide makes all of the liberal democracies that have supported Israel, because it is a liberal democracy, it makes all of those liberal democracies look bad, like they're supporting genocide.

45:20And I think it's really important to be crystal clear about facts and use numbers to explain that this is not what is going on. And people should not lose their faith in liberal democracies. Because if this war happened, like Russia was perpetrating this war, the numbers would look totally different. Just like the numbers of civilians killed in Ukraine and the way they're killed looks totally different to what happened in Gaza. So I'm happy to let you move on. But I think it's a really important topic in society, not just business, right? I think a lot of the Israel haters are really US haters.

45:56And they hate the bigger press of the US. And Israel is just an arm of the US, really, in the Middle East. It's the only liberal democracy in the Middle East. And if you hate the US, and this is all the Greens and all the East type, they probably don't have a huge view either way on Israel. But Israel is considered the US slash Middle East version. So we're going to hate them. So they're rich. Yeah, I think you're right. and they're white, and so they're not all white, but they think they're white, even though the majority of Israelis aren't. They're rich white people who are oppressors, so we'll hate them.

46:27I think it's just the view of most of the people on the left and far left and the Greens and some part of the Labor Party, and it's pretty sickening. The one thing Richo got totally wrong is this. He mostly fought his battles internally in the Labor Party, and he said, whatever energy and time I had left, I used that to fight the Liberal Party. And what he was fighting was his fundamental belief that the radical socialist left of the Labor Party would not be electable in Australia. And if he let them get control of the party, it would be the road to political oblivion for the Labor Party. And I think what has played out in the last five years globally has proven that that is no longer the case and that we are moving increasingly to the left in the Labor Party in Australia compared to the historical position of the Labor Party.

47:16We're moving – the left is moving further left and the right is moving further right. That's right. We're just increasingly polarised, which is bad for everyone. For us in the centre, which is probably almost the majority of people, we're just left with nothing. That's right. Because everybody's raised the edge. Here's my quiz. I'll just give you a lot of quizzes this week. I think it's – this is a quiz from Microsoft Research. Did you notice that my quiz, it had a question and then it had an answer and the answer was numeric down to one decimal point and there was no legibility issues or questions about the answer.

47:49It was just sharp. This is a victory lap. Totally sharp. A victory lap of victory laps on your quiz. Yeah. So this is – I don't actually agree with the answers to this, but I'm going to say it anyway because I find it interesting. Here we go. So this is top 40 jobs most exposed to AI. I'm going to go through all of them so I'm going to be weird. But top jobs most exposed to AI. Top five. Oh, I won't give a top five only. Mike, can I say we have to be honest about Mike because we give him a lot of praise and a lot of grief. But there was a huge explosion in that last quiz and that was you bombing.

48:23I know. I'm so disappointed. I don't know where I was pulling those numbers from. Yeah, I can guess. And so you can redeem yourself on this quiz, all right? Because I'm bad at these quizzes, but you're historically very good. Now you know what pressure feels like, Mike. Now you're under pressure. He's sweating a bit. It's a stressful feeling, right? The only way – when you're at the top, the only way is down. All you can hope for is not sliding down. There's no up left. Let's see how we go. What have you got? Let's see how many of these 40 you guys can name. Because there's some here that's ridiculous.

48:5440? There's 40 total. And just see how many you can name. Some are tiny or whatever. And some are like less likely. Lawyers. Is lawyers on here? I actually can't see lawyers on here, but that's probably just a miss. That's not wrong nor right. Let's just ignore that. Keep going. Well, that's wrong. That quiz already wrong. Yeah, it's wrong. Software developer? One. Software developers. I saw them on here somewhere. They're not high. It's not high. I think the thinking is software developers become more efficient, so you don't lose your job, you become more efficient. So I can't see them on here.

49:28I literally. Oh, no, they are. Sorry. Web developers are actually really low. They're one of the least exposed to AI. Right. Who came up with this? Is this the Web Developers Association that came up with this? I was going to say any copywriting job. Yeah, very high. That's somewhere on here high. Yeah. Yeah. It's a very precise quiz. Podcast producer. No, not on the list. That's safe. God damn it. Podcast host. Well, Notebook LM. I think that takes the podcast hosting job, doesn't it? What about sales? Like anyone that works in customer service or sales? No, I think sales is good because it's interpersonal human contact.

50:08This is where I disagree. They have sales reps more likely than customer service reps. So this is where I think it's just a bit wrong here. You know what sales – you know these SDRs. You know what they are? I don't really know what they are. But I think they're the people that make the – they'll warm up the leads and find the leads. Isn't that what they're called? Sales development reps or something. They've just got sales reps here, which I think this is just wrong. Yes, but that part of sales is increasingly being taken over by AI. So finding lists of leads and sending out the initial emails, that is being taken over by AI.

50:40But definitely telemarketers is sort of on their bellow. Yeah, but okay, maybe. What do I think is really going to get taken away? Some people are not going to like me answering this. There's one really, really obvious one that's always number one, always the most exposed. I would have thought copywriting was the most exposed. Well, I was going to say data entry, any data entry or. I don't have that specifically on here, but I agree with you. I think that's really high. Quiz creators. How about that? That should be. No, quiz creators is very safe, like highly safe. Well, you know, some of the things that are going to be augmented but not removed are like radiology, pathology, any pattern recognition.

51:17But they haven't gone that deep. They won't go, right? They're not going to disappear. And GPs are totally safe. Like GPs are completely safe. I don't know. What am I not thinking? So writers is very high. So writers, authors, I don't know about authors, but I put copywriters on that. That's like the third, fourth highest. So I think authors, book authors, they are not going to be displaced by AI. I disagree with that. I disagree with a lot of people. What's on the artists? Like I disagree that artists are going to be displaced. Artists are not on here. Graphic designers? No, that's a problem.

51:49I think graphic designers absolutely is at risk. They'll obviously use AI. So the good ones will harness AI and the bad ones will go. I don't know. The number one, the really obvious number one, translators, interpreters. That goes pretty quick. Oh, I didn't even think about that. Yes. Yes. I think that's probably true. I had historians up here, which seems weird to me. I don't see how that's at risk. Telephone operators, really high. That makes sense. I tell you a job that's going to disappear. Critical thinkers, that will go. Yeah, possibly. Anyone doing critical thinking? News analysts slash journalists on here.

52:24Yeah. Travel agents is actually high-ish. It's sort of top 10, so that doesn't bode well for us. Well, you're trying to wipe out travel agents. I mean, you can't say it. No, we're not. We're not trying to wipe out travel agents. I know you're not. You're not. Except you're – yes, I know. You're not going to wipe them out. You're going to augment them. Well, one of our fastest-growing channels is selling to travel agents. So I actually disagree with that. I've actually got DJs on here, which also doesn't bode well for my second career. Yes. Well, I don't know what to say about that, but I will say this about travel agents in all seriousness.

52:55Like you're going to create some kind of agentic tool and probably that tool to help people put together packages, for example, or pick the right one. And that tool might end up being like an Amadeus type tool that travel agents used to use to find and put together the right option for their client. So I think that could actually be a really good tool for travel agents. Yeah, we've got a product called Trip Planner, which basically helps you plan your trip. And our next version will have the ability to effectively chat to an agentic AI or an LLM on each component of the trip. So you can say, I don't want to go to this restaurant on this date.

53:32Find me another one that's Spanish, not Italian. Or I want to create me a walking tour in Soho. So we'll have that. That's very cool. I'll wrap that quiz up. I've got one more quick quiz. Oh, thank God. All right. That's a mercy killing at the end of that. Yeah, so America's top-selling EV brands, Q2 2025. Oh, this is more interesting. Yeah, so we talked about Elon Musk, who's obviously got this$1 trillion pay packet coming. How do you – well, obviously he hits some really hard hurdles. How do you – and this is – Where do I think that fits in, is you going to ask me? Where do I think Tesla fits in?

54:07Yeah. All right. So I'm going to guess that number one is BYD because it seems to be number one everywhere. The order is not on here for some really weird reason. All right. Where are you finding these quizzes? This is from... This is a quiz put out by Tesla. Let me guess. The top five brands sold in the US are Tesla. It's from Clean Technica. Yeah. Probably owned by Tesla. Yeah. Well, Tesla's number one by a long way. Well, that can't be true. How can that be true? Although, although, I will backpedal and say this. There are mega tariffs on Chinese EVs now going into the US. So it might be...

54:42When was this? Q2. So three months. They don't have any Chinese brand. It's got US, Germany, Japan, and South Korea. Well, it could be. For some reason, there's no China on here. The tariffs that Trump has put on Chinese EVs might make it economically unviable to sell them in the US. Yeah, it might. That's the only thing to think of. There's actually a more interesting story, to be honest, that there are no Chinese EVs on this list. So let's think about who there is. So you said Tesla's number one. You know Trump has softened on Elon again. Yeah, he comes and goes. We're not back to bromance, but it looks like there's a bit of a, you know, detente in the relationship at least.

55:20So what's number two? We have to think of EVs out of Europe. Is that what you're telling me to think of? Volkswagen. Well, I gave you the list of originating countries, so you should be able to work back from that. I didn't – I wasn't listening. I said the US, Germany, Japan, South Korea. All right. Germany, VW? Yeah. No, hold on. I don't see VW on here. No, Audi's on here. Okay. It's low on the list. Well, let's say Audi. Where's that? Audi's like – I'll base you. Tesla sold 143 ,000 vehicles last quarter. Audi's 5 ,700. So much, much smaller. It feels like so few vehicles, doesn't it? How about Mercedes?

56:02Mercedes is on here. That's about – oh, that's even less. That's 4 ,600. That's expensive. That's why. We have to think about – that's why I was trying to think – you said German. I was trying to think about a cheaper German brand that makes EVs. There's one more. I don't know. Who the hell's number two BMW? That's expensive. Who's number two? Number two is Chevrolet, which I think is part of GM. Isn't it, you say, a German brand? No, I said American, and Chevrolet's American. That's not a German brand. You said American, German, something, something, whatever. I forgot. That's 27 ,000 is Chevrolet.

56:36And then next up is Cadillac 11 ,800, which I think is also GM. Then you've got obviously BMW. Then you've got – I'm just looking up these logos. There's a logo I actually don't even recognize. It's a logo that looks like a square but on its side, whatever the hell that is. Isn't it a square on its side a square? Isn't that like the fundamental characteristic of a square? But like a square where it's sitting on its – a square sitting on its point. Oh, yeah. Hang on. Oh, that thing. Yeah. Yeah. I do know what that is. That's Polestar, isn't it? It could be, but Polestar's not American. I can't work out what the hell that is.

57:13Well, is this American? Maybe it's not Polestar. Whatever, they're 10 ,700. Then you go on to – oh, sorry. Ford is 16 ,400. So Ford's number three. Number four is Hyundai at 15 ,600. Then you've obviously got, I think it's Chevrolet, then BMW, then that mystery one. Then you've got Nissan at 9 ,100. and you've got Honda at 6.8, General Motors itself at 6.8 and then into Audi, Genesis, Kia and finally Mercedes. So that's the split. Is that a Lincoln? No, the Lincoln logo is like longer, right? The diamond. Yeah. Well, I just want to say basically the summary of your quiz is possibly this. America has put huge tariffs on Chinese EVs, so they're not coming in.

58:00The only people selling EVs are mostly Americans, and then it's Tesla and daylight after Tesla, and nobody wants to buy EVs anymore, and the jig is up for EVs for the time being. I mean, that's a summary of that quiz, isn't it? Well, Tesla's still selling pretty well. 150 ,000 cars. Yeah, I think that's not too bad. 130 or whatever it was. Yeah, I think that's too bad. It doesn't seem like a lot to me. sales total, which is not horrendous. It's 10 % of total car sales. Okay. Just Tesla. All right. That's all right, I guess. No, this is everyone. And Tesla, obviously we have Tesla having, Tesla's like almost 50 % of all.

58:34So Tesla, for all its criticisms, and we're not obviously the biggest fans of Elon all the time, they still do dominate EV sales in the US. And then there was the - When you tariff China out of the market. It's right. I'm checking on perplexity and there's no BYD in there. So I think you're right. I think it's just the tariffs. Yeah. So did you see, we're probably not going to talk about this now, but maybe a conversation for another day is the rise of Chinese autonomous taxis. I've seen a bit on that, but I'm not sure how far along they are. Far. Like, Waymo would say they're ahead, but I saw an article in something, could have been the Wall Street Journal or the New York Times, and they road tested two brands.

59:19One is Baidu. Yeah, okay. Baida, who's the Google of obviously China. And they were really good and were able to effectively navigate Beijing traffic. If you can navigate Chinese traffic, that's a lot harder than navigating New York or Melbourne traffic. Did you see how we talked about on the pod a few weeks ago, Waymo's applying to come to Australia after maybe they heard our pod and acted? They are. So some of these Chinese brands are doing deals with Uber for Europe in order to have a platform to enable them to be booked. I think, you know, I keep coming back to this same point. Is anyone actually going to make a ton of money out of autonomous vehicles?

59:59Is it going to be the cars, the software, the booking platform? Who's going to make the money out of it? My guess would be possibly the sensor makers, if there are specialized sensors, might make some money. but it's hard to see. You think it gets commoditized? Yeah, I think it gets commoditized. I mean, either way, I think you're probably right, but this is so exciting for people like us. Yeah, I agree. I've been talking to a couple of people, at least this week about the Telstra, so Telstra full self-driving is now available in Australia. When they say full self-driving, you still have to touch the wheel and you can't use your phone and stuff.

1:00:33But two people told me about it and two people said it's incredible and it pretty much drives them and they don't really do anything on a one to two hour journey, they can just trust it and not have to concentrate at all, which is pretty amazing. Tesla is trialing autonomous taxis in the US, but they still need a human being behind the wheel. Yeah. And they're working on that new, sort of call it the Model 2, which will be the fully like no wheel car. But we're getting so close. It's that old Lenin quote, nothing happens for 10 years, everything happens in two weeks. We feel like we're getting to that two weeks for autonomous.

1:01:05It's happening so quickly. And this, my two biggest game changers for our life, like imagine we spend, like my wife especially, so long driving kids around to places because they're in that 9, 11-year-old age bracket where you're just constantly driving them to sport and gym and swimming and diving and whatever else. Imagine if you just put them in an autonomous vehicle because you don't have to worry about the dodgy Uber driver. You can chuck them in an autonomous vehicle and you know it's going to be safe because they're way safer than a normal driver and they can get out and you don't have to take them these annoying 15, 20-minute journeys.

1:01:33is it's just going to be game-changing, especially for single parents who can't work and take people at the same time. This is going to be such a game-changer for society, Western society. And the second one is VTOL, vertical takeoff and landing. That's getting a lot closer, especially fixed wing. And that's going to make one to two, three-hour journeys, 10, 15 minutes, super accessible. And it's going to completely change the way we think about regional travel and airport travel, both these two things. and obviously autonomous vehicles is a lot closer than VTOL, but these are going to be absolutely game-changing for the way we think about society.

1:02:09So there's this famous literary quote from Ernest Hemingway in a book. The best of times, the worst of times. That I think, well, I can't believe you just, but I think you might find that's in The Tale of Two Cities by Charles Dickens. Oh, that's right. Is it Shakespeare? No, Charles Dickens. Heard of him? Oh, Charles Dickens. And so it took me three times to read A Tale of Two Cities, and I didn't think it was the greatest book. So there you go. Do you remember that Simpsons quote when Monty Burns has the monkeys? It goes, it's the best times. It was the blurst of times, you idiots. And he chucks out the movie.

1:02:41Yes, I do. So Ernest Hemingway, he's a different person, separated by 150 years or so. He was writing in the 50s. But I think he died in the 80s. I actually don't know. But he wrote a book which I haven't read. So the book is called The Sun Also Rises. It's like one of the famous books by Ernest Hemingway. And there is a very famous quote out of that book that perfectly describes what you've just talked about with autonomous taxis, which is one of the characters said, was asked, how did he go bankrupt? A particular character. And he said, two ways, gradually, then suddenly. And I think that is the perfect quote for the way, what we're seeing with autonomous taxis.

1:03:20A hundred percent right. And we are, we are so close. I think Tesla's going to be first here because obviously they're here and we're waiting for Waymo to come. but this is going to be absolutely good. I think we're talking like one to two years before we can start like just letting the car drive us around. We don't have to worry about Ubers. Like I'm – the most nervous I am on the road is when I'm sitting with an Uber driver who's on the phone, barely touching the wheel, probably been driving for 10 hours, barely getting paid. Like I'm generally concerned in this situation. And the sooner we can get the road – the best way to reduce the road toll and we can all – once we've got autonomous cars, we can increase the speed limit because the only reason we've got this ridiculously low speed limit, A, is idiot politicians, but B, is we've got a road toll created by fallible humans and humans just shouldn't be driving.

1:04:06Well, we can agree that the 30-kilometre-an-hour road limits, speed limits that are popping up, ostensibly for safety, are actually a Trojan horse to try to get cars off the roads in a lot of these places. Well, they're revenue-raising as well. Yeah, maybe. But the revenue goes to the police, not the council. It goes to consolidated revenue. It goes to the state government. But this is a council decision to drop the speed limits. So I think it's just a Trojan horse for trying to say, we want cars off the roads and bikes on the roads. That's my guess. Let's go. I've got one more quick story before we jump to a break.

1:04:43You see the one-time private market darling pet circle continues to really struggle with the AFR reporting that revenues slumped 2.9 % last year to$373 million and losses grew by$10 million to$37 million. PetCircle's operating costs increased somehow by$18 million last year, rising$28 million, halving the company's cash supply. And this is a result of a full technology overhaul and major investments in automating warehouses. The company ended the financial year with$60 million in the bank, almost half the prior year when they had$110 million cash. Bear in mind, they raised$75 million for investors, or specifically Prism Capital, one investor, like, I don't know, two years ago.

1:05:24Without that capital raise, these guys are pretty much dead. So the company expansion, revenues grew by 300 % between 2013 and 2015, gave an evaluation of over$1 billion in 2021 after a Series C fundraising round of$125 million. It was backed by some really impressive investors, Airtree and TDM, and of course, Prism, which God knows what's going on with those guys who put another$75 million in at the same price even after the business was struggling. So this feels like a fallen angel. Does this business have any future at all, I do? Two words, golden window. Basically, there was a golden window for this business to exit and for the founders to take their money because I thought it used to be a very profitable business.

1:06:08No, I'm pretty sure it's never made money. You sure? I can't. I'm not going to go to the grave on that, but I don't think it's made money. Yeah. Well, it's always raised money, which kind of indicates it hasn't. It got into this world pretty early and grew pretty big. And the thing is this, now there are competitors. Like this Leica business, LYKA. Which is doing really well. What looks at it? Yeah. Doing really well. Great founder story. Yeah, amazing. And so you have to time things. And I tell you what you can't do. You can't get into something early and nail it and then just keep doing that thing and nothing new while other people come and do the same thing.

1:06:47I question whether they nailed it. It's easier to grow revenues when you're losing money. The question is, was this business ever unit economic profitable? And I don't think it was. You might be right about that, but I don't know. But my point is, you would think on these kind of revenues. Listen, this idea, I'll tell you the tailwinds, because I love businesses that are going with tailwinds. Easier to make money, right? These businesses have tailwinds. One tailwind is that tons of people bought dogs during COVID. tons and so I think 60 % of Australian households now have a dog some crazy number like that so there's a lot of dogs number two people are having kids later and other pets yeah but I'm just going to talk about dogs as a tailwind okay let's call it that's my thesis number two people are having kids later or not at all and so they want or they're sorry I'll say there's two drivers one is kids are having kids later or not at all but they want to have something together with their partner to share and so they get a dog and then they anthropomorphize that with a word the dog and treat it like a person and so all these like pet grooming pet pet what's the nail thing called where you get your nails done uh pedicure manicure pedicure manicure you can have all that with your dog now it's all going berserk right so it's all of this like treating the dog like a person plus there's a massive increase in single person households that's lonely and so they're all buying dogs and treating them like humans what about cats i know but i'm just talking about dogs okay and so yes i'll give you your cats you prefer cats to dogs is that you a cat person no i'm definitely prefer dogs cats but i'm saying that a lot of people like cats all right so don't advocate for cats all right we're not invitating for cats well i'm just pointing out that cats exist you can't forget the cat all right there are cats people say you're a dog person or a cat person i'm like i like them all i prefer dogs a bit but like you know my personality is more the dog personality than the cat personality mike dog or cat uh i've never owned a dog but i've owned a cat in my childhood i've never well let me just say never been a big person you haven't owned a cat the cats owned you is what you mean yeah i guess that dynamic works and so the other tailwind with so the tailwind with all of that happening is the shift from traditional kind of like try to find cheap dog food I'm going to talk about but pet food dog food to more and more premium stuff treating this dog like it's a person and that has seen the rise of premium foods and also other premium activities pet insurance because people are getting quite expensive surgeries from vets like people do not want to put dogs down and so fair enough I don't want to put dogs down but like so they're paying a lot like ten thousand dollars i mean some dogs cost ten thousand dollars and so really all this comes back to pet circle they should be absolutely flying it's a massive massive massive tailwind and they're not and like it is and you know scratch the business scratch there's a smaller business and obviously obviously um you got pet stock which is now partly owned by woolworths uh which is absolutely killing it uh so that's that's doing well.

1:10:02That's a jewel in the Woolworths crown, one of the only jewels in the crown right now. There's so much competition in this space. And I just think Pet Circle is just not particularly well run. It's just another me too. They've tried to take an offline business online when there's other people doing it better. It's just a bad business. We can't make money. Can you name a single power they have? They have brand, that's for sure. Do they? Well, when you say they have brand, is brands not helping the acquisition costs because they're losing money. It's not helping their margins. They're losing money.

1:10:32I don't think it's got great brands at all. Now that, well, I want to say this, and we can be a bit more sophisticated now. I've spent one year of my life reading about brand equity and building my own model for it. I can tell you this. Brand equity is very complicated. And so you can have a lot of awareness without having people willing to pay a premium for your product. No, but remember that the second manifestation is lower CAC. And I don't think these guys have lower CAC either. So I think they do have lower cap because they have a lot of subscribers that are just repeat purchasing. So I do think they get that.

1:11:05That's switching costs. That's not brand. If you're talking about subscribers. Well, that's one of the benefits of brand. Nah, that's switching costs. Switching costs is how hard is it to stop subscribing? And the answer is easy. But the fact is they have subscribers. You've got something all set up. It's a hassle. Like I'm not going to change for no reason. One out of ten. Nah, like three or four out of ten. I think the iPhone is 4 out of 10. The Apple ecosystem is 4 out of 10. No, Apple's like 8 out of 10. Apple's really hard to switch. No, I think I told you. It's not SAP. SAP is 10 out of 10.

1:11:40Well, SAP is 10. SAP is 10. Well, is your scale a logarithmic scale? Like the Riktok scale where everything is 10 times the one before. It's a linear scale. I don't think it is. And so what I think is you have businesses like Pet Circle that I think they do get reduced cake. That's my view. But they don't get pricing power because people are not willing to pay a premium for their products. And that's the big problem they run into. And what if I said this to you? I think one of the beneficiaries of this shift towards all the dog stuff that I just talked about is Peter Alexander. because their pajamas, they are covered in dogs of different breeds.

1:12:24And I genuinely think that has been a sales driver for Peter Alexander. I genuinely think it has been. If I see anything that has a cavoodle on it, I know that if I buy that for my daughter, she's going to love it. And so that is definitely a driver of consumer purchasing behavior for me. I think if you look at all the kind of venture-funded businesses in the last 15 years, from Canva being the high-water mark of greatness to everyone else to – well, last thing wasn't venture-funded, but we'll talk about Safety Culture later and Culture Amp and all this stuff. I think Pet Circle is almost the high-water mark of businesses that just shouldn't have been funded.

1:13:03Like, should have been bootstrapped. They should have tried to make money the real old-fashioned way, and venture funding this business was the wrong idea. And, like, obviously the air trees of this world, this is that business. They're not going to get it all right, and they get plenty right, and this is one they got wrong, clearly. It's hard to think of a reason why this business was venture funded. It just shouldn't have been. And remember who also backed this business? Who? Blue Sky Capital, who have one of the worst records ever. Yes. This is one of the ones that Steve pointed as a great investment that clearly hasn't gone that well.

1:13:32But TDM is a very good investor. Well, TDM is the best investor in Australia, but they just obviously don't get it. Even Warren Buffett doesn't get 100%. That's just what they got wrong. You know who the chairman of Pet Circle is? who's been the chairman for more than a decade. I don't know, actually. I can't remember. Craig Blair. Craig is the chairman. I didn't realise. Yeah. I should have asked. I was actually meant to ask Craig about this. Yeah, I think he stepped down and stayed as a director. It says in the Fin Review that Airtree owns 18 % of Pet Circle across different funds. I have a vague recollection that I once read an article that said Craig had owned a chunk of stock PA, which means on his personal account, that means his own money, co-investing, and maybe sold it down and made a ton of money.

1:14:20But I can't remember. I could be wrong. Yeah, I think that's right. Well, I'm sure Craig, I think Craig does listen. So I'm sure he'll let us know. But that would make sense. Craig's a great investor. So I don't know why this was funded. I think the mania of the early, the mid 2010s and anything e-commerce was popular and And you have the catch guys going really well and all that stuff. I don't think this business will get funded today. Certainly not with these metrics, but I think this is a - Do they sell, does Pet Circle sell dog food under its own brand? Or does it sell other people's dog food?

1:14:49I think it may have its own brand, but I think it's marketplace. That's the critical question for me. So I believe if it sells under its own brand, this could be a great business. But you know, that's my bias. The fact that it loses this much money after 15 years or whatever in business, it's raised a heap of money if you're at this point like i think they've done their dash this is a business that needs to be put down i think i would happily happily get involved in this business if it's sold its own stuff i believe that this business could be turned around to be a great business within five years if if it's direct to consumer owned brand e-commerce if it's selling other people's dog food i don't know pedigree i just said the name of a dog food brand i don't know what I'm talking about but like if it sells that then I think I've got nothing to add to this business and I think it's in the hell of all third-party retailers that don't get to keep enough margin uh just look according to perplexity it does sell its own brands underlines pause for life and Christmas by Pet Circle a seasonal collection so it does obviously have um its own brands as well as well right which is like the adore beauty type of approach which is well Adore's recently started private label, right?

1:16:02That's pretty new. Yes. When I look online, it's hard to know if they only sell their own brands, but it looks like they sell other brands as well. So I think, listen, my view on Adore Beauty is deeply bearish. Like when I walk through the Southland shopping centre, so I go to malls pretty frequently to look at who's in what stores, and there's really no one ever in the Adore Beauty store in Southland. one person, two, whereas Mecca's always full and even Sephora has people in it. Oh, Mecca. Mecca's the absolute high water. Speaking of Mecca and Sephora, my wife was in Sephora and Mecca at Chatty last week.

1:16:43She just went to Sephora and nobody helped her. And she like, obviously you need help in this sort of thing. You need to get someone to get something for you. And they were going to buy something and nobody came, went to Mecca and there was like three people helping straight away, bought a bunch of stuff. This is why Mecca is such an incredible, one of the reasons why Mecca is such an incredible business. And now that we know that when we were wondering, how's it possible that Mecca makes so much revenue and doesn't make all of its profits, now we know it does. It just wasn't obvious where those profits were being held.

1:17:13Yeah, it is one of the great Australian businesses. Just before we go, I'll go to a quick break. Just before we do, speaking of malls, we have what is opening on Wednesday morning, Adir. I've got no idea. Oh, okay, I'm going to guess. Hang on, hang on. Luxury Escapes in Bondi Junction. You're right. The retail event of the decade. Luxury Escapes. I presume you're flying up for the opening. Are you going to be there? I'm actually, I'm not going to be there, but it is very tempting to fly up, but I don't think I can make it. But actually, you know, I genuinely would fly up if I didn't have stuff on that day.

1:17:45I would love to come up for that. We've got a media event in the morning, and then we've got the big, so if you're in, obviously, this pod's coming out Tuesday, so if you're listening to this, pop down Wednesday. There'll be$100 ,000 of giveaways, holiday giveaways and voucher giveaways in the morning. So we'll have that happening at, I think, 9.30 the store opens, 9.30 or 10. How many square metres is the store? It's actually a pretty incredible looking store. So special thanks to the team at George Berry Studio who are incredible designers who designed our Chadston store and have done an even better job, I think, with our Bondi store and Trust Projects who have built this in amazingly quick time.

1:18:20Not Bondi, Bondi Junction. I mean, the prices are not the same in Bondi and Bondi Junction. We need to just keep those as separate suburbs. At the Westfield in Bondi Junction, next door to Apple across from Mecca, who we just talked about, next to all kinds. So it's a pretty good spot. So how many metres is the store? Let's get to that question. About 300. If you look at – we've got a mezzanine level and a ground level. We should do a podcast show in there. You can give away lots of stuff. We can. We'll do an OB there one day. We could have done it on Wednesday if you were up in Sydney. Alas. Well, you know, usually people try to give me more notice than no time.

1:18:54Than 24 hours. Pop down. We'd love to see as many Contrarians fans as possible come in. We've got a big sort of celeb event in the evening, which I'm going to try and get to, which our chairman's hosting, which should be a great day. So hopefully you'll see lots of listeners and Luxury Escapes customers. If you want to win something, head down to Bondo Junction Wednesday morning, or all day Wednesday, really. We'll go to a quick break, back with some even more great stories just in a moment. And we are back. And we're back with our most popular segment idea, which is what? Well, it's not your quizzes.

1:19:28I'll give you that as a tip. Of course, our deep dive brought to you by Terim Capital, our great friend Scott. Terim know how to acquire technology companies that grow sustainably over decades. They are the Warren Buffett of Australian tech. If you're thinking of selling, discuss how it might work at terim.capital.com. So thanks to our good friends at Terim Capital. If you're a VC and you've got a business you've been in for a while and you don't think it's going to become a unicorn, but like it's got revenue and like it's got some prospects, then you should call me. But if you don't call me, you should call Scott Terim because those are exactly the kind of businesses that he is interested in.

1:20:10Our deep dive this week is a business called Nirvan. Do you know Nirvan's old name? I sure do because I used it and I know people that work for it. It was called Trip Action. I mean, we dumped them, I think, but we did use them. They're a lot better now than they were. I had a journey like anyone. So, Nirvan is a corporate travel and expense platform that literally started trading on the NASDAQ about a week and a half ago. It's trading a little bit down. So, its IPO price was$25. It's now trading at$17.86. So, it's down about, what's that? 33 % from its IPO price. And it's got a valuation of, call it, about$4 billion, which is still very impressive for a 10-year-old travel company.

1:20:50The company was actually the first to use a new SEC rule that allowed public listings during government shutdown. We're about 30 days into, of course, the US government shutdown. Yahoo Finance reported that unlike the traditional IPO path, which requires SEO regulators to review and grant final approval, Companies using the shutdown workaround got automatic approval for their IPO documents 20 days after submitting their price range, bypassing the need for SEC approval. The problem is this carries a risk. The government can scrutinize documents later, and if the SEC finds material deficiencies or undisclosed issues, the company might be forced to amend its statements, which could lead to a lower stock price and, of course, litigation.

1:21:25Despite this risk, Navan proceeded with its IPO because the bulk of its registration statement has been reviewed prior to the shutdown. Yeah. The company was actually valued at$9.2 billion US in 2022 during COVID, ironically, when it raised its$154 million Series G. So this is a business - So crazy that it's a Series G. How many are going to have letters in the alphabet? I think our friends at Secret Escapes, which is a novel travel business, had a Series G as well. So it seems to be a bit of a travel thing. You know what it stands for? It stands for, God, get this business to IPO. That's what Series G stands for.

1:22:01It stands for grotesque amount of money raised, I think. But these guys are smart guys. They're Israeli-American guys. I think the business is still really run out of Tel Aviv, although it is US listed. They are a great platform that we compete with them. We have a small travel business, but obviously a fraction of these guys. I think they're a very impressive business in terms of what they do. They're tackling a big, old, staid, boring market run by, obviously Flight Center does a great job with it. There's American Express. There's a bunch of old school corporate travel businesses that run it.

1:22:34And these guys really are sort of a new booking.com form of travel, corporate travel business. Adia, what are your views on this listing? Well, I don't know any of their numbers. I will say during COVID, they had to make some decisions. And one of the decisions they made and the reason they changed the name to Nirvan was because they expanded from being, they decided to launch an expense management business, not just a travel booking business. That's right. Like a Concur style business. Exactly. Which is owned by SAP, isn't it? Concur? Yeah, it is. Absolutely it is. That business basically, I knew somebody that was working in that business.

1:23:12That business just took off and grew and grew and grew and gave them this other arm to their business. And I think in some ways COVID was the best thing that could have happened to this business. I mean, the IPO timing is a bit unlucky. Not as unlucky. I tried to buy, I can say this openly, I tried to buy like shares in Karma, which are listed on the ASX. We'll talk about Karma in a few weeks, I think. Well, I can say I got scaled back to like 23K as kind of a ridiculous investment. But like, I think it's worth, you know, what, 15K or something now two weeks later. So whatever it is. So it's a tough time.

1:23:48Every tech stock has been pummeled. No, yeah. The market's a bit worse. I will tell you this interesting story. about Nevan, which I think is the most interesting story about this business. And it has to do with one investor that made$1 billion out of Nevan. Do you know who that is? Yep. His name is Oren Zay. No idea. He's an Israeli VC. You know how many people work in his VC firm? I'm going to say two. One. Just him. He's a sole VC. He's an engineer. He's worth probably three or four billion US dollars. Unbelievable. He's 68 years old. He was an engineer from the Technion in Haifa. Like a software engineer.

1:24:40Software engineer. Worked for IBM. Then decided to go into VC and then went out on his own. His first investment, so he's N equals one, okay? One guy. His first investment is a business you might have heard of that he seeded and set on the board of called Audible. I am. So that went well. That bought by Amazon. Here are some of his other investments. So he's generally the first money into these investments. Wow. He's the last let's give Israel essentially. I'll tell you some other investments that he made. Howes, you know that business, H-A-U-Z-Z. He was the first. Yeah. Yeah, it's good. The interior design business, essentially.

1:25:21Next Insurance, haven't really heard of that. Tipalti, so that's been very successful. Chegg, the textbook reselling business and online textbooks. So this guy, basically, is unbelievable, and he single-handedly pocketed a billion dollars for his seed investment in the van. Did he sell Float, or when did he actually sell his shares? I'm not sure how much he sold down, but his shares will be worth a billion dollars. I don't know what he invested. It was seed. It was probably 10 million years or something. So the IRR that I've read about his fund is 100 % per annum. He'd be the greatest investor.

1:26:02Actually crazy. By a long way. I think James Simons was like 30 % and that's Renaissance. Warren Buffett's 20%. TDM's 25 % in Australia. Anything above 20 % is considered world-class best ever. So this guy is based in Palo Alto. He has no office, essentially. He takes meetings in cafes. He didn't really understand what they were building. No slides, no product demo. He just thought, these people, I think they're going to build something special. So he says he wrote a small check. It could be less than$10 million. It's actually crazy how successful this guy has been. And there are a few of these types of people floating around, these solo investors that run their own personal – like he's got other people's money, but he's like a one-man venture capitalist basically.

1:26:55It's an unbelievable story. That's pretty incredible. Just looking at Nivan's financials, I've got sort of month-by-month financials actually from – sorry, quarter-by-quarter, I should say. So go back to July quarter, 2023. They were making gross profit of$60 million and they had OPEX of$128 million. So they're losing a lot. So losing$68 million. And then there's some interest on top of that, but forget the interest stuff. They're losing$60 million on$60 million revenue. You could fast forward to now, their revenue hasn't actually grown that much. Their revenue is only$73 million a quarter. So it's grown 25%.

1:27:29So not particularly great growth. They really have massively scaled back their expenses. So expenses have dropped from$128 million a quarter to$80 million a quarter. So they're basically a break even now. So they've gone from losing$68 million to breaking even in the space of two years with minimal revenue growth are very different to what you'd expect to see from a fast growing sass start it's almost the opposite to what so how do you get to well how do you get to four billion dollars as a value it was nine billion is if you get four billion how do you get how do you get there it's i get nine billion nine billion is euphoria printing money everyone's excited but how do you get four billion on this business bizarre that it's growing so slowly like it's um i didn't expect the growth to be so slow but I also didn't expect that I've actually thought it'll be losing more money um I didn't realize it would be um relatively break even which the break even part is quite good it's it's the lack of growth that's the concern yeah I just don't see how it gets to um that kind of valuation I know in COVID they fired like hundreds of people I remember they fired hundreds like I kind of got a bit of an inside seat to what was going on because of the people I know inside the business.

1:28:40Yeah, it was brutal what was going on during COVID. I mean, you went through it as a travel business. We actually didn't fire anyone. I think we're the only travel business that didn't fire anyone. I know because you looked up, all of your staff looked up and opened their mouths and the government poured money down their throats, but that was not the case in many places around the world. And so they fired a few hundred people. And I think they did a great, I mean, I think they've done a great job. The thing is this, So you got a business. It grew 25 % over what period? A few years. Actually, I'm actually not sure that's fully.

1:29:11I'm looking at a different financial summary in S1, which is like their prospectus. So I think 23, 24, there was no growth. 24 to 25, there was more growth. So look at the year ended, 31st January, 24. It's a weird, really weird time period I've chosen here. But the year ended 31st January, 25, 2025, their GDP, I should say, grew from 240 to the 370. That's much better growth. That's more like 45 % growth last year. So that's actually not so bad. Their loss also reduced significantly. So loss from operations reduced from 246 to 107. They definitely are getting better. They're getting closer to profitability for sure.

1:29:53Yeah. I mean, it's hard to know what this is valued at. I'll tell you the last fact about Oren Zev that you'll love, which I've been holding off till the end of this discussion. So originally, like he wasn't rich, right? And so he was only investing his own money. And then he met a guy that said, you got to take some money and persuaded him to take some external money. And so he had a$20 million fund. $2 million was his money. $18 million was this other guy's money. Do you know who that other guy was? No. Peter Thiel?

1:30:29That worked out well. Their gross booking volume, by the way, last year was up about 30%. So their margin grew. So look at growth. Remember travel businesses, especially corporate travel businesses, they have really low margins because you're selling a lot of flights and stuff. So their margin grew from – so last year, 2024, they had gross – I'll do Gap. So Gap gross profit of$2.39 on 5%. So 4.8 % last year, so pretty low. this year it was 5.6%. 0.6 on 4.8 basically, 15%. So they grew margin by 16%. Yeah, exactly. Exactly. So they definitely grew their margin, but the margin was so low. Like 5 % margin is like, I think our margin is like 20%.

1:31:16So there's much lower margin than what you have at Luxury's Gaps. Yeah. You got to think about this, okay? This is how I think about this business. So you got a business that's doing, what'd you say 75 mil a quarter of gp okay so that's the 5.4 percent is the 75 mil okay and so let's say it's growing i'm going to say it's growing at 40 percent well i'm going to say 35 percent because it's growing at 30 and it's growing its gp margin 15 percent let's say that was sustainable to keep doing that okay so that would be growing at 35 percent so what that means and it's at zero at$75 million. So right now it generates, I'm going to talk about it annually.

1:31:59I know it's not perfect because it's growing every month, but I'm just going to talk about it annually. So at the moment, it's doing$300 million of annual gross profits for zero actual profits. And it's growing, let's imagine that number's growing at a third. It's probably growing a bit faster because of, but let's imagine it's growing at a third, that gross profit number. So that means next year it will do$400 million of gross profit annualized. Like I'm talking about annualized numbers. And so – Well, it did 370 gross profit this year. And this was 31st of January. Okay. So let's even say this.

1:32:41It's doing 400 mil of gross profit. And next year it might do – let's stretch it to 450. I don't think we'll do 500, but let's stretch it to 400. It depends how I do it. All right. 500. No problem. 500. So it does 500. So we're not worrying about how much stuff it sells. It probably sells roughly 20 times that amount of stuff. It does sell 20 times that amount, yeah. Because of the margin. But it keeps$500 million. And one of the reasons you love using gross margins so much, and I tend to use revenue, is because of the fundamental difference between your industries and the industries I'm in, which is that your gross profit tends to be 20%, and the gross profit of the businesses I'm in is 70%, 80%, 90%.

1:33:20so but let's use gross profit on this so 500 mil it will grow by 200 mil how do you think about how much of that 200 mil will flow through to real profit and the way to think about that is do you think they can curtail their costs significantly because that gross profit that doesn't include marketing expense and presumably a lot of that 200 mil is going to be consumed by marketing expenses, isn't it, or not? Actually, because they're B2B, not B2C, they're not booking.com or Luxury Escapes. Their marketing expenses is much, they definitely do market and you'll get retargeted. They're not a zero marketer, but they're not a massive marketer.

1:34:04Like if you look at their sales and marketing costs, it actually dropped last year from$220 to$218 and they were able to grow revenues. That's actually a really impressive story. So that's not going to eat the extra 200 mil, let's say. And so what about staff? What did that do in the last that was so if you look at r &d which is so there's developers they've got three lines r &d sales and marketing and gna uh so gna is general and administrative expenses administrative general general administrative was flat r &d dropped by caught eight percent so these guys done an unbelievable job at growing revenue and who knows what they can do it again this could be a one-off sugar hit for whatever reason but it's very rare you see a business effectively caught flat sales and marketing or they're down a couple mil and grow revenue by 35%.

1:34:50That is almost unheard of. We actually did it last year at Luxury Scales, funnily enough, but it's almost unheard of. So we might say if they could drive 20, 200 mil of additional gross profit in this business in a year's time, it's possible they could keep 100 mil of that flowing down to the EBITDA line. And then all of a sudden your$4 billion is 40 times EBITDA and the year after it might be 15 times EBITDA. And so maybe that is the bet that people are making on this valuation that they've reached the inflection point of, so my, you know, my favorite way to measure businesses is to say what percentage of incremental revenue or gross profit in this case is actually flowing down to EBIT or EBITDA or whatever profit number you want to use?

1:35:40Well, if you look at, this is actually remarkable. If you look at their gross profit went from$240 million, their gross profit went up$138 million last year. And their loss, as I said, the loss reduced by more than that. So it was actually remarkable. Their loss reduced by$150 million. But that's a one-off. That's cost-cutting. Yeah. And this is obviously taking, it's pretty rare you see a business reduce marketing and reduced R &D and grow by 35%. So who knows if this is replicable. But even if it's somewhat recombinable rule. This is a business that is actually really interesting. Like it's almost unheard of to see these kind of numbers.

1:36:14Yep. So what we're saying is, and the way to think about this as an investment thesis, is how fast can this company double its gross profit? Well, you gave them 67 % growth with your 500 mil the year after 300 mil. And so that's doubling in a year and a half, which is, that would be a crazy growth rate, but it's possible. But let's say it doubles every two years, the gross profit, which will be faster than that. If it's keeping 50 % of that, then pretty quickly, this valuation starts looking cheap. And that's the bet on this business. And the question is, can they do that? And how big can that gross profit line get?

1:36:56Because if it's, let's say they were doing 500 mil of gross profit, that would mean they were doing close to 10 bill on the total revenue line. I mean, that's a lot of sales, isn't it? $10 billion? Oh, for travel? Well, booking does like$200 billion. Okay, so basically investors look at this and they say, maybe this was the thesis, they say the total addressable market, the TAM on this business is massive. Like these guys might be going to$10 billion, but booking.com is doing$200 billion and the market is measured in the trillions. and so we're not worried about them hitting the sides of the market we think they can maintain strong growth in their gross profit line through a combination of total bookings growth and gross profit margin expansion which they've achieved and we think that they've passed the inflection point where they're going to be keeping i'm just going to make up numbers half or more of their incremental gross profit flowing through to real profit and if that's the case and they can do that then this is a dream business that you only find very rarely and is going to the moon that would be the bull case well think about we'll think about go go back a step and think about the actual business itself so here's the really good part about these and flights has done a great job with this as well is this is a business with very high switching costs so if you're a if you're if you're a company and obviously you're the exception because you switch from them but no but i it was it's not easy like and we weren't using it for long yeah if it's embedded in all Look, if your expense management is embedded in this business as well as your travel, you know, I don't know, on your Richter scale switching costs, I'm not sure where it sits, but it feels like at least as high.

1:38:43Well, it feels like at least as high as a consumer switching off the Apple ecosystem. Which I think is 7 to 8. I think there's very high switching costs here. Not impossible by any stretch, but not like switching off SAP, which is an absolute nightmare. But there's definitely switching costs here. and this is a business that is b2b so that their marketing costs you'd think would be relatively consistent so yeah as long as you got low churn you can just keep adding customers and you get expansion revenue so you've got those two things and you've got to probably built their product there isn't that much more to build so i don't think they need to keep these guys are the anti-atlassian they're not spending more on r &d spending less on r &d they're making that that's an interesting they're making their product better but they're not spending more to do it they get 130 million bucks on spend which is just going to making the product an existing product better best in class now they can continue to invest in that make it better i think they can get 80 of that revenue to to to actual profit why not it's possible and so the bare case of this would be that all of that big jump in gross margin was a one-off sugar hit of expense cuts that um as you grow past 10 billion in total transaction.

1:39:51Well, so I think there's a nuance to that. I think what you're saying is they maybe had a one-off great increase in revenue that might not be repeated. The expense cuts, they basically kept expenses steady. So they didn't cut. Well, they cut R &D 8%. Yeah, but we're not talking like 50%. All right, but you're right, you're right. Let's say the great year that we just saw was a one-off that's not going to be repeated, which might account, if you were cynical, you'd say that would account for the IPO timing. And basically, the other bare part of it might be at 10 billion of TTV, total transaction value, you might be in a space where you're not really that much of a threat to your competitors.

1:40:32But as you head to 50 billion, the competition might get tougher and more aggressive. I don't know, I'm just trying to make a bare case. And that would be the bare case. This is one of the few businesses we've talked about, where if you said to me, am I long, short or neither, I would say, I actually feel like I would have to study this company in significant detail to form a view on what I thought the trajectory was of this business over the next five years. They haven't really announced much more financial since. They did announce that they thought that on the general travel market, business travel grew 20 % Q3.

1:41:08So you'd hope they're not going to announce the business grew 20 % and they grew less than that because that would be a bad portion if they came back with that in a few weeks. But that's what I talked about. At this size, you would have to say their thesis would be that they will continue taking market share and therefore growing faster than system growth. I'm extremely bullish on this valuation. Are you? At this valuation. It's very rare you hear those words come out of my mouth. They're a notional – I say competitive as well as a consumer business and have a tiny business travel business. But we think we've built a product that we think is comparable to the bar.

1:41:41In some ways, maybe better because we've got our exclusive content they don't have. but we've built a very similar product. I think we think these guys are the best in class. They're the best in the world by a long ways. They've got the best product. As you said, they've got basically unlimited TAM. Like they're barely touching the sides of TAM. It's probably like a 50X TAM of what they're doing. It's a great product, great TAM, growing while reducing marketing costs, taking back R &D, building on a really great product, great switching costs, okay brand, getting some scale. And there's going to be scale economies as these businesses get better because you get better overrides and better deals with hotels.

1:42:15This is a business whose powers are increasing, not decreasing. I think obviously the sales and marketing costs going down probably indicate their brand strengthening. But you would say, so they've got switching costs. We tick that. We have to think about this relative to competitors. That's what the powers are. So they have switching costs that are as good as their competitors' switching costs, presumably. Like they've got good switching costs. Their brand is weaker than their competitors'. Who are you talking about? Flight center or? Well, in the US, who's the biggest of these players in the US?

1:42:48Amex probably? Yeah, maybe. So, but their brand is probably not as strong as that. Then their scale is not as big as their biggest competitors. But maybe 10 Bill of TTV gives you enough scale to jump across a lot of other competitors. Like maybe they've broken out into the big league at 10 Bill. I think the point with scale is they're building their powers. So maybe you're – and don't forget who we as a business travel provider and who these guys compete against is not always other people. It's competing against no one. So there's a lot of businesses that have no Nervan, no luxury-scale business traveler.

1:43:20So you're not actually competing against just Amex and Flight. You're competing against people who've got nothing. So there's a massive part of the market there that just doesn't use anyone. And this is also a part – I think if you ask businesses what's the most complained about called outsourced software product, I think this could be up there. So I think as in business travel. Plus they've got lots of, I can tell you definitively, they've got lots of international expansion opportunities still with this business. There's no doubt about that. So this is my view on this. I can see the bull case, but I don't feel like I know it and the space well enough to make a definitive call.

1:43:57But the bull case economically is clear to me. You're saying, yeah, I see the bull case and I know the industry back to front and these guys are the best and I'm super bullish on it. And so I would say, well, this has got to be a buy for us in the contrarians fund, right? Non-investment advice, buy in the contrarians fund. Yep, absolutely. Okay. But yeah, I love this business. I think it's leader in its field, massive TAM, and they've shown some real financial discipline in the last 12 to 18 months. And it's pretty rare we talk about a business that's grown 30 % and reduced marketing, rare to the point of unheard of outside this business and my business.

1:44:35Because they're not really a software business, that's why. Well, they are in many ways. Their software is best in class. They're a software slash travel business. But there's a lot of, presumably there's a lot of people interacting with humans booking travel because they have to support booking decisions in the software. Yeah, there's a customer service layer on top for sure, no doubt. So is this a, but when you say we're bullish on this, are we bullish like we're going to buy this and then talk about it again in five years kind of bullish? Like we're not trying to say this will go up in two years.

1:45:04you think long term which just hang on to this stock? Forget timing and that kind of stuff. The question is, do I think this business has an intrinsic value that's significantly higher than its current market value? I think yes. That would be my answer. I think, as you know, voting machine, weighing machine, this could be a valuable business, a much more valuable business in two weeks or in five years. We don't time, we're famous, we don't try and time the market. Warren Buffett has said this for 50 years. What we see is a business that appears to have a great margin of safety and I think is, I love these businesses that are developing their powers.

1:45:39A bit like Swift Man when he sort of turns six or seven, he's learning how to fly. Like this is a business that is developing its powers and I think the best time to buy a business is as it starts building its powers and you know it can just lean into those powers more and I think this is businesses at the perfect stage. And at$10 billion, I think you're paying possibly too much for a premium. At$4 billion, it's starting to feel, you know what, I think people have been overly critical of this. You know, it's like Superman learning to fly, putting on muscle while shedding weight at the same time.

1:46:10That's what this is. Yeah. Oh, that's a very interesting discussion. On that note, we will call this a day. It's been another great episode. Thank you, Eddie. Thank you, Mike. We will enjoy the Melbourne weather, which has finally come good. And we will see everybody, of course, for our famous Ask Us Anything episode on Saturday. By the way, I don't know what direction your window is facing, but it looks awfully cloudy outside. So there's a good sales pitch. Are you working for Visit Victoria now or something with that remark? We are good friends at Visit Victoria, so we work close with Luxury Escape.

1:46:39So shout out to the team there. But on that note, we'll bid farewell. Our dear lives in far more salubrious confines than me, clearly. But where I am, it's really nice weather. We'll see everybody on Saturday.