20VC: Scale's $14.8BN Acquisition: Is Scale a Dead Man Walking / What Did Meta Buy | Chime IPO: Are IPOs Hotter Than Ever | Ramp Hits $16BN Diluting Only 1% | Salesforce, Slack and Dropbox Falling Behind: Are Incumbents Losing Ground

25:35One of the deep reasons for not making that change is, oh my god, it's such a lot of work. And you really have the guy. And I always tell people, this is open -heart surgery, even if the founding CEO wants to make the change. This is open -heart surgery, and you've got a one and three chance of dying. It's really brutal. Just one, one a little while ago, I haven't updated, but I don't think it's going to change. I did analysis of all the B2B IPOs, okay? Of the IPOs, 90 % still have the Founder CEO as CEO, and as near as I can tell, all but one had an elective step down, okay? Like we're, we just don't want to do it any more at scale, okay?

26:09That's like a page or a story and a few others. Let me contrast this a little bit with Discord, because Discord is not a B2B company, okay? it has elements of it. If we're aiming for these great outcomes and nothing else matters today in the B2B world, then if the founder CEO is out, I'm out. There's no hope in B2B. If the founder CEO is out, I'm out. If the founder doesn't want to go to the distance and works here to hire someone great, it's a little riskier, but you can't have amazing outcomes because that's what the facts say. The violent change is very hard. I could come up with some examples of where violent change worked, but it's just so hard.

26:42Yeah, the one canonical example, as you say, Jason, in consumerism, which is why it attracts such attention. It was a violent change, it was very controversial, but if a board member feels it's his fiduciary obligation, and this is where I do give Bill Curly credit, if you're on the board of a company that's raised $10 billion in money from third -party investors, I don't think you can just say, I religiously don't fire founders. If you come to believe it's your fiduciary obligation to make a change, and again, we can't run on alternatives of history. You don't know what over would be, whether without Travis Kalenig versus without Dara, But in particular in the light of the kind of backlash he got from it afterwards, I do give credit for anyone who says I'm in the boardroom There are lots of people's money on the line I'm gonna be a good for jewelry and do the hard thing not the aesthetically pleasing soft thing.

27:30I'm gonna step up to my duty I don't know the exact story with discord, but um if I had the choice as a seam investor You have two choices Jason Sitaran. He's clearly one of the best found I mean he seems like I only followed him since the beginning, okay I have a super fan from a distance. Okay. If I was to see investment, you said you got like the company's plateauing. Jason doesn't seem to want to go public. We're worried about them. You have to, we've done the math. The last run was at 15. We can either bring someone in and try to go for a 20 billion plus IPO or stick with Jason or probably going to have a 10 billion IPO.

28:02Okay. I'd stick with Jason. In a heartbeat, I would stick with it. I would stick with the risks of the founder. Oh, okay. We're going to have a somewhat worse out. I would take my, if I invested at 20 pre, what's the multiple? with delusion. I don't want to do that. I don't want to, I don't want, and I think what Bill Gurley's doing at Uber was doing a mental calculate. If they did it with, with Discord, I'm sure this is what happened. I don't think he's, he's clearly want a generational founder, but he's not the, the, the belt and he's not the guy running Starbucks from Newport Beach, whatever that guy is, right?

28:32I'm okay just making a billion dollars, Rory. In, or two, a couple hundred million in carry and sticking with the founder. And in all seriousness, I'll take the bet. I'm actually, I genuinely want to have those conversations where I'm on the same side as you. And it's not just because I want less. It's often because it's less, but with a higher certainty. Because I go back to my comment, whenever you make a change, you've got a one in three chance that the person you hire is an empty suit and a fricking disaster. So I hate making change. But I'm going to say it again just because I can't stop.

29:01I do think there are still sometimes when you say the combination of reasons, including for due to reasons you do. You just, they're God. I hope that doesn't happen a lot. And here's here's a matter of question though. Sorry here. I don't just didn't I mean interrupt. I think this where you start if I'm a founder Okay, and let's say benchmark did push them out right and Sequoia used to be clear like we'll find the right to you Whether it's you or not, but you're gonna make a lot of money that will used to be a part of the Sequoia's pitch right it may not be you It is an important factor for founders to weigh in When you sell three percent of your company a demo day at 60 post it's still your company It's still your company It is a more and more founders do also.

29:40Yeah, they should agree. I would say the comment, I first of all, I totally agree with that, it's relevant. I think actually, we'll talk about founders for a while. It's pretty clear that early on, part of the reason that Sequoia aren't in Facebook is residual frustration with Mike Moritz for prior situations where they had, in fact, made a CEO change, which is why I think the pendulum, which was way too far over on the, you know, always make a change has massively moved the other way. So maybe the clear statement is this, if you had to pick one default mode, it's clear and you've got only one button that you always press the same button, you would go for the never change button because it's statistically the right outcome.

30:20We're going to move on. There are a couple of other rounds that I do just want to cover. I want you always to mongerize. Ram can announce they've raised at $16 billion price. These guys Let's just never stop fundraising. The price just goes through the roof. Amazing, and this is not criticism. It's astonishing. One, how did you think about that, raising it 16 billion? And then two guys, I don't get it. Brax is like 10 .11 and mercuries at three and a half with 500 in revenue and owning the banking relationship, which is more valuable. How do you guys think about this? Just to frame it, like this is 1 % delusion.

30:57Here's the thing, it's 200 million at 16 billion. Because some of these rounds, you look at them, they're great, but they're 20 % delusion, 30 % delusion, right? That's an expensive unicorn, right? 1%, I mean, I know it's a lot, but we're not really gonna notice the delusion on our cap tables, are we? So you made two statements, you know, you compared it to Brex and then you and then Mercury and you were implicitly saying, how, you know, why would you do that 16? I mean, my sense of it is that they have a very nice business which has bought card and software and have headed more up market. Dobrex has also moved up market.

31:34And the quote -unquote competitor here is a combination of the card business from Amix and the account payable business from the accounts payables suite of SAP or Oracle. So they have a software plus kind of transaction business, which is pretty nice. You know, they've got hyper -grote. I get it in terms of just the explosive growth they're seeing in that space. I think it slowed down. I think the million dollar question on all these Fentech companies is how ultimately do they trade if and when the growth slows down? That's probably a question you'd be asking yourself if you were paid 16 billion for that business.

32:13For what looks like a seven, eight hundred million dollar revenue, you know, reasonably high -grought business. It feels lofty, but as we're going to discuss if we get through our agenda, which I doubt, found a fund have shown an uncanny knack for getting these things right. So I'm not gonna bet against it. You're right. Brax probably are basically the same amount of revenue. Mercury's approaching. I don't think Mercury's bank relationships are worth anything. Harry, I think there were zero, I can tell you why. But putting that aside, here's the theme that I see in the private markets, which I think is weird, which is that let's assume ramp is the fastest growing of the three for the sake of argument because it has the highest valuation.

32:47It should be, right? It should be. I still feel like for startups we're giving revenue valuations that don't have an adjustment for different ways their comps trade in the private markets. And if ramp is in a space that's 2 to 4x revenue at one that's public or whatever you could look at the comps 3 to 4. That's the part, you know, a lot of Fintech revenue is lower, it's lower margin or the public market's value at lower. And that's the part I don't get in even my own portfolio when I see valuations that value 80 % gross margin products the same as 20 or 30 or 40 and that remains a mystery to me in the private markets, right?

33:24Where everyone gets the same ARR valuations, even if the quality of revenue or even if the public comes to the public comes are different, right? So I totally agree with you there. And I just like to say, wow, and just the speed, they are always announcing fundraisers. Well, I mean, it's every three months ramp as a new round, which is again, great. I'm just like, wow, 1 % every six months with a little bit of tender offer thrown inside is no big deal. But I hear your point. And as a reminder, it is probably at the margin a cash -consumptive business because it is, I mean, just like Amix, it's giving people credit cards that they pay for things and the merchant gets paid next day and then someone has to float the card for 15 to 30 days.

34:06It's not a lending business in any long -term sense, but on a short -term basis, you are lending money and you have to fund that capital. So there probably is a capital need. Now, I don't know how much doing that with securitization or receivables. But fundamentally, this is not the kind of company you can run on the cheap. It's not like a software company where you can be down to your last dollar and juggling payroll, as I'm sure Jason did many times, right? When it's starting out, you have big -ass receivables. I remember doing the math and you kind of have to make a bunch of assumptions about, you know, if you have revenue or a billion, then, you know, if you're getting two or three percent, you can work out the gross transaction value per year.

34:43And then if you say yourself settled over 12 months. You probably, if you're doing a billion in revenue, you probably have roughly four billion in receivables you're financing. In other words, you're advancing money, maybe two to four depending on the credit cycle. You're advancing money to your customers that you have to fund on the balance sheet, and that's probably where some of the money goes. I actually think it's a really interesting way to do relevance. The most important thing today is to be relevant and to own consumer attention. And I think by having frequent fundraisers and frequent media hits.

35:13It's just a great way to continuously keep velocity and momentum ahead of someone like Brex. It's actually important for it. In the nicest way, I would push back on you. You went, um, but I know. I do think it was, especially because most customers don't know which one to pick. It's all brand anyway, right? And brand Brex, but I don't, even I don't know. But ramp is always on Twitter. And they've got Sasquan or whoever this random footballer is running with ramp on. and that goes for oil. No, no. No, no. You know what, how you did, you called me on the correct, I did make a little face, but I'm willing to say you're correct.

35:47It kind of goals me that you'd be using fundraising as momentum builder, but you're right. So much of the business in this part of the market is about momentum that, yeah, they're smart. Most of what they do is pretty damn smart. And that's probably smart too. Plus, if you're doing it, if you're new customer, you don't want to invest in a loser in the space. It just sucks. When the velocity comes out of the product, when they start removing features, You just just the beauty of this ramp brex mercury at all business is everyone needs it right they may not need these pro It's a hundred percent a attach rate, right?

36:16But I I don't want to and I don't want to be trapped. I don't want to be ripped off I don't I want someone that's actually going to make my life easier where the spend management actually works Right, I don't want to see the ones where the energy is seeping out of the company I just I won't I won't sign up for that vendor intuitively. It makes no sense, right? Listen 16 billion at ramp and paplacity raising again, first tranche 15, second moved to 18 because there was so much demand. Rory, is it the same as you said last time which is just, hey, it's an infinite shortage of a massive $500 billion outcome for all the dice?

36:47The two -step price uptake thing is weird, but you're seeing some of that now where I think the first round gives you certainty and then the people that didn't get in say, I just paid 10 % more, I just want in. It's just a sign of deal -heated to sign at the market right now. Rational CEOs take advantage of it. Listen, we have OpenAI creating more news as always. We have a 200 million defense contract from the Pentagon, which is actually very sizable. It's like the largest Pentagon ever given to a single provider. How did you guys read that? Also, OpenAI is first for A &T defense in this way. Aggregate comment, it's probably good news.

37:24I just love the fact that the Pentagon is spending money with all these venture backed, high -glought, very technically savvy, forward -facing companies. I think it speaks to some level of improvement in the procurement process. Palantir started that, SpaceX, and I think it's on to all that. Now, I think it's great. You look at the news right now, and wars and other places, and you go, I want to make damn sure that we have the best stuff if we ever go to war, and it looks like that's not being made by the old Fadi -Daddy company. So big picture, good news. Go team. related to what you said, Rory, I open to achieve its mission.

37:59Anyone with this market share, you have to be friends with everybody. Before 2020, there were so many principled CEOs. So many, we were so principled about issues about not working with defense, or the government, there are many things, folks, or principled. In fact, many things that are very lined with my values, that folks are no longer principled on, you've got to be neutral. And I think the limited press I saw on it, Sam said this is not much, this is only 200 million, this is not material to us. This is a small deal, right? He probably didn't do a customer call on this one. I mean, maybe he did.

38:27But it is immaterial. You can't be Republican or Democrat or anti -this. The threat to open AI from being political is so high. Right? You've got to be friends with everybody. And so you've got, I mean, other than rogue states, I think open AI has got to sell to everybody. They've got to own it. For the record, he may want to be friends with everyone. He doesn't appear to be doing a great job of staying friends with Microsoft. What happens there? With the Microsoft feud. Listen, I think they're lucky in that Microsoft crossed the line first. Listen, it's a weird deal because Microsoft basically bought OpenAI and they're going to end up being like a 33 % shareholder of a standalone company.

39:03This is the opposite of scale in some ways. They're de -scaling. Before ChatGPT, this was in some ways a struggling company, right? Before, I mean, ChatGPT exploded, right? It was great, but the revenue was in the grand scheme of things relatively minor. So they sold 49 % to Microsoft, right? Now they're going to decel it. But Microsoft does use multiple providers, right? It does compete with Chachi, with OpenAI. So even if it's allowed under the contract, they did cross the line in terms of remaking, I think the spiritual side of the relationship. I don't know if just because Microsoft Quotin Quotin crossed the line first, and I'm not sure they did, I'm not sure that will impact, I don't know how it ends up, but I'm not sure that it will be determined by, you know, who Quotin Quotin crossed the line first.

39:46I think it's a very weird contract. It's right up there. So a very different version of Weird than Scale AI, but very weird. It's not just about ownership and preferred stock and common stock. It's all sorts of different rights around profit sharing, all sorts of different triggers on AGI. In situations that ambiguity, the person who has the most leverage has the best chance to win. And I would argue Microsoft is quite a lot of leverage because it's not existential for them, especially now. I think they have no leverage, actually, honestly. I'm not trying to be a chaos agent like our prior guest.

40:20Here's why, because listen, I'm still, I'm a student, right? The reason I think they have no leverage is because I think that whatever age EI is, we're going to be there pretty soon. So Microsoft loses, what Microsoft wants out of OpenAI is a relationship where as much of it survives. I mean, obviously it's tied to profit sharing, survives this moment in time in the relationship, right? And they can, I'm listening, I'm sure they would argue over it and I haven't, I don't know the details of the contract, but the profit sharing all the rest ends at AGI, right? So part of this relationship ends at AGI.

40:52That's a good reminder of that term because if you recollect a few weeks ago in one of our quick questions, someone, someone that went in and we're going to hit AGI and I think my answer, which now I feel smart because Jason confirmed that is, my comment is we're going to hit AGI when Microsoft and OpenAI litigate what OpenAGI is because everyone else is using that term, Lucy Goosey, it could be now, it could be 2045, who the fuck knows. Now half a trillion dollars of value depends on that word. I can tell you, it's you right Jason, that is the only part of the contract where you go, ooh, that is a bit of, because it's ambiguous.

41:26So you're right, that would be a fun vector of this discussion. I've talked with several of the smartest folks I know and AI, okay. What they think about this, what they think about AJ and they basically all say very the same thing. At this point in time, it's something Sam Altman made up to simplify a lot of concepts. He's the one pushing the narrative. And none of us really believe there's a magic point for AGI, right? At a lay level, I think we're close to being there already. That's the risk to Microsoft. Like, so I think my only point is, if I both have something to lose in this, and Sam is sitting, he always, like, the guy signals early and he's like, you know, Microsoft will end up with 33 % of a new entity and like he's just trying to create the outline of a deal so that it lands there, right?

42:09They own a third, he owns six or seven percent, it gets reorganized in some weird new way, right? And what does Microsoft got of it? They get a longer tail. They're going to get a longer tail in this agreement, but it's going to be a different one because the cash alone is not important to them, pre -your -point, right? The IP and the relationship is more important than the cash. What are they going to do with the cash? Divident it out by scale AI prime? Like they don't actually need the cash, do they? I think we're going to agree that they don't need the cash. I agree. Scale AI Prime coming to you soon, clearly.

42:39Listen, guys, we've talked about Chime in two separate episodes. And this went out. It went public and it popped 50 % all IPOs up in 2025 except for sale point. Is this assigned the IPO market's roaring? There hasn't been a better time in years. And how did you analyze Chime specifically? Yes, yes. They clearly are growing now. Right. It hasn't been a better time in years. Yes, because there's been none and some is better than none. It's not a complex question. I mean, doesn't it mean you think it's pent up demand that's just latching on to a available supply, not necessarily the quality of companies coming out?

43:20No, I think the great, no, I did not say that at all. No, I think, should it look, how do Windows open? Traditionally, good companies go out at a attractive prices. That's how you, if you've had the window shot, the only way you will open it is with good quality assets and that prices where it's attractive. And the way it manifests is, unfortunately, you get these pops where effectively, the company going public has effectively bribed the buying public to like IPOs again because investors were all fully Pavlovian. If you were a IPO buyer in 2022, your searing memory is, I bought the mall in 21, I lost my 30 % 40 % on average, 90 % in some cases.

44:01I'm never doing that again. So you take a long time to come back. Now in the last month, your narrative has changed. It's, oh my god, I piled into the last five IPOs. I'm up 70 % on average. I'm up 250 % in the case of chime, in the case of circle. This has been a huge boost to my fun performance. I got to do me some more. So the pop helps the win. It's not ideal. There should be a better way, but there's clearly positive momentum now from good companies and there's going to be more of an appetite. Will this lead to data breaks or stripe or one of the big boys going out? Even if they go out, the sentences wrong, how it doesn't lead, you see, lead you're implying that they couldn't go out and now they can.

44:45They can go whenever they want. They could have gone in 22. They could go in 23 because they're so big and so good, they can go whenever they want. That's an idiosyncratic, I mean, genuine come. That's an idiosyncratic decision that they're gonna make that they don't have a ton of visibility into. I think what they're going to do, they can go out whenever they want, but now they have data to suggest that if they were to go out at this period in time, it is highly likely that they will be priced at a premium with a huge amount of demand. They did not have that historical data beforehand. So this data is leading to a decision for them.

45:16I'll give you that. It's not clear to me that the only angst was on pricing. I think it's much more true, maybe the better statement that says Harry, I think it's much more true for the whole flotilla of companies in that 200 to 400 or 500 range who have been trying to figure out where to go and can now see some kind of exit. For those folks, everyone's dusting off their plans. For the big four or five companies like Databricks and Stripes, you write. At the margin, it's a more favorable time. Why not? I think there are reasons for doing it. I'm not doing it. are more about the whole when they want to do it, do they really want to deal with it.

45:50So I could imagine an entire IPO cycle where once again, not of the two names you cited chose to go out and we get to the end of the year. Was chime mispriced or is that pent -up demand? Well, by definition, pent -up demand, the whole point of pricing is to pick up pent -up demand. So by definition, it was mispriced. My limit is saying from folks that have been involved in some of these recent IPOs, and it's limited Harry, you probably have had more, but the advice was just to be conservative. It's a slow market. Will the advice to be less conservative now after these IPOs? Probably, right? I think you're still gonna tell everybody to be conservative, right?

46:26It was to be conservative, and yes, we could talk about how much money people really left on the table versus in theory. You can't sell every share at the highest possible price, right? That's the fiction in the circle math. But even if the company leaves money on the table, the investors distributing over the coming years, is they may have only lost a little bit from the incremental delusion. Delusion aside, the IPO price is almost irrelevant for the VCs, it's when you get out and getting out strong, maybe worth the incremental delusion. That's the one that Bill Gurley, I guess, disagrees with, right, is that there's a trade -off.

46:59Like, going out strong doesn't matter, right? You'd rather go out and limp along. That's the advice. The other thing I would say on Databricks, and I don't know on Databricks, I literally know nothing, but literally the fact that this last week they had an analyst summit where they went through all their metrics, their revenue, their growth rate through an entire group of investors and analysts says to me they will decide one day to file and it will just happen. Like they're already read, they're not really are they running their company like they're going to IPA. They're actually managing to Wall Street like they're already put they're at the edge of managing like they're already public, right?

47:32So I wouldn't be shocked if we opened up the news tomorrow and they filed because they're already completely ready, right? They're already they're already and they've already halfway there. So So I think we'll be shocked in Databricks because we think we'll see these signs, but they're, it's like a Sam Altman narrative. The signs are already there. Like they literally could file next week and we don't want to be shocked. Totally agree with you on Databricks. I actually interviewed that, uh, head of sales, Ron, who was unbelievable and spoke in detail about how they structure and run on the level.

48:00Crazy. He was there since almost the beginning. I mean, really crazy. I was so impressed with him. One of the, one of the companies in the flitilla that you, I think very wisely describe is Gusto, who announced the tender at 9 .3 billion at 900 million in ARR. I was actually surprised there at 900 million in ARR. Amazing, congrats to Tom Lohan, Josh and the team, that's awesome. I don't know if you guys had a take, a read on that, coming out with 909 .3. Yes, you underestimated them. We had talked to them way back when, and obviously, you should have done the deal. So I share your pain. I think, look, Paywall is one of the biggest markets out there.

48:35I mean, sometimes the obvious shit is the most important shit, right? It's a huge big market because everyone gets paid and you get five bucks a month per US worker that you're paying. You know, ADP and paychecks are two old -school companies that are, you know, worked approximately a hundred billion. There's a bunch of other companies that the ten to thirty billion dollar level of public comps in the space. So it's a huge ass market with a lot of attach and it was pretty stodgy. So at one level, I'm not surprised given the time, and they've clearly executed really well to get to that size and scale.

49:08But they have a modern SMB -focused paywall solution. There's half of the workers in the United States working SMB, so you're probably at 60 million people on which you can get, I'm just doing the math in my head, five and 60 bucks, call on them. Yeah, I mean, you get to a huge market very quickly, 60 billion market. You know, and they're also lucky, I think all these guys are lucky in that. They have a great comp. So paychecks, again, I think was founded in the 1870s, or we could look it up. I mean, it Paychecks is an old one. It's trading at 10X revenue at 55 billion in market cap. So it's very easy and it's, look it up.

49:44It's at an all time. It's not just trade it up. That's an all time high. It's at an all time high today. So if you're a VC, it's very easy to say, well, look, okay, Gusto's at a billion. Paychecks is at five, okay? Gusto is growing a little bit faster. It's newer. It's better. It's founder led. You can back into Gusto, all of the payroll folks, You can, with a $55 billion dollar ancient public company trading at 10X, you can justify any of these deals. People don't realize paychecks toast a few others. There's some great comps out there. Well, ADP is what? I mean, you have to put it ADP. I mean, the two big dogs in payroll are ADP and paychecks.

50:19And I'm a paychecks, I think, was found in the 1960s, 1960s, the 70s because the original founder went on to continually run for governor of New York as a republic. And all the years. He's almost all the time. I imagine. They're both, they're two big businesses. So provided you can make the economics of replacement work. You can build a big country. 80 P .I .R .A .R. is 80 P .E. is trading at 15 times revenue. Yeah. Why didn't we just put the fund into 80 P .I .R .R.? We forget about putting the fund into these newer kids. We should have put the fund into 80 P .I .R .E. and paychecks. 80 P .I .R .E and paychecks.

50:49I mean, that's what my grandma started up used. Like, they used paychecks, right? Roy, was your reflection on turning down an early gusto round and did it change your mindset teacher anything? Yeah. Yeah, that I can occasionally be very stupid. You know, we talked to him in between rounds, so it wasn't action -ingajion. But yeah, I think I underestimated both the founder and the openness of the market, well, two things, one, the founder, the openness of the market to switch. And I'll say something else, the willingness of investors to pay up quickly for that, such that it got outside my price range very quickly.

51:23Stuff happens. I mean, I was wrong on that decision. Being wrong sucks. Final one before we do a quick fire. We mentioned old God competing with new. Gleene is a $7 .2 billion company today moving very fast. Dropbox is still working to get Dash out, which I'm sure is a good product, but it's separate to their core product and core business. Can the old God compete with a very, very fast, well -funded new God? I'm starting to lose confidence in the old God. I'd listen, I think because the LLMs are open and anyone can use the API. most of the work is done by third parties. Use an open source framework for your chat, and then you can use an LOM, and then you can, it's pretty simple to rag a bunch of data and stick it in.

52:05And I just figured that at the software level, the big guys would catch up, right? But I'm just, in my ecosystem, they're still too slow. I just don't see it. I don't see it. I'm worried. First, the minor comment. I do believe the quote unquote ol guard can compete if they, in certain circumstances, if the situation is right, and then they have leadership to just push it through. But I don't think that's the issue here. It's a different issue. The real truth about drop -buck shipping and not shipping whatever the party is, dashes, is it doesn't matter. Let me tell you what I mean by that. Typically, the old -guard play is some version of, I'm the system of record, I'm already in there, I can add this stuff on top.

52:47That's the pitch every time. I'm service now, I can add an agent. I'm Zendesk, I can add an agent. I'm selfless, I can add an agent. And the new guy's pitch is, we have this agent and we can run on any system of record, so you can buy us and you don't have to change out your old guy. That's the vector of competition. What it means is you can only be an old system of record provider. Your right to win is predominantly in your existing customer base. And service now is a big one, and Salesforce has a big one. And brutally in the enterprise, Dropbox doesn't. So even though we throw out Dropbox and They're not in the same quadrant.

53:22It's not a relevant question with all due respect, Harry. Glean is out there competing with all the people on enterprise -wide deployments for big -ass companies. And they're going to have a whole bunch of competitors in that space that we could talk about. Even if Dropbox had pitched a perfect, functionally equivalent product to Glean, it would mean that for their existing business customers, which is a small -ish percentage of their total business, they would win all that business. But then when they moved on to customers who didn't have dropbox, they would be at ground zero competing and skin for that.

53:53And that I think is the real issue, not some kind of, are they powerful? Are they good enough engineers? Are they strong enough founders? I think just situationally starting where they are, it's just hard to get there. Roy, the choice of me is I have very few feelings and so you can always say it's a wrong or a moronic question. My repeat was taught to you would be, you're very wise. What would be the right question to ask with regards to the new versus the old God, then. Whenever you're dealing with the old guard, by definition, they're not going to bring umph to the table. They're going to bring the assets of what they have.

54:24So the interesting questions are things like Salesforce, ServiceNow and people like that. And you know, we had a mention there of, I will say the whole Service Salesforce throttling slack seems pathetically lame, irritating to customers. And I was asking someone about this and they had a good take in it. They said, it probably doesn't survive in that form, but it probably survives because If I'm a customer, you're telling me I can't ask if I'm selling Salesforce records. When I want to true Glean, that's not going to survive. But the question is, is there some kind of API connectivity fee? Are they going to try and monetize that?

54:59But it definitely felt a little lame. I mean, you'd really want them to say, of course you shouldn't use Glean because our product is so much better. Raises slack. Have the best days been, and it is now in decline. I mean, almost by definition, your best days are as a startup. But going public and then selling for 20 cents, seven times revenues, I don't think it would get 27 times revenues today. So yes, by definition, it's under downward slope of excitement, which isn't to say if it was well -run and integrated well, it couldn't be a perfectly good and successful part of the Salesforce ecosystem.

55:30And we're, you know, small, small in size, but big Salesforce users. So it's not like it's doomed, but they got to make it happen. Do you think it will be a good and successful part of the ecosystem if it continues as it is? Well, look, first of all, it's probably maybe doing two and a half billion in revenue today, some around that. Yeah. Just as an aside, I don't think Salesforce got a terrible deal in the end. You just got it. You got to view it by where it ends it up as a revenue multiple. And Salesforce is growing single digits, so I don't think Mark would want to give up that two and a half billion today.

55:58And in fact, interesting for sellers, not all of them, but the light, so many of the acquisitions slack even Tableau, which I think was founded in the 50s, they're actually all growing faster than the core Salesforce. So like we can say, oh, Slack isn't what it was, which it isn't. But growing in the teens when the core is growing 78%, and you have billions in revenue, that's material, right? It's this hard stuff to do. So I think Slack today is pretty successful, like LinkedIn, it's not as good, but LinkedIn, it's just a different Slack. Will it be a hub for developers that people build their, those days, the hot Slack workforce as our hub?

56:35Those days are far behind us, right? But here's the irony of it. My view is Slack got acquired. It was a better even better deal than it looked. You know why? It only had one product. My view, Stuart is a generational founder, right? Did it multiple times? Did the connoissee we'd all love to work for? Right? But I think deep down in his heart, he didn't want to do multi -product or they would have been multi -product. Like it had an existential ticking time bomb because it could only be so big as a single product company. So it had It had to evolve. And so this is a new enterprise slack. It is what it is.

57:07We still y 'all use it. And just like work day and LinkedIn are locked down, it's gonna be locked down. And the three of us can complain, but if all stayed in state farm and those folks don't complain, ink on change, we don't matter. The small slack and sales risk customers, we don't matter at 30 billion ARR. We just don't matter, right? We don't matter. Chaps, we're gonna do a cowshee quickfire. We've got three to go through again. and Koushi, essentially, prediction marketplace where different people bat on different things, will Apple announce iPhone assembly operations in the US this year?

57:42I'm sitting outside the US, I hear constantly, oh, we wanna bring back manufacturing, starting with phones, will they bring it back? Yes or no? Based on the news today, I don't know what the odds are, I don't have the, in front of me, I'm gonna say they're gonna announce it, yes, because Trump announced a Trump phone at $499 to be built in the US yesterday. It's gold. You guys are so classy. Your president's announcing phone packages. I like all like you haven't seen our new office. It's all gold as well. That's because your prime minister couldn't build one. Look at you, Roy. You've got you've got you've got a coin under gold phone.

58:16Not nice. I think listen, it's not possible, right? If it's it's close to impossible, but announcing it and beginning a process, you might have to do it. You just might have to do it. So I'm going to go. Yes. Take it. You announcing yes, Yes, Rory announcing doing, yes or no? Politically, it would be smart to announce that even though it's impossible. I think Tim Cook is such a straight shooter that he just couldn't pull it off with a straight face because everyone was no, it's absolutely bullshit. But yes, in a cynical world, I would make one phone in the United States of America just to confirm, you know, we can, we too can do the low margin, commoditized parts of the electronics value chain and end this question.

58:56Will the S &P finish positive this year? Yes or no? The record of analysts predicting the S &P, the start of the year they do this exercise as S &P at the end of the year, universally wrong, the error rates huge, there's nothing to it. Much more interesting question is, okay, now let's talk a bit, because then you have odds, and now you can actually make an economic decision, because the odds here is S &P, will it finish on the, I'm waiting it as 70 % likely yes, is that correct? So that's what they're saying. Given that I would take the know, you know, I think you would make more money betting no than yes at that kind of ratio.

59:33I'm all in. I have no more cash. So I'm all in on this bet already. I think it's an easy bet. So you're right about the 70%. Like I'm not, when it's my own money, I don't get the benefit of the 70%. Right? I get the benefit of the 50. Personally, I'm 100 % in. So I already made the bet. Yes. I want to build on that. I think when people ask especially investors, they're opinion on shit. The correct answer is don't even answer a question. The real question is Where is your position? And I'm with Jason. I'm about 75 % equity, mildly terrified, you know, almost nothing in bonds and then a best in short term and word stuff.

1:00:03I'm back. I'm back where I was in 2008, 100 % equity in my personal position, 100 % back just like 2008. It was great. Yeah. I wanted you with the right part of 2008. It was great. It was great. Final one, Willard Chinese AI model reached number one this year. My bet is yes, but not published. So no. Oh, great. Easy call. In other words, I'm right, but no one will ever know. I'm gonna try to get back to China this year. Obviously we've all been shocked the last whatever, eight months by performance, right? I don't mean to date myself, but man, outside of pockets of San Francisco and areas of London, I've never seen folks work remotely like they do in China.

1:00:41I mean, it's just insane. And maybe it's changed because I've made it back in a while, but I plan to go back this year and... I don't mean that working last. Yeah, if the government's behind you in China, There's so much energy in that culture. It's just I don't want to take the under on this bet because I just I feel like this is a hubris. This is a Bay Area. There's a lot of Bay Area hubris. And this is one of them. We can't access. We can't access our internet. It's a different world out over there. But man, the power when everyone's aligned. You right. Jason, I'm coming back to you. I the bet has to be yes.

1:01:13There's all sorts of noise of will you know. There's all sorts of noise. How it's modern. But the idea that there's a less than one in five chance, which is what the odds are saying, that at some point this year, one of five or six really aggressive, well -run Chinese tech companies can't achieve even temporary parity with one of things just feels to me it's stupid bet. So you're exactly right. The bet at these odds has to be a yes, which is different than saying their quote unquote, going to this place, open AI. Probably not, just like at various times when one of the other models sneaks ahead of an open AI for, you know, a month in the various measures you kind of go.

1:01:48That's interesting as a state of the art, but that's not actually how the business value is created. At that level, I come around to, I'm with Jason. The answer is yes. There's no world where we've got all the smart people and they don't. It's silly the minute you say it. So of course they will. There we go. Well done, Jason. That was a very definitive answer, Rory. Yeah, it just convinced me. He's exactly right. Now, I love it. I hadn't spent a second thinking about it before, and it's just not that I'd never have been able to try it later this year. Well, now you're a true venture investor, Rory.

1:02:16Okay, you should be proud. You say things with little thought, but great confidence. See, that's what was afraid of what happened if I did this. So that actually, that never have you said anything more likely to cause me to fade. Don't, don't, don't why. Did you have such a visceral reaction to Jason saying about Tableau in the 50s because you turned that one down and see? No, no, I didn't, but it was, I want to say the early 2000s. I remember the Daniel. Yeah, exactly. And I'm sure the puttablos guys screaming, you know, like please don't say that about me I'm relevant. I got 40 billion dollars.

1:02:49I am somebody. Oh dear. Well guys listen, I always love my time with you Thank you so much for doing this with me and you've been fantastic rock and roll I mean those shows the highlight of my week Jason Rory. I so appreciate the time there If you want to watch the episode on YouTube you can find it by searching for 20vc Also, let me know what you think of the show. What can we do to make it better? Which guests can we have on? Let me know Harry at 20vc .com. But before we leave you today, here are two fun facts about our newest brand sponsor, Kajabi. First, their customers just crossed a collective $8 billion in total revenue.

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