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25:39it was like, well, sort of, but we platted all into new hiring. So they took the productivity, and they didn't keep the head count flat. They just hired twice as many people that are twice as productive. So I don't know whether that's 4x or whether it cubes out to 6 to 8x or 16x, but how can you sit still with your little two -person company in San Francisco when the best of the best are reinvesting those gains. They're reinvesting those gains, which is stressful because the bar's gone up. And that's so I'm like, okay, that's a good nuance point, right? So yeah, twice as productive, but we're reinvesting all those gains.

26:10So you can't keep up. And this is an agent AI where there's no modes. So if there's no mode, you better run faster. This one guy, one person with lovable is great if there's no competition and a huge mode and no bugs to fix to another issues. But dude, I literally yesterday I was at a board meeting with a company invested in 2019 that's at about 20 million now. Okay, so a great love the founder's not a rocket ship, but great, right? had two competitors that I know of, one of which got acquired and one of which wound down. Pretty good, right? I mean, not perfect, but like, you know, yesterday the board slide, it couldn't fit on the slide.

26:47He had like 11 columns with different categories because of A and I. He's like, this is the world today. This is the world today. Three of one, 100 competitors. What does the board say to that? How do you respond? It was divergent. And I think one of the board members was very concerned. They're like, my God, you gotta sell your company, right? One was neutral and the folks that have been around the longest and honestly, Harry, the ones where it's already in a fund that's way up, being one other VC, we're like, dude, you're hyper committed, you know the market cold, right? The customers love you, reboot the company.

27:25We all have to reboot our company since 2025, reboot it however you want. What does that mean? Right, reboot the company. You've got to, whether you're AI native or AI whatever, you've got to be part of the future because that's where the customer pull is. That's why MoveWorks is acquired for $2 .5 to something billion dollars. It's where the market pull is. Totally is. I completely agree with you that. Was the founder receptive to that? Yeah, yeah, yeah. I think so, yeah, for sure. It helps that they're casual positive too, right? 20 million. That's super helpful. I think we've got, I think we've got Bob and joining us.

28:05Yeah, it's right here. Amazing. There we go. I mean, perfect timing. We, we say, perfect, perfect timing. We, we say that one perfectly. Bob, it is great to have you, man. Thank you so much for joining us. Hey, man, congratulations. Can I ask Bob, how does it come to be? How does that acquisition come into existence? Does, does Bill McDermott call you up and say, hey, Let's make this happen. What does that look like? Well, there's a saying I think in the you guys have references in the past, you know, great companies are not sold or bought. And so I think that, you know, we've been building this company for about eight years, really with the idea of using AI to transform the workplace.

28:45And as you guys know, I started with IT transformation, then moved across the entire enterprise, especially in this new agenteic era where we got really good at providing this agentech reser. And long story short, over that period of time, about 250 of our 300 customers, we're also service now customers. And we could see ourselves working really well together. That's often a big part of the story, right? Yeah, I mean, customers were sort of like, hey, you guys work super well together. We love both products. Service now has this agentech platform. They've got a lot of work orchestration, systems record databases and the like and you guys have this great employee layer.

29:25So, Harry, I think it was sort of one of these things where if I was probably honest, it was a conversation that naturally would have happened at some point. And it did. And I think that I've been watching the market. We've seen tons of enterprise interest across the globe, especially in the last nine months. I'd say in the fall something happened and we started to see a lot of demand for our product and you know we talk about growth rates and venture and you know startups their board meetings of 100 % or 200 % But that's still not fast enough. I mean, I think if you look at the appetite of the world out there I've got 350 customers bill in the team over there have 8400 at large enterprise the prices on their platform.

30:16So, how do we actually go from where we are to that scale? And I think this opportunity is one in which just felt so right that I decided it was the right move at this time. Did you guys have that overlap? I think you said 30 % of your customers were on service now or something like that. Maybe I misinterested. Did you have a joint go -to -market motion that kind of drove awareness of the deal? or how did that, or was it, maybe it was competitive in some ways, right? I don't know, but how did that join that overlap drive the deal? Yeah, so we were integration partners for the last seven of the last eight years.

30:55So we had a ability to work very well within their system. Just for the sake of numbers, it's 250 out of 350 customers that are service now customers. So quite a bit of a problem. Yeah, that's pretty high up. Yeah, and let's call it the most. But what we found is that we were sort of continuing to focus on our trade, which is this agenteic employee experience later that could do search, that could do deep automations, but we even had to figure out a whole new architecture around how do you build automations in the agenteic era, how do you think about this translation from ambiguous language to precise APIs, which is not easy.

31:37In fact, you have to build separate reasoners and slot filler models and what we call manifest generator to figure out what plugins to select. There's a lot of detail there that goes into this. But as we did, I think we started to find ourselves, especially at some of the largest companies, like Paleta Networks or CVS or Siemens or Unilever or Perst or Honeywell. I mean, the list goes on and on and I think that we started to get very good at the top end of the market to solve not just employee productivity, which is what I call weak ROI. It's like you say, bovin three hours a week, who cares? You're still going to pay my salary.

32:18But the real strong ROI is where you can actually transform core business processes. And so everyone's talking about MCP servers and all this stuff right now, but we had to figure out how do you actually integrate? with an SAP Workday Success Factor service now, Salesforce, Conquer, Gira, all of these systems, fresh service, and do it well, and actually be able to trigger deep core business processes. That's where you get the strong ROI. And I think that was sort of why this partnership felt so right for both parties. Can I ask, with the 250 of 350 in terms of the overlap there, I actually have a company where they have a partner who is much, much larger than them.

33:05And frankly, they will and do have the opportunity to be acquired by them. And their fear is if we don't say yes to the acquisition, then they could go with someone else, one of our competitors as the partner. And so we're almost strong armed into an acquisition because we also rely on that partnership. I guess respectfully was that the case here? And what would you advise me to advising this founder on how they should approach it, given they are very nervous. If they don't say yes, or that partnership could go. Yeah, so slightly different story for us. I mean, you all know my last company, Refresh, was acquired by LinkedIn because we were using a lot of data from LinkedIn and Facebook and these sorts of deep web databases, right?

33:48And so that was sort of probably more like what you're describing where you sort of have to, you know, it's an IQ test of what decision to make. So for us though, we have been building this platform as an independent service across all these different systems. And so we want it, we've been supporting the service now, but we're also supporting GERB, supporting a fresh service, reporting Microsoft, supporting all these other services. And even though we have customers that use service now, they're also using all those other products too. So we will continue to support and expand the reach of our platform with this, even past this acquisition, because that is where the gap is in the market.

34:30That's where people want something that interoperates with everything. So, in your scenario, I don't know the details, but sometimes there is a situation where that is very true. But in our case, ServiceNow was one of many deep partnerships that we had across the enterprise ecosystem. They were just a company that I admired a lot. I mean, what Bill McDermott has done, they're one of the most underrated companies I think, doesn't get discussed very much on podcast, doesn't get brought up very much in the circles that we all spend time in. And when I started MoveWorks, I didn't even know ServiceNow.

35:09And I was - We don't talk enough. We don't talk enough about the deep enterprise. It's just not in interest area of most folks, right? I mean, I felt the same way I bought them a month ago. Now, I'm down 25%. I'm like, ah. But yes, I totally agree. Bill is incredible. Can I say, how was Bill as a negotiator when you're discussing the deal with him? What was that like? He is a generational leader. How was that discourse into play? And how does one come up with a price today? Well, I mean, I obviously, private conversations I won't share, where what shouldn't be. But I will say this, Bill is someone who is exactly like you see him.

35:55He is very warm, very generous, very honest. And what he says, he sticks with. And I think that I've learned a lot from just being around him and watching him over the years, but now more closely. And I think it was a very welcomed and warm conversation, if you want some color around how these things got done for us. I don't think all of these types of conversations happened that way across the industry, but for us, the partnership was already kind of there in many ways and so I think that we could both speak each other's language on the first conversation. What he says is often stuff that I've said and vice versa.

36:48And so I think that it was a real treat to spend more time with him. And then of course, there's Emmett Sivari, who's now leading, he's the president and chief operating officer, who worked very closely with us on this as well, really thinking about how to bring the Sigenic letter to every corner of the business. So I think the two of them have really had a strong thesis around where they can take service now and what we can do together. And you know, this isn't the last you'll hear from me. I think as I said, we're going to continue to build this future together with service now and move works will continue to proceed forward.

37:30and my team, you know, when this all gets closed, you know, with regulatory approvals, we'll be pushing really hard and aggressively towards this vision. Was there any concern for you about the regulatory approvals? We've seen, obviously, quite a stringent regulatory environment. I'm just intrigued when we look forward out over the next 12 to 24 to 36 months, whether that plays into founders' mindsets as to the willingness, whether to engage in processes or not. Did you think about that, were you concerned about that? How did that plan to your mindset? It was the first time I've been through something like this where that factored in.

38:08So I took the Council of our experts and folks involved. But I think we do see it as a very beneficial thing for the market. And we've already seen the benefits. A lot of times you don't know because there is no prior. But we have a lot of customers who have been very excited about working with both of us who proven that. And I think that, you know, obviously I've got to let the regulators do what they do. And they'll make that final decision. But look, I think, you know, with any sizable deal, all these factors go into it. But, you know, ultimately as a founder, you have to do what makes natural sense.

38:52And for us, I think MoveRux can become a worldwide phenomenon. And I think this was the best path to get there. So we'll trust that the regulators also will do what they need to do to ensure that this is configured the right way. But it isn't the primary thing that we start with. Can I ask a one question, Harry, if I'm just curious. I remember when right after AppDynamics got bought for Cisco for 3 .7 billion. Jody Bonsel came to Saster and he was very specific about the deal. He was very tactical. He's like, well, we did the math at 3 .7 billion versus three more years to IPO with dilution and time.

39:36The IPO equivalent was 6 billion. The IPO equivalent of 3 .7, given time risk and dilution was 6 billion. And I don't remember when that was. I mean, I'm dating myself was probably 2017. And that was a big deal back then for three. And he's like, we couldn't pass up the deal because of the, I suspect Wiz went through that. Did you guys, with your investors, go through that analysis and say, holy, holy, good jolly, it's not just $2 .85 billion, the headline price, right? But compared to what? Like what would you, did you have this logical, distance discussion? Because that's even more money than it sounds from a founder perspective, right?

40:11Because of time, delusion, and everything else, right? I got to raise another round, three more round, hiring another thousand employees. That's another 25 % delusion, 10 % from the IPO. Did you guys do that kind of trade -off to the future? I think that everyone does those calculations continuously as you're building the business and deciding to raise more capital and what it's gonna take. As I said before, I think ServiceNow is underrated. And I think that what I felt strongly about is joining them to go do this and to create this vision, I think was gonna be more creative for all my employees than perhaps going at this stubbornly alone and continue on the path.

41:00And don't get me wrong, I think founders start companies with strong, strong conviction of what they wanna see eventually, but this sort of, as the market has evolved And I've seen just the appetite increased so dramatically and the number of large companies that have come under our platform just in the last six months has been so insane that I just realized we couldn't catch up to the speed at which everything was moving and so this this made the most sense and of course you do all that calculation so does everyone and you think about what is the was the opportunity cost and so look I think Can I still have an opportunity for startups, but I think that in this AI world, we do have distribution modes that are very important that exist and that I think will still be important to think about as you want to build your brand and your vision.

41:59So I always worry that we drastically overestimate adoption in the short term and underestimate it in the long term. Do you think we are overestimating adoption in the short term for some of the largest companies in the world you mentioned some names earlier? I'm thinking European incumbents who still don't know what Slack and Notion is, like a loaner adopting AI first principles. Do you think we are overestimating adoption in large enterprises? Or not given what you just said there about the speed of those customers joining? So it's actually a good question because there is a nuance there. We're seeing a lot of large enterprises now after two years since ChatshipT came out.

42:37Finally, say, okay, we got to do something, and we want to do something. But I think that there is still a very long journey in terms of the true change management and the integrations and the leveraging of these capabilities throughout their entire business workflows. So, you know, I was on a panel the other day and someone asked, you know, what do you think when we talk about it in two years? And I said, from the enterprise standpoint, exactly what we're talking about right now, which is, you know, the adoption curve and getting things in and moving things along. Again, we've seen this where customers absolutely are ready to go, but just their own internal processes may take six, nine months.

43:14You get the approval, you then start the implementation, you roll it out to a subgroup, and then it goes from there and there. So I think that we are seeing that transformation. It's just happening slower, not because of the technology. To your point, technology is there, but it's a people problem. I think change management is a very real thing that I think we underestimate. And I think it's where startups and companies like ours have really focused our attention in trying to help these organizations really figure this out and support them. I think that, you know, we did a lot of work over the years to really perfect this large enterprise motion.

43:53We just got FedRap authorization two months ago, the first agente platform to get that. because we have to build a lot of the security measures, the protocols, the infrastructure on Google Cloud and this and that, that it just takes time. And I think that's where people over or underestimate the work that's required. You mentioned distribution. If I were to push you into one camp or another, does AI benefit incumbents with incredible distribution to huge companies existing or startups with speed, with agility, with ability to just move much faster and think much quicker. Which one does AI favor more in the next two to three years?

44:38Well, I think on the leading edge, startups are always the first to sort of bring out the newest capabilities we saw this with deep seek. And we see this with search moving into research and some of this capabilities that are are now possible. But I would say that as that technology gets absorbed quickly into the market's zeitgeist, the larger companies will continue to play a very big role at titrating the cadence of which the stuff really gets into the hands of millions of users. We have a 5 million users on our platform. Thursnet has 150 million plus. So if you think about just the reach that these organizations have, I think the incumbents of previous generations are different than the ones today because I think they're very innovative.

45:31I think, you know, all of the hyperscalers are very innovative. I think all of the large staff companies are very innovative. And so I think that there is going to be winners on both sides of it. And sometimes, like Wiz, like MoveWorks, we combine forces. But I still think there's going to be a healthy opportunity for new companies to emerge and if they choose to stay independent, can do so. Harry, can I ask you one matter question that I think MoveWorks might be very helpful on AI, which is where the money comes from? Where are you? Is the budget, budgets, budgets for AI? What percent of, are you seeing, is budget, are you stealing from other sources of budget in the enterprise, right, maybe more dated workflows or systems, right?

46:18And how much is new AI budget that CIOs and others are giving to, whether it's innovation or just new budget? Like how much of your revenue is new budget versus stealing it from other systems, date adventures, et cetera? I don't think there's one answer because I think every company is doing their budgets differently. I will say that at the start of 24, we started to see solid numbers inside of budgets for for people to deploy AI systems, agentic systems to help their employees, to drive business transformation. It wasn't just coming out of a slush fund, or a one -off type of situation. These things are now in the budget.

47:00I've seen a lot of analyst reports where they think where some of that's coming from and how it's sort of being repositioned. But I'll give you an example. Broadcom started off on MoveWorks six years ago. They had 10 ,000 employees. Today, they have 50 ,000 after buying CA, semantic, VMWare, and they have the same size support team across ITHR and a bunch of other functions with the help of MoveWorks. And so, when you think about the budget, oftentimes the budget doesn't have to be looking backwards, it can be looking forward at how do we reduce our costs of growth while the business will grow, does everything have to grow linearly with it or can it be sub -linear, can it give us more leverage?

47:44And that's what we're seeing a lot with our customer bases. They are able to do more with their budgets because we're able to keep certain costs lower and have the efficiency of computers doing it where I think in other cases it was more labor intensive. Maybe that's good just to summarize. I think that is interesting. That about a year ago you started to see CIO's budget agenda AI essentially is a line item in the CIO stack, right? That I'm not, that is, however you define it, that's growth, right? That is growth in the overall spend, whether it's coming out of the, not growing the head count or coming out of getting rid of half of the support team, forget about where that's its separate issue, but it's budgeted, right?

48:31That is incremental. I think that's the that's the profound question there. We're getting incremental budget, right? Because that's what's got a fuel this growth, right? Not just for hyper scalers, but at the application level, right? Is there more budget, right? Otherwise It's just moving chess pieces around the board, right? If it's incremental, that's why it's the gold rush That's the gold rush is it's incremental budget, right? Bob and dude listen, I want to say thank you so much for agreeing to hop on. Thank you so much for providing liquidity to this ecosystem What we forget is that when you sell LPs get money back and they reinvested it managers like me and Jason and listen, it's been an incredible journey.

49:11So thank you so much and well done again. Awesome. Thank you both. Good to see you. Congratulations. Amazing. Love that. As I said, dude, I think people forget the kind of multiplier effect on liquidity and and how LPs getting that back and the recycling that comes from it, just so, so important. It actually goes to one of my questions that I wanted to ask you to, which is like, I think we're going to see a drastic reduction in the number of IPOs. When you look at Stripe, when you look at data, I owe you 50 grand, but keep going. Yeah. You do. I think it's actually 75, but you know, I owe you, I owe you this.

49:45But my question is like, are we going to see a drastic reduction in the number of IPOs with these case studies of bluntly the extension of private markets, favoring founders in in very effective ways. I think we don't know, Harry. I think that, first of all, IPOs are tough to pull off, no matter what looks like in the media. There's not that many buyers. It's a very niche thing to buy in the IPO when anyone can buy the next day. Most tech IPOs are flat two years out. So why would you buy in the IPO? It's a very, you think ventures in the chassis class, so is whatever people buy in IPOs. Okay, so there has a lot of stars have to align for it to be worth people's time, right?

50:27Overall, having said that, I think it's a gold rush. I think whatever we feel today, Stripe, Big M uh, um, Shine, the list of folks north of 500 million, okay? Canva 3 billion that are going to IPO in the next 18 months. It, whether it may not be at the pace of 2021, like we, I need someone smarter than me to put it in a spreadsheet, right? to look at the number of IPOs in 2021, will it be intuitively, I actually think it should be higher just because of the scale today, but it's going to be a gold rush. And these concerns we have around the quiddity in the ecosystem, I think will remain. I think it's a huge issue, but we're going to forget about it starting next year.

51:06We're going to get so drunk. We're going to get so drunk on getting our move works and whiz cash back. We're going to forget about that our cash is stuck in 300 unicorns. We're going to forget about it because no one wants to be. You can't make money as a Debbie Downer adventure, can you? There's no money to be there. So many folks we know after a decade and a half in venture become Debbie Downers, don't they? Oh, everything sucks. Seeds overpriced. Ownership is down. Founders quit. There's too much fraud. I've fallen into that trap once in a while, right? But you can't make money in that trap.

51:36Sure. My question is, do you really think Can from Figma will go public in the next 18 months? When you look at them, they have incredibly strong, both investor and consumer brands. Yeah, they can continue to run in the private. So you can see the maturation of secondary markets. I mean, early employees get liquidity. Investors get liquidity. Do you think they really do? My limb, I don't know, but I can tell you just one insight. It's a small one. One of these top folks that we talk about going public, but that might not need to, right? One of these folks recently tried to acquire one of my investments for a relatively high price.

52:07Okay. And they, they shared that they're quite plainly their goal was to IPO in the coming teens of months, okay? So if they're telling that to a target, just so they can understand the trade -off of cash and stock in the deal, right? I think that, listen, I'm not on every board. You need to get everyone on and ask them the same question. All the leaders, you're Sequoias and you're Mammunes. But I think that CEOs are, there are some exceptions. I could give you another story in a minute, but I think there's a ZAM that in the next 18 months, it's just time. And yes, you can do endless tender offers, but a lot of that is driven by taxes in the US.

52:43It's not really driven by the quiddity for investors. It's driven by this brutal tax situation of RSUs expiring They're expiring on employees and they're and they're becoming taxable events before the IPO That's what's that that and that issue lurks like taxes and headaches from employees. It's not And yeah, I don't know but this was just one story of them saying listen It's gonna come in the next 18 months and if they say 18 months that means it's on it's being planned, right? One thing I think that we overestimated Ventures, PE coming in and saving the day, so to speak. I think a lot of Venture Investors like, ah, PE's gonna be the savior.

53:18And it's like, actually, Settlesworth was a great deal, and that was kind of one of few where actually, PE really paid up. But generally, it doesn't actually work out that well for actual Venture Investors, I find. I'm more worried. So yeah, Settlesworth, I was one of the first investors. That was like the last deal, the last era, right? Well, that deal, that was the last one. Yeah, that was the multiple on that. I don't know. The seed was at eight and then what was an A, but really would be seed today, was at 29. Kyle tells that story a lot, right? I forget after that. But I don't think it was 100x, right?

53:52So it was probably 40x or something. I don't know. It come back, right? But it's still a lot of work to get. It is interesting. It's not, you know, we talk about 100x, but even that doesn't deliver. With delusion and time, it doesn't really deliver. So it's probably 40x, right? The a lot of learnings. But my worry, Harry, I'll tell you, I'm really on this topic. I'm bullish on the golden age, okay? But I have, of my investments, yeah, there was sales off to an F billion, but last year, like, one of the last of that group of investments is a chemical logical. They got bought from almost 300 million by PE.

54:24Okay, so there's a bother examples. There was, my first investment was pipe drive. That was PE for 1 .4 billion. In my portfolio, I have ones that are north of 20 million that are cash flow positive, that have strong assets and strong NRR, I haven't gotten any offers, haven't heard any offers. 50 million, 100 million no offers. So I know there's 400 private equity firms, I know Vista and Tom O 'Brawo have raised new funds, you have all these, and I'd love to get you to get them on your shows and ask them this question because I'm not seeing the type of just tire kicking that I saw a year ago. I'm not seeing it, I'm maybe other people with broader Our pro -flyers would tell you different.

55:07That's what worries me. I don't know. We're waiting for P to bail us out. Forget about the multiples and the waterfall. I'm not sure they have the appetite. I'm not sure they want to be stuck with these assets that they're like, you know, sales off to is a rocket ship. It's not in my business how it's doing today, but I don't think it's growing, right? And they merged it with drift and Gainsight just merged with Skilljara yesterday. Like all these piframs are mashing up these things to produce these Frankenstein's to go public. And I think it will work. But does that mean you want to buy another one?

55:35I don't know if you're seeing it in the US, but in Europe, the hottest thing in kind of this kind of weird Incession of P in venture is this services play with AI bolt on and it's how do we buy services businesses? And then juice up margins with an AI slash technology player around it. That is like the hottest thing in P today Yeah, but are they are they buying unicorns that are growing 11 % I don't I'm not I'm just not even seeing the tires being kicked That's my worry. I'm not even seeing the tires being kicked. Yeah, no, listen, I totally agree. I think we've got Andrew joining us.

56:11Now we can find out the truth about everything here. There we go. I had Andrew on the show recently. He's fantastic. It was a great one. Honestly, I got so many messages about the show. It's also one of those shows where there we go. Andrew, it's great to see you, man. I was saying to Jason, I love doing our show. I got so many comments off the back of it, Andrew. I honestly just asked everything that I needed to know and and then I feel there's so much more though I wanted to ask you and you know I'm looking at a lot of finance things that I'm seeing today and when we chatted before I asked you where is value in this ever changing world and you said compute and hardware and I know I'm looking at all of my friends who are putting a lot of money into compute and hardware and compute and hardware startups and I wanted to ask you should I be following them what should I be looking for in them I'm seeing some incredibly young founders I was with a 19 -year -old found to try to take on Nvidia this morning, raising $20 million for a pre -seed.

57:04How should I be thinking about this, Andrew?

57:09Well, if you don't know a lot about hardware, I wouldn't invest in hardware. I think Harry, it's probably the same in many things, is that hardware is not an easy place to make money. It's a place that has historically rewarded experience, both from investors and from entrepreneurs. I think the number of different technologies involved in designing a chip is extraordinary. Not just the logic, which is what most people think about when you think about chip design. That's just the fun and part. That's writing in very low level software. But the selection of tools, right, we pay millions of dollars a year in tools, the selection of geometry, right, which fab and having a relationship with a fab, you're going to pay 20 or 30 million in NRE and if you have a bug in your chip, you have to pay it again, right?

58:09The backend design and the time enclosure is an entirely different skill that the companies like Google outsourced to brought to Broadcom.

58:25It is an extremely complicated and difficult place to be and it hasn't historically rewarded 19 and 20 year olds where the market has rewarded extreme inexperience is where they look like the customer. The reason social networking was phenomenal for them, as you and I discussed last time, was they were selling to their friends. And this is something that an experience actually might have negative value on. We don't understand what is top of mind for the 18 to 24 year old, 16, 24, whatever. That category is extremely difficult to reach unless you're in it, unless you understand it. And historically, we're graduate students, right, tools for their friends, right?

59:14They go through the roof. When people in college write tools and write things that their friends want to use, VCs I'll take that very, very seriously. When there hasn't been a history of success in the same way in infrastructure software, in databases, for example, they haven't come from very young entrepreneurs. You know, sort of Salesforce automation has come historically from salesmen. It's not out. If you look at the history of Salesforce, back to Seabull, back to, right, these were people who knew their audience. And I think that's where young entrepreneurs have a tremendous advantage. And perhaps in these extraordinarily complicated domains such as chips and enterprise infrastructure, Sure.

1:00:10Those of us with a little gray hair, who are maybe a step slower in our 40 yard dash time, where we have some accumulated wisdom and that pays some dividends. Jason, I'm happy to have you. To ask you, does cool we've opened up a wave of excitement, a wave of investor excitement from here. Does it open up a wave of net new M &A, IPOs? How does that go in public? change sentiment, change investor appetite, change the ecosystem. I think the core weaves was, it wasn't an easy path to IPO, that they are an unusual business, they are creative business, that many of their innovations are in the finance structure.

1:00:58They were among the first to use the type of debt they're using to recognize the EG bar against GPUs and use their access to leverage advantage. I think for them, for their team, what an enormous success to get out the door. I mean, this is hard. And the number of people who tell you, you can't do it, the number of parasites that jump on to try and nibble a little bit. You know, you tell somebody, I want a great slide deck and they say $40 ,000. You say, it's for an IPO road show, they say $125. 25 and there's just this we're left nibbling away at you trying to tell you you've got to do it their way or you got to be sure that their clients get the big part of the first day bump.

1:01:46And I think as entrepreneurs, we've got to be focused on the people who are behind us, the teams that we built, who've invested careers behind us and our investors who've been with us long periods of time. And we've got to be focused on them. and I think to a person, the entrepreneurs inside of CoreWe were extremely happy at the outcome. And yesterday's performance was phenomenal. The short sellers got squashed. And I think they're long -standing investors are extremely happy as well. I think after that, Harry, the proofs in the pudding, what you need to do is you need to go and execute. And what you did on the first day doesn't really matter.

1:02:24I think what matters is where you are in six or eight months and where you are in two or three years. and are you able to build the business, use your new capital structure to generate value? I don't know what you guys think, but it seems to me that we make a big deal of day one. I think we should make a big deal of day 180 and day 365 and day 450, right? We should see. Does this new money does a new capital structure? Are we entrepreneurs able to execute in this new environment. I think those are the things that matter. I think whether your banks made money, whether it was hard to get out the door, I don't think entrepreneur should care very much about that.

1:03:07Jason, there's nothing weirder than being an employee the day after the IPO, right? Because you go back to work, like you turn out your computer. Actually, you have a lockup usually. You're not liquid, right? Even if you are, you're vesting, right? It's just, and everyone's like, go back to working, It kind of feels weird. You don't know, should I be doing my normal job? Is it over? Is it just beginning? It's just, it's a weird, the day after the IPO is an employee, weird day, weird day. I think that, that's exactly right. I think that it is not the end. It's the beginning. It's the beginning of adulthood in a company's love, right?

1:03:44In a particular form of adulthood. And it, you now have to execute. You have traded lower cost capital for a different level of discipline and oversight brought on by both the markets and the regulatory infrastructure. And what you need to do is go back to work and crush it every day. And nobody talks about that. What they talk about is, oh, look, Goldman did this or City did that. And what matters is, is, are you managing to keep your engineers from being be focused? If your stock goes up a lot or goes down a lot, do you keep them from... Emotional whipsaw, right? I remember when we took a company public and way back in the day at Riverstone, I mean, those a day our stock was down and individual engineers lost more than their father's made in their entire life.

1:04:41And it is extremely difficult. It is extremely difficult to work through that I did not be affected. And so you have to prepare your team, you have to prepare yourself. And guys used to tell me, we know what our stocks doing based on a look on our CFO's face. That had a bad place to be. Guys were a little scripts and so the net worth was streaming across their monitor as each trade happened as their stock went up and down. I mean, you have to get past that. None of that is helpful. Jason, how did you analyze it? The cool weave. Well, listen, I love what Andrew is saying is they've done a very creative and clever way of using debt in other ways to monetize a gap in the marketplace, right?

1:05:35Being able to probably cut in edge GPUs and making it accessible and affordable. I mean, I have to say I'm very confused by the financial engineering. I'm very confused by the debt loads being sort of off balance sheet I'm very confused if they will have the cash flow to pay it off I'm very confused. I'm very confused if they all have the cash and what I really don't like going back to kind of some of these old Day stories Andrews said I'm I'm nervous about this this put option that the last round investors have Coat to put back almost two billion of stock right? I'm worried about because I lived through that once as an employee And it created a death spiral at a company, right?

1:06:13So once you can't explain that. What does that mean for everyone listening just to put option on? Well, look, by understanding, having read it, it's discussed, but under discussed, is the last round investors, obviously they weren't fully aligned on the price, right? And so there's structure. And I don't think this is a bad thing. It's okay for late -stage investors to be more conservative on price than founders. Like, and so they agreed on a deal. Look, if we don't trade up 70 % from the IPO in two years, you have to buy all our stock back. You have to buy all our stock back. And on paper, that might make sense to a late stage of history.

1:06:44It's not like they're making a profit, right? It's not like getting your money back as any profit for the VC. But the problem is what tends to happen if the company isn't generating a mass cash flow, where are they going to get $2 billion? And Corvay doesn't have the $2 billion per se, right? I think they'll probably get it. I would imagine open AI or Microsoft would give it to them. But if it doesn't, what happens is, I think it puts massive pressure on the stock price when people don't think it's going to happen. It accepts you up to have your head cut off in two years, right? Because the shorts come in hard.

1:07:15They come in hard. I just worry about it. It's stressful. I'm not a public market investor and in my comments weren't sort of about the deal structure and I think there is a lot of complexity in their deal structure. complexity and I think for me I've tried to avoid complexity. I think if you can get a term sheet in a page or two, that's really good If you can describe very simply, what both sides are getting. Right? You're getting, if you invest behind me, you're getting our passion and our drive and our innovation. And you're getting every day of drive. And in return, I'm trying to deliver a return for you in line with the risk you're taking.

1:08:03You got to be able to make that very, very clear and simple. Now, there are other people who have made a great deal of money and do really well and very complicated transactions. That's not historically where I've chosen to participate. And I think I'm not an expert in the debt. I know the guys at Cotou did some of that debt and their investors behind us. And I know some of the guys at Altimeter did some of the equity and their investors behind us. And so they're extremely sophisticated investors. I'm sure they did their diligence and were very careful. But I think in general, I think for entrepreneurs who I think are Harry's audience, getting out the doors extraordinarily hard and Kudos to them for doing it, Kudos to them for being creative, and now the balls entirely in their cortex acute, they got to deliver.

1:08:54My fear with the put option is that it puts such pressure on that you no longer have a long term, you have a two year horizon. You have a date that you have to deliver to. And that can create bad incentives, but I'm sure they'll manage that. And the only question on the table here is, can they move from being what they are today, which is interesting financial engineering, good execution, to something bigger and better. They bought weights and biases. I thought that's a step in the right direction to build a comprehensive software layer to provide some new value. But I think as an entrepreneur, you see people doing creative things, getting out the door and you say, Godspeed and we wish wealth.

1:09:41I think now go and execute where, even though you guys deliver primarily in video gear, we're 100 % behind entrepreneurs doing interesting things. Andrew, can I ask a different question? I think you might want to do more on Corvieve, but just because we have Andrew, You know, it is, I can't believe I'm gonna say this is trending, but it is certainly trending in a sense to try to sell to defense, right? All of a sudden entrepreneurs are excited. I'm sure Harry met with a 16 year old entrepreneur yesterday that wants to sell to defense. You've just closed a deal with DARPA, right? My limited life experience as an entrepreneur is this stuff is hard.

1:10:15It takes a long time. The money is there. The money is there, right? But the qualification times, the times to market, I mean, my God, maybe the world's changed. But what have you learned? Is this a great place for VCs and founders to go? What have you learned selling to the Starpa deal into defense? I think one of the real challenges for our department defense is their pyramid structure is designed for them to buy without trust from Lockheed Martin. Yeah. And huge primes. And when small innovative companies come, they're both parts of the Department of Defense that you bolt on to neatly, right?

1:11:03When you go to sell to an enterprise and say, I'm looking for the senior VP who's responsible for AI analytics, that guy's responsible, that woman's responsible for this, this, this, and this. Who's responsible in the Air Force for innovative solutions, using AI across X, there's not a person, right? It's extremely difficult to find. So the sales process is really, really hard. Yeah. And then the contracting is mind -numbing. And the contracting is something that, you know, if you on and the Trump administration could do something to change the contracting. I mean, what happens is when you contract with zero trust, you end up with Bible -sized contracts.

1:11:49Right? If you don't trust the other side to do anything well, to have any integrity, to do anything, you end up trying to specify every case, right? And you tack on that always policy dimensions, and you end up with contracts, they're literally this big. And it is a very difficult place to sell. It is a place that once there's a reason why, for many of these, we partner, we're doing a project right now with the Canadian military and we partnered with Dell. That's why sort of HP federal, Dell federal, the big integrators often are the vehicle in. But they help you overcome this one piece, which is just the contracting is extraordinarily difficult.

1:12:39Finding the right people who are bold and innovative and are looking for new technologies, it's not easy. And I think it's not an accident that the people who had success have done it before. Right. And you don't have to be the founder who's done it before, but your co -founder could, or your head of sales needs to or your CEO needs to, you need to find people who have built a career in that community. And that takes a tremendous amount of effort and work and they aren't hanging out at sort of coffee shops in Palo Alto, right? That's not in the good job.

1:13:27Having the I think, and it's not just the role of that, it's a mindset of this is how the military procure or commerce procure or this is how the FBI or the CIA or the NSA are the national nuclear security agency. This is how they go about doing business. That is, it looks very different to sales cycles very long, the contract is very complicated. it is unclear. Often they will make requests. You know, we are in the process of meeting some of these requests, but they might make requests that you have cleared people, right? How are you going to support your equipment if it's on site at a secure facility?

1:14:15So either you need partners that are clear, you need to get cleared people. Sometimes they want to manufacture inside to be cleared, or they want you building to be cleared. What if you have Persian employees? Sometimes you have to put them in a building next door. The complexity of selling to the military, not just the US military, I think the Five Eyes, so the Canadian, the Australia, the English as well. This is hard. Do you have a consideration when you're selling them given cost plus and their bluntly willingness to pay traditional pricing and operate in traditional pricing structures? Given that and your ability to sell to any customer on the planet, that there's a real opportunity cost of your time and resources for something that might not actually be worth it, given the sales cycle, the procurement process, and then the cost plus structure at the end of it.

1:15:06Yeah, I think what cost plus is, it sounds like a good path, but it is a terrible way to do business. It's a way of business that says, we don't trust you and you're going to slam as much cost as you can into the cost side. And we're going to try and run around and make rules about what goes in and what doesn't. We have a system for this called accounting. We have a generally accepted accounting principles and while they're not perfect, they're not anybody. And so what we're going to do is pretend that it's cost plus. Now if you've ever built a home and your contractor runs cost plus, you know exactly what happens, right?

1:15:56The contractor doesn't, doesn't negotiate with his window guide all because he's making 17 % on top of whatever the window guide charges. So the incentives are dead wrong, right? And it's exactly the same. You know what you want is innovative people. You want to structure that can take a little bit of risk where if the innovative technology or invest behind innovative technology, they're not fired if it doesn't work. What innovative technology means is the probability of failure is higher. That's what it means. That's why VCs need higher rates of return to the earlier stages. You have to take a more risk.

1:16:33If you want to do true innovative things, then your procurement arm needs to be able to withstand some false starts. They need to reward big wins rather than reward not getting burned. You need to have a mechanism for smart people to participate. Right? I mean, it is a real challenge for the military to hire and retain world class AI scientists. Right? They are. I honestly don't know how the military or their NSA or stuff does. I don't know how they recruit them. Right? I don't know how. It's hard. And so I think these are all challenges. Now what Andrew has shown, and I think what some of the war in the Ukraine has shown is that commercial technology can really have an impact in a way that was unexpected.

1:17:28The drone behavior using basically drones, you could buy a Costco. I mean, these aren't heavyweight military drones, but their drones that were designed for hobbyists and 16 -year -old kids are playing a meaningful role against Russian tanks. I think that is a wake -up call to the military and where interesting technology could come from, it doesn't have to come through the traditional primes, the traditional Lockheed Martin or Lidos those are these other guys that are so entrenched in building weapons systems. They can come from other places. And that some creativity and innovation can, can, can meaningfully impact ground warfare.

1:18:19I mean, there's a big push in the UK that when you look at the defense budget spending that I, I can't remember what the number is, but it's 20 pounds. I think we're pushing towards that that goes outside of primes. So it goes to net providers to encourage this kind of double classification of supply from different providers. You know, I'll tell you a funny story that happened to us. There is a mechanism in the US government's contracting, designed for smaller companies. And it's called an OTA, an alternative, something or other. And it was designed for to simplify the contracts to make it easier to contract with us.

1:19:05And we have a big project with government. The procurement agent, it was agreed that this would be an OTA procurement agent took the standard contract, cut and pasted into the OTA. So we have the exact same contract as we would without the OTA. Right. Wait, that, that, there needs to be sort of a cultural change, right? And I think that takes real time. And I hope that the success of Andral pushes that. I hope sort of Elon's success in showing the world that you don't need to be NASA. that build rockets, turns out that really smart engineers in Silicon Valley and in Seattle and in LA, build rockets too.

1:19:57It turns out that creative people under tremendous pressure in the Ukraine can use commercial things that are just above toys to have a meaningful impact in war. I think all of these ought to be in the new calculus of how we organize the acquisition of innovation and the procurement of acquisition by the government, particularly the military. Andrew, listen, dude, I cannot thank you enough for jumping on with us. I so appreciate hearing your thoughts. It's great to have you here. Well, I enjoy talking to you guys. I really appreciate you making a few minutes to chat. I'm anytime you want, I'm happy to jump on and talk about technology and any doubts.

1:20:45We love it. You're all started. Thank you so much, man. Awesome. Be well, my friends. Cheers. Awesome, my friend. Listen, before we wrap up, I just want to finish with a bat. You can have a bat with me. We've done bat as before. I'm up, whatever it is, 50 or 75 grams. Yep. I got it. I got a wouldle down. You got to win it down, baby. What's your back gonna be? What's my bet? Yeah, like what do you think we should bet on? um How many deal executives leave in the next 90 days?

1:21:27Okay, you want me to come up with another one? I can go with more. I you can do it. Yeah, for it What do you think it's gonna be? Three I say three executives and I'll I'll let you define executive loosely so that you come out ahead on this bed I'm gonna say three executives leave in the next I think I think it's gonna be one Well, you're gonna lose I'm gonna you 50 grand on this you're gonna say one executive. I'm not betting 50 grand I'm betting about a hundred dollars 50 50 50 50 thousand pounds instead of dollars Then we gonna do another back because I'm not gonna this is a sacrificial lamb I see.

1:22:02Okay. The one thing I say, the one thing I think happens now and this is a new phenomenon that we've seen in the last years is that new cycles move faster than ever. So fast. With the rise of Trump, with the rise of Elon, with the rise of Sam Altman and AI, bluntly, this is super hot today. It will not be super hot tomorrow or when I say tomorrow, I mean, even next week. Now, it's we it'll become stale. It's a weird world. It becomes stale. You don't care. Yeah, and so that's the only thing that I think it's like this too sure pass I don't say that's exactly what I'm not passing comment on it, but cycles move so fast I Think to your point on how many leave given the speed of cycles less than people think I'm still going for three and I mean I have thoughts, but it is just I'm just just being practical I think I think I think it's just for the shareholders I think it's gonna be a very successful company going forward, right?

1:22:56founder led, but I think three folks gotta go. I think three folks gotta go. But the news side, I mean, I'll tell you we could break. I mean, you know what? I mean, you're a news expert. I can't believe we don't even talk about the fact that two people tried to assassinate Trump. We forgot about that in like a week. I mean, if this was like five years ago, we would be talking about this for four years, right? We would talk about your president and Monica Lewinsky for a decade. We're not even politics aside. We're not even talking about multiple assassination attempts against the president, right?

1:23:22I mean, we forget get in an hour today, we forget in an hour. To your president's flogging Tesla's on his front lawn. And then JD Vance is, you know, trashing the European leaders of the world, saying, hey, you need to defend yourself. And everyone should move. And we'll forget in a day. We're gonna forget in a day. When these tariffs end, we're gonna forget we had them. We're not even, we're not even gonna talk about them. The day the tariff ends, the next week, we're not gonna talk about tariffs, are we? So, we're gonna talk about this week. Jason, thank you for doing the daily deal with me, my friend.

1:23:52and I love doing it. You're a star and I look forward to the next one. All right, man, you're the best. Talk to you soon, Harry. Stay well, brother. BELL RINGS 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. Wow! Second, Kajabi's users keep 100 % of their earnings with the average Kajabi creator bringing over $30 ,000 per year. In case you didn't know, Kajabi is the leading creator commerce platform, with an all -in -one suite of tools, including websites, email marketing, digital products, payment processing, and analytics for as low as $69 per month.

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