AI Producers, Tesla Robotaxis & the Rise of the “Tiny Teams” Era | E2142

27:41I would love this. Someone please come to my city, Jason. The other big picture I think here to look at is there's no reason to rush. Sometimes people, startups and founders get a little bit edgy about losing market share and having to catch up. And they think they're in a race with a competitor when in fact, you have to actually really assess where the race is. The race we're talking about here is car ownership versus non-car ownership. It's not a self-driving race. So let's just pause and understand the game you're in. There's a really interesting concept of finite games versus endless games, right?

28:25Finite versus endless. A finite game, there's a winner and a loser, right? And you play and it's miserable and you don't enjoy it until after it's over and you've either won or lost. And when you win or lose, then you have, you know, this moment in time where you feel great and then afterwards it kind of sucks. you know other games like you know when i go skiing skiing is an endless open-ended game it's not a finite game i can ski many different mountains around the world i'm not skiing against anybody and it's the enjoyment of the game here if you think you're in a race it's going to be miserable if you're you know it's waymo versus uber and lyft or you know waymo and uber versus tesla versus ux what you're really in a race here in this infinite game is car ownership.

29:15And in that way, everybody's on the same team. Zooks, Uber, Lyft, Tesla, they're actually all on the same team. And right now that team has one point. The other team has 99 points. So now we get into the finite game. It's an infinite game. People can take an infinite number of rides and will if the price keeps going down. So if you frame it like that, then it's car ownership. And Tesla becomes a very interesting company, right? Because they are still selling cars. So car ownership matters to them, but they also see the future and they're disrupting themselves. So now you get to the concept of the innovator's dilemma.

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31:15So one side of their business, the balance sheet of buying cars with young people might go down because riding in cars is going up. Riding in ride sharing. I think we're going to get to 20 % of rides will be done in a robo taxi, a Zooks, a Waymo, an uber a volkswagen a tesla within 10 to 15 years i think it could be 20 of rides and um if that happens that means you need much less cars many many fewer cars will be needed many fewer will need to be produced which means that an environmental basis you know i think we make 50 i think i make 70 million cars a year globally and i'm pretty sure uh it was a good job for producer what i'm pretty sure um you know toyota and volkswagen are you know your main players there and the chinese are coming on strong i think they're exporting about five million cars a year now which 94 million cars made per year as of 2020 okay okay great yeah i have all day it was 70 million was my old number so yeah let's let's call it we're you know getting close to 100 million cars a year you you for each percentage point of ride sharing you know you're talking about 10 million cars.

32:31It's going to be a lot of cars need to be dedicated to this. But at some point, there are enough. So if we all of a sudden could redirect all hundred million towards ride sharing, I think it'd be the end of car ownership. But we can't. There'll probably be one million or two million of these created per year out of that hundred million. And then it will get to three or four and five and six million per year. And we'll be off to the races. Volkswagen made an announcement last week that they're going to sell ID buzzes with full self-driving to anybody who wants to buy them. This is a real shot across the bow of Tesla and the entire industry.

33:08And then Waymo announced that they're giving their software to Toyota and you'll be able to buy a Toyota robo-taxi. So now you'll have really three players you can commercially buy as a consumer a self-driving car from. So you could own it and sleep in it. Very interesting how this chessboard is going to go. But again, the great part about this game is everybody who is on the side of non-car ownership has an opportunity to win big. Let's move on, Jason. You wanted to talk about this really interesting job posting from our friends over at Quora. But if you don't know what Quora is, it's a well-known online question and answer service, Jason.

33:46But the second act of the company, most recently, is a thing called Poe. It's a service that allows you to interact with a great number of different chatbots. Users can pay between$5 and$250 a month for Poe to get more credits to use more AI models. Seems to be doing quite well. But we're curious today about a new job posting from Adam D 'Angelo. And this is for a new role that he says is, quote, a single engineer who will use AI to automate manual work across the company and increase employee productivity. You thought this was incredibly interesting. why did it catch your eye? I think somebody is going to figure out how to manage an entire company by AI.

34:29In other words, AI CEO. So here we are with producer Claude introducing it this week. Hey, this is an important role. How can we train the AI to be a real-time producer? In fact, my long-term goal for producer AI is to have it listening to the show, a year from now, I'd like producer Claude to be able to interject and maybe put data points on the screen without us asking. So it anticipates. So I say, what's the market cap of Volkswagen? And all of a sudden, just producer Claude comes along in the bottom and puts it there. Eventually, it could be an avatar. It could talk to you, but maybe not breaking in, but just slow and then fast.

35:03So when somebody like Adam, who is deep in the AI game and Cora, my understanding is they're doing a ton of licensing and training data. They're in a really good place. And we saw a scale AI bought by Facebook doing like a training data company. I think Quora kind of falls into that category as well. When you see the founder saying, I need somebody to examine every single function or role and have it, you know, attacked by AI, relentlessly ripped apart and automated. This goes back to the blog post I I wrote automate, delegate, deprecate. And then I wrote a blog post this weekend on Sunday, I shipped it on Saturday or Sunday, about just, hey, we don't talk about job destruction anymore.

35:53So here, when you look at the responsibilities, develop and maintain internal tools and systems to automate existing work and increase employee productivity, that is the high order bit. What that means is, what are the employees working on that are chores, that are not the main thing that we can take away from them? away from them. And instead of having employees do this, you have an outsider, an agitator coming in and saying, I looked at what you do and I've automated it. So an individual will never automate themselves. Why? There's going to be some natural fear that they'll automate themselves out of a job.

36:26They'll be, they're too busy to do it. They'll be, they lack objectivity. They think that there is something special about what they do, right? And so the unique thing about this is that they are an outsider watching people work and eliminating work, taking things off their plate. So I anticipated this. I've been talking about it. And when you see CEOs do this, and then you see the reaction, I don't know how many millions of views that tweet got, that post on X got, but I'm going to guess millions, like two or three million people probably viewed that. Because I saw a number of other CEOs quote retweeting it like I did and saying, everybody should have this position internally.

37:11And in fact, last week, I asked the team to start thinking about a growth and automation position here at the firm. So instead, because not everybody knows how to build these tools or likes building them to just look at every function and figure out how to grow that function and make that function more automated. As an example, when a founder sends us an update, we have a tool that reads the updates, looks for the important data in it, like what's their burn? What's their revenue? What's their growth? And then try to map those to fields in a database and write summaries. Founders will write us, God bless them, 1 ,000, 2 ,000 words, of which we have to scan that email and get the top five or six data points.

37:57And if those data points aren't in it, the next phase of that tool will be to reply to the founder and say, hey, this is the launch AI bot. Can you give us the last three months of revenue, the last three months of expenses, and then the last three months of burn, which is those two numbers subtracted from each other? And can you tell us the headcount? Because we don't have headcount in here. And can you tell us the cash in the bank? So we need to get those numbers to anticipate fundraising. And we are going to have the bot in the next iteration, not just take the update they send us by email typically, or sometimes they'll send us a Notion page or a DocuSend.

38:38You know, we're going to do it that way. So that is, I think, the big innovation here is that an outsider is going to do it. Be scared, folks. If your job is easy to do, be scared. I'm inviting you to be scared. So to answer your earlier question, Jason, 1.4 million views on that tweet. So that's a lot on X. And also, I just thought your point about not everyone knows how to use these systems was actually really dead on because one thing that surprised me when I was reading the requirements for this job at Quora, they want five plus years of, quote, experience in full stack development with strong skills in Python, React, and JavaScript.

39:18And they want experience creating LLM-backed tools. So this is not a job for someone who is just an AI enthusiast. This is for an AI engineer, which I think is where we are today, probably in a year, it'll be easier to fill with a lower technical requirement. But the thing that I'm really curious about is what stage of a startup is the right one to bring someone like this on? Because if you're two people, you don't need one. If you're 2000 people, you should have one. So Jason, just in your thinking, when is the startup big enough that it should have someone dedicated internally to beating back at cruft and delay?

39:53The founders should know how to do this. And when you get to, you know, scale, maybe 10, 20, 30 people. Yeah. Having somebody do this sounds like the best possible use of your capital, because what you have to ask is, how much more efficient will this person make the organization per year? I'm going to guess they make the organization 10 % better per month, but I'll put it at, but 2 % better a month. Can an AI optimizing person make the organization 2 % better a month is your calculation. 2 % compounded for 12 months, that's obviously a bit more than 24%. I don't know what it is. A great one for Claude to do for me off the top of my head.

40:4027%. Perfect. So you're 27%. Okay. So if you had five people, you'd be in the black. If you had 10 people, that's only 10 % of your revenue to make everybody else 27 % more effective. Oh Lord, you get that 17 % spread. If they were in fact, 10 % of your spend, and it might be you're spending on other things besides just salaries, but on a salary basis, it would be 10%. It might be 5 % of your overall spend or 7%. Usually staffing is two thirds of a startup's expense or any companies in tech. So this is a big deal. I think this is the future. And I think job displacement and doing more with less is a trend that is accelerating.

41:24When Andy Jassy wrote his note last week, did we talk about that on Friday? We did. We did. Okay. I've got so many podcasts I'm doing. I did Twitter on Sunday and talked about it all day. I went all in, it came up. And then I wrote this blog, this Substack this week on my J-Cal from All In list. I have a J-Cal from All In list where I'm talking about the subjects from All In. And then I have the startups one, which is just, I think, calacanis.substack.com, which is where I'll talk about startup stuff. So, you know, maybe politics and think pieces on one and just straight up startup news on the other, but I cross-posted it.

42:02And the thing in the industry is we're just not talking about the job destruction, displacement, automation, however you want to frame it. You can frame it how you like, what you can't do is deny it's happening. And I felt the need to write this piece because people are specifically telling me to stop talking about this. Whenever somebody tells me to stop talking about it, I do the opposite. I lean in. So when people are like, hey, don't talk about Trump and tariffs, don't talk about job displacement, don't talk about crypto and scams, we're all making money, then I talk about it more. That's just who I am.

42:36So, you know, I talked about crypto and the crime and, you know, all that stuff 10 years ago. And for the last 10 years, I talked about Tether, human trafficking, whatever the issues are around these issues. I'm going to talk about this one. If you don't like it, tune into another podcast. They'll take you. Yeah. You can just go, yeah, listen to another podcast and they'll lie to you. The truth is this is going to be the fastest job destruction in human history. The fastest job destruction in human history. So what one must do in this situation is just understand that's happening and think about the opportunity.

43:15The opportunity is there will be many, many white collar individuals and many blue collar individuals. and I'll say entry rung in jobs, people who would have taken the entry-level jobs, the bottom of the ladder, jobs, dishwasher, greeter at Walmart, the least qualifications necessary, the lowest paying jobs in the world, picking strawberries, driving an Uber, whatever the least amount of skill you need and the least credentials, those jobs go first. At the same time, management and white collar jobs that are not highly technical or highly human, they're going to go as well. And so here we are, folks.

44:02The opportunity is for startups that use that surplus. There will be a surplus of humans available. The white collar ones should start companies. The blue collar ones should also start companies. If you're a blue collar worker and you can get 20 people together, you know what's not going to go away? Like home repair. handyman jobs, gardening, like those jobs are very intricate and difficult and nuanced, and you can learn anything. Long story short, huge opportunity coming for all this surplus. Absolutely. Just one last question on this, because I was really trying to think about the future of this.

44:37So how do you measure ROI inside of a company that's trying to automate tasks? Is it just like how much slower your hiring ramp is because people are freed up to do more? Is it your software spend you might be cutting out? How do you make sure that you're doing this intelligently to actually move the company forward versus being performative about it? Previous cost versus current cost. Previous time to complete tasks versus current time to complete tasks. And you really have to be monitoring those things. As an example, when we would have an application for funding or we would get like an update from a founder who we'd already invested in, these were 30 to 60 minute endeavors.

45:13okay now with ai summarizing a deck ai summarizing an email ai putting the data from those two things into the database to start you take out about 80 of the work because a lot of it was manually saying this is a sas company this is a marketplace this is a fintech company this is a company that's raising a series a this is raising a seat a lot of times they'll just tell you i'm raising a seat I'm raising a series A. Where's the crunch-based link for this? Where's the LinkedIn for these founders? A lot of this stuff can be done with AI. And so how much time were you spending on it previously? What are you spending on it now?

45:50And then times, the number of times you do that task. We have 20 ,000 applications for funding. If you save 20 minutes per application, that's 40 ,000 minutes a year. That's a lot. Yeah, that's almost 1 ,000 hours, 800 hours, whatever it is, like 800 hours. The average employee probably works 1 ,600 hours. Now, technically, they should be working 2 ,000, but we all know how this works. Some people work more, some people work less. People have vacations. People drink a cup of coffee and hang out at the water cooler. Ballpark, that might be like half a position. When you replace half a position, then now I have redeployed in our venture fund that time, and I'm finding we have more time to talk to founders.

46:31So we started something where we're doing pods of portfolio companies. So I took 11 people, divided it by the number of active investments we have, which is maybe 250. Each person in the company has a 250-person pod. I'm sorry, a 25-person pod, 20, 25 founders. They invite them every month to hang out in that pod and just give an update to their fellow founders and themselves. And we're having, I think right now, five to 10 of them show up. And we just did the first one. If in the next one, 10 to 15 show up and we grow from there, just more times of us having an opportunity to understand where the founder's out at.

47:09And we were previously, you know, be looking online for that information, et cetera. So you can just level up, level up, level up, redeploy that time. But I don't think we'll ever hire another. I don't think we're going to hire people in relation to our portfolio size anymore. Okay, so this chart from Apollo. Share of firms answering yes to the question that they have used AI tools in the past two weeks. So this is a question asked ostensibly to CEOs. Did their firm use AI tools in the past two weeks? Only 9 % of them said they are using AI tools. So this to me is an incredibly low number. I would ask the question, how many?

47:53If you go to a startup, you say, how many AI tools are you using? Man, if I asked one of our founders, how many AI tools, how many AI tools did you use in the last two weeks, Alex? How many AI tools have you used? Five to 10, probably on the other side of that. Yeah. I was going to say five at a minimum. Yeah. And so I think I've used six or seven in the past week easily that I've dipped in and out of. So this is incredibly low, but I think these might be legacy firms. I think for startups, and that is the advantage. That's the advantage for sure. This is definitely the pool of 1.2 million is a large number.

48:30All I'm trying to say is that as we think about how far startups are taking this, the rest of the industry is way behind them. So there's a lot of gains coming and a lot of also, I think, startup revenue to be made because there's a lot of people in lost seats to sell. So it's very, very encouraging. Now, on the small team size point, would you like to see, Jason, a list of the companies that have made the most money with the smallest staff? okay most money smaller staff so this is back to efficiency yes i would love to see that all right so let me uh just pull that up for you this is a website called the tiny teams hall of fame and i saw this and i thought to myself jason's gonna freaking love it so here we are jason as you can see this is a tiled list of companies with essentially how big their team is and how much revenue they have generated mostly measured in arr and some of the data here is a little bit dated.

49:20For example, we know Cursor's at 500 million ARR, not 200. But it goes to show just how many companies are building quite a lot with very, very few people. Magnific, a startup that does AI images, 10 million ARR, two people. Mercore, a company we've talked about on the show, 30 people, 50 million ARR. This is no longer just a proposal. This is now a reality. And I'm blown away by this data. Pretty incredible. If you were to look at Lovable, we had them on the program, 17 million ARR, 15 people, a million per person. I think a million per person is a pretty predictable bogey now. 200 million ARR, 20 people at cursor.

50:05If that is true, it's 10 million per person. And, you know, if the average person all in is 150, 200K per year, depending on benefits and how, you know, seniority. Because remember, AI employees are paid much more. So we've seen this, you know, there might be one or two people at Cursor getting paid a million dollars a year who are AI scientists. Then you might have AI developers getting paid 250. You might have a product manager getting paid 150. then you might have a bunch of people getting paid 50, 75K who are in other data labeling, you know, less, you know, developer tech-centric jobs. But$1 to$20 million seems to be the average.

50:46This would be great in a database to see the average and the trends. And that will be the interesting thing is where will these companies be over time? It's unnecessary to make$10 million per employee, obviously. So then you have to ask yourself, is that company, If I was on the board of that company, I'd be saying, why do we have so few people? Why don't we have 20 people in Japan making a Japanese language version of this and go down to 5 million per employee? And in fact, why don't we also have a sales team in Germany and a German language version and have five people there? And what are the other markets?

51:23Why do we not have people in India? And also, why don't we have a training course for young people and an educational effort where we have five people working on bringing this technology to, if it's so great, to universities? And so what you just saw happen in my mind was capitalism at its best. Great capitalists, great entrepreneurs. I'm not saying I am one, but they will look at, oh, my God, how profitable can this company be? And then when the profits come in, then you say, oh, wait a second. I have product market fit. I'm profitable. How can I increase the velocity of that top line? We know that the bottom line can be profitable.

52:07That's what happened with DoorDash, Uber, and some of these other companies. They were losing money. Robinhood was probably losing money every time they got a new customer. They were investing. And then suddenly it flips. You go out of the J curve, and money starts raining down. So this is going to be a great moment in capitalism where you have the luxury. If you're getting profitable so early, you're going to have the luxury to say, what would we do if we could hire three more smart people in Germany? What would they do? OK, we'd have a we would start hosting a weekly in the German language cursor webinar, and we'd have an in-person, you know, cursor con.

52:49and we take cursor con around the world and we'd send the same team to different cities and have them train people and buy them bagels and locks and have a great time uh so you being a money printing business you know is great but if you make i mean i can't believe i'm saying this but if you're making if your earnings are too great then you're going to have to give dividends to your shareholders buy back your shares incredibly boring i would these companies should be asking how can we grow faster? You just said music to my ears. Share buybacks, incredibly boring. Agreed. Now I ran into this, Jason, because I was reading a couple of articles, one from Bloomberg, one from the Times.

53:26And both of these actually are talking about this trend of startup founders building quite a lot with very few people. So I think the broader media landscape and the public are catching on to it. Who wrote the story? The New York Times. And this was from Bloomberg. Yeah. Oh, what was the New York Times story? I missed that. When was that? uh the new york times was from february 20th 2025 it was entitled ai is changing how silicon valley builds startups and then bloomberg's is from june 20th silicon valley's tiny team era is here okay uh but here's the cool thing jeffrey busking from flybridge capital uh teaches a class at harvard and he was telling his class that they should prompt chat gpt to quote act as a co-founder to develop their startup ideas and this struck me as slightly worrying but i just wanted to get a vibe check from you.

54:12If someone came to you and said, Jason, I'm a co-founder, sorry, I'm a founder. I'm not a solo founder, though. I also have my AI co-founder. Would you laugh them out of the room or take that seriously? I would take it deadly seriously because it shows like some visionary lunacy that, you know, when you see something odd, weird, peculiar, peculiar is like maybe a good word. The weird stuff is the most interesting to me. So I would say, tell me more. And then people hiring agents. Remember there was a company charging 15 ,000, like build an agent to do this. Like that could be the future. The future might be, Hey, we've got this Claude producer and we wanted to do really cool stuff.

54:58We need somebody to write that code and to, you know, write the prompts for us and to iterate on it. So there's somebody out there who is a specialist at Claude and Zoom and audio and video and podcasting, and they just keep building tools. And that becomes a startup in itself, or they just sell you the agent. And then your agent goes for an upgrade, like buying droids. So there might be like Jawas out there doing this kind of stuff. I like it. Sure, why not have an AI co-founder? You were much more positive about that than I expected, but I'm totally here for it. I also like the idea that people can create what they don't have on their own and just be a little bit less dependent on other people joining on early.

55:42So that's a good way to build more companies. Build a board member. AI board member would be incredible. They're out there looking for opportunities. They know what board members ask. That would actually be a really interesting tool to give to founders as an AI board member and give them like the five classical personalities of board members, the venture capitalist, finance person, the former CFO, again, another finance person, compliance person, an attorney, a former founder who made it big and is now retired, a product-driven person, you know, a strategic, somebody who works at another company that made an investment, you know, they're working at Intel or Microsoft and their venture arm investing in your company.

56:28And that board all bundled together and built out is reading your board deck and you get a preview of the questions they might ask. I think you could do that today. You could just take your board deck and say, you know, what would board members ask about these? And I wonder, I bet your founders are doing that already. So Lon just told us, producer Lon says that he had a founder university company in his pod that had a board of directors that was entirely chat GPT. So apparently we're trailing founders here by a little bit, but I think this is going to become pretty common because not every board member is so unique as to be unreplicable with a digital system.

57:05You know, I have this domain named begin.com that I was able to acquire, and I've been thinking about something in this zone for it, like for startups, for companies like the begin, you know, board or, you know, co-CEO. We always talk about co-CEOs being a bad idea. What if, like, again, was the co-CEO looking at all the data and telling this, you know, CEO coach, right? A CEO co-pilot. That's an interesting idea. CEO co-pilot. I like that. I like that a lot, too, especially if you want to think about, like, cybersecurity and compliance checks and what are all the boring things that you forget but you need to know as a CEO.

57:41Yeah. I dig that. I want to talk really quickly about one more founder thing. This is a story that I think is pretty cool. So, Jason, we've talked about Mark Zuckerberg, who is trying to hire over at Meta a kind of cream of the crop of AI talent to build out a new super intelligence team. There was a recent story from the journal that came out, and it's a bit of a retread of the overall idea that what Mark's working on and how much money he's going to spend. But what struck me is how hands on Zuck is here. So he's actually in a WhatsApp chat with Ruta Singh, the Meta exec in charge of recruiting.

58:20Zuckerberg's reading all the AI papers to find out who's doing the work, reaching out to their preferred communication method personally, having them over for dinner at his house, promising unlimited compute. And he is staying in the process of recruiting them, quote, right down to planning their desk locations. And we've talked a lot about founder mode on the show in the last year. And I don't think there's a better example of that than this, because Mark Zuckerberg is one of the world's richest people. He's the CEO and founder of one of the world's most wealthy companies. And he is literally in there handholding the recruiting process to get the talent that he needs.

58:56So I think this shows that no one ever outgrows the founder role. And also there's no work that's beneath the CEO. It is a moment in time where there are people who have a there's a finite number of people who have this skill. It might be an infinite game, AI, like building tools and everything like that. But there are a finite number of really good players today. And whoever has them has a greater chance of winning a big prize. If you think the big prize is worth, let's call it$10 trillion, there's probably no better use than recruiting right now. If you recruit somebody who comes up with the idea of how to leverage Facebook and WhatsApp and Instagram's data to serve a better ad or a new ad format.

59:51It was really questionable what the ads would do on Facebook. I didn't believe that ads would work in social because you would be interrupting people's conversations, et cetera. I thought it'd be really hard to do, whereas Google ads were very specific, right? You type in a keyword, you know what it is. And I thought these ads would be not as effective in the feed. It turns out I was right. They were not as effective in the feed on a cost per click basis, on a click through basis, right? If you type in a very specific keyword on Google, your chances of clicking the ads are very high. In a social network, if you scroll by something, it's very low until they made the ads and it still is very low, but people are in there for three hours.

1:00:34Whereas on Google search, you're on there for 30 seconds and you do 10 searches a day, you're on it for three minutes versus 30. So, you know, there's a big difference between 200 minutes or 300 minutes in a service and three, they figured out a way to make it work. And they also had a lot of psychographic data on the person who they're friends with, et cetera. So I think Zuck is doing the right thing, trying to get people to come work for him. And if you were a freelancer, if you were talent at this point in time, it would be foolish to not test your market value. If you like had your deal a year, two, three, four years ago, you probably want to test your market value.

1:01:22Um, because the value has gone 10 X in a year or two. These people are super, super valuable. How cool would it be to go to Mark Zuckerberg's house in Palo Alto and have dinner. Like, I don't know. I would answer his email just for that. One funny anecdote. Someone actually just didn't think that it was actually Mark reaching out to them. And so they didn't respond to him for days and days and days because they thought it was spam. And I thought that was a kind of an interesting problem to have if you're Mark. Like, no, it's really me. I'm here. All right. I want to do one more story before we jump to our interview today, Jason.

1:01:55Just a quick note on an acquisition. Are you familiar with the company called Couchbase? no couch base no uh that's the most honest i love that okay so really briefly couch base went public back in 2021 and they offer what's called a source available it's not open source but similar to it uh no sequel database they have not done particularly well since they went public and that's why they're getting sold they're selling to havelli investments for about 24 50 a share that's 50 cents more per share than they went public at so this was effectively a flat ipo from 2021 through today. But just some data points for founders out there who are curious, what is the clearing price today for slower growing SaaS companies?

1:02:38Well, the company had ARR of about 250 million at the end of Q1, Jason. And so that means it's selling for about 6.5X Q1 annual recurring revenue, but that's with the premium in the take private. So I think probably like 5X, four to 5X for slow growing SaaS, I think is the current market clearing price today, even with markets at or near all-time highs? Yeah, there's a lot of private equity folks looking at underperforming assets that went public. This has always been the case. This is something that happens in public markets, and they go private. They change the management, typically. They rip out a bunch of expenses, and then they look for somebody to flip it too.

1:03:23so you know it's even if your company doesn't do well uh or is slow growth these guys are growing 20 year over year uh 10 20 that's still pretty good growth uh but i guess the market for whatever reason doesn't believe in this company uh and so taking a private is a great way to go and you're going to see that over and over again if a company doesn't break out you have this backstop of private equity folks looking at it saying, yeah, I'll take that. And there have been a number of interesting companies. Dell, I think, probably would be the biggest example. I think that was the largest go private ever, I think, was Dell.

1:04:03At some point, it went private and then went public again. And it's obviously doing phenomenal now. $24.4 billion back in February of 2013. That makes me feel old. I thought that was much more recent. I didn't realize it was 12 years ago. And now it's worth 80 billion, right? So, you know, it'd be interesting because, you know, now if you go look at the max chart for Dell, you know, you get a stock price to 2016, which I guess is when it came back out. It'd be really interesting to look at its market cap when it was public, then take out the private. You could kind of try to blend how much the company's been worth over all that time.

1:04:40uh but you know here we are uh going private lets you clean up your cap table your product line all of that you know in a very clean way so yeah all right now today jason we have a bit of a return if you will we're going to talk to scott hickle from throne science now you may recall that lon myself and you back in may looked at throne science which is the company that puts a camera in your toilet. And we made one to seven to 500 different jokes about it. Yes. And the founder was very, very kind. He said on Twitter, thanks for talking about my company. I don't think you guys fully got it. So Lon said, let's have him on the show and ask him what we missed.

1:05:23And generally speaking, take another. Are you saying that we ished on the company and now we're making up for it? Yes. I'm saying that we're going to give ourselves a swirly by having Scott Hickle. Are you saying we're going to get the straight dope from the founder? I'm hoping so. Scott, can we bring you up? And we're going to hear all about this. Scott, there you are. Can you just give us the huge dump on what's going on with this business? I mean, you have a toilet behind you. Yeah, this is the office. I mean, the number of jokes and the fundraising. When you went and raised funding, what was the best joke that landed?

1:05:59did who dropped the best joke by far my favorite i could not tell you who did this i've heard 10 million of them at this point but my favorite is uh poop jokes aren't my favorite but they're a solid number two poop jokes aren't my favorite but they're a solid number two that's that's strong because you get you got layers of joke there it's layers of joke uh but in all seriousness business. How did you birth this one? So in truth, it started as a joke. So my now co-founder Tim and I met, he moved to Austin back in 2021 as part of the COVID exodus from San Francisco. My best friend from college knew him and was like, hey, please give Tim a soft landing when he arrives to Austin.

1:06:44I brought him into a poker game and we were sitting around the poker table talking about startup ideas you'd love to start, but would not want your name associated with. And so everyone's pitching sex, drugs, rock and roll, vice industry stuff. And Tim was like, you're all fools. Clearly the money is in smart toilets. This is inevitable. At the time, his idea was a toilet seat with a scale on it that would just weigh you before and after. It's kind of a vanity metric. And I was like, you know, that's hilarious. Clearly you would put a leaderboard on it, sell it into frat houses and name that company Throne.

1:07:15So that was the original idea for what is now, I think, a deadly serious invention. But, you know, Tim and I joked about it for two years. We ended up working together. And it wasn't until 2023 when we were looking for a startup idea in earnest to go start something. I called my mother, who's a geriatrician. I was like, hey, mom, is there any medical utility to looking at people's waste? And her response was, honey, in the field of geriatrics, there's an old joke that is old people care about three things and three things only. They're kids, their meds and their poop. As you age, your gut motility starts to slow down.

1:07:56You are very aware of changes to your digestive system and you talk about it all the time. In fact, she says she gave, she stopped giving her phone number to her patients years ago because they would send her so many unsolicited pictures of poop. So how does the product work? Like if, and how did you find product market fit for this specific product? And I'm asking this in all seriousness now. We'll make more jokes after this. We had jokes before it. But what is the reason, the killer reason, to invest in this product and to buy it? What is the great outcome here? Yeah. Great question. Two answers.

1:08:41The first is the health and wellness answer. So there are roughly 60 to 70 million Americans with chronic digestive diseases who do not have anything to track those conditions on a daily basis, the same way that we have 50 devices that track sleep and exercise and respiratory rate and cardio, right? Like I'm wearing a whoop, I've had an aura. There's nothing looking at gut health, urinary function, or hydration in those same daily ways. And then ultimately kind of our North Star, the mission for us, is we want to build a smoke detector for colon cancer. So colon cancer is the second deadliest cancer in the country behind lung cancer.

1:09:13And the kind of pernicious thing about colon cancer is if you catch it early, It is one of the easiest cancers to cure it, right? It's a 45-minute outpatient procedure. You get a colonoscopy, and you can make it to your kid's little league game that night. If you catch it late, by the time it's gone distal metastasization, you're looking at like a 15 % chance of survival five years from now. And the crazier thing about it is that you have basically a 7 - to 10-year gestation window for a polyp to develop into a malignant tumor. So if we can detect it in that gestation period by looking for trace amounts of blood that are invisible to the naked eye, that will not only improve health in the, you know, helping people monitor gut health, but ultimately save lives.

1:09:50Scott, though, you were talking on Twitter about your fundraising and how you guys were trying to pitch it as essentially a smoke detector for colon cancer. And also, I believe the phrase was whoop for your poop. And then you had to flip that. Can you just walk me through how VCs respond to this and then what you had to change to make the pitch work? Yeah, that's so exactly right. So I think the most well-meaning but ultimately unhelpful advice I got going into the fundraise was, you know, we have this long-term vision of building the smoke detector for colon cancer, but short-term, we're building whoop for your poop, right?

1:10:20Like the daily gut health and hydration tracker. And so people would say, start with the big vision first. And when you start with the big vision first and say, here is this$100 billion opportunity that can save tens of thousands of lives around the planet every single year, you lose people's attention when you start going into it. And here's how we're getting there by building this health and wellness device first. whereas when you say we're building this health and wellness device that's a multi-billion dollar opportunity because there's whoop and oar that have proven the market and you know garmin and fitbit have educated now one in six americans is already using a wearable every single day when you start there and then say and then by the way kind of the call option here is if we can build the device that also detects fecal occult blood and that can save lives that you just ending on that note is far more powerful than starting with, here's the high note.

1:11:10And then by the way, it kind of tapers off. All right. On that note, continue to success and keep us informed. Let us know when the new version drops. Alex, Jason, thanks for having me. Thanks, Scott. Appreciate it, man.