How to Make Billions from Exposing Fraud | E2234

22:21But it does seem that in this case, comparing the boom program to what we pulled off with Concord, that perhaps the private industry may be a little bit better equipped to handle supersonic flight. One last thing before we move on, $5 ,000 to go to London round trip from the US. Man, they're gonna sell a lot of tickets on these planes when they finally get there. I think a really intelligent point from Blake here in an early point was talking about Elon Musk and vertical integration. You know, in 2025, we have so many examples of vertical integration from startups. We have, you know, we talked to Base Power and Zach Dell, Elon Musk and all of his factories.

22:54You hear from Anduril and their vertical integration efforts. And Jason asks, why not go for the whole gambit? Why are you even selling a book of business here? Why not just own the flight itself and become a passenger airline as well? Blake responds really well saying, for one, this is a really complicated problem just building this jet. So we'll take one step at a time. But part two, as a lean and scrappy startup, to your point, it is much easier to finance a plane when you have a book of orders. So he says, you know, we're going to get a book of orders, these LOIs. And once these orders come through, we'll be able to really scrappily get this amount of capital together that we wouldn't otherwise have access to if we were trying to become a passenger airline right out of the gate.

23:43Also, if you want to build an airline, you're kind of barking up a pretty tough tree because people like United Airlines trade at roughly 0.5 times revenue and Boeing trades more close to two. So if you're just thinking that's in purely price sales terms, Blake really does have a point. Now, next up, I do want to talk about a book because this is a book that Jason was talking about in 2016. and he talks about it each and every week here at Twist and Launch. Take a listen. Am I in a system that's constantly reinforcing discipline or do I kind of wing it and I figure, oh, I can make that work? And this is where Checklists, I don't know if you've ever read their book, The Checklist Manifesto.

24:15I love that book. Isn't that a great book? Checklist Manifesto is my audible selection of the day. They're not a partner or sponsor on this episode, but they have in the past. But what a great book. Explain to everybody the story about the, was it the B2 bomber? In the book, when they talk about the checklist manifesto, they were talking about one of the planes was so big and complex that one pilot couldn't – the way they used to have the structure of it was you'd have one pilot in charge. Right. And then everybody else would do what they said. Mm-hmm. But – so they really didn't have like a delegation system.

24:47But then because of this checklist, they created checklists and then they would run them down with each other. So they sort of dispersed the load of maintaining – Yes. Putting the load across pilots is a big deal as well. So typically for a commercial aircraft, you'll have one pilot reading the checklist, another one doing it. Much less likely you skip steps. Right. I think this plane had like six engines or eight engines or something crazy. Sounds like a B-52. I think it was the B-52. Like they thought it would never work. And then when they got the checklist going. And there you have it, Jason bringing forward the checklist manifesto, which is a common occurrence here at the launch and twist offices.

25:20We could not run such an incredible operation without the checklist manifesto. But I think this episode is probably the best time to bring up the book in question. That's because one of the key segments from the book that we all read was about how B-17 flying fortresses in World War II were these new, much larger aircrafts were very complex for pilots to run. And they need to scale the amount of pilots going over Europe rapidly in order to engage in these bombing efforts. And here we are talking to the CEO of a supersonic aircraft company. I'm sure the crew members on those planes will also be using checklists themselves.

25:57Well, you know, humans don't have infinite memory unlike AI models. So we do need a little help as we get through things. I do want to bring up one last segment though, Marcus. This is all about raising money and building a team. Now we know about hiring engineers, all the sponsors of this show are in that domain, but how do you find people that want to take on our project that will take a decade and it involves building a plane that no one has seen before? Well, let's find out. You have to get some crazy angels and be a crazy founder yourself who made a little bit of cheddar. to put up the money for this and prove it.

26:27Yeah, well, I think time will tell on that. Okay. So right now you guys have raised a couple million bucks, two million bucks. Yeah, before YC, a couple million bucks. Got it. And then after YC, we'll talk about it in a bit. What will it take you to build the prototype? It sounds like 25 million bucks to build the prototype. Actually, less than that. Really? 10, 20, something in that range? In that range, yeah. So it's very fascinating when you think about it, how little it costs for you to make a prototype that goes supersonic. Yes. Again, the bar for commercial aircraft is really high, as it should be.

26:55The bar for experimental one-off is... It's disturbingly low. I don't know if it's disturbingly low. Like, the responsibility is all on you to build something that actually works. So when I was first getting this business started, of course, I had to get an amazing team together. Sure. And so I was living in the Bay Area at the time and flying Cirrus out of Palo Alto Airport. And so I would take off from Palo Alto and I'd fly down to Mojave in Southern California, which is like the hotbed of experimental aviation. So I was going down there a lot, kind of, you know, on recruiting trips. Right. And one of the first times I was down there, I was very new to the whole thing.

27:29Like I had my pilot skills and like a little bit more, but not yet a ton. And I was getting a tour of the hangars. And there is something amazing behind every hangar in that airport. And so this guy showed me his hangar. And he had in there a Bert Rutan designed aircraft, one of a kind, that he had refurbished. And so I'm looking at this aircraft. I'm thinking, I want to ask a question about it. But it can't be a stupid question, right? And so he looked at the wings and there were these bumps about a foot out from the fuselage on the wings. I'm like, well, that's different. I haven't seen that before.

27:59What's that? And he said, oh, that's a great question. Well, when we built this, we didn't want to build a new landing gear from scratch. So we stole one off another airplane, but it didn't fit. And so we cut a hole in the wing and we put some fiberglass over it. And then he says, let me show you what we did with the nose wheel. And so apparently the nose wheel had also stolen off of another airplane. And it would retract if it wasn't canted just right. It would kind of jam and not go into the wheel well. Well, they fixed that by drilling a hole from the cockpit into the wheel well and giving the pilot a stick to poke the wheel if it's not aligned correctly.

28:38Yeah, it's not aligned correctly. And at that moment was when I realized that people in Mojave hack on airplanes the way people in Silicon Valley hack on software. You had to hire people who knew much more about aviation than yourself because, let's face it, you were a web guy, software guy, who got a recreational pilot's license and now wants to build Concord 2.0. Right. There's a little bit of a gap between what you know and what the people who built the Concord know. A little bit. A little bit. Who's the first person you get on the team or the second person you get on the team? And how do you convince them that you're not insane?

29:09You get all manner of responses. But first off, I think most people underestimate as adults how much they can learn, how much new things they can learn, and how quickly they can get deep. Especially with experience, you start to learn what knowledge really feels like, what clarity feels like, and what it feels like when you don't have it. So I spent about six months or so teaching myself aerospace engineering fundamentals, just reading textbooks, doing problem sets, meeting smart people, showing them my work and saying, can you check this? and people are really generous with their time, especially when you tell them what you're trying to do.

29:41And so I learned a ton from that and I got at least to the point where I could judge the people I might hire. And we went through, so we went through an exercise where the first couple of people in the company, so critical, and I wanted the best people in the industry. So I asked everybody I met in aerospace, if you had a magic wand and you could wave it and you could get anybody to come work on this project, who do you want? And you start to see what names come up. And then which ones come up multiple times. Exactly, exactly. And so a little over a year ago, we had about half a dozen candidates for the first couple roles on the company.

30:11We flew them all out to the Bay Area, got a conference room for a couple days and said, let's tear this whole thing apart technologically and also tear apart like what are the lessons of how you build an airplane company? And you can tell, you know, you sit in a room with half a dozen really, really bright people. And these people were like the inventor of the personal jet, the chief engineer from Atom Aircraft, the chief engineer from Spaceship One and Spaceship Two, whose airplane is in the Smithsonian. Like this was a high level room. And you spend a couple of days with those people and you quickly figure out who are the ones you really want to work with.

30:42And so we hired two people out of that room. People go into aerospace because they either want to build a rocket and go and colonize Mars, which case they should go work at SpaceX. Right. Or they want to work on fast airplanes. Right. In which case they should come and work at Boom. Well, will investors put the money up? With the benefit of hindsight markets and nine years going by, I can tell you that the answer is yeah, they will. Boom has raised to date over$700 million, according to Crunchbase data, and they raised$300 million last December. I will say though, there have been some bumps in the road.

31:10This has not been an easy journey for Boom. In fact, they raised their most recent capital markets when they announced their new data center project. Essentially, they're going to take some of their engines they've made, put them in a shipping container, and use them to power data centers. Because if anyone has money today to spend, it is AI companies trying to expand their compute footprint. That's absolutely right, Alex. And I think this goes to the heart of what Silicon Valley has come to represent philosophically over the last 10 years. For one, being lean as a startup, pivoting to where the value is today for this very long-term vision to change the world.

31:43And secondly, and almost more importantly, is getting a few smart, hardworking individuals together who are going to change the world for, you know, basically every part of our lives from Google, Uber, Instagram, even the U.S. government with Doge. Small people, small groups can do quite a lot of work very, very quickly. But I also really appreciate what he said about learning because it sounds like the number of people or the individuals who can have this level of impact is not small. In fact, it's open to all of us. Absolutely. Blake picked up a book and started reading about, you know, aerospace engineering.

32:15If he can do it, then we all can do it. Yeah, there's no excuse, which actually is kind of annoying. Like, thanks, Blake. Just saying, hey, I became an aerospace engineer in six months. Well, some of us have other responsibilities. No, I'm kidding. I love going back in time, Marcus, and seeing founders earlier in their journey. We often talk to people after they've achieved success, after they've gone public or raised the big rounds and whatnot. But it's fun to go back and see the joy in the challenge, the early progress, and the seeds of future success So thank you, Marcus, for your time. Everybody, we'll do a couple more flashbacks this year.

32:44Look forward to it. Until then, I'm Alex, and this is Twist.

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33:27It's a guided experience inside ChatGPT that can help you build your website through plain language conversations. Just think about that. And you're going to get pay links, dedicated URLs that make it easy for you to collect payments online. So go to squarespace.com slash twist for a free trial. And when you're ready to launch, go to squarespace.com slash twist for 10 % off your first website or domain purchase. Thanks again to Squarespace for being my longest running supporter here on twist. All right, next up on the program is a fascinating project. Alex, you and I have talked on twist about investigative journalism, you and I've spent our careers in journalism.

34:07Journalism's broken. Journalism's transitioned, yada, yada. Creative destruction is occurring. And we talked about investigative journalism and how important it is. It turns out there are whistleblower laws. Whistleblower laws allow you to get 50%, a third of the money recovered and the settlements here. People don't know about this, but the SEC has been giving these awards for some time. Some of them have gotten very large, I think up to nine figures. Our guest today, who Alex will introduce in a moment, has created a startup to address this and productize What a brilliant idea, Alex. Over to you.

34:38Yes, please welcome to the show Alex Shea from the Anti-Fraud Company. Jason, I first heard about Alex when he was taking Brown University to task. Given that Brown University is about 25 feet from my house, I was like, who is this guy? What is he doing? Well, now he's built a company that wants to do exactly what you just said, use investigative journalism and also the power of AI to uncover fraud and collect fat penalties from the government for saving us all some money. Alex, welcome to the program. How are you doing? Thank you for having me. Yeah, Alex, tell us, what is your company, the mission, the product, and where are you at today?

35:09Yeah, that's a great question. So I think that we're probably not like any other company that is in the world because we don't have any customers. And the reason for this is the way that we monetize is using an obscure piece of law called the False Claims Act, which has a provision called the KeyTan provision, which basically says that if you're a whistleblower, you found fraud that nobody else knows about, and you bring it to the government, then you can file a lawsuit essentially on behalf of the government against the fraudster, the person who's defrauding the government. And then when it settles or you have recovery or you went at trial, then you're entitled to 15 to 30 percent of whatever you end up recovering.

35:50So this, it turns out, is a way that you can monetize information, investigative journalism about frauds that haven't been previously reported. And it turns out that this can be a pretty fine business model because the fraud that is out there can get pretty big. Okay, so here's justice.gov, the Justice Department of the United States of America, the DOJ. The False Claim Act. Many of the fraud sections cases are suits filed under the False Claims Act, FCA, 31 U.S.C., blah, blah, blah, blah, blah, a federal statute originally acted in 1863 to defense contractor fraud during the American Civil War.

36:35The FCA provides that any person who knowingly submits or causes to submit false claims to the government is liable for three times the government's damages plus the penalty that's linked to inflation. Wow. This thing's existed. you've created a company to file these claims on behalf of the whistleblowers who find it and then split the revenue with them? Is that the business model? That's not quite right. So we're not a whistleblower. We're not a law firm representing the whistleblower. We're not a law firm at all. We are the whistleblower. And so the way that people typically think about this is when they think about these whistleblowers, they think that these are typically people who are inside the company.

37:11Their boss is doing something wrong and they tell on their boss. And this is what it most commonly was used for. But they made an amendment to the False Claims Act in 2009, I believe. I think Senator Chuck Grassley of Iowa was the one who pushed this, who broadens, who can bring these whistleblower lawsuits. And so whistleblower might even be a misnomer because you don't necessarily have to be an insider. Maybe a more correct way of thinking about this is more of a bounty hunter program because completely outside the conduct and still bring a case. And I think one notable type of case that happens is oftentimes a company's competitors will sue them if they're engaging in some kind of unfair business practice that is defrauding the government.

37:55And they'll be like, hey, hey, you can't do that. And numerous times in the past, this has worked. And companies have been able to get these whistleblower recoveries by telling on their competitors. And so we're similar to that, but taking it in a different direction in that we're just investigating. And when we find stuff, we're bringing it ourselves as a company, even though we're not insiders to the conduct. That doesn't matter. We're still able to do this under the law. But Alex, just to be clear about this, we're talking about fraud from corporations that are essentially overbilling the government.

38:26That's my understanding of kind of your thrust. Is that fair? That's correct. Yes. The statute is applicable when federal government spending is implicated. Okay. Now, I found some fraud stats from the government, and it's looking like they're finding several billion dollars a year in terms of fraud. My question is, how much fraud are we actually catching as a percentage of the whole? Are we getting, and this is an estimate, like 10 % of it? Are we finding half? How much more is there to uncover? There's a lot more. So I think even the low estimates, I mean, some people like Elon Musk is famous for saying it's$1.5 trillion in fraud.

39:06Some other estimates are less than that. The Government Accountability Office says it's more like$500 billion a year. But again, we have like a$7 trillion budget. So like a non-negligible percentage of the federal budget every year is going to fraud. And 500 million out of 7 trillion? 500 billion. And what's being uncovered under the False Claims Act so far every year is maybe like 4 billion or something like that. So this is what we call a TAM expansion play, is we think there's a lot more fraud that's not being uncovered so far. And we think we can help the government do it. Now, you partnered with a co-founder who has been doing this for some time.

39:47So tell us about how you formed the startup. You know, you had this original idea. Give us the origin story, because this is one of those startups that I would say is, when you're an investor, confusing. You've never seen it before, which then makes me lean in and get interested. And I've had to train all of my 12 associates and training at our fund when you don't understand a startup, when you can't put a pattern on it, when it seems weird or crazy. That's when you lean in. That's when you get more curious. So give us how you originated this startup, maybe a little bit about your partner and why that was so important.

40:33Yeah. No, thank you, Jason. So there's myself and there's two other co-founders, actually. and the other two are both lawyers and I'm more of an engineer. So my background, I think as Alex alluded to at the beginning of the episode, is a few months ago, not too long ago, I was a student at Brown University and I sort of noticed that there were a lot of issues with Brown that implicated both tuition dollars because it costs like$90 ,000 a year to go to Brown, but also government funding because Brown receives on the order of magnitude of$500 million a year from the feds as well. And so, like, why is it so expensive?

41:12And sort of, I'm a fan of Andrew Yang a little bit. And something that he's been saying for a while now is that the reason why Brown was so expensive is because of all these wasteful practices in the administration, and the particular number of administrators, the fact that there are 4 ,000 or so administrators. And to be clear, we're not talking professors, but we're talking about deans and secretaries and people who do people all day. Why are there so many? And as myself and critics like on all sides of the political spectrum, like Elon Musk or Andrew Yang will say is that that's kind of weird that there's like twice as many administrators and professors, especially since there haven't been so many in the past.

41:51And so I sort of put together a data mining project that really analyzed what they did. And that got a lot of attention. I ended up testifying before Congress about this. They also tried to discipline me, but that case didn't go anywhere and I was cleared. But I ended up testifying before the House Judiciary Committee really about issues about what was going on at Brown and how this was implicating financial aid and our tuition dollars and federal funding. And this really just made me aware that, you know, the government, they're great and all, but they really can't stay on top of everything that's going on on the ground.

42:23And I think that's a critical insight that I had and that my co-founders also had independently. One of my co-founders is a former FTC attorney. He worked in the Biden administration. And his focus area is really pharma, Medicare, Medicaid, sort of how big pharma companies are cheating and are leading to regulatory capture in ways that are preventing the generic cementering market from lowering prices for consumers. So he's really been interested in this from a different angle. Alex, that was David Barclay, right? That's David Barclay. And then our third co-founder, Sahaj Sharda, he just graduated from Columbia Law, where he wrote a book also about higher ed, about what the institutions of higher education are doing with their tuition pricing actually is a violation of antitrust law.

43:20And he wrote the book, and then it became a federal class action lawsuit. and all these Ivy League schools have had to settle this for like tens of millions of dollars. And so I think it really goes to show how much grift there is out there that really the federal government hasn't been effective at putting a stop to so far. And maybe some private market incentives are the way to go. How many cases can you take on at once? How much do you, how long does it take to settle these? Because as a startup, you have to have a business model. Okay, bounty hunting, great. Love it. Boba Fett, IG-88. I like the analogy.

44:01But you have to collect the prize. How long will it take you to collect the prize and get your startup to the point at which it becomes sustainable, right? That's going to be the big question from your investors, I'm sure. Yeah. So that's a great question. And I think the best maybe comparison that you make fraud bounty hunting too, is it will sound unusual, but I think one of the good comparisons that you can make is by comparing us to a biotech company. Because essentially, we have sort of these legal assets. The biotech company has pharmaceutical patents, also sort of IP assets. And they take a while of time to develop, is that you have to pass all these clinical trials and wait for FDA approval and maybe get approved.

44:43And so there's some duration there. But eventually, it, you'll win some and you'll lose some. And that's the business model. I think what we have here is pretty similar, is that you're right. It's slow. Is that with these false claims - Five years, seven years, what's the estimate in your model for how long it takes to settle these and to get your bounty? It depends on if the case settles or if it has to go to trial. If it settles and the DOJ gets involved and really pushes pressure on the company, on the fraudster to settle, then that could be as fast as two years. But you're right. It's like for longer cases where there's a lot of back and forth and discovery and it goes to trial, it might take five to seven years.

45:29But because we're running numerous cases every year, maybe 10 a year at a good rate, maybe even more than that, if we set up more verticals, we think that we'll be able to be solvent pretty soon in the future because at least some of these will settle. And the other way that we can monetize this is by selling portions of the cases to litigation finance firms, even before - Explain what a litigation finance firm is. I mean, I can guess from the term, but explain to us how long they've existed, how they work, and how they sell an interest in a case. Yes. So I guess the legal mechanics of what we do is that each False Claims Act case is we're not actually filing it through the anti-fraud company, but we're dropping down a subsidiary.

46:24And then we're essentially just sharing, selling shares in this subsidiary to litigation finance. Like an SPV, like you might for investing in a company? Is that the format you use? Something like that. I mean, it's just literally selling shares and that they're buying them shares. Who buys this? High net worth individuals? And how much would your average case be? Like, what would the opportunity be? And then how do you syndicate it? How do you find the investors? There's like an established market for litigation finance. I guess the thing that they typically like to do is they like to fund these big class action lawsuits because you need a lot of funding up front.

47:04And these sort of like class of plaintiffs probably don't aren't able to front front the cost when these things can cost like 20 million to actually litigate. And so essentially what what what these are is these are a certain class of investors who who invest money that pays for the legal fees and stuff up front. and at least in the class action context. And then they have an interest in what the outcome is. How big is the interest? How much do you have to give up to access this kind of financing? I mean, it depends. I think that maybe we would give up like 10%, 20 % of the interest in our cases.

47:40I think we don't want to give up too much because with litigation finance, it often is pennies on the dollar. But this is a way to get liquidity fast. but this is not the primary way that we intend to generate revenue because we think that all our cases are good and we think our hit rate is going to be better than you see on average because whereas many of these whistleblowers are sort of bespoke whistleblowers that don't really know what they're talking about are our industry insiders who are telling on their boss whereas this is our whole business we think we'll have a better hit rate and so we're going to be more inclined to hold on to most of the cases if not all of it ourselves this is just sort of one way that we could get liquidity if cases are taking a while.

48:21Alex, I'm a huge fan of rooting out fraud and saving us all money. Like Jason and I are absolutely behind you here. But I'm curious about repeatability and how you're going to be able to keep finding things on a kind of like plan basis. Like how are you going to do this year after year after year? So what techniques are you using to look for fraud? How are you confirming it? And what legal resources you need behind you to ensure that you're doing this and won't get sued into the ground because you're going after companies who have an interest in you not getting your way? That's a great question.

48:53And the way that I see it is that when you're committing big fraud, because we're going after big frauds here, we don't think that tinkering around the edges with small million dollar frauds is really going to fix the budget deaths that we're facing. And so we're going after billion dollar frauds. And the thing is, when you're committing fraud at that scale, at a billion dollar scale, is that you're going to leave traces somewhere in data, in government data sets that we have access to, in commercial data sets that we're purchasing, in filings that you're making with the government. And there are sort of, there's this whole branch of researching this called OSINT, open source intelligence, that has been going on for a while now, where we're just sort of sleuths on Reddit, we'll dig through all this information and try to put it together.

49:45And I think that now that we have AI, though, and that really accelerates our ability to process information because fundamentally at the core of what we do is that we're an information processing company because we're gathering signals from all these places. And so there's really two key ways that we're doing this here is we're going through textual data with LLMs. And so I don't want to give away too many of the secrets here, but essentially we have access to a trove of documents of relevant stuff. And we're running through this through LLMs to see if we can find any indicia of fraud. And then secondly, we have access to a bunch of sources of data from the government.

50:26And this is more structured data. And so my background is actually I'm formerly at Palantir. And so we sort of ontologize these structured data sources and see if there are any flags raised there. So you're going to put the entire government into Notebook LM and find the fraud. I love that. My question is, why are you talking about this? Because, Alex, you don't need publicity to go out and get customers. It seems like you're talking about this and you're going to engender competition. Or do you need to get inbound? I mean, maybe you do get inbound. I don't know. We do get plenty of inbound. And if anybody is watching this show and knows of any things against the government, feel free to let us know or go to the antiflodcompany.com.

51:09Is there a submit form there or you just have to get your email? There is. Emailing if anybody has any tips for us. We've gotten some tips that have been useful, but also there's just a lot of subject matter expertise on our team. like we have experts in sort of the pharmacy space, expert, long-tenured investigative journalists, obviously a bunch of legal experts and engineers who know what they're doing with all this data stuff. And so a lot of the ideas also just come from in-house. We have a hunch that something's going on and we go try and find it. But honestly, I don't mind if other people want to do a similar thing and want to find fraud because again, there's a lot of fraud.

51:52I mean,$500 billion is the low estimate. $1.5 billion is the high estimate. Somewhere between those two numbers will probably wind up being the truth. You can't be taking on more than a couple of dozen active cases at a time, can you? Oh, absolutely not. And I think this just shows the value of capitalism and incentives, because when you have a law that Lincoln passed in 1863, like the False Claims Act, that entitles sort of whistleblowers to a share of the interest in recovering fraud for the U.S. government, then everybody wins. the whistleblower wins, the government wins, because they have money that they otherwise wouldn't have recovered.

52:30And just by aligning incentives so people do stuff that is protective for society, this is a very good way, I guess, of structuring this law here. The problem is that we've had it since 1863. We have these incentives in place, and we all agree that incentives matter. But why hasn't that incentive structure of getting such a large chunk of the recovered monies done more to combat thought? How did we end up with$500 billion to a trillion dollars a year we fought if we have these aligned incentives? Was it AI the missing piece? I think there's two missing pieces. I think AI was one of the missing pieces because it just makes the information processing so much easier.

53:06There's this metaphor of the blind man and the elephant, right? Is that one is touching the leg, one is touching the trunk. And this is how fraud detection has been for a while now is that people have sort of a glimpse at part of their conduct, but they don't really get the full picture and AI and having that gives us more of a full picture than blind men and elephant. But I also think there's a lot of activation energy that you really need to put together all these pieces. And that's why the most effective way of being a whistleblower is by being a whistleblower company, because then this is what you do every day.

53:43You learn from it, and then you're able to make it repeatable, as opposed to sort of these bespoke whistleblowers who's like a guy in the company and then they got fired and so they're mad and they have some dirt on their boss and they file an FCA case themselves. I mean, like this is useful, but I think that putting it together in a company that specifically does this is incrementally more so. Final question and congratulations on all this. I think it's awesome. And it's really of the moment. You must've seen Nick Shirley's knocking on doors at daycare that story obviously is a 15-year-old story and people have already been tried.

54:22What's your general take on what he's doing first? And then two, when things have been, you know, bubbled up and investigative journalists have knocked on these doors many times, is there more of an opportunity there for you or less of an opportunity? Yeah. I mean, I'm not so sure if we're going to be taking on the Minnesota case necessarily ourselves, because a lot of stuff has already been publicly reported on that. And I mean, like one of the central premises of the False Claims Act is that you have to bring information that's not already public. I mean, that makes sense. But I mean, I like the whole concept of exposing fraud and really having citizen journalists doing that.

55:05I think that's all really good. And I think you're alluding to something more fundamental here is that the business model for investigative journalism sort of is broken. Maybe it might have had more of a golden age in the 80s or the 90s, way before my time, when you had these local newspaper powerhouses where everybody had a subscription and everybody bought ads in the newspaper. And so they really just had a regional monopoly, and they could really look into these things, like the sexual abuse in the Catholic Church or Theranos. And investigative reporters really had a lot of resources to make these prestige stories.

55:40But I think what we're seeing these days is that where everything is online and that you get paid based on clicks is that then everybody is making more click-baity-flavored content. And there's not so much interest in investigative journalism. And we really think that False Claims Act and these other whistleblower programs is a great way that we can monetize these investigative insights that are non-public. And also we plan on publishing full write-ups when we're able to do so. But I think that this is a new business model for investigative journalists and one that we're hopeful is going to be the future.

56:16Well, I do hope that you publish all those documents because I would love to see the spirit of investigation live on, Jason, but a fantastic company. We love it. Private Sector Doge, it's the anti-fraud company. He's Alex Shea. Thank you much for your time, Alex, and Godspeed, save us all some money. Thank you, Jason. Thank you so much, Alex. All right, we have a question from our amazing founders. Hi, my name is Gopal, or GP, for Zsupra.ai. We make basically AI foundational models for pharmaceutical and healthcare industries. So we're in Japan right now, and obviously we have some global growth ambitions, and you're, I guess, a high-powered recruiting agency in Tokyo.

56:55But one of our clients is one of the larger drug companies in China, and we have to basically have models in the China mainland. So there's some data federation issues. Obviously, we can manage this remotely, but are you able to help us get the kind of talent that we need? So we need A-plus talent. I'm coming from a background with AWS, IBM, all this type of experience. I want that quality in the mainland, and I want to be able to communicate with them very tightly in that we are in the same culture. Because I'm part of another larger company right now, and culture is important. Great question.

57:46Recruiting A-level talent in China in a very interesting moment in time in terms of globalization. Yeah, well, I mean we also have a mainland China office. But to be honest, actually there's a lot of Chinese people who love Japan. There's a lot of Chinese companies out here in Japan as well, like ByteDance for example. So I think again, it's not a secret sauce. All you need to do is make sure that you reach out to as many people as you can, of course have the right partners. Why working with an external recruiter is a good thing is because if you directly go to the candidates, you know, you could tell them stuff and they might tell you stuff, but they're not going to be 100 % honest with you guys.

58:32But if they work with external recruiters, candidates will tell exactly how they feel. Right. Because you're their advocate. You're their intermediary. Exactly. And, you know, like, that's why, like, I think, you know, if you have a right partner who understands the market and who understands your business, and, of course, like, we have to get to know each other. If it's me or whatever recruiter, you have to spend time with them because, like, if you really care about culture, like, they need to know you well. What are you looking for? How do you spend time with a recruiter before the process?

59:03I mean, like, are we going to hang out in the office? Are you going to watch us work before we start hiring? Yeah, how do you interview the founders? What do you typically ask them? And then how do you pick, because you, I'm assuming, don't take every client. As a founder, like, you would reach out to a recruiter, and then say, hey, can we have a chat? This is what I'm looking for. And then you have that first initial consultation, right? And I think within 30 minutes, or even within 5 minutes, you kind of know, like, if this person's going to be able to vibe with you, right? So, yeah, like, spend time on the calls.

59:29As a founder, you have to ask questions, like, is this recruiter trustable? Do they know their things, right? Like, do they know the market? Thank you. I'm Yuko. So we are building Japan media. Japan media is kind of anyone can create and sell manga and anime with AI. And how can we acquire global talent? Because we cannot pay so much salary compared with that of the US. How do you do it on a budget? Or you don't? Yeah, that's the difficult part, right? I mean, if you want to get really good talent, you got to pay to play ball. That's just how it is. So unless if you don't have cash right now, you can do equity.

1:00:13But then you have to find a candidate that's passionate about what you're doing. They got to be passionate about the manga, the anime, the sales, whatever you're doing. You will find that person. It just takes a lot longer time. And it kind of precludes you from having a recruiter because recruiters get paid typically based on a percentage. And so the great recruiters are probably not going to take on early stage startups. It's good for you to know this now as a founder for when you get your Series A. and maybe you've got$2 or$3 million in the bank and you can afford somebody great, then the recruiter would kick in.

1:00:43My best advice would be you're trying to find the person, if you were to draw an X, Y axis, passion for the subject matter and talent and ability. And the further into that top right-hand quadrant you can get, the better you'll be. And there's another variable that you can put in there. They've already made their money. So finding somebody at Meta or Uber or Microsoft or Google who has taken down a large chunk of cash and doesn't need to work, but wants to be productive and really loves your mission. Wow, what if everybody in the world could participate in anime and manga? That would be like an incredible thing for them.

1:01:21Wow, they might really love working on the product. So that means even more you're selling them on the mission. And what's great about those people is they are potential co-founders. They'll be probably more equity driven and they might even want to invest in the business. So I've seen people come to startups or come to me and say, hey, I made a bunch of money. I worked at Meta. I want to join another startup. Here's my skill set. I also want to invest. I want to buy 2 % of the company, 4 % of the company, and I want to get a 2 or 4 % equity package and I want to be the CTO. Hard to find, but you always have to be recruiting.

1:01:53A-B-R. Always be recruiting. Hey, this is Mickey Vito, co-founder and the CEO of Cashier Technology. I have a simple question. I saw the movie about Uber and there was a tough time there. What is the most important lesson for an HR leader to build the tough team? There were some tough times. You had to have a bit of grit. You were there for during some of them. What's your best advice for building a resilient, gritty, strong team? That's a great question. I think what happened with Uber was it went from a baby to an adult real fast, skipped all the teenage years. So a lot of drama and a lot of things happened.

1:02:39But I think if Travis was to do it again, I think someone, an HR person, who's gone through that growth environment, who's seen crazy, is probably the perfect fit for someone who's going to go through that kind of tough times, right? So people who've been through Uber HR, like they can do like anything basically right so if you can find someone that basically went through a growth environment chaos environment that's gonna be the person that will hustle with you and probably can solve like a lot of great problems for you one of the paradoxical things about grit is sometimes it's those type of environments that make the great entrepreneurs so they come in and they're have great potential and then And they have significant hardship.

1:03:29And that's how they actually become great. And sometimes it takes getting kicked out of your company like Steve Jobs did and then coming back. Sometimes it takes having a near-death experience, almost running out of money, like happened to Elon three times with Tesla. Or three times when he blew up rockets and he couldn't get one to, you know, not blow up. It's the crises. It's the challenges that make the entrepreneur. but we have a perception of like, oh, there are these people who are incredibly resilient, incredibly strong, and those are the people who change the world. No, the world is hard.

1:04:03Startups are hard. Competition is hard. And that's what makes them. It's that experience. It's going through that fire that actually makes them. And I think your advice is really good. The companies that have imploded or had great success and then had it taken away, they're filled with people who have the scar tissue to be strong right sometimes the bone breaks comes back stronger it's like it heals stronger right there's this concept what's the concept in japanese culture where you something breaks like a vase and then they use gold to kintsugi this is a very beautiful concept kintsugi it's when something shatters and then you remake it and you glue the pottery back together with gold and they stole it for Star Wars.

1:04:48In Star Wars they had this concept where like some of the masks which originally came from the samurai Darth Raiders inspired by samurai but one of the masks was broken and then they Kylo Ren's helmet thank you editorial director he knows every cultural reference Kylo Ren's helmet was re-put back together and he welded it back together after he smashed it where got smashed. Really interesting concept. Comes back stronger. Okay. This has been a great episode of This Week in Star Wars. We'll see you next time. Bye-bye.