Inflation cools, how Waymo handled a crash, and the next startups to go public | E1965

0:00if you launch a crypto project maybe instead of a free market if you want to be able to do it in the united states you have to state your position on the project's website you have to disclose all the owners above one percent how they're affiliated to each other just like in an ipo you see like the major holders and then if they want to sell their tokens or move them they have to file and say hey i'm going to be selling these just letting you know because obviously i have inside information because i'm writing the code i'm writing the code under which this token works I mean, you want to talk about an advantage, the advantage of somebody who's writing the code of how the project works.

0:43That's like being like, I control how the money is printed, how the diamond mine extracts diamonds, and you're the buyer of the diamonds or you're buying into the system, but you don't even know how the printing machine works. Maybe I can print a billion dollars. Maybe I can print a million. You don't know. So this is all about disclosures. And I think a regulatory framework would be a really, really great step forward. This Week in Startups is brought to you by 8sleep. Good sleep is the ultimate game changer. The newest generation of the pod, the pod for ultra has arrived. Head to 8sleep.com slash twist and use code twist to get$350 off the pod for ultra.

1:30Zendesk. The best customer experiences are built with Zendesk. Qualifying startups can join their startup program and get Zendesk products free for six months. Visit zendesk.com slash twist today to get started. and CLA innovation takes balance. CLA's CPAs consultants and wealth advisors can help you get from startup to where you want to end up. Get started now at CLA connect.com slash tech. All right, everybody. Welcome to this week in startups. We're live across all channels, Twitter, LinkedIn, and of course, uh, YouTube go search for this week in startups on YouTube. You can follow my partner in crime here, Alex Wilhelm.

2:16He's Alex on x.com slash Alex. I'm at Jason. We're going to be going live with news three days a week. That's our goal. And this is the first week we've done it. Congratulations, Alex. It took a couple of weeks, but here we are. We are doing our third news program of the week. It feels fantastic. I love podcasting because I am a yapper, I think, to use the modern vernacular. And so I just love doing this. And the cool thing is, we're talking about this just before the show, is that unlike Like many summers in the past when news would slow down, everyone would go on vacation, kids are home, no one's really working.

2:48Things are so busy still in technology that we actually had to cut a lot of stuff from today's show docket. So crazy, man, we're back. And I think it's going to be, you know, they had that hot girl summer that Megan Thee Stallion did then they had hot boy summer. I'm calling it right now. It's hot tech summer. Okay, we got big docket energy today. And it's hot tech summer. we're going to be with you the whole way through the docket today i know um i had sent you a couple of items there was this waymo crash yes the apple post wwc glow and performance i want to get into um and then you want to talk about inflation uh and it's cooling and then we got hey we we really are into this twist 500.com we're going to be cracking the 500 most important private companies So if they haven't gone public yet, they're not Uber, DoorDash, and Google.

3:43We're going to be covering them as part of this database project to track the top 500. Today, we're going to start with our top 10 startups, most likely to IPO. But let's get into the document. What happened with Waymo? So this was interesting to me because self-driving cars have gotten a lot of bad press lately. And so it was really good to see, I think, Waymo being incredibly proactive. So go back about a month, a Waymo self-driving taxi ran into a telephone pole. And we have a picture of it coming up now if you're watching the video. And it's a crash that you definitely don't want to see from anybody.

4:15But I do think that self-driving cars are just held to a very high standard, Jason. And so we'd expect them to be flawless. Some mistakes like this are a big deal. The news is that this week Waymo has executed a software update for all 672 of its cars. This is technically a recall because it's an update. It's software. So to me, it doesn't really meet that threshold. But that's quick. A couple of weeks, new software, patch the issue, be proactive about it. I love it. Yeah, you're absolutely correct. These are held to a higher standard. There was nobody in the car. The car was coming for a pickup.

4:47It was in an alleyway. And in the alleyway, instead of the phone poles being on the sidewalk where they belong, they were in the road. There were some lines, but this was an edge case. So when you hear about self-driving or any new technology, edge cases are super important. You'll hear people talk about five nines. That means the reliability of a system, nine, nine point five nines would be nine, nine, nine, nine, nine. So when you have a data center, you want it to be five nines. When you have a nine one one call system or a military satellite, these things need to have really good uptime. That's what we're seeing with self-driving.

5:22That's why these things aren't on the highways yet. The cost of this accident on a highway would have been death, dismemberment, you know, it could have been catastrophic. But if these things are going on average, probably 20 to 35 miles an hour, the chances of death at those speeds is incredibly low. Now, are you going to break your leg or could it kill a dog or a child? Of course. Yeah. But here, eight mile per hour crash into a phone pole. I want to see these kind of accidents. These are the accidents we want to see now. little ticky tacky and then hopefully these systems become more reliable and to your point higher standard there's a much higher standard for robo taxis than a taxi driven by a human 30 40 50 000 people dying every year from drunk driving distracted driving and speeding uh and reckless driving you know we we know the short list here these things don't have that so it'll be a 10-year process, I think, for us to trust these things fully.

6:26But people are trusting them in San Francisco and Arizona, despite this, you know, ticky tacky eight mile per hour fender bender, I guess is the best way to describe it. So I wanted to bring it up for that reason. Yeah. I mean, the pole looked fine. The car looked dinged. You know, it wasn't like it ran into it and split the Jaguar I-Pace in half. It wasn't going 90. It was down an alleyway on an edge case it hit it very slowly but still to you know to weigh most credit got on it quickly proactively went ahead and did the recall didn't get forced to by the government which i think is a way to show good faith up as opposed to what happened with cruz which was bad faith right yes cruz man i mean what a disaster all right i mean just summarize for the audience yeah yeah so cruz got in trouble um a couple months back because one of his cars hit a pedestrian and dragged them for 20 feet the extenuating circumstances are that a different car hit the pedestrian first knocked the person into the way of the cruise car which then dragged them talk about the edge case of an edge case right yes but there's a saying in politics it's not the crime it's the cover-up what is worse than the crime yeah they submitted a video that didn't include all the footage and then they got in trouble for it and now they are slowly tiptoeing their way back to market.

7:41Waymo, on the other hand, being super smart here. This is their second recall of the year, by the way. They also had a recall back in February after a couple of Waymos ran into the same towed pickup truck in Phoenix. So clearly, again, not good. But have you ever seen a 16-year-old with a Suburban, especially if they've been smoking weed? I mean, that's terrifying. So I'm just less scared of these cars than I am of children driving multi-ton vehicles at 80 miles an hour down the highway, as if that makes great sense. you've heard me talk about how great my sleep is sleep is a superpower and my superpower is eight sleep they've got the amazing pod that you add to your existing mattress it will cool you down or warm you up depending on which side of the bed you're on i like it nice and cool i sleep deeper i am a sleep king and you might be a sleep king or queen too and you can be one if you get the Pod4 Ultra.

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9:40I love this product so much. I designed it to invest in the company. Literally was that guy who I was driving recently and a kid in an old like classic BMW pulls out of their driveway without looking like and just almost takes out my car and the two people who were on a hike on the street and i got out and i just talked to the guy and i just had great compassion i said hey what's your name what's his name you know eight 17 years old i said you got this great classic car it doesn't have a review mirror in it doesn't have a backup camera or beak beams so if you got a cool car like this just make sure you go extra slow out of the driveway because man if if that kid had been there you'd be in jail right now or if you hit my car your parents probably take your bmw away from you and they probably wouldn't fix it so i had a nice conversation with him because i just saw myself you know when you're 18 19 20 years old your frontal lobes are not fully developed you're going to make stupid decisions this is why uh the technology in a tesla needs to be replicated in all cars it must be standard which is you can speed limit the car and you know where it is and and uh some people tesla doesn't have this one but i did uh bring it up with elon i'm going to remind myself to to bring it up with again, geofencing the car for the teenager key, because you give keys now in a Tesla by person, not just by car.

10:58So you can give a key, you can speed limit it, but it should also and I don't know if they have this yet, but it would be a very cool feature to geofence it. The car is not allowed to leave the peninsula, it's not allowed to leave Brooklyn. You know, so you can have that conversation with your kid. But if it does leave Brooklyn, you know, it's on the Brooklyn Bridge, my parents didn't know we were going to Manhattan with their car, it would send them a text message. And so I'm really in favor of trust, but verify. And there's a really great piece of software for you. You'll deal with this now that you have babies called Bark, B-A-R-K.

11:31It monitors kids' phones and devices. And, you know, if a song or a YouTube video has something in it that's inappropriate, it sends mom and dad a text message. It tells you how to have the discussion with your kids about the topic. And then it also does like these educational things like, hey, by the way, this emoji is for cannabis this emoji is for sex this emoji is for this and so it's not like a nanny it's more like a guide on the side best friend like hey you know or a guidance counselor it's kind of like having a guidance counselor so i just want to give a shout out to the bark team okay okay jason i want to i have so many thoughts about this so first of all the geofencing thing for cars it's one of those things that my first thought about it i'm like that's an amazing idea And my second thought is, how would I have liked that growing up?

12:21Man, that's tough. We were free range. You got to remember, we were free range. And we probably took a little too much risk, which made us strong. As Gen Xers, we've had this conversation. And we have claimed you in the Gen X draft. I talked to the millennials. We won that trade. So we gave up, you know, some annoying Gen Xers to get you. I don't know if it was Alanis Morissette or who it was. All the Smashing Pumpkins fans. Yeah. Gave away some Smashing Pumpkins fans. in order to get you but um i do think like there's a good balance here and the one i like is trust but verify so i think it should like hey you're leaving brooklyn and it fires off a notification to you mom and dad on the same thread oh that's really in brooklyn yeah um just wanted to make sure everybody's in sync with this like i just think those kind of things are cool um and i set speed limit regulators on all of my cars um just so nobody gets speeding tickets and everybody gets reminded to be safe so you know everybody can make their own thoughts on this and for our family i don't mind a little bit of spicy language in music or i don't mind a movie having a little cartoony violence in it like fallout the tv show yep but you know i do want to know about drug mentions or sex or maybe you know some other things uh suicide suicide self-harm all of that stuff depression and so i do think like there are tools um and we just need to get to a 16 year age limit we talked about this on the show monday i think yeah monday when we talked about um what was the startup called fizz and i didn't get any reaction from them yet but i just want to uh i thought about it afterwards because i was a little harsh was i harsh you were um emphatic I don't think you were unnecessarily harsh.

14:08I think you actually said what you thought. And I can see how the people might think that you're trying to. Okay. You weren't grandstanding because it was heartfelt. If you had been insincere, it would have been too much. Got it. So yeah, I just want, I, I, collecting on my thoughts two days later, I just want to say to the Fizz founders, you're welcome to come on the program and I'll talk to you about it. Alex and I will do a quick conversation with you. Sure. Come on anytime. Maybe you have some learnings from this. And to the, my friends who are investors in the company and the, I was a little bit strong.

14:36Um, I take back none of that. Zero. Yeah. You, you know what you're doing. You're the adults in the room. So as the adults in the room, I stick with my position. Earlier today, I was on X and I was going through my mentions and I ended up running across or my notifications or whatever the hell they call it now. And I did run across an NEA investor who was, I think, on the Fizz board. So he follows me. So definitely people are aware. So anyways, Fizz crew. You got the, you got the follow. Okay. Come on the show. Let's talk about it. We'll talk about it. yeah yeah it was uh really quickly though so waymo is now in four cities jason uh if you don't know it's austin sf phoenix and la everybody fantastic to me this just goes to show that they're ready for more i'm just want providence to be on the list so my question to you is how do i get my little ponock town on waymo's radar so i don't have to drive um it's not going to happen in new england i apologize you built the grid system uh in a very strange way so manhattan good grid system parts of brooklyn good grid system but you know you go to austin you go to um phoenix you know some of these places have perfect grid system and they need a grid the better the grid the less education is the better you got a lot of back alleys it's also not coming to spain it's not going to be in barcelona it's definitely not going to be in florence italy yeah i mean in italy like you're driving with two cars on a sidewalk half the time in a tiny little car and knocking mirrors off so you know those are the places that'll be last the places that'll be first perfect grid system phoenix is perfect because there's no pedestrians places with pedestrians no bueno places without pedestrians great and you know one of the things we need to do as well um is making cities better for pedestrians i don't know if you've been to have you been to hong kong before i have not been to hong kong i've been to shanghai but not hong kong yeah so in hong kong you know it's a very dense city obviously absolutely they have walkways for humans and And then they'll have streets with no walkways for humans, just cars, or a barrier between the humans and the cars.

16:39So, and they experimented with this in Manhattan in Rockefeller Center area by putting up metal things because pedestrians and tourists would just wander into the street and get clipped. So they just kind of corral humans. And I think that's really how we have to design cities, more of like the highline kind of experience where you can have your kids running around off leash, no problem. they're not going to get clipped by a bike or a car. And that really is what we start have to start thinking about is taking back areas for pedestrians and then separating them from the cars, especially the self-driving ones.

17:12Cause then you just remove the number one concern we have, which is like child getting hit by a car. Hey, there's been a lot of afterglow for the Apple. Let's let's let's hit that real quick. Yeah. All right. So when we talked about Apple, Jason was super positive about the overall results. He said, this might be a seminal moment in the future of technology. And the market says, not to gas you up, Jason, but I do think that mostly they agreed with you. So we have a chart here of Apple share price. If you look at the lowest point, that is, I do believe before WWDC talked about AI, and then the last two days are the post AI glow, as you said, this is a lot of money, because when we're talking about Apple, we're talking about trillions of dollars.

17:52So if my math holds up, it's about 300,$340 billion in additional market cap for Apple, since it dropped all of its AI news. The share price was about 192.50. And when I wrote the notes for the show, it was 215.85. Now it's actually up higher. It's 2.1964. Yeah, it's a good trade. So did you buy more? I didn't buy more. I have a nice Apple holdings over at jtrading.com. But I'm going to start trading here. Now that I got you here as my partner in crime, I'm going to start putting some trades on. I'm going to rebalance the portfolio this summer. I kind of placed a lot of bets in the bottom of the market and kind of learn.

18:28And then somebody told me I could start my own ETF. So I'm thinking of taking my J trading and making an ETF out of it. And then people could buy my ETF, the J trading ETF. And then you could, if you wanted to trust my lunacy, bet alongside me. So anyway, somebody had stopped me on a flight recently and was like, oh my God, you need to start an etf for j trading i was in the austin airport getting my uh brisket at uh shout out salt lick um broken tooth worthy and uh so yeah i'm thinking about putting that in there i you know i got demolished by warner brothers demolished by disney my twilio went sideways everything else boom and so there's a lot of lessons there you know warner brothers disney i i'm sorry warner brothers and disney i i thought those companies had really great potential but think like it's they're struggling they're both struggling yeah media is tough right now streaming economics are particularly difficult i mean if you want to think about it in a kind of crude sense software or anything delivered digitally is having kind of a hard time right now but in apple's case given that people expect this new ai set of services to sell more hardware this is effectively a hardware boom because as it turns out and this was a surprise to me you have to have an iphone 15 pro or the future generations to actually run apple intelligence on your device which means that my iphone 11 is now it has to go like i just i can't gen behind wow that's shocking behold behold my phone just don't particularly care we have a chart coming up if you're watching the stream we have a list of all the different devices that can run uh the new stuff the good news is only iphones are restricted jason so if you have like an old m1 imac or you know macbook m1 or later you're fine yeah yeah okay cool so it's just your phone's not gonna i've been sweating that new uh m4 ipad i have no reason to upgrade my ipad and but it's just looks like it's sexy and thinner and they may have me i don't even know why i have an ipad i'm being honest i just kind of like to travel with both sometimes i like an app um but i may may upgrade just for the heck of it because i love these things yeah i have an ipad pro that i bought i bought the keyboard for it yeah and i haven't upgraded it in years because i just don't use it just to be honest no you like to write on your desktop i i mean i collect mechanical keyboards which i think it kind of details my entire stance on this sort of thing um although i do run a mac an apple magic keyboard on my my work computer because i love those just for lots of typing but i just don't have a use case for it and so when apple drops the new m4 ipad pro it looks incredible it's such an achievement but it's like uh it's like a ferrari engine in like a right like you just like what are you gonna do now that you couldn't do with the m3 chip if they continue to put an uh an ankled operating system on it i don't understand what the point of making it the most powerful computer in their lineup is if i could run mac os on it i and put a mouse with it i'd be pretty great if i could have windows on it i can tab between windows a little bit easier like i hate this concept of like split window it's like it's almost like they're purposely making the ipad um like i said ankled or restricted in some ways yeah i don't know what the word is here they're handicapping it maybe i can't say that because uh ableist i think i can say handicapping it they're they're handicapping it and like hey why can't i run it with mac os or give me like the mac os feature so i can have a mouse with it i travel with and etc i'm loving my dell i got the dell like latest latitude man it is awesome uh and then i have a dell desktop over here so i you know i'm like you i go mac for when i'm recording podcasts i go dell for everything else so i think the reason why apple has not harmonized its operating systems between screen sizes is actually due to Andreessen Horowitz.

22:30And I can explain this. So Andreessen Horowitz has Steven Sanofsky as a board member, a board partner. Steven Sanofsky was in charge of the Windows 8 project, if memory serves. Windows 8 was how Microsoft tried to harmonize tablets and desktop. It failed, and everyone made fun of them for it. So essentially, I think right now, no one has a way to bridge the touchpad mouse interface that we all know and love on our desktop computers or our laptops, and the kind of touch-centric tablet world. And until someone figures that out. I mean, Apple's just going to be making the best possible hardware with very little to run on it.

23:04But investors don't care. Apple's now once again, the most valuable company in the world. It was 3.3 trillion when I checked before the show, probably 3.4 now. So ahead of Microsoft, ahead of NVIDIA. I don't think it actually beats Aramco, but that's cheating. So shout out to Apple for ones that can kind of be on top. And I want to know how this is all going to work in China, but I know we need to move on, but I'm curious how Apple's AI stuff actually will function in more closed digital markets, Jason. Yeah, I mean, you, you have to obey the local laws at all times, or you cannot participate.

23:37So that's always been a challenge for American companies to make those hard decisions. And, you know, Google has chosen not to operate in China, they don't want to have their data services be used to collect dissidents and send them to re-education camps to put it mildly apple um it is in is there and they will claim they don't have to round up dissidents and the reason is because iCloud runs through a third party company there so there's a data company that runs iCloud that means if you're an Apple user there Apple can say like oh no we don't cooperate in collecting dissidents and sending them to re-education where they lose 40 pounds in six weeks it's like a spa plus re-education uh in china yeah you kind of like get weight loss plus torture plus every education yes they can just point to the cloud provider and say yeah there's we don't do it but the cloud provider does so it's it's pretty gnarly when you think about it now you can make your own moral ethical determination should we engage and have less wars because we're intertwined and maybe move slowly ever so slowly towards human rights on a global basis or should you just not participate and drive a wedge between the two countries you know it's well we tried no easy answer there for a long time i mean i think there was a great expectation that the internet and you know a more capitalist system was going to lead China away from a more authoritarian government.

25:11And up until the current premiere, I think that was kind of on track. But it just goes to show the power of, frankly, ideology over how things run. But just to make a point about the Apple partner, not the only company that does that. Microsoft, of course, worked with, if memory serves, 21VNet when they brought Azure to China. So working with a local digital cloud provider is, I think, a smart way for U.S. companies to have a hold over there, but not really get too deep into it. So that's just kind of how that plays out. All right, startups, when you're a business, you know, it's crucial to treat your customers right.

25:46Unreasonable hospitality should be your goal, right? Great book. And you know, who's great at helping you get delivering unreasonable hospitality? Zendesk. We use it. We love it. The Zendesk suite arms your business with all the tools you need to deliver exceptional customer experiences. And it's made just for startups. And they care about startups. It's built so you can build strong relationships with your customers through amazing support, experiences, and without growing your headcount. So do what Shopify, Squarespace, Uber, Instacart, and JCal does. Rely on Zendesk. They're your partner. Software company Unity, they saved$1.3 million with Zendesk automations and self-service.

26:30And they saw an 83 % increase in their first response time. These companies love Zendesk because it's so easy to set up. It's made to scale as you grow. And they give you all the metrics to make reporting easy, keeping you and your business agile and investor ready. And because you are a startup, they created the Zendesk for startups program. When you join the Zendesk for startups program, you're going to get unlimited access to all Zendesk products, expert insights, all the best practices you need, and entry into their amazing community of founders, all at no cost with the first six months free.

27:03So there's no risk to you. And there's all upside, you're going to learn so much from them, because Zendesk does this better than anyone. So apply to the Zendesk for startups program and use Zendesk for free for six months and get ready to scale with the best customer support. Go to Zendesk.com slash twist. That's zendesk.com slash twist. Good news, Jason, finally, inflation. It's finally, it's doing things that we want, kind of. So the data came out today. Yeah. So inflation, bad. Less inflation, good. I think start there. So the CPI, the consumer price index data came out today from the government that it was unchanged in May and was up 3.3 % in the last 12 months.

27:43It was down from 3.4 % in April, and April also saw 0.3 % growth. So definitely a better month reading and a better year over year reading. I was pleasantly surprised by this. I've been disappointed by inflation data a lot lately. And so to me to have better than expected results, I mean, breath of fresh air, open door, a nice breeze, I'll take it. I was surprised. You know, it's important for folks to realize when we talk about inflation slowing, that doesn't mean it's going down okay it means the rate of increase is you know is what we're talking about here so it's still going up 3.3 percent which means if whatever you paid for a loaf of bread or your starbucks whatever it is if you paid 10 bucks for something last year it's going to be uh 10 and 33 cents this year okay doesn't seem like a big deal we can absorb that amount of inflation why can you absorb that amount of inflation well real wages real wages have been up employment's been very low so there's a dual mandate by the fed they have an unemployed they have an employment target uh and then they have uh this two percent mandate for inflation they want to see it at two percent and they want to see something called full inflation that's the fed is supposed to be independent why does all this matter uh well interestingly um you know how we loan money should be correlated with these two interests for some reason that's what we came to in terms of loaning out money and what rate it should be at it obviously got out of control because you had two administrations in a row that spent money like drunken sailors trump went crazy and then biden went crazy yes printing went so this is literally a non-partisan issue money printing machine went and it's it's existential now for our country at some or at some point it becomes existential because the interest payments are so high um yes but why i i was wondering why two percent not three percent or one percent four percent it turns out i did the research on this a couple months ago because we're having a back in the like macro days of all in we're trying to figure all this out um in the 90s in new zealand an economist picked two percent as a target everybody adopted it yep there's no rhyme or reason behind two percent the person felt that was the right number they guessed they estimated it was a guesstimate so is the right is 3.3 crushing no it's trending down now why does this matter for startups then becomes the big issue and i think that's like a whole i mean i think you understand why as well um but maybe you could explain to the audience why this is worth even paying attention to if you're a startup or a VC.

30:26Yep. I just want to throw in one little note on the 2 % target because I've thought a lot about this too. And the way that I've explained it to myself is the reason why we want some inflation, now it doesn't have to be 2 % over none, is you really don't want to be dancing on the edge of deflation. Because then prices fall, companies shrink, it becomes harder to service your debts, for example. Inflation generally makes it easier to service your debts, better for the economy. but you know i'm not going to sit here and say that one to 1.5 is not superior to two don't have a view there but definitely you want to be above zero to avoid frankly what china's dealing with right now which is deflate all right so oh here we have a chart right now up on the screen of inflation historically this again shows the rate of change so the rate of change has decelerated but we're still going up oh my gosh inflation was so low for so long wow i forgot how good it was look at that yeah i mean it was it was a pretty spectacular rise there post pandemic so yeah you know when you look at 2020 you know obviously we were all locked in our homes then money got dropped on our heads stimulus and we obviously did too much now in hindsight if this gets back down to 2.3 2.1 whatever which is trending towards uh what we'll be looking at is saying you know what we saved the economy of the united states and the global economy so as crazy as this felt to be on a roller coaster maybe mission accomplished and so i know people don't like to give credit to anybody for anything done by the government and everybody hates everybody and but we might look back on this and say you know what yeah we may have spent overspent Sure, surely we did.

32:12Maybe we reacted too slow. Pretty confident we reacted too slow with the rate hikes. But maybe, just maybe, all's well that ends well. We'll have to see. But now, why does it matter that we were late with the rate hikes? Why do rate hikes matter? Why does inflation matter for startups? As inflation rises, the government will try to cool the economy by raising the price of money, which is effectively just raising how much it costs to loan and borrow. And so people then have to be a little bit more conservative because money is just more expensive. As interest rates go up, as the Fed looks to combat inflation, what we see is assets that are correlated with growth and risk see their value decline because other assets like treasury bills or high grade corporate debt are more attractive because they start to yield more.

32:59And so what we see is things like tech stocks go down. Now that matters to startup founders, because Jason, public comps matter for how you price around. Sometimes it matters more than other times. But when we do see rates go up, we do see tech stocks come down. And therefore, we do see limited exits in the IPO market, like right now, for example. So it's all correlated. I know if you're probably a seed stage founder, you don't care because you're like 10 years out from an exit. But you probably care if your VCs, LPs have any money. And when the stock market goes down, well, they have less. So it's all the same kind of bowl of spaghetti.

33:34I think it's really important to understand it so that you can ignore it. Once you understand it, it demystifies it. In a high interest rate environment, like you're saying, an LP, a limited partner who has money. When I was in the Middle East, I was meeting with one sovereign wealth fund. We're just talking shop. I didn't raise money from them or anything. And they said, we are getting 12, 15 % on corporate debt. So corporations paying their debt are paying us 12 to 15%. Venture historically pays that number, but it's illiquid and it's not guaranteed and it takes 10 years. So if we can be in instruments that have more liquidity, that's the name of the conference and that are guaranteed and that pay off quicker.

34:19Okay. I think maybe we'll go with that. So that's why you see only one in six first-time venture funds have been able to raise their second venture fund of late. The risk capital has been taken off the table. Everybody's getting conservative and people are just going to put their money in savings accounts. Even for somebody like me with a modest family office compared to these other ones, I have to look at things and say, do I build more businesses or do I retire, sit on this money and collect five, six, 7 %? And this is one of the John Galt, you know, Atlas Shrugged kind of moments for an economy.

34:58If you make it too easy to just sit on your money and collect a coupon, or you make it too arduous to build a business because of red tape, then what happens to business owners or, you know, capitalists in a system is they might just say, not worth it. I'll just sit on the sidelines, which by the way, when I went to Europe, and I talk to very rich families, they don't invest in venture, they don't start new businesses, they take their existing businesses, and they nurture them. And they just, you know, stabilize them and care for them very deeply, whether it's their, you know, farm or winery, or hotel chain, or pharmaceutical company, whatever it is, they are caretakers of these existing businesses, and they don't take risk, which is why in those economies, you have massive unemployment.

35:48and you have this like um you know kind of trending towards socialism kind of or socialism light kind of economies in our economy super vibrant people want to take risk people get greedy in a good way they get optimistic and they want to take risk so we just have to be very careful here that we don't clench up and make it so rich people rich endowments rich institutions don't want to take risk and they don't want to put money into venture capital right now because they're like, you know what? Yeah, venture capital, I'll just put in a coupon. I'll just buy the S &P and be done with it. Right. And that's a dangerous place for our economy.

36:24Um, my money market funds the next Uber or Coinbase. Yeah. My money market funds are yielding like what 5 % right now, just like, so my family's emergency fund, just sitting there and fidelity is just every month, just paying me lots of money. And I'm just looking at that. I'm like, gosh, this feels like cheating, but why would I take more risk with that money when it yields so much? And so again, back to the point about why this matters for startup founders. If we see interest rates come down, which we're now expecting to see, and we'll get to that in just a second, it could imply that people need to try a little harder, and therefore more money for VCs, more money for your company, et cetera.

36:57Now, Jason, stock market is on a tear today, right? Stock market is on a tear today. When I looked, the Dow Jones was up a little bit, but the S &P was up a point, and the NASDAQ was up 1.7%, which for a single day moving in the stock market 1.7 is a lot so very positive reaction there and the reason why is that people are now expecting for rate cuts to come so we have a chart from the wall street journal we're going to put on the screen right now showing the change in expectations from uh the 11th to the 12th and basically what we're seeing here is that about 20 percent uh greater chance of a rate cut in or before september and to this year according to traders so it seems like jason the chance of Plus, getting a rate cut this year is darn good.