OpenAI CTO Departure, DOJ AI Compliance, M&A Trends, and more! | E2014

0:00so there's two individuals um who are digging a tunnel on the other side of the tunnel are a bunch of diamonds the one guy is walking away when he has but one or two strikes left with his pickaxe to get to the diamonds the other person is feverishly trying to get there i'm not giving up folks i am not giving up other vcs might be giving up i believe we are on the precipice of the greatest super cycle in the history of business because what ai is capable of doing if you can own you know these companies and help grow them now and they are as efficient as they appear to be trending towards the amount of earnings that these companies could have per individual is going to start looking more like i don't know google's earnings apple's earnings or only fans which is to say tens of millions of dollars per employee not hundreds of thousands right This Week in Startups is brought to you by Linear.

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1:49All right, everybody, welcome back to This Week in Startups. He's Alex Wilhelm. I'm Jason Calacanis. And we talk about startups, technology, and we'll delve into media politics as it relates to those other topics. And Alex, I understand there's some breaking news. Yeah. So we were literally just sitting down, getting our mics turned on. And the Financial Times reports as of seven minutes ago, Jason, that OpenAI's chief technology officer, Mira Maradi, is leaving. oh yeah hello hello that's interesting so they have an unlimited amount of capital they have a massive lead and the cto has left the building yes that's a breaking news story so whenever we have a breaking news story we like to speculate what are variables what's the context around this we know open ai is raising at 150 billion like five or six billion dollars i think was the target of that raise so they have unlimited capital to pay this person but there was also a secondary where people could cash out and when people cash out large amounts of money sometimes they'll have an existential crisis all there or they will just say well i'm going to call it a career there are those there's two variables there there's also unlimited funding uh for new startups so that person might want to be in the number one position that's another possibility uh and then there are other startups that already have been formed that are looking for ctos who could make a better offer or there could be some uh thing that happened that led to them being pushed out fired or disagreements those would be the top potential category so there you have it folks it's going to be somewhere in that zone in all likelihood or it could be personal god forbid personal tragedy you know need to address something in the personal life um you know a sick parent or something so well any indication of why they're leaving as i run through all possibilities and you try to queue up this news i hope i filibustered enough no no no you're good um she said there's never an ideal time to step away from a place one cherishes yet this moment feels right our recent releases of speech to text and the latest models uh mark the beginning of a new era uh that's made possible by your ingenuity and craftsmanship she wants to quote create the time and space to do her own exploration uh i would bet you lunch which is my favorite wager jason that uh i bet she and sam altman disagreed about stuff my impression of watching sam do business for a while now is that he gets his way and you're either on board with that or you end up leaving but i mean ilia left and john shulman left and now mira's out and it's becoming increasingly at the top of the pyramid the sam altman show even more than it was before so that's that's my vibe is she can was she considered a co-founder or not i didn't know if she was considered a co-founder in terms of her title or when she came in i don't think she was considered a co-founder um she also had that terrible moment on tape where they asked her the training data it's the same individual yeah yes yeah and she she became a meme where she gave like a grimacing face like they were like did you train off of youtube and she said i probably if i answer that question i might get fired and or trigger a lawsuit but i'm an honest good person so i'm going to grimace which is what an honest good person would do if they got caught with their hand in the cookie jar this reminds me a lot of when a company does something bad and then they just cannot admit that they did it so did you see the boar's head meat fiasco in the u.s oh no i mean i know boar's head because i grew up on the east coast it's a roast beef and you get your liverwurst got all the good no more liverwurst they're out of that product line and they closed the factory because uh they were inspected by the fda and they found listeria uh meat on the walls just basically everything you don't want to see in them yeah and they responded with we care so much about our customers we uphold their value i'm like no you don't just tell me all right we were too cheap we made a mistake we're gonna spend more and do better i'll respect that much more than just being grimaced at if you will but anyways mirror she's out and um well bad news for open ai fans i guess well um it does seem like that organization now has so many people uh and so much capital and so many users and so much revenue that i wonder if one person can you know coming or going actually will change the fate of the organization i don't suspect it will yeah that's fair i wonder also if you know if i was the cto of an org and she was there since 2018 so not a co-founder but a very long tenured employee at the company um if i had been there for what is it now six years and we started off as a research group we got larger increasingly commercial and then suddenly you're in the process of raising six and a half billion more it's probably less doing code and more doing meetings than she might want to do and i kind of respect that if it's worth 150 billion and she was a cto and she had but one percent of the company would be worth 1.5 billion 10 basis points would be worth 150 million somewhere between those two numbers is probably what a cto would get um now yeah if he was an early stage startup because this had a very weird beginning and weird corporate structure you know the cto if they were a co-founder would own you know if it's four co-founders they might own 10 each after dilution 20 each in the beginning um as a hired gun cto brought in later low single digits so you know she had one one percent she's a billionaire and she might have been able to sell you know whatever 10 of her holding she might have taken down 10 to 100 15 million to 150 million and be sitting there saying you know what there's more to life than this and yes it could also be maybe sam feels that the organization outgrew her.

8:03We all of those reasons. And when you get a wishy-washy kind of statement like that, it sounds like she might've been pushed out. Yeah. Well, more to come on this reporting just off. I couldn't not bring it up on the show. If you want to build beautiful software products, well, you need a beautiful development platform, but most issue trackers just aren't helpful and they feel like a chore to use. But linear is different. It's developer-first, incredibly fast, beautifully designed, and it's purpose-built for how modern product teams work. With Linear, you can streamline bug reporting and task tracking, plan and spec new features, and manage your long-term product roadmap.

8:45That's why Linear is the tool of choice for tech companies of all sizes. Half of Y Combinator companies build with Linear, and it powers Cash App, Scale AI, and Vercel. So here's your call to action. See for yourself why product teams love linear. Visit linear.app slash twist to try linear for free with your team and get 25 % off your first year. That's linear.app slash twist. Jason, the actual news we have for everyone today is a change to compliance rules in the realm of AI that might impact startups. You had me look into that. I have it for us. A possible M &A comeback, hot startup rounds that indicate a return to valuation normalcy.

9:26And then thanks to the group text, generation tool belt and interesting data on how the youth are changing up how they approach the labor market. All right. First up, though, Department of Justice compliance. Jason, these are now incorporating AI into kind of the best practices. I have a lot of thoughts about this, but I'm curious why you flagged it for the show today. You know, I just saw people talking about it and there was a Wall Street Journal article and I was wondering why the Department of Justice was talking about AI as a potential risk and that compliance officers and compliance programs needed to be involved in that.

10:06So compliance, as everybody knows, or maybe doesn't, is typically in a finance organization, let's say, you want to make sure that you're doing things by the book. It's kind of like the legal department and making sure, you know, it's kind of legal adjacent and it's like operations, but more serious operations. So compliance might be, I don't know, something silly like, well, when we make a trade, there's a document and it's signed and this level of person needs to approve a trade above this amount of money so that we don't have some rogue trader. You remember that story of the rogue trader who was trading well above their limits, you know, on some desk and then they get flipped upside down because they were doing something that they weren't supposed to be doing.

10:49The compliance officer is supposed to check that. Yes. So I'm wondering why AI came up on their radar, if it's preemptive or reactive, and there's something happening in organizations that requires compliance. Okay. So it turns out there's this thing called the Evaluation of Corporate Compliance Program Guidance Doc. And what it is, is a series of best practices. And if you're a company that has to deal with compliance, which is most of them, I'd say, then if you follow this document and you make a mistake, the government will say, well, look, you did follow the best practices. Something went awry.

11:28We are not going to take you outside and hit you with sticks. We might fine you, but probably no one's going to go to jail. And so when they expanded this document to include some stuff on emerging technologies, which really is just focused on AI, what this does is it means that companies that want to use AI products will have to then take AI compliance into essentially how they do business to prevent getting in trouble for it. Now, there's a bunch of stuff here. I'm not going to run us through this. I kind of summarized it down to three things in the realm of risk management. So the first thing is our companies that use AI, quote, keeping tabs on potential negative or unintended consequences and working to mitigate the potential for deliberate and reckless misuse.

12:10So that doesn't sound onerous to me. It sounds more like know what you're doing and don't have no guardrails. That doesn't scare me too much. and then two more things that really stick out to me one was are companies certain that quote the technology is used only for its intended purposes so don't build something that can do very bad things and then just ship it out there and then go whoops us and then finally how is accountability over the use of ai monitored and enforced so that's kind of i think the key bits nothing here strikes me as as you're not going to get like lena con level angry about this jason um but i do think for startups that are selling ai you know mediated or predicated products are now going to have different conversations when they do sales and that's kind of what stood out to me here is if you're a startup you need to answer this question yeah if you're working in finance you know maybe hipaa you know uh health information yeah you you have to be thoughtful about how ai is applied so if you were to put a language model into a hospital or into morgan stanley or something or blue cross blue shield and you did it in a non-thoughtful manner and it resulted in people's information being leaked or i don't know a prescription being given that shouldn't or financial advice being given that was wrong or somebody not getting a mortgage because your algorithm and your language model didn't correctly assess the risk or you know they gave a mortgage to somebody that was too risky all of these applications when they hit the real world have consequences self-driving pretty obvious i was using 12.5 today and was very impressed you know it still needs an intervention it's not ready to take the steering wheel out neither is waymos but it's you know we're in the autonomy end game as we've talked about here and it's one of our themes yes but there's a lot of compliance there right hey make sure you record things and keep track of interventions then you start going down to the next one which is health care maybe people are getting a prescription or they're getting a diagnosis you know way down there is grammarly or the new writing tools that we talked about inside of um the ios beta 18 for the iphone 16 i guess the ios is a different version than the phone so i think they're on ios 18 iphone 16 ai that apple intelligence as we showed you know if it puts the comma in the wrong place i don't think anybody's going to get sued no oxford comma or not i mean you'd be annoyed but you're not gonna get sued so but if you put the comma in the wrong place in a financial transaction and add some zeros by mistake uh you could be in a lot of trouble for example i think the hipaa point's great because the thing about unintended consequences stood out to me as you can't claim ignorance so for example if you had an llm that sat atop hospital data and allowed i don't know doctors to ask your questions about patients cool if someone who wasn't uh allowed to access that data asked it who's the most obese patient in the hospital today yes well you should have some guardrails around that and that's why these rules don't this didn't terrify yeah it it just seems like we're now got the regulators aware that ai is being implemented in 2024 and will be implemented and they're just saying by the way we're aware that you're aware that we're aware that we're all aware that this is happening and so since we're all aware don't screw it up uh pretty pretty basic stuff i think for founders you know it's very interesting when you work with young founders alex because for a period of time when this came out i had a lot of people coming to me saying i'm going to do ai therapy so i'm going to have an ai do therapy with a person and And I was like, well, you know, some of the people have therapy, you know, they might want to, I don't know, cause harm to themselves or another person.

16:06Yeah. You know, or they, you know, there's all kinds of like really bad things that can happen. Like, how are you going to deal with that? They're like, oh, we're going to put a disclaimer. I'm like, you're going to need to talk to a lawyer about this first. Like probably several lawyers. i mean if you want to do you know characters and it's for fun and i'm talking to hannibal lecter and you know it's like or i'm talking to a marvel superhero that's one thing but if you present it as hey this is your companion or this is therapy that's where i think you got to be thoughtful because maybe these things get trained on hey what are famous psychologists and and what do they think maybe it's outdated maybe it's not applicable maybe we've realized giving this type of advice to this type of person could result in this outcome that nobody wants to see so again just because a new technology doesn't exist doesn't mean you can just apply it to everything recipes yeah and you know i don't know um writing uh and tier level one support are different than healthcare and finance so just be thoughtful everybody yeah and you know i'm just thinking about this it actually it's very reasonable to presume that if we're going to use a computer or an llm to do a medical function that it would be held to the same standards as the humans that do this and humans have to carry malpractice insurance and you know like there's relatively rigorous credential in there because we've learned all regulations are written in blood as the old saying goes, that we need to have some rules here.

17:39So in fact, maybe from that perspective, Jason, these rules are light compared to where we're seeing AI applied. So consider these a minimum, but not a sufficient amount of regulation. All right, everybody, I invest in 100 companies a year. And one of my key criteria is, do they make good business decisions? Are these people strategic in how they deploy capital? And you know, it's a great decision. It's a great decision to choose Oracle Cloud Infrastructure. Oracle Cloud Infrastructure, or OCI, is the next-gen cloud solution. It's a one-stop platform for your infrastructure database and app development with built-in AI where you need it most.

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19:52So a half billion dollar transaction. And CTEK reports that it sold for a price that was higher than its last round. So presumably everyone did okay. And that comes on the heels of Salesforce spending$1.9 billion to buy own. So a couple of big deals from the CRM giant. This week also, Vista Private Equity said that they're going to buy Smartsheet. IBM's buying Kubicast. Databricks bought Tabular. And then there's a bunch of other deals. So just preparing for this little rip it didn't seem that bad so what am i missing from these news stories compared to kind of like the experiences of vcs well um you know we happen to have a chart here uh and so if we pull up the chart uh small deals um we got a lot of small deals occurring i think that's because these companies are out of money uh and the valuations got ahead of their skis and vcs no longer want to fund them therefore these are shotgun m a company is not going to get more funding the valuation is lower by i think in the one example you gave 75 percent lower maybe than the previous valuation that it got sold for so you'll have something that was worth 2 billion sell for 500 million or a billion sell for a billion and um you know it is a sign that uh the venture community probably didn't want to keep funding these and the deal structures and the overhangs were too complex to let a deal go through so what i mean by that is company stops growing it's growing 10 a year they've got 500 million in revenue it's no longer a high growth company therefore as a venture capitalist if you have dollars to invest would you rather invest in a company that's proven it's growing 10 year over year with some hope that it could break out that has all of this weird cruft on it and you have to have a lot of negotiations to do a down round to uh cram people down to do a uh pay to play deal so previous investors don't participate in this round they lose it all for a business that is sideways or even worse low growth now you've got this like oh my god we've proven we can't grow and uh you get some fire sales because vcs don't want to touch it there's too much hair on the deal is i guess the the term people use so that then a sales force could come in and clean up maybe they say hey that's a billion in revenue let's say the company has a billion in revenue and this other company is trading for you know x times dollars uh and the vcs just want to get their money out you could start to see these situations where you have a clear path to get your money back as a VC and move on to the next investment that's that's a lot of what I'm seeing a lot of VCs are saying you know what yeah I like this company it's making 100 million I just don't want to come to these board meetings anymore it's too hard it's not working and I have other investments that are growing if I put 10 million into this if I put 100 million into it and I can get back 10 million plus or minus you know my original investment i can give it back to my lps i can recirculate it put it into other investments that are high growth yeah and this is the doggy dog world of venture in a market that went through something as cataclysmic as post-zerp and and that's what you're seeing is these distortions on top of distortions lena khan you know a chilling market with her approach so you have like a double distortion kind of going on here and it's going to take time to work this all out Yeah.

23:31Okay. I got a couple of questions for you. First of all, let's talk about growth rates that are sub-venture for different sizes because a$500 million revenue-based former startup that hasn't gone in public yet can have a lower growth rate than one that has a hundred million. So let's start around there. What's the minimum growth rate needed for a everything else held equal, normally quality SaaS company to raise more venture capital? if you look at the public markets you'll have companies like uber airbnb google apple grow at 10 to 30 percent 20 30 percent in the public market on large numbers is considered high growth yes in venture 50 100 200 percent year over year growth is high growth so you're at 10 million next year at 20 you're at 20 million this year next year at 32 this would be like the high growth numbers when you start getting down to 10 or 20 growth people start looking at a five-year chart compounding if you're growing 10 a year it's going to take seven years to double the revenue it means the valuations not going to change dramatically so you don't have like crazy market pull like airbnb and uber did in those early days where every quarter you were growing 20 or 30 percent quarter over quarter and so you want to get out of those investments and start focusing your limited amount of time on investments that are growing faster and um you know the the overhang is the other big issue people invested a lot of money at a high valuation and now you put that growth rate on top of it nobody wants to put more money in therefore the management team says okay we'll go for break even so they get advised hey you're going to run out of money nobody wants to invest so you go for break even you then start hitting break even but you're growing slow and then everybody complains well you're growing slow why should we give you more money and you're like wait a second which is it are we investing in this business investing is another way say of saying losing money going down the j curve for a brighter future and people got so scared during the post-zerp collapse that they actually probably steered towards break even so much that they became low growth or no growth companies and then the outcome is you know a sale at one or two times revenue yeah i actually i i have the charts for what you just said i'm going to screen share here and uh so here we go uh this is uh from the best of our cloud index this is revenue growth rate for public cloud companies over time uh you can see that there's been a little bit down and then after everyone was told to get profitable growth rates rapidly accelerated at the same time over the same time horizon trailing 12 months uh free cost low margin shot right up so you can literally see the trade-off between growth and profitability here it's super vibrant but jason i want to narrow down the point about um growth rates because i want to know how fast they decelerate as your revenue base scales because of course when you're a series a series b company triple digits you want to triple for a couple years then double for a couple years but if you're at 50 million a year in revenue today it would would 40 percent year over year revenue growth be enough to keep you in the venture game okay keeps you the venture game for sure yeah and you know there's always the hope of new products there's always the hope of uh acquiring other companies and increasing margins landing and expanding so there's a whole series of hope and and really if you think about building a business building any enterprise you're it is a fight against pessimism and um trying to steer the car into the turn as opposed to going off the track right and you have to really have this blind belief that hey if we get to a certain amount of liquidity in the uber or airbnb network we will have a great experience so wait times will go from 15 minutes down to five and under people will become trusting that they can get a lift or an uber in time or that their food will come in time so they don't they stop going shopping and they say i'll just door dash it there's never a situation where a person in a modern city in america or around the world you know 15 years after the the creation of uber feels like i'm not going to be able to get a cab nobody has that fear anymore 15 years ago it was that fear that led to the opportunity but you needed to invest in having enough liquidity in the supply in order to have that happen so we hoped we hoped liquidity would arrive and then we hope consumers would become addicted to it we hoped that you could raise the price of it once all of those hopes became reality now you've got a money printing machine and you saw the same thing with airbnb will people let people stay in their apartment will people take their extra apartment their second home and or they keep their home and instead of selling it they put it in the airbnb inventory and then they go buy another home because they did well for themselves and they keep the original home that was like a lot of the big airbnb win was people had like some i don't know let's call it a one bedroom and then they had a family but they had paid for their one bedroom or they had a tiny mortgage on it and they were like yeah i'm gonna buy this you know house in the suburbs but i'll keep the apartment in manhattan and i'll put in the airbnb inventory or whatever that was kind of the magic that you had to squint and really believe that somebody would do something as crazy as that and it happened so it's the triumph of hope over pessimism that's really what startups and entrepreneurship is so i want to tell you um how important it is that now ubers are like running water because i was at the uber launch party in chicago so this was back when it was black cabs only and they only had like three in the city at the time literally just paying black job drivers to be there you know right they bought the supply yeah which is to be clear smart but like there was like three or four ubers live in the city at this time and it was so cool because i was the only person who had uber at my university because no one else went to that thing um and then i recall years went by uber became more you know pervasive and lyft became big and all this and i remember one time i was flying into i think it was san francisco and i'm like oh i don't need to worry about transportation at all even if i'm landing at 2 a.m because this is going to work yes that that unlocked for me new locations too like i the world felt much more reachable and i think that's the magic moment that's so hard to get to but oh my gosh is this sweet once you nail it i mean it just happened to me with apple pay you know i i i misplaced my wallet uh and uh my my spouse uh did me a favor of like collecting it for me and then misplacing it i have no credit cards i have no driver's license and i was operating in the world without credit cards yeah and i was like wait a second how is this possible i'm like everything's apple pay and i always keep a cup of hundy on me it's my old like it's my upbringing that i gotta keep you know a knot in my pocket i always have a little cashy poo um and then even giving tips last night at the valet i gave a tip using venmo i said to him you got venmo you know when i get my haircut now venmo all tipping is occurring on venmo now so this cashless society which we've been working towards is now even a credit card list society you can and i can leave my home without my keys last night talking about running water i went at the same valet situation where i didn't have a credit card i also forgot i keep the key in the cup holder my spouse took the key out of the cup holder you see the theme here yes sometimes you're married yes i'm married and what married people do is they create little problems for each other you know i do the same for her it's true so i get to the valet i don't have the key to my car i said to the guy okay can i park it myself he's like this happens all the time go in your app hit start wait here we'll park it we'll even charge it for you um but just don't leave until we're parked got it he parks it just in case for some reason the car couldn't start because you can remote start it it's now parked great now i can leave so no key for my car valet worked no cash i was able to pay the valet just like a little indication that you know you you start to trust something to the point at which you could leave home without the keys to your car house because you have codes to do that and rfid and you have apple pay there's no flaw with this plan whatsoever apart from the fact that i keep putting my phone down and walking away from it like i'm fine with everything being mediated through my phone just because it's convenient like your car should be entirely just an app right that's just easier than keys if you have a tesla yeah if you have a tesla if you have a super route back like we do it's not sadly that why isn't it what are they doing it's so easy to do come on super route back that's a great car we bought a 2019 super up actually the one because we wanted the bigger engine they stopped making okay we had to go i'm sure the new one has keyless entry on your phone i mean how could it not i would hope so i would think so but in the future though everything's gonna be on my phone i just wish that i would stop putting it down and it would go between the seat cushions and then my children would sit on it and then i don't find it and then i'm running around the house like a moron okay to conclude this section though yeah yeah uh there's some good news here this is a quarter by quarter breakdown of the same data set we looked at before but look at the last two quarters compared to you see the average of the preceding seven that's better that's actual money and i think we're starting to have a little change in the wind if you look at q1 and q2 of 2023 q1 and q2 of 2024 looks like it's triple so now it's going from a base of almost nothing and uh but you know the exit value and the number even and the raw number of transactions is going up so this is great um some of these are acquihires some of these are inconsequential but uh any sign of life is good and uh you know we'll we'll definitely lena khan's gonna go that's for sure no matter who wins the election she's done and so um yeah as we talked about on the last episode you're right we didn't get to talk about it last time but um the uh the kamala campaign kamala harris campaign is trending towards crypto and uh the biden administration just pushed back some of their own party to approve uh some chip plant stuff so it feels like after much hand wringing the democratic party is is gently scooting towards a direction that i think you'll like better jason i'm just curious if it's gonna have any impact on the election but it does seem that the complaints have been heard so i agree with you on lena con being out because what's constituency i mean i think you can only hate capitalism so much in america before it works against you and you don't win the election so i think what they're probably looking at is people liked obama and clinton who were moderate democrats people like moderate republicans as well you know for whatever problems i have with trump i don't know if you have some problems with him i suspect you might have some character issues with him be kind of weird if you didn't uh just a couple um putting all that aside he's a moderate democrat as well i mean trump's behavior is as a moderate democrat it's just he pretends to be a mega lunatic conservative because that that's how he wins he got a base he's been a democrat his whole life yes he's pro-abortion he's pro-business you know he just panders to get a base which i think is what happened on the left too i think they pandered to activate a base for a period of time but now when it comes to those swing states what are people in pennsylvania and arizona and nevada do are they extremists these moderates and women who are the swing voters now they're not they want normalcy normal border normal abortion health care rights you know normal taxation they want normal and so i think what you're seeing is both of them are just acting a little more normal and mna is normal i i really appreciate you took that you tied all the way back into the eminent that is that is what 2 000 of your own shows will do practice be normal venture capital is widely seen as one of the most lucrative asset classes in the world go look at the s &p 500 nearly every major tech company on that list was once funded by venture capital firms producing billions of dollars in profit in the process the hard truth however, is that the biggest venture firms are almost entirely funded by institutional investors, like endowments and sovereign wealth funds.

36:31So unless you knew a guy who knew a guy, you and 99 % of individual investors did not get to participate in the pre-IPO growth of any of those blue chip companies. And it's happening again. Look at the biggest names in AI, for instance. Almost all of them are still private, just out of reach of your portfolio. The Fundrise Innovation Fund is finally changing that. It's a more than$125 million fund. It holds some of the most exciting pre-IPO tech companies in the world, and it's designed specifically for individual investors. This time, you can get in early at Fundrise.com slash twist. Carefully consider the investment material before investing, including objectives, risks, changes, and expenses.

37:12This and other information can be found in the Innovation Fund's prospectus at Fundrise.com slash innovation. organization this is a paid advertisement now next up jason i have some good news which is that the m &a return that we're seeing now you have phrased in a lot of companies ran out of cash dealing with some overhangs etc but not everything is cleaning up the trash from the last party it seems that a lot of startups right now that are hot today are raising lots of money at prices that seem to be much more reasonable so i'm going to give you two examples really briefly and i want you to tell me if I'm totally out to space or if I'm onto something here.

37:49So first of all, WhatFix, they just raised$125 million Series E Warburg Pincus. Now the valuation jumped up by 50 % compared to their 2021 round. TC had that number at$600 million. So they're probably worth $900 million now, give or take. And this company grew its ARR 4.5x year over year. So to me, that's a lot of growth that's not a huge valuation jump in a company at this age of maturity not being a unicorn shows price discipline your thoughts yes love it um if the arr is growing four times that's a very high growth company um and yeah it was probably not that the valuation is low right now it's that it was high back then and so it has been digested you ever um you ever celebrate the thanksgiving you've been to a thanksgiving and yeah and you get a second plate oh yes yes i i do and then the pie comes out and you get the you get the pecan pie you get the apple pie maybe go a little a la mode and then you watch the game and then you go back and maybe you have second and thirds you know and then the next day friday saturday you're just you're still trying to burn through those galleries maybe you have a turkey sandwich later in the day on friday but you know that's this indigestion uh is what i'm trying to get at here is just we just gorged and so i think that's good discipline it's probably good value and what we really have to start thinking about is can you make money and so you could look at this in chat gpt and in fact i did that earlier um and i've been using the um is it oh four is the uh no it's a new one oh one okay so the oh one preview is what i'm about to show you here i just i typed this in earlier um a startup just raised 125 million at a 900 million dollar valuation we're trying to figure out how much money these folks made friends and family invested 100k at 2 million accelerator like mine or yc or tech stars 125 for seven percent seed investors put 1.5 million at 10 series a 30 million 150 million dollar cap series b at 100 million 1.5 billion at cap latest round was a down around 125 million at 900 million dollar valuation make the cap table this is really complex it thought for 77 seconds wow yeah that's a lot of thinking because i just gave it something like that's many steps you hit the down arrow key here so it's listing disparities building the cap table assessing share evaluations breaking down ownership breaking down ownership determining share dynamics evaluating the terms evaluating improvement i mean it starts telling you all the things it's doing converting the notes uh initial founder ownership founder shares assume the founder started with 10 million shares representing 100 ownership friends and family put a hundred thousand at two million dollar cap ownership percentage 100 000 divided by two million equals five percent correct shares receive five percent of total shares before series a accelerator 125 or seven percent ownership okay they have seven percent before series a seed round 1.5 million they own 15 sure enough that makes sense calculating shares before the series a founders ownership 73 because 100 minus 5 minus 7 minus 15 equals 73 it's not exactly correct but anyway it starts doing this all oh my gosh yeah and then here the founders after all this owned 50 friends and family owned 3 3.4 and then i said hey well how much did they how much are there how much is it all worth so the founders are have 50 of a essentially a billion dollar company for 513 million friends and family stake 35 million accelerator stake 50 million and then you start seeing you know series b whatever a long way to say and then it tells you the multiplier 351 x for the friends and family 400 x for the accelerator um it's not counting dilution perfectly here long and short way of saying um you know it's very hard to make money in these later stages and this is one of the big challenges with let's say um the series a and seed rounds today can you return your fund can you return your fund let's say you have a 50 million dollar fund it's approximate size of our fourth fund okay you own seven percent of a company you get diluted 50 by the exit let's say even a little more like 60 so you're three percent at sale three percent at sale for a billion dollar company you hit unicorn status is 30 million okay and uh let's say it hits 1.5 billion sale it's another 15 million so right around 1.6 billion you know you return your fund kind of hard to hit a 1.6 billion dollar company but it does happen how often does it happen might happen one every 200 investments for an accelerator maybe every 300 investments so you start to realize like even for an accelerator it's hard now you imagine you invested you know and owned seven percent for seven million dollars just how far you have to get for that fund and how many names you need to have the elevation of prices at series a and seed has made it very hard for venture funds to get a return it's great for founders but it's kind of breaking economics for fund managers and lps and so we have to return to some normalcy and that's i think the healthy part to the story that you're describing today yeah i think normalcy is good um i'm going to bring up one more example of a company that i think is doing pricing pretty reasonably well um torque to our q just raised a 70 million dollar series c evolution equity partners we don't know the valuation this time, but my read here is that it's less than a billion because they would have said more than a billion if it was.

43:56And that matters because the company has crossed the 24 million ARR threshold and has been tripling for a couple of years and thinks it'll hit 100 million ARR by its fiscal 2026. So here's a company on its way to nine figures in revenue with a sight line to it, and it raised 70 million, and it's not a unicorn. And I think what that does say, jason is investors are now saying at the series c and beyond level we are going to start thinking about what your possible like market comp exit is and we're not going to get too far ahead of that because we don't want to be stuck holding the bag like we are with so many companies that are overvalued from 2021 so it just feels like discipline is not back but returning maybe it's returning yeah i would say that yeah so i mean 24 million um you know times uh 30 multiplier uh you know it's pretty obviously 720 million dollars that's pretty juicy valuation um 30 times top line revenue it's a high growth company you know in another lifetime maybe they would have gotten 50 or 100 times right so it would be double that 1.5 billion maybe would be 2 billion and people were just assuming that they would give the value next year's revenue or the 2026 revenue so we give credit for work not yet accomplished and i think that's where people got themselves in trouble the the tigers that those kind of cohorts came down and said some number of these companies are going to be worth a hundred times what they're worth today so let's just give them credit on average for you know a year or two of work maybe two years of work and they'll fill in the valuation.

45:38Then we start making money in 2027, 2028. This company is being valued on their revenue now. So while they may say they have a line of sight to a hundred million, they're not getting valued at a hundred million in revenue times 33 billion. They're getting valued probably at 30 times revenue, 700 million, 800 million. Sure. And I think that's reasonable because you don't get a 30X multiple in the public markets. It's more like eight, but as the company grows, its growth rate will come down, blah, blah, blah. But from this point, from the series C, it makes sense that later on it'll be valued like a public company and that's the important thing because then you can exit you can have an ipo you can have a sale to private equity or to a tech company and then jason gets paid and that's very important for the venture capital scene i mean if i joke if you if you don't return dpi if there's no distributions to paid in capital we the industry's over i don't know how to say it more clearly now because there are other places to put money we've talked about this so many times if the lps can put their money somewhere else they will so the founders um you know they need to do the best job to get the best valuation they can but one thing they could do in terms of having empathy if they do get to the point where they have this crazy marketplace is understand that you know if people are overpaying you for your shares then it's going to come back at some point they probably have downside protective provisions and if they're underwater then they are going to sell your company as we saw in the brief history and it might not you know be so good for you so there's something here about not gorging and not getting ahead of your skis if you and and you know the way i would explain it you know to somebody who is buying a car you know like if you can afford uh you know whatever model y and you're thinking about getting the model x and it's twice as much money and you're somewhere between the two get the model y you know live under your means and be comfortable you don't want to stretch too much and then feel pressure and i think that was a big part of the excess and everybody said it anybody who'd been in the industry through multiple cycles warn if you raise too high a valuation and you don't hit it you may not be able to raise capital again you may have venture capitalists who behave oddly on your cap table yes your board meetings and that's what we're experiencing now so there was a reason those warnings came you know there's a book called devil the devil takes the hindmost i think and it's a history of various um financial booms and panics throughout time.

48:19And the really nice thing to know reading that book is humans haven't gotten any smarter, but we haven't gotten any dumber either. We're just kind of doing the same things and through bubbles and through business cycles, we end up progressing. But if you do get caught in the downswing of a bubble, it's going to be absolutely brutal. Jason, in venture capital terms, though, if valuations are more reasonable, VCs will have less aggressive TVPI growth. But if those lower valuations allow for more exits they'll have faster dpi am i doing that correctly yes that is so great that you have nailed this i mean you're you're you're you're moving from like superficial journalists trying to figure out what's going on the inside to being on the inside and understanding it innately right and and i went through this same journey i'm just like your big brother a little bit ahead of you on it the dynamic is do you want paper do you want to feel good on paper or do you want to feel good in reality and you know there's this expression that bill gurley told me at some point that somebody told him which is you can't eat tvpi you can't put that on the table and so you know it might have felt good for example instacart shareholders had a very high valuation and then that company which i think is called maple bear on the public markets the corporate name yes yes which i mean what are you doing just anyway yeah instacart today is worth 10 billion yeah and it's doing really uh well recently it went down it was trading at 22 a share in 2024 um and remember they kind of got pushed out of the nest to they forced them to the ipo because they had been trading i think their private round was the highest was like almost 40 billion they were very aggressive during covid i think apuvra the former ceo was brilliant at pitching the company and raising capital but i would say from where i sit the valuation that he did raise that in the end wasn't the right one well and now it's worth 10 billion in the public markets as opposed to 40 billion in the privates that's one of the major ones i can remember here and so that is probably the best example we have of what will eventually happen to your company is there is a voting mechanism and then there's a weighing mechanism uh is i think the way warren buffett said it or charlie munger said it it was graham right oh okay so maybe munger kept saying it um but the concept here is you know in the private markets we're all voting yeah instacart's a great idea airbnb is a great idea coinbase that's killer this is great that's great okay uh robin hood killer idea okay how much is it worth okay we're not voting if this should exist in the world anymore we're not voting if we want it as consumers and we're not voting if we want it to place a bet we're weighing it what is the actual value of it in reality well the value is what's its growth what's its earnings is it losing money or breaking even and we saw this with uber and airbnb when these things and lift were losing money people didn't want to own them once they started you know restructuring people wanted to own them and so i feel like i was talking to a couple of people who were in the venture business um this past week a number of them have left the venture business oh and we had a real heart-to-heart discussion and the heart-to-heart discussion was i don't know if i can do this cycle again i don't know it's just too hard and i said to one of them you realize that you fought up until this point and you might be leaving right as the party's starting up again and we're on the greatest cycle of our career it would literally like i'm gonna stop watching the nba you know when michael jordan retired you would have missed lebron you would have missed staff you would have missed all these incredible players you know i'm gonna stop watching television you know after hill street blues and saying elsewhere is off market you would have missed sopranos right and so you got to be careful when you quit and right now i think the people who fought through and have not given up we are on the precipice of working boom exactly it's this meme you're literally describing this meme i had to pull it up this is uh it's the if you're listening to some audio it's the uh the mining meme when the person you've got turns away oh people love to put text on this to make it into kind of whatever they need but this is what you're describing so there's two individuals um who are digging a tunnel on the other side of the tunnel is are a bunch of diamonds the one guy is walking away when he has but one or two strikes left with his pickaxe to get to the diamonds the other person is feverishly feverishly trying to get there i'm not giving up folks i am not giving up other vcs might be giving up i believe we are on the precipice of the greatest super cycle in the history of business because what ai is capable of doing if you can own you know these companies um and and help grow them now and they are as efficient as they appear to be trending towards yeah the amount of earnings that these companies could have per individual is going to start looking more like you know i don't know google's earnings apple's earnings or only fans which is to say tens of millions of dollars per employee not hundreds of thousands right and that's the i don't know if you've seen that you might be able to pull it up as we talk here uh one of our great producers can but there's an incredible image now of revenue per employee now nobody ever included only fans because it's a privately owned company but for whatever reason the information about only fans is public i guess they're releasing it because maybe they're releasing it like some private companies do ahead of a potential ipo but um the revenue per employee here uh as you see for apple and you know this is uh i'm not sure when this is dated but it shows you know facebook at 1.6 million and you know apple almost 2 million per employee now you cut 20 of your employees that means those numbers go up 20 and you grow 30 for three years in a row as we talked about with the recurring theme static team size age of efficiency i think we're going to to see these companies start going on and earnings care like we've never seen.

55:08Okay. Now, that is great. And because I have the vast majority of my net worth in the stock market, which means that I'm going to do great. If that business super cycle happens, my net worth goes up, my feet go up, I turn off the webcam. Goodbye, Jason. I'm out. Huzzah. Great working with you, pal. Great working with you. Three full months and we're done. No, but a lot of people don't have wealth and a lot of people might have had jobs that do get efficiencyized by this thing and you know yeah but we're talking a lot about different generations here on the show we talked about gen bet and one thing that you and i've been kicking back and forth this generation tool belt and it's going um more into the trades than into the post four-year education sector and i wonder if there's a dovetail between the hyper efficient technology company world you're describing or just companies using technology to become more efficient and folks going back to the world and hitting things with hammers and if those will nest neatly or if they're going to be a little bit more at odds with one another i'm not sure but i'm very curious to see what happens to the labor market i think you hit on something here um it is very true that an entire class of knowledge workers with hundred thousand two hundred thousand dollar degrees can only make fifty thousand dollars and then you look at plumbers as but one example we have a serious shortage of plumbers i know this because we invested in a company called blockable and getting plumbers was like a blocker i'm like how is that a blocker you know and it's like yeah how many people want to work in a industry like plumbing quite literally yes you know people would rather be wordsmiths or math wizards and push excel documents around and write words for a living guess what too many people wanted to do that too many people got graduate degrees too many people got undergraduate degrees in you know english lit whatever those were very expensive now you compare that to being a plumber you compare that to being but a handyman what does a handyman cost in your region if you were to hire and i'm sorry for using a gender specific term a handy person sounds absolutely stupid well a handyman a laborer who fixes things like door handles and windows and that are misaligned and annoying stuff what is a handyman cost in your region our flood door recently broke and so our handy woman actually cynthia had to come out and fix it for us uh she's she fixes everything for us when we break it because let's be honest my spouse and i are the highly educated useless people that we're discussing here sure and i think she costs us she's like semi-retired now a little bit older love cynthia if you see the cynthia you're the best um i think we pay her 30 or 35 an hour for what she does but it's probably a little bit more task-based because she's a key to our house and she comes over and does things but it's about what our nanny costs per hour i think yeah and i'd say most place most major cities if you would do this in new york city la or in you know a larger city than where you are it's 75 an hour whoa for a handy person for a handy person that's straight up if you found one for 50 you would be thrilled now wow i hate to do math but the math uh people work 2 000 hours a year yep right for 40 hours a week 50 weeks a year give or take about 2 000 so you can always do back of the envelope math with two thousand two thousand times seventy five is a lot of money it's 150 grand yeah yeah it times 50 is 100 and in your case the 35 is even seventy thousand dollars now you look at the uh business insider you just pulled up their chart they have a union you pull up the union salaries entry level it was forty six thousand dollars a year and i think they fought and the union got it to like entry level was 48 or 52 000 so congratulations on your english lit degree and you're going to be a wordsmith and just like you and i started our careers you're going to get 52 000 a year uh you're gonna get 25 an hour and so i think with chat gpt what is it good at what did we use it for today words and thinking and math right we did the cap table exactly what we just talked about so you would you rather is chat gpt gonna fix that door hinge is he gonna fix my uh you know my my toilet that won't stop running it's not no it's not jason one thing i when we were out in in Napa, I was talking to your brother, actually, and we were talking about our, I think, our growing up and slightly blue-collar-ish roots, if you will.

1:00:00You've been around restaurants. I grew up with a welding machine, you know, that sort of thing. I've done construction, you know? I've done some concrete work, done some rebar tying, done some bricks, done a lot of shoveling. Oh, man. I just don't want us to overly romanticize skilled trades, which are critical to the economy and should be respected and well compensated but i don't want to overly romanticize them because it's really hard on you a lot of the stuff is still really really hard on you and dangerous but i do think you're onto something so i pulled some data to talk about this um just to put all this into perspective according to an angie study 70 of skilled trades people are worried about the trade shortage the trade staff shortage yes and there was a recent apprentices they have no apprentices ah well jason did i find the data point for you on apprentices john can we get the annual new apprentices chart up please i had no idea you were gonna go there that's uncanny there you go uh according to the department of labor in fiscal year 2021 there were more than 241 000 new apprentices and there are 22 more active today than the previous 10-year average.

1:01:13And this chart shows you that there has been some COVID-y ups and downs to the data that we have, but it shows an upward swing. Now contrast this with our historical college enrollment chart. Yeah, I'm going to guess college enrollment is flat, maybe. I mean - Very close, very close. So historical college, undergrad is the black line, peaked in 2010 at 18.1 million, up from, yeah, and listen, we've had population growth, So there's a little bit of that in there, but it's not as dramatic as this chart. It's been trending down. It has picked up according to early data for 2023 and four, but it's still a couple million below.

1:01:53So what I'm seeing is apprenticeships slowly growing, college slowly coming down. And just to put a capstone on this, um, can we get the first Fred chart, please, of construction jobs in the U S thank you. Um, and so this is at an all time high. And I think this is the series of things that are leading people to discussing what will the youth do. My thought is this, Jason. It's good to have intelligent allocation of labor in an economy. That's not controversial. But one thing we haven't done, I think, as well as we could is having slightly more reasonably balanced compensation for different roles.

1:02:33which is why people who are blue collar often want their kids to go to college to have a shot at a higher income ceiling. That didn't work out quite as well as we thought. But if we're going to have people go into the trades, I just hope we as a society treat them well and don't treat them as second class economic citizens. I mean, the truth is, if you are a journalist, if you are, you know, an account, you know, a bookkeeper, let's take CPAs out of it. just go like the rundown like the person who does accounts receivable those jobs are not as future proof they're not as well compensated um they're not as desired and they're not as high growth as manual labor and trades persons and you know i think there's no shame in a trade a trade is amazing and if carpenters and i don't think you do either um and this could be a great life for people and then also being entrepreneurial in this regard you know in your town uh which you're in rhode island yes sir right uh 35 an hour you got a nice rate with a friendly uh you know uh handywoman you know new york it might be 75 here's my best piece of advice arbitrage and so geographic arbitrage is another theme that we've talked about here on the show yes and when we talk about geographic arbitrage i'm typically talking about athenawow.com go there and get an assistant and pay 36 000 a year and they'll train them and it's kind of like the amazon web services of that they'll give you a free month or something since you're my pal putting that aside you don't have to go halfway around the globe here that same trades person who's but a handy uh woman handy band would double their rate in manhattan so interesting arbitrage you go get a bunch of clients in manhattan you charge 75 an hour you go to manhattan for do a 12 hour day do three jobs a day work three days a week put in your 40 hours in three or four days and take a four and work three or four days take four three or four days off that kind of approach i think is a winning approach because cities too expensive rural areas are you know sometimes literally 75 less than living the cost of living in a city five thousand dollar apartment five hundred dollar apartment you know like it's not i mean it literally is like that to rent a room in manhattan have a one-bedroom apartment is five thousand to rent a room an hour and a half outside of the city would be a thousand so that's 80 percent less for the equivalent and so you start thinking about that arbitrage 80 percent less cost and double the uh what you can charge or triple there's something really cool there and you know what's going to enable it the autonomy end game you're going to be able to take your tesla i just like i said i was using 12.5.1.2 or 0.2.1 or whatever today we're getting there uh waymo we're getting there if you could just jump in a waymo or a tesla or an uber and it drives you and you could sleep or watch a tv show it's not as exhausting that three hour commute it's not as exhausting and um you know i think there's like something very interesting going on in the economy and and if college degrees at four years i think they're worth five to ten thousand a year that's what i think a college degree is worth i think a college degree should be 25 to 50k that's what i think the value it provides in most cases i think it provides it should provide it should be the cost of it should be 50 or 100 of your starting salary i like that model a lot because it shows how far things have gotten out of whack there because the college that i went to university of chicago i i'm just gonna guess probably cost 65 000 a year now just just spitballing out a lot i don't think that's gonna be wrong by more than 5k either way and that's an insane amount of money quarter million dollars quarter before you start quarter million dollars post tax so someone has to make 500 000 to pay 50 tax on it just that's this is the math i do with it with our child care costs i'm like wait a minute this actually cost twice as much yeah i mean i've been there crying yes but i have a new baby i just restarted chasing oh my god um okay you're sharp today you must have gotten some good sleep last night because you're you're on the you're on your game today so we actually crisp back and forth here with the pick and roll for us today i feel like we're really uncovering some very interesting trends and when you listen to this week and start if you're not just gonna get the news you get some insight on these trends here and this is a very interesting trend there's another data a point though so a listener um boss in barakat he said that plumbers and electricians operate in a very regulated industry you have to be licensed and it can take time to attain that status absolutely true there are qualifications for many things um the fastest growing job in the u.s according to the i think this is the bureau of labor statistics is wind turbine service technicians the second fastest growing jobs is solar photovoltaic installers and so if you look at just this list right now that I pulled up of the fastest growing jobs.

1:07:55Many of these do require a degree, a certification, but they don't always need a four-year degree followed by a two-year master's. And so one thing I think we could as a society get a lot smarter at is tying reasonable qualifications at the education level to jobs. Two-year degrees, great. You don't need a four-year degree for everything. And I think we've gotten too into that. So people now feel like they have to take on the debt. So there's a lot of inefficiencies in our economy, Jason. that i think we can improve on and that's an opportunity when i see these problems or you see inefficiencies i always just think what's the solution what's the startup version of this the startup version of this is somebody creating an online course on how to start a handy woman business or how to start a painting or a carpenter business all the that could be taught over youtube that could be done in you know a two-week or a three-week course in person and you could charge i don't know five thousand dollars for that now imagine for five thousand dollars you go to a 10-day course on being a carpenter and a handy person you learn all the basics all the basic tools it's uh 200 hours right do it a month maybe and it costs 10 000 if you're charging 75 an hour you're going to pay that back in a month of work and that's like where you start actually should be making a calculation about your degree when we looked at that list you brought up you know some of those jobs paid 150 some of them paid 60 and that's a you know it's like a two to three x range the degrees cost the same yeah the degrees cost the same how is it that a degree will cost a quarter million that gets you 60 000 a year same school offers the same degree for 250 and it makes you 170 000 a year as a data scientist they have that's the the mismatch and that when there's a mismatch in the economy if you could train a data scientist without a degree and the data scientists there were 160k i think that data is a little old by the way because i'm not sure how valuable data scientists are right now but anyway a data scientist let's just say data science is worth 160 sure can you teach somebody to be a data scientist in six months a year like what's the minimum time and the minimum cost because colleges are thinking the opposite they're thinking it has to take four years why does it have to take four years why can't it be done in four months why can't it be done in 40 weeks why can't it be done with an apprenticeship these are all opportunities yeah i think i think parents want their kids to have this um college experience thing and i've never liked that phrasing i i graduated early because i wanted to stop collecting student debt and go work full-time sooner because i was tired of going the wrong way net worth wise.

1:10:35But I think a lot of parents want their children to have the full four years or five. In that case, there's a failure to launch societal question there that's a little bit distinct. But the idea of faster education, faster time to value, do you start up language, I think is great. And I think there's probably going to be a lot of opportunities here for startups to build cool things because there's education, there's licensing, there is platforms that are being built for the construction industry. Procore is a public company now, construction tech is popping off there's a lot of really cool things here i'm optimistic that things work out well i just hope that we pay people reasonably because people respond to incentives and you can end up back to your point about same degree less income with doctors not wanting to go into primary care for example and we have primary care deserts in this country because it's not a very well compensated medical part medical profession so everyone wants to go be a derm etc so we're gonna have to probably pay a little more for these to get people into them but people are aging out of the trades and we need to have infrastructure we i mean google started offering these career certificates i don't know if you're aware of this but i remember when uh our friends at coursera i think are the partner with this um and i think coursera yeah it is coursera it's just right there get started on coursera so google was looking looked at the roles they can't fill and this is a google career certificate you can google it and here choose a certificate cyber security data analytics it support digital marketing e-commerce project management ux design learn the skills you need to unlock reward unlock reward outcomes 93 000 plus median entry level salary across the certified fields 1.8 million job postings and look they have even shorter course offerings ai essentials and agile essentials agile project management so they just said screw it come to google take a course here and then apply for a job with us or somebody else how brilliant is this it's amazing somebody make a startup i'm i'm telling you right now i'll fund this i'll give you the first 125k come to the accelerator we'll brainstorm it teach people how to be handymen and handywomen and carpenters you know and come with a course for whatever number of thousands of dollars that teaches them not only how to do with the trade what the most common problems have hey the dishwasher's broke this is broke but also how to market yourself find customers build them price out the jobs and stuff like that if you could figure out how to not only provide the supply of handymen handy people handy women handy folks jason handy folks thank you you know not only your thumbtack providing a supply of them um that you have to go aggregate you're actually making them yes yum yum this is an incredible business if you could go to a website of handy people and it was like these are people we trained and that you can order one right now for this price and you know that we certified them in dishwashers oh you know light uh electrical work that doesn't require an electrician there are things like changing lamps or you know whenever your ceiling fan that doesn't require mounting a television man somebody make that website and train those people and then these people are going to go out and make 50 100 bucks an hour sometimes they'll do projects um and so this is the kind of innovation we need in the world um and it's i think for young people don't expect you're getting a job at google you know don't don't that's not it's not goldman sachs and google and ibm those jobs microsoft they're going to go to a smaller and smaller number of incredibly elite performers and you saw my message to our company yesterday i did i said i i'm dealing with this personally i said if you want to be remote here you have to be what was the extremely high performer yeah i said i am totally fine with you being remote if you're an ehp extremely high performer and you manage yourself everybody else we're returning to an office i got a little office here we're gonna have four people in it me plus three in austin and my new approach to training people is people who are not yet ehps like yourself or myself or some of the great people we work with they'll just sit next to me and they'll sit in the room and be mentored so i am bifurcating it in real time based on our discussions here and what i'm learning in the world ehps extremely high performers you know by all means remote hybrid you pick everybody else the other 80 of the world is how i would define it and we saw that with the amazon story you know you're going to have to, you're going to have to either come to an office and be mentored, or you're going to have to find your own way in the world as we've discussed right now, just really great trend.

1:15:38And we got, we got to stick on top of it. If you have any other questions for us, we take one or two questions from the audience and we'll wrap. The tenant media fiasco is very damning. Do you have any thoughts? Well, CCC on YouTube, Jason assigned me to research that the other day, and it ended up at the bottom of the show notes in the section that I call cut for time. So, uh, Jason, we can just, feelings on the tenant media thing give me your tldr yeah tldr um there were a bunch of dopey bloggers uh that's a technical term who were offered apparently allegedly very large sums of money and when i say large sums of money they were offered a hundred thousand dollars per episode to license their what i would call you know what would you say c tier d tier d tier podcasts epitome of mid okay so mid podcasters get offered joe rogan level deals they're so dumb they're so mid that they never question where does this money come from they just take the money they happen to be the same bloggers who believe that the you that ukraine is responsible for putin invading their country as if ukraine and biden went to putin put a gun to his head and said if you don't invade that country and start murdering people we're going to attack your country these idiots these useful idiots i think is the technical term sorry allegedly took all this money and the money was given to another i mean it's no other way to say it i would say they're allegedly i'm going to use allegedly here because they originally get their day on a court but the people who are at the center of this um and was uh lauren chen another conservative she knew that she was getting russian money from rt and they were trying to get these useful idiots to amplify pro-russian anti-ukraine sentiment these people have all come out and claimed they did not know yes i would claim they should have known because you were just given massive amounts of free money if somebody comes to me and says i'll give you a hundred thousand and i've gotten a lot of very big speaking offers that i've turned down where they're like hey we got a hundred k speaking offer now that's like you know listen i'm i've made a lot of money i don't need the hundred k but if somebody offered me a hundred k speaking i'm like okay well where is it maybe i'll go you know it's a free money i'll take it uh might be interesting i've gotten these offers from like those charlatan course people you know who i'm talking about like they sell courses and then they try to prey on people and so i know what they're doing their reputation washing they want me to come to give a talk with them they take a picture with me then they tell people hey jay cal's legit and um therefore buy my course in real estate no bueno for me so every time a speaking agency brings me these alex like we have a wonderful opportunity for you jay cal hundred thousand dollars you go to florida and you speak about your syndicate and investing in startups and it's wonderful do you want to do it i'm like what's the name of the conference who's the host and then i do a google search and i look at the names and it says blank blank scan right blank scan and then i go to reddit and i type the person's name and they're like i gave ten thousand dollars to this person to come to their 10x this conference 100x this conference yeah and i got scanned and then other people say it changed my life it's not for me to decide but in other words you should know who's paying you yes these people are pretending they don't um the woman in the middle of it if it's true that she took russian money to do this i think she that would make her a traitor uh at least if she's an american citizen which i did not check actually that would make her i think an unregistered foreign agent which i think gets you in a lot of trouble i don't think we mess around there i think we still have our cold war muscle wrapped around that bit of the law yeah uh she is a canadian um living in america i don't know if she has a u.s citizenship um but wikipedia say she's canadian and i guess the people who got caught up in this were benny johnson i've seen him on twitter uh tim pool dave rubin lauren southern uh dave rubin seems like a pretty smart guy um so they're all conservative i'm nothing else for being conservative but there were other people who were offered this money and they didn't take it and the one person who was offered the money who didn't take it i saw them talking about it on twitter they were like well obviously this was a scam and it yeah and so the the most sinister part about this whole thing i think alex is they picked people who were amplifying this message and then gave them mountains of cash they didn't even have to pay them to say certain things they just found the useful idiots who were saying it anyway yeah and they gave them more money to run their operations which means they can hire more people have better equipment so very sinister on the russians part very clever what do you think yeah so the only thing i'm going to really add here to answer our different cccc from youtube is that there is a lot more free-floating money in conservative media than there is in liberal media.

1:21:07This is why Talking Points Memo has a couple of staffers. They have to earn their keep. They don't have the same collection of people who are willing to put money behind their ideological background. And why is that? Well, I was reading the Brown Indie, Brown Independent or something the other day, and I read the intro bit. It's an anti-capitalist publication from Brown students on the radical side of things, which i read because i like to read everybody uh but that's why people don't who have money don't tend to fund super lefty things but i think there's enough money in and around conservative commentary if you will that checks of that size were probably large but not as shocking as they seem to me so they have benefactors and they're used to benefactors whereas on the left you have advertisers and the left advertisers in the media business tend to be very left-leaning the advertising business um you know just generally left more left-leaning so um yeah it all adds up i do think there are benefactors who have agendas who really like to back conservative media and they do it quietly like in the same way george soros might back some things on the left there are the george soros equivalent you know right-wing people who like to fund them so yeah maybe that's the case maybe they're used to getting you know people dropping money on their heads to say right-wing banks anyway yeah there's that's a much longer conversation but i mean essentially i don't believe you didn't think that it might have been the russians is my is my underlying vibe because if someone told me that i was gonna get paid 100k to blame things on ukraine i'd be like huh who would who would want me to say that apart from some people that you know there was a there was a in the indictment again allegedly um so everybody gets their day in court they said like one commentator they said to them hey we're not hitting our numbers could you amplify this tweet and then there was some like amplifying of tucker going to the russian supermarket and being amazed that the supermarket had had coin operated but by the way we haven't had since the 80s because i don't think you need to pay here but okay whatever um he's an entertainer let's leave it at that but they were trying to amplify that and then literally the the thing alleges that they were like isn't this a little too on the nose and obvious yes so shilling i think was the phrase yeah they're like are we shilling so it's kind of like huh i mean these people are i think it's like these people are traitors um the people who knew if they didn't know useful idiot or naive if they did know traitors but i don't have strong feelings only so strong a defense um i do want to close with one more well one more thing my my audience question is uh i i saw that your friend your your bestie went on joe rogan and so um three hour episode um i literally did you listen to i well funny story um i was having lunch with chamath before i came on air here we went to cherry blocks we got a beef rib we got some uh brisket and i drove him to the airport literally as i was taking his bag out of my car the episode dropped he's like oh my god the episode dropped he recorded it on monday so quick turnaround there for joe rogan i haven't listened to it but chamath has been on rogan yes and so good for him and uh it's a three hour discussion and um you know i i like joe rogan you know a comedian who does really great long form stuff uh and uh yeah enjoy i just want to know when when are you going on on the rogues wow that's interesting you say that um seven years ago kevin rose introduced me to him and you know that was when he was only in person i had just come out with my book and we were in a dm exchange and just the timing didn't work i wasn't able to get out to texas because he was only doing it in person right and like an idiot i didn't follow up but this is when And he was just starting his program.

1:25:11It was very early days. And so I don't ask anybody to be on their podcast. So I haven't pitched him on coming on. But I'm in Texas. He's in Texas. We have like 20 mutual friends. Lex Friedman, Elon, Chamath now. So I'm sure I'll meet him at some point. And if he wants me to be on, I'm sure I will be. It's the same thing with Tim Ferriss. Friends with Tim Ferriss forever. And then I never ask people to be on their pods or anything like that. I just don't like asking. i don't know maybe it's my irish upbringing catholic no i feel you and then just one day you know tim first was like hey it would be an honor to have you on the pod i was like sure i'll come on the pod we had a great discussion so i i just wait when people think it's a good time for me to come on i come on but i never ask yeah so but congratulations to chamoff go look at it yeah hey i just i think you should do it because then uh i could sit down and and uh i'll actually listen to my first three hour podcast because i've never i'm an audiobook guy so it is like joe rogan is doing an audiobook um and you know he he was very influenced like i was by howard stern in the 80s and 90s and when you have a morning drive time show like howard did that is four hours to fill three four hours to fill so you know he was like the original podcast from anyways howard stern so he would let somebody come in he'd interview them then he'd have them hang around for the news on the early episodes of this week in startups i would do an interview and then i would have lon harris and tyler and the guests sit in for the news and we talk about the news so i kind of copied that format uh and uh i enjoyed it um and so yeah uh we we talked about the uh departure somebody just asked on linkedin about the departure we talked about that in the top of the show so when you get the episode you can do that you can rewind the youtube video and listen to it again he's alex wilhelm we're working on the twist 500 go to twist 500.com if you have suggestions let us know he's Alex on Twitter slash X.

1:27:05I'm Jason. This is this week in startups. Do us a favor, write a comment, tell us what you want us to talk about. Just say hi, subscribe to the YouTube, all that great stuff. And we'll see you next time. Bye bye.