TWiST News: Startups & Wealth Taxes, The Bitcoin Boom, and The OpenAI Browser | E2051

0:00maybe that's reasonable maybe a 1 % origination is that i wonder if that is on the table uh i know that i had heard some people talking about that concept well Norway didn't follow that path is a 1 % origination is a 1 % origination is that i know that's a 1 % 0.84 % on unrealized capital gains if you leave the country. Oh my God. So they put a gun to your head. Yeah. So it's a total disaster. Like instead of, you know, seeing a bunch of their top taxpayers leave, all the entrepreneurs being like, hey, this makes no sense, you know, taxes, but please do it when we actually have or make money. So instead of being like, hey, maybe we should just like make some reasonable adjustment, they like double down.

0:47So basically what's happening now is like you have to leave before you start a company. This Week in Startups is brought to you by Squarespace. Turn your idea into a new website. Go to squarespace.com slash twist for a free trial. When you're ready to launch, use offer code twist to save 10 % off your first purchase of a website or domain. Open phone. Create business phone numbers for you and your team that work through an app on your smartphone or desktop. Twist listeners can get an extra 20 % off any plan for your first six months at openphone.com slash twist. And DevSquad. Most dev agencies only offer developers.

1:31Why? Because product management is hard. Get an entire product team for the cost of one US developer, plus 10 % off at devsquad.com slash twist. all right everybody welcome back to this week in startups i am your co-host jason calicanus i'm an angel early stage investor here in silicon valley austin and new york but based in austin now you can join me if you have two or three friends and you want to start a company go to founder.university we run it three times a year 250 teams and um we invest in about 10 of those 20 of those we'll give them their first check to incorporate we love investing in startups and with me my co-host alex wilhelm you probably know him from crunchbase matter mark before that and tech brunch he is a deep knowledge expert on the technology and finance spaces and we're going to run through your top tech news three times a week monday wednesday friday typically this week monday tuesday for the holiday week alex how are you doing sir i'm actually fantastic because i'm looking forward to overeating and becoming a couch potato on thursday and friday don't call me because i will be on the couch unconscious i love it love it i am in new york uh my hometown with my brother i'm in upstate new york hanging out here i went to the giant game yesterday and watched the abomination of a football team play another abomination of a football team and we tailgated i've had uh my dad's had season tickets since the 70s wow and so i you know i i think i paid for the psl psl you know this per seat license when they make a new stadium oh yes yes you know that was like 20 years ago i haven't been to a game in like 20 years i've been in california it's never worked out so i go and you know kid from brooklyn it's a big deal to have season tickets you'd always tailgate for the games tailgates when you drive your car you park in the parking lot you drink and you eat you know heroes from duiker heights you know like big italian subs or whatever sometimes you get a grill going so i went it was freezing it was freezing yes and i'm like that's so cold and they're like it's 50 degrees what are you talking about it's not cold have another beer uh so uh shout out to everybody who have the giant game and it was just a miserable terrible game incredibly cold and i'm like at least i get to see the new stadium that you know these my dad always had good seats at 12th row like just off the end zone it was just amazing seats uh but you know these these uh bastards did this psl on him and uh you know it's a lot of money like 10 grand five grand a seat so i'm like at least i get to see the great stadium worse than the old stadium really worst stadium i've ever been to you know you start going to chase center and you start going to these new stadiums i was at ut's game you know this is not like some you know it's a college uh football arena i mean unbelievably gorgeous tons of amenities disgraceful disgraciad.com for disgraciad for the giant stadium the meadowlands still remains one of the worst places on earth you can go i understand we didn't have the world cup there as well so in advance to the rest of the world coming to america the meadowlands is not representative of the best of america it's representative of the worst of new jersey and new jersey's pretty much considered the worst state in america unfairly because there's some beautiful parts but there are there are you literally are going to the worst place in what most people joke is the worst state so we're not putting our best if you will i i have to say the giants got smoked um i'm not shocked by that the eagles however won and are now nine and two so if you are an eagles fan go birds we're looking pretty good for a team that no one actually believes in i think we're the opposite i think we're pulling nine and the giants or 28 or something terrible look at least you're not the patriots who are still dealing with having gone from the well they were they were the dynasty and now they are the laughingstock right yes well i'm not a patriot fan i don't have a dog in that fight anyways let's call it what it is they cheat um anyway they're the astros of the northeast if you will anyways uh on today's show big show we're talking to dunes ceo about the impact of taxes and how that deals with basically startup formation across Europe, Jason.

5:49He'll be up first. Then micro strategy and the Bitcoin trade. What is Michael Saylor doing? Is it genius? Is it going to fail? We'll talk about that. Then on the lightning round, quick thoughts on open AI, building a browser. What's going on with Blue Sky, the burgeoning IPO cohort of next year. And if we have time, the cost of AI in human terms. But let's start with Dune CEO. Jason, this was an interesting conversation about taxes, Norway how did this get your eye well it was uh something trending on x where Dune's ceo is just talking about having to pay taxes on unrealized gains and the impact this has on startup founders as you know you can become uh incredibly wealthy on paper when you are at a private company and you could have no access to that wealth and if you have to pay taxes on it you could be in a very strange situation where you're forced to sell any liquid security and we've had this discussion in america a number of times on taxing unrealized gains wealthy people you know you can be the ceo of a giant public company and you've got a billion dollars in stock or a hundred billion or anything in between and you can take loans against that never sell the stock the stock keeps going up and this happens in 0.01 percent of the cases in startups and so it can look a little unfair you're getting loans against your stock you never sell the stock so you never pay taxes and so people get very confounding well this person owns essentially a house that's worth a lot of money that they built they still live in it they've taken a loan against it but they never pay taxes it's only when you sell those shares that you do pay taxes now for rank and file or for every other company you probably fail that's the majority outcome that's the default for startups is you fail and that equity becomes where it's zero the people who invested in your company and they put 10 million dollars in they take a loss on that 10 million and that's called capitalism is people build these companies constantly people get equity in them and the default is they go to zero so let's bring in the the ceo here and we'll just walk through the example here of what happened to uh frederick yeah so frederick hagga is here and i have to say i have a fanboy moment jason because i'm a big fan of dune his company because it is essentially a repository of endless information on all things web 3 and so if you are a chart dork like i am it's essentially candy land so frederick thanks for being here man thank you so much and thanks thanks for those kind words yeah yeah explain to us what happened to you uh and how taxes wealth taxes paying taxes on unrealized gains works in the nordics in the eu Yeah, for sure.

8:33So maybe I could just start quickly explaining sort of the situation in Norway. And, you know, basically, I think Norway was more or less like a middle of the pack in terms of economic prosperity in Europe type of situation in mid last century. In 69, Norway found oil. So great, right? And then a lot of countries really mess up finding a bunch of resources, right? You know, some few people will like capture all of it, whether it's corruption. politicians or some elite that really just gets all the profits. Norway has been managing this really well for half a century. Basically, what they first did, the politicians essentially did two genius moves.

9:15One was, at the time Norway found oil, there was no expertise in the country. We understood, or the politicians understood, we need to build up the industry and get people in here to help us, international companies. But they also understood that Exxon and Shell taking all the profits of this is sort of not a great deal for the Norwegian people. So they've started taxing the oil companies on 80 % of their bottom line. So very aggressive tax, but you know, you get to drill the oil on Norwegian territory. So that was like a brilliant move because then the Norwegian people benefits from this amazing, you know, valuable resource.

9:53And Frederick, just to be clear here, that is the source of wealth that has led to Norway having essentially a 1.7 trillion dollar sovereign wealth fund yeah exactly yes so the largest in the world and they just announced last year that they were going to engage in venture capital and maybe private companies which i think everybody was waiting for because they were in public equities considering it yeah considering it this week in startups is brought to you by our friends at squarespace the all-in-one platform for you to build a beautiful website and for you to grow your business. Whether you're starting out or you're scaling up, Squarespace is going to make it easy to create an incredible website that engages your audience, allows you to sell whatever you need to sell products, content, or even your time all in one place.

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11:46That's squarespace.com slash twist. Make sure you go to that URL so they know you listen to the pod. That was essentially the second genius move, right? So this oil fund now owns like 1.5 % of the oldest stock in the world. So it's like a pretty massive thing. And yeah, basically in the 90s, the politicians even understood that the revenue from the oil industry that was coming in was so massive that they couldn't responsibly spend it on a running basis over the budget. And that's when they set up the oil fund. So very impressive, like austere, sort of forward thinking, you know. The opposite of America.

12:23they were financially responsible they have a massive surplus and the is it five ten million people in norway it's one of the smaller nordics yeah five ish so you have a trillion dollars five million people it's a lot of money per uh individual citizen in this fund and do people get like some benefit every year from it do they get a small stipend or a distribution or do they just get to live in a country with incredible healthcare and low taxes not low taxes but but you get good healthcare right but so basically the way it works is uh so this is also like very impressive from the politicians essentially what they said is like we'll only take profits from the fund and we'll fund state operations on that so it's basically a rule that says three percent is the max or like the average that we will spend so in theory if we have three percent return on it it will go on forever because you never draw down from the fund, right?

13:17So very impressive. And there's broad political support to do this. And they've been doing it for like 20 plus years. However, basically now the whole thing is like sort of catching up to the country and the politicians a little bit. Let's just pause that for a second. Basically, you have great oil wealth, but you also have a lot of oil industry and like the whole economy is extremely oil oriented. So in terms of the companies being built and whatnot. And then of course, like oil will not go on forever. There's climate things and you don't know how long it's going to be in the ground anyway. Everybody's starting to acknowledge that like, oh, actually we need new companies and different types of companies, not just oil companies, right?

13:54So just to take our story, me and my co-founder, we started doing in summer 2018, crypto, we're a crypto data tool. We make it super easy to analyze anything happening on the blockchain. And basically when we started, this was not a cool hot sector, right? It was like after the ICO bubble had popped and people basically thought the thing was dead. So we had to hustle extremely hard. And coming from Norway, pre-COVID, all these things, you're kind of like nobody's from nowhere and in an industry that not a lot of people thought much about, right? So basically, we spent over half a year with no salary.

14:32We had no money at all. If we traveled, we shared hotel rooms, just kept it extremely lean and scrappy. And then we managed to raise some funding, but still, we went over two years, just the two of us. We didn't hire anybody. We had like 40K salary after we raised some funding. Basically, really, really hustled. And then with COVID and the new 2021 era, we really had the right product in the right market and grew a ton. And suddenly we were able to raise a bunch of VC money so we basically raised our c in series a and b in just over a year so suddenly we went from like you know very small and scrappy to you know big big company in in a way right and basically then we have a very strong balance sheet because we've raised we raised 80 million dollars and what happens then is basically norway has this well tax and if you're like you know if you're an oil company if you do real estate things like that like you can have that you can do various things so that you don't have cash necessarily, you have other things on your balance sheet.

15:42And so for some, it's always been sort of call it annoying, but for some people or some industries, you can kind of cope with it. But then for us, suddenly we have like this balance sheet full of cash, which obviously we're going to burn and we're a startup and we're lost making all these things. And we're faced with a wealth tax bill on the cash of the company. And that's a 1 % tax. And if you're not public, it's on the balance sheet. So if you're public, it's on the actual market cap of the company on the 31st of December every year. But if you're private, it's the balance sheet. So essentially, we had a strong balance sheet, and they multiply that by our ownership share, even if we just have common shares, and then by 1%.

16:27So if you had 80 million in the bank, you own 50 % of the company or 40 % of the company, you get a tax bill every year for eight hundred thousand dollars one percent of 80 million something to that effect and then you're responsible for half of that 400 000 or whatever 40 of it 300 000 something in that range yeah yeah you know sort of ish in in sort of the logic is right and so basically we were about to face wealth tax bill of like a few times our net income essentially you know we made something around the ballpark of 100k dollars and this was like multiple 100k dollars um and so you know it's absurd and then at the same time around the same time there was like a new more left-wing government and they actually cranked up the the rates on the wealth tax on the dividend can i clarify because i was doing a lot of prep on norwegian taxes before today's show that was when they raised the wealth tax percentage from 0.85 to 1 if you have a net worth of less than 20 million krona right yeah so so you can subtract you know two million dollars ish if you have less than two million it's not counting but basically they cranked up the dividend tax and the wealth tax at the same time which was essentially an effective doubling of the wealth tax because you have to take out dividend to pay for the wealth tax um and so in two years norway actually lost and lost 100 of their top 400 taxpayers um accounting for 50 of the wealth of the top 400 so wait where do they all go can they just left town uh i mean it's like atlas shrugged essentially you know people disappear but uh everybody goes to switzerland and the reason for that is switzerland also has a wealth tax and so for sort of tax treaty reasons you end up in switzerland because then you pay a wealth tax which is lower and differently sort of set up but still a wealth tax in switzerland and the way taxes work in europe is you pay the taxes of where you're domiciled as opposed to in america alex if you were to leave the country and still remain a citizen of the united states you still get charged your federal taxes so no matter what you do the american government will make you pay taxes whereas if you're in a lot of european countries wherever you move to you pay the taxes there which kind of makes sense but america will follow you around the world you will not have to pay state taxes but you're going to have to pay your federal no matter where you are i think at least america is like one of the biggest talent and capital magnets of the world right as opposed to a lot of countries in europe so yeah have a bit of a this wealth tax continues i i assume in norway even though they have this massive amount of wealth from oil that they found offshore that they've been slowly uh pulling out of the ground yeah yeah so this is kind of like the paradox right because obviously the state has a lot of money, it doesn't need.

19:33So the wealth tax is like less than 2 % of the budget and you could have easily like improved, you know, the corporate tax rate is like 22%, you know, make that like 24, 25, no one would have left the country because of that. But they're very ideological and very strong, like socialist ideas, right? And to some extent, I think it's like great that the oil fund can provide the healthcare and education in these things. I mean, it's a fantastic thing. the problem is that they have so much money from the oil wealth now that sort of the sitting politicians kind of just assume money grows on trees right they don't really care if so many people live they're just like hey we have to tax the rich so we have to have these taxes even if they don't make sense even if people are living in the wall of shame there's some wall of shame going on now explain that to us yeah so so this is kind of the the crazy thing with the story is I personally did some opinion pieces.

20:27I called out, like, hey, I can't pay this tax. It's many times my net income. No one can answer me as to how I'm supposed to do this. But what made this story go kind of viral was the socialist left party were interviewed in their offices in parliament, actually, the other day. and turns out they have like a wall of shame which is like newspaper articles on people criticizing the tax system so i'm and my face was on it so basically i'm on the wall of shame yeah here you go so i'm on the wall of shame for having criticized you know the the tax code yeah yeah and no one has ever you know told me how i'm supposed to pay this tax but you get this stuff In terms of paying the tax, if the company was sitting on$80 million in investment, I guess what would have to happen is you'd have to give shareholders a dividend of the money they just put in.

21:21That dividend would then have to be prorated. So if the investors own 40 % of the company at that point, they would be getting their own money back in a dividend so that the founders could pay the dividend or could they do a special dividend just to the founders? it becomes so unnecessarily complicated, but is that what winds up happening in these kind of situations? I mean, you essentially do dividend or you have to sell shares, right? But it's also kind of absurd that just for being based in Norway, you have to sell your stake in the company, even if you haven't made any money. Frederick, I want to clarify a distinction between the corporate side of this and the personal side of this, because the way that I understood this was your company raised money, your paper wealth, your personal paper wealth went up, and then because of the wealth tax and because that money was unrealized gains essentially you were therefore staring down essentially a 1.1 percent bill for your personal wealth which wouldn't impact the corporate account am i am i confusing the issues here this is why everybody is leaving because it's like a personal thing so you save your company essentially by leaving because then your company doesn't need to do if you own 30 of a unicorn your co-founder owns 30 percent of a unicorn that's 300 million in paper wealth and you have to pay 1.x on it or 0.85 on it that's like three million dollar tax bill so then you have to sell six million dollars in shares or five million dollars in shares every year just to work at your own company and over 10 years you got to dilute 50 million shares or something crazy yeah i mean it's it's on the balance sheet if you're not public so yeah just to be clear on that but uh so it's somewhat lower but it's still you know can can be excessive amounts and oh i see maybe a 409a maybe could the 40 did you have the like book value of the company that you got it yeah um so the book value could be the 80 million dollars in cash some multiple times the revenue some goodwill for the logo and the brand name so maybe you're paying uh you know tax on 30 percent of 200 million or 300 million some smaller number than the high watermark paid for preferred shares.

23:36Either way, you can see how complex this is. Unnecessarily so. That's the thing that kills me, Jason. Look, I know it's popular to dunk on European socialists and the American business community. And I think in this case, pretty warranted because this is such a self-inflicted wound. All you have to do is tax people borrowing against their unrealized capital gains. And then everything works out pretty well you can build wealth you can still have some of it be liquid you can pay a tax on that as a sort of regular income and i think everyone wins so to me this is just such an unnecessary mess yeah small tax on a margin loan against your shares would be i think a great compromise here so if you're you know let's pick jeff bezos and you had a million dollar a billion dollar margin loan that you were living against against your 200 billion in amazon shares if you You paid 1 % of that.

24:28You paid 10 million a year on it or 2%, 20 million a year on originating the loan one time for using the loan. And then after you pay it back, your stock's gone up more than 2%. It's all a wash anyway. Maybe that's reasonable. Maybe a 1 % origination. I wonder if that is on the table. I know that I had heard some people talking about that concept. Well, Norway didn't follow that path, Jason. And what Norway has instead proposed is an exit tax, according to BDO Global back about a week ago. You're staying. Yeah. So this tax, by the way, is 37.84 % on unrealized capital gains if you leave the country.

25:08Oh my gosh, they put a gun to your head. Yeah, but starting now, Frederick, right? Because you're safe because you left earlier. I left, yeah. So it's a total disaster. Like instead of, you know, seeing a bunch of their top taxpayers leave, all the entrepreneurs being like, hey, this makes no sense, you know, taxes, but please do it when we actually have or make money. So instead of being like, hey, maybe we should just like make some reasonable adjustment, they like double down and introduced a new. When does that go into effect? And did that accelerate people leaving? Yeah. so basically what's happening now is like you have to leave before you start a company because if you get successful you will be screwed over by the wealth tax crazy is this you can't move like if i were in this situation and we had a billion dollar valuation you know on the last round and i leave and i'm supposed to pay for it yeah like you literally now you have to pay bankrupt for life hundreds of millions of dollars and realized gains you might as well just shut the company down or whatever wow it's really interesting flee to the united states we'd love to have you well i mean and i think we'll land on that alex which is the lesson in all of this is if you're bold enough to create a billion dollar company you're also smart and bold enough to pick another location and you're the there there you ever hear that expression alex that they're there there has to be a there there that there there is the core brilliance of the thing now that they're there in silicon valley is the entrepreneurs and the and the capital allocators if that there goes there there being another there which is texas or sweden or italy or singapore like apology went to singapore right a lot and so did the um and he's been public about that and so did the uh uh they got one of the co-founders of facebook and he gave up his citizenship eduardo i believe yes went to singapore yeah and he paid some fee to leave so i think those are kind of the tip of the spear make it simple make it easy make it fair is my best advice thanks so much for coming on the program don't tax unrealized capital gains that's that's basically the the moral in france went through the same thing.

27:28I mean, literally a bunch of French citizens became citizens of Russia, of all places, like Dron de Perdue and a bunch of other people were like, you know what, I'm going to take Putin's offer up and move to Moscow. Founders know that every missed call is a missed opportunity. Customers don't want to wait. They will call someone else if you don't pick up. But if you use open phone, you're never going to miss another customer call. And guess what? It's super affordable and easy to use. People used to spend tens of thousands, hundreds of thousands of dollars putting in a corporate phone system. And now for just$15 a month, OpenPhone will give you a business phone line and complete control of your destiny.

28:10Want to know who's answering customer calls and how they were handled? OpenPhone can do incredible things like sync with HubSpot and give you AI-powered call summaries, automated responses to ensure you don't miss a single ring. Well, that's all built into OpenPhone. And if you've got an existing phone number, they will let you port it over at no extra charge. Get 20 % off your first six months. What an amazing offer at openphone.com slash twist. That's O-P-E-N-P-H-O-N-E dot com slash twist for 20 % off for six months. Hey, but just before we let Frederick go, though, we have him here, Jason, live, so we can abuse him a little bit.

28:46How's Dune doing? How's revenue growth? How are you doing next year? Did you cut costs? Are you thriving? Are you still a unicorn? i mean uh who knows uh we haven't been to the capital markets for a while but uh we have you know we have our very i had a very like uh humble upbringing so we've we've stayed pretty lean we have a lot of money in the bank still um we've been doing great this year uh it definitely was uh you know a few rough uh years uh previously maybe jason suggested we should have pivoted but we stuck to it and well i mean if you believe in crypto and you think the issue has been regulation and over regulation which has been an issue for crypto in the united states if you think there's a new regime in town that's going to be pro crypto and allow more experimentation in the number one market in the world the united states uh then now is a you'll be rewarded for that you know i mean And a lot of my criticism of crypto has always been twofold.

29:48One, not producing actual products that consumers love and use, like just not delivering products. And number two, just breaking the rules around. And the rules are very strict in the United States. So and maybe those go hand in hand. No, like it's hard to be innovative if you're shackled by rules. and so my hope is you know that uh some middle ground between you have to act like a stock and follow the books on you know 100 year old regulations and the wild west maybe there's something in between those two like do it the way we've always done it or no no rules yolo anybody's a bag holder yeah no i agree i think that's a that's a fair take yeah so we actually launched We had our annual conference, DuneCon, just a couple of weeks ago in Bangkok.

30:39We had a thousand people come out. We had Vitalik on stage and a bunch of great people. And we launched the index product. So we have a lot of on-chain data. And now we've launched an index for on-chain adoption. So there's all this hype. There's all the prices going up and down, all these stories. And essentially now we index how much people are actually using the chain. So we have a metric that is composite of transaction fees. So how much people spend on writing to the chains, you can look at like the run rate. So you could see, oh, there's like now, uh, I think last 30 days, it was like$600 million spent on writing to blockchains that the transactions fees that people pay.

31:17So that's like a$6 billion run rate. So it's like in the ballpark of like opening. In a way that would be what people spend, you know, on their AWS accounts or their cloud computing accounts, but for crypto. So that's an interesting proxy. i guess the counter to that is how much of that do you think is painting the tape uh creating false trades people just screwing around in order to manipulate and make stocks go up and and is there a way for you with your analysis to kind of pull out what they call wash trading or painting the tape because that's always been a criticism that alex and i have had of you know these spaces is how did how do you know reality how do you know that there's a billion dollars in doge being traded every day or if that people painting the tape and we have the dune index coming up on screen yeah so we can actually look into this so this is like the overarching number and it's uh just like tells you something about adoption so you can for for instance if you go the 365 days on the chart here you can make that like um five years or all time and then basically So explain what we're seeing here for people listening.

32:27Yeah. So essentially, this metric is a composite of the three metrics on the left. So transaction fees, transfer volume and transaction count. So we sort of take these metrics and put them into one to get a sense of like how these things are doing. So if you do transfer volume to answer your question, if you go on the left sidebar, and hit transfer volume, basically, and then you can go further out maybe do five years here as well um so this one we filter so this is like monthly value transferred on chain but we filter if you if it goes to the same entity on both sides we filter it out and if we only take the net effect of a transaction so if it calls a bunch of smart contract and does a bunch of weird stuff we only take you know not all the things going on but only the net value transfer effect so essentially this tells you something about you know how much value transfer real value transfer is happening on chain so we think the great and if you scroll down you can see which blockchains contribute to this like um yeah look at that tron is just like has half as much as a bitcoin why why is tron so it's a big stable coin there's a lot of stable coin activities so like a lot of um this is a lot of um you know turkey a lot of like middle eastern and Asian countries use to transfer a tether around.

33:51So that's the tether trading where it's just a stablecoin moving back and forth, which is people just trading dollars essentially. They're trading digital dollars because they're all pegged to the dollar, right? Yeah. Amazing. So essentially you can now get a really neat high-level overview and since we have the run rate and stuff, you can benchmark, you can get a sense of So I think if you look at the scroll up, I think the run rate is 8.7 trillion right now. So if you take the last 30 days, multiply by 12. Visa, I think, did like 12 trillion last year in total transfer volume. So it's actually in the order of magnitude as Visa in terms of value transfer that's being provided by the systems now.

34:36what percentage do you think of that is um like if you had to break that into buckets how much of that is speculation how much of that is money transfer how much of it is the gray market or people doing you know nefarious things uh let's say you know is there any way to get more insight into that and to also understand by region because the wallets are so anonymized now the vpns are you know so deft at hiding stuff like how do you even know what's going on there you know that's a great question so this is uh the next on our roadmap so we will break it down by like product category so you know is it sort of defy is it stable coins this is like other things we also have a lot of labels tagging so we have the geo of a lot of the main entities on chain so we haven't built this out yet but you can follow the Dunetrics page and we will post more Awesome We have to wrap it up there we're going to have you back next year because I want to know about the revenue side of things I know you have a series of paid tiers but thank you for breaking down European taxes, I hope Switzerland's chocolate is as good as everyone claims it is I know the fish is good, the fish is really good Norwegian fish is very good you can go to japan or jason right you should get some norwegian salmon on your it's very interesting you say that they will literally have norwegian salmon on in tokyo and they'll have santa barbara uni and then you go to santa barbara and they have hokkaido uni both both are exceptional it's just literally they fly by each other on planes and people like the branding of uh the other all right good to see you thanks for coming on and explaining it we love alex to have the um the main character of the moment on the pod one of our commitments and frederick was definitely the main character last week and this week the main character is once again michael saylor yes bitcoin has gone on a huge run-up all right take a second and picture the ultimate all-star team for your startup okay you got that mental image maybe the avengers maybe even X-Men, Wolverine, Cyclops, pick your favorite superhero team.

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That's devsquad.com slash twist, and transform your startup with the all-star team it deserves now a lot of people think i am like anti-crypto you can tell from our previous guests you know i've always had the same position which is you know produce great products and don't steal you from retail and i'm cool with all the innovation here but my lord the amount of dumping on retail of this stuff and the lack of actual products in the world that actually perform a function for people has been very troubling i i i assess this because in the early days of crypto when i'm talking 2011 2012 when i first got hip to it i met with about 100 founders and i would say one or two were like really good teams that were actually producing product and the other 98 99 were kind of crazy dreamers fringe kind of anti-establishment slash grifters that's turned out to be exactly as i assessed it because all the icos resulted in no competitors to airbnb to uber to google they all said they were going to defeat all these products and services just by being on the blockchain and using crypto but the one thing that has been extraordinary is bitcoin bitcoin has not uh been hacked or compromised which you know was a possibility you know any system that could be compromised there could have been an attack vector 51 attack or a country could have maybe taken control of the majority of the servers and the mining like china there was a fear and then there was government intervention where governments could just say hey it's illegal to do this it's turned out neither of those two attack vectors have happened i thought the default case was going to be bitcoin would go to zero i was wrong on that because governments have accepted it and there's been no way to compromise the network even with so much at stake so does it mean that a government couldn't ban it in the future or tax it heavily as we just heard governments can do all kinds of weird things and taxes and if you had a government like the united states or another major government get really nervous about bitcoin there is a possibility they could do something very simple like put a 10 tax on buying and selling it or something like that a crypto tax this administration seems to be the ultimate pro crypto at least they said that to get votes we'll see if that actually happens and that's part of this seems like that is i mean i i saw a headline about i think brian armstrong is helping to vet people for the next administration i mean that's right well yes as long as you think that people should be allowed to regulate themselves i worry slightly about that mean i do agree it's very pro crypto they didn't regulate themselves there's a long history of people not regulating themselves and then there are examples the movie industry and the video game industry came up with their own rating systems and self-regulated so that they didn't have the government do it let's hope crypto does that but this bitcoin uh surge is based upon regulatory change now it does seem like there'll be regulatory change so maybe it should have popped but it popped from 62 i don't know if it's broken 100k yet but it was kind of bouncing right around 97 98 99 000 yep and um this has made michael saylor's bet look really good at the moment but he's doing some really interesting innovative slash crazy stuff so maybe you could tf for the audience the publicly traded company micro strategy michael saylor has said before played the clips of this before like if you believe in bitcoin sell everything you own mortgage your home sell your cars and just acquire as much bitcoin as possible and in credit to him he's been saying that from you know ten thousand dollar bitcoin up to 90 and everything in between he's remained consistent sell everything you own buy bitcoin that's his position now he's doing that so explain what's going on with micro strategy because this is to say it's an all-in strategy would be an understatement absolutely so micro strategy for people who don't know is two things one is a software company no one cares about that jason it's shrinking so whatever put that to one side it's also the vehicle for michael saylor's bitcoin strategy which is to sell debt to sell shares and use that money to acquire more bitcoin and we're talking about jason not just dozens of bitcoins or hundreds of bitcoins the company's latest purchase announcement was that they bought 55 ,500 more bitcoins for 5.4 billion dollars in cash and they announced that on november 25th so that is today you will note so that is the scale of these purchases now the question five billion just to be clear 5 billion in bitcoin and they acquire that in some trading window which we don't know over how many days they did that we do november 18th through november 24th and the average price paid was 97 862 dollars inclusive of upfeeds okay so in five days they bought a that would be on average a billion dollars in bitcoin a day yes yes i see your point i i just think that's super important to point out here because what happened to the bitcoin price during that window there is a supply demand issue here many people who own bitcoin or hodlers like myself um who bought it at 100 to 200 would it be even more accurate my wife bought it at 100 to 200 credit where it's due credit where it's due credible trade by my wife that has resulted in you know a very large position in bitcoin that we will never sell that's our position where you know we're holders like anybody else so here's the price of bitcoin was around 90 000 92 000 yeah went on 10 and now it's coming back down okay so that means quite possibly that last bump the 90 to 100k bump that window 91 to 99 was the michael saylor bump where he swept another five billion dollars worth of bitcoin in the market because you need a seller in order to acquire bitcoin and it is a finite resource which is why everybody thinks you know this is uh you know the is the equivalent of gold right there's only so much of it yes and just to put this into context for everybody in micro strategies q3 earnings they said that they are going to raise 42 billion dollars worth of capital over the next three years 21 billion equity 21 billion fixed income securities this is their 21 21 plan, and they're going to use it to buy more Bitcoin.

44:46So basically, MicroStrategy is all in on using its resources, whatever it can marshal, mortgaging its corporate house equivalent to your earlier point, to buy more Bitcoin. And when they do this, this is where it gets fun. When they do this, they purchase more of a finite asset. And then as Jason points out, the price goes up. And then the way the game is currently played, Jason, and I know we'll get into the mechanics here, but the market is willing to afford MicroStrategy a premium on its stock price as it pursues this Bitcoin purchasing strategy. So they're essentially selling more stock at a price that you might think is aggressive compared to the value of their Bitcoin holdings, and then using it to buy more Bitcoin, which then gets rewarded by the market, and then they have more capital to play with.

45:27Essentially, they're kind of making their own magic here, which in financial terms can be a little bit worrisome. Yes, I've seen people on Twitter saying this is a Ponzi scheme. uh i've seen people saying this is not sustainable because if they hit a bump in the road the whole thing blows up the bump in the road being a 30 40 50 bitcoin pullback which has happened many times in the history of bitcoin so let's maybe start to unravel this onion and we're not going to do it in one episode folks so we're going to talk about it today but when we get back after thanksgiving or maybe even tomorrow we have a live show we're going to talk about it again but what is the value of all of the holdings that MicroStrategy has in Bitcoin.

46:10That's number one I've been trying to figure out. Okay, so I ran that number and in their latest SEC filing, they said they now have 386 ,700 Bitcoins. Okay. At the current price before we recorded, that was worth$36.7 billion, which Jason is less than half of their$82 billion market cap. And we also established their software business is shrinking, so it's not worth anything. So that means - There is no software business. Let's be, I guess, it's like if the software business is there and that's the other kind of thing people felt was a little non-traditional here you had a software business that built a quote-unquote bitcoin treasury but it's almost like this is almost like a spack or something where they had a shell of a company and it's being it's doing something else now so the software business is not even reported on here it's its values may be one billion of the 82 billion or something yeah it's all about a 400 million dollar run rate shrinking so it's going to be worth what's 3x so call it 1.2 it's de minimis compared to the main let's make it 2 billion of the what would be a huge valuation five times what it's uh so you take 2 billion out of 81 billion 79 billion 79 billion 36 billion in actual bitcoin so it's two times plus or something like that um which means if you were to buy micro strategy you're buying half the amount of bitcoin you could buy in your coinbase account so if you buy a hundred dollars in if you were to buy a bitcoin you have a hundred thousand dollars you could buy one bitcoin on your own with coinbase or robin hood i'm a shareholder in robin hood um or you could buy half a bitcoin by buying micro strategy yes Why on earth would anybody buy the micro strategy stock if it's worth half, you get half as many Bitcoin that you don't control and you have no agency over?

48:11Michael Saylor's determination what he does with Bitcoin. So why would I pay twice as much for Bitcoin? I'm perplexed by that. That is the thing that I cannot understand. And all the analysis we've seen of this says that he is using overvalued stock to buy more Bitcoin. Smart. Literally, I wrote in the notes. why put a premium on their stock when you can just buy bitcoin like it makes no sense to me the only question the only idea i have is maybe people are unable to purchase bitcoin even through an etf for certain accounts and so this is the best way to get bitcoin exposure that's not possible if you can buy an etf you can buy bitcoin you can buy microstrategy and if you have a robin hood account or you have a coinbase account crypto sits next to on robin hood stocks on coinbase said they don't have stocks but you could just open a coinbase cat so this that's not true that's cap and that would only be worth what a two percent premium if there was some cool shenanigan there to give more access to people but if you can buy the etf why would you pay more for it and so to me this micro strategy strategy sounds genius you sell stock you raise debt you buy bitcoin your share price goes up everyone's happy but to me it's predicated on them maintaining this enormous premium which is just the market being irrational so to me this is going to eventually stop so people would short micro strategies but if you short micro strategies stock seeing this other side of the arbitrage so michael saylor's arbitrage is i use this market cap to get more loans the loans are collateralized by micro strategy stock or the bitcoin we don't know so if you were if he gets that five billion dollar loan is that five billion dollar loan collateralized and is it the top of the preference stack on micro strategy stock or the underlying bitcoin because if it was the underlying bitcoin in a scenario where the bitcoin dropped 50 and we're at bitcoin 50k again or bitcoin 40k again which by the way history would say is the inevitable outcome because it goes through boom bust cycles but if you think hey it's only going to trade in tighter range now so it goes down to bitcoin 70k let's say or 60k during a recession or whatever people need their money it's correlated with stocks now um at what point does he get a margin call essentially where he can't pay their because they're they pay six percent interest i think i i saw go buy on x that he's paying six percent on the five billion so that means every year he has to pay 300 million no it's better than that it's better than that the latest three billion dollar offering i'm reading the terms right now of this it's uh senior notes do 2029 at zero percent coupon but a 55 conversion premium and that's what i was trying to chase down because you you asked how this is this is structured there's a lot of new billion they have to return 4.5 billion but they don't pay interest i believe that's i i think the conversion rate of the notes is 1.5 shares per anyways all right so this is where we're going to need some help for the people who are shorting this we're starting the discussion here of what actually is happening michael saylor is welcome to come on this week and start up sending time to talk about this i i saw him on cnbc and he talks so fast and he's so enthusiastic and it's a little bit of word salad we don't use the buzzwords here we're just using plain english simplicity how much is he paying in interest on the loan what do people get when the loan matures and then what happens if um what happens in the scenario bitcoin goes down to 30k right it loses 70 of its value does he have to if that's due on 2029 he's got a lot of time but what if in 2029 the price is lower than it is today what happens how much gets liquidated and so the same way this could be going up is there a scenario where it could go down because i know people who've been highly levered in their equity positions and they have gotten margin calls and have been unable to liquidate assets fast enough to pay them down to pay down their margin call you know what i'm just looking through the financial documents as we talk about this and uh i'm gonna bring up my dad's phrase again jason that excessive cleverness usually fails and so to me like to me this seems like a lot of structure as we say in the in the investing world around what is effectively a hodl strategy it seems like a very complicated way to acquire bitcoin inside of a corporate entity when people can just purchase the asset themselves so i guess i guess maybe my my lingering question is why is michael saylor doing this why not just buy bitcoin with your personal wealth and then sit on it this is also why i don't understand bitcoin conferences what do you do get into a room and i'll go we like bitcoin huzzah and then sit down like i mean my god well i mean i think it's fun to hang out with other people and socialize and dream and but you know that it is pretty clear bitcoin is a great way to store money and to transfer money it's not necessarily the cheapest way to transfer money there are cheaper ways to move it uh but of all the cryptos it seems like the only one that's different the only one that has this massive people who believe in it like a cult um and if you know that is what belief systems are you know if you have a billion dollars in u.s dollars or yen and we all believe in them you could go have fun with that billion dollars right or let's just make it even easier you have ten thousand dollars in u.s dollars you go to vegas people will give you chips for that ten thousand dollars they will now you go to uh the middle of the amazon you whip out your 10k and it's a tribe that's one of these pre-modernization tribes and you show them the ten thousand dollars they light it on fire and they start a fire with it and they cook some you know whatever whatever on the on the fire with it because that's its value is to start a fire it doesn't have ten thousand dollars in actual value to them no and that's you know that's what the brave people who bought bitcoin for a long time have been rewarded with is they believed in a system that has caught fire and people believe in it i think it's kind of hard to unravel it now because there's so much belief in it but i do think that there could be people who are shorting the stock right now making micro strategy go up which then gives michael sale of the ability to get more loans and doing a more audacious strategy and own half the amount in his treasury of the actual value and that spread between his holdings and the market cap should be what 10 max max there shouldn't be more of a premium as we established earlier there's no reason for there to be premium i do want to quibble though very slightly with your point about bitcoin being the only um thing of its ilk we forget i think about litecoin which back in the day was supposed to be silver to bitcoin's gold if you go back in time far enough it's also proof of work it also runs on a decentralized you know um compute system and so to me if bitcoin is theoretically going to zamoon why wouldn't litecoin also it's also secure decentralized etc so i'm always curious about that uh last point though companies that are not all in on being bitcoin holding companies are still holding the coins tesla jason you'll recall um had at least 765 million in bitcoin that they moved uh i think it was last month and then uh hut didn't they they had bought a billion in bitcoin at like 30 or 40k so i wonder if they doubled their money and then they've now sold it or they're just going to keep holding it as part of their treasury i tried to go through their investment um uh their ir documentation couldn't find anything i could only find press stories about them moving some of their coins in different wallets because you can track that on the blockchain but the point is they're holding lots of bitcoin and other companies are having often some of their what would have been short-term investments in treasuries cash and other similar assets also held in bitcoin which i don't think is i don't think that's terrible if it's one two three four five percent i don't think that freaks me out too much i think that's where bitcoin's going to wind up in my family's portfolio probably about one one or two percent uh somebody sent me this uh The crypto people have been sharing this meme, apparently, on the back channels.

56:34I don't know what it means. Oh, okay. So, SPF, Sam Bankman-Fried, currently behind bars. Got it. And Michael Saylor has a history of getting in trouble with the government. Oh, does he, really? There's a trucker? So, back in 2000, charged by the SEC for inaccurate financial reporting,$350 ,000 in penalties,$8.3 million in disgorgement, and got into a scrap with the Attorney General of DC, Jason. had to pay a$40 million settlement about where he lives and where he was paying taxes. Oh, okay. There you go. All right. Well, listen, I don't know what's going on here. Thanks for tuning into this week at Startups.

57:14It doesn't make much sense to me. I do hope that crypto becomes legalized. And if there's somebody who can help me architect, maybe my guy Vinny Lingham or Sandeep, you know, my friends who are deep in this game, but who are legit guys uh if my legit guys can help me make j coin i would love to have a way for all this crypto wealth to flow into a coin that we then invest in startups and then i get 20 carry on that just like i do on the funds and um people could take 10 of their crypto wealth and put it into startup wealth or one percent or none percent whatever their jams are okay so this is a way to unlock uh extend crypto wealth and have it go into nascent startups either crypto focused or not i like that okay well i mean everybody's trying to take everybody's trying to achieve diversification and seeking alpha right they're looking for some way to beat the markets if you thought crypto was that and you built up enormous crypto wealth right like i have bitcoin holdings from 100 200 a share thanks to my wife uh we have these if you could then say well i want take 10 of that that's gone up a thousand x and take 10 of that 100 100 x of it and put it into the startup game great and then it would be fluid in that you could trade the coin so if you need it out right now if you're in a venture firm and you try to get out of it it's just it's i mean you can you might be able to sell it to the gps your interest so let's say you owned one percent of our 45 million dollar last fund sure and you had 450k in it let's say the value of that was in half or double so let's say you have 225k you got 900k and you want to liquidate it somehow you you're in the j curve and it's worth half as much we're now out of the j curve it's worth twice as much in this imaginary scenario how do you get that money or if you wanted to sell just 10 of it let's say you needed 10 of it and you were down in the j curve but you needed 25k you can't really get it there's no fluid way to do it you have to call me you'd have to find somebody to buy it from you and you're pay through the nose i presume you're legal expense the legal expense is going to be 5 10 15k whereas you know on both sides of the transaction probably whereas with if it was just a token and it traded well you could just say to my wallet to your wallet yeah i'll buy it off you for 25 cents on the dollar or 200 cents or 200 percent of the original cost basis sure and we could just trade it and it could happen globally with a billion people participating and then it could be a coin on coinbase where you know you could see the underlying value of the assets and people would just be trading it all day long imagine a venture capital firm that just traded 24 hours a day seven days a week it would be awesome because if that firm hit uber or coinbase or robinhood or com or whatever then the shares could be worth something and people could get intermediate liquidations in it right or liquidity have you seen the um the arc family of funds yes their arc vx that's investing in um venture capital yes i i know it's not a big fund yet but i'm keeping my eye on that but you're referring to this kind of in the other way around like do it on crypto to get money into yes and so i think that'll be popular if you could pull it off i think it could be popular but here's the thing i think the what um they're doing with that other fund you mentioned um or kathy woods yeah i think that's some sort of a closed end fund type thing where you can take out five percent a year if you're a member of the fund so you're limited in your drawdowns every year to a window where they have a drawdown window and i believe the way it works is she gets a fee that's not carry that's just a percentage of the holdings every year in other words like a management fee so then the incentive is to make it as big as possible get your one two three four five points on it kind of like a money manager does but you're not incented um to grow it in terms of the multiple like you would with a 20 carry that venture capital has got like we make our money through the growth of the underlying asset i.e carry just like a ship captain would by going trading the spice route and whatever you bring home to the queen is the you know you get 20 of whatever you bring home and the value of it this is the opposite you're just getting paid a fee of how large it gets so your incentive is to make big get more people to put money in but your incentive is not to get big returns so you just it doesn't make a lot of sense for me these financial structures and the financial structure should be open to anybody to creative solutions with disclosures with responsibility and education on both sides okay i i just think that's the way forward and we're not there yet and i hope that we get faster to it but i will say michael saylor uh congrats on the market giving you a 2x multiple on your bitcoin holdings because apparently you can do that now and everyone goes okay okay here we go uh lightning round time jason this is a new idea that we had and we're going to do four really quick ready for this okay sure all right open ai building a browser the information broke this story essentially build a browser integrate chat gpt into it they're working on search products this is very contra google i would say overall and they've picked up some big names like darren fisher who worked on chrome and um shivakumar uh vinkataraman who was part of google search advertising business i think this is awesome curious what you think yeah there's two reasons why they're doing this both of them are equally brilliant number one you intercept searches so when people have learned you just instead of typing in www.drudge report.com you just type drudge report now you've intercepted that and done a search instead of you know sending people directly to the thing so that's a reason to do it in and of itself number two if you on the browser side in other words on the device side analyze a web page i'm on i can do whatever i want with that web page i can do speech to text i can do text to speak i can save that page you're allowed to do whatever's in your browser window so while a company like open ai is not allowed to take i don't know a video that's in the browser window and ingest it without permission they're not allowed to take a new story from the new york times as we see with their lawsuit and ingest it into their um large language model you the user can take that document and feed it into a local llm and do whatever you want right so you can remix it just like i could buy a book or i can buy star wars and i could edit star wars on my computer and george lucas can't do anything about it and disney can't do anything about it the reason they're doing this nobody's brought this up is this is going to allow them to remix and to do analysis on top of copyrighted materials that they cannot do in their main index so let's say you had a website that was very protective of their content like instagram or linkedin you're not these things are not allowed to be indexed you can index like a little snippet of a person's linkedin page or maybe the top level their bio of their x or instagram profile but those those contributions of meta products are not in the index they're not in google search index and they're not allowed inside of open ai that's why opening i believe did a reddit deal right and they're they're licensing their data and core did a deal with them but you can do whatever you want in the browser and so that's going to allow them to store every single linkedin instagram page you look at alex and everyone i look at and put them in our personal llm so get ready for a bifurcation to happen everything in that browser the open ai browser goes into your local storage and you're running a local version of chat gpt and llm on your desktop or on your laptop or on even your phone and then you're merging that with the language model provided hopefully i did that in under a minute i think i did you did i want to add one more thing about why i'm excited about this so one thing that i've been shocked by is how much i live in my browser now apart from playing games on my my gaming pc i essentially just always live in the browser and that's kind of where i do my work spotify aside right and maybe slack and it's amazing and it's amazing how in browser we are so to me if you're open ai you want essentially to build an operating system but you don't want to build an operating system because oh my god can you imagine how hard that is just to like build a chrome ask andrea yeah yeah and you know what how many os's do we have in the world total that are that are mass three four yeah three or four i mean if you got harmony os now in china and so forth but like essentially they don't want to do it a browser much easier to do so if you're open ai what's the what's the shortcut to control it's a browser and so i can see myself eventually becoming an open ai chrome guy all right so next up on the lightning around is blue sky uh jason i'd forgotten that twitter had incubated blue sky back in the day jack dorsey was on the board it's been blowing up and i pulled some data just so everyone can see this uh july 31st 2023 434 000 users july 31st of this year 6.1 and then today 22 and a half million users jason uh it may actually finally be a breakout twitter competitor or ex-competitor we've been talking about this for a long time and maybe one finally has come around that people will use thoughts um is it run with what's a differentiator for blue sky is my question um is it just that it's not x or is it that it's federated is it that you can post there and post other places in other words why am i going there am i going there because i don't like x and i don't like elon and i don't like the maga nature of and i don't like the anonymity there and the trolling whatever and then i go to threads and that's where all my my if i were to look at all my journalist friends and like people really on the left like not centrist but lefties right yeah the lefties are all on threads right if you want to look for kara swisher or whoever they're going to be on threads they've deleted their accounts on x in protest so they're going to be there so then what where does what space is blue sky yeah so so i think actually it's kind of like an alternative to threads more than x i've always thought of threads as like the super corporate version of of x and so that's why i've never really cared about it because when they launched threads they had all these brands that were like breading their excitement about threads and i was like guys i never want to hear from coca-cola or southwest i'm good thanks blue sky to me is different in feature terms easier to do like like block lists and pass those around but the reason why i think blue sky is doing well is not the features but it's the users so i think you nailed it with the people leaving so i'm on both x which is where i live and have lived for a thousand years but i'm also on blue sky jason not because i care about the software but some people that i miss like john scolsey an author that i love uh he's over on blue sky he's no longer on x so if i want to see his stuff i literally have to go you have no choice but to be there no choice but to be it on a semi-regular basis now so that to me is is my personal progress then um i had an account can't remember my login i'm going to create another account over there i'll start playing with it but yeah whatever i mean it's i i really am finding that social media is a detriment to my overall life experience and i want to do less social media i want to do more podcasts and writing i don't like the nature of either or any of the social networks right now i actually if i do like one i kind of like tiktok and i like linkedin okay i'll explain why i like linkedin because i'm seeing a lot of our portfolio companies and other entrepreneurs doing threads about their business and i like business yeah i don't like inmail because my inmail sometimes is a lot of people um try to sell me sas products or whatever and i i don't make those sas decisions in my organization so it's a little annoying but i have seen actually my email is a little bit better i would like linkedin to just make me an email account which was what raul was going to do at at linkedin people don't really know too much of this history but i think when jeff was running it he had told me he was interested in making a linkedin email product so imagine alex wilhelm at linkedin.com jason calacanis at linkedin.com just started working that would be amazing and then if they could you know intercept the email um or you know have inmail be part of that and then i had quick keys so i've been begging them to make the inmail interface better and make it more like gmail or superhuman and then i would actually use it more and i would have a lot of my business stuff over there so i i am liking what i'm seeing over at linkedin in terms of our portfolio company sharing what they're working on tagging each other and where we've been doing our live feed over there so this week in startups is live with them we actually get some good contributions so yeah i like linkedin for business uh people are in a business mindset over there and then tiktok you know there are some world positive folks over there who i just like following and there are some storylines over there that i like um but the intellectuals you know and the powerful people in the world are still all on x and i so i think it's unrivaled i don't like being a super router on x as much anymore because the maga folks really do target you if you're on the left so i have brigades of people yeah no matter what i write are just violently attacking me like in some cases and i tweeted some of the dms like in some cases literal violence most cases just harassment and so i could understand people opting out of x because of the harassment issues that you get as a left-leaning person or even a moderate i'm a moderate who is socially left but you know if i know if i do something that's out of the norm over there man i get brigaded and it's just like okay well now i've got to like scrub my comments for people saying like really horrific things and i'm hiding and blocking people and then if i put it on only people i follow can comment then it was quote retweeting me oh you're a coward and then you you're gonna pile on and quote retweets or screenshotting you and calling you a coward because you just don't want to deal with their abuse means because you know that means that i'm just curating my experience of life gal exactly and so that's the problem is like the as you get more popular your the detractors spend more time harassing you yeah and so there is a challenge i think elon and the x team are going to have to figure out which is anonymity and not being able to block the the block feature now is actually kind of cool um if and i think they have to keep working on it i would like to be able to ban anybody from replying who has an account under a year old and under a hundred followers because i would say 99 of the spam i get are accounts verified or unverified under a year old under a hundred followers in other words they're burner accounts and i'm i'm getting inundated with burner accounts you know uh essentially swatting me in my replies and it does make me want to participate less because it's like i'm i'm there for intelligent challenging discourse not drive-by comments it just feels like if you have a burner account you can drive by with no cost so there's more work to be done on the drive-by accounts for me um and the balkanization of social media or short text social media is a bummer absolute bummer one last thing about the block feature i know people are concerned about um i suppose especially women are concerned about not being able to block certain people as much as they had before and i think that's perfectly valid but one thing i i like about the change i'll just throw in some positivity here about x because it's where i've lived since 2008 um i can now see mark andreason's tweets again yay you can't reply to them i can't reply to them but i can now see what was previously included to me and everybody knows that everybody who uses x on a regular basis has a backup account so i have my jason calicanus account and my at jason account people when mark and treason blocks me or scott adams was blocking me whoever's blocking me i will once every couple of weeks or whatever or if i need to because somebody sent me a tweet and they're like oh check out this tweet and i'm like oh i can't see it and but it's mentioning me or it's meant to be i will go to that account and then go see it there i just and i just flip it you just flip it in your app you re-click the link to it yeah so it's kind of doing what everybody did as a route around anyway but you can't comment on that person which is kind of nice so i have now spent my time deleting drive-by comments from one-year accounts that are not intelligent if it's i mean if somebody wants to make if somebody makes a funny roast of me i kind of like it and i'll reply i'll actually engage it but you are very sure about that i've seen that yeah yeah but dumb ones i'm like well you're just wasting everybody in the class's time with a dumb drive-by comment so anyway uh it's gonna continue to be balkanized it's a bummer uh but you know x is still growing threads are still going and uh blue sky is still growing so i think i gotta get on blue sky again just like i'm i check threads once a week uh twice a week and i comment once in a while i don't get a lot of replies there but i have 10 000 followers so yeah whatever is what it is here's the last thing i want to ask about this because i think twitter incubated blue sky back in the day does that mean that x today would hold any shares in blue sky because it'd be pretty funny if blue sky has its moment everyone freaks out about it and turns out x owns you know 40 of it all right um lightning round last round last one uh big news core weave is going to go public next year jason reuters reported this this is one of the gpu neo clouds 35 billion dollar reported valuation looking to raise three billion dollars more i think we're seeing this ipo go out next year because they want to raise more cash.

1:15:56So they're actually using this as an IPO versus kind of a capstone event like Stripe's going to. I think it's super cool. And I'm literally now hype as hell about all GPU clouds because if one's going public, more are going to go public. Thoughts? Yeah, Neo clouds means new clouds, obviously Neo. And they are clouds with GPUs. This one, CoreWeave in particular, had very presently bought a lot of H100s, I think, early on. so they had an advantage and they've got large large amounts of private equity capital that's been loaned to them so back to big public entities taking loans i'm not saying that there's a ponzi scheme aspect to this one or i haven't heard anybody say that but i have heard people say you know this is an all-in type moment for a company like core weave what if h100s get replaced by something or their shelf space or the demand goes down so if you are betting on a neocloud you're making a very consolidated bet on ai on h100s you know and and the the downstream versions of those a100s whatever else they're making so it's a very concentrated bet it's probably been fully um realized a lot of the gains will be fully realized so one of the things with these ipos to keep in mind is you know if you look at the prices of them a lot of times when they go public they've been fully priced in my experience or maybe generously priced which means the founders when they raise money and they sell those shares are getting full value sometimes great value from selling those shares because then it trades under the ipo price for a while what was the ipo price of robin hood somebody today told me that they just passed their ipo price so robin hood ibo price was 38 per share and hood today is worth 37.42 so they're back i mean i haven't sold the share of mine i distributed ours to our shareholders our lps i held all my personal shares even down to eight dollars a share because it went down to 821 i actually i think i bought some more when it was down on the ground i bought some more uber when it was down on the ground smart because i was like well this doesn't make sense and this is i i think goes to what warren buffett is doing right now which is he sold a bunch of his apple because he thought it was overpriced perhaps or fully realized built up a huge cash position of over 300 billion he's going to wait for the market to correct in the next 24 months and then buy back in i suspect that's what's gonna i think that's why if people are selling their bitcoin to michael saylor my guess is the people who are selling it are those really experienced bitcoin traders who know hey this thing boom busts yeah i'll sell michael saylor all my bitcoins at 100 at 95 000 a coin 99 000 a coin whatever the range is there and then i'll sell them again i'll buy them back again at 50 000 and then find the next bag holder so i'm not saying anybody can tell you what the price of bitcoin is going to be a year from now but i think if you asked all the savvy people if S Vinny Lingham or Sandeep Madra or Tramath.