TWiST News: The Startup Redefining Sonos, Influencers, Elections and Google's next AI push | E2034

0:00the next one that was incredible okay in this like buzz arrow was hey alex willham's new book cautious optimism the book has come out and uh you call all the bookstores and say hey do you have any copies of cautious optimism i gotta get this book and they'd be like uh let me check yeah we have two copies hey could you put one aside for me i'm gonna come pick it up tomorrow you never show up but you do that a thousand times once a week twice a week to all the bookstores what do the bookstores do they order more copies yeah now they got more copies they're stuck with them They put them in the mirror and they just created buzz that you go into the store and they were sending agents into stores saying, hey, do you have this book?

0:42Because my friend told me it's the greatest book ever to influence the people at bookstores who are the reps. Wow. I mean, this is creative thinking, but it's sinister and it's against the FTC rules. And they came out with rules you have to disclose. That's why you see paid partnership hashtag in a lot of paid partnerships. This Week in Startups is brought to you by DigitalOcean. Whether you're just getting started with AI or seeing your project take off, DigitalOcean is the cloud platform that lets you focus on what matters, building killer apps. Right now, get up to 100k in free credits at do.co.twist.

1:23Terms and conditions apply. CloudDevs. Building the best remote team is tough, but you don't have to do it alone. Visit clouddevs.com slash twist for an unbeatable offer on hiring elite LATAM talent today. And Kelshi, the largest regulated predictions market now lets you trade on US elections. Visit Kelshi.com slash twist to see live election odds, place a trade and get$20 when you deposit 100. All right, everybody. Welcome back to This Week in Startups. I am your co-host, Jason Calacanis. I invest in startup companies here in the Silicon Valley, Austin, New York, basically English speaking startups, since I don't speak a foreign language.

2:09With me, Alex Wilhelm is my co-host here. Alex, how are you doing? Well, I'm good. Although I think I need to find like the Duolingo FAQ got in wacky with it because you can solve that, Jason. You can learn any language you want through the power of technology. No, if I had the time. it is one of my great regrets in life is that i didn't learn how to speak another language when i was younger i wish uh some of that french had stuck but uh you know it's it is an interesting thing people uh always want us to invest in their company in japan or india or france germany and you really should go with a local investor who speaks the language understands the culture can use your product and vice versa if the person doesn't speak english can't use the product it's really hard to give advice right and so we tell folks like we would you know this is a really interesting idea from china from the philippines from wherever germany a lot of times interesting stuff and we say just let us know when you launch the english language version or if you go after us customers if not get those local investors to invest in the early stage i do appreciate that You're sharing Alpha with the European venture capital community, Jason.

3:22That's very generous of you. Before we get into the rundown, though, and we have an awesome guest today, just so everyone knows, I want to point out that this is earnings week. So when you see us later on, we're going to have data. Jason, Tuesday, Alphabet, Snapchat, Reddit, AMD. Wednesday is Meta, Microsoft, DoorDash, Robinhood, Coinbase. And then Thursday, Uber. And Apple, Amazon, and Intel. Yeah. So I am a shareholder in Alphabet. meta microsoft doordash robin hood apple amazon and uber so i have those eight of the group so i have a vested interest in some of these earnings more are you feeling good about earnings this cycle how do you feel about like q3 results you know i have a thesis here and i think it will be something we'll talk about on today's show my thesis is and this involves a lot of politics as Well, we will continue the big spending train.

4:20I know there's Doge, Department of Government Efficiency, and I know Elon said he was going to cut$2 trillion. That would be amazing if it happens. I don't believe it's going to happen under either administration because I think what we're going to see is tax cuts from Trump and spending. and then from uh kamala if she wins we're going to see more slightly more spending and no tax cut what that will net out to i believe is 10 trillion added to the debt by the time this um four years is over if that does happen where does that money go alex where do you think all that money winds up uh ultimately winds up in the hands of investors i think equity holders correct yeah so if you were to spend money on government contracts well those government contracts might be with corporations those corporations service the government they make the money it goes into equities okay if that money were to trickle down and go to new jobs for or raises for government employees where would that money wind up well two-thirds of our economy is consumer spending so consumers if they got a raise what do they do with the money they spend on vacation they spend it where does that wind up it winds up in uber uber carnival cruises you know virgin airlines whatever it is airbnb or maybe people treat themselves to a doordash more often you know once more a month twice more a month and so ultimately equities is where i believe the money will wind up it'll not wind up in savings accounts it'll wind up in 401ks which as equities it'll wind up in people buying equities or homes increasing in value what does that mean it means people who are um the the folks who own equities which is the top 60 percent of the united states will benefit most in the bottom 40 percent they live hand to mouth they will not benefit therefore i believe corporations with static team sizes will have greater earnings even if their top line contracts because of consumer spending.

6:32Let's say we go into a recession, which seems unlikely right now. Everybody seems to have baked in the soft landing has already occurred. But let's just say we go into a recession. If it contracts a little bit, then you just fire the bottom 10%, which CEOs don't have a problem with doing anymore. Boards don't seem to have a problem with it. So you just right-size your spending, earnings remain the same or go up. so that's my prediction i i agree with a lot of that yeah well stock stocks go up was the old the old riff you know it's interesting because that was partially kind of a keynesian argument like government does this economy does that but i i wonder if there's not another side to that coin of what does it feel like as a nation to have net 10 trillion more in in debt because that's a non insubstantial fraction of our total national debt and i wonder how large that number can get at it's growing faster as a percentage than the global gdp is and i wonder when those fall out of sink and then we end up in a worse situation do you think that happens in the next four years with 10 trillion or i think right now it's be it's uh it's on people's mind right and so the fact that there's even a dialogue of this doge and the government spending being out of control the fact that that's even part of either platform's discussion um means it's becoming acute so we did not talk about it over the last 16 years because it was not acute we we had balanced the budget under clinton and it was like a little bit of debt you know increasing didn't feel like our percentage was that off now the percentage is hitting an all-time high and the interest payments are crazy so i i did a back of the envelope i think the interest payments are now thirty five hundred dollars per person per year so you're a family of four fourteen thousand is your share of the interest on our debt that if you were to put it in those terms people would get very scared and if it doubles over the next you know our debt doubles over the next three administrations now you you would be at your family of four 28 000 a year in interest no principle that will change a little bit though when rates come down because the interest rates uh interest payments skyrocketed with rising rates so this is the chart i just pulled up this is the uh the federal surplus and deficit um you can see that first real collapse was the 2008 era i believe and then we had a slight recovery through the later Obama years and then the last couple administrations have been a little bit freer with the checkbook you might say if your startup is all in on AI well digital ocean is the cloud platform that's going to help you scale faster without all the headaches you're going to be able to do incredible things with their GPU powered virtual machines like training your models or building AI agents or just crushing massive data sets all in seconds.

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10:09So here's your call to action right now. Approved listeners can get up to$100 ,000 in free credits on us. Visit do.co slash twist to get started and view terms and conditions. That's do.co slash twist. On the show today, we have Sonos' Matias Schick. We're going to talk a little bit about google joining anthropic in the ai pc race the influencer election and if we have time some eye candy in the form of chinese evs that might literally take you to the moon um but let's start with matthias chic from sonos jason you really wanted to have matthias on and i want you to tell people why well i had just seen this great thread welcome to the program matthias and you had built a speaker company and raised venture capital for it i know the degree of difficulty in raising venture capital better than almost anybody because i help founders do it and hardware is hard and you were able to land the plane and be acquired by sonos and i'm also a fan of sonos's products and audio products in general so i thought you had a really great story i thought we'd start with maybe you could tell us about your startup and how you found that there was an opportunity to improve speakers i mean this is a space where let's face it people were i think pretty sure that we'd have incremental gains in speaker but you found a way to maybe have more than just incremental so maybe you could explain to people what your product was as a startup and then we'll get to the acquisition by sonens yeah sounds good so thanks again for having me on the show um so let's start at the beginning uh my brother and myself timothy and myself matthias we um have always been very passionate about audio um even as kids of like four and five years old we would like take secondhand speakers take them apart pick out the woofer put it in a bigger box and crank it all the way up and as soon as the doors would start to rattle we would be like happy with what we were doing um so it's a deep passion it's not just something we started out of college or anything um so fast forwarding to 2013 we had a high-end speaker company together and although we had something which was quite unique from a design perspective it wasn't that unique from a technology perspective so we were looking at what the others were doing in the high end speaker space and funny enough if you'd look at a woofer or tweeter or a mid-range from a tech perspective so looking at the magnet the membrane and all the components they were really quite similar and we also found that a speaker that you would buy let's say 50 years ago is quite similar to a speaker you'd buy today from that hardware component perspective.

12:44So you'd see some changes in materials, you'd see some changes in tolerances, but not something that's really drastic or revolutionary in that sense. And I think it was our naivety, like being very naive in a way that we found something that was quite different. So we started the company Might in 2016 after our high-end speaker company that we had in 2013. And our sole purpose was to find something new in the hardware space and to be specific in the transducer space or the speaker transducer space i want to pause you there because we pulled up your patents and you guys had a patent for distributed transducer suspension cones in october of 2020 tell people out there who don't know what a membrane is transducer just give people some background on the the terms here okay so i'll just bring this into the screen as well this is a speaker or what we call it a transducer and this is the one that we actually built before Sonos acquired the company.

13:44So as you can see, it's roughly three and a half inch in diameter, but it can get the same performance as a conventional eight inch woofer, which is of course much larger, heavier, and everything. So membrane, that's the surface, which moves up and down, back and forth. We have this rubber suspension that makes sure it stays in place. And then the internal consists of magnets, which are in this white casing. And there's a coil up here. So as soon as there's electricity going in the coil, it moves up and down because there's a magnetic field around what the coil is producing around the magnet. So those are the main components of a speaker.

14:24So you were asking about this distributed motor thing that we were doing. So conventionally, as you can see, all around, you can see these magnets and coils. Conventionally, you'd have one magnet in the center and one coil. The funny thing about that is that if you put something behind the membrane, you are actually limiting how far this membrane can move backwards because you put something behind it, the magnet and the coil. And in the end, what we're trying to achieve here is as much air displacement as possible. So moving that away from the rear of the membrane to the side, which we did, it's now in the corner, actually creates more space for this membrane to move up and down, ergo to displace air.

15:07Got it. So that gives a fuller sound in a smaller space? Exactly. So some people think you need a large enclosure for large sound. That's not the case. You need large air displacement for large sound. And that's what we're doing with this very compact product. And then this manifested itself in a new Sonos product, which I haven't ordered yet, but I'm definitely going to order any moment here, which is this new sound bar now i've had a i had the old sonos sound bar this isn't an ad um although i think they did advertise a couple years ago um i've just been a fan forever of sonos um and uh this is the arc ultra sound bar and sub four it's a thousand bucks for this arc ultra and it's a thin sound bar that goes under your tv what and then inside of it is your technology what does this uh experience do for somebody versus not having a soundbar and just having a regular tv yeah that's like a world of difference yes so where to start so for example i think one of the things that i really dislike with television like the building speakers is vocal clarity or dialogue clarity which is a huge upgrade with a soundbar in general but then what sonos arc ultra adds is um spatial audio so there's 914 coming out of a single object which is really quite unique and next to that of course we introduced our woofer technology sound motion which then adds um like good good and very solid bass which is also something that's generally missing in the tv but yes i'm sorry again my ignorance here but uh you said 914 and as a music fan but apparently not a sufficient audio file I have no idea what that means yeah good point so 9 actually means all the speakers which are around you on air level they've got your front channels your rear channels your side channels etc.

16:59surround channels then 1 means the subwoofer and 4 means your height level so stuff that happens above you for example if there's a helicopter flying on top of you it can happen in front of you left to you right of you behind you and that's all coming from a single speaker which is really pretty cool that's amazing so you have the ability to point some of the speakers up in the air some of them straight out and then create this sort of surround sound bubble yes oh a sound bubble yeah and i know people call it sound stage in the when people listen to music um but now you can get sound today with like these thousand dollar sound bars that used to cost i don't know 15 25 000 to do a room 20 years ago yeah yep it's it's like it's just the next generation of what you'd normally i'm using conjunction with your tv or just to listen to music how did you get venture capitalists to back a speaker company 10 years ago yep that's a good question so it first of all it was really hard to get money for hardware because people always say like hardware is hard and that's true so and then if you narrow it down try to get hardware funding in the netherlands and it's a tiny country um we're great with software we're great renovation but hardware there isn't that much and then to make even more narrow we're talking about consumer tech hardware so it's which is really hard because it's a race to the bottom if you make something great some chinese factory is going to make you know the same factory that makes your product is going to make three knockoffs on the weekends or when you end your contract with them with some local founder in shenzhen correct this is what happened yeah yeah yeah so that's one of the bigger worries that they have also if you look at um the multiples um in consumer tech in hardware it's quite a bit less than in software so you were able to get vcs to come on board because they were audiophiles already and you just found let's say product vc fit we talk about product market fit but there's also product vc fit in other words like there are vcs who have private jets who backed boom which we've had on the show blake a couple of times and i consider that the ultimate like uh product vc fit because they all want to they think their time is so precious that getting somewhere two hours early and then sitting in bed watching netflix as opposed to getting there two hours later and watching netflix in the plane is a difference but um i think the main fit actually found with our um um pc company was disruption in a way so what we presented was something that that disrupted or disrupts the audio space as we did something that's very different from what what has happened in the past 100 years and um that's what really spoke to them in a way so they weren't really audiophiles they did have backers of their fund which were audiophiles that we met and show the tech and which they really loved but in the end they they really felt for the part that we can disrupt the industry.

19:59Like big tech at the time that we were trying to raise money, everybody was doing smart speakers from Amazon to Google to Apple. And all of them were trying to figure out how can I get this small speaker into people's living rooms in order for them to order stuff through my speaker. But also it should sound great. So people really feel like they have a good speaker in their house. And that part really spoke also to this PC, as it of course would mean large numbers i i gotta say points to the vc because they backed a company that ended up doing very well but jason to matthias's earlier point the multiples in question sonos currently trades for a price to sales ratio of one not easy yes it's hard that's that's tough but but matthias you guys ended up selling for what was reported to be about a hundred million dollars so i'm curious take me from might's founding to when sonos starts knocking on your door saying hey you guys have built something cool and we want it yeah so 2016 um we were just a company of two my brother and myself starting to develop the tech and we really started like skunks work way um with practically no money actually with the money we had from our previous company um i think one year in we tried to attract a little bit of capital like really a little bit like a couple of ten thousands and we did that from the university where i studied um we made a Groove Concept, which they really liked and was really impressive.

21:18So they invested a bit more money in that same year and with a bit more like around 50k. Thereafter, we took really actually small steps now that I think about it. Most of these stories are like, we raised 500k and then 10 million and then 26 million, but we really went from like 20 to 50 and then the next step, 300, which was convertible debt, which never converted because we actually had the choice to convert yes or no. yeah oh nice yeah oh so that's that this is a very unique thing if it doesn't convert you pay it back and you don't have to give up the equity so depending on the deal that can work out really well for the founders or not and for the investors sometimes they don't mind doing that um i wouldn't do it are you looking for an unbeatable deal on senior talent well if so you need to look outside of your borders.

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22:50So, here's your call to action. Because they're such big fans of the show, CloudDevs is offering Twist listeners an exclusive pay-what's-fair deal. Instead of their usual fee, only pay what you feel the talent is worth for a limited time only and exclusively for our listeners. Just go to cloud devs.com slash twist to pay what's fair for your next five star hire. So tell me about how the audio industry reacted to what you were doing. I know it's a very precious insular industry. When they saw what you were doing, did they think this is BS and try to deride you? Did they copy you? Did they celebrate you?

23:29Because it is a bit disruptive and it's lower priced. and man, I use some focal headphones and I got these key speakers. These people are really, really like serious audiophiles and very serious about products. I'm curious how they looked at your entrance. Yeah, so first, of course, there's disbelief, especially like we're in the Netherlands, so I can really demo anything through Zoom or whatever video conference. So first of all, we tell a story and we tell them we can do something 10 times better than you, which is, of course, a pretty tough story to sell. the marketing people like it the tech people a little bit less we spoke to a lot of companies where you'd find that they would feel like we didn't invent it so we don't really like what you're doing that kind of feeling that we have they have so over zoom was pretty hard or any video comforting was pretty hard but as soon as we get the chance to demo what we had developed it was a way different story so we'd get in the room they would get all their smart people in the room, all the guys that invented patents or made big inventions, and which are patented.

24:33And we demo our speaker. Funny enough, there's one here in the corner. I think it's already visible, quite small. There, next to the R300. And again, disbelief, like, is this really coming from that tiny speaker? Which was actually in the beginning was really, really funny to see that, to see the reaction where even companies bring in their own speaker because they thought maybe it's the acoustics of the room they're trying to so they wanted to compare it and make sure what they were seeing is real so let's go you know as we get to the third act here getting acquired how does that happen for a startup i i've always been of the belief that great companies get bought they're not sold did you go out and try to sell the company or did people start knocking yes it's second so we of course we kind of set it up in a way so we always stayed in the background until ces of that year 2022 where we really made a lot of noise so we won best of ces at that time we started talking to reporters and of course we reached out to all these companies that we already were in discussions with for a couple of years so even from 2019 onwards we've been in discussions with like almost all of the audio and tech industry and just like keeping them in the loop of what we were doing um so this is a key key important part here alex what great founders do is they keep the competitive set and the partnership set aware of what they're doing now this seems like maybe you wouldn't you'd want to be stealthy well once the product's out there they're looking anyway and you know most of the acquisitions you'll see are partnerships to acquisition in other words somebody says oh you know we want to do some sort of partnership with you and then they offer to acquire you so that's what happened to me with weblogs inc aol said hey we want to invest then they said we want to buy half the company then they said we want to represent your ads and then at some point ted leonis just said you know we'll buy the whole thing this is getting too complicated why don't we just buy you buy the whole company and i think that's probably what happened with you too yeah matthias yeah so actually our strategy was to sell licenses to all of the audio and tech world so imagine getting a couple of bucks for every speaker sold with hard motion or sound motion technology that's pretty cool yeah um but in the end it's also a huge competitive advantage to have a technology that all the others don't have and that's the part that sonos really fell for next to of course a great cultural fit and in general great product technology fit so that's what i want to double click on because people talk about selling their company but we often don't talk about day two like once you're there so you guys sell to sonos what was it like going from being you know in charge of your own company to being part of a much larger organization and how hard was it to get your tech into their roadmap yep no actually it was really quite funny like from day one so the company got acquired and there wasn't a break in between it being might and it becoming a part of sonos like on friday we brought the news and on monday we started um it was pretty cool um but it actually went quite natural of course there are quite quite large differences so um the weight of changing a roadmap with such a large company is way different than with a startup we could just say from the one day to another let's stop doing this and do something else which of course sonas couldn't but um as they were already working on our ultra when we joined they were actually quite flexible and changed the design quite drastically um once we joined so are you happy you sold the company like looking back i mean i know this is a public forum and you're talking about your employer but like you know was it the right choice do you think looking backwards to sell for that price at that time yeah yeah i think like i'm really happy with our choice like especially from a timing perspective it really was the right time the market was doing great and also there was a great need for this technology at the same time also our company we are really great at disruption and like the first part of having an idea and bring that to life and then sonos is really great at building reliable really great sound experiences so marrying those two together to make beautiful products it turns out to be a winning combination yeah alright well I'm excited by it well and we're looking forward to buying the Sonos Arc everybody can go to Sonos and just pre-order it I don't know if it's for sale yet is it for sale yet the Arc?

28:57yeah if you're in tomorrow like tomorrow onwards you can really like buy it good timing to have you on continued success and then hey final question for you these high res flak files I've been getting into and playing them do you have the ability to play those yet on sonos i know sonos has been working on their hi-fi strategy and there were one or two speakers but hi-fi doesn't work over bluetooth you got to have like ethernet or something plugged in so tell me about the hi-fi strategy here and with your speakers does it make a difference if you're playing like an mp3 off of spotify or a higher res mp3 off title or co-buzz and using a proper flack like i do yep now so of course it matters source or content quality matters.

29:43What I personally do if I want to listen to a flag file or even like a master rendering, I use Tidal. Yeah. Probably also familiar with that. Yeah. Play high-res audio. And so does the speaker support that high-res and the input of it now? Tidal is supported on Sonos? Yep. Tidal is supported. Absolutely. Yeah. Great. What about Cobus? Do you guys do Cobus yet? Oof. I mean, I wish I could answer that. i feel like i should know but i don't you know about kobas right yeah i do like i used cobas before title but then i found that they have less content available so i moved i may have to move to title then yeah i am really getting into it i can't wait to get this i i have an lg tv and they've gotten better with dialogue so i was using it last night i was watching inside out two with my daughters and the dialogue was much better than previous tvs but i know it can go up a level why is the mix on dialogue so problematic today i don't understand why everybody is complaining now that game of thrones breaking bad whatever it is they seem to make the sound mix not um they seem to make it much different maybe it's because they're making it for like movie theaters and these move and and they're they're they're listening to it in a way that 90 of the audience isn't listening to it yeah i can imagine like what i would recommend is like for example with arc ultra we have a spatial we can render spatial audio which means you have a dedicated center channel and we have dialogue enhancement so all the details that were put in the mix you can really get that like from a dedicated speaker which i believe is quite nice so this is a known industry issue the dialogue issue and everybody's kind of attacking it at once yep yeah i think this do you have this issue too alex where the you can't hear the dialogue but you hear explosions everywhere so i was just actually chatting to the youtube crew i wonder if this issue is why people in gen z and the millennials love to have subtitles on because one thing that people say is oh my god these kids always have subtitles on maybe our media is just poorly mixed and no one can actually understand what people are saying especially if there's any background noise the only other hypothesis i have jason to your point about game of thrones and breaking bad shows that use a lot of ambience and maybe sound engineering to create a lot of background noise to set the stage might have an issue of that clashing with dialogue and i think people expect more of a soundscape than we did back in the you know pure dialogue film era so i wonder if that's an element of it too but my tv is terrible so i don't know if my tv is trash or if i'm commenting about an actual issue here well we're gonna get you a soundbar and that should sell me filter will solve it for you all right mateus thank you so much for coming on the program congratulations on your startup uh hardware is hard you made it happen and now you get to you know have this great partnership with sonos and the team over there which is awesome my friend julius jankowski is on the board and uh you know i'm a big fan of their products i use them in every uh one of my homes which i guess sounds obnoxious um in both of my homes i use them i've sold the other two but i love sonos because it just works and it's so elegant and beautiful and it's awesome that it's supporting high res now uh all right thanks so much mateo thanks jason thanks alex see ya what is a prediction market let's talk about that to start it is a way for you just individuals to buy or sell a contract on a future event.

33:16Okay, what's the future event that you could buy or sell a contract on? Who's going to win the presidential election in 2024? Hal Sheed, the world's largest prediction market, just made it legal to trade on the upcoming US elections. That's right. For the first time in 100 years, US citizens can now legally place trades on election outcomes. And the election is less than, I don't know, two weeks away. Wow, so close. Now, political polls, we know, can be highly inaccurate. But the markets, that's where the Sharps are putting their money. And so the big question is, who's going to get it right? And that's where the arbitrage comes in.

33:54And that's where you have to make a decision. And election outcomes matter. They impact your taxes, the economy, and of course, it's going to impact your investments. So you can use this as a hedge. If you believe that one candidate is going to be great for your stocks, you might bet one way. If you believe that they're going to be terrible for the stocks and the economy, you could bet another way and that could hedge your exposure in another category, like say equities. Cal sheet allows anyone to protect themselves if their preferred candidate loses. So go check out the real-time election odds.

34:25It's really fascinating just to see it go up and down based on the daily news that's coming out or somebody had a rally, somebody had a great interview, somebody had a bad interview, a great debate, a bad debate. I think it's very exciting and this is the future because hey people have skin in the game I want you to check out Kalshi that's Kalshi.com slash twist K-A-L-S-H-I Kalshi.com slash twist and get in on the action you will get an additional twenty dollars with your first deposit of one hundred that's Kalshi.com slash twist what's next on the docket I love having these live guests and it adds a level of like raw honesty to it i love the fact that you're asking hard questions alex well done uh but let's let's keep going polite edge i i try to like be like hey i know your employer is gonna hate this but and that way it gets them all relaxed okay real talk somebody was saying last week when we did our great uh we had heritage on to talk about voting irregularities and we had hans on and people were like one or two comments in youtube oh you have tds or you know like he's never going to come on the program again blah blah blah and i'm like at the hans and heritage want to take hard questions there are partisan organizations in the world this is a non-partisan show run by two human beings who also vote in the election but i thought i asked him i don't think any of the questions were particularly hard i don't think he would say that he got hard questions i i think the issue is fan culture and people getting very tribal in what they expect questions to be and i think in the era of people going direct any question to someone of note that is let's just call it sharp elbowed is considered to be hating or being biased but i i think the hard questions are what made that entire section good because we you and i could have gone over the data ourselves and shown the statistics but it was pressing hans on a couple of things that i thought was in fact useful um i just want to say you end up with it by the way where did you because we're sitting here a week later uh six days later where have you wound up in terms of your assessment of uh voting irregularities and people cheating on voting obviously there's some amount of fraud in every system yeah so where do you net out specifically with the presidential election that is occurring in 10 days yeah i think we're doing pretty good and i think we're doing better than we deserve to given how our system is set up and given how spread out handling elections is around the nation i would expect there to be more fraught given that there does seem to be ways to impact the system but the penalties as we discussed with hans do seem to keep people away from voting going through the heritage database prepping for that segment because i went through a lot of the entries it was a lot of people that were like i didn't know that in my state a felony precluded me from voting right now some large percentage of it are individuals who registered to vote who weren't citizens or you know had some other issue or were felons or something like that the conclusion i've come to is because we have a a union of 50 states uh which i think is this brilliant feature uh of the united states it's like having 50 different operating systems yes or or forks of an operating system and so what that means is if you have one if you just have windows there's one attack vector affects every windows machine yeah but if some people are on mac some people are on chrome os some people are on windows and that's just three operating systems you can only have one third of users go down right or one of the three but we have 50 so to hack a national election would require getting into 50 different states or let's say six or seven swing states and having to do different things in each state because they run them differently and because everybody and the comments are always well why don't we have like one thing right we'll have one system of record it's like okay one then you have one system you can hack so in some ways the fact that there's 50 different systems keeps it from at least on the federal level yeah when we have a national election impossible and if you extrapolate and this is where i think maybe people thought i was a little bit sharp elbowed or whatever he wouldn't answer how many were federal you know in he he wouldn't answer like does he think trump won or not yeah did trump lose so i understand partisans don't want to answer that because they lose favor with trump and and you know like saying your team lost is kind of tough for people um like i would when the knicks lose i i'm kind of like we got robbed so me and the u.s women's national team every olympics or world cup yeah sure i'm with you you're like i got robbed the refs got me but then also like he wouldn't answer the question of like how many votes do you think are actually stolen if you have 1640 a year yeah would we times it by 10 or 100 and that's where i took from that baking in his partisanship which is fine it's a it's a think tank that's a partisan think tank yeah um even if it's 10 or 100 if it's 100 times if there were 100 instead of 1600 if they found 160 000 over 40 years when we have 100 to 200 votes a year on average i think we're in great shape now every vote should count but if i told you there were a billion credit card transactions a month and we had a thousand cases of fraud you'd be like awesome that's what we're having in voting that's my impression of it and it's i find it very encouraging because there are people out there who want to influence impact and change our elections i mean um the government has spoken about uh russia china and iran in particular about where they're looking to to change things or at least influence things and i think we're doing okay i just think as well that it's such a it's such a bummer to me how how partisan voting rights are today.

40:53And frankly, the Heritage Institute, our foundation, has been muddying the waters a little bit. They did this clip that I found when I was prepping for that segment. They were going around asking people in Spanish, you know, are you a citizen? Are you going to vote? And some people said that they weren't a citizen and they were going to vote. And then the post went back and fact-checked these people and, no, they're not going to vote. They're not registered. They just didn't understand the question that was being put to them. And so that is a way to engender fear of, essentially, people who are brown.

41:20Fear, uncertainty, and doubt. is the strategy i think that is you have on one side fud and then on one side you have hey you know you're making it impossible for this you know uh group of individuals pick race gender socioeconomic status you're you're making it impossible for them to vote folks to get on an airplane you need an id it is not too much to ask for id voting let's call it what it is give me a national id plan that will make sure that everyone has one and i will sign that day one it's such a simple thing so i just find both sides are so insincere about solving this issue um maybe one side 60 40 or 70 30 we could debate that but let's keep moving through the docket here you know let's let's get into the docket and let's actually start with the state's point because one thing i found while i was learning today about how influencers in our elections are being paid under the table jason is that this is something that's not been decided on the federal level and in fact states are stepping up so in this post that was written by um kat sokresky an excellent journalist over the post and former tech cruncher this is washington post oh yes washington post did a story about influencers being paid by packs or super packs correct yeah yeah so the folks on your TikTok or on your YouTube or on your Instagram that are talking about a particular issue might be getting a check, Jason, on the side.

42:49And at the federal level, we as a nation decided we're not going to regulate this mostly. And so people don't have to disclose that they're being paid by a PAC or a super PAC to post about a particular issue to their audience. And to me, that just seems like an odd exception to make for normal paid disclosure rules. But I want to get your take on that first well if you're doing an advertisement if i were to say right now hey go to athenawow.com get a virtual assistant it's the greatest thing ever i would always say before you go to athenawow.com understand their advertisers on this pod and i was the first investor in this company and their last company so you would have that context i am biased in the fact that if they do well i do well i have an investment in the company so So that's the kind of disclosure you should make.

43:42And I try to do that anytime I talk about one of our startups. Yes. I will say in just natural language, I'm so excited to be investor in density. Here's their new product, this new waffle when we had them on. So transparency equals good and integrity. So what's the issue here? um the issue is there was a company called paper post or whatever back in the day yeah they were covertly getting influencers you know in the youtube era before tiktok and instagram blew up and they would do really nefarious stuff and they called these buzz agents there was another company called buzz agents 15 years ago this is how sinister it was i mean sinister in a clever way okay so i give props to the marketer they would have the sony camera they would have a beautiful couple like unrealistically gorgeous couple in manhattan on their honeymoon the couple would say hey would you mind taking our picture you would take a picture they would say yeah no no i just my i got this wedding gift it's the sony vx 1000 um can you hit this button so i can get a wide shot in 4k and they would take your picture and they would just do this all day long oh wow is this and they wouldn't disclose it then they had like jimmy dean sausage or somebody i'm making it up yeah and then they would send you sausage they say have a party take pictures of the party share it on your social of you and your friends eating jimmy dean sausage so now you're being used as a prop yes your friend who's serving you sausage is in on it the next one that was incredible okay in this like buzz arrow was hey alex william's new book cautious optimism the book has come out and uh you call all the bookstores and say hey do you have any copies of cautious optimism i gotta get this book and they'd be like uh let me check yeah we have two copies hey could you put one aside for me i'm gonna come pick it up tomorrow you never show up but you do that a thousand times once a week twice a week to all the bookstores what do the bookstores do they order more copies yeah now they got more copies they're stuck with them they put them in the mirror and they just created buzz that you go into the store and they were sending agents into stores saying hey do you have this book because my friend told me it's the greatest book ever to influence the people at bookstores who are the reps wow i mean this is creative thinking but it's sinister and it's against the FTC rules and they came out with rules you have to disclose.

46:25That's why you see paid partnership hashtag in a lot of paid partnerships. But in Kat's story discussing this, she points out that people want to make sure that there is plenty of room for political speech and that we don't have two onerous rules for political speech versus commercial speech. And I can see that being an argument you might really buy into. But when I watch an ad that's paid for by one of the major two campaigns, at the end, it says, you know, I'm Kamala Harris, and I approve this message or whatever, which I think is good. I think it should have a name attached to it. Super PACs and PACs definitely muddy that.

47:02Super PACs and PACs paying influencers muddies that even further. So to me, Jason, given the examples that you've put out there, and given that marketers will do anything to get their message out, I think more disclosures here make sense, which is why back to the state's point, Texas, is kind of a an outline example here because um texas decided that uh if you're going to do this you have to um disclose that you're being paid to make a political post so shout out to the texas and then the detail is how do you have to disclose you have to say it up front at the end do you have to say it in audio or do you have to bury it in a hashtag and at these these the devil's in the details because people could give a whole thing and then just put it in the the hashtags and nobody would see it um just yeah you should always have disclosures it's so simple even like the new york times when they bought wire cutter they put a little sentence if you buy stuff on this page we get an affiliate link does that make anybody think twice about you know the advice in wire cutter for me no because i trust it because i know the writers there whatever but you know on a schlocky website they don't do it and you think hey the schlocky website has their 10 best whatever you know webcams and they don't disclose it and you know they're getting affiliates so they don't care what advice they give you they just churned it out using chat gpt and make a thousand pages all over the web with top 10 lists the top 10 list is meaningless and so you really have to it's buyer beware in all these cases and i do think super disclosure like really upfront disclosure is important in all these platforms and i do applaud texas if in fact they're stopping this shenanigans i don't like shenanigans no shenanigans are not good but i do think the fact that we're talking about this does underscore how things have changed in the not just get out the vote, Jason, but get out the message side of campaigning.

49:02I mean, think about 2008 was, you know, pretty email focused. And this is also mentioned in the, in the Washington Post story we're describing, but over time things have, have changed. And I think today, social media broadly is where a lot of people who are potential young or even kind of middle-aged voters are getting their news. So having your reach there in a more authentic way, AKA from influencers versus branded accounts makes a lot of sense. But if we're going to do this as a nation for the future disclosure will seem to be something that we should be able to pull off and yet not to disparage my favor from a government democracy but uh we can't seem to get this one over the line and that is to me a disappointment but both political parties do this and both at the federal level uh don't want more rules around it which i think is there are more pernicious ways to do this i can tell you um really you know the what happened with rt backing that third-party podcasting company and then giving those four podcasters a hundred thousand an episode and then they look away and don't ask questions of why they're getting a hundred thousand an episode but they previously made five thousand an episode so it doesn't add up but they just take it anyway these are the kind of things that i think are super important to consider there are other ways to do this as well you could pay for somebody's trip to the dnc the rnc you could pay for their hotel room you could give them a stipend now they're not paid to say anything but you got them there you paid for their camera equipment you paid for their trip first class travel whatever it is and that's where junkets come in and in journalism we had a junket culture and it was pernicious in uh the automotive space very to the point at which automotive journalists would get a car for a year or two and they would have two or three cars in their driveway because somebody might say yeah you know you can just hold on to the car it's insured uh-huh all you got to do is put gas in it uh and i remember when we did autoblog somebody was like hey yeah we'll give you this car to review i was like all right great so then we did it and i was like oh wait a second i just got two thousand dollars of value taking this thing to tahoe uh and so i looked at what the automotive review uh policy was at the new york times and it was we return it with gas full if you give it to us get gas and we can take it for whatever number of days is necessary to fit the story format which in their estimation was one week yeah so we'll take the car for a week we'll return it with the gas you gave us that's it and other people you know would take them forever and then they would fly them to the autobahn or to kawaii to do like a racetrack in hawaii or germany and or france and you're like okay so how's the review going to turn out from this mega corporation that just spent twenty thousand dollars sending you first class somewhere putting you in a great hotel for a week to drive their cars if you write a bad review maybe you don't get invited to the next one and that's that's the thing if you dangle all these perks you might say to yourself look i am an independent person i'm not going to go to the auto bond to drive the new mercedes sl 40 billion and be biased but then you're sitting there at your computer you're like that was lovely and i'm a freelancer and i make four dollars and they've me first class of bund or something you know yeah yeah well that's why junkets are generated by nearly every publication and everyone that you can name their band because they don't want that kind of bias and all all this is to say that if you want to have trust with people and i think influencers really trade in trust with their audience you should disclose so i think it's even better for the influencers themselves jason to be up front to be up clear like when wirecutter tells you we might get into commission you know they thought that they should tell you that yes a lot about their ethics how they approach business ah um listen though next story let's keep moving here all right so you want to talk about this let's talk about trust um trump rogan youtube search jason what is the okay so there's a kerfluffle today david hanmeyer hansen from 37 signals uh did this tweet he searched for the joe rogan interview of trump which i guess everybody wanted to watch i got to watch the first half hour of it uh i'll watch the other two and a half hours of the greatest hits at some point i'm sure uh when i go for a hike or something but uh if you search for joe rogan or rogan trump interview or rogan trump interview full it does not come up in the search results so i did the search for it and um it just doesn't come up now there are multiple issues at play here but end of the day google's the greatest search company in the world the youtube search is normally pretty good for me but i know it's not perfect and i do know there's a bunch of clipping accounts that clip a lot of stuff but it should know a this is the hottest video on youtube 30 million plus views in whatever three days and it should know that that this is the right video so this will make conspiracy theorists think the technology industry is trying to suppress the video now the video has got 33 million views so it can't be suppressed it's being viewed but it is being suppressed in search results is it being suppressed or is it being um is it not coming up in the top views because short clips are preferred and there's so many short clips of it that the zone has been flooded by short clips what's your take yeah so So YouTube search is bad.

54:52And while I really agree five years ago that Google was the best search company in the world, I don't think that's the case anymore. In fact, Google search is pretty poor. And often you have ads throughout the whole top of the fold. And they often want to push their current thing. So on YouTube, to your point, they're very much into shorts. And they have changed search in such a way that when you search for something, it gives you three or four or five entries. And then it says people also liked, and then just shows you whatever it wants to. YouTube search is not search per se, so much as it is a conduit for them to give you stuff they think will keep you engaged.

55:28And that is very different than find me this specific video. And I've run into this problem for years on YouTube search. It's terrible. And just for example, for this show today, I was trying to find the 32nd Sonos clip showing off the arc soundbar. i did variations of the search before we even had this conversation and it took me five or six tries i think to find that actual video because it was always reviews reactions you know ai voiceover stolen video clips and just bilge all right so here's a google search what is the search term here what do we search for on google search not youtube search this is trump joe rogan okay trump joe rogan great if we look you get news because it was a big news story there's a lot of news coverage on these keywords and then if you scroll down i'm sure the first link is going to be the youtube video or not let's see yes the first the first actual web search no does seem to be oh so the first organic web search is correct but the videos it starts with msnbc and then some other flash post and robert f kennedy jr so this is the issue um as you can see here google search organic search starts after the video is perfect so this would lead to the theory that youtube search is broken because the youtube results here for videos if you go to videos in the tab on google and you do a search there it's youtube videos plus everything else and so if we go to videos actually it came up number one so there you go uh but the little snippet was incorrect so something is going on i think around the other theory i have is they talked about election interference during the show and they talked about covet i know from this week in startups videos all in videos if you talk about those two subjects they can label you so let's click on the video here and see if it got a label um if this has a label on it if we scroll down does it have the warning about covid or elections nope so that's interesting in and of itself this should have been labeled about elections in covid because i know they talked about elections uh extensively so i wonder why that didn't come up and i'm pretty sure they talked about covid so that should have come up i so i think i know why that's the case it's because they don't want people saying well they're censoring this oh my gosh bias and so forth i bet they're giving really really free range to anything joe rogan wants to do um i was just trying to figure out where it ranked on trending because often when you hold a youtube clip that's new and hot it'll say you know number 34 on trending i don't see this one on the current trending list i don't know if that means anything but i don't think they're going to be trying to point out that trump might have told a couple of whoppers in there because i don't think they want trump to try to ban youtube when he becomes president well let's do this let's go to bing oh b-i-n-g and type in the same exact thing rogue and trump interview and let's see what bing thinks because this would be a way and then we could do duck duck go so if we do those two we would get like to some ground reality here of if this is a youtube issue a google issue and bias so on bing um so here's here's bing this is what comes up i haven't used bing in a minute uh later um so news first news first yeah explore more news top 10 moments from watch mojo okay um and then it goes to the organic results after news the first one is new york times scroll up okay so you have news then they do a video the first video they have watch mojo so they got it wrong then for organic results are starting here first one bbc's seven takeaways second way at one is did youtube censored show rogan's donald trump interview from newsweek the hail five takeaways then variety so here if we're scrolling down here where is the actual interview so let's let's click this button up here where it says see more underneath the first video just to see what we get yeah see if there's more video here the answer is nothing when you push that button and bing nothing happens okay so there you know so let's scroll up and just click the video tab and let's just see if it actually i mean this could just be the fact that this thing got so much coverage for so many different outlets that it kind of broke the algorithms on the entire web so if you were to click the video tab what happens this is it right here oh i'm sorry yeah you have search co-pilot video so this is the this is the bing video search and very similar to youtube it's clips excerpts and smaller bits yeah uh interesting so and let's go to duck duck go this would be very interesting and then we could uh also do brave's search engine the brave browser but uh if we search just up there for uh trump rogan interview boom let's see okay the news is in yes they put news first and then the bbc bbc is brushing it on seo apparently yeah apparently bbc is very trusted i think as a news source so they get it wrong too and just for fun videos really quick oh yeah same issue all clips not the original so what we've learned three of those four get it wrong and google video search gets it wrong so out of five searches four out of five get it wrong the only one that gets it number one in organic results is google search which i mocked at the very start of this segment and i feel slightly silly so shout out um to google search for having the first organic result be correct but you know these search products are not designed to help you find something they're designed to keep you watching and i think that's that's an interesting insight too is if you are keep if they are designed to make you hunt and pack through all these clips maybe the algorithms because they're designed to in if you wanted to extend the session time showing people clips and making them fight to find the original the algorithm could be doing that to extend people's time on site that's a really interesting scary thought is that the algorithms are not your friend jason the algorithms want to waste your time and get you to click more because if you click more you would click on more ads i think that might be actually what's occurring here is that they make more money if the algorithm was told make money and increase session length those are your top two orders and third get to people to what they want like it's a distant third eventually get them to they want the algorithm would say make people click and do four or five searches to increase their time on site so it purposely frustrates you wouldn't shock me if that's the case although i will say though what's interesting about this entire situation is we're not taking into account subscriptions and people you know we love to say on youtube like and subscribe but joe rogan's clip with trump which is several hours long got as we said 34 million views in a couple days people found it the thing is they just didn't find it through the search box mostly so i guess that's just goes to show the power of people actually subscribing to a channel because you don't get 34 million views that fast by accident the link was definitely shared everywhere on socials and people eventually found it so if you're a subscriber it probably came up on your for you page essentially your login version of youtube so i'm so i'm so excited that the election is almost over jason because i feel like we have to go around and and like everything is so amped up everything is uh oh they're they're censoring this oh they're suppressing this oh i just well we've i think we've done our service as captain obvious and ma and and uh i'll be captain obvious and captain nuance and you could be um like uh your own uh second lieutenant obvious or something no nuance like it would be like a superpower or we'll be this like a super team because we looked at election interference with heritage the people who have the most bias of anybody you know uh and are totally like literally writing project 2025 as the suggested agenda for trump we had them here we came to our own conclusion with their data with them it was a wonderful discourse and here we are looking at search it turns out four to five search engines didn't get this right so then you have to ask yourself is it microsoft duck duck go google's team and youtube's team which are different teams all working in concert against trump and i think the answer is i don't think so i think this is an algorithm problem those teams aren't even working in concert with themselves half the time and let alone across different organizations there's no there's no cabal guys it's just a bunch of nerds that are trying to make one kpi slightly better and what that means is uh you don't recommend three hour video clips top and search results as we found out no and listen i'm i'm doing brave search which is my favorite search of all and i love the brave browser and if you go to search.brave.com shout out to my friends at brave who have been a sponsor of the show full disclosure at some point although i don't think they are now literally they start with news and it's independent san antonio current newsweek independent um real clear politics discussions from reddit and then on the videos msnbc a short from youtube and cnn and then back to organic results they do not have the actual video in the top 10 just like everybody else so and even you know i tried doing like full interview and i could you can see when you have the suggested drop down that everybody's putting in full if you put in full it does take you to episode 2 2 1 9 on spotify as the number one result so you know um maybe it's just search is doing what search is supposed to do which is to get you the trending things the clips and the recaps are more appealing to people than the original maybe that's what the algorithms think because now we have six different search engines and one in six got it right five out of six didn't get it right so you have to believe brave duck duck go independent search engines then you have to put bing youtube in that group as well that they got it wrong so yeah i'll just i want to close with this youtube your search is miserable and i hate it and it makes me so sad that every time i do a search you think you know better than me after giving me four wrong links that then you're going to change the subject in the back path of search stop it stop it this is what do what i say thank you there it's so obvious to me now that we did this exercise and talked it through if captain nuance and uh if captain nuance and uh cautious optimism there you go both uh work through this and it seems like the algorithms are designed to frustrate users to increase session length and to make the most money by getting you to click on things that you didn't intend to click on in your frustrated search if you stop searching and you found they don't make as much money i think that's what's happening here the conspiracy theory that i will allow is this if you make the little clips more popular than the full thing people will watch three of them instead of one and there's probably a higher ad load for watching three 10 minute summaries and there is watching one three hour clip done done precisely we're done here all right well i i do think joe rogan turns off motor youtube monetization so youtube makes no money on joe rogan's clips joe rogan's full episode and they make a ton of money off the clips why do we that's what it's doing we should have started there we should have gone all right forget everything else follow the money and we figured it out the clips are monetized and joe rogan's interview is not this is this happens to this podcast and all in as well if we don't have monetization on i bet you we don't get as much and we should run a test here on this week in startups and turn on monetization so i'm going to ask my team to just turn on monetization for this week's shows on youtube and we'll run we'll just test it because we'll still have our ads in but we'll turn it on for whatever this week's episodes are turn on monetization and let's see if they get better search results people are going to point out that we're running ads twice but it's okay uh we are going to pause everyone right now and talk a quick second for jason to talk about the launch cloud kitchens incubator and when he's done with that we are going to go back to ai on your pc because google has big news to take us out okay so my friend uh travis who created uber has a company called cloud kitchens we're back at it collaborating and what we've done is we have created lit the launch cloud kitchens incubator and what it is it's a 14-week program so that food entrepreneurs can get a little bit of investment from us i think we give them 50k at the start and 50k at graduation uh to help them build and scale their vision for a cloud kitchen what's a cloud kitchen what's your favorite food alex tell me your favorite food at the moment you got two favorite dishes three favorite dishes rattle pork gyoza i would say um really really good chorizo tacos and i'll round it off with a healthy peanut butter protein smoothie perfect let's go with dumplings gyoza is those dumplings right now what a great concept if somebody had let's say 12 different homemade dumplings pork mushroom maybe duck maybe some blend maybe something fun like pastrami in it and so you get this incredible menu you have this great idea you're gonna do um get gyoza am i pronouncing it correct you're pronouncing the way i pronounce it though i'm now terrified that we're going to get some some mail and sue us if we get it wrong but get gyoza is your idea and it's 12 different ones and you order it like chicken wings where you can get a 12 pack and you can pick in groups of four right this is a great idea you're not going to open a storefront if you opened a restaurant to do get gyoza or gyoza group the gyoza group restaurant man that's going to cost you a million dollars minimum to test that in a city but what if you could test it in a five thousand dollar a month all in maybe 10 with all the food in a cloud kitchen and then get feedback on your recipes you could spend ten thousand a month five to ten thousand a month maybe hit break even immediately or even profitability or maybe you lose a little bit while you're testing the concept for three months that's what a cloud kitchen allows you to do now once you figure out your format then you could say you know what i want to have this i got it in manhattan let's have it in brooklyn queens staten island and the bronx and new jersey and now you have your gyoza made in one of those kitchens and then somebody ships them to the other five kitchens and now you've got six locations for five thousand a month each all in you're spending 30 ,000 a month and you're making some of these cloud kitchens, Alex are making one to$5 million per kitchen.

1:11:25There are brands like, um, uh, there's a goop kitchen brand now by Gwyneth Paltrow. It doesn't exist as a storefront. It exists only in virtual kitchens. And if it works, you can sweep the nation with these once you perfect it. Okay. So I, you know, people often joke that like technology has invented something that we've already had before. Like we're going to put self-driving cars together on the road you invented a train okay hear me out though is cloud kitchens kind of like a non-mobile food truck exactly okay now here's the thing when you do a food truck that costs two hundred thousand dollars i've looked into it okay just to get one of those set up now i'm sure you could buy a huge one for twenty five thousand dollars somewhere but i think on average you're talking about twenty five thousand now you got to park it somewhere you got to put it somewhere you could be in a cloud kitchen you could tour one today and start tomorrow and you don't have to buy any equipment you're renting it you're renting the equipment you don't have to sign a lease you can come and go as you please plus all of the software is designed to take orders through the cloud kitchens uh platform which lets you do direct lets you do doordash lets you do get eats whatever postmates uber eats whatever and so they manage everything free and then they also have salt so if you didn't buy salt you can buy wholesale salt from cloud kitchens in the pantry section so all of this equals um oh and they place them all over the world at the best locations for delivery so they've already optimized this is at the 10 and the 405 freeway exchange this is at the 290 and the one this is at the 280 and the 390 or whatever in the bay area right they put it exactly where the density is so the drivers know where to go and the driver sometimes will pick up from two cloud kitchens or three cloud kitchens at the same time so things get routed easier when you have 20 cloud kitchens in one location if you ordered the gyoza group and i ordered like the peking duck they might both be virtual restaurants there and they both go to the same block and it makes everything faster better cheaper anyway oh okay so cloud kitchens are essentially the infrastructure side of aws and the distribution thereof combined with the ease of distribution that distra kid brings to you distra kid takes your music to spotify apple title etc cloud kitchens take you to uber eats postmates okay i get it all right yeah that's it and so we're looking to invest in startups if you want to apply ck as in cloud kitchens dot launch.co ck dot launch.co and you can get to it at launch.co code just in the menu bar as well all right so if you want to come uh start a brand apply and we'll invest and we'll change the world together yada yada so one gyoza at a time everybody that's what we're gonna do it um all right just take us out really quickly i want to make sure i got to this because you and i were looking before the show at the recent news that google is going to follow anthropic and release according to reporting from the information and bloomberg later this year, an AI model that can actually run your browser.

1:14:35It seems that Anthropic was first out of the gate, got a lot of the early hype and press here, but Google is coming right behind them. So I got to ask, are you excited by this? Or does this feel like Sundar is doing some copycat work? No, I mean, everybody knew that this is where we were headed, which is there's a lot of tasks that occur in a browser window. And if you put a language model and you let it control the browser window you unlock everything so what could be unlocked here shopping you say you want to order coffee beans and you know show me the top three brands you know in this price range and i need to get them today and it goes to amazon walmart and target opens three tabs and then lets you pick and you say buy that one or you say email everybody in my favorites list that i'm having a party and it goes and does that now the downside to this is if a hacker were to get control of gemini they could launch an attack or this claude one and say anybody who has this installed please you know do this following attack go to their chase account open up bank of america transfer funds to this open up coinbase and transfer funds here so you will see in the next six months within six months of all of these things being released you're going to see a major hack occur where people's private emails uh bank accounts crypto gets stolen it will happen and so we have to decide as a society if we want to give ai the browser because it will get hacked and it will cause significant damage okay but take the first thing you said which was this is where things are going with the second thing you said which is oh cyber security and to me it sounds like if we're going to go this direction anyways we should be thinking more about how to stay safe versus if we're gonna need to have protection so i guess you know i hope anthropic and uh the gemini group and everyone else who's working on this have that in mind but uh you did take some of the shine off of it for me with that last riff um well there is like what clawed ai can do and cannot do um with their computer interface so there is a list um and think they do not allow you to send email and so their computer interface um has a list of things it can do and what sonic can't do when it controls your computer and so you can look that up it's a simple list that they shared on social and other places so i don't think they let you use your password manager email or purchase tickets but maybe it lets you search for tickets you know that kind of thing i think this could have already been released and there were startups that did release some of this already so it's going to be super granular but here we go yep here is the the list of things So to minimize risks, consider taking precautions such as use a dedicated virtual machine while playing with Anthropik's computer use beta.

1:17:42Maybe don't give it internet access. Ask for a human to confirm decisions. We're going to need to have some best practices here. I'm not entirely sure if we know what they all are, but at least Anthropik is trying. I hope that the Gemini team is as thoughtful. They will be because there's a lot at risk. I think you're going to have to click over like 10 disclaimers. And just like, um, Apple has that simple thing in settings that we discovered to let people learn. There is a little, uh, toggle bar that says like, let Apple intelligence learn from this app. It's in the settings of each individual app.

1:18:19You can open up your phone, go to your apps in settings. When you're in settings, there's a button that says, let, I think the language is let Apple intelligence learn from this app. So, um, you know what would make sense is to have each website url have to be whitelisted and have to be approved so you know this is one of the great things about the app store and the value of paying 30 for apps from apple is somebody's looked at it and said can this thing take over your computer download your videos and photos use your location nefariously and there's that interface layer right uh so that's why you have to give permission to each app to know your location to send you notifications to use your webcam and to use your microphone it's a system level decision by apple and you have to turn it on for each app yeah that's what we're gonna have to do with browsers because chrome is owned by google google should allow chrome or should have chrome say do you want to allow gemini to read and send email on your behalf and it should say yes no or with confirmations boom and if it just said with confirmations you would come up with an api that on send or on compose it would say click here to approve yeah but with with x and linkedin we have seen kind of people being opted into some things at times and so i wonder if we have the right norms in place kind of at the trust level frankly across major social platforms around the web to do that and i i wonder if google's gonna have the the chutzpah and the spine to say we would love to track everything but we're not going to until you give us permission to even though we're an advertising based company because they are risk averse and they when you file a lawsuit or when you do a hacking attack you go after the deep pocketed folks there's no reason to sue a small player that has a million dollars in revenue you're going to go after the player that has a hundred billion in revenue because they'll pay you a settlement right so they have the most at stake and this is exactly what the arc of technology is something disruptive like this comes out and you're going to have to be thoughtful every step of the way just like self-driving you got to be softball ever thoughtful every step of the way and i don't know if you saw the tesla earnings last week they've increased their margin energy business is doing great cars are flat but the most important thing was elon said hey listen if unsupervised fsd doesn't work on hardware three yeah no big deal we'll just upgrade you to hardware four for free that was like a very big under the radar statement what he's basically saying is hey you know there's i don't know maybe 500 000 people who paid for full self-driving we'll give you a two thousand dollar new computer and cameras if we need to because four is working but three maybe isn't working to the level that four is and he just said hey no problem that would be a two billion dollar recall on a million cars um which is what they made in profits in a quarter so and that's what i was about to get to which is this is the statement that a company that is not cash constrained can make go back in time to when tesla was scraping nickels together from the couch they could not have afforded to do this but here we go your free cash flow does unlock a lot of good things that build customer goodwill because people were worried that they might get left behind but if you say we'll fix it there you go well you know i use i think this is i was talking to a friend of mine and we're having very different experiences with fsd i was saying i'm getting three interventions an hour and i would say one out of six is one that i would say would cause severe damage and or could be potentially life-threatening and five out of six would have been fender benders or like somebody would give me the finger or something because the fsd did something weird like didn't know which lane to go in or stutter stepped into a traffic circle that's typically where i my fsd breaks down is like making a left turn it stutters a little bit or going into traffic circles or unpaved roads you know on our roads unmarked roads obviously it has a make it has to make its best guess putting all that aside people with the 4.0 hardware from the last year were reporting different things than people with three and i think now we know why the computer is more powerful and it's able to process more in the moment and maybe the cameras are better i don't know or maybe the number of cameras is better so i thought that was like the most important thing i saw out of that tesla thing and then also they're making a fortune off of the margin on these battery packs yes they discuss that very seriously if you look at the tesla earnings once you scroll past the car bits you get into the energy storage energy collection storage section whatever it is that's one of the most interesting parts of tesla's q3 earnings if you haven't read it go just google tesla ir and just go through read through the report yourself it's worth it's worth the time uh jason for friday show i think we should do the crazy cars from china on friday show yes so let's tease it here i just want to show one of them i found a bunch of different accounts the cars in china that are being made today are bonkers i'm not saying they're safe i'm not saying you're gonna be driving them here but there are some really crazy visions and they've stolen a lot of innovation from american companies but they're also innovating in their own right here's a sample of two or three things that will show you in detail on friday the minivan i think is the one i thought was really crazy with the doors that open like a subway doors okay so this is a car and a veto in one we'll talk about that the car separates from the veto let's show the next one uh the ziger mix is going to cost about 40k jason it's got uh really wild stuff we will show this and as another point i was doing work on the land and air vehicle xpeng gac saic and geely technology groups uh Aero Fugia are all working on wild EV tolls that merge with cars.

1:24:39So come to the show on Friday. We'll blow your mind. We're going to do crazy car concepts in reality in China. If you have any of them, I'm Jason on Twitter. He's Alex on the Twitter slash X. You can add mention us or DM us what you want to have on the show. Next live show, I think is going to be Friday. Um, and, uh, but maybe who knows, maybe we'll sneak one in on Wednesday. We'll see you all next time. Bye bye.

1:25:04Thank you.