What Ramp’s data tells us about AI, unemployment and more with CEO Eric Glyman | E2192

25:23I think we were probably at like amongst young people, mid-teens. I think in that time period, it was mid-teens. So, you know, most of your friends had jobs, but probably one in five didn't, one in six didn't. And what happened then was people started zines or they started bands or they became freelance photographers and they joined what was called in Wired magazine, freelance nation. It was really interesting, this concept that you didn't have to have a full-time job and stay somewhere. Let's go to the next piece, which is you are a SaaS-based business, and it's got a per-employee component to it because each employee gets a ramp card.

26:01So some amount of your revenue is based on headcount. So how does this impact you if the land and expand concept as a SaaS company doesn't work? Do you have to spend more time trying to find new companies? I love that she asked this. And so even SaaS apart, we started the company about 2 ,400 and I guess one day ago with this sort of counterintuitive mission, which is we actually want to help our customers spend less money, not more. Got it. And we would get all these questions of, but don't you make money when businesses spend more? And we'd say, yes, that's true. But it turns out if businesses stick around for a while and spend less, maybe they'll spend less this year, but I think there's going to be a lot more.

26:49Their health span will increase. Maybe I'll make 5 % less on the card spend, but you might expand into more of the business and the business might become larger over time. And so, you know, in general, we're actually totally okay. If our customers spend less on software in one given year, we think kind of doing right by businesses will earn us more businesses for the long run. Eric, just to be clear here, you're talking about interchange revenues that you make when people use their ramp cards, and that drives a large chunk of your revenue. So you're happy if they spend a little bit less as long as they stay with you and grow with you.

27:22That's right. And I think the same is true. We do have a component where you can add on paid seat-based software. It is an extraordinarily fast-growing business line. It's two years old and already the second largest component of what we do. But what I would say is we're very happy, actually, if people are downgrading the number of seats at any particular point. The goal is, you know, we just want to be a partner that helps businesses be more profitable. I think that approach in aggregate, what we make, may make less than any individual customer has worked. Over the last year, you know, Jason, we passed over a billion a year in revenue.

28:06The business is just about doubling and, you know, we're doing it while generating cash, which is, you know. So are you profitable or are you not trying to be profitable now? We're generating free cash flow. Wow. Congrats. What do your investors think about that? I guess pre-IPO, that's a good thing because it sets you up. But aren't they also some board members saying, hey, listen, I got in the seed round. I got in the Series A. Why don't we acquire more customers here, Eric? What are you doing with this free cash flow? We don't need free cash flow. We're not here for a dividend. How do you manage that?

28:36It's very funny that you say that. When your product is selling money to companies, you sometimes want them to burn money and to go spend more. And so one, to your point, we definitely have have, you know, investors and board members saying, you know, that's great. You're self-sufficient. But maybe this is, you know, a bug, not a feature. Can you go find more ways to spend more money and grow? And I think they have a point where, you know, something like two percent of all corporate and small business card spend in the U.S. is is is happening on ramp. But 98 percent is not. And so I think there is a good point of we want to find ways to efficiently deploy more capital.

29:14Let me hit you with an idea. Let me hit you with a couple ideas, because this is what, you know, seasoned board members like myself do. We send you on side quests just based on our own personal experience. That has nothing to do with reality. No, in some cases, it's based on some reality. But I assume that, you know, many people like our company, the executives have an American Express Platinum or Centurion, they got a United Business, and then they got a ramp card. So when I am out and about in the world doing stuff, I'm like, my rank and file employees, go ahead and use the ramp because you're not spending a lot.

29:47But when we have big spending, I'm like, get me those United points, get me my platinum, get me my Centurion Lounge because we'll use those. So, I guess, first question, where do you stand in terms of, like, benefits and competing against the American, you know, wonderful, the platinum card is absurd. Not that I'm optimizing for these things, but, man, the United Flight Points is a really incredible program. So, how do you think about Amex Points, this incredible United, and then we were doing Bonvoy for a while and getting, I mean, I didn't pay for a hotel for a couple years there. So, tell me how you think about your value prop versus theirs.

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31:47Yep. Great question. So I'll start up with like our general philosophy that I'll hit to the specifics. So first, for most business owners, I think the average American business has a profit margin of 8%, I think roughly last year, which if you just think about the math of that, and if you're valued, most businesses in America are profitable and valued on a multiple of profits. A dollar saved is not equivalent to a dollar earned. A dollar cut of cost is mathematically equivalent to$12 earned if you were trying to get more profit dollars. And so we think that actually reducing cost and helping people spend less, Ramp helps businesses spend more than 5 % less every year, is just much more powerful than the points and rewards.

32:33And so we focused on how can we take what at launch, when Alex first covered us, we were help companies cut their expenses by 2 % per year. Now it's upwards of 5%, and I think that's too low. I think it should be closer to 10. And so I think it's more leverage. And second, I actually would argue, I think that the luxury in today's world in 2025, it's not access to a lounge or anything like that. If anything, when I go to JFK, you know, the lines for these lounges are too long. They have screwed them up. This has become a literal thing that the velvet ropes, They're not building enough velvet ropes behind the velvet ropes, in my experience.

33:16So that makes sense. I always felt, Alex, that this was a bit of a grift, because I remember when I had my last job working for somebody, which was Sony, in 92, 93, everybody was trying to figure out not how to get the cheapest flight and hotel, but trying to figure out how to get the most points so they could take their summer vacation. And the company just kind of turned a blind eye to it, because it was like, yeah, whatever, we're making billions of dollars. But I think that's probably correct. And then you have new entrants like Robinhood. I have that. I was an early investor in Robinhood.

33:46They sent me one of the first gold cards, and they pay you back money like 3%. So I do think there's this trend towards that. I was going to tell you a ramp lounge that when you go to the ramp lounge, you buzz in with your ramp card, and it's like, yeah, here's a bottle of water. Get the fuck out. It's like, that's not why we're here. We're not here to give you benefits. Two lawn chairs in a large open room. Totally. There is something to be done here with the RAM card sending up. It would be an anti-lounge. I mean, if RAMP's all about saving you money, here's where we're cutting. Eric, can we go back to the 2 % and 5 % thing, though?

34:22Because I recall when RAMP was young, you were helping people find double spend, things they were paying for twice and sizing that. How have you managed to 2.5x the amount of money you save on average? Where is that coming from? Yeah. So a couple things. So first, we'll kind of build it from the basics to the really advanced stuff. You know, on your consumer card today, one of the most frustrating experiences people have is they sign up for a gym or a subscription to a service, and they want to cancel it. And you can't do it. You know, you call them. They won't pick up the phone. You wish you could go to the card.

34:56You can't turn it off. With Ramp, we were the first in the world and still one of the only companies on the planet where you can one click, whether it's on one merchant or 10 ,000, you know, merchants, 10 ,000 cards. You can say, I don't want to pay for this gym anymore. And every other merchant in the world can charge your card except for that one. That should exist on other cards, but somehow it doesn't. And, you know, when you're running a company, things like this happen all the time. You have engineers paying for software. You're trying things out. and they just add up. And this gives you kind of a, you know, a kill switch at the central level to kind of turn off spend.

35:33That is not, yeah. So that's been - I had my own, I built, I rolled my own ramp experience in this way when I would have a, I'd have like two cards created under my card, one for like media subscriptions, New York Times, whatever. And then one for SaaS subscriptions. And I would just say, cancel them. I would literally cancel them in September because I know all these things are coming. And trust me, if you're lost on an island, like literally Wilson, what was the Tom Hanks movie? Castaway. Yes, Castaway with the handprints on that. You're literally with that soccer ball and Salesforce and HubSpot, they'll come rescue you to get your payment for the next year.

36:13They will find you. There's no way for them not to find you because they want that renewal so bad. And so I would just turn these cards off and everything would be ding, ding, ding, ding, ding. We'd be phone calls. They call everybody. They get on LinkedIn. They would DM everybody, email everybody to find out what's going on. How do we get this thing renewed? And man, that really works well. That's my favorite use case for what you do, Eric, is to just ramp the cards down to$1 a month and just watch people lose their mind because of these dark patterns. I wanted to share two things that I just think would be interesting for our discussion while we're here.

36:48You know, this crack team I have here doing live research. To just go back to our discussion, young male college grads are now jobless at the same rate as non-grads. So just take a minute, Eric, to think about this. If you look at the college grads on the left, the men there, seasonally adjusted, three-month rolling average, 22 to 27-year-old, by education type, non-college, which I'll call generation tool belt. That's what we call it here on the program. versus college grads, in some cases getting like weird degrees, the college grads spike up. Nobody needs them. Now, for women, the gap is not as bad.

37:27I think there's more women in college, but for men, it does seem like maybe men are not as necessary in the business workforce with their college degrees, or maybe they're getting the wrong ones. And here's from the Bureau of Labor Statistics. 2019, recent college graduates were at 3.25, second sell down in the second column. 2025 average, same time period, January to December. This is January to July versus January to December, but 4.9%. It's up 1.34, but that's not, that's 1.34 is the point change, not the percentage change. That's like a 50 % increase in unemployment versus those folks. there's something going on here huh eric well i uh have a lot of thoughts about this one for me it's a couple things um last week open ai had their their dev day and they highlighted it was only 30 companies ever um that have consumed more than a trillion tokens on their model and ramp was one and so um we're a very very heavy user of these models and one of the things that's very unusual about these large language models is, you know, I guarantee all the latest models have read more about these specialized skills that one might learn in college than any person alive.

38:48For it to be specific, these models know more about accounting in aggregate than any accountant on the planet. Oh, this is such a great insight. They know more about law. They know more about health, you know, diagnosis. Because that information is on the open web because these are careers and people are searching out career information. So content producers, universities, they put all this stuff online. So therefore, the LLMs get what a great insight. Wow. The thing that I think is going to be very strange for people to reconcile with is I believe over the last hundred years, the weight of wealth in the U.S.

39:22was specialization. You would go to a university and you would pick up a craft. Yeah, that's that's this is the if you're watching the audio. Before you go into this thing, what about the ramp? What are you using tokens for at ramp? Are you using it to identify, spend, and categorize it? That is exactly it. I think one of the very tedious areas of work for companies is, let's say you've gone, you've booked that flight or hotel, you've paid for that SaaS subscription. There's a lot of work that goes into go and get that receipt, put it into clean, readable form, and then put it into your accounting software.

39:59You usually have controllers, finance folks, accountants kind of tagging these. So it's very tedious and monotonous. And our, you know, today ramp is not only faster, but more accurate, you know, really than almost all accountants, you know, using the platform. And so just as you can kind of autocomplete your sentence for, you know, things you're writing, you can have like a faster form, rough draft essay. You can have your books virtually almost done before you even open them to go review them. And so we use a lot on accounting automation, bill payment automation, procurement automation. So we use a lot of this.

40:32But I think, and we can go a lot deeper, but to the macro point, you know, I think that in a world where you can, through a query or an API call, call on this knowledge base of, you don't need to be an accountant, but you know how to interface with a digital accountant. You don't need to be a lawyer, but can interface with a model that knows more about law and how it relates. I actually think there might be a good reason why non-college graduates are doing just as well as college graduates, which is if you know how to use these tools, you may not need to have the specialized knowledge. Levels the playing field.

41:12Exactly. What you learned in college is so superficial and light compared to the depth of AI. If you just spent one year using AI tools exclusively, you would be so much further ahead than trying to remember that, you know, top 10 % of the knowledge. Interestingly, if you've spent over a trillion, I'm just looking at Claude AI explaining to me what that costs. Looks like you're spending tens of millions of dollars on AI spend to do this. Ballpark correct with OpenAI? It is. I think that estimate is a bit high. There's a lot more efficient ways. There's calls. And then there's also what's the amount of data you send through for the query, which lowers the cost quite a bit.

41:59So if not tens of millions, you're certainly spending millions on AI with open AI. Just as a founder, you know, open AI came out first. But are you looking at the other models and low balancing beside them and actually thinking like people did in year five, six and seven of, you know, their cloud spend years one through five? You're like, this is amazing. I don't have to stand up my servers. Then you get to year six or seven. You're like, wait a second. I wonder if, you know, Google Cloud is going to beat Azure, if Azure is going to beat M2S or Oracle's cloud. I feel like we're now in that moment where people are going to start price comparison.

42:31And then there's always DeepSeek, open source. And there's another open source competitor in America now that's doing pretty well. So how much do you spend your - Which one was it? Together AI, I believe. Together AI, yeah. So take me through how you think about load balancing and or comparison shopping and negotiating for tokens versus, I'm going to just stand up one of these open source models. Have you tried standing up an open source model and just saying, I'll just do it myself? Yes. To be direct and quick, the answer is you have to do this. You're a great guest, Eric, because when I answer your question, you actually listen to it.

43:09They're like, yes, it's a really good question. And I think one of the lenses to sort of understand this is whenever... So I remember when there was this release where OpenEye went from GPT-4 to GPT-4 Mini. or the 4.0 model and people, you know, investors saw, wait a minute, this task is, to call the mini model, it costs only 10 % per call of what it would take you to call the main model. And they said it was 90 % accurate. And people said, what does this mean? Are you using this? Are your costs going way down? How do you deal with the inaccuracy? And it's like, no, no, no, what you do is you send, you invest a lot in benchmarking and different tools to kind of go and see what's the accuracy receive the models for certain tasks.

43:55And it turned out that for 90 % of tasks, roughly, it is 100 % accurate. And for 10 % of tasks, it is completely inaccurate. And so once you learn, once the models are good at, what you do is you take this 90 % of traffic that works really well, and you send it to the low-cost model here. And this last 10 % of traffic, you send it to the expensive model. And models are kind of like that. What's strange about these new models as they jump out is things that suddenly didn't work do work. Things that worked before, you might be able to find a much more efficient model architecture is able to take them on.

44:29So you gotta be on top of this. Your tech team's gotta be on top of this because it's a major expense and it's a major opportunity. After OpenAI, which obviously you had a major partnership with, who's most impressive to your tech team? It depends a lot on the function. I mean, I think that, you know, Well, who do they keep bringing up? Like, who do they keep saying, this is impressive, which one? Anthropic in particular for coding and engineering, there's just something in the model, I think, in the way that's developed, which lends itself to be, I think, extremely compelling consistently for software engineering in particular.

45:05I think it's really good. I think that the latest Gemini model has also, because of the much longer context window for very complex tasks, heavy research, I think, has been extraordinary. and even Grok as well, I think, for physics and math-related questions. Yeah, they're doing great on math. I was at the XIA office, and I was meeting with the math team specifically. And they had... Yeah, you know that... Elon invited me there on a Saturday, parking lot full, ordered in steaks, hung out with the top people. It was very impressive to see their commitment. And they were working on that Humanities Last Test.

45:43Is that what it's called? Humanities Last Test? And they were, like, walking me through the problems that are like the hardest things in the world to solve. And they didn't want it to like have known the answer just from like, you know, I got, I stole the teacher's, you know, quiz book and I got the answers. They wanted to know how to actually do it. So they introduced a demonic AI agent into the group of agents solving the problem. And they said, the goal of this demon is to try to give the wrong answer. And then these five agents have to explain to it why it's wrong. And it was really, really interesting.

46:21What are you showing here, Alex? This is the humanities last exam, the tests we're talking about. And this is the leaderboard of current winners and Grok4, GPT-5 and Gemini 2.5 Pro. The models that Eric just mentioned are at the top of it. Eric, can we talk about agents though for a little bit? Because you guys rolled out agents for controllers in Q3 and you rolled out agents for accounts payable in Q4. How strong are these tools and how are they different from, I think you rolled out ramp intelligence, back in like 2023. So to me, it feels like a reprise, but I presume they're doing something different this time.

46:52The big, I would say, when you think about 2023 with intelligence, large language models could go, and I think that the dominant design then was this idea of a co-pilot. You could feed it questions and it would suggest kind of the outcome. What's unique about agents is I just, I think there's a lot of jargon around this, as I think of them as models plus tools. You know, they're not just the model response, but you give them permission to go do something on your behalf. Whereas intelligence might have said, I suggest you categorize it in this way. I think this might be fraud. An agent will go and can automatically approve that report for you, can go actually initiate the buying purchase process.

47:38From an advisor to an assistant, essentially, instead of telling you what you might do, it just does it for you. That's right, is I think one of the big things. And some of that has to do with just the sheer level of improvement in accuracy and predictability, coupled with the ability to handle more generalized tasks, going on a web page, completing some outcome. And maybe to explain what's so useful about the policy agent, ever since Enron happened and that failure blew up, there was this act called Sir Baines-Oxley, which says that for any transaction, you can't buy the thing and review the transaction yourself.

48:12Someone else needs to do it. It makes sense. Good idea for people keeping books. But what it's resulted in is for anyone who's worked at a large company, you know, decades of, you know, pardon my language, but just like corporate bullshit where like, you know, if you buy like a$5 coffee, your boss needs to sign off. Was it appropriate for you to buy like a coffee or a hotel or something like that? And it's just this cottage industry of an unbelievable amount of work where, you know, today, most people, they get an expense for their report and they don't review it because it's a waste of their time.

48:42Or they do. And it's, you know, is do you really want the boss reviewing? Is it deep human intelligence to go and do this? Functionally, what we built in the policy agent was, you know, we built an AI that knows your expense policy in detail, can see all the context around the transaction. and with 99 % plus accuracy is able to approve, flag, or deny transactions on the manager's behalf. We've seen leaders like a Notion or a Quora or today thousands and thousands of other companies adopt this, and they're able to automatically approve 90 % of transactions that are in policy. You can show you all the reasoning for why that is.

49:23Flag the last 10%, and you catch like 15 times more out of policy spend and you save a whole lot of time that just would have been people doing low value tasks. And so it's a bit of an example of, it's not really in anyone's job description to do this stuff today, but it's a perfect use case for an agent to go and just make work feel a lot less kludgy. And so, yeah. I'm curious about adoption of agents inside of the brand customer base, because you mentioned earlier that your customers are now much more than tech startups. So when you look outside of the realm of tech, Do you see a similar adoption curve for agents amongst your more mainstream customers?

49:59I do. And in some sense, it's actually been almost faster. I think one of the lenses to think about is there's this revolution happening in the world of AI. And people know that this technology is out there. But most businesses don't have a single software engineer working at their company, let alone an engineer working just for their finance team. And so for our customers, they're not saying like, hey, I'm coming to you for, you know, go sell me the AI product. They're just saying, I want to close my books faster. I want, you know, convenience to get, you know, the expenses in quicker. And so if it's easier and it's quicker, intuitive, and it's embedded, they'll just turn it on.

50:41And so - So there's no concern from them about hallucinations or mistakes. Because if you go back a year ago to AI, people were talking about the flaws more than the productivity. It sounds like in this case, because you've packaged it up in a way that's like save time, people are just willing to go with it. That's right. And what's so interesting about, you know, our model, there are hundreds of millions of transactions that occur every year on RAM. And it goes at the end of the month to a controller who, you know, they are quite literally hired by companies to review and ensure the expenses are accurate.

51:12And so rather than before, you know, they're tagging every transaction by hand, you know, and then reviewing it and then pushing it over the transactions are all categorized they they they review it um and based on their what they approve or deny um uh it's functionally a large-scale context engine to learn not just how companies keep their books but how you specifically do this and so with every progressive run uh less and less needs to be reviewed you gain trust then you see these companies move from heavy review to, you know, I trust the model to go take this through on this 90%. And so that training step has been helpful.

51:52How long does that take for them to go from, we'll try this out to we're confident that this is taking care of 90 % of the work for us? Because that seems like a pretty important time spent to understand AI agentic adoption. Yeah, not that long. I mean, I think even for the first month that people go and take, you know, do transactions, I think we, you know, one shot C, you know, it's 90 % plus accuracy on our recommendations are ultimately accepted. And every progressive month that goes and teeters up to the 95, 99 and goes from there. And so, yeah. All right, everybody. Eric, you are an amazing guest.

52:27You got to come back soon. I would just like to have you on and talk about like the news with you. Great guest. You know, I have a four quadrant guest, like expertise and candidness. And you're like in my top right quadrant. You've got great expertise, and you're candid. That's how I cast Friedberg, Sachs, Gerstner, Gurley, all these great people I cast into shows previously, is are they candid, and are they really competent? You're in the candid, competent quadrant. Great job, Eric. Everybody go try RAM. It's awesome. I use it. Yeah, not an advertisement. Just authentically, I use it and love it.

53:03All right, Eric. We'll see you soon, man. Thanks for your time. Thank you, guys. Upload that audio file. It's a lot to be here. Yeah. Thanks, pal. What a great guest, huh, Alex? I love a guest who just was like, yes, I'll answer that question. Not the question my PR department asked me to filibuster in and shoehorn into the discussion. Eric has been like that since the very earliest days that I knew him. Because I covered Grant back when it was raising its early rounds. Not trying to brag, just I have to be the person taking these calls. No, no, no. I mean, part of the reason you're here is that you have such great industry knowledge having been at TechCrunch as a high schooler.

53:33Yeah, basically. But he was always that candid. I mean, even back in the day, he's managed to maintain it too, which is even rare, I think, amongst founders who get to the Decacorn stage, they tend to get a little more closed off. Not so. All right. Here we are. We're in our docket. If you want to follow the docket, you can watch us build the docket starting the night before this week in startups.com slash docket. And then as we're doing the show, you can see me in real time looking at the docket. And I do strike through when we've covered something. And I really want to cover this story about the broken handshake deal with YC.

54:02And God, it seems like every day is another YC drama. Let's go to the drama. Tell me about the drama. this week in YC drama. Yeah, well, you know, YC is very large. It's very well known. It's well-capitalized, has a lot of founders. You put all that together, Jason, you're gonna get some drama. Now, here's what's going on this time. There's a founder by the name of Daniel Jung. He is in charge of a company called Omen, which calls itself the first agentic investing platform, tagline, trade anything. Pretty standard. Why not go through YC? This company applied late, got into YC, used that imprimatur, that label, that YC credibility to go out and hire people, and then backed away, turned down the traditional$500 ,000 YC safe investment, and essentially just left the program after taking their whipped cream off the top.

54:55This led to a lot of folks being a little bit concerned because handshake agreements are pretty important in early stage investing and especially in accelerators like YC. And so the founder was heavily criticized. His point is, well, hey, you guys say drop out of college. Why can't I drop out of YC? And folks are pretty mad. So I want to start, Jason, by asking you, explain the importance of handshake agreements in early stage investing. and then I want you to give this guy a grade from he's being the good kind of trouble to he just torched his entire reputation in Silicon Valley. This kid's a genius, total genius.

55:32If you want to do something punk rock, that's what - Pause, pause. You stop screen sharing. I'm going to pull this up. I have a better version of it. Okay, great. Yeah, I was just showing people the docket, by the way. If you're looking at the YouTube video, you can see our docket here. That's why I encourage everybody to go to the docket thisweekinsartups.com. You see the notes that we're actually reading from and our research team did and producer Claude did. But yes, you share and I'll talk. So here's what I want to say. Boohoo Y Combinator complaining about this and using the YC brand to say it's a YC dropout.

56:06Harvard doesn't complain when Zuckerberg does it. And in fact, Y Combinator is known for asking that question. Tell us when you broke some rules. I don't have the exact question, but But they ask people and they sort for people like Sam Altman, who are rule breakers, who do, you know, crazy things like take a nonprofit for open source, you know, and make it a for profit. Yeah. You know, like that's what they're optimizing for. They're optimizing for punk rock. And then they want Daniel, the Daniel Young on Twitter. They want him to be well behaved and stay in his lane. I mean, F off. This kid's punk rock.

56:46He can say, hey, you know, I did the handshake, but I didn't sign the safe. I'm out. In fact, he can sign the safe and say, you know what? I don't like this. I want you to let me out of the safe. Now, they don't have to let him out of the safe, but he can be punk rock. That's like the whole reason, you know, founders win is because they're willing to be a little punk rock. And if I'm YC, the proper response from the YC people, you know with this I see Pete Koeman who I guess it looks like from his Y Combinator logo actually this triggered them wow so you have multiple Y Combinator people responding to him yes and they were very very very unhappy and Daniel later on said to Mr.

57:31Pete Koeman Pete respectfully blah blah blah you let us into YC we're grateful that you were willing to bet on us we think you were right to do so and we want the rest of the world to know why even if our stint at YC or shorter than initially anticipated. But YC seems really, really mad about this. And that's why I was curious about the handshake element because I didn't realize that so much - Until it's signed, it's a handshake. That's why they call it a handshake. You know, is it rude? Is it unethical, immoral? All right, whatever, yes. Yes and no. But the deal's not signed. Until the deal's signed, you have the right to back out of it.

58:09You know, you can say like, okay, I want to do that, But if like on the way to your car, somebody's like, I'll just put a million dollars into your company directly at a$10 million valuation. You don't have to give 10 % to YC for, you know, 200K. Well, okay. YC should be happy for them. The reason YC is overreacting here is, well, one, they're super dramatic. Everything they do has to have this drama. But this is anti-founder, you know, and they're like really concerned that this is going to become a trend. I think they've been very threatened by some of the new speed run from A16Z, ARC by Sequoia, Pear has their summer program.

58:49We have launched Accelerator and Founding University for a long time. We're not a new entrant. Techstars is coming back, Antler. All of these programs are better for founders, in my mind, than going to YC. Not that YC's bad. YC's, you know, as good. But I think these other programs are better because they give better terms. and you're not one of 500 founders or 250 founders. They're more bespoke. So if you go to Speedrun, if you go to Sequoia Arc, if you go to Pear, if you come to our program, and I'm talking my own book here, obviously, it's less of a factory like Y Combinator, and you're not going to get lost and give a one-minute presentation on demo day, right?

59:27Other programs like ours, two or three minutes. You know, you get a little more time. In ours, you're one of 12 companies, not one of 200. Or in Arc, I think they take a dozen. in. So they're more bespoke. If you can get into one of the bespoke programs, I think you'll have a better experience. And I think that's what Y Combinator is feeling is like they have competition now. So and also there seems to be something with young founders. I don't know why this is, but there seems to be some pent up and maybe it's just the nature of being number one in the space and having such a great reputation.

59:56So it's, you know, it's actually in some ways a compliment that dropping out of YC is the equivalent of dropping at Harvard. If I was Tyler, who says, imagine breaking a handshake agreement and bragging about it on social media for likes. That's a terrible tweet. What they should have said was, we appreciate the founder. We think they're amazing. We wish them great luck. We wish they would have come to Y Combinator. We hope that when they raise their next round, maybe we could participate. We wish them all the best. If the program's not for them, we want them to do what's best for them. That's the right response.

1:00:30Tyler's response, not correct. Peter's was, for everyone wondering, dropped out of YC is just an edgy way of saying broke a commitment and contract. They're attacking a new founder. You should have some grace for the new founders. They're going to do things that are spicy on the margins, Alex. They're going to do things that could annoy you as a more senior executive or somebody who's been in business for 30 years. Sometimes founders do things. I've had founders do like multiple times. This has happened with like 10 founders. I've had 10 founders do a round of funding and not tell me. When we have rights in that round, Oh, so you didn't get your pro rata.

1:01:04Oh, my. Well, no, you could then have to go back and reverse it, or they sign a deal without telling us, or, you know, and then we're like, well, no, but did you talk to your lawyer first? They're like, no, no, I got this great deal, I signed it. And you're like, oh, okay, just, you're supposed to do that. So I always tell founders now, like, before you do any deal, or you give somebody three board seats, like a founder did recently, I gave him two or three board seats, I'm like, please call me first. Please call me first, because I've already made my money. I'm already micro-famous, as everybody knows.

1:01:32and I'm slim now. Like, everything I want in life, I've got a great family, I'm Svelte again, I made my money, and I'm micro-celebrity. And I'm micro-celebrity, let me tell you, it's a pretty fantastic place to be. I get a lot of great invites. I can go to F1, I can go to all this stuff and hang out in the pits, and I don't have to buy a ticket. It's fantastic. If I tell you anything, it's in your best interest. I'm only doing it to help you and be a good participant in the ecosystem. Like, literally, that's 100 % of my motivation. So please don't give two seats to somebody. Please don't give two different investors or three different investors three different terms and side deals and, you know, like, just keep it standard.

1:02:11And if you're going to sell the company, let's have a process. Don't just sell it to your friend and then, you know, not do the process. Don't give yourself shares without telling the board members you want to give yourself a new equity grant. Like, there's a process here. And let's not get you in trouble or, you know, cause reputation damage. But here, I think Daniel Young is punk rock, and I'd like to have him on the show on Wednesday. Okay. Well, we'll reach out to him and see. And I believe the YC question you mentioned is, what social hack did you do? Something along those lines. Asking founders how they managed to circumvent and kind of short circuit the attention economy.

1:02:42I think the founder of Cloly, who we had on the show back in the day, is a good example of the current young founder archetype, Jason, willing to kick sand in people's faces to make a lot of noise. And here we are one more time. So there also was another comment. There's this account called Speck, S-P-E-C, that is obsessed with Gary Tan. I love Gary Tan. I've known Gary Tan. I think he's a great human being, and I think he's a great founder and great investor. I know he had a bad breakup with Alexis Ohanian, who I also have a lot of respect for, so I don't know. Sometimes founders can break up.

1:03:16But I think Gary's great. But this account Speck, which is OpenCV with underscores on either side on Twitter, keeps CCing me in this, because I guess they want me in another job. Or they CC a lot of people. Yes. But they had an interesting tweet. Yeah. So the tweet reads, so you can't neg YC, but YC can neg you. If you're not familiar with the word phrase, neg, it means to just diss somebody, essentially, Jason. And so in this case, there was a girl who, quote, lost her full-ride scholarship because she dropped out to do YC. And then it shows an email, and the email reads, I'll just read it out for folks.

1:03:52And by the way, neg means negative in this sort of space. So if you neg a girl in these like, you know, those crazy - Pickup artist. Pickup artist. Yeah, yeah, yeah. That's what I couldn't find. The neg is like, oh, wow. You know, one of your earlobes, Alex, is longer than the other. That's kind of weird. And Alex was like, will you date me? I'm already dating. You're the co-host. Okay, let's read this. I'm so conscious about my ears. All right. The email reads, and this is to a founder who is NYC. You have perfect earlobes. Thank you, Jason. Also, there's one person in the world who's allowed to break my phone sound.

1:04:24It's my wife. Sorry about that. All right. The email reads, I wish I was emailing under better circumstances. It's become clear that you three cannot operate as a functional team. We funded your company under the assumption that you could. And as a result, company name can no longer participate in YC. You have three options. Shut down. Give us the money back. Keep the company alive and give us the money back or keep the company alive and keep the money. At which case we'll give you back your shares and cancel our safe and no longer be an investor. I strongly recommend you pick option one or two.

1:04:52So this is them essentially saying to a company, That's from Gary? Is that confirmed? No, this is from someone with the initials MS. I know one person. Oh, Michael Sebo, maybe. I wasn't going to say it out loud. I also know Michael. It could be Michael Sebo. Michael's fantastic. Gary's fantastic. But the point here is that YC will often, well, not often, but sometimes play a bit rough. And so if they're allowed to play a bit rough, then why can't founders do the same, Jason? Okay. All right, listen, it's business. Things can get a little chippy sometimes. It can be very annoying if a founding group like this, you fund them, and then they start creating chaos.

1:05:28Because what you don't want to do is have a distraction in the incubator for the other companies. That's not fair to the other companies. So, just like if you got accepted to Columbia or NYU, and you start causing drama everywhere, and we've got you on a scholarship, and you're going to be on the basketball team, or the hockey team, and you're just running amok. And it's like, well, maybe this isn't the right opportunity for you. We can take our scholarship back. Like in this case, it's$125 ,000. $125 ,000. In this case, if I was YC with billions of dollars under management and dozens of unicorns, including their most successful ever, I think is Airbnb, which is worth, I don't know, close to$100 billion.

1:06:11My two unicorns are worth more than that, but then you know it's not a competition. $74 billion. Airbnb is an incredible company. I think it's the largest one to ever go through there. Robinhood's worth$125 billion and Uber is worth$197 billion. There you go, Jason. So my two are bigger than their biggest, but it's not a competition. Oh, it's not. I see. It's not. There's not a scoreboard here. Oh, okay. Everybody just tries to help the ecosystem. I'm kind of making a joke here because people do get competitive. And I can understand if it's Michael Seabold or if it's Mary, Susan, whoever. You want to have a clean separation.

1:06:50if there's going to be drama. I don't think that email's too aggressive, except for maybe the last line, like pick one or two. But sometimes you've got to be firm with a group of people who are causing chaos and be like, listen, one, two, three. And I have had similar situations happen where something comes out during due diligence. We haven't signed the deal yet, but maybe we're between handshake and due diligence. And you can say a thousand times to a founder, pending due diligence and they will not hear that. That is like a frequency that like they're not capable of hearing. But if you do due diligence and it turns out like your customers don't match or whatever, or, you know, it doesn't feel like particularly defensible technology, you have the right to back out here.

1:07:34I think, I don't know, I might be on Michael's side here that he gave them some great options. He said they could keep the money and they would get off the cap table. I mean, that's the opposite of a lawsuit. I think, I'm going to give Michael the win here, that I think actually he gave them a firm, crisp set of decisions. You might say, like, pick one or two is my best suggestion. Might be a little aggro, but I don't think it's overly aggro at all. I think he's giving them good founder advice, which is, hey, listen, if you guys want to have chaos, that's fine. That's not what YC's about. We need harmony, because we've got two, like I mentioned earlier, or like there's 200 other, there's 199 or 299 other people in your cohort.

1:08:20Like, please, stay in your lane and just be productive for 12 weeks. The end. So anyway, long story short, YC is amazing. Gary's great. Michael's great. And this kid's great who's being a little punk rock. You can't optimize for punk rock and then be upset if somebody's punk rock with you. The end. Full stop, everybody. And for the YC people, did they delete their tweets when they were dunking on the kid? I saw there's a bunch of deleted tweets in that thread. I don't know whose tweets got deleted or if we know. I took those screenshots of the Pete and Tyler tweets myself, and then I grabbed that thread, Jason, just to highlight how many things have been taken down, because Daniel had removed some of his initial tweets that kicked off the controversy.

1:09:03So we had to find them via - So Daniel deleted his tweets. Anyway, I'd like to have Daniel on. Maybe that's a good investment for me. And if you get rejected from Y Combinator, don't wait six months. Email your boy, JCal. Okay? It's very simple. Jason at Calacanis.com for life. Or you can email me if you love the All In program, jason at allin.com. Or if you want to get a meeting with the 11 people on our investment team, forward your YC application that got rejected to ycatlaunch.co. Ycatlaunch.co. and you will get a meeting with my team within 24 or 48 hours, including a little bit of weekend time because my team works a couple hours on the weekend to meet with founders.

1:09:46We will meet with you quickly. We'll do a 20 minute first call with you. You pitch us your product or service, 10, 15 minutes. We ask you one or two questions. You ask us one or two questions. Then at the end of 20 minutes, you know, we, we end the call and then we will talk to you and have a follow-up and see if it makes sense for us to go to a second call. We do this because it's founder friendly. Like, It's good to, you know, save you time. And if you don't get into YC, I don't think you should just apply to YC. I think you should apply to our program, Founding University, if you're pre-revenue, you know, like year zero, or apply to the Launch Accelerator.

1:10:21We have a common app, launch.co.com. I also think you should apply to Andreessen Horowitz's Speedrun, Antler, PEAR, does a PEAR VC. Marr does a great program over there. With Pejmon, these are great investors. great founder friendly folks. Ruloff and the team, Stephanie and everybody, they do the ARC program. And we'll put those links in the show notes today. I am not a zero sum person. You should, I think the Y Combinator folks have a little bit of like circle the wagons. They're not, I think they're just a little too cutthroat. I'll be honest. It's a bad look because it, they don't need to be.

1:11:00When you're winning, you should be magnanimous. I've had to learn this in my life. All of us have to learn this. Chamath's talked about learning this. When you win, especially in, you know, when you get to the top of the, you know, the top rungs of the ladder, where I've been lucky enough after a 30-year, brutally hard career, fought my way in here. I get it. I had to go punk rock. I launched a zine. It's as punk rock as it fucking gets. Like, I couldn't get published, so I started my own magazine and photocopied it. You know, people didn't respect me. I started my own tech conference because I couldn't get into other ones.

1:11:39Period. Full stop. Right. I started my own podcast. It's OK to be punk rock. But then when you do win, you've got to flip, Alex. And this takes personal development work. And it starts from the top and the leadership. The leadership has to say, hey, we've won. We're going to be relentlessly magnanimous. If I could put a post-it, you know, here on my teleprompter, it would be be a mensch. Like my Dave Goldberg, rest in peace. He was the menschiest guy ever. I modeled my career after Dave Goldberg, Goldie, rest in peace. He ran Survey Monkey, he ran Launch.com, in a way. I did Launch.co as a tribute to him, because I always loved the brand, Launch.com, which was his music startup.

1:12:22He gave me time when I was coming up in my career that he didn't need to give me. And if you ask anybody who met Goldie, he gave everybody an hour or two. He didn't need to. He was rich already. He was living the life. He could get any meeting. He could hang out with any powerful person he wanted. Died too young. But when he was alive, what did he do? He was, he was, if you met 10 mensches and there was a mensch lunch, they'd say, where's Goldie? Because we want to have a mensch at this lunch. Literally, he's a mensch's mensch. That's what I aspire to be in my life. I aspire to be Goldie and be a mensch.

1:12:56Another amazing episode of This Week in Startups. I'm going to get emotional, so I'm going to leave it there. All right. Unless you have anything else we need to add or any housekeeping we need to do here. No, other than saying that we're going to have a really fun AI TAM sheet already for you on Wednesday. It's going to be great. I noticed you taking those notes in the docket. Well done. If you want to tune in live, go to thisweekinstartups.com slash YouTube and it will automatically send you to YouTube and subscribe you to the show. All you have to do after you subscribe is it gives you a little pop-up on YouTube.

1:13:25Hey, would you confirm you'd like to subscribe? You confirm you want to subscribe, but you hit the alert and the bell there. And then if you could, do J.Cow and Alex a favor, write us a review on iTunes. I hate to beg for reviews on Apple Podcasts, but it is a big part of the show getting surfaced to new people. If you write a great review, we're gonna shout you out at the end of the show, which we're about to do at the end of the show here. We'll read one of the great reviews. And if you email me your review at jason at allin.com or jason at calacanus.com, all goes to the same place, I'll write you back and say thank you.

1:13:57and you get to say hi to me. Because I'm a real person. It's true. Trying to be a mensch every day of my life. I am a real human on planet Earth. And if you get to a position of power, which Y Combinator is the height of power, and you have this impact on people, best advice. Do what I did. Do a little personal self-discovery, you know, whatever it takes. Just reflect. You can never go wrong by being helpful and being a mensch. And you can go wrong by being critical of people, especially publicly like this, especially for a nascent founder, because some people will frame it as bullying. I'm not framing it as bullying, but obviously that's the reaction online here.

1:14:35So this is the thing about the power imbalance that YC maybe needs to, and this is something Gary has inherently in his DNA, I believe. He's a very competitive person. He's a full contact person, as you can see, with his, you know, opinions on KP, math, and San Francisco. All good character traits. but he should probably build into the YC culture being magnanimous. Be a little magnanimous when you're at the top, right? Because you sometimes forget how much power you have. I don't anymore. I know that if I mention somebody on the podcast, it's going to carry a little bit of weight. I'm not over-indexing on it, but it could negatively impact them.

1:15:17So I've been more thoughtful in how I'll say things. I used to be a little more Howard Stern, a little more shoot from the hip. It's true. But we all learn as we age and we all become a little bit more patient, a little bit kinder. And that's when you can give back. But more on Wednesday. We'll talk AI Tam. We'll have more guests. Actually, we have a very fun guest on Wednesday, Jason. So everyone stay tuned. Oh, tease it, tease it. Even if they're not confirmed. It might be the first initial S, second initial J, perhaps. Oh, Stevie's coming. He might be. My Stevie. So, Wednesday. I love Steve Jurvetson.

1:15:51That's my guy. What an investor, board member of Tesla, SpaceX investor. I mean, you want to talk about a mensch and a visionary investor? Steve Jurvetson, the J in DFJ. And now he's got his own venture firm. We'll see you on Wednesday, everybody. Bye-bye. Bye.