Is investing REALLY the hardest job in tech? A TWIST VC Roundtable (ft. Deedy Das and Jay Eum) | E2204

Register for Founder University Japan's kickoff! https://luma.com/cm0x90mk Today's show: *On TWiST, Jason welcomes an all-star VC panel — Deedy Das of Menlo Partners and Jay Eum of GFT Ventures — for a deep dive into the shocking scale of early-stage AI raises, a transitional moment for investors, the growing importance of the "prosumer" market, ChatGPT's insane smile curves, and much much more. IN THIS EPISODE What the panelists make of Roelof Botha's exit from Sequoia… and is he really going anywhere… Why Jason says VC is no longer the best way to get rich… Why so many private companies are growing SO HUGE before going public… And much more! Timestamps: (00:03:37) Jason is fresh from surviving Riyadh traffic but he's here and introducing our all star panel (00:04:03) Why Jason compares Riyadh to Silicon Valley in the 1960s (00:05:21) Friend of the Pod Roelof Botha is stepping down at Sequoia… our insiders try to guess what might have happened… (10:00) Crusoe - Crusoe is the AI factory company. Reliable infrastructure and expert support. Visit crusoe.ai/startup to reserve your capacity for the latest GPUs today. (00:13:11) Deedy moved up at Menlo without being a venture native… he shares the secrets behind his rise. (00:19:09) Was Roelof wrong about "return-free risk"? Does more capital always = more great companies? (20:00) Northwest Registered Agent - Form your entire business identity in just 10 clicks and 10 minutes. Get more privacy, more options, and more done—visit https://www.northwestregisteredagent.com/twist today! (00:26:54) With so many private companies growing SO HUGE… when is the right time to go public? Considering the case of Glean and Stripe… (30:00) AWS Marketplace - If you're ready to really accelerate your sales cycle, AWS Marketplace is your next stop. Head to https://aws.com/startups to learn more. (00:30:07) Why Jason says venture capital is no longer the best way to get rich (00:32:34) Why AI apps are so appealing to enterprises after years of paying for SaaS (00:36:32) The growing importance of "prosumers" (00:37:31) Why Deedy says a smile curve is the most beautiful depiction of "Product Market Fit" (00:44:36) Why it's still tough to raise pre-seed money, even during an AI "boom"! (00:46:08) Why Jason says the hardest job in the tech ecosystem is being an investor (00:55:52) "Time is one of the primary drivers of venture capital return." - Jay Eun (00:57:42) Deedy on the shocking amounts being raised by early-stage AI companies (01:00:21) Just how much DO VCs work compared to founders? The panel compares notes. (01:02:53) Are some investors not doing diligence? Deedy on the speed of some AI deals. (01:16:51) The panel picks their fav portfolio company of the moment (or one of their faves) Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com Check out the TWIST500: https://www.twist500.com Follow Alex: X: https://x.com/alex LinkedIn: ⁠https://www.linkedin.com/in/alexwilhelm Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis Thank you to our partners: Crusoe - Crusoe is the AI factory company. Reliable infrastructure and expert support. Visit crusoe.ai/startup to reserve your capacity for the latest GPUs today. Northwest Registered Agent - Form your entire business identity in just 10 clicks and 10 minutes. Get more privacy, more options, and more done—visit AWS Marketplace - If you're ready to really accelerate your sales cycle, AWS Marketplace is your next stop. Head to https://aws.com/startups to learn more. Check out Jason's suite of newsletters: https://substack.com/@calacanis Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com Subscribe to the Founder University Podcast: https://www.youtube.com/@founderuniversity1916

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Deedy, you were promoted recently from principal to partner, I believe. I know you probably can't tell us all of Menlo's long-term plans for succession, but I am curious how often you think about your upward trajectory at the firm? And if there is more headroom for you to grow into, do you want to become one of its core leaders down the road? Is that a possibility? Tell me what it's like from your hot seat.

• 0:21Speaker 01

  Honestly, I'm very thankful that they brought me in as somebody who had no real experience in venture. I was really a person who just studied the craft from a distance. I write online, I read everything I can. I was a part of a startup gleaned that went really well from the very beginning to about the time I left, and it's still doing fantastically. I just don't have that approach to how I see Menlo. I joined this fantastic team very much to work as a team together and reinvigorate what the firm stood for. We've been around for 50 years. We're on our 17th fund, so a part of the old guard, really, in terms of how storied the firm is.

• 1:06Speaker 01

  But with any time, I think there is a time for resurgence and rebuilding of a firm. And I don't know what the future lies, but I think every day about what we could be doing differently to be a different adventure. And if you look at the last four people that we've hired at Menlo, you have Tim Tullie, who is a CTO of Splunk, you have Joff Redfern, who is the CPO of Atlassian, you have Matt Kraining, who did a PhD from Stanford and sold a unicorn cybersecurity company, you have me. These are people who've operated businesses. And so one of the things that we are trying really hard to do is marry this set of people

• 1:45Speaker 01

  who have been in the weeds and seen the brutality of what it takes to run a good company with investors who get the finances, who understand the long-term vision as well. And we're very early on that arc. Who knows what that future holds? But right now, my main focus is, hey, let's focus on getting things right as a firm. How do we invest? What are our principles? What do we stand for? And how do we get in and partner with the best founders, to be honest?

• 2:16Speaker 00

  This Week in Startups is brought to you by AWS Activate. AWS Activate helps startups bring their ideas to life. As you build and scale your business, Activate credits grow with you to support your changing needs. Apply to AWS Activate today and receive up to $100,000 in credits. Visit aws.amazon.com/startups. Northwest Registered Agent. Starting your business should be simple. With Northwest Registered Agent, you can form your entire business identity in just 10 clicks and 10 minutes. From LLCs to trademarks, domains to custom websites, they've got you covered. Get more privacy, more options, and more done.

• 2:57Speaker 00

  Visit northwestregisteredagent.com/twist today. Crusoe Cloud. Crusoe is the AI factory company. Reliable infrastructure and expert support? Visit crusoe.ai/startup to reserve your capacity for the latest GPUs today. Hey, everybody. Welcome back to This Week in Startups. My name is Alex and I am joined today by an illustrious venture capital panel, starting off with my co-host, Jason Kalakannis, who's currently still in Saudi Arabia. Jason, I hear the traffic is fantastic in Riyadh.

• 3:33Jason Calacanis?

  Yeah, I just got caught in a little bit of the old Riyadh traffic, but I ate at a really great traditional Saudi restaurant. We stood on the floor and used the bread to pick up the food. It was amazing. But we wrapped up our third day of Sanabul Founder University. So, thank you to all my friends in the region. Sixty startups, all from the region. And about forty-five of them are from Saudi. Saudi nationals building incredible companies. And it's kind of like coming to Silicon Valley in the sixties or seventies, where there's a lot of energy, a lot of great founders. But they're just starting this entrepreneurial journey. And it's very rewarding to meet with these incredible

• 4:15Jason Calacanis?

  founding teams. They're doing fintech in a major way. They're doing construction tech in a major way. There's a lot of real estate going on here. And then, you know, every great idea like you see in founders from America. And we did a three-day intensive, talking about how to build companies. These are all year zero companies. And we're going to be doing two of these classes a year. Two of these founding university classes a year. So, it's really exciting for me and really proud of the work we're doing. Yeah.

• 4:45Speaker 00

  Because Jason needed more frequent flyer miles. We've finally solved that problem. All right. Else, on the panel, on the panel today, we also have J. Um from Global Frontier Technology Ventures, or as I call it, GFT Ventures. Jay, how you doing?

• 4:58Speaker 03

  I'm doing great. Thank you, guys, for having me. This is really exciting.

• 5:02Speaker 00

  And we have Didi Das, whom everyone knows from his high caffeine tweets. He's a partner, a new partner over at Menlo Ventures. Didi, how are you? I'm fantastic, guys. I'm, I'm really glad that we're all here today, because there's been a kind of a seismic shift in the venture capital world. We saw a changing of the guard at Sequoia, with Roloff Botha stepping back from his role as kind of chief steward of that firm, handed off the reins to Alfred Lynn and Pat Grady, two well-known names. But I gotta say, guys, I'm a little bit shocked. I did not see this coming. Heard no rumors, no rumbles, no premonitions. So, first, I'm kind of curious, who knew? And if you didn't know, are you surprised by this? Let's start with Jason, who's already laughing.

• 5:43Jason Calacanis?

  Well, I'm, I'm good friends with Roloff for a long time. He brought me into the venture business. He created the scouts program at Sequoia. I was the first person he asked to do it with the Sequoia scouts. He was on the board of my company. He invested in Mahalo back in the day, fifteen years ago. And I've known him all this time, one of the great venture capitalists, somebody I learned a ton from. And I didn't know. But I did know that the firm had some spiciness going on with Sean McGuire being very public.

• 6:11Jason Calacanis?

  About his feelings, about the conflicts in the Middle East, etc. I'm not sure if that contributed to it. I'm just catching up here on the other side of the planet.

• 6:22Jason Calacanis?

  You know, and saw the Wall Street Journal say that maybe that had something to do with it. I don't know, but they have a great tradition at Sequoia with the stewards. Obviously, Don Valentine started the firm and then he had Michael Moritz, Doug Leone, two legends as well. And they, you know, gave it over to Ruloff and Alfred, and now Alfred and another partner are going to run it. So, you know, best of luck to Ruloff. He had one of the great runs in the history of venture capital. And that's a pretty intense thing to do, to run Sequoia, the literally most legendary

• 7:00Jason Calacanis?

  and successful venture capital firm in the history of venture capital. So I wish him a lot of luck.

• 7:04Speaker 00

  DD, you work at a firm that has a number of partners and kind of generational history. It's been around for a minute. Looking at the headlines Sequoia's gone through, had to kind of divest its China India funds. There was the FTX mess, the Sean McGuire stuff that Jason mentioned. There was the Klarna board seat scrap. To me, that didn't seem like enough in aggregate to force a change at a firm with the stature of Sequoia. So I'm just kind of curious if you expected this? And if not, what might have happened?

• 7:32Speaker 01

  I have no idea, to be honest with you. I mean, the few times I've met with Ruloff, I think he's a fantastic guy. And I think everybody on the Sequoia team that I've interacted with has been quite fantastic. Look, when you're a firm like Sequoia, you're going to get scrutiny. I mean, you're, you know, historically the number one venture firm. And so whenever something like this happens, I'm not surprised that so much scrutiny is drawn to that firm. But look, I'm excited for Alfred and Pat, and they're both great guys. And I'm excited for them to take, take the helm of stewardship at Sequoia.

• 8:05Speaker 00

  All right, that's two safe answers, Jay. What do you got for us?

• 8:11Speaker 03

  Well, the interesting thing was I just saw Roloff a few weeks ago at the Stanford Business School's Centennial Celebration. And Roloff played a big role in organizing some of the really interesting alumni panels. He talked about the stewardship, and it's always been something that I think many of us in the venture industry has admired, Sequoia Capital IV, having that stewardship task where you hand over the reins to the next generation before you get too stale and too crusty. And I think that's frankly been one of the reasons that they've really been able to ascend to the top of the hill. I remember

• 8:52Speaker 03

  when I started in the industry 20-plus years ago, there was Sequoia, but there was also Kleiner and a few other firms. And I think it's kind of undisputed where Sequoia is in terms of the hierarchy today. The great thing about this is the stewardship, part of what I had heard, because I was on a board together with Jim Getz, who was the prior steward at Sequoia, he actually told me something really interesting. He purposely tried to stay in the background and show up less at the office sometimes to make sure the leadership was handed over properly, so that people would not be looking around for him asking

• 9:35Speaker 03

  questions, but they would actually make sure to ask the new leaders and the stewards to actually make those right decisions. So maybe Roloff is in that mode as well.

• 9:45Jason Calacanis?

  I think that's, just to build on that, Jay, that's what I saw happen with Michael Moritz, Sir Michael Moritz, and Doug Leoni. They said they were handing off to Alfred and Roloff, and then I would come by the office for the next five to 10 years, and they would still be there. You've heard me talk so much on the pod about the importance of renewable energy. That's why I'm so excited to talk to you about Crusoe today. Most AI infrastructure is still powered by fossil fuels, but Crusoe has an innovative energy-first approach. They've actually built a high-performance AI cloud platform that's powered by wind, hydro, and Geothermal energy in Iceland. Right now, they're using 100% geothermal and hydroelectric power to deploy the latest Nvidia Blackwell GPUs on Crusoe Cloud.

• 10:29Jason Calacanis?

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• 11:05Speaker 03

  Yeah.

• 11:06Jason Calacanis?

  But they had this like tradition of like, I would say, a decade-long transition. I suspect that's what will happen with Ruloff as well is that, you know, he'll be hanging around doing all the boards he's on. But it's a numbers-based business, Alex, and if you look at Ruloff's run, over $50 billion to LPs was distributed. It was insane, and it was insane from the moment he got there. He did YouTube, he did Instagram. At that same time, they did New Bank, they did Square, which he, I think, is still on the board of. And they did, you know, the Sequoia Fund where they hold on to their public shares and help their LPs decide what to do with those.

• 11:49Jason Calacanis?

  WhatsApp was an amazing fund. I heard that fund was 21X. You know, that's a 21X is a big fund. And of course, they did the Scouts Fund that I got to participate in. And so just brass tacks, he put numbers on the board that we've never seen in the industry. And when they, when they look back on it, those are some very big numbers. And it was put up during a time of increased competition, massive increased competition. And they, they stayed true to their knitting. They didn't get so big that they became one of these mega funds. You know, even the funds they just announced were pretty modest in size, given what Sequoia is capable of. And they've never lost money for an LP.

• 12:33Jason Calacanis?

  That was the other very proud thing that, you know, they had going for them in the history of the firm. Never lost a dollar for LPs, but. It's, um, you know, the changing of guard has to happen and then LPs do judge you on your succession plans. As a solo GP in our firm, I get that question a lot. Are you, you know, what's going on? Are you going to retire? Are we going to have a fifth fund? What's going on? Have to be honest with them. Okay, I haven't decided yet. And so that works against you if you're a solo GP and they have a lot of serious firms as LPs. So it's, um, it's a big deal.

• 13:06Speaker 00

  Deedy, you were promoted recently from principal to partner, I believe. I know you probably can't tell us all of Menlo's long-term plans for succession, but I am curious how often you think about your upward trajectory at the firm and if there is more headroom for you to grow into, do you want to become one of its core leaders down the road? Is that a possibility? Tell me what it's like from your hot seat.

• 13:28Speaker 01

  Honestly, I, I, I'm very thankful that they brought me in as somebody who had, you know, no real experience in venture. Like I was really a person who just studied the craft from a distance, right? I write online, I read everything I can. I was a part of a startup gleaned that went really well from the very beginning to about the time I left and it's still doing fantastically. I just don't have that approach to how I see Menlo. I mean, I, I joined this fantastic team, um, very much to work as a team together and, and reinvigorate what the firm stood for. I mean, we've been around for 50 years. We're on our 17th fund. So we're a part of the old guard really in terms of how storied

• 14:09Speaker 01

  the firm is. Um, but, you know, with any time, I think there is a time for resurgence and rebuilding of a firm. And I don't know what the future lies, but I think every day about what we could be doing differently to be different in venture. And if you look at like the last four people that we've sort of hired at Menlo. You have Tim Tullip, who is a CTO of Splunk. You have Joff Redfern, who is the CPO of Atlassian. You have Matt Kraining, who did a PhD from Stanford and sold a unicorn cybersecurity company. You have me. Like, these are people who've operated businesses. And so, one of the things that we are trying really hard to do is sort of marry this set

• 14:50Speaker 01

  of people who have been in the weeds and sort of seen like the brutality of what it takes to run a good company with investors who get the finances, who understand the long-term vision as well. And we're very early on that arc. Who knows what that future holds? But right now, my main focus is, hey, let's focus on getting things right as a firm. How do we invest? What are our principles? What do we stand for? And how do we get in and partner with the best founders, to be honest?

• 15:22Speaker 00

  What is the Middle of Interest Media Training Budget per year?

• 15:26Speaker 01

  Whatever it is, I think it all goes to me now.

• 15:31Jason Calacanis?

  You know, there was a time when venture capitalists didn't do media. They were just very quietly behind the scenes. I think I might have had a little bit of, I might be to blame for being the first venture capitalist to podcast.

• 15:44Speaker 03

  You open the select gates, J. Cal.

• 15:45Jason Calacanis?

  Yeah, now everybody, if you're a venture capitalist, you have to have a podcast. But it is the big change that Dee Dee points out, which is the industry went from in my lifetime being people who were professional finance people or who got into it right out of school. Steve Jervison, you know, I just had him on the program and he did do a little time in tech, but he got into venture very early. And, you know, Ruloff worked at PayPal, obviously, but then got into venture very early in his career. And now it's, founders expect that people in venture have some scar tissue and have been in the trenches. That's a real kind of a different vibe than it was.

• 16:27Jason Calacanis?

  And it's also an industry in massive transition right now. Like, I think we all represent the original boutique venture.

• 16:36Jason Calacanis?

  Kind of model, smaller funds, you know, really handcrafted, but then you have these, you know, Andreessen Horowitz, giant platforms, you know, many different sector funds, billions of dollars under management that, you know, it's sort of trends towards average returns or, you know, you know, indexing the industry in most cases. So there really is two venture industries and I think Sequoia has done a great job of staying true to the traditional venture industry. But, you know, Roloff is still young. So the question I have is after he takes a little break, I wonder if he's gonna start a firm or go work with Elon at

• 17:18Jason Calacanis?

  a company. I mean, he's an, he was an operator 20 years ago. So I wonder what's next for him. I have no idea. I haven't talked to him.

• 17:26Speaker 00

  I think we're all gonna be waiting to see what Roloff chooses, but I want to go back to the idea, Jason, you talked about venture capital changing. Roloff had gone on a bit of a media tour before he stepped back. And one of the things that he said that we talked about a little bit a couple of weeks ago was that throwing more money into Silicon Valley, quote, doesn't yield more great companies. Jason, we started off today with you discussing 60 companies that you're talking to in Riyadh, 45 of which are Saudi based, not a historical hub of startup formation, let's be honest. But it seems there's a lot of founders out there who want to build. So is Roloff kind of wrong about, you know, capital not helping build more great companies? Because it feels like today, going back to Deedy talking about Glean and all the other major companies that are doing well today, that we're seeing an enormous density of great companies being built and

• 18:11Speaker 00

  formed.

• 18:12Jason Calacanis?

  Yeah, in America and Silicon Valley, for sure, there's too much capital chasing too few really great ideas. And that means you can see it in the valuations and, you know, people are running up valuations to points that may break the model. If you're a seed investor, I was talking to a seed investor just today, who, you know, let's say they put 250K into a company at a $40 million seed round. Okay, if the company becomes worth a billion dollars and they got diluted by half, I mean, what are they going to return to their investors? You know, they own a very small fraction of that company, less than 1% of it and like

• 18:55Jason Calacanis?

  a quarter percent of it, they're going to return 2.5 million, 5 million from their fund if it's a unicorn. So it's an incredibly hard business and a lot of the math just doesn't pencil out. And I think the other thing Ruloff was saying during his tour was that it was a return-free risk, venture capital at this point in time, which was very funny, and that got a little bit of weight. But yeah, we are an industry in transition and it's unclear to a lot of LPs, it's unclear to a lot of VC firms, you know, how the returns will happen and if we can return the amount of capital being deployed. It's a big TBD.

• 19:30Speaker 00

  Yeah, Jay, your first fund was 140 million if memory serves, so kind of the opposite of a multi-billion dollar fund. Are you going to be able to return all of that? And what's your take on more capital and not leading to more great companies?

• 19:45Speaker 03

  Yeah, I think there's a couple of things that come to mind. So first off, innovation is everywhere, so whether it's in Riyadh or Seoul or Tokyo, there's some great companies coming out of that. The other thing to keep in mind is while the US venture capital ecosystem is primarily private capital.

• 20:03Jason Calacanis?

  Hey, listen, we meet a lot of early-stage founders here at Launch, my investment company, and some, they don't have a lot of traction yet, they just have an idea. Maybe they haven't even finished their product, they've just got an MVP, but they still need investors and accelerators like ours to take them seriously. And you know what? We can't just wire money to your Gmail or your PayPal. That's not how it works, folks. We need to know that you're a legit and official business. We need to know your company is incorporated. That's why you need Northwest Registered Agent. It's the service that will help you run your business the right way from day one. In 10 clicks and in under 10 minutes, you're going to file for your LLC or a C corp if you're a startup, get a domain name, launch your official website, claim your business

• 20:45Jason Calacanis?

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• 21:10Speaker 03

  Where the primary objective or the sole objective is really pure financial return. There's plenty of regions, as we all know, that there is actually a strategic element to funding going into venture capital. Government-driven funding, which started in Israel, been adopted in parts of East Asia, including South Korea, Japan, Singapore, and other locations where they want to actually build the startup ecosystem, primarily to make sure that there's job creation, there's innovation. And so, a lot of these countries and a lot of the funds that are located in these countries, they don't necessarily benchmark against the S and P 500 index funds.

• 21:54Speaker 03

  As long as they are generating a reasonable return, they are creating jobs and they're creating innovation for those ecosystems. So that's, I think, important to keep in mind globally. I think second point is that there's a lot of venture capital firms out there, and I think anybody that's starting a venture firm. When I started my first venture capital firm back in the day called Translant Capital, and I asked the same question before we started GFT Ventures, is does the world need another venture capital firm? Right? And unless there's a clear reason for existence, it's really difficult to justify it because there's so many great firms, there's so much capital out there.

• 22:38Speaker 03

  When my co-founding partner Jeff Herbst and I, you know, a couple of recovering ex-corporate venture capital guys, the ex-Samsung guy, the ex-Nvidia guy teamed up to launch GFT Ventures, we had a very specific agenda, GFT being global frontier tech, so we're a frontier tech fund, but we had already been investing in AI and data science companies for over a decade. We saw The growth, the potential coming up, and we wanted to really concentrate our efforts on that specific category. And it turned out that it was very serendipitous. A year after we launched the fund and we're about to wrap up our final closing, ChatGPT

• 23:18Speaker 03

  gets announced, the whole world gets a sense of, you know, the impact, the massive impact that AI brings to the table, and I think that really benefited us. And I think it helps for us a little bit to be OGs, so to speak, where we've already invested in companies like SoundDown AI, which are now public companies three years in. You know, companies that are coming out of the entrepreneurs, the lieutenants from those companies, starting new companies, getting founder referrals and whatnot has really helped us so far.

• 23:48Speaker 00

  Didi, I want to go back to Glean for a second because if memory serves, the company crossed 100 million ARR in like February or March of this year. And I feel like if you go back to the era of Box, before Box was public, if you reached 100 million ARR, it was heralded as like this really big moment, like it was an accomplishment. You can go public now. Well done. You've done the thing. Now, I feel like Glean's announcement was kind of forgotten because so many companies are reaching, you know, eight and nine-figure ARR milestones. So that's why I say it feels like today we are seeing more great companies built because they're reaching such scale so quickly. Am I over-indexing on the names that I know, Didi? Or are we actually seeing a greater number of outstanding startups actually be formed in scale today?

• 24:28Speaker 01

  I think there's a couple of points that I'd make here. Number one, I think a simple point is like, Glean is a boring B2B, top-down sales business. Like, nobody outside venture and startups has any business caring about Glean. And they shouldn't, right? Like, you know, I don't expect New York Times to run a piece on Glean. It's not ChatGPT, right? So it does not meaningfully impact that many lives outside knowledge workers in certain categories of companies. So I'm not shocked that this is not a global sensation. Number two, I would say is it is worth noting that Glean included, but sort of all companies at that growth stage are raising at valuations that are so big and so forward-looking that, you know,

• 25:12Speaker 01

  It does make sense that the media wants to cover those the biggest companies with the biggest potential outcomes and biggest potential growth tracks. Um, and, and, and Glean too, maybe in a world before Glean could IPO. But when we look at the company, we're see, we're like, okay, we could go in IPO now. But let's, you know, fortify sort of the bank balance and then try to shoot for higher. When is the right time to go IPO? I'll give you another anecdote. I heard this recently from a a growth stage company that we were trying to invest in. And these founders, you know, we, we sort of asked them like, hey, so what are your plans of going public? And I think they broke character for a second and they're like, well, you know, if everything serves us well, like, I don't think we need to like, why, why, why?

• 25:59Speaker 01

  Um, and we're like, well, you know, it's kind of important to us. So that, that, that happens. Um, and, and so we are seeing a shift with, with how big growth stage companies in that hundred million plus ARR bracket are looking at governance. Why would you want to go public? You can raise infinite money in private markets if you continue to grow. Um, you don't have to do all of this reporting to the SEC. It, it is, it just makes your life a lot more easy and you get the liquidity that you wanted. So, you know, the, the, the sort of balance of when to, to go public is also changing. Um, the private markets didn't have this kind of capital. Maybe at the time that Box was there to support an indefinite series of growth rounds. Um, so that, that is changing.

• 26:46Jason Calacanis?

  Yeah. You don't get it, Alex, put your question.

• 26:48Speaker 00

  Oh no, I was gonna call you in to respond to that. So perfectly certain.

• 26:52Jason Calacanis?

  Well, yeah, I mean, it, it seems like Stripe has decided that they're going to be private forever. And, uh, you know, speaking of like seed funds and angel funds, the scouts fund, the first scouts fund, I did Uber famously and then, um, less famously, Sam Altman did Stripe in that scouts fund. And that I think is the Highest multiple fund on cash that Sequoia ever did. And now with secondary markets and the ability to swap investors out in years 12, 13, 14, like SpaceX and Stripe are doing, you know, it is creating some liquidity for venture, but you would be, you know, much better served to have it actually be public companies and

• 27:34Jason Calacanis?

  distribute to your LPs the public shares. That's what LPs really want, is to get those public shares and then make their own decision of what to do with them. So it's an industry in transition. Great founders are coming from anywhere, to Jay's point. It really is a global industry. And, yep, these industries are being jump-started. But if you look at the Scandinavian countries, Sweden specifically, Israel, obviously, and then you go to Australia with Canva and Atlassian, you know, now you're starting to see Decacorns come out of these regions. It's not just like the occasional unicorn and like, oh, Spotify's worth a billion dollars back in the day. It's now Spotify's, I believe, worth over $100 billion. 128.

• 28:19Jason Calacanis?

  Yeah, so you've got, you know, a $100 billion company coming out of a country of 30 million people. Atlassian is also up in that range. I don't off the top of my head where they're at, but then Canva's at 40 billion, I think, in the private markets. These are not small companies anymore. Talent can come from anywhere. Great founders come from everywhere, specifically. They used to land on our shores. We used to welcome them here a lot more than we do at the current moment, even with the, you know, Trump saying he's gonna put those green cards. I'm still gonna follow up with him about that, put those green cards on the diplomas. But yeah, these companies are being formed all around the world, and the secrets are out. You know, just being here in Saudi for the last three days, they're listening

• 29:03Jason Calacanis?

  to our podcasts. They're reading our news sources. They're on the Substacks. They know the techniques. They're asking me about Raul's Product Market Fit Engine blog post and the talk he gave three years ago on this podcast. Like, they're up on it. So the secrets are out, and talent comes from anywhere. So there's a very bright future here. We did have a four-year pause under Lina Khan where there was no M&A. And I think that, when that...

• 29:36Jason Calacanis?

  You know, indigestion gets cleared and we can kind of move some of the companies that should have been bought and consolidated and get more DPI. I think people feel a lot different about the industry. But I know a lot of venture capitalists now who are just saying, "This is too hard. This is too hard. I'm quitting." And that's not the case with Ruloff, I don't think, but they were succeeding. But we all know on this call, many folks who are not going to raise their next fund. They're just like, "This has been too hard. There's no DPI." In fact, if you want to get rich, it's not the perfect way to get rich. It used to be in people's mind, "Oh, I'll become a venture capitalist. I'll be a billionaire." No, venture capitalists are not becoming billionaires. Hey, startup founders. Are you tired of losing deals to endless procurement cycles and complex contract negotiations?

• 30:21Jason Calacanis?

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• 31:05Jason Calacanis?

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• 31:23Jason Calacanis?

  Their funds do two or three acts. They got to chop up their, you know, funds with four partners, five partners. They're not actually bringing down as much money as you might think because they own such a small percentage of startups. You know, it used to be the Series A, the seed round, they would get 15%, 20% of a company. Now the seed round is 5%, 6%, 7% of the company. The Series A might be only 10% of the company. It's an industry in transition.

• 31:50Speaker 03

  Yeah, for sure. I mean, one thing I would add, though, is despite there's more competition, there's more challenges, for sure. Some of these companies are growing at a rate that I've never seen in my twenty years. I mean, it's just the potential outcomes of some of these companies where, you know, everybody knows that Lovable hit a hundred million ARR in less than twelve months. We have other companies that are trying to beat that record right now. And so if you extrapolate some of these companies and the growth rates that they have, and again, you know, the good news is a lot of these AI, especially AI application, AI platform companies, they're growing on existing infrastructure that has been built for decades.

• 32:34Speaker 03

  Connectivity is there, mobile app distribution, all of those things are in place. And on top of that, more recently, you know, there's actually a willingness to pay, shockingly, right? People understand that there is actually a cost for every inference that goes into it. And, you know, thanks to OpenAI and others, they've actually been able to be trained to actually pay for the utility that they get from some of these applications. So I've never seen anything like it in my career.

• 33:03Jason Calacanis?

  I think that last point Jay made is I've never heard anybody make it actually so crisply, but I think it's so important to think about. We all think, oh, cloud computing, the infrastructures, the rails, the bandwidth, sure, all that's set up. But what's also been set up is that businesses had such a great experience paying a hundred dollars a month or five hundred dollars a month for a piece of SaaS software that they're like, yeah, this thing's as good as Salesforce or Slack or HubSpot.

• 33:27Speaker 03

  It is so worth it, yeah.

• 33:29Jason Calacanis?

  It's so worth it. And so when all these AI tools came out and it was like forty dollars a person to be on Claude for the enterprise account, I was like, yeah. And, oh, Grok wants to charge us too? Bring it on. Oh, there's a two hundred dollar version? Absolutely, I'll pay for some people on the team to have the two hundred dollar version. If it makes them one percent more efficient, if a developer wants Cursor and Copilot and five versions of it and they use two a month, businesses are just very frisky about that. And they understand, I think, that making existing high performers, higher performers, is better than hiring more people.

• 34:05Speaker 03

  Right.

• 34:06Jason Calacanis?

  So that's just to build on your exceptional point, Jay. That is also part of it that goes into why these startups are doing so well. Do we hire another designer? Or is there a design tool that this designer can use that makes them go faster on Figma? Do we hire the sixth developer or just give the other five another tool? It's a pretty easy decision for management.

• 34:26Speaker 00

  I think Jason's talking about the B2B case here, Jay, but when I was thinking about the company you might be discussing that's trying to raise lovable to 100 million ARR, I was thinking of Higgsfield, which recently raised and is growing quite quickly. That's B2C, so a slightly different point, I think. Are you seeing?

• 34:40Speaker 03

  Actually, it's not. So certainly, there's a B2B customer base, B2C customer base for sure. They fall into the category of, so very similar to Canva. They actually sell for short form video creation, and this is our co-investment with Menlo, obviously. They actually sell to creators, and they do short form video generation for social media, right? So if you think about who the major customers are, including the Mr. Beast of the world and whatnot, these are not individuals per se, right? These are actually small enterprises. Some of them are quite big, and they are looking for platforms that actually generate, you know, high-quality, realistic video so that they can actually

• 35:25Speaker 03

  supplement their own efforts to actually have these studio setups, camera setups, and whatnot. And they've done a fantastic job. They have grown, and this is, since they tweeted themselves, public information, they've grown 60x in the last six months. I've never seen anything like it. It's crazy.

• 35:45Speaker 00

  60x?

• 35:46Speaker 03

  1 million ARR to over 70 plus in a little over six months.

• 35:52Speaker 00

  So Jay, one thing Jason likes to talk about, though, is there is sampling, there is testing, people have to play with things. I'm curious if you can share anything about the revenue health at that company. Is that ARR sticking around like we would expect traditional enterprise SaaS ARR? Is it a little bit more loose? What's it like?

• 36:08Speaker 03

  Yeah, it's too early to say, but it's certainly somewhere in between. So it's not like, you know, B2C revenue where people try something out, and the minute they get a better deal or a better feature from somewhere else, they'll drop it and move on. It's not as sticky, obviously, as enterprise revenue, but the company is actually moving into that category as well. But again, the Canva segment of what we call prosumers is a massive segment, and they are sticky, they are loyal. If they find a platform that works, why would they switch over? So yeah, they're actually accelerating revenue to a rate that I've never seen in my career before.

• 36:48Speaker 00

  Didi, I want to get you to weigh in on the willingness to pay in the AI ARX. I think this is a major tailwind for startups of all sizes.

• 36:55Speaker 01

  I mean, look, I think Jay said, said exactly what's going on and Jason said it too. Like, there is immense willingness to pay and try new things. When it comes to like, thinking about like, growth versus retention is often like a thing that people in venture talk about.

• 37:10Speaker 01

  And I, and I think the point that's really missing here is, you know, when you can grow today in a product-led motion faster than ever before. And if you actually compare those retentions, retention cohorts to enterprise businesses, you're not going to see the same kind of retention. But what you actually see in, in great businesses is you end up seeing a smile curve. And my favorite graph for this is, you know, I've tweeted this multiple, multiple times, is you look at the ChatGPT retention cohorts. If you looked at, there's this great article, funnily enough, this is a great article Sequoia put out a long time ago, which is talking about generative AI Act One, or I think it was Act Two, I'm not sure. It's, they said, you know, the growth is here, but the retention is not.

• 37:53Speaker 01

  If you compare one month retention on ChatGPT to any other product in the market, say like, classic YouTube or a WhatsApp, it's far, far from that retention. It was something like a forty percent, maybe less, whereas other products are eighty to ninety.

• 38:09Speaker 01

  And then if you look at the cohort retention curves over time, holy hell, has that changed? Like, it has become a ninety percent retention product over time. Yeah. Though, you know, the two common things I read and I see all the time is people, they whine about retention and they whine about margins. Growth, I think, is way, way, way harder than either fixing retention or margins. So as an investor, I am very comfortable, you know, backing companies who are able to grow and then think about how we can figure out the retention and the margin story. And we're seeing that at these companies. Like, people complain about cursor margins all the time. But, but you know what? Like, they're doing some interesting stuff.

• 38:48Speaker 01

  The likelihood that cursor fixes their margin structures, the likelihood that Anthropic fixes their margin structures is far more than another company growing into tens and hundreds of billions of dollars of revenue scale. So, you know, I'll, I'll put it, put it that way.

• 39:05Speaker 00

  Also, I think the retention numbers matter a little bit less when the top of your funnel is 800 million weekly active users. I mean, you're not selling to 15 people, so you need to keep 10 of them. You have the whole world essentially as a potential customer, and OpenAI has done a lot of work in India, Deedy, to build out ChatGPT Go. And then they also launched a Indian language model benchmark recently, which I felt was indicative of where we're seeing a lot of AI demand, which would be, in this case, India.

• 39:31Speaker 01

  India is an interesting story, especially when it relates to ChatGPT. I'm really, really curious how this plays out, because, you know, I'd worked at Google prior to this, and we were focused on a lot of the India efforts. And one thing that's really, really surprising, was surprising to me then, is the India internet view is very different from what the American view is. So, for example, it was kind of like, I took it for granted that search is always the biggest Google product, and then there's, you know, maybe a YouTube, Maps, things like that. In India, YouTube was far, far ahead of search as a product. In fact, people didn't see search as the same kind of valuable utility, even though it was a really high number, as people in the West would. And so I think what's

• 40:14Speaker 01

  really going to be interesting for ChatGPT is, people are adopting it, but language and typing out queries is not fundamentally as widespread in that market as it is in, say, an American market. And so it'll be super interesting to see how that plays out. I think video, audio, these sorts of multiple languages are going to be a really interesting phenomenon when it comes to AI in India. And also, you know, willingness to pay for software in India is far, far less than in America. So we'll see.

• 40:42Speaker 00

  Well, I mean, that'll change with time, but I do have the chart you were talking about. Here is the smile curve from ChatGPT. And Deedy, just be a VC for me for a second. When you see this, what's the first thing you notice? And talk to people as if they can't see the chart, because a lot of folks are on audio as they hear this.

• 40:57Speaker 01

  Okay, so let me try to describe this. When I had tweeted this out a while ago, I called this the product manager's wet dream. I think this is absolutely, when you're a product manager, you look at things like cohort retention charts. What a cohort retention chart is, and I'm not going to put all the caveats in here, is if I have 100% of users on day zero for a given week, How many of those users return to PayMe or return to the product, there's two kinds, on week two, three, four, and down the line? Now, when you look at those weeks stacked up over time, what you're really looking for, both as a PM and as an investor, is you want the curves to look like they're going up. You want more retention. So from month one, if you're looking at this graph,

• 41:42Speaker 01

  it used to be a 60% at month one, and you see this go up over time for every incremental week, and now it's about 90%. And this entire graph, not only does it sort of decay over time, but then you see what's called a smile curve, which is people actually come back and pay more. So after they may have churned, they may have canceled, they come back and they go like, the same user comes back in maybe month 10 and goes like, you know what? I missed that. I need ChatGPT again. I'm gonna go and pay more. And a smile curve is the most beautiful one-line description of I have product-market fit. People will churn and go like, nah, just kidding. I'm back. And that's what's beautiful about that graph. It goes up and to the right,

• 42:27Speaker 01

  up and to the left in this case, actually.

• 42:29Jason Calacanis?

  And that was for Gemini's product?

• 42:31Speaker 01

  This was for ChatGPT.

• 42:33Speaker 00

  ChatGPT, we have a Gemini chart here, Jason.

• 42:36Jason Calacanis?

  No, it's fine. It's just impressive to see that the brand is so strong. This would go back to the sampling thing we were talking about earlier. People like will start using a product, and then they forget they used it. And then six months later, a year later, they go to it and it's like, oh, you already have an account. Oh yeah, there was the project I worked on. Yet now I'm ready to pay for it because the product has proven itself. That is the one strange thing about this moment in time and this technology wave is that so many of the products are providing so much value that people will pay for them. And to think like...

• 43:15Jason Calacanis?

  You know, prosumers, you know, content creators are willing to just buy 10 tools a month for 15 to 150 dollars each. Like it's just 10 years ago, it was like pulling teeth to get them to pay for anything. They were just like so cheap. They, you know, I'll just figure out a way to do it for free. I'll use open source software if I have to, whatever. And now they're just like, yeah, I'm making money. I need to, I need the best possible tool. I'm not trying to save money. I'm trying to make better product.

• 43:59Speaker 00

  I want to bring up something that we're hearing from a lot of launch founders in the accelerator or at Founder U. There's a lot of reports that the bar for pre-seed is just getting higher and higher and higher. And so people are kind of curious for you guys to answer. What is a reasonable set of venture expectations for pre-seed companies? And people are particularly asking, why is there so much of a revenue expectation for companies that used to be at that stage? Couple of founders and an idea. And Jay, I want to start with you on this one. Current expectations and why things have changed.

• 44:31Speaker 03

  Yeah, it's interesting. I think

• 44:35Speaker 03

  this whole AI boom has masked the fact that it's actually a tough, tough environment out there for everybody else. And so if you think about kind of a lot of the capital that kind of rushed in into the industry, and these include non-traditional sources from private equity firms to sovereign wealth funds and whatnot, that we're trying to get into the act and that kind of culminated at the peak of the bubble in 2021. A lot of that money has actually kind of gone away. And so there's actually, as Jason pointed out earlier, a lot of the seed funds or pre-seed funds that were actually funding those kind of opportunities, they're having trouble raising their funds.

• 45:16Speaker 03

  Right? So they're having their challenges. Not a lot of pre-seed seed funds are actually actively investing as they were just two, three years ago. And so obviously the funding environment for those startups that are just coming out and pre-seed is obviously very, very challenging. And so, you know, even for us, when we launched in 2021, the quality of the companies that we're seeing then versus what we're seeing today, and the quality of the deals in terms of bang for the buck valuations that we can get, it's so much better now. I mean, we have invested alongside with, you know, you guys at Launch.

• 45:52Jason Calacanis?

  Yeah.

• 45:53Speaker 03

  In a profitable one million AR company at sub twenty million post-money valuation. Right? And this company has grown five X in the last, you know, several months. So there's some really, really good companies out there. And so if you're an investor and you have the capital, you're going to be picky. You're going to pick and choose the companies that have great product market fit, great background of the founders that are actually showing traction. And I don't necessarily have to take the risk of free revenue opportunities because I can actually validate. My due diligence, basically, the market does for me. And I love it.

• 46:27Jason Calacanis?

  Yeah. It's like there's zero to one, and then there's zero to one million.

• 46:31Speaker 03

  Exactly.

• 46:31Jason Calacanis?

  These are like two different proof points, like zero to one, you know, you got one customer or whatever, or you launched the product. Like zero to one million, you can't really fake, right? And you are a function of your opportunities. So if there's no companies, you know, in the seat, stage knocking on your door with a million dollars in revenue, well, by definition, you're going to invest in them to help them get to a million. But if there's twenty who've knocked on your door this week and they all have between a half million and two million, well, now you're going to make the best choice out of that group. And I've been trying to explain this to founders who were lollygagging, who were taking their time, who didn't have a sense of urgency.

• 47:12Jason Calacanis?

  And then they met reality and they said, well, I don't understand, like I was able to raise money for my last startup and I'm further along this time. And I'm like, you are assuming that you're competing against your former self. You're competing against another group of founders who are coming, who have a company that went to sixty million in revenue in this amount of time. Sure, the valuation's much higher. But they've eliminated a ton of risk. So it's very much like the public markets today. If you've got a company that has very low margins and very slow growth, and you're up against Uber, or Coinbase, or Google, or Facebook, or Google, or Amazon, and people are looking at those companies, wow, these companies are growing revenue

• 47:57Jason Calacanis?

  on big numbers with great products, and they have incredible margins, and they have momentum and network effects. There's a flight to quality. That same kind of thing has happened even as early as seed now and Series A.

• 48:10Speaker 01

  Yeah, I want to jump in here and maybe say like, there's almost like, there's two stories of founders really. And if you look at the data, it becomes super clear, which is the volume of capital deployed in venture is at the highest it's ever been. But the number of deals that that capital is chasing is actually shrinking right now. I don't know the exact number. But on one hand, you have founders who are like, holy shit, stop knocking down my door, trying to fund me. And on the other hand, especially at the earlier stage where the metrics are fewer and far between, where founders are like, you know, I think I'm awesome. I think this product is working. Why is nobody taking my call? So yeah, I think the data does support that as well.

• 48:52Speaker 00

  All right, just backing up Deedy really quick here with some data. Here's a chart from the KPMG Q3 Venture Pulse. And as you can see here, I'll just sports cast a little bit. It's a chart showing how much money VCs invest and then the deal count over time. And deal count peaked in late 21, early 22, and it's been in kind of a secular decline since then, even though capital has returned to the market. So we're seeing a return of dollars, Deedy, but not a return of deals, which I presume that means your no percentage is going up over at Menlo.

• 49:23Speaker 01

  Yeah, I mean, look, Menlo specifically is

• 49:27Speaker 01

  There was another beautiful graph Peter Walker put out on like, you know, fund returns based on the strategy, whether it's a spray or pray or a select fund and selective fund. And I think Menlo is still very traditional that way. Like, we like to pick, we like to do lower volume, we like to work and spend time with our founders. This is why we do lower volume deals. The reality as like, basic eighth graders in math will tell you is if you do a more concentrated strategy, the variance is much higher. If you do a spray and pray strategy, the variance is lower. What is not so obvious is typically, I believe that what that chart said too, is a spray and pray strategy has a lower median return than a concentrated strategy. So, obviously at Menlo, we hope that we're not at that median. We hope like,

• 50:11Speaker 01

  we're definitely an outlier when we're doing those select deals. But man, it's not easy, right? Like, everyone is chasing those select founders. So, how do you go and actually prove that you can find them and then add values? I think that's still very tough.

• 50:28Jason Calacanis?

  And I think Jay, you have to make sure you don't overpay. Absolutely. Just to, you know, explain to founders who are listening here exactly how hard our job is. Then founders want to break the record for their accelerator and get the highest. They want to get 1 million more than the last founder, you know, set up a poker game they got, and they're in a competition. Which means then we own a smaller amount, which means then on the exit, we get less to return. And so, the game becomes harder and harder in terms of eventually getting a return for your LPs. So, it's, I would say, perhaps the hardest job in the ecosystem is being an investor. I think it actually is. Now, you can't cry

• 51:11Jason Calacanis?

  for them because they get paid huge salaries, you know, and it's, it is a pretty great job when you have the diversification of 10 bets or 30 bets in your fund, whatever it is. But you don't have to sit there grinding your teeth at night, but this is the best time possible to be an entrepreneur who can execute and who's revenue focused. If you can grow your company, you know, I was telling the founders in, you know, when I was out here on my trip, they said, who gets funded? I said, the person who's growing 20% a month. Person who's growing 5% a month. Today, because there's so many deals to look at that people are starting, you have a choice between which high-growth company you want to invest in. Exactly. That's a very different world than it was, you know, 10, 20 years ago.

• 51:56Speaker 00

  But Jason, explain to me how you said earlier that we're seeing VCs kind of give up and walk away because maybe this isn't the place for them. And then, you know, ever since we've had that point from you, we've talked about how there's so many great companies to invest in, they're growing faster, AI payment tailwinds. Explain the disconnect between those two points for me.

• 52:13Jason Calacanis?

  You know, it's just classic supply-demand. There were far, far too many VCs and we saw that break when the private equity folks, as Jay referenced earlier, came down and they started competing and they didn't do due diligence, they just said, oh, if any of these firms do a deal, we'll just do, we'll assume that that company's been successful and we'll do their next round. Just think about how crazy that is. That assumes that, you know, if our firm has a good track record, or DD or Jay's have good track records, there's a person coming in and just blindly betting on that when we all know that we make mistakes, that we are far from perfect in our decision-making. We, in fact, if you ask most VCs, which company did you think in your portfolio was going

• 52:57Jason Calacanis?

  to be the breakout and then which one actually broke out, they wouldn't be able to tell you at that time in the first year. So there was just far too much supply of capital, but, and there's still a large number of companies, that's true as well, but if you're going to put larger amounts into the winners, that means there's less left over for the rest of the kids in the class, which if you think about it in Darwinian sense, if this was, you know, like an ecosystem and these are all different species, what we're now seeing is the species of founders who can generate revenue are going to get a lot more of the calories in the ecosystem.

• 53:41Jason Calacanis?

  They're the sharks in this, they're the apex predators. And if you can't get revenue... You know, you just may not be able to get the calories.

• 53:49Speaker 03

  I mean, one way to think about it is, remember, we had this unprecedented bull market leading up to 2021, right? And if you were, let's say, an entrepreneur turned angel investor that was betting on YC companies that were almost guaranteed to raise the next round of financing, and you would have automatic write-ups, it was a good time to play. And those results culminated in launching a micro VC fund, right? And life was great. Life was easy. Just continue betting on those companies, right? And now the world has changed. We're living in a different world. You know, there was a time where, you know, the tide would raise old boats. It's become a lot more difficult now.

• 54:30Speaker 03

  And so the ones that actually have experience, have the data, pattern recognition, have a reputation with the entrepreneurs are still going to be able to find those opportunities. But if not, and you've been part of that crowd, then you've just been kind of riding that wave, it's a lot harder. So those are the folks Jason, I think, refers to that are not going to be able to raise their next fund because they haven't returned capital.

• 54:53Jason Calacanis?

  Yeah. And they weren't doing, they were blind betting in a lot of cases. They just had a network, they bet. They thought they were experts at this because the markups happened.

• 55:03Speaker 03

  Exactly.

• 55:04Jason Calacanis?

  But then the fundamentals weren't there. And then they did all of their bets, their micro fund, because I was LPs and some of them, they might have done all their bets in an 18-month window when the valuations were peaking. So there was no time.

• 55:18Speaker 03

  Diversification, yeah.

• 55:19Jason Calacanis?

  No time diversification. Thank you, Jake. And so that was one of the things I learned from Ruloff and Doug Leoni and Bill Gurley, the people who kind of mentored me when I was coming up, is like, hey, take your time. You don't have to put it all to work in 18 months. You take, if you deploy over three or four years, which is typically how funds used to work, four years, not two, or 18 months, or some people would deploy in a year. You would have, you know, some, you know, time diversification as well. And they didn't have that. And so here we are, folks.

• 55:50Speaker 03

  And we all know, one of the primary drivers of, you know, venture capital return is really timing, right? You have to be in the game at the right vintage so that you can exit at the peak and go in low. And it's just the way it is.

• 56:05Jason Calacanis?

  Yeah.

• 56:06Speaker 00

  Jer, I wanted to talk to you about entry prices because everything that I'm seeing from data sources indicates that we're seeing essentially median pre-money evaluations get back towards where we were in 2021. But we've also discussed quite a lot about how companies have more revenue, they're growing more quickly. So does it kind of net out okay that we're seeing higher prices today because the companies are of higher value and therefore just going to be more durable to grow into those prices?

• 56:30Speaker 03

  I think it is. I think, you know, it's become a little bit easier, quite frankly, in terms of discussing valuation because now we can actually base the valuation on a revenue multiple. Right? And as we mentioned earlier, we're more than happy to wait to actually see some early traction and give a fair valuation based upon kind of what the, you know, generated revenue or AR at that particular point in time is, or at least what the expected one would be 12 months from now. And have a reasonable conversation about what the appropriate multiple is instead of just trying to draw numbers out of thin air. So while I believe median valuations are kind of normalized somewhat, the underlying revenue growth is actually much better these days.

• 57:15Speaker 03

  And so thus we're getting more better, I would say, better priced opportunities.

• 57:20Speaker 01

  Maybe I'll add some color to that.

• 57:22Speaker 00

  Oh dude, please.

• 57:22Speaker 01

  Like, I think the median valuations, I agree with Jay's point, but you know, what's interesting is if you look at the 95th percentile, that's a whole different story. Right? Like the median valuations look like it's kind of reasonable. Oh yeah, look a little uptick this year. That's nice, but things are growing. I agree. On the extremes, I mean, it's, it's crazy out there, right? Like you have multiple companies with no revenue raising at a billion dollars. You have, you know, I've had in this past week, multiple people say, we're AI guys, so I need a hundred million dollars because here's this cool result. No business, no nothing. And I'm like, this is a recurring phenomenon. So, you know, and, and some of them are going to raise those rounds.

• 58:04Speaker 01

  Whether, whether I say yes or no. So I do think there is also a bit of a story there as well. At the median, I think, yeah, it's fine. I mean, look for growing so fast. If you're, you look at Anthropic, right? Like Anthropic is literally the fastest growing software company of all time. Zero, 100 million, a billion, and then this year tracking to 10 billion. These are made up numbers. Like you can't tell people.

• 58:29Speaker 00

  You gotta show this chart. I mean, this is.

• 58:32Jason Calacanis?

  I've seen it. It's crazy.

• 58:34Speaker 00

  Here is the chart from our dear friends over at the information, giving them some credit of revenue growth from both OpenAI and Anthropic. This comes from a story, guys, that came out this week, indicating that Anthropic has raised its revenue projections. And as you can see here, it's grown from incredibly little to quite a lot. 1 billion ARR at the start of the year to 7 billion at the last thing that I heard, though, Deedy, sounds like 10 billion might be the new number?

• 58:59Speaker 01

  I mean, around that amount. I mean, I'm following the information leaks. These are not investor comments. This is how much information I get about Anthropic. But, but look, I mean, the reality is Anthropic has always underestimated their own numbers. So this projection is not as wild as it might seem. If you, if you know the history of how often they have undershot their actual goal, which is every single time, every single year, they've undershot their own goals. So, you know, I think, I think it's, it's just insane how much growth there actually is for the absolute top companies. One last thing I want to say, Jason said the hardest job is, is in investors. That's absolutely not true. The hardest job is definitely of founders.

• 59:46Speaker 00

  I think maybe he was saying like, chance of success is.

• 59:49Jason Calacanis?

  Yeah, I'm talking more about like the, the compensation, but yeah.

• 59:54Speaker 00

  This is going to get clipped and put on VC brags, I can tell.

• 59:58Jason Calacanis?

  No, no, no. There's two different things. So if you really want to make the big money, be a founder for sure. And then joining these great companies is a clearer path to compensation. But VCs don't have to work 996. And they're not. I mean, yeah, that's, that's very true, I think.

• 1:00:15Speaker 00

  What, what are VC hours? If engineers have to work 996 today?

• 1:00:21Jason Calacanis?

  I would say I probably work 60, 70 hours a week. And people on my team work 50 to 70.

• 1:00:26Speaker 00

  Deedy, how much do you work?

• 1:00:27Speaker 01

  I, I don't not work. Like, I think I work all the time. I don't think the work is as intense as it was, that maybe when I was at a startup. But, I mean, you know, look. Like I'll be just candid, like I'm I'm new in this industry like and I think like the only thing that I have to add is is is is hours. That's like the only thing I can control is how much information I'm ingesting, I'm able to process and then helping the people that I'm trying to help. And so, you know, that that that means that that frankly, like I will like I will return texts at 1 a.m. I am up working all the time. Um, I I don't have a family yet, and so at some point, maybe that will change. But right now, like this is this is my life.

• 1:01:05Speaker 00

  All right, Jay, just because we're doing this apparently, how much do you work? And are you working the uh, the 10 to 4 that I hear VCs love to rock?

• 1:01:13Speaker 03

  Well, I I think I think as you know, Jason alluded to, I think, you know, all of us have to be constantly on, right? So if you actually count the hours that you're off, you know, you're sleeping, you know, bathroom breaks and whatnot. Um, maybe you you have some, you know, private hobbies that you enjoy. I love to watch movies. I'll play some games once in a while. But excluding all of that, like I'm constantly on and, you know, uh, everybody knows this, but I'm have this kind of bad habit. Like I have a zero inbox habit, so I will have to clear my inbox before going to bed. And the first thing I do when I wake up, grab my phone and go through my emails and texts and messages and whatnot.

• 1:01:55Speaker 03

  And so I think most functioning VCs are basically trained to work like that because that's the expectation. You know, you kind of have to keep pace with your founders.

• 1:02:05Jason Calacanis?

  You have to keep pace with the founders and then you have to, the deals are getting done so quickly now that, you know, if you need time to do diligence, well, that's on you. You you better move quick because a founder can just say like, yeah, you know, um, we don't have time to wait. We'll talk to you in the next round and if you are able to get in the next round.

• 1:02:26Speaker 01

  So you really do need to. On the diligence I can share, um.

• 1:02:29Jason Calacanis?

  Yeah, go ahead.

• 1:02:30Speaker 01

  You know, there there was an interesting anecdote, I'm obviously not going to name the people involved, but you know, there was a a a close friend founder of mine who was raising this round and um, and and, you know, at some point he was like, hey, can you look through my data room? Like, tell me if I'm doing things right. Um, this is kind of my first rodeo doing this kind of round. Um, and and I look through it and I give him some feedback at the end of the day and he goes like. Hey man, we already have term sheets. I'm like, dude, you didn't have, you didn't have a data room. Like, what do you mean? Like, you didn't have your financials on there. What do you mean you have a term sheet? He's like, dude, I'm just telling you what happened, man. Like, I, I, I don't know how, I don't know what I did, but it, it is actually true that because of the speed of these deals and speed is a differentiating factor

• 1:03:14Speaker 01

  in order for many people to win deals that, um, look, there are some cases where diligence is just not happening. That's the reality.

• 1:03:21Speaker 00

  Deedy, we just, we just went through a lesson in 2021 about not doing diligence, investing too quickly, and assigning unicorn valuations to revenue-free companies. What the f are we doing now?

• 1:03:32Jason Calacanis?

  FTX, I mean, you're speaking of Sequoia and other firms. A lot of them just drafted on each other's supposed diligence. And it is, when the market gets hot, and I've lived through now a couple of bubbles, like three, I think, four.

• 1:03:48Speaker 00

  Yeah.

• 1:03:48Jason Calacanis?

  And I, I always see the same thing. People lack discipline, so they don't do diligence, right? Um, so they suspend disbelief. Okay. Number two, they get really greedy, so they don't take the opportunity to liquidate positions when they maybe have the opportunity on. They hold on too long, et cetera. Um, and then I see people actually acting, um, I see people acting unethically. And that happens in a bubble as well. And you'll see this, ZD, like, you, you'll start to see people who re-trade deals on either side. It could be founders, it could be entrepreneurs. You know, you'll have a founder sign a term sheet for a convertible note at one valuation, and then another VC pays at a different valuation. They're in the same round.

• 1:04:32Jason Calacanis?

  One person has MFN, another person has a side letter. Nobody knows the complete picture of what's going on. And so we've had to unravel some of these things that have occurred. I don't recommend anybody do anything other than standard documents and being upfront with everybody. Because when people find out that you gave a special deal to one firm or that somebody had some special side letter or whatever it is, um, and they might have MFN in their documents, you may have to go correct that in the next round and the valuation's gone up now. Yeah, just always standard documents and, and don't play any games. Um, you know, and, uh, yeah, just best advice. People get very weird. And then the other thing that happens is people, you know, um, sometimes uh, they forget who helped get them here. You know, we'll have

• 1:05:16Jason Calacanis?

  You know, and you see this every time there's a bubble. People will be like, oh, you got an amazing deal. You have to give up your board seat. You have to give up your pro rata. You have to give up your information rights. We invested in you three years ago when nobody else believed in you. Why are you asking us to give up all of these rights? And the founder will say, oh, the V C who was doing this round is saying if you don't give them up, they're not going to do the round. And then I, you know, all kinds of shenanigans occur. Just being standard and being upfront and like, you can really see people maybe start playing short term games instead of long term games. I'm a long term game guy, like really like the long term game of everybody just being respectful and not trying to get over on people. I saw there was somebody talking, things Jason Lemkin said he saw like a couple of founders

• 1:06:01Jason Calacanis?

  just abscond with the money. So when we get these peak moments and then people don't do diligence, you could have interlopers come into the industry and everybody knows those stories as well.

• 1:06:12Speaker 00

  Dee Dee, are you see, I'm sorry, Jay, are you seeing similar levels of malfeasance and poor behavior as we are in, let's say, a hot market?

• 1:06:22Speaker 03

  I mean, fortunately, I haven't directly experienced as much, but I'm sure it's out there. We've heard, you know, stories from our colleagues out there. I do think that the the level of FOMO is getting to kind of bubble levels for sure. I've heard stories now of high growth founders being chased at airport security lines, people showing up unannounced at doorsteps with term sheets. I mean, things are getting pretty frothy again. And so, um, you know, again, understandably, nobody wants to miss out on the next, you know, OpenAI, Anthropic, lovable, whatever that is, but it's getting out of control.

• 1:07:03Speaker 00

  All right. So one way that founders create FOMO, and I actually have a tweet here from Dee Dee, is by doing intelligent work on social media. This is a tweet from Dee Dee saying, this is the ultimate TikTok growth marketing guide every Gen Z founder is using. And one thing I'm really bored of is expensively slickly produced launch videos, Deedy. But it seems that because everyone knows you can now go from zero to 100 million ARR faster, they're more desperate to grow revenue from kind of day zero versus maybe a little bit later when they have better fundamentals, economics. And you're kind of tongue in cheek playing into this here, but is it healthy for the startup land to index so heavily on, I would say, like in-group virality over on X or TikTok?

• 1:07:45Speaker 01

  Um, I actually like, don't mind it. I don't think it matters. I think the problem really is when the product does not follow that marketing, right? Like, the fact that you're doing like viral distribution campaigns is immaterial to me. Look, X is a pretty terrible place to do viral distribution campaigns in terms of the volume and audience you reach. So I think founders doing it on X are maybe more clout chasing than business chasing. Look, the real audience is probably on the other, like Instagram and TikTok and Reddit and things like that. And, um, and I think that's fair. Look, like if you're trying to grow your product really fast, like absolutely, you should be employing all the tricks of the trade to do that. If you do that and your product is absolutely shit, then, then you're gonna have a hard time, right?

• 1:08:29Speaker 01

  Like, it's just gonna, you're, you're gonna try to run behind something that you can't keep up with. So that's not great. And on the flip side of this, what's super fascinating to me, it was fascinating to me in the last couple of weeks, actually, is I've been doing this all the time. I suggest you guys do it if you have like a lot of free time, but, um, do you know how, we know that LLMs and ChatGPT, often when you ask it a question, it will summarize from a bunch of web results, right? And a lot of those web results happen to be Reddit results. And so there are entire companies built on spamming Reddit with high-quality content that's completely AI-generated, where they sneak your company that they're trying to sell in there in ways that, trust me, like, most humans, including myself, would not

• 1:09:14Speaker 01

  know that this is fake at face value. And so what's happening is like, it's not just the TikTok and Instagram stuff, it is also like this insidious nature in LinkedIn and in... Reddit where there's these not only sponsored content, but just automatically algorithmically generated content from like basically bot farms of anonymous accounts that are influencing people's behavior.

• 1:09:36Jason Calacanis?

  Wow.

• 1:09:37Speaker 01

  And then slop is an interesting terminology. I actually had this interesting conversation the other day where like the real question is it is only slop when we know it's AI generated. But the reality is in most cases, people don't know.

• 1:09:49Jason Calacanis?

  It could just be a stupid person or just an unsophisticated person reading it, not realizing it's slop.

• 1:09:55Speaker 03

  Well, it's not only that, though. The quality of some of these short form video creation is mind blowing. I I challenge you to notice a difference. Just a year ago, two years ago, you could tell, right? Everybody's, everything is still in, just the mouth is moving. Nowadays, it's so sophisticated, multiple camera angles. I mean, look, the the point that was made earlier about, you know, viral growth generation, some of the smartest guys are using these AI tools to do it. Think about the fact that instead of having to record these short form videos multiple times a day, you can actually create a video likeness, virtual likeness of yourself using AI, having scripts that are auto-generated using generative AI, and just having them

• 1:10:38Speaker 03

  automatically posted to a specific targeted audience that again, you use agentic AI to specifically target. We just closed an investment in a company, and I've never done this before. They are a AI chatbot company. And again, why would you invest in an AI chatbot company? Because they're changing the game. And the way they fundraised, they actually found investors all using their own tools, the due diligence, the pitch deck, and even all the due diligence questions, you would come to their website and you would be able to actually utilize their own chatbot to generate the engines. I love that. And so, you know, there are so many AI tools these days that are making every step of the startup business process so much more efficient.

• 1:11:20Speaker 03

  You know, if you're not taking advantage of that, I don't think you're doing your job right.

• 1:11:25Jason Calacanis?

  What's the company that you just made an investment into?

• 1:11:28Speaker 03

  Uh, this is a company called Lizer. Shout out to Lizer.

• 1:11:31Jason Calacanis?

  L I Z?

• 1:11:32Speaker 03

  L Y Z R.

• 1:11:36Speaker 00

  If you want to look it up, it's lyzr.ai if you're listening in to this live. I have not heard of this company.

• 1:11:43Speaker 03

  You'll be hearing about it.

• 1:11:45Speaker 00

  Okay.

• 1:11:45Speaker 03

  But I just love the ethos that they were basically eating their own dog food in their fundraising process. And they have a little bit of a shout out on a LinkedIn post to announce to other founders to utilize their own service to be able to actually raise your series C, series A.

• 1:12:02Speaker 00

  I want to loop back to what Deedy said about insidiously, basically SpawnCon being put into human forums. This is kind of the dead internet theory, Deedy. Are we at risk of reaching a tipping point in which we've automated so much content generation that we wind up in a world when it's just bots watching bots and humans are just left by the wayside? And I ask because I was expecting a more negative reaction to the Cluely-style hype videos from y'all, but instead, very much a different response, which is good, why you ask questions, but it makes me worry that if you guys are this positive on it, we're going to see so much of it that it could become a preponderance.

• 1:12:39Speaker 01

  I think, look, it's just not my position to say, right? Like, if I was at Google or at Reddit, I would want to tamp down on this. Absolutely, right? I don't want my platform to be spammed with AI-generated content. But on the founder's side, like, look, if that is an avenue that is generating engagement for you, I can't complain if they want to use that to grow their business. So I really do think that, like, I hate the internet theory. I hate the fact that this exists. At a philosophical level, I don't think that should happen. You know, there's this, there's this great graph called, which people are calling the new flippening.

• 1:13:21Speaker 01

  I don't know exactly how they got this data, but it shows how much of the internet's content is human-generated versus AI-generated over time. And what does that mean, like, for the future of how even, like, these great products like ChatGPT work? Like, it's just going to be a loop of eating its own slop and then churning out stuff that is not human-generated at all.

• 1:13:45Jason Calacanis?

  It means an opportunity, the opportunity for us as humans to, in some way, you know, authenticate that the content we're making is in fact us and not AI. And I think what you're going to see is like in Star Wars when they say, hey, we don't want your kind in here on Mos Eisley, and they don't let the droids into the bar. That's happening now. No AI. So people are now putting on their movies or, you know, on their stories, no AI. This includes no AI. There's no AI added to this. So it's going to be kind of like acoustic or organic food. People are going to start labeling things human only or 100% human as a reaction to this.

• 1:14:26Jason Calacanis?

  Now, I love the storytelling, like so Cluley, I'm not sure if their business will be successful or not. We've had the founder on here, he's super spicy, but they know how to storytell. And storytelling is important because you, the ability to tell a story is something that Elon does exceptionally well when he runs his companies. Steve Jobs does exceptionally well when he does his stories. Travis and Uber did this exceptionally well. They told the story of why this needs to exist. And to do it in a short form video and make it punchy, because today's tools allow you to do that. If that explains your value proposition to users faster than tool tips in the app or word of mouth, great. Now, we have a company, Howie, we're investors in, we seeded the company.

• 1:15:10Jason Calacanis?

  And they just did like their own launch video about like doing meetings and a lot of VCs use this Howie software to do meetings and book them and they've got human in the loop to make sure it does what it does correctly. That ad just added like a lot of brand value to them. It added like a vibe of like this isn't just a regular service. This is like, we actually care enough about the service to tell the story in a really interesting way. I kind of like it, actually. It's kind of the difference between somebody who makes like a cheap eight dollar, you know, three dollar t-shirt merch that nobody's ever going to wear. And then somebody makes some really interesting, great piece of merch that you actually use in the world.

• 1:15:55Jason Calacanis?

  It's kind of like that. But I love some of these launch videos. I go, I go watch them all day if they're done well.

• 1:16:01Speaker 00

  All right. Well, can't be wrong on that one. Guys, I have to take us to a conclusion here. We could talk for the next three days. I know, but I do want to give each of you a chance to shout out a portfolio company. Tradition that I do these. So Jay, who is your current favorite child and why? Oh, no, no, don't ask.

• 1:16:16Speaker 03

  All of our babies are cute and beautiful, but I do want to give a shout out, since we've talked about Higgsfield already, to Abacus and Jason, I hope they're on your favorite list as well, but I just love the fact that this entrepreneur bootstrapped his way to a million dollar ARR. And as we all know, while every consumer out there has now tried some form of AI agent, whether it's ChatGPT or whatever, there are certain enterprises and certain industries where you're literally banned from using it, right? And so I think the fact that in the financial industry or the healthcare industry where your data cannot leave the print, you have companies like Abacus that come from the industry, know these pain points,

• 1:17:01Speaker 03

  and they've built a model where they basically have created kind of a, I would say, a AI foundry service in a way, where they enable the enterprise customers to basically train on your own data. They provide all the tools and the infrastructure using open source models, and they are able to even provide a application generation platform where you can build your own in-house version of ChatGPT to be used for in-house compliance, rule lookup, policies, and all of these things that, you know, would be great to have on your fingertips. They've screened out for hallucinations and whatnot to make sure it's 100% accurate.

• 1:17:41Speaker 03

  And once it's been proven and tested in an internal environment, guess what? They're going to try it with partners and customers.

• 1:17:48Speaker 00

  Yeah.

• 1:17:49Speaker 03

  And so it's just a great, great model and just love the greed of the entrepreneur to actually start this from scratch, bootstrap it all the way to a million dollar ARR, and now they're off to the races.

• 1:17:59Speaker 00

  GoAbacus.co is the URL if you want to check it out. Deedy, who is your favorite portco and why is it OpenRouter?

• 1:18:07Speaker 01

  Well, I don't think OpenRouter needs another shout for me, given that Elon tweets about it like five times a day. But

• 1:18:16Speaker 00

  I mean, it's got the best charts online, man. I love it.

• 1:18:20Speaker 01

  I'll talk a little bit about OpenRouter. I'll maybe do an actual shout that I think deserves, uh, needs it more, maybe. Um, OpenRouter, look, fantastic business. It's part of my thesis that if you are a, if you can be a product-led growth company, you must be a product-led growth company. There's various versions of an OpenRouter that could have gone and sold B2B to enterprises, but they were, are absolutely going to be steamrolled by this massive thing that has awareness in the, in the broader world, and then, and they are. So, love that company. It's fantastic. We're going to live in a multi-model world. People want to know what's happening. There's 20 plus great models and hundreds of other models.

• 1:18:56Speaker 00

  Sure.

• 1:18:56Speaker 01

  With different providers, and people want to know which providers are doing what and how can I access the different models?

• 1:19:01Speaker 00

  But the company you love even more is?

• 1:19:05Speaker 01

  I love OpenRouter. They don't need my love anymore. They're, they're, they're, they're, they're kings. Um, Goodfire is the company I would love to shout out to.

• 1:19:13Speaker 00

  Ah, yes.

• 1:19:13Speaker 01

  And, um, and the reason, um, a little bit of the backstory on Goodfire is, look, it's a mechanistic interpretability company. That's a fancy way of saying brain surgery for AI models. And we don't really understand how AI models work. We don't understand how they think. We rely on them to give us thinking traces, which are poor proxies for what's actually going on inside their head. Um, and these are the top mechanistic interpretability researchers who started teams at Anthropic, DeepMind, OpenAI, who've come together to set out on this mission to really understand what's going on as, in, in AI models as it becomes ubiquitous. I think it's absolutely fundamental for society for us to understand this, because we cannot trust black boxes with, you know,

• 1:19:55Speaker 01

  huge decisions. Um, and I think they have tremendously cruel scientific breakthroughs that, um, they will announce at some point, that are going to be extremely valuable.

• 1:20:04Speaker 00

  I was excited about Goodfire if we got into deep tech, because I know that Jay's made some investments into robotics companies. And when I saw that they were an AI interpretability research company, I was like, yes, that. Um, but we got to move on. Jason, last question is for you. Who is your favorite port coat, or at least the one you want to shout out on the show?

• 1:20:20Jason Calacanis?

  Well, I mean, I could have done Abacus, but I'll do a, a different one, um, and spread the love. Next visit, AI. This is an AI-powered, um,

• 1:20:29Jason Calacanis?

  You know, a clinical note taker, except it works in a very specific vertical, which is psychiatry. And that has very specific note taking details, as you could imagine. And this is a great co-founding team with a psychiatrist and an AI specialist. And they very quickly got this to work. And you can imagine psychiatrists who are doing counseling or just sessions and prescribing drugs and a lot of other modalities. They spend like half their time, a third of their time, just doing paperwork. And this stuff has just nailed it. The fidelity, when you go after something narrow as a startup and you get it right, it can really pay off.

• 1:21:13Jason Calacanis?

  And so this is one of the things we try to teach people in the accelerator. They're concerned, oh, VCs are not going to be impressed because it's such a small idea. Like, trading a stock for free is a very small idea called Robin Hood. Like, watching your taxi come to you on a Google map and paying for it is a very small idea, but it's a profound idea. That then things were built on top of, like, Robin Hood is not just trading a stock for free now. You can get margin loans, you can do crypto, you can do prediction markets.

• 1:21:44Speaker 00

  You can get a mortgage, Jason, they do mortgages now.

• 1:21:47Jason Calacanis?

  Okay, I wasn't even aware of that one. But, you know, it's, I always like this laser focus. I tell people, like, you can turn on a flashlight and just like, kind of, point in the forest and like, yeah, we're going to do something out there. When you take the laser pointer, you're like, we're going to do that. See that thing right there? Right there, that's what we're doing, that laser. We're going to do it really, really well and make it perfect. So the customer has no choice but to use this product and they love it more than anything they've ever had. That's kind of the magic in that year zero or year one. Just do one thing better than everybody in the world that makes that customer just so delighted, they won't shut up about it. And that's when your PS score gets like nine or 10. And so everybody wants to do, you know, the co-pilot that transcribes what you're saying.

• 1:22:32Jason Calacanis?

  But, man, just getting in there and knowing that this person is taking this ADH medication on this level and it's this code and it's this type of ADH medicine. It's not the generic, it's a specific one with a specific one. Like, you gotta get that right. You can't get that wrong, right? Or else it's just not worth using. It's not like hallucination when you're trying to figure out what movie to watch this weekend. Favorite Paul Thomas Anderson, Jay, your favorite Paul Thomas Anderson? Speaking of movies, you say you like movies? You have a, are you a Paul Thomas Anderson guy?

• 1:23:03Speaker 03

  Yeah, the most recent one, what is it? There's Leo.

• 1:23:07Jason Calacanis?

  One battle after another.

• 1:23:08Speaker 03

  Yes, oh my god. I was on the edge of my seat the whole frickin' time. That was crazy.

• 1:23:13Jason Calacanis?

  It is like a three hour like.

• 1:23:17Speaker 03

  Oh yeah, it's an explosion.

• 1:23:18Jason Calacanis?

  It's a marathon and a sprint. It's crazy. Um, but it's, I, you know, my Paul Thomas Anderson favorite still remains The Master.

• 1:23:25Speaker 03

  Oh, of course.

• 1:23:26Jason Calacanis?

  Oh, that, that movie was. The Masters, that's next level. Dee Dee's looking at us like, how do you guys have time for this? We're from a different generation. We cared about cinema. Alright, everybody. See you next time.

• 1:23:40Speaker 03

  Alright, bye, everybody. This has been Twist. See y'all soon. This was so much fun, guys. Thanks.

• 1:23:43Jason Calacanis?

  Great times. Thanks for doing it, Jay. Thanks, Dee Dee.