Ferrari EV, Enhanced Games, Alcohol & Podcasting | Christopher Hale, Sean Henry, Eric Ries, Alex Atallah

(00:27) - Ferrari EV (40:58) - Enhanced Games (47:41) - Christopher Hale, a Catholic writer and former executive director of Catholics in Alliance for the Common Good, discusses Pope Leo XIV's recent encyclical on artificial intelligence, highlighting the Pope's emphasis on maintaining human dignity and responsibility in technological advancements. He notes the Pope's concern over delegating human decisions to machines, especially in contexts like warfare, and underscores the call for Silicon Valley to consider the ethical implications of AI development. (01:10:48) - Alcohol & Podcasting (01:17:21) - Sean Henry, co-founder and CEO of Stord, announced the company's recent $250 million funding round, elevating its valuation to $3 billion. He discussed Stord's decade-long development of a vertically integrated platform that leverages robotics and AI to enhance commerce, enabling faster deliveries and cost efficiencies. Henry also highlighted the launch of Stord Labs, dedicated to testing next-generation robotics and AI, and the company's international expansion into markets like Canada, Europe, China, and Australia. (01:31:05) - Eric Ries is an entrepreneur and author best known for The Lean Startup, which helped popularize iterative product development and rapid experimentation in startups. He is also the author of The Startup Way and Incorruptible, where he explores institutional trust, governance, and how organizations can remain resilient and accountable at scale. (02:09:45) - Alex Atallah, co-founder and CEO of OpenRouter, discusses the evolution of AI models and the importance of neurodiversity in AI agents selecting cost-effective tools for specific tasks. He highlights OpenRouter's recent $113 million funding round, led by Capital G with participation from existing investors and strategic partners like Nvidia, ServiceNow, and Databricks, emphasizing the company's commitment to fostering a diverse team. Atallah also addresses the trend of companies optimizing AI inference costs by utilizing multiple models tailored to specific tasks, leading to significant cost savings and improved performance. (02:22:45) - 𝕏 Timeline Reactions Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://www.youtube.com/@TBPNLive

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

• 0:01John Coogan?

  Watching TVP and today's Tuesday, May 26th, 2026. We're live from TVP and the Temple of Technology, Fortress of Finance, Capital Capital.

• 0:11Jordi Hays?

  We're back.

• 0:11John Coogan?

  We're back.

• 0:12Jordi Hays?

  A lot of complaining around the office this morning.

• 0:16John Coogan?

  Oh, yeah.

• 0:16Jordi Hays?

  Team was upset. They said two days is the perfect length for a weekend. Three is just too many.

• 0:24John Coogan?

  Too many.

• 0:25Jordi Hays?

  And so we're glad to be back.

• 0:26John Coogan?

  Back. And Ferrari's back with a new electric car.

• 0:31Jordi Hays?

  Are they back?

• 0:32John Coogan?

  That's what we're going to debate. They're certainly, they launched it. Ferrari launches a $640,000 Johnny Ive designed, glass clad, electric Speedster. They're calling it the electric Speedster. I was not, I, I.

• 0:49Jordi Hays?

  And that is the journal's word.

• 0:51John Coogan?

  Five seats. I wouldn't, I, when I think Speedster, I think smaller. I think two seats.

• 0:56Jordi Hays?

  I wouldn't.

• 0:56John Coogan?

  I think Porsche.

• 0:57Jordi Hays?

  It is quick. It is speedy.

• 0:59John Coogan?

  Well, have they actually released numbers on how quick it is? I know that they mentioned that it has 1,000 horsepower. We would assume that it's quick, but who knows? We don't have a Nürburgring time. We don't necessarily have a zero to 60 time. We will see, but we do have some good coverage from the Wall Street Journal.

• 1:16Jordi Hays?

  There is a zero to 60.

• 1:18John Coogan?

  What is it?

• 1:18Jordi Hays?

  I think they released it. It is more performant than I believe the Model 3. I will confirm.

• 1:24John Coogan?

  Model 3 or the Model S Plaid?

• 1:27Jordi Hays?

  Now, that's a good question, Joe.

• 1:28John Coogan?

  Because the Model 3 is not like base model.

• 1:31Jordi Hays?

  Zero to 60 in less than 2.5 seconds.

• 1:33John Coogan?

  Okay, that's not as fast as a Plaid. That's, yeah, that's, that's sort of surprisingly low or surprisingly high. Anyway, named after the Italian word for light, the loose will test, or is it Luce? Luce? Luce will test the appetite of the super rich as EVs have fallen out of favor in the United States. It'll be interesting to know where, when did this start? Because there has been a big shift and it happened somewhat quickly. It feels like it's been like the shift away from EVs happened over a year or two, but the design timelines for a product like this might be five years, might be even longer. So let's, let's set the table with the Wall Street Journal article and then we can go

• 2:15John Coogan?

  into your take, just so we have a little bit of context here. An electric vehicle big on glass, light and space. This isn't your father's Ferrari. On Sunday, Europe's most valuable automaker took the wraps off. Yeah, Ferrari has been a, it's a big company. It's a, it's been a successful, the market cap's been huge. Like it's grown a bunch. The acquired team did a great podcast explaining the whole history of the company.

• 2:39Jordi Hays?

  Stock is down 5% today.

• 2:41John Coogan?

  5% today, but it's still, what, what is it?

• 2:44Jordi Hays?

  It's a $62 billion.

• 2:45John Coogan?

  That's not bad for, for, I mean, I feel like a lot of other car companies are sort of beaten up and much smaller based on their, uh, their volumes.

• 2:52Jordi Hays?

  They're only down 30% over the last year.

• 2:54John Coogan?

  Okay, okay. Does that make an AI winner? Who knows? Uh, so, uh, named after the Italian word for light, the Ferrari Luce will test the appetite of the super rich for EVs when electric vehicles have fallen out of favor in the US, the world's top, uh, top market for luxury cars. Designed in partnership with celebrated Apple alumnus, uh, Johnny Ive, the model also represents a leap into a new technology built, uh, for a brand built over decades around the size, sound and sensation of traditional engines. The Luce will be among the most expensive Ferraris that aren't a part of a limited production run. So it's an unlimited production run. They will be making as many as there are demand for. They'll make a bunch. People will hopefully come and buy them. If they do, they'll make more. Uh, this is.

• 3:39Jordi Hays?

  Production might end up being limited depending on demand.

• 3:45John Coogan?

  I think you can see where Jordy's take is going. Uh, but, uh, the, the, the interesting thing here is that, uh, Ferrari, uh, typically has sort of two tiers, limited production runs. That's the F40, the F50, the F80, the LaFerrari, the Enzo Ferrari, these halo cars, these hyper cars.

• 4:06Jordi Hays?

  SF90XX.

• 4:08John Coogan?

  SF90 was interesting because it was a one level above the sort of a base model mid-engine sports car that they've made in the lineage of the 360, 430, 458, 488.

• 4:24Jordi Hays?

  And then. 296.

• 4:25John Coogan?

  296, which is unlimited production, but at the lower end, lower end still $300,000, but it's at the lower end of the traditional mid-engine sports car, tossable, not fully track focused, but it's a sports car. And then the SF90 came in as sort of like this mid-tier, higher end, more expensive, twice the price of the of the 296, but unlimited production run. So by getting one, you weren't locking yourself into a very tight allocation. And that, of course, led to some serious depreciation in the SF90 market, which has been sort of heralded as a crisis for Ferrari. And this doesn't seem like a response to that. This seems like a continuation of that potentially. But anyway,

• 5:10John Coogan?

  the company's starting price will be 550,000 euros, roughly equivalent to 640,000 dollars. That's more, that's a lot of money. That's more than the SF90. That's more than the Dolce Trilingeri, more than the 296.

• 5:26Jordi Hays?

  More than the new Testerosa.

• 5:28John Coogan?

  More than the new Testerosa, and also more than the Purosangue, which is V12 naturally aspirated. And also, but the Purosangue only has four seats. This has five. So you're getting an extra seat for just an extra 200,000 dollars.

• 5:41Jordi Hays?

  Hundred, 200 grand.

• 5:42John Coogan?

  It's a wild value prop. The launch event stadium took place in Rome in a stadium with a towering concrete sail that was opened for the Vatican's 2025 Jubilee, featured tortellini by Italian chef Massimo Buruto, Botura, clips of Formula One stars Lewis Hamilton and Charles Leclerc racing the car and lots of lights. Ooh, I want to see this, what this car actually looks like on the track. I haven't seen a video of that yet. The unveiling sparked a debate among car fans online with many pillaring the design as too far outside of Ferrari's design traditions. Ferrari's Milan listed share slumped around 6%. Ferrari has framed the shift as a chance to experiment. "We wanted to do what we hadn't been able to do before",

• 6:25John Coogan?

  said Ferrari chairman John Elkin. Let's see. The Luce is Ferrari's first ever Ferrari with five seats, an option ruled out by the axle in its traditional powertrain configuration. So if you have a family of five, this is your only option. Despite the roominess, the EV accelerates from zero to 60 in less than two, five seconds.

• 6:45Jordi Hays?

  And if you have a family of six, you could pick up two of these for just over 1.2 million.

• 6:51John Coogan?

  Yes.

• 6:52Jordi Hays?

  And you'd still have some room for friends.

• 6:54John Coogan?

  Husband and wife, his and hers.

• 6:56Jordi Hays?

  Yes.

• 6:56John Coogan?

  His and hers, luches. Yeah, wild, wild prop. Also, yeah, I mean, uh, uh, top speed's 190, top speed in the Plaid is 200 and top speed in, in many, you know, Cadillac CT5V Blackwigs, maybe more than 200.

• 7:11Jordi Hays?

  Yeah, so I did, I did confirm, by the way, that it is, uh, half a second slower than the Model S Plaid.

• 7:16John Coogan?

  Yeah.

• 7:17Jordi Hays?

  Which is a lot.

• 7:18John Coogan?

  Yeah, it's, it's, at that point, maybe you don't really recognize it, maybe you can't really tell.

• 7:25Jordi Hays?

  Yeah, the problem is, yeah, the problem is, the, the, the range is worse than pretty much everything BYD makes, pretty much everything that Tesla makes and a lot of these other manufacturers. Uh, but they could always argue, oh, but the performance. And, uh, and I don't think for this kind of car buyer,

• 7:44John Coogan?

  Yeah.

• 7:44Jordi Hays?

  performance matters. What is performance? Is it acceleration, straight line speed, how it handles in corners, right? This car is not gonna be

• 7:54John Coogan?

  Track weapon?

• 7:55Jordi Hays?

  I don't think.

• 7:56John Coogan?

  But we have some, there's some body kits that might help with that.

• 7:59Jordi Hays?

  That may take it out.

• 8:00John Coogan?

  See, you put a wig on this thing, anything is possible.

• 8:02Jordi Hays?

  To me.

• 8:03John Coogan?

  So, yeah, the range is what you were getting at. 330 miles, despite an unusually large battery. Latest releases from BMW and Volvo run for more than 500 miles. The Lucid Air Sapphire is over 500 and, uh, many Teslas can get up into the 400 something range. 330, totally usable for most people, especially if you're charging at home. Totally fine if this is a daily, uh, and you, you know, want to drive this around. But it is, it is sort of in search of a, like, how does it fit into someone's life?

• 8:33Jordi Hays?

  Yeah.

• 8:34John Coogan?

  Because, again, it's not designed for the track, it's not designed for the straight line speed.

• 8:38Jordi Hays?

  I overall, I think it looks pretty cool.

• 8:41John Coogan?

  Mm-hmm.

• 8:41Jordi Hays?

  It looks unique.

• 8:42John Coogan?

  Yeah.

• 8:43Jordi Hays?

  I don't, I don't see it and immediately want it.

• 8:46John Coogan?

  Mm-hmm.

• 8:47Jordi Hays?

  Like, uh, there's been plenty of other modern Ferraris that I think look amazing. Even, even many of them have gotten quite negative reactions.

• 8:55John Coogan?

  Mm-hmm.

• 8:55Jordi Hays?

  Uh, so, so overall, I think the design is interesting. I think the interior is obviously cool. We talked about that. I was somewhat worried that the interior would maybe not match the exterior. I don't like the two-tone thing, but again, that's just sort of like a modern Ferrari thing. Like I, like I think it will look really cool if it's entirely black, right? Murdered out.

• 9:19John Coogan?

  A lot of people were saying that.

• 9:20Jordi Hays?

  Will look quite cool. But yeah, the, the main thing is like the, this entire, that angle looks great, by the way. But not $650,000 great. It's certainly the most confusing release from a major automotive manufacturer that I can ever remember, right? Who is this? Who is this for? Like coming out and it costs significantly, like right away, I'm like, am I, am I, am I crazy? This is like costs more than the Purus Angue, 12 cylinder, the Testa Rosa, all these other cars that didn't get amazing reactions, but I think are like very, very cool. Seeing them in person, they look amazing. They, I think they're fantastic.

• 10:07Jordi Hays?

  What a confusing, what a confusing call.

• 10:11John Coogan?

  Between like seeing images and videos and pictures of cars and then actually seeing them in person.

• 10:17Jordi Hays?

  Yeah.

• 10:17John Coogan?

  Like oftentimes when you see something in person, you're standing there and you have the sense of perspective. They can look a lot better. Sometimes they can look worse.

• 10:25Jordi Hays?

  One of the other, one of the other challenges is, you know, Ferrari, modern Ferraris have had, outside of their halo cars, have had, you know, pretty massive depreciation. And what have EVs become synonymous with?

• 10:39John Coogan?

  Depreciation.

• 10:39Jordi Hays?

  Depreciation. So this car, like the Purus Angue, I don't really know how it's going to hold up. It is naturally aspirated V12. It's probably going to hold up. Decently, you're still gonna be able to buy, yeah, you're still gonna be able to buy it. Unlimited, you're still gonna be able to buy one for probably $350,000 like in the next couple of years. But this, I can imagine just getting cut, uh, getting cut in half, like quite, quite quickly. I expected it to come in, you know, not, not a very informed view, but I, I expected them to come in at maybe something in like the $300,000 range.

• 11:20Jordi Hays?

  Right? Something that is, would be a very expensive daily, but something that somebody could compare. Oh, should I get, yeah, should I get a Roma? Should I get, you know, a Taycan Turbo S if you want an EV? Oh, should I stretch a little bit and get, uh, get a Luchè? Uh, and, and again, I just don't know, I just don't know who this car is, is for. I hope that there's enough Johnny Ive fans to make this sell. My, the, the, the sense I get is like, I don't think Ferrari would have started this project and said,

• 11:59Jordi Hays?

  you know, we've always wanted to make a $650,000 daily EV. That's been the car, that's been the car. And it seems like they started this project and they're like, let's make an entry level. That the closest thing Ferrari has to a mass market car, a car that you can daily, a car that is, is unique, really thought through from the beginning, right? This idea of combining EV with a Johnny interior is like a cool concept. And then you could imagine they start and they're like, oh, we're going to be able to hit 350 for, or we're going to be able to hit three, 300 for sure. Okay, maybe, maybe it'll be more like 350, but like still we're in the range.

• 12:40Jordi Hays?

  And then it just starts like ticking up and up and up and up and up until. How do you, how do you, how do you just, how do you justify the price? It makes no sense. Uh, and it's very, it's very, it's just very, uh.

• 12:56John Coogan?

  I saw when you're laughing.

• 12:58Jordi Hays?

  Hunter, Hunter, be kind.

• 13:02Jordi Hays?

  It's a very, it's very concerning because I just think it's basically proving that Ferrari, I don't think can ever, I don't think they'll ever be competitive in EVs.

• 13:14John Coogan?

  This segment?

• 13:15Jordi Hays?

  Yeah, this segment, I think it's, I think it's completely over.

• 13:17John Coogan?

  It feels really hard to compete in. You're going up against Tesla, this vertically integrated, like, comes with, like, if you want a daily, you also want self-driving capabilities, you also want the, oh, park it, auto summon, like, you know, you want to be able, like, all these, like, random features that Tesla puts in, like, take your car, play the games, like, very functional.

• 13:36Jordi Hays?

  And the thing with the Luchia is the design, like, there's so many elements of the design that are super tactile, very cool.

• 13:43John Coogan?

  Yeah.

• 13:43Jordi Hays?

  It's quirky, but Tesla has done a very good job of making a, a car that is very drivable. It's.

• 13:52John Coogan?

  And it can be quirky if you want it to be.

• 13:54Jordi Hays?

  And it can, yeah, it has the sound of.

• 13:56John Coogan?

  The sound of, like, more, it has a soundboard, like, if you want the quirk, you can get the quirk.

• 14:01Jordi Hays?

  So, yeah, so, so I think it's, I think it's over. I think, I think it's over.

• 14:07John Coogan?

  Take me through your take from start to finish, uh, and then we can.

• 14:10Jordi Hays?

  We've, we've covered, we've covered a lot of it. I basically said, like, look, the, the peanut gallery is already, already very negative on all Ferrari launches.

• 14:17John Coogan?

  Which is sometimes bullish.

• 14:18Jordi Hays?

  Every single time, they say, bring back Pininfarina.

• 14:21John Coogan?

  Yeah, yeah, yeah.

• 14:21Jordi Hays?

  Pininfarina is not coming back.

• 14:22John Coogan?

  Yeah.

• 14:22Jordi Hays?

  Like, the whole company got sold to an Indian automotive conglomerate.

• 14:27John Coogan?

  Tata Motors.

• 14:28Jordi Hays?

  They, they, they launched the Pininfarina Batista.

• 14:31John Coogan?

  So if you pull up the Pininfarina Batista, if you pull up a picture of that, you will see, uh, an image of an electric hypercar that looks exactly like you would expect in the sense that it's the car that would go on a poster, you know, on a kid's bedroom. Uh, but it's a million dollars or more, and it goes zero to 60 in two seconds. Uh, and the reviews are kind of like, yeah, this is the max. Yeah, the Pineda Ferrina Batista, right there. Like, that looks like a McLaren, like a Ferrari. Like, it looks like, it looks like if you went to ChatGPT and just said, like, make me a hypercar. And I think it checks the box. And I think the Luce does not. I think if you went to ChatGPT and said, design me a hypercar,

• 15:12John Coogan?

  you could, you could sit there for, for days and not get something that looks like Luce, because it does look different. And that can be good. It can also be bad, because people are expecting this. But this car, I don't think sold very well. Because the buyer for this design wants a naturally aspirated V12 with a manual shifter, right? Uh, and they want something that's, that's more focused and more of an experience. They don't want something that's practical at all.

• 15:38Jordi Hays?

  Yeah. So. Yeah, so, so, so anyways, people are always negative on, on, on recent Ferrari launches. I don't, I, I usually don't agree. I think a bunch of them have been great. Uh, and, but, but the anger towards the design, I think, is totally misplaced. You gotta be, you gotta be, like, disappointed, uh, in the price. The gap between what you can get from a range and performance from, from Tesla or BYD, let's say, in the fifty, sixty thousand dollar range. You're looking at a 10x difference, right? Uh, and, and that, that gap is just way too wide. So I think if they had been able to come in, in the low three hundreds with this, it would have been super desirable.

• 16:23Jordi Hays?

  Quite functional, right? This is a great, great commuter. I, we would have been seeing these all over LA. I think this is gonna flop. And I actually think that if Ferrari wants to be competitive in this sort of, like, mass market EV category, even like luxury, you know, luxury, um, uh, not, not necessarily true mass market, but, um, but more, uh, high-end, I, I think they would have to, at this point, like, partner with, like, you could imagine them partnering with, with someone else and effectively just saying, like, you know, throwing in the towel. I think they still have a fantastic business focusing on. The the higher end of their range.

• 17:06John Coogan?

  Think of what a high end driver focused sedan, four door, five seater sedan is. Because typically, the when you get to five seats, four doors, up market, expensive luxury, you just go SUVs. You have like Range Rover and Urus from Lamborghini. And, you know, Aston Martin is pushing that way. Like, it feels like this is a very like the four door, expensive four door is rare.

• 17:37Jordi Hays?

  Yeah, and I think.

• 17:38John Coogan?

  It's very differentiated.

• 17:39Jordi Hays?

  The Purusangue, personally, I would have liked to see something that was like, like sportier.

• 17:43John Coogan?

  Than that?

• 17:44Jordi Hays?

  Uh, yeah, it's very.

• 17:46John Coogan?

  It's supposed to be.

• 17:48Jordi Hays?

  Yeah, but but it's a for an SUV from Ferrari, something a little bit more aggressive. Personally, I would have liked it came off very.

• 17:55John Coogan?

  Take out the second row, take out the T seats.

• 17:57Jordi Hays?

  No, no, you can make a sporty, a Kaien Turbo GT. It's a sporty. Carbon fiber. Fast SUV.

• 18:06John Coogan?

  I I just feel like with the the Purusangue, it's like the like, like the 296 is right here, sir. If you have any complaints about it being an SUV, like they do have a, they do have a sports car for you if you want that. The question is just like, if you want, if you want performance, you go sports car.

• 18:23Jordi Hays?

  I'm just saying, like, I'm just saying, I think they they they, uh, they kind of missed on both, right? I think if they made like a super.

• 18:30John Coogan?

  Weird.

• 18:31Jordi Hays?

  If they made like an aggressive, if they made the Purusangue, but it was like more aggressive, I think it'd be way more desirable.

• 18:38John Coogan?

  Wait, are you talking about the the stock Purusangue? Or are you talking about the Puganator? The Mansori modified Puganator? The Puganator?

• 18:48Jordi Hays?

  No, I think.

• 18:49John Coogan?

  Mansori has a body kit for the Purusangue that's, uh, called the Puganator, which is such a funny name.

• 18:55Jordi Hays?

  Yeah. So so anyways, uh, big, big, big L. Uh, and, uh, I think that, uh, that will become very obvious in in, you know, the the coming years. They are going to sell some. I expect Cupertino to be crawling with with Luches.

• 19:13John Coogan?

  Hopefully.

• 19:14Jordi Hays?

  But and I was thinking like.

• 19:15John Coogan?

  In the Ferrari.

• 19:16Jordi Hays?

  I was like, who is, when I thought about who is a buyer for this, it's like foreign exchange student in the US that needs a car for like.

• 19:26Jordi Hays?

  A few years.

• 19:26John Coogan?

  Sort of like a black badge Cullinan.

• 19:28Jordi Hays?

  Exactly, exactly. And but but that's not a big market.

• 19:33John Coogan?

  Yeah, it's just hard because I understand the like the concept of like the the when I when I imagine like the the Cullinan like driving on the sand dunes in Saudi Arabia. It just has such a different vibe. It's so it's so much more regal and royal than this design. This this design is so much more friendly. We can actually go and look at.

• 19:55Jordi Hays?

  The fact that you can it's like, hey, luxury car buyer. Would you like a Rolls Royce Cullinan? Or a Ferrari Lucci Luce?

• 20:07John Coogan?

  Yeah.

• 20:07Jordi Hays?

  Which is a

• 20:10Jordi Hays?

  just extremely millennial coded car.

• 20:13John Coogan?

  It I mean, it has a lot of the Apple feel to it. A lot of people were making.

• 20:16Jordi Hays?

  I had I had a theory earlier that maybe maybe the real cost, maybe it's like a $50,000 car.

• 20:23John Coogan?

  Yeah.

• 20:24Jordi Hays?

  But making a custom iPad and you're only going to make a very small number of them. You're only going to make like.

• 20:29John Coogan?

  It's a $500,000 interior.

• 20:31Jordi Hays?

  No, it's a $600,000 iPad.

• 20:33John Coogan?

  Okay.

• 20:34Jordi Hays?

  You know, the the in the front console.

• 20:37John Coogan?

  Yeah.

• 20:37Jordi Hays?

  So it's it's it's basically like a Model 3. And then in a $600,000 iPad combined, right? Because I don't think they're going to be making a lot of these.

• 20:46John Coogan?

  I really wonder how they're going to how they're going to drive. You want a Safari version, right? That's the ideal?

• 20:52Jordi Hays?

  I do. I do. Sam Sam Sheffer was sharing the.

• 20:57John Coogan?

  Like, what does it look like if it's all?

• 20:59Jordi Hays?

  And yeah, I went in there. I was like, make it make it a make it a Safari version and get some bigger wheels on it.

• 21:05John Coogan?

  Expand the wheel wells. Easy ask.

• 21:07Jordi Hays?

  Basically, do another 300 grand of work to and make it a million dollar Luce. Add some add some equipment.

• 21:15John Coogan?

  You know what this looks like? This looks like.

• 21:17Jordi Hays?

  Pull pull um pull this up, this image.

• 21:25John Coogan?

  What was the Lamborghini electric one that they were working on? The Lanzador. It was like a big car. This was like a theme for a while. I don't think it ever went anywhere. I don't know if you saw the Lanzador. I can share it in the thing.

• 21:40Jordi Hays?

  There it is.

• 21:41John Coogan?

  So this is.

• 21:41Jordi Hays?

  Yeah, I think this looks cool. Again, having a car that's designed to go off-road that only has a few hundred miles.

• 21:52John Coogan?

  It's kind of a crazy move.

• 21:54Jordi Hays?

  It's kind of a crazy move, but I could see.

• 21:57John Coogan?

  People take the Rivian's off-road and they're very good.

• 22:00Jordi Hays?

  Yeah.

• 22:00John Coogan?

  Because you can, I mean, this car has four electric motors, one in each wheel.

• 22:04Jordi Hays?

  Yeah, the Rivian.

• 22:04John Coogan?

  And so you can adjust the torque independently. So if you're losing grip on one rock.

• 22:10Jordi Hays?

  Yeah, a Rivian at the fat ice race in Big Sky was going absolutely crazy.

• 22:16John Coogan?

  Really?

• 22:17Jordi Hays?

  Yeah.

• 22:17John Coogan?

  Disgusting.

• 22:17Jordi Hays?

  It was extremely impressive.

• 22:19John Coogan?

  Yeah, it's designed for that. Pull up the Lamborghini Lanzador. This was the Lamborghini's electric concept that I think got scrapped, but might still arrive in 2028. I just shared this image in the production chat. Because it has this idea of like the big car. It's like, have you seen this? What?

• 22:41Jordi Hays?

  2.6 says, that looks sick. Oh, wait, it's an EV.

• 22:45John Coogan?

  People don't like electric vehicles. I mean, great for daily commutes, great for, you know, high gas prices. This Lanzador, you saw this?

• 22:54Jordi Hays?

  Which they discontinued because they realized it was going to flop extremely hard.

• 22:59John Coogan?

  So, but it sounds like Ferrari is fully moving forward with this. They're going with it.

• 23:04Jordi Hays?

  Yeah, I mean, all the EU manufacturers are.

• 23:07John Coogan?

  This is a very high up car. Like you're very high up.

• 23:10Jordi Hays?

  Caught between a rock and an EV, right? They, there's basically.

• 23:17Jordi Hays?

  I was, I was trying to, I was asking chat about the, um, uh, about like the, the right, you know, regulatory situation and basically the EU regulates average CO2 emissions across each manufacturer's new cars registered in the EU.

• 23:33John Coogan?

  Hmm.

• 23:34Jordi Hays?

  So it's not like model by model. It's like based on all the cars you're selling in a given, the new cars you're selling, you need to be under certain emission standards across the entire fleet. And so if you sell a handful of EVs, you can bring down the average.

• 23:51John Coogan?

  A lot.

• 23:52Jordi Hays?

  A lot.

• 23:52John Coogan?

  Okay.

• 23:53Jordi Hays?

  Uh, and so.

• 23:54John Coogan?

  So yeah, maybe they only sell a couple thousand of these, but it's enough. But yeah, it seems, seems, seems tough.

• 24:01Jordi Hays?

  Uh, we texted one of our buddies who has maybe 30 or so Ferraris this morning, uh, and, uh, he will be buying one.

• 24:10John Coogan?

  He made a good point.

• 24:11Jordi Hays?

  Whether it's.

• 24:11John Coogan?

  He made a good point. Uh, anything that's, uh, you know, hated at launch has the opportunity, like the expectations are low, has the opportunity to become like a cult classic at some point. There's a lot of cars that launch and people are like, this is what happened with the Carrera GT. You're really, it doesn't look any different. It doesn't look as extreme. It doesn't stand out if you're stopped next to a 911, most people will just think it's a 911.

• 24:33Jordi Hays?

  So you think, you think in, in 10 years, we could be looking at Luches going for two, three million?

• 24:38John Coogan?

  Probably not, but who knows? Maybe 20 years? I don't know. It might be like an interesting relic of a particular era.

• 24:45Jordi Hays?

  Pull up this, pull up this post from Rhett.

• 24:48John Coogan?

  Yes.

• 24:49Jordi Hays?

  I like this version.

• 24:51John Coogan?

  Clear plastic leaning into the vibes of.

• 24:54Jordi Hays?

  Leaning, just lean into the plastic.

• 24:55John Coogan?

  Yeah, there's something here. People were having fun. I mean, it's a golden age of, uh, Gen AI images. Uh, someone else was comparing it to the.

• 25:04Jordi Hays?

  Luca, former chairman of Ferrari, which Trey mentioned in the chat earlier in Italian. He says, if I say what I really think, I'd be doing Ferrari harm. You risk destroying a legend. I'm very sorry. I just hope they at least take the prancing horse off that car.

• 25:21John Coogan?

  Wow.

• 25:22Jordi Hays?

  What should we do? This for sure is one car the Chinese at least won't copy off us.

• 25:28John Coogan?

  Wow. Those are very, very harsh words.

• 25:31Jordi Hays?

  He, of course, worked under Enzo.

• 25:34John Coogan?

  Whatever, whatever journalist went out and hunted down Luca, the former chairman of Ferrari, like really knew that there was like a scoop to get here. Because this is not a seated interview. This is not planned. This is an ambush and he was, he was struggling to not completely blow things up. And yet the body language of him like touching his head, he's, he's not.

• 25:59Jordi Hays?

  Uh, TJ, former F40, 360 owner. He's driven most modern Ferraris. So he, he feels, uh, he's very qualified to chime in. He says, and apparently an unpopular opinion, but I think this is great. Interior fully Johnny, exterior totally Mark. See the Ford concept, which we can pull up. I imagine for the OCD types, the daily interactions are going to be quite satisfying.

• 26:23John Coogan?

  Hmm.

• 26:24Jordi Hays?

  Yeah. Yeah, that, that is the, it is an extremely unique interior and things are experiences. This could be something you get to experience all day long. Uh, I'm excited to drive one. Uh, I won't be buying one.

• 26:41John Coogan?

  I won't be withholding judgment. I won't be judging a book by its cover.

• 26:46Jordi Hays?

  Um, yeah. TJ says, my opinion is, is in 10 years' time, the Johnny Ed Ferrari design will be the main business at a price point of 150 to 250 K equivalent and slowly washes out Ferrari as we know it. Launching at today's price point preserves the dying core biz while they transition to an Apple style business. Uh, I would, uh, TJ knows a lot more about cars than I would. I would take, uh, but I would take the exact opposite.

• 27:11John Coogan?

  So hard to do.

• 27:12Jordi Hays?

  I would take the exact opposite. I think this is going to be more and more like an ultra luxury brand, small number of cars at very, very high prices.

• 27:21John Coogan?

  Yeah.

• 27:21Jordi Hays?

  For hardcore enthusiasts.

• 27:23John Coogan?

  Yeah.

• 27:24Jordi Hays?

  And getting back.

• 27:25John Coogan?

  F80.

• 27:26Jordi Hays?

  Yeah, just getting back to what.

• 27:28John Coogan?

  Like the next SF30 should be limited and manual and natural.

• 27:33Jordi Hays?

  Yeah. They're already coming back. They're making, they're making a version of the 296 without the EV.

• 27:38John Coogan?

  Sure.

• 27:39Jordi Hays?

  Componentry.

• 27:39John Coogan?

  Sure.

• 27:40Jordi Hays?

  So, so yeah, I would take the exact opposite side of this.

• 27:44John Coogan?

  Yeah.

• 27:44Jordi Hays?

  Unless Apple, or sorry, unless Ferrari, you know, does.

• 27:49Jordi Hays?

  You know, does something like effectively a licensing deal and says, hey, we can't make a car for this cheap, but we can license the badge and BYD can make a car for 50 grand.

• 28:00John Coogan?

  That might be it.

• 28:00Jordi Hays?

  And then we'll charge 50 grand a car to put the prancing horse on it.

• 28:04John Coogan?

  Yeah, I mean.

• 28:04Jordi Hays?

  And that would be full.

• 28:05John Coogan?

  Look at what Waymo is doing.

• 28:07Jordi Hays?

  Could make sense.

• 28:07John Coogan?

  So Waymo is sourcing the powertrain and battery from Chinese EV manufacturers, but none of the telemetry, telecommunications systems, IT systems, that's all Waymo. And so you get all of the benefits of the Chinese industrial supply chain. You get efficiencies around batteries and cheaper frames and powertrains and drivetrains and the batteries, but you don't have the, oh, like the Waymo spying on me because the cameras were made there necessarily, or like the whole car was made there. And so I think Waymo's been very quiet about this.

• 28:49John Coogan?

  Obviously, they're not really like openly talking about this decision, but I think that they that they picked a very clear line in the sand with where with what parts of the Chinese supply chain they would go into because the whole like Waymo's are Chinese cars would be like a bad headline. But if they can say, well, we're just buying things there that don't, they can't have any spyware in there because it's just a bunch of aluminum and battery packs or whatever. I think that will, at least I think that's their strategy.

• 29:18Jordi Hays?

  Yeah.

• 29:19John Coogan?

  People, people, people will still be suspicious, of course, but by and large, I think people will be happy. We should pull up a Ford 021C concept car designed by Mark Newsom, who worked with Johnny Ive and did the exterior of the Ferrari Luce, because this car is so cool. I think we were all looking at this and really enjoying this. It's the Ford 021C concept car. As TJ pointed out, Mark wanted to create a car that was simple, likeable and fun, built at a historic Carozera Gia in Turin, Italy. Mark developed a car via drawings, followed by computer models, and finally created a

• 30:02John Coogan?

  clay model to perfect, to perfect complex surfaces.

• 30:08John Coogan?

  To perfect complex surfaces. Every component of the car was designed and fabricated from scratch from workshops all over the world. The tires were custom made by Pirelli in Italy. For example, the composite exterior featured seamless shapes and deceptively simple surfaces, including a wraparound retractable trunk that opens like a drawer and a door handle and door handles that are simple aluminum buttons surrounded by translucent plastic rings which illuminate when remote locking is activated. The doors themselves open to expose a completely open pillarless interior. The windows were designed to allow as much light as possible to enter. This was

• 30:41Jordi Hays?

  Chad absolutely hates this car.

• 30:44John Coogan?

  They hate the clown car.

• 30:47Jordi Hays?

  I think this would be a fun weekender.

• 30:50John Coogan?

  Yes, but this is this should fit into like the Volkswagen ID Buzz lineup, which at 60,000, at 70,000 was deemed like woefully overpriced and should have been more at like 30 or 40. And so some a design like this could be amazing. But again, price is everything here because for for something like this, it can be this like delightful utility, this fun thing similar to

• 31:16Jordi Hays?

  I would instantly, I would instantly pick up the Ferrari Luce for 20 grand.

• 31:22John Coogan?

  Many people would.

• 31:24Jordi Hays?

  Sheil asked Chad CBT to make a four door electric Ferrari. It's pretty good at this. I bet this version would be more popular than Johnny's. This thing looks mean.

• 31:36John Coogan?

  It looks like a Dolce & Gabbana a little bit.

• 31:39Jordi Hays?

  Yeah, mixed with.

• 31:40John Coogan?

  Also, it's just it's it's so clear that it's not electric. Like, like, why would it have this big, long front hood?

• 31:49Jordi Hays?

  Because it looks good, John.

• 31:50John Coogan?

  And it looks good because this is what you're used to. But this looks like a 200 inch car. Like, as a daily, this seems like it would be wildly impractical in terms of parking and dealing with everything and.

• 32:00Jordi Hays?

  It looks perfect.

• 32:00John Coogan?

  And also, it feels like it has a lot of down.

• 32:03Jordi Hays?

  The new images model is so good at making cars.

• 32:08John Coogan?

  Yep.

• 32:09Jordi Hays?

  You almost think that Sam was pretty involved.

• 32:13John Coogan?

  Potentially. Are you talking about Nikita Beer's car?

• 32:16Jordi Hays?

  I mean, this thing looks fantastic. Phone has got to make this. He.

• 32:21John Coogan?

  They need a production version.

• 32:23Jordi Hays?

  I think, what do they call it? What did Bone call it? The Nikita Borgata?

• 32:27John Coogan?

  Borgata.

• 32:30Jordi Hays?

  I mean.

• 32:32John Coogan?

  It looks sort of like a Nissan Murano Cross Cabriolet.

• 32:35Jordi Hays?

  This looks absolutely.

• 32:37John Coogan?

  And the front is very, very funny.

• 32:38Jordi Hays?

  Incredible.

• 32:39John Coogan?

  Yeah, if it was the Apple car and price for scale, this thing would go triple platinum uh in all white with um with the Apple logo on there. This does feel like a little bit of uh a lot of Apple leaked in this thing. Bobby Goodlatte says, uh, my theory on the Luché, this is the car Johnny wanted to design for Apple. Apple didn't want to ship it, so he made it for Ferrari. This car with an Apple logo priced at a hundred thousand dollars would sell extremely well. I wonder, I wonder, I I wonder if you can get to a place where the fit and finish and the OCD, that that's the like the daily interactions, that's the piece that uh I'm not super clear on willingness to pay for that because with

• 33:23John Coogan?

  a phone, you're using it just as much as a car, but I don't know, there's something about like iteratively onboarding to the the little features in the iPhone that create this lock-in, whereas people go and they test drive a car and maybe the uh maybe like the the window switches are in the wrong space and it's slightly annoying, but they don't figure that out until much later, you know, or like the the uh the the volume knob is in slightly wrong place. It takes a long time to like become frustrated with that. Um I it would be hard. It's a harder pitch to make to a new car buyer. Like, oh, this won't have any frustrations. Those minor frustrations that you experience in other cars, like that won't be a thing here.

• 34:07Jordi Hays?

  Yeah, I do. I don't know. I do find that a lot of uh my frustration with modern cars comes from the software hardware integration, right? And this dynamic that we have now where where the the manufacturer has their software stack and then they also have CarPlay and they're constantly basically competing.

• 34:25John Coogan?

  Yep.

• 34:26Jordi Hays?

  Uh and it makes absolutely no sense. Like, I'm in CarPlay, like, car I just bought like a week ago. I'm I'll be in CarPlay and then I'm like, oh, I want to change like the the heating or air conditioning. I gotta get out of CarPlay to go and do it in like their software. It's very, very annoying. Um and so, yeah, Apple, Apple would make a uh a fantastic car, but even I just don't know with Apple, part of it was like, no one's been able to make a. Great, like a truly great car business.

• 35:00John Coogan?

  Hmm.

• 35:01Jordi Hays?

  Like.

• 35:02John Coogan?

  Tesla, but yeah.

• 35:03Jordi Hays?

  But it's not a good, it's not a good business. The, the car business is not a good business.

• 35:07John Coogan?

  Yeah, it's made 20 billion in free cash flow over the history of the company. Something like that.

• 35:11Jordi Hays?

  Yeah, for, as a, you know.

• 35:14John Coogan?

  20 years, yeah.

• 35:15Jordi Hays?

  Over a trillion dollar company.

• 35:17John Coogan?

  Yeah. So. Ship a lot of cars, though. It is the number one, the Model Y is the number one best selling car in like California, China, everywhere, basically.

• 35:26Jordi Hays?

  Yeah, that's what I'm saying. So like insane product market fit, global hit.

• 35:31John Coogan?

  Yeah.

• 35:32Jordi Hays?

  And it's still.

• 35:33John Coogan?

  And to be competitive on a margin basis.

• 35:36Jordi Hays?

  Great business.

• 35:37John Coogan?

  Crazy, crazy, crazy. And, and that just feels like entirely new DNA for Ferrari to spin up. It's like hand belts, like that's the whole concept and, and you know Tesla to get to where they have on price point and distribution and scale, like completely different.

• 35:53Jordi Hays?

  Uh, Jack Butcher made a great point. He said, make the Luce 30% wider and everybody would love it.

• 35:59John Coogan?

  Where's this?

• 36:01Jordi Hays?

  You can see it on the screen here. It has such better road presence when it is wider. It just looks when it's, it's too boxy.

• 36:10John Coogan?

  Sure.

• 36:10Jordi Hays?

  And it looks just a little dinky, but.

• 36:13John Coogan?

  Yeah.

• 36:13Jordi Hays?

  Looks a bit more aggressive.

• 36:14John Coogan?

  It does seem like, uh, everyone, everyone is just asking for something that it's not trying to be. Like you make it wider. Okay. It's less drivable. It doesn't fit in garages as easily. You make it longer, like the proportions look cooler, but it's not, like it's, it's not going to be as easy to fit into parking spaces and stuff.

• 36:33Jordi Hays?

  Yeah.

• 36:34John Coogan?

  The whole point of a vehicle like this is to be, uh, like accessible and usable. Uh, and that's very antithetical to the Ferrari ethos, but maybe that wasn't the goal.

• 36:45Jordi Hays?

  Uh, one car that was getting a lot of love was this special edition that was teased online. You can pull this up. This is the natural ice edition. Uh, I thought, I thought this looked fantastic. Uh, if the team can pull it up here for everyone to see.

• 37:03John Coogan?

  Yeah, with a wrap, I think.

• 37:05Jordi Hays?

  Really beautiful.

• 37:06John Coogan?

  People might be wrapping these for sure. I'm sure.

• 37:09Jordi Hays?

  Color matching, color matching the wheels to the, the, the gloss and the shine of the can, I think is really, really nice. And I could see this being a hit on, uh, at least college campuses.

• 37:21John Coogan?

  Yeah, yeah, for sure.

• 37:24John Coogan?

  Imagine having this be your college car and wrapping it. Well, the wrap is usually paid for by the brand. So the brand will be like, oh, we want to, we want a campus ambassador.

• 37:34Jordi Hays?

  I know, but I was hoping that Ferrari would just take the leap and actually do a full on partnership, special edition, right?

• 37:41John Coogan?

  Yep. Well, chat didn't like the Ford 021C example, the concept car in the orange, which we can pull up. But I want to know if chat likes it more if it has a body kit. Let's pull up the Ford 021C right after the.

• 38:01Jordi Hays?

  There we go.

• 38:01John Coogan?

  Does that do anything for you?

• 38:03Jordi Hays?

  There we go.

• 38:03John Coogan?

  If you turn it into a track weapon, are you getting somewhere?

• 38:08Jordi Hays?

  Look at the arrow.

• 38:10John Coogan?

  It's so aggressive. But show, show the original photo, the first one. Yeah, there you go. You're going to take that, some slight modifications and boom.

• 38:20Jordi Hays?

  Take it, take it away. Go back, go back to the, to John's version.

• 38:25John Coogan?

  There we go. Yeah. We should look at the solo cup inspired.

• 38:30Jordi Hays?

  Oh yeah. So John is having, went really, really deep on designing some new cars with, with the.

• 38:36John Coogan?

  I think I got a future here. I think I got a future.

• 38:38Jordi Hays?

  Look at this. They call this the red time, the red line, good times, sharp lines.

• 38:43John Coogan?

  The red line.

• 38:44Jordi Hays?

  Inspired by the iconic, simple, universal solo cup.

• 38:50John Coogan?

  Driving a solo cup inspired.

• 38:52Jordi Hays?

  This is really the perfect Memorial Day weekend car.

• 38:56John Coogan?

  But this is what I'm talking about where like, if you saw a company come out with this, I think the reviews, like take away the, the joke of like the beer pong thing, like just the proportions of this particular hypercar, everyone would be like, oh, that looks like a supercar. That looks cool. But it looks like generically cool. If it can be, if it can be just like one shot by an image model, it's probably not going to stand the test of time. I don't know. It's not taking any risk. Like this, this feels like as hilarious as the, the, the solo cup inspiration is, it's not taking any risk. When you were renting that.

• 39:30Jordi Hays?

  The main, the main, the, the two things, like again, I, my, my criticism was never the design, although the design is not. For me, the criticism comes down to the price point and then positioning it as like an everyday car. And then the concern that I have because Ferraris have always had electronic issues that have plagued the brand forever. My personal experience, I had a Ferrari for a while and I replaced the main battery like three times in three months trying to solve an issue. And eventually basically was like, okay, this is always going to have electrical issues.

• 40:08John Coogan?

  Do you think all the parts on the inside are glued in like an iPhone? You're replacing the whole car? I mean, people will be doing that with Teslas. They'll just be dumping them and getting new ones.

• 40:20Jordi Hays?

  I really liked your version of the Nissan Murano Cross Cabriolet.

• 40:24John Coogan?

  Yes.

• 40:25Jordi Hays?

  Trying to get into a proper, proper hypercar. If we can pull this up.

• 40:29John Coogan?

  I think this one.

• 40:30Jordi Hays?

  This thing just looks really.

• 40:31John Coogan?

  This one would sell. Nissan hasn't introduced a hypercar in a while.

• 40:34Jordi Hays?

  Could be this.

• 40:36John Coogan?

  Could be this.

• 40:37Jordi Hays?

  Look at this. The Nissan Murano. The Spyder. It's crazy.

• 40:41John Coogan?

  It does look good. That was the thing is that I was like, oh, let's, let's start with a joke and then get to something that looks ridiculous and is, and still has some of that joke, jokey-ness to it, but the final result just looks like a normal hypercar. It just looks like any other hypercar. Anyway.

• 40:58Jordi Hays?

  Anyways, we should talk about enhanced games.

• 41:02John Coogan?

  Yes.

• 41:03Jordi Hays?

  So I, I went over to David Center's house.

• 41:07John Coogan?

  Yeah.

• 41:08Jordi Hays?

  On Saturday, on Saturday. With, with my friend Ben. And we were all excited to watch and we basically turned it on and pretty much 15 minutes in, I texted John and said, I thought the stock would nuke. On Tuesday.

• 41:29John Coogan?

  Yeah.

• 41:30Jordi Hays?

  And it did. It's down, um, I, let's see, it was now forty-one percent.

• 41:35John Coogan?

  I saw chatter about the enhanced games on the timeline. It seemed like everything was going normal. I saw some viral clips. I saw some posts about it. I didn't notice anything out of the usual, but you said that, uh, it, it, it did not like blow you away. And I wanted to understand what about it was not a great, like you, you, you come away paying for UFC pay-per-view or, or watching it on Paramount Plus now, uh, very satisfied. Like, why was this any different? From my perspective, this looks just like any other sport on TV.

• 42:07Jordi Hays?

  Yeah.

• 42:08John Coogan?

  It looks like something you watch in sports and yay, you root for somebody and you pick a team and.

• 42:12Jordi Hays?

  Yeah. So, so first of all.

• 42:13John Coogan?

  Yeah.

• 42:14Jordi Hays?

  You know, this company went public before they had ever hosted an event, right?

• 42:17John Coogan?

  Sure.

• 42:17Jordi Hays?

  So, uh, and, and we've been hearing about it for years. I, I said to you this morning, it feels like we've been hearing about this for like eight years. You said it's more like maybe two years or something that it's even being talked about.

• 42:27John Coogan?

  Yeah, yeah.

• 42:28Jordi Hays?

  Uh, but anyways, a lot of anticipation. People have been super excited about this. Uh, the, the entire concept, I, I think is, uh, is just like really cool and wild, right? You take something that, uh, like the Olympics, which, you know, even if you're not obsessed with swimming or, or weight, or weightlifting or running or any of these things, like the Olympics are always like, you know, you know, an exciting cultural moment. Uh, and I think like, uh, I, I personally, you know, have a bunch of, you know, fond memories watching the Olympics, right? So take something that I, that I generally think is very cool and you add, you know, steroids, uh, that's a very fun idea.

• 43:07John Coogan?

  Yeah, it'd be jet fuel.

• 43:09Jordi Hays?

  Uh, jet fuel.

• 43:10John Coogan?

  Should enhance the experience.

• 43:11Jordi Hays?

  And, uh, and then as soon as I started watching, uh, there, there's a bunch of stuff I would give them a pass on, right? Like the production value, putting on an event for the first time.

• 43:20John Coogan?

  Yeah.

• 43:21Jordi Hays?

  It didn't feel like you were watching the Olympics. It felt like you were. Watching like someone's first attempt at hosting an Olympics.

• 43:28John Coogan?

  There weren't those like crazy like drone cameras following things ultra slow mo.

• 43:33Jordi Hays?

  Yeah, they were. They were trying to do stuff, but again, the people doing commentary have never done it before.

• 43:37John Coogan?

  Sure, sure.

• 43:38Jordi Hays?

  You know, the the whole event is, you know, just being birthed, right? So it had an insane amount of attention on it for a first event, which is always tough. But then watching it, I realized like the appeal, like none of these, none of these events, like you can't just watch somebody run in a race and know whether or not they're breaking a record. Like you can see like, oh, that person's quite fast.

• 44:00John Coogan?

  Yeah.

• 44:01Jordi Hays?

  But unless there's like crazy graphics and stuff.

• 44:04John Coogan?

  Yeah, you need like an overlay of Usain Bolt of like the official.

• 44:07Jordi Hays?

  Yeah, yeah. So so it's never about, it's never about like exactly how fast someone was, right? Because sure, there's records involved, but the difference, you can't noticeably see whether somebody lifted 220 kilograms.

• 44:23John Coogan?

  Yeah.

• 44:24Jordi Hays?

  Or 220.1. It's not visible to the eye, right? And so what became really obvious to me instantly was like the appeal of the Olympics is you have these like very niche activities where athletes dedicate their entire life to this pursuit. And then every four years, there's like a five minute period where they're getting like the entire world's attention and they're representing their country and they're going for glory. And they either, they either do it or they don't. They get the gold medal or they don't, you know, whether even getting a silver medal is like agony, right? Because like you just dedicated your whole life to this thing and you're in second place. And so it really is about, it really, it just stuck out to me immediately that it's about,

• 45:09Jordi Hays?

  you know, national pride, representing your country, you know, true excellence, right? And in watching this, there was none, none of that. They were trying to do to basically build up the brands of the athletes ahead of time. But there was just like no, I didn't feel like bought in to any of the storylines. These are a bunch of athletes that were formerly Olympic athletes and some of them had done quite well that are now basically opting into a like just a for profit. Like the Olympics are not about making money. The enhanced games were about, sure, it was about the athleticism,

• 45:50Jordi Hays?

  but a lot of it was just like a payday, right? And so like there wasn't the same, I didn't feel, basically we turned it on and then we walked outside and we just made a fire and like hung out and it was like really far in the distance. And we eventually came back, came back for the very end, not realizing that no records have been broken the entire, entire night until the last event. And then you watch the event and I think what would have been, made it more interesting, like a horse race, because is like if you had like an actual overlay of the person swimming, the actual record, like you, they left a lane open or something like that and you could have seen the person.

• 46:32John Coogan?

  I mean, it was seven one hundredths of a second.

• 46:34Jordi Hays?

  Yeah. So it was really, really tight.

• 46:36John Coogan?

  Would have been neck and neck.

• 46:37Jordi Hays?

  And so, yeah, so anyways, it wasn't, it didn't like capture me. I think that it's something entirely different than the Olympics. I, I think it's a very clever way to market generic, generic supplements, right? If you go on enhance.com right now, we don't have an affiliation, of course, but you can just get testosterone and a bunch of, you know, a bunch of different products. But, but yeah, it to me, to me, you also came away being like the human spirit is way more powerful than any PED. Just like dedicating your life to something for decades and being absolutely obsessed and, and representing your country

• 47:19Jordi Hays?

  is more powerful than being able to do whatever performance enhancing drug. So major white pill for humanity.

• 47:27John Coogan?

  Yeah. Actually somewhat related to Pope Leo the 14th, new letter magnifica humanitas, which we will talk about with our next guest, Christopher Hale, who writes letters from Leo and is joining us right now. He's in the waiting room. We'll bring him in to the TV Vin Ultra. I'm Christopher. How are you doing?

• 47:47Speaker 02

  Great yourself.

• 47:49John Coogan?

  Uh, great, yeah, I was, uh, I was reflecting on Magnifica Humanitas and, uh, I mean, I was struck by, we were just talking about the enhanced games and, uh, the Pope's commentary on, uh, transhumanism and posthumanism, uh, and I'm sure we can go into all of that, but why don't you, uh, start with a little bit of introduction on yourself and then take us through, uh, some of the key ideas or lessons that you pulled out of this letter and how you processed the, the news?

• 48:17Speaker 02

  Yes, well, so my background is I worked in the two things that you're not supposed to talk about on dinner dates, uh, religion and politics. So, um, I, my career, uh, working with President Obama, um, after college, I ended up leading Catholic outreach, actually ironically enough, for President Obama, um, during his reelection campaign, and since then I've done various initiatives, uh, uh, representing consulting for companies, um, on, on faith and, and in politics, and I've also done religious outreach once again for every Democratic nominee, uh, since 2012 in fact, um, but I, I, um, also, um, spent a lot of time devouring, consuming, uh, Catholicism and its intersection with faith and politics.

• 49:00Speaker 02

  I was a contributor, columnist for Time Magazine for about a decade, uh, during the pontificate of Pope Francis and, um, got invited by Time Magazine and actually Newsweek to cover the conclave that elected Pope Francis this past year, I'm sorry, Pope Leo this past year. Yeah, and from that I started writing a substack and it took off. Um, the substack is called Letters from Leo. It's about the intersection of religion, uh, pop American politics and technology. So, uh, yesterday, though, it was a holiday, though, it was Memorial Day, it was kind of my super bowl of sorts.

• 49:32John Coogan?

  Yeah, it seems like it was, uh, it like, this particular, uh, news, like, really broke through. It felt like, I don't know if it was just a slow news day, I think you mentioned that there was like, bad weather in a couple media markets, does it, was that literal? Like, like, there was nothing else to report on, or people were just inside bored and so they were reading all sorts of different stuff? Like, what was your process on like, how the actual announcement rolled out?

• 49:55Speaker 02

  I was very upset when the Vatican announced that it would come out on Memorial Day. The Pope is born in the United States. I just thought it was a bad day for media condition. Um, there was bad weather. I'm here in DC. It was raining. In New York, it was raining and cold. So my, my, my religious claim is that God opened the heavens and the poor weathers to allow the Pope, uh, Pope's, uh, documents to be received. But yes, it, it took off and I think, um, I think what that was really the hope of Pope Leo XIV. He really wrote this letter and this is different from how these encyclopes normally work. We could talk about that a little bit about that, but normally these are very pie in the sky. This was certainly had pie in the sky elements of it. But, but, um, this was really meant for y'all, for Silicon Valley.

• 50:39Speaker 02

  He, he wrote this with builders in mind. Obviously Christopher Olah being there was representative of that. But he wanted this to take off in Silicon Valley. And, um, you know, yesterday morning, uh, Jack Dorsey tweeted out the entire encyclical. So I think mission accomplished. I think he has woken up a lot of folks, both detractors and supporters in Silicon Valley. And I think, um, this Pope, this document's resonating and making a lot of noise.

• 51:04John Coogan?

  Yeah, yeah. What, what about it, uh, do you think is resonating? Because, uh, it, it is such a broad document, uh, and it feels like he's taking sort of a middle path. Uh, I, I saw it as an optimistic document. I, I saw it not as, not as a doomer. Uh, this is, uh, AI is gonna, you know, uh, you know, kill everyone and this is the end of the world. Like AI can be useful, but there are a lot of different decisions that we need to make. How AI is rolled out, how we, uh, maintain our humanity. That seemed to be the central thesis, which I, I liked. It seemed like, it seemed sort of like a, like a middle ground. Is that, is that the goal? And then what would you expect Silicon Valley to take away or change based on that?

• 51:45Speaker 02

  So that was the goal for sure. I think Pope Leo XIV understands that AI is inevitable. Let's just do this for a second. He's he's a he's seventy years old. In Pope speak, that's like a baby. He's quite young. He's the youngest Pope we've had in forty years. He's the first Pope to own a cellphone. He's the first Pope to send an email. He's the first Pope to have an Apple Watch. So he's ingrained in the technological revolution in the flesh.

• 52:10Jordi Hays?

  He daily drives an Apple Watch?

• 52:12Speaker 02

  Yeah. Yeah, he has an Apple Watch. He also has a Garmin too, so.

• 52:22Speaker 02

  So me and him have, you know, some some path to go there. But yes, he loves technology. He plays world every day. And most importantly, he consumes Western media. He consumes that Western media and what's going on. So he knows what's what's happening in the world. And so I think that really informed him what he wants. The Catholic Church never prescribes policies. They prescribe principles. It's really up to the policymakers to do that. It's really up to Silicon Valley and the products they make to do that. But what he wants Silicon Valley to keep in mind is this question of the human person. Whether our projects are advancing the dignity of the human person or whether they are not. And I think that he hears language that concerns him quite a bit oftentimes.

• 53:06Speaker 02

  He's especially concerned about any time where human responsibility is abdicated to to machines and there's no one that you can look back to. And particularly, he's in a lot of his documents talking about war. Obviously, what's going on in Iran has really concerned him. He was particularly affected by that first bombing on the day one of the war that killed one hundred and sixty eight schoolchildren in Manava, Iran. And he received a letter from those children's parents. So he's deeply impacted by decisions like this. And he finds that to be grotesque, but he thinks it would be even more grotesque if machines were killing humans without a human decision making involved.

• 53:48Speaker 02

  So those are some of the concerns he has. It goes on the economics as well, but really the underlying, underpinning concern. Is human responsibility. He wants that to be at the forefront and the dignity of the person. Now, to Silicon Valley, what that looks like. I think that there's a significant chance that a lot of people will, in Silicon Valley, will view this as, you know, D cell nonsense, uh, do or not, which you, as you said, it isn't. But I would say take the Pope seriously.

• 54:16John Coogan?

  Yeah. On, on, on the economic question, um, I was interested in the fact that he sort of called out that, uh, that GDP might not be the best development measure, uh, because I've been hearing this from all over the place. We had Doug O'Laughlin, who is the president of Semi Analysis, very deeply in the, uh, in, in the inner workings of the AI build out, talking about how, uh, GDP was an inaccurate measure of certain measures of progress in terms of just economic impact of AI. Uh, then you have, uh, Kyla Scanlon has written about the vibe session, this disconnect between, uh, the economic progress of Americans versus

• 54:58John Coogan?

  the perception and happiness. And, and we can see it right now. The economy is growing, the stock market is at all time highs, yet consumer sentiment is at almost all time lows. And so I'm, I'm, uh, I've talked to a lot of folks about this problem of like, what are we measuring? What is the goal? Uh, it's always been GDP. And I think it's, it's, it's interesting to see that the Pope is calling it out. I don't know that anyone has a really solid answer. The, my, my fear is that you wind up going towards like happiness optimization and then that takes you into a very dangerous territory too. Uh, but, but in terms of like unpacking that question of, of GDP, development, progress, measures, like, how do you think

• 55:42John Coogan?

  the church is, is reflecting on, on the way we have become a very measurement driven society broadly?

• 55:49Speaker 02

  Well, let's go back. So Leo XIV was named after his, uh, he took the name, his own name, after his predecessor Leo XIII, who in 1891 wrote what was called "Rer on the Barm," if you're not a Latin expert, that means "on new things." And Leo XIII, a lot of people in the West credit him for the intellectual force behind later unions, the intellectual force behind a 40-hour work week and weekends, et cetera. I think that that is a good indicator of what Leo XIV wants as well. The word leisure is sometimes, I think, derided in a capitalist society. But in Catholicism, it's a great thing. We rest on Sundays. Jews rest on Friday, Shabbat,

• 56:34Speaker 02

  the Sabbath. There's something about being able to limit the time of work, expanding the time of recreation, of spending time with your family and loved ones. Remember the word recreation. Its root is recreate. That's actually the mission, if you will, of the Catholic Church, of Christianity, is to recreate. That's what Christ does in Christianity when he rises from the dead. We're looking for more moments of recreation. So I think the Catholic dream would be, you know, to honor the 40-hour work week, and perhaps maybe a little less, I don't think that's possible, but to honor the 40-hour work week as sacred, to honor leisure as sacred, to ensure that people only have to work one job to provide for themselves and their families. I think that's what we're

• 57:19Speaker 02

  looking for. We're looking for a baseline comfort that everyone can achieve in this country by working hard for 40 hours a week. There's nothing wrong with having rest.

• 57:30John Coogan?

  Yeah. So help me synthesize that with what the Pope said about like the unique human challenges, the challenges that make us human. He said, "For an algorithm, an error is a flaw to be corrected. For a person, however, an error can be a catalyst for profound change." It was sort of a warning against transhumanism and this idea that every problem is to be solved. In fact, sometimes the problems are what make us human and our struggles are the value and what brings you joy overcoming. But how are you synthesizing those two ideas?

• 58:05Speaker 02

  I think that what, and so it reminds me of an author that maybe your listeners are familiar with, Oliver Berkman, wrote, I believe it was called, I can't remember the word, it was 4,000 Weeks, basically, a survival guide for mortality. And for the Catholic Church, for Christians, for people of faith in general, mortality is not something to be overcome in and of itself. It's about having a dignified life. He's very skeptical of Brian Johnson, like, of course, he didn't name check Brian Johnson. Yeah. But for Christianity, death is a part, a noble part of the equation. So I think it's really hard for the Pope and for the Church to understand this idea, that that is something to be overcome. Just to get a little theological for a second, really,

• 58:49Speaker 02

  the way that Christianity overcomes death is by dying. St. Paul says that Jesus by dying destroyed our death. So that is not something we should be afraid of. It's something that is part of the journey. It creates a second life for us, a life everlasting. So more practical level, I think we want to do anything that can dignify the human life to make it better lived, to make it more comfortable for people. But we shouldn't be afraid of our limitations. St. Augustine famously says that my shortcomings, who, by the way, St. Augustine's a patron of Pope Leo XIV, he says that my shortcomings actually give

• 59:29Speaker 02

  honor to God, because what it does is it proves the need for a savior. Let me put it in more blunt terms, we can't save ourselves. I think if Pope Leo thought there was an original sin of Silicon Valley, it's that Silicon Valley, at its worst, thinks it is God, or that it can recreate God. Yeah, we see a lot of that.

• 59:50Jordi Hays?

  How, how, how would you guess that he feels about people sort of implying that AI is alive? There were some... Comments at the event yesterday saying, you know, these systems mimic feelings like

• 1:00:07John Coogan?

  Yeah, people were particularly, particularly pointing out that Chris Ola or like Anthropic has written in the past that, that they have detected like, you know, emotions within certain reasoning chains. And then the Pope said that these systems don't feel emotion in the same way. But I didn't see that much incongruity there because one is sort of a description of, you know, the flavor of a text that's being generated. And the other one is like the real true emotion, I suppose. But how, how did you process that? Like, is there actually a divide? Or is there some more synthesis that can be drawn there?

• 1:00:42Speaker 02

  Sure. I think on the first, I will say that I think Leo views this as a side issue truly in terms of he really cares about the practical first and foremost.

• 1:00:50John Coogan?

  Sure.

• 1:00:51Speaker 02

  But what you're referring to, I mean, we know Anthropic gathered 15 faith leaders in March and asked the question, is Claude a child of God? The very short answer from Catholicism, from Christianity writ large, is that the inviolable dignity of the human person is unmeasurable. A better way of putting it, people always, you hear that phrase, the whole is greater than the sum of the parts. It's actually a Christian idea. The wholeness of what it means to be a human cannot be measured or recreated in a lab. It is a theological claim. It is a religious claim. So I think the best way the church could understand it

• 1:01:30Speaker 02

  is that you can mimic a human being 99%, perhaps 100%. But the fact that it wasn't brought to birth by God and brought to birth by a human, a human person first and foremost, and created, if you will, in a lab, I think that limits the possibility of it being divine.

• 1:01:49John Coogan?

  Hmm. Jordy, what else stuck out to you?

• 1:01:54Jordi Hays?

  Uh, what was, how do you feel the church more broadly, uh, sort of?

• 1:02:04Jordi Hays?

  You know, I thought I was, you know, seeing some of the, the clip of, of Olaf talking about, you know, job loss and job displacement and economic disruption. I thought, um, I can imagine a lot of people in the church broadly were upset to have, you know, representative of Silicon Valley there. Uh, and, and who, who many, I, I don't know if this is the view, but many would feel like is part of the problem, at least when you look at, um, you know, tech CEOs or lab CEOs specifically, when they go and do interviews and historically when they've done interviews and they're saying like, you know, this is gonna, we think this is gonna cause, you

• 1:02:47Jordi Hays?

  know, massive, massive disruptions to the labor market. People look at the person and they think, you're doing this. Like, why don't you stop? Right? Um, and, uh, you know, we, we don't need to talk about, um, uh, maybe why it's, why it's, why it's worth doing, but, uh, I'm curious what the kind of broader reactions to that kind of rhetoric are around job displacement. Cause I would say the industry is like, the industry is becoming like quite divided. I think that everyone generally agrees that there will be, uh, you know, some, uh, serious

• 1:03:28Jordi Hays?

  evolution of certain jobs and, and roles and things like that. Uh, but a lot of people in the industry believe that there will be significant job creation as new companies get built and, and entirely new roles emerge, even if some roles and, and jobs go away entirely.

• 1:03:47Speaker 02

  And of course we saw the same thing, uh, in the industrial revolution itself. I'll stay on Christopher Olaf's remarks. I, I wanted to step back very quickly. Uh, Olaf's, Christopher Olaf's presence there was on the result of really a 10-year effort by the Vatican to engage with Silicon Valley. And to be very blunt, um, that engagement was at times rebuffed, uh, by some, not by others. Uh, Christopher Olaf was there because OpenAI more than any other. Company in Silicon Valley took these questions seriously and took the engagement of the Vatican seriously. And I know for a fact that February dust up with the Pentagon. Um, um, and the it's the Vatican would argue, at least officials of Vatican would argue.

• 1:04:29Speaker 02

  The uh, the courage that Enzo Pique showed in that um, in that uh, fiasco. Was the final, was the final straw that makes made them the guys for, for the Vatican. But very quickly, I thought Allah's remarks struck a lot of people in Rome and here in the United States. And it's quite honest. I appreciated him saying that like, we're not driven by these questions. In fact, we are driven by innovation. We are driven by profit. It was something of a, I, it was the opposite of a pitch, you know, and I appreciated the honesty. In some ways, I saw someone arguing is actually a confession. He went to Rome and asked for a confession. He said, well, we have these shortcomings and we need outside institutions to be.

• 1:05:08Speaker 02

  I don't know if referees is the right word. It's probably too strong a word, but advocates for, for a, for a human centered um, development of AI.

• 1:05:16John Coogan?

  Yeah. Um, have you, have you uh, looked at uh, uh, who do we have, uh, who do we have on the show? Um, uh, Pat Gelsinger, have you looked at any of his analyses of these different L L Ms? He's benchmarked all the L L Ms on uh, on like how spiritual they are, how they, how like, how they map to uh, different religious values. And uh, his sort of complaint is that the, the L L Ms are, are uh, overly agnostic or overly atheist in the training data. Perhaps because there's like a lot of Reddit in there maybe, uh, and I'm wondering like, uh, if there's uh, any perception of like the, the, the, the, the training data.

• 1:06:00John Coogan?

  Like the actual products themselves uh, misaligning with the views of the church.

• 1:06:06Speaker 02

  I would say, so I would say the Catholic Church, Pope Leo XIV is not looking for the, uh, an LLM to replace a priest or religious advice. And I think that you have concern that people would go there first, quite frankly. So I don't think he's most concerned about the bias. I think he's concerned, I mean, I think obviously Pope Leo is neither left nor right, but I think a lot of his concerns do on this really attached to what the left in the United States is saying. Um, I think that there's concern about bias and profiling, uh, bias in credit scores. He talked about that. I thought that was remarkable. That he talked about credit scores and mortgages, uh, getting access to mortgages. I thought that was, uh, profound. So I think that is more of his concern. We actually saw another study today that said that,

• 1:06:48Speaker 02

  um, when you ask, um, some LLMs to, to, um, they compared like when you asked them to, to compare religions, the Catholic Church, uh, got a nice review, a glowing review. And so perhaps God's Catholic or not. But I don't think Leo cares as much about that stuff. I think he concerned, he's concerned more about, quite frankly, access to resources and, and judgment calls about who gets something versus not and punishment and not. Those are really what I think overwhelms us. Look, this document was long. He, he did a lot in it, but the thing that really kind of took most of, like the least of, latter part of a bigger portion of it was war.

• 1:07:23John Coogan?

  Yeah. Can you help me understand, uh, his views on international governing bodies, international cooperation? A lot of the debates in artificial intelligence right now, they get, they sort of, they, they sort of run into, uh, problems where the different American companies sort of agree on something, but then there's this boogeyman of international competition. And if we don't do it, China will. And so we must continue to accelerate. And it feels like, uh, Pope Leo sort of gestured towards a view of international cooperation that could be the solution,

• 1:08:05John Coogan?

  but also there were some detractors who were worried about the negative outcomes of, of that. And, and I'm wondering like how you interpreted his, uh, his vision for international cooperation in the modern era?

• 1:08:20Speaker 02

  Sure, I think the first thing is obviously he's an American pope, but he is the pope of 1.4 billion Catholics. So of course he's a globalist. Of course, he is concerned, he puts global institutions at the forefront. He's not unfortunately to some chagrin, not America first on these questions.

• 1:08:38John Coogan?

  Sure.

• 1:08:38Speaker 02

  Um, I think that the critics of Leo are going to be disappointed because he, he does believe in regulatory order. Uh, he does believe in international norms. He does believe in, in, uh, governing societies. I mean, the most conservative pope we've had in the past 60 years, Pope at the 16th was very big on, on the United Nations and equivalent organizations. Now, I think some in Silicon Valley might rightly argue that's naive, that those things don't work. But I would say that if, if for a practitioner, um, I think that what he would ask is at least allow the question. Uh, can we have more cooperation? Um, can we have more agreed upon constraints?

• 1:09:20Speaker 02

  And can we at least engage in this in, in, in good order? Um, he obviously, um, you all are profit run companies that are listening today and that, that, that's the reality of it. But I think he wants, I think he wants everyone to take the heart. Um, what are, what can we do to ensure that what we're building is, um, for the common good of everyone? Um, but I, I very much think that J D Vance, when he went to Europe and Paris in 2025. And he said, let's talk about innovation more and guardrails less. I think Leo's saying, no, let's talk about guardrails as well.

• 1:09:55John Coogan?

  Oh, interesting. Okay. Uh, well, thank you so much for coming on the show and breaking down for us.

• 1:10:00Jordi Hays?

  Yeah, great to meet you.

• 1:10:01John Coogan?

  Jordan, anything else?

• 1:10:01Jordi Hays?

  I appreciate it.

• 1:10:02John Coogan?

  Have a great rest of your day. Thank you so much. We'll talk to you soon. Goodbye. Um, interesting. Uh, I am excited for more people intact to digest the encyclical and see where all of this goes.

• 1:10:18John Coogan?

  We have our next guest joining in just three minutes, three minutes. We have time for one quick story, closing out the enhanced games, of course. The next thing was that over the weekend, Diary of a CEO host, Stephen Bartlett, went viral for saying that-

• 1:10:39Jordi Hays?

  Tyler, throw me, throw me a beer.

• 1:10:41John Coogan?

  Yeah. So this was, this was a funny clip. We can play this actual clip. Ross Hendricks, a lot of people were not, were not happy with this. The quote is, it's from, from a Clipper, says Stephen Bartlett says, "A few glasses of wine ruined the next three days of his life." Let's play this clip.

• 1:10:57Speaker 03

  It's one of those areas where you don't understand the hidden cost until you really give it up for a while. And I think about my own relationship with drinking and I stopped drinking at 30 years old. I'm now 33. And I had just drank because I just drank. I'd never ran the experiment of just giving it up for a while. And then like, I don't know, maybe I was at 31, I thought, you know, I'll have a drink again because now I could really A/B test it. I had a year of not drinking, decided to have a drink again. It ruined three days of my life. I had a couple of glasses of wine, didn't get drunk. It ruined three days of my life because of the domino effect it caused. So it meant that I got worse sleep that night. And then because I got worse sleep that night, I ate more poorly the next day because my, my dopamine system or whatever, the cortisol system was all messed up. And then I podcasted worse. I didn't go to the gym the day after.

• 1:11:42John Coogan?

  People did not like that I podcasted worse.

• 1:11:45Speaker 03

  Because I felt really bad. I then slept worse. And I could track all of this on my week. #ad# sponsor, #invest, whatever. Yeah. And I was like, oh my god.

• 1:11:52John Coogan?

  I love that Chris is just chilling there.

• 1:11:53Jordi Hays?

  The perfect, perfect page bait.

• 1:11:55Speaker 03

  This hidden domino effect that I must have been living with for my whole life.

• 1:12:00John Coogan?

  And so this is like a very non-controversial take that has been popular on podcasts for years, really. But it's, but it's so pointed here. And I think, I mean, there's a bunch of interesting things. I mean, a lot of people are just saying like, oh, you should just be able to drink and like, it's gone too far with the, the total abstinence culture. Like you should be able to have a glass of wine and be fine if you're, if you're completely knocked off of everything for three days after a couple of glasses of wine. Like, you're Not actually like, you know, strong and hardy and you like, like you've life will throw other problems at you and, and much worse than three glasses of wine. You will lose sleep because your kid is sick and you will still be asked to perform.

• 1:12:43Jordi Hays?

  And so I think, I think parents, parents watching this certainly looked at it and thought, if one, if one night, if one bad night's sleep doesn't allow you to work out for two days, it throws you off so significantly, you probably shouldn't, probably shouldn't have kids because get ready for, you know, every other.

• 1:13:02John Coogan?

  A lot of craziness, like life will throw all sorts of stuff at you.

• 1:13:05Jordi Hays?

  It was funny because when, when we, when we started doing the show and you saw like my various health habits, you used to joke like John would say, I'm a junkyard dog. I just eat everything and I just assume it's healthy and nourishing and I feel great. Right. And you would joke that you would say, if Jordy had a single inorganic blueberry, he would.

• 1:13:25John Coogan?

  It would kill him.

• 1:13:26Jordi Hays?

  He would explode.

• 1:13:26John Coogan?

  He would explode instantly, the thoroughbred diet.

• 1:13:29Jordi Hays?

  So yeah, I've certainly just, you know, battled that myself, like the, the, the, the point of being healthy is to be resilient.

• 1:13:37John Coogan?

  I mean, the funny thing is that we, we, we used to have Dom Perignon episodes where we would drink on the show and it actually did make us podcast worse, as silly as that sounds like it was harder to maintain the flow of conversation. And you'd think, oh, having a couple of drinks is probably loosens you up like, no, this is actually a performance. Like even though podcasting is a silly job, like it is a job and you need to be on and.

• 1:13:57Jordi Hays?

  Yeah. Another example, so we, we basically decided, we decided early on to never take sick days, partially because we would, we, we spent so much time together, like we're always, if one of us gets sick, usually the other one gets sick. It's just part of the game. Uh, and, and think about moments where you just feel like completely terrible, but because we don't take sick days, we're like, okay, we're going to power through and you end up still like, we end up still having a fun time. We end up hopefully still having a good show.

• 1:14:27John Coogan?

  Yeah.

• 1:14:29Jordi Hays?

  And, uh, and so, yeah, I think, I think this is this, I think we probably hit, um, I was, I was talking with some friends yesterday and it, and it, it feels like alcohol is going to go the way of cigarettes where it's broadly established that it is very unhealthy, but can still be quite enjoyable. And will maintain some level.

• 1:14:54John Coogan?

  Like cigars, cigars.

• 1:14:56Jordi Hays?

  No, but but I mean, cigarettes are still widely.

• 1:14:59John Coogan?

  Yeah, but cigarettes are so addictive that people either like smoke them all the time or not at all. Whereas I think a lot of people who do drink wine will have like a glass of wine on the weekends. Whereas there's no one who's like, I have one cigarette a week. That's not like a thing, but people do that with cigars. They'll be like, oh, yeah.

• 1:15:16Jordi Hays?

  There's definitely people that that are.

• 1:15:18John Coogan?

  It's pretty rare, though. It's pretty rare. Anyway, the the last thing is that I was I was fascinated by this fact that this went so viral because of this clip. And Crypto Mickley, who is web three clipping at Counterparty TV, not Thread Guy, clipped this. And I was interested in it because at first I was like, is this out of context? And this is sort of the full context from the actual show. But it does sort of change the context because this is obviously from a longer show. It's two people hanging out for an hour. They're talking about a lot of different things. But when the clip is introduced, it's like Stephen Bartlett says, a few glasses of wine ruined the next three days of his life. It's the most it's written like a press release, you know?

• 1:16:03John Coogan?

  It's like a statement and it's not necessarily what Stephen would have put out as a press release. So you wouldn't put it, he wouldn't necessarily have done a blog with the title.

• 1:16:11Jordi Hays?

  Yeah, and the actual, and the actual, this is a guy that cares a lot about performance.

• 1:16:15John Coogan?

  Yeah.

• 1:16:15Jordi Hays?

  And he's basically admitting that he had a few glasses of wine and it and it threw him off.

• 1:16:18John Coogan?

  Yeah, and he's just trying to tell like a positive story of like, yeah, just, you know, removing something, feeling healthier. It made him happy. I don't know, but it clearly it clearly triggered everyone because there's 24 million views on this and and 2,000 quote tweets.

• 1:16:33Jordi Hays?

  And Ian over at SciCom, the team behind Huberman, Ian is pulling up the chart of new podcasts by year. It's possible that drinking is correlating.

• 1:16:46Jordi Hays?

  Podcast creation.

• 1:16:47John Coogan?

  People are drinking.

• 1:16:48Jordi Hays?

  Because people are drinking.

• 1:16:49John Coogan?

  We should start a podcast.

• 1:16:50Jordi Hays?

  We should start a podcast.

• 1:16:51John Coogan?

  Maybe, maybe.

• 1:16:52Jordi Hays?

  It actually peaked right in 2020 and falls off a cliff.

• 1:16:54John Coogan?

  This is a crazy chart.

• 1:16:55Jordi Hays?

  Right when drinking really fell off a cliff because of COVID too.

• 1:16:58John Coogan?

  Yeah.

• 1:16:59Jordi Hays?

  Make it make sense.

• 1:16:59John Coogan?

  So where all the podcasts launched in 2020, I guess, is that, is that where this line lines up? Because I guess during COVID, a lot of people started shows and then it went back to sort of the baseline. I guess I'm surprised. I'd like to know more about this data because it feels like there's been like an ongoing boom forever, but I guess not. Anyway, we have our next guest waiting in the waiting room. We have Sean Henry from Stord. He's the founder and CEO joining us today. Sean, how are you doing?

• 1:17:30Sean Henry?

  Good to be here. Thanks for having me, guys.

• 1:17:32John Coogan?

  Welcome to the show.

• 1:17:33Jordi Hays?

  Very cool green screen in the background. Love it.

• 1:17:37Sean Henry?

  Not a green screen at all. Anyone goes by, this is, this is real time. This is live. I'll blame all of my performance on my three glasses of wine from Friday or Saturday night.

• 1:17:48Jordi Hays?

  There we go.

• 1:17:49Sean Henry?

  Otherwise.

• 1:17:50Jordi Hays?

  There you go. Great to see you.

• 1:17:52John Coogan?

  Great to see you.

• 1:17:53Jordi Hays?

  Been too long. You got some big news today.

• 1:17:55John Coogan?

  Yeah, break it down for us. What happened?

• 1:17:58Sean Henry?

  For sure, John, Jordy, good to be here. Thank you, guys, for having me. Well, we're announcing that Stord has raised $250 million, a $3 billion valuation.

• 1:18:07John Coogan?

  Congratulations.

• 1:18:09Sean Henry?

  Thank you, guys. Thank you. Really, to power the physical intelligence layer for commerce. We spent a decade building this at Stord and we think that the scale, the vertical integration and the ability to apply robotics and AI to the massive data set we have is just transformational for commerce and what we're enabling for our customers. So very proud to announce this round and thrilled to be here live, sharing it with TBPN.

• 1:18:34John Coogan?

  So what's been the biggest growth driver? Obviously, you're expanding in your commerce market, your offerings, but also is, is e-commerce, is commerce as a, as a general category still growing? What are sort of the macro trends that are tailwinds for you?

• 1:18:52Sean Henry?

  Yeah, if you look at our announcement, what you'll actually find is we put out a pretty public chart of revenue. And you'll find in our tweets that right around the time that AI came out, about six months later, we accelerated massively as a business, which really is in part that we had spent eight years to that point already building so much vertical integration of software from the time we're speaking to a consumer during the checkout saying, "Order now, get it on Thursday," to the time we're orchestrating that network, to the time we're executing it with software in a building like this across our network of nearly 100 facilities. And so when we took that vertical integration with the scale that we had, maybe two years ago at that time powering about $5 billion of commerce, today powering almost $17 billion

• 1:19:36Sean Henry?

  of commerce, what we've been able to do is drive just faster deliveries, cheaper outcomes with all of that technology and with all of that scale combined. And so a lot of what we're using this new capital for is to keep expanding that scale. There's such a flywheel behind this business where as we get bigger, we're getting faster and cheaper. To then also complete the front-end stack of software. That's been a big part of our growth the last few years is that we've built out that whole front-end consumer experience that's now interacting with tens of millions of consumers per year now that we power deliveries to over a fourth of US households. So we're going to keep expanding that front-end software stack. And then the final big pillar of our growth is we're also announcing stored labs with

• 1:20:19Sean Henry?

  this raise, which was a big part of why we raised so much capital, $250 million, to apply AI and robotics to all of this real-time volume in the real physical world already running real-time. And we've carved out an entire facility here in Atlanta just dedicated to testing next-generation robotics and AI before we apply them and roll them out across our entire network.

• 1:20:43Jordi Hays?

  Oh, sorry. Yeah. What is, uh, what, what are the different why nows that you're feeling in robotics, specifically around, you know, in, in fulfillment infrastructure? Is it like, uh, is it happening on the model side that, that there's, you know, other Neo Labs just working on the intersection of AI and robotics all the way through, you know, uh, you know, uh, new actuator technology come, coming out of, let's say, China, like what is, is it, and I imagine it's the combination of a bunch of factors that's creating the opportunity, but what are you seeing? Why is now the right time to invest what sounds like, you know, nine figures into, um, your own robotics and AI products?

• 1:21:26Sean Henry?

  Yeah, there's really two why nows going on right now. One is why now for our business and one is why now for this investment in stored labs. For our business more broadly, I think the why now comes to by 2020, consumers had been taught they wanted fast, affordable deliveries. And that was really what was driving commerce in today's world. Since then, for the last five years, brands of all sizes have fought to get that Amazon like delivery on their own channels so that they can win and retain their consumer. Rather than, as one of our customers said in a quote for this round, they don't want to just be a SKU on Amazon. They want to be a brand and own their channels and own those direct relationships. It's actually been a really hard five or 10 years for e-commerce when you take into

• 1:22:09Sean Henry?

  account all the changes with Apple and Facebook and rising ad costs, then with tariffs, then with, uh, first with COVID, then with tariffs and all of these kind of compounding challenges to where the why now for us is really that these brands have been beaten down, they faced rising costs, they faced rising competition from Amazon, from TikTok shop and more, all that are just disintermediating them with their customer and harming their unit economics. And so we want to give them those unit economics on their own website. And we even saw two, three weeks ago, Amazon themselves announced this kind of AWS for supply chain moment. Well, we don't see that as any different, that Amazon is really just subletting some capacity in their network.

• 1:22:51Sean Henry?

  What brands want is truly structurally different, which is independence. They want somebody who's not using their data against them, who is driving all the branding on their packaging, their tracking and more that keeps consumers coming back to them, but it was validating. The why now for robotics and stored labs is equally interesting, which is that You kind of look at a company like a Tesla, let's say, and you go to the algorithm. They often put hardware and automation last because first you have to nail the processes physically and the operational excellence around those processes. Then you have to nail the software to run those processes and kind of unify those two. And that's really what Stor'd spent the last decade building.

• 1:23:34Sean Henry?

  And then only once you've gotten every efficiency out of software, every efficiency out of process, then do you go hard code with hardware, which is physical, it's expensive, it's hard to undo. And that's really where I think Stor'd timed this perfectly in that hardware's changing. The hardcoded robotics from yesterday and now the agentic robotics of tomorrow that can learn better, adapt better. Already in this building, for instance, all of our cameras are equipped with AI that are telling us about productivity across the facility, about safety issues, about compliance issues. That wasn't available a few years ago. So when you take our vertically integrated software with then all this hardware and sensors and vision and how it's then feeding dynamic agentic robotics, we're in this like

• 1:24:18Sean Henry?

  fundamentally different paradigm in automation forward. But you have to have the existing software and vertical integration to capture it.

• 1:24:26John Coogan?

  How are you thinking about the different robotic opportunities? Like, I think there's a lot of excitement about humanoid robots. We saw last week a demo of a robot, sort of humanoid, flipping over packages so that barcodes could be scanned. And when I'm in a manufacturing facility, I usually see much more purpose-built machines or robots for those specific tasks. If there's a million boxes that just need to be tipped over, typically there will be a conveyor belt and some sort of device that just does that one task. And I'm wondering if you're seeing more energy being devoted to task-specific robotic optimization or more generalist projects? Like, what excites you?

• 1:25:11John Coogan?

  What is, where's the next, like, couple of years look like?

• 1:25:16Sean Henry?

  Yeah, it's a great question. I think it's where we're headed, which is more general. I think the task-specific automation of the past is what's kind of causes issues because oftentimes the task at hand changes. You implement that robot and six months later with a new SKU variety, new production change, new consumer demand pattern. All of a sudden, the model you built that ROI off of is now fundamentally changed. And if your robot can't adapt to it, you've just wasted so much capital. And so we're very much focused on this kind of new generation of more agentic, more dynamic robotics. And a big challenge in the past was that you kind of either had a robot that moved the arms and could grab something, or a separate robot like the Kivas of the world

• 1:26:00Sean Henry?

  that were kind of moving the legs and it was just shuffling something around the facility. So now you're entering this new paradigm where what could a humanoid do in a warehouse? If you can move the top arms and the bottom legs at the same time and really see this new level of movement going on in a facility. But it's in part why we're so excited because our foundational insight when we began STORE beyond the kind of consumer trend and that every brand was going to need these Amazon capabilities was the reason brands can't do this is that traditionally physical logistics and logistics software, and then the software that serves a brand and speaks to the consumer are all sold separately. And you're trying to figure out how to integrate all of this together

• 1:26:42Sean Henry?

  and tie it into the physical atoms moving out there in the physical world. And so our thesis was, well, if we build all of those together, the infrastructure, the operating software and the consumer-facing software, we will be the platform that can iterate off of these. And right now, our biggest costs are essentially either decisions, labor, or deliveries. And with how our decisions are going from ML to AI, we're getting faster and cheaper than our industry because of that proprietary software. With how robotics are going from hardcoded to agentic, we're getting faster and cheaper at a faster pace than the industry. And even things like drone-based delivery, it's such an awesome capability and incredible category of companies and what's happening there. But you still need inventory.

• 1:27:26Sean Henry?

  Everywhere to be able to deliver from a drone which has a limited radius. And you need that front end consumer experience software telling the consumer drone deliveries available and stored is what controls that part of the stack that then extends out to then enable things like drones. So the shortest statement is we kind of see ourselves as the vertically integrated platform that can first take advantage of a lot of these emerging technologies because our industry is so far behind us.

• 1:27:54John Coogan?

  Talk about international expansion. Where are you live today? Where do you think you'll be in 12 to 18 months? Like what international opportunities are exciting to you?

• 1:28:07Sean Henry?

  Yeah, so we're very large in the US approaching 100 million packages a year to about a fourth of US households this year. Internationally, Canada is our next biggest market, followed by Europe and the UK. We're expanding with recent launches in both China and Australia and that's taking US brands internationally to say, hey, we can already ship your products globally to over 180 countries. We do that every single year. But what if you actually wanted to hold your inventory locally in those markets and deliver locally? So if you step back, when you think of stored as saying we are the physical intelligence layer for commerce, what that means is really we're trying to give all the physical infrastructure, all the software tools, all the robotics and all the AI that you need to sell anywhere

• 1:28:52Sean Henry?

  and deliver to those consumers. And so already today, our platform is infused at every level with natural language AI where I only bring that up because one of the most fun questions we've seen brands asking is, where should I expand globally based on where all my consumers are already purchasing from?

• 1:29:09John Coogan?

  Yeah, is China an underrated opportunity for independent brands? Like we were just reflecting on the fact that the Tesla Model Y is the best selling electric car in China. It's obviously an American made, American developed vehicle. And I'm wondering if that's not on the top of anyone's mind, but is there some sort of opportunity there?

• 1:29:30Sean Henry?

  I think you may be on to something. That's not necessarily why we expanded into China. We are very customer obsessed and so we tend to follow our customers globally. And to your point, we went with one of the fastest growing US brands who wanted to access consumers in China and expanded with them. And so I think oftentimes we think about the inverse, which is, hey, if I launch a brand here, my, my product, my IP or other is going to be quickly replicated internationally in markets like China. Well, there may be the opposite, which is the end consumer there may actually want that brand from other markets like, like the US. I think there's just this often underestimated fact of opening up more channels tends to decrease your CAC on your first channel.

• 1:30:13Sean Henry?

  Cause what we see is, let's say a brand goes into a new marketplace, a new store, a new international market, and therefore the audience just gets larger and larger and larger who's seen them at least once. And so then your ad effectiveness goes up and so your CAC organically continues to go down.

• 1:30:29John Coogan?

  Yeah, that makes a lot of sense. Well, congratulations on the fun.

• 1:30:32Sean Henry?

  Great update.

• 1:30:33John Coogan?

  Thank you so much for coming on the show and have a great rest of your day.

• 1:30:37Sean Henry?

  Talk to you soon. Thank you guys. Good to see you again. Until our next run in.

• 1:30:40John Coogan?

  See you later. Bye. Up next, we have Eric Reese.

• 1:30:43Sean Henry?

  What a chat.

• 1:30:44John Coogan?

  The author of Incorruptible, Why Good Companies Go Bad and How Great Companies Stay Great. Eric is in the waiting room. We'll bring him in in just a minute. You probably know him from his first book, The Lean Startup, which focused on why successful, successful companies drift. This book is focused on why successful companies drift from their founding principles and how to prevent it. The Lean Startup was foundational to me when I came to Silicon Valley. I remember I went to a Lean Startup book event, probably back in 2012, you spoke there and it was very inspiring as I was starting my first company. And I took away from it just, you know, money is not infinite.

• 1:31:28John Coogan?

  Don't die. Don't burn all your money. But I mean, maybe we can start there and sort of reset, like what are the correct lessons that you think should endure from the lean startup? And then we'll go into incorruptible and sort of all of the, all of the evolution. But I'd love to sort of have a reflection.

• 1:31:44Sean Henry?

  Super.

• 1:31:45Jordi Hays?

  Incredibly influential on my career and journey.

• 1:31:49John Coogan?

  Really like unlocked entrepreneurship for a lot of people because it was a perfect time where like it was you needed $20 million to be a business.

• 1:31:56Jordi Hays?

  Well, yeah, for me, for me, as somebody who just grew up obsessed with startups and be on TechCrunch every day and all the startups that I thought were cool and crushing it were in TechCrunch. Every, you know, 12 months raising all this money and it feels like out of, you know, it feels like out of reach when you're a teenager and then you realize like, hey, the capital is way less of a constraint than than you would think. So thank you for that.

• 1:32:23Speaker 05

  Well, guys, thanks. Thanks. And first of all, congrats to you on this success. You know, what's really held up, like a lot of the techniques and the specific tactics from lean startup are a little dated now. I mean, you know, Groupon is a case study like it's it's it's old now. It came out 2011. But I think the principles have held up really well. And especially if you think about like from a mega trends perspective. The book said that the world's going to get more and more and more uncertain. So our ability to plan and forecast is going to get worse. I think we think we nailed that one. And that the democratization of technology is going to mean that more and more and more people are going to be able to build faster, cheaper, better products. And so when you put those two things together, every industry that's been hit with a double whammy with those two things, lean startup holds up real well.

• 1:33:03John Coogan?

  Yeah. Do you think startups are getting leaner or less lean in the modern era? And what I mean is that I will see, we have folks on the show all day, oh, $200 million seed round. It doesn't feel lean. At the same time, we hear about the mythical one person, one billion dollar company. And although there's been some reporting that's been a little bit debunked on, it hasn't happened yet. It feels like it is becoming more attainable. You can run leaner, even if you're just using SaaS products, but also AI agents can do a lot of things. You can answer a lot of questions. You might have slightly lower legal bills just because you're a little bit sharper going into that negotiation.

• 1:33:45John Coogan?

  And so I'm wondering on the the net leanness, how are you processing the modern era?

• 1:33:50Speaker 05

  Well, every time we have a mania or a bubble, you know, call it right, the situation goes bimodal real fast. You have people who are struggling to raise money if they're not in the favored category and then obviously the money is flowing ridiculous. What's funny is I've been at lean startup long enough that people periodically write these articles that are like such and such company proves that lean startup is over.

• 1:34:09John Coogan?

  Sure.

• 1:34:09Speaker 05

  And they always pick a company like Quibi.

• 1:34:11Speaker 02

  Okay.

• 1:34:12Speaker 05

  So it's like, you know, you just never know what it's gonna be the thing. I think fundamentally, like using resources well is an eternal entrepreneurial virtue. So even the people that are overfunded, a lot of them run into trouble because now you don't have that, that reality kind of barking at you all the time to make sure that you're actually building something that people want. It becomes easier and easier to delude yourself, the more money you raise.

• 1:34:33Jordi Hays?

  The other, the other kind of startup that's emerged is the, is the, is the lean startup that ends up raising a lot of capital, but simply because they were lean and they were like really scrappy and they grow super quickly. I'm thinking of like, you know, a Turbo Puffer, right? Uh, our, our friend's company where, you know, raised very little money, is at a nine-figure run right now, but extremely attractive to capital. But, but, but, but his entire approach is like, how do I maintain that scrappiness even once I have a fortress balance sheet? Because that's what made the company great from the beginning. It's just like doing things that customers want, that they'll pay for, you know, all these things.

• 1:35:12Speaker 05

  Well, it's so easy when you take in that level of money to lose that ethos.

• 1:35:17Speaker 02

  True.

• 1:35:18Speaker 05

  The thing that made it worth investing in, in the first place.

• 1:35:21Speaker 02

  Yeah.

• 1:35:21Speaker 05

  And I think it's interesting, like I know quite a few companies that like what you're describing, where the fundraising was done for some other reason than for the money. In fact, I know a bunch of founders who brag to me, we raised this money and never spent it.

• 1:35:32Jordi Hays?

  Yeah.

• 1:35:32Speaker 05

  Um, because it can, it can make sense to have a fortress balance sheet, but to me, the real question is not about like, how big or, or small is the organization, how much money was they raised, but how much control do the people who are locked into that mission actually have over what happens next? And sometimes when you raise too much money, especially too much money too early, you think, you know, you ring the gong and you're really proud and that's great. You know, like it's, okay, that's really fun, but then like how do you actually, yeah, or you, I get the air hard, you guys with the sound effects and like sometime, you know, this, you know, the media environment, like steadily building a product that people love day in, day out, like.

• 1:36:03Jordi Hays?

  It's hard.

• 1:36:03Speaker 05

  That's not the sexiest story. And so sometimes, you know, we get, we get distracted by all these other things that take us away from the one and only one thing that truly matters, which is can you build a great product, build a great company?

• 1:36:14John Coogan?

  Yeah, yeah. I mean, there are so many, and a lot of financial reporting sort of misses the changes of control that happen. Like, there might be a company that's raised a $1 million series seed, and then a $5 million series A, and there's two VCs on the board and one founder. And then there might be five founders on the board and VCs are stuffing $100 million checks, and they can't even get a board seat because there's so much demand. And which one tells you more about the future of that company? Potentially, the governance side. How are you grappling with the just governance in the modern era? I mean, I feel like that's a lot of what this book is about. There's so many different paths. There's, you know, PBCs and really diffuse lots of, you know, lots of co-founders having even stakes.

• 1:37:00John Coogan?

  And then you have the SpaceX AI, immense control in a single founder. Both can produce, you know, fantastic products and good financial outcomes. But like, how should we interpret all the different roads that are available to founders these days?

• 1:37:14Speaker 05

  Yeah. It's really confusing. That's actually part of the reason I wrote the book. The book is meant to blueprint, to actually show a new, better way forward. Like, the extreme founder control has its problems. You know, psychologists call it hubris syndrome. Not to name, not to name check any particular founders, but you know, that can cause some issues. But also, investor-dominated companies really underperform, precisely because we have this financial system that has this gravitational force that pulls companies down into mediocrity or worse. And the book I document, like, over and over and over again, we reenact the parable of the goose that laid the golden egg, and just stab it right through the heart, when we, by removing the thing that actually made it worth investing in. In the first place, how many times have you gone to a restaurant and you're like, look on your phone, you're like,

• 1:38:00Speaker 05

  take one bite, and you're like, did private equity buy this restaurant? It tastes disgusting!

• 1:38:05Jordi Hays?

  No, I have the best, I have the best example of this. My favorite, my favorite hotel in the world was bought by private equity. And one of the things that every guest would talk about, didn't matter at all. It's just like, barely contributed to the cost of like, you know, having a guest there, was that every night the hotel would walk around and they would leave a warm chocolate chip cookie and milk for each guest. And private equity bought the hotel, which only had like something like 20 something keys, and they immediately removed the free chocolate chip cookie with milk at night thing. And I just so such a funny thing to like take out, but is exactly the kind of

• 1:38:46Jordi Hays?

  thing when you met you transitioning from, you know, this like founder led, you know, family operated business to investor owned.

• 1:38:58Speaker 05

  Yeah, what's sad about it is we built an economy where people are routinely rewarded for cutting costs, but never held accountable for the downstream brand and quality consequences of that. So like on the balance sheet, getting rid of the cookie is immediate ROI positive.

• 1:39:13Jordi Hays?

  Yeah, and you can justify it. You can justify it because the cookie is still on the menu. So people want the cookie.

• 1:39:18Speaker 05

  Yeah, they can get the cookie if they want. Why do we have to give them a free?

• 1:39:20Jordi Hays?

  We looked at the data. A lot of people don't even eat the cookie, right? And so it doesn't matter, of course.

• 1:39:26Speaker 05

  No, you got it right. Like, how is it possible that the capital structure of a company has a flavor? You can literally taste it. And because like, notice how when you said that private equity took over your hotel, we're all ready to give you condolences, right? Like you could, in theory, you might be like, wow, having those resources made it better, right? Go, that's great. Now they're gonna, no, no one ever feels that way. And everywhere I go, you know, I've been to help you do this book tour on the new book, people are coming up to me to be like, I know that story. Yes, that happened to me. And they've named like 20 different restaurants to me, hotels, like so many service products where, and again, it's not about private equity per se, it's that we've built this pervasive force that is just dragging companies down. So if we're gonna get now get to the governance question, and I know for founders listening, it's like, oh, God, governance, so boring. But like, as I say in the book, if you don't get the governance of a company right, no

• 1:40:10Speaker 05

  other decision you make will matter in the long run, because you won't be the one making it. So we have to figure out, how do we create that like incredible alignment, you've seen it in mission driven companies, right? Where everyone's on the same page. How do we protect that special thing from outside pressure? And when you put those two things together, we can create what I call mission controlled companies that cannot be corrupted by this temptation.

• 1:40:35John Coogan?

  There's a bunch of different things that I want to like click through to get to interrogate that. The first is probably quarterly results, quarterly earnings. I've seen proposals to go to every six months reporting and it seems like, okay, that would align public companies with like the CEO could think for six months instead of three months and take bigger risks and, and, and think longer term. That feels very good. At the same time, it feels like the, the, the rug that you sweep things under is potentially just getting

• 1:41:09Speaker 05

  Twice as large, yeah.

• 1:41:10John Coogan?

  Twice as large or the closet where you hide the bodies is getting twice as big. And I'm wondering, is there a tension there? Am I wrong to think that there's a tension there? Because a lot of, a lot of like, I, I, I think about, you know, problems in the public markets with long-term value creation, long-term alignment. But then I also think about the, the transparency that comes with being public, the regulation that comes with being public, the access to public investors, retail investors that can participate in a company before it's a trillion dollars if it's going to be a great company. So how, how are you dealing with those tensions if there are tensions?

• 1:41:45Speaker 05

  Yeah. Okay. First of all, attention is completely real.

• 1:41:48John Coogan?

  Okay.

• 1:41:48Speaker 05

  And you think you got to know is, is long-term stock exchange, the company that I founded, is the one who filed the petition last year to the SEC to switch from quarterly to semi-annual.

• 1:41:57John Coogan?

  Oh, you're the one. Okay.

• 1:41:58Speaker 05

  So obviously I have a, I have a, a strong, strong view about it. Yeah.

• 1:42:02John Coogan?

  Oh, nailed it.

• 1:42:04Speaker 05

  Exactly. So, and what's funny about it is, okay. So first of all, we have to understand the scale of the problem. You're not going to believe this, but we have

• 1:42:13Jordi Hays?

  By the way, sorry, sorry. Before we continue, you should have named it like, you know, Eric's, Eric's Law or something like that. You're not getting enough credit. You're not getting enough credit for this.

• 1:42:23Speaker 05

  Guys, that's, listen, the memes and everything, that's your department. Okay. I just, I just, right? So, okay, but you've got to understand the magnitude of this problem is insane.

• 1:42:31John Coogan?

  Yeah.

• 1:42:31Speaker 05

  If you look at other countries, there's these natural experiments where certain countries have, have switched from semi-annual to quarterly reporting or vice versa. And they happen to do it in such a way that not every company changed at the same time and it was random who did which. So we actually know the valuation consequences of quarterly reporting and it's roughly a 5% loss of total equity value.

• 1:42:51John Coogan?

  Wow.

• 1:42:51Speaker 05

  Companies are 5% less valuable.

• 1:42:54John Coogan?

  Interesting.

• 1:42:54Speaker 05

  When they report quarterly than semi-annual. So the academic research on this is pretty good and the magnitude of the cost, we're talking about so much, so many billions of dollars of lost value. It's not because the like, you know, effort to do a quarterly report is expensive, although it is expensive and annoying. Rather, when people report quarterly, they start to run the company for the quarterly report. So companies no longer make products, they start to view the quarterly report as the product, which means they're mainly meme factories. What do I have to do to generate the report that will get me what I want? Now, getting rid of quarterly reporting just by itself, I don't think is a very good idea and we'll see what the SEC ultimately decides to do. I think we should replace quarterly reporting with a better, like more fulsome disclosure

• 1:43:36Speaker 05

  project where long-term investors can actually find out what the F is going on at the companies they invest in, where today, companies are strongly incentivized to give out as little information as possible. But that's kind of broken the partnership we need between long-term companies and long-term investors. That's of course, part of why we created the exchange in the first place.

• 1:43:52John Coogan?

  Yeah. Talk about public benefit corporations and how incentive alignment might play out, like in the longer term, when there is, you know, when you get to a stage of a company that's a lot more like Apple than a founder-run, like Anthropic is a unique example with a set of co-founders, but like the, the normal Fortune 500 company has a leader at the top that might have 1% equity and a board seat, but there is a chairman of the board, there's a board of directors, it's much less controlled. But in that scenario, they're reporting to shareholders and they have a fiduciary duty to shareholders. If, you know, you have a company that's, you know, broadly held and has diversified

• 1:44:37John Coogan?

  board and diversified ownership structure, but is a PBC, how does that play out? Like, what are they doing differently? Is it that the CEO has two different hats and they're mentally taking these on and off throughout as their decision-making or, or what is?

• 1:44:52Speaker 05

  Yeah, no.

• 1:44:53John Coogan?

  How does that actually play out?

• 1:44:55Speaker 05

  Yeah, that would be too hard. The so-called double bottom line, triple bottom line, I think, has not worked out very well precisely because it leaves CEOs really confused. Okay, you want to be multi shareholder, great. Customers want lower prices, but employees want higher wages. Now what? So it kind of leads to compromise. But what's interesting, PBC is actually not that new. For the vast majority of time, there have been joint stock corporations on this planet. It was considered obvious by everybody that they should be incorporated to do a specific thing. When they're just trying to make money for themselves, they wind up hollowing themselves out. That's what makes them dangerous. It was only in the 1980s that the idea of so-called shareholder primacy came into effect. So if you like walk by your local park, you will see trees that are older than this idea. This is not some like pillar of ancient pillar

• 1:45:37Speaker 05

  of capitalism. And in the book, I make the case for, first of all, we got to get rid of shareholder primacy. I think it's a, it's just a terrible idea. But the question is kind of like attacking it is easy because the data is so good about all these best practices being so bad. The issue is what do we replace it with? What does mission primacy look like? And I think the key to that is to understand that being a for-profit company is actually great. Making a profit is actually about making the world a better place. That's literally the definition of it. It's like a positive margin transformation. So in the book, I argue, and I feel we're doing it on the same day that like Pope Leo made this same point in way, in way better fact, you know, hundreds of pages, I only mentioned it in passing, but like literally to make a profit is to maximize human flourishing.

• 1:46:18Speaker 05

  That's what it means. So now coming back to the PBC, all PBC does is give the CEO and the board the legal cover to pursue long-term value creation in the face of hostile investors. So if you go there and say, listen, I want to sell the company to Philip Morris because they're willing to pay a dollar more per share than it's worth, you need the tool to be like, no, that's ridiculous. Of course, we're not doing that. And that's what PBC allows you to do.

• 1:46:39Jordi Hays?

  Interesting. What do you think are some of the most underappreciated companies in history that had, that you feel like had mission primacy?

• 1:46:51Speaker 05

  Yeah, yeah, obviously, these are profiled in a great deal in the in the book. And what's really interesting is if you talk to people about corruption and say like, why does companies go to, you know, go to bleep after they get big or whatever? Most people will be like, it's inevitable. It's human nature. It's companies get old, they get big, there's a lot of money involved, blah, blah, blah. But those same people, if you're like, are there any companies you trust? They're like, man, I love Costco.

• 1:47:13John Coogan?

  Yeah.

• 1:47:14Speaker 05

  It's like, interesting, like, how come? But I thought it was inevitable. Costco is a $400 billion public company. Oh, yeah, well, they're the exception. You're like, but what about Patagonia? You got a Vanguard mutual fund? What about, you know, John Lewis partnership? Or you ever eaten a Hershey's chocolate bar? Are you ever taken a Novo Nordisk medication? Like, there's all these weird exceptions, many of which are decades or even like more than 100 years old. And what's interesting to me is if you take that whole category of companies as a data set and say, what do they have in common? Every single one of them violates pretty much all of today's so-called best practices about how companies are supposed to be structured, built and run. So I think we actually have really good data that this is not some abstract thing. So like, so for example, when the founders of Anthropic left OpenAI, so was that like three or four OpenAI crises ago?

• 1:47:59Speaker 05

  I can't track. But anyway, it's like hard for me to keep track. But anyways, like, it's been a rough, you know, it's been a rocky road. When they left, like, I was one of the people that they talked to setting up their governance structure. And not only, and again, I am not taking credit. Okay, don't do the meme thing, okay? I'm not taking credit for Anthropic's success. Obviously, I played only a very big part.

• 1:48:16Jordi Hays?

  They wanted to call it the Eric PBC, but you said...

• 1:48:19Speaker 05

  And I had to talk them out. I was like, guys, please, please, no, no, I don't, you know.

• 1:48:23John Coogan?

  No, no, no. They were looking for an idea and you told them like, I think you should work on AI. That's what happened.

• 1:48:28Speaker 05

  Yeah, yeah, they were like, maybe thinking of pivoting out because they left OpenAI. And I'm like, maybe we should give up on AI.

• 1:48:32John Coogan?

  They were gonna do protein shakes or they were doing an energy drink and you were like, I think AI.

• 1:48:37Speaker 05

  I just talked to you guys about the IRS CEO. Don't get me in trouble here. People are gonna click this out of context. They're gonna give me buzz.

• 1:48:42John Coogan?

  Yeah.

• 1:48:43Speaker 05

  Okay, well, listen, so I'm not, for the record, I am not taking credit for their success, nor am I trying to talk smack about OpenAI. I know you guys love them.

• 1:48:50John Coogan?

  Yeah, yeah.

• 1:48:50Speaker 05

  But the specific thing I think is really interesting is because they were really worried about this specific issue. When I gave them my typical litany of like founder loss of control horror stories, they could see how bad that would be. And in fact, it's funny talking about the Pope. I was at an event at the Vatican last year, talked about AI governance. And I was on this panel with every major AI company, OpenAI, Anthropic, Coher, Palantir, Google, Meta, everyone on the one panel together, and me for some reason. And I'm looking down this row, and I'm like, oh my God, not a single one of these companies has standard governance. They all consider it to be too dangerous.

• 1:49:26John Coogan?

  Dangerous.

• 1:49:26Speaker 05

  They gotta have somebody playing the role of what's called the mission guardian.

• 1:49:29John Coogan?

  Yeah.

• 1:49:30Speaker 05

  But Anthropic, to their great credit, I think, did not want it to be the founders personally holding that, uh, that special responsibility, because it's stressful, as so many founders who are trapped in this situation. So they created something called the Long-Term Benefit Trust, which is like a multi-branch government, right? So you have the, the, the for-profit PPC, and then you have the board of directors accountable to a second entity, this, this outside trust. And the data shows that companies with that structure are something like five times more likely to live to year 50, and have like way better long-term value creation metrics, too. So again, I think we have the evidence that there are these better structures, yet most founders are never given this as an option. And by the time they find out about it, it's too late, they've already lost control.

• 1:50:11John Coogan?

  I want to talk about-

• 1:50:12Jordi Hays?

  I think, uh, one interesting thing is, is, uh, if we move to bi-annual reporting, there's gonna be a lot of work. Accountants, lawyers are gonna have less work, but you're creating a new struc-, you know, these much, you know, these complicated structures, they can just shift their attention to working on mission, mission-aligned companies.

• 1:50:34John Coogan?

  Maybe, maybe. Uh, yeah, sorry. That wouldn't be that bad, would it? No. I think, like, compared with what they're working on now, I think that-

• 1:50:40Jordi Hays?

  No, no, I, I'm, I'm, I'm sort of joking, but at the same time, I think it would be much better use of, much better use of their time.

• 1:50:47John Coogan?

  I, I, I want to talk about Mondragon, is that how you pronounce it?

• 1:50:50Speaker 05

  Sure, yeah.

• 1:50:52John Coogan?

  I, I'd like you to introduce it, though, first, for those who aren't familiar. And then I have some questions about, uh, you know, where we go, what lessons we learn from it. But first, uh, how do you understand that?

• 1:51:03Speaker 05

  See, I don't get to talk about Mondragon very often, so I know you did your homework, and I just, A+.

• 1:51:07John Coogan?

  Awesome.

• 1:51:07Speaker 05

  Um, okay, so, so it's funny, we're talking about the day of the Pope's encyclical. So, so a Catholic priest-

• 1:51:12John Coogan?

  Yeah.

• 1:51:13Speaker 05

  -walked into the war-torn Basque region, uh, after the Spanish Civil War. So this is not the setup for a joke, it's not like a priest walked into a bar. He actually went there.

• 1:51:21John Coogan?

  Okay.

• 1:51:22Speaker 05

  And instead of like preaching, you know, um, just- Uh, comforting people who are being devastated. He had this vision for a new kind of economic reality where workers would be empowered to learn a trade and to own and to control their own destiny. And to make a very long story short, he started to create this network of worker cooperatives, um, where the workers themselves own the means of production and they build all kinds. It started with like industrial equipment and now make all kinds of stuff. And, and if you zoom out today, Mondragon is this gigantic company that employs 90,000 people in Europe, one of Spain's largest companies, makes elevators and then have a grocery store chain and all kinds. Like if you look at it from the outside, you say, oh, that's like a fully diversified industrial conglomerate. Makes sense, like making a

• 1:52:07Speaker 05

  lot of money. That's perfectly sensible. But if you zoom in, there's nothing about Mondragon that actually resembles a typical for-profit corporation at all. It is a network of, I think, 80 or 90 of these independent worker cooperatives that work together. They have like a congress where they send representatives and they self-govern. And any of the cooperatives can leave the network if they don't get benefit from the central services that it provides. So this is an example of what I call a mission locked constellation, which is a, a set of entities that when you zoom out, the customer, the investor, anyone from the outside perceives it as one thing, but it's actually, uh, many things. Now, be honest, if I pitched you, this is my business plan, that I was gonna create 90,000 person network of 80, like,

• 1:52:52Speaker 05

  if I pitched it to you, wouldn't you say it was impossible?

• 1:52:56John Coogan?

  Um, well, that's my question.

• 1:52:58Speaker 05

  That should never work.

• 1:52:59John Coogan?

  Uh, yeah, I.

• 1:53:01Jordi Hays?

  I would, I would say, it's not that it could never work. It would just be extremely hard to reproduce. Like, I think if you got a really talented group of people and you tried to rebuild something like this, even knowing all of the mistakes and challenges that this last one had, it would still be very difficult and probably end in failure. But.

• 1:53:21Speaker 05

  Right. So.

• 1:53:22Jordi Hays?

  But it's clearly possible.

• 1:53:24Speaker 05

  Well, it's clear, the fact that it exists obviously proves that it's possible. But I think most people, when they're thinking about how to start a company, like, just have a very narrow view of what can be done. Cooperatives employ, I don't have the stat in front of me, like, millions of people worldwide. Like, it's not some, like, weirdo niche thing. It's actually like, it's a tool that we can use. Now, in the book, I try to go through all the different ways you can create mission lock. And this is one of the.

• 1:53:50Speaker 05

  Yeah, you guys are a huge Vanguard episode like REI will know.

• 1:53:55John Coogan?

  I guess my, I guess my question with it is that, uh, so I, I, I agree with you. Like you got me. If, if somebody came to me and pitched me that, I'd be like, ah, that's too complicated. That doesn't pattern match to like the usual series A like, ah, I don't, I don't get it. I'm out. Right. Uh, but is that why we don't have an American Mondragon in the modern era? You know, like, like, why is there no, uh, why aren't there as many like, you know, uh, Mondragon style counterparts to the monolithic, traditional founder-led companies? Because the, I, I've heard people pitch this as like, America would be better if we had more co-op networked like Mondragon style entities. And, and, and my initial pushback has always been like, well, it's a free country.

• 1:54:39John Coogan?

  Like, I don't, I don't know that that's illegal. I think it's legal. I think you could just go do it if you wanted to. So is it that people don't want to, or is it that like Jeff Bezos is secretly out there like killing people who want to try to start the Mondragon of Amazon and like compete with him? Like what's going on?

• 1:54:53Speaker 05

  So that's a really good question. And like, so for example, so credit unions, credit unions are the closest thing we have in the U.S. That serves like, I think it's like 40% of American households have an account or a credit union. So they're pretty big. They're all not, you know, they're not-for-profit, member-owned financial institutions. And the fact that they exist holds big banks accountable in really interesting ways. So that's like maybe the closest. The, the point that I was trying to make in this book is not so much that we need to copy Mondragon or any particular company, but rather collectively, these are called alternative structures.

• 1:55:21John Coogan?

  Yes.

• 1:55:22Speaker 05

  Control something like 5% of world GDP.

• 1:55:24John Coogan?

  Yeah.

• 1:55:25Speaker 05

  So I don't want to convince anybody to do anything, but for founders that want to attempt something like this, most of them have never been given the permission to even try. If you talk to most lawyers, bankers, like, and you just say, I'm thinking about doing this. They're always like, oh, honey, that's so sweet that you're concerned about mission.

• 1:55:41John Coogan?

  How about a Delaware C corp with a safe?

• 1:55:43Speaker 05

  Why don't you worry about getting your first customer?

• 1:55:46John Coogan?

  Yeah.

• 1:55:46Speaker 05

  Yeah, exactly. Just go focus on this other stuff. But one of the most important ideas in the book is this principle I call, it's always too early until it's too late. So what happens is you talk to all these advisors and like, oh, it's too early. Oh, they're so condescending about it, too. Like, don't worry about that. Just get. And then one day, I've actually been in the room where the CEOs like talking to their CFO and bankers and GC and everybody there and be like, hey, whatever happened to that, like, mission protective provision thing that Eric was talking about? Did we ever get around to doing that? And they're like, oh, you were serious about that? Yeah, I told you to do it. You said it was too early. Like, yeah, now it's too late. When was it the right time? Yeah, you should have said something, man. Like, I did say so. I just feel like that has become the way that this is done. And it's why so many founders lose control.

• 1:56:30John Coogan?

  Japanese K-ratsus. Alternative. Do they fit in the category of alternative structures? Are they good? Are they bad? Like, I only know about them from the very highest level. Tell me. I imagine you've interrogated them more. Do they fit in? And is big tech emerging into a K-ratsu? Like, Google owns Anthropic and SpaceX and Microsoft owns OpenAI? Like, we're sort of maybe Yeah, we're maybe walking our way into a K-ratsu. I don't know.

• 1:56:59Speaker 05

  Let's see. Let's see after the financial engineering recedes.

• 1:57:02John Coogan?

  Yeah, yeah, yeah.

• 1:57:06Speaker 05

  Yeah, I got into. I originally got into all this from studying Toyota. Remember, lean startup comes from lean manufacturer.

• 1:57:12John Coogan?

  Yep.

• 1:57:13Speaker 05

  And it's really funny. I can remember when I first was going on, just like when we met 2012, talking about lean startup. People would sometimes be like, hey, you're telling us to create the next Toyota, but you're also taking up telling us to build a venture-backed company and take it public.

• 1:57:25John Coogan?

  Yeah.

• 1:57:26Speaker 05

  Like WTF? Like, I thought the public markets are super short term, but if you read any books about Toyota, they're super long term. So I actually like spent a lot of time on that question of like, have we just grandfathered Toyota into the modern economy? But even when I was in Japan, I remember people talking to me about, we don't even create them anymore. Like, we have these legacy companies that have this really unique, cool structure that are kind of a hybrid of public and family run. Like, it's a little bit in between both.

• 1:57:50Speaker 05

  If you look at the data, these structures only work if the company in question has a really strong ethos to accomplish something other than making money. That really is like, that's what you see, like, that's what unites everybody from like, these like really progressive companies we've been talking about to Elon, to everybody. If you have a larger vision that is long-term in nature, that is like trying to, whether something really lofty, like I want to fix climate change, or I want to go multi-planetary, or something really simple, like I just want to create high-quality products, no matter what it is, if you have that vision, you are a business revolutionary, whether you know it or not, whether you admit it or not, because the economic system we have has been designed to destroy these companies, to suck the marrow out of them, because they're too weak to stand up for themselves.

• 1:58:34Speaker 05

  So if you look at the historical examples, where they're talking about Mondragon, or the Kuretsu, or all these different structures, like, they're only good if the thing they're protecting is good. So the question for me is like, as founders, as investors, as leaders, as board members, like, how can we create more and more and more of these companies that have a real long-term mission, that are what I call mission-driven, not just like mission-hopeful? And when you do that, you see this like really counterintuitive economic benefits that you get. So it's like, you also get moral and ethical benefits too, you know, like, but that's not even really the reason to do it. You can do it just on the basis of the economic argument alone.

• 1:59:09Jordi Hays?

  Do you think that AI will force companies where it was otherwise maybe too late to maybe over time, you know, sort of massively sort of rework any of their corporate structures? I mean, the example I'm thinking of that is notable recently is Samsung had 48,000 workers basically say like, "Give us a much greater share of, you know, AI-driven profits, or we're not going to work anymore," and started a, you know, pretty big negotiation. I could see over time that happening at more companies, specifically ones that are, you know...

• 1:59:52Jordi Hays?

  You know, facing disruption due to, due to artificial intelligence.

• 1:59:58Speaker 05

  Yeah, there's two things I think that, that are pushing in that direction. The first is the data on employee ownership creating commercial advantage is actually really strong. So I didn't know this. I was always a big, you know, everyone at Silicon Valley, like we're into employee ownership. But I didn't know it was like an ideological thing. I thought it was just good, good practice. Actually, we have really good data. There was a big meta-study of like 55,000 companies with various levels of employee ownership. And they found that employee ownership exhibits dose response. Like 10% ownership is better than zero, 50% is better than 10, 100% is better than 50. Not just in terms of employee welfare, but in terms of commercial success of the company, revenue growth, stuff like that.

• 2:00:35Speaker 05

  The second thing is I really think AI is going to make collective action problems like very different, very different than it was before. So for example, an old Toyota production system piece of wisdom was that if you're doing a lean transformation, taking cost out of a business, it's not ethical, nor is it effective to ask the workers themselves to contribute to their own firing. Like, nobody wants that. So, so they're going to sabotage the effort, but also it's just not right. It's just fundamentally not right. You should take the savings you're getting from whatever the thing is and use it to grow the business. Like if the, all these CEOs who are like, I'm getting a hard on for laying people off using AI. Like if they were serious about how powerful they think AI is, they'd be trying to use it to gain competitive advantage. Like I, I call BS on that whole thing.

• 2:01:18Speaker 05

  So I think you're going to see a lot of, a lot of companies who, who actually sincerely believe in this possibility, realize that we have to enlist our employees in it. This is existential for our business. We're going out of business if we don't do it. We need to be allies with labor to get it done together. I think that alliance is going to be far more powerful than what we currently teach, the way we teach leadership today, which is this very zero-sum game thing. What was called shareholder primacy is really the idea that companies should treat their employees and their customers like a resource to be mined. My favorite quotes in the book is, if you'll indulge me, there's a Wall Street analyst that was criticizing Costco. He said something like Costco takes money that rightfully belongs to shareholders and instead invested in improving the customer experience.

• 2:02:03Speaker 05

  Like that's supposed to be a criticism like what are we doing here? That's how you get $1.50 hot dog.

• 2:02:08John Coogan?

  My favorite, my favorite bit in here from Costco is I, I'd heard this quote before. I thought it was just a meme, but from Costco CEO Jim, is it Senegal?

• 2:02:19Speaker 05

  Senegal, yeah.

• 2:02:20John Coogan?

  Senegal, if you, if you raise the effing hot dog price, I will kill you. Figure it out to then CEO Craig Jelinek in, in 2008. I always, I seen that quote before. I thought it was just a joke, but I guess he actually said it, which is remarkable.

• 2:02:34Speaker 05

  No, he actually said it. And in fact, he said that and another quote, which is, he said that if, if Costco raised the price of a dollar bottle of ketchup by three cents, they would sell the exact same number of ketchup, right? No one would notice. They did that across the whole store, 3% across the board raising prices. They would increase their net income by 50% and not lose any sales.

• 2:02:56John Coogan?

  Yeah.

• 2:02:57Speaker 05

  So why don't they? He says, it's like the business equivalent of taking heroin. You do it once and then you gotta do it again and again and again. Next thing you know, you're not the no price leader, low prices are the, are the easy way. Now that quote and the hot dog quote are distanced.

• 2:03:11John Coogan?

  Yeah.

• 2:03:11Speaker 05

  There are memes online and I was like so worried that I was going to quote him incorrectly that I actually contacted Costco PR and they put me on the phone. I were so nice of them. They put me on the phone with him. I was like, is it, is this really true? Did this really have to confirm it to me? He confirmed it to me personally. So yeah, I think this like very distinctive, countercultural way that they have run that company now for 40 years, the dollar 50 hot dog and everything. Like what's interesting to me is when I tell people that story about the hot dog, nobody ever says like, how come the COO was trying to raise the price? Cause of course he was like, we've all been trained that. You can, you, if you can get away with screwing people over, you always do it no matter what. You raise margins, margins are a source of strength, but Costco is, I think built on

• 2:03:54Speaker 05

  a very different philosophy, which is that margins can be a source of weakness. Jeff Bezos understood it. He used to always say, your margin is my opportunity. So when you are too, you're making too much money when you are being too extractive, you're actually harming your competitive position in the long run. And the fact that we're consistently incentivizing that all across our economies, I think, a bit of a travesty.

• 2:04:13Jordi Hays?

  There was a recent story, Everlane was acquired by Sheen, Everlane, you know, darling of Silicon Valley, you know, raised a bunch of venture, very strong mission, ultimately to get swallowed up by the beast that it sought to displace. Michael, the founder, is a buddy of mine, he seems very fired up. There was a leak earlier today that he's working on something new in apparel. How would, what is your, what is your kind of general advice to somebody that wants a mission, a company to have mission primacy? Like, what is, what is kind of the, there's no Stripe Atlas equivalent today. You can't

• 2:04:58Jordi Hays?

  just go press a button and make one of these, but how does somebody get started?

• 2:05:03Speaker 05

  I'm working on it. I'm working on it, obviously.

• 2:05:05Jordi Hays?

  Yeah.

• 2:05:06Speaker 05

  Check out the book. The book has a QR code, actually has a really detailed implementation guide, and we have like an incorruptible term sheet, all kinds of like legal docs, the whole thing, if you want to, for those that want to do that. But, but for, for your friend, and for so many people who've been through this, I've personally counseled, I can't tell you how many mission-driven founders who get betrayed. The company gets destroyed, they get ousted, whatever. And you talk to them afterwards. I just had this conversation with Whole Foods John Mackey. I tell a bunch of stories in the book of people who've been through this. And you ask them about it, and they really take it personally. They're like, I failed. This happened to me. I should have tried, didn't trust the right people. I tell, I tell a story in the book of a founder who, on their deathbed, was like, I just didn't trust the right people, put the wrong people on my board. We personalize

• 2:05:49Speaker 05

  it, which means we keep the structural causes invisible. We don't see how it's not personal. This is a force that is dragging us down. So I tell the story even of a really close friend of mine, great entrepreneur, who was just tragically ousted by his employees onto a new mission-driven company. I remember asking him, dude, on the new company, what are you doing differently by way of governance? And he was like, like what? It didn't even occur to him that there was like any possible, any possibility that the new company could have a different outcome. So for your friend, there's two things we've got to do, okay? Just two. One is what I call the path of ethos. We have to build the company operationally to stand for something. The great Saul Price, the father of modern retail, the progenitor behind Costco, he called

• 2:06:33Speaker 05

  this being a fiduciary to the customer. Who would you rather die than betray? Write it down. Make that the operating system of the company in its management structure, in its business model, in its culture. The second thing we have to do is what I call the path of integrity. We have to create companies that are capable of making and keeping promises, like that have structural integrity. So they don't give in to inner temptation. They cannot be bullied from the outside. You're trying to buy them, they can say, "F you." If you try to incentivize them to do some bad thing, they have the structural strength to resist. And that's where things like PPC, board mission pledge, the long-term benefit trust, like that's where many of the kind of so-called governance structural best practices that we currently are taught have to go by the wayside.

• 2:07:14Speaker 05

  When you have that special formula of ethos plus integrity, you have a company that is, wait for it, incorruptible.

• 2:07:22Speaker 06

  Woo!

• 2:07:23Jordi Hays?

  Hit the go. This is great. This is great timing. I was, I was talking to a founder yesterday. I was giving them advice and they're with an idea that a lot of people have raised venture to do, and the same way Bezos talks about your margin is my opportunity. I was telling this founder, like, "Your competitors raising venture is your opportunity because they're going to have to do a bunch of things that aren't really aligned to what would make the products great for customers, or what would make the product that you really want." And what I like about this approach is setting things up in a way...

• 2:08:05Jordi Hays?

  That a lot of the problems that you're talking about are problems where you have other shareholders and there's other people that have a stake in what you're doing and that's most businesses will end up that way over time. But if you can find a way to create a corporate structure that mimics the this insane mission-driven founder and allow that that that, you know, the entity to maintain that even after the founder is gone. This sort of permanent structure, I think it will be incredibly powerful. So, thank you for coming on.

• 2:08:34Speaker 05

  No, thank you. Thank you for saying that. I will say, you know, obviously you've heard I believe in feedback. I really like it. It's kind of my thing. Anyway, so I had a lot of people test read the book, you know, maybe 600 people generated something like 10,000 comments. It's like I really, I eat my own dog food, you know? And the thing I'm the most proud of, of that set of people is I'm, I think we're up to five or six of them now. You know, it's like, well, coming up on 1% of the people who read the book so far have reached out to me to say that they had a new business idea that they wouldn't even considered before. Because they were able to use this framework to see new opportunities to make a profit that they they just were blind to before. And a bunch of them have that, just the thing you were talking about a second ago, like that there's some category where everybody hates all the vendors.

• 2:09:15Speaker 05

  Because they're all like, they're all a-holes, you know, they're all extractive jurors. What if we had a category, what if we had a company that kind of competed by being trustworthy to companies? You're seeing that obviously in AI, but you said it's so many categories where it's like, oh, that's actually very simple to make a business like that if you take this idea seriously from the beginning. So, anyway, very excited to be here on launch day with you guys. What else, what else can you bet TB to get the word out about?

• 2:09:38Jordi Hays?

  Congratulations. Super, super, super exciting.

• 2:09:40Speaker 05

  That's great to you too.

• 2:09:42John Coogan?

  Hopefully we can talk soon. We'll see you. Goodbye. Alex Atallah has some news. We're seeing a Cambrian explosion of AI models and it's happening on OpenRouter. The future of AI is neurodiversity. Agents choosing the most cost-effective model provider tool for the task.

• 2:09:59Jordi Hays?

  He's back.

• 2:10:00John Coogan?

  And he's back. Welcome to the show. How are you doing?

• 2:10:03Speaker 06

  Doing well. Thanks for having me back. You've been very busy.

• 2:10:07John Coogan?

  Been busy. Give us the news. What happened?

• 2:10:10Speaker 06

  So we actually raised this round back in February, but we

• 2:10:16Speaker 06

  from capital G as the lead and our existing investors participating and a lot of strategics from from different corporate VCs participating to like Nvidia, ServiceNow, Databricks and a bunch more. And we're growing the team. So, you know, not only do we believe in neurodiversity as a good thing that every company will need to leverage, but also like neurodiversity within our team as well. So if you're smart and you are get things done and you are you think in a unique way, we want you.

• 2:10:49John Coogan?

  How much did you raise?

• 2:10:51Speaker 06

  We raised 113 million.

• 2:10:58John Coogan?

  Now, let's talk about ROI. You're obviously pushing tons of tokens. People need to measure the ROI on these tokens. How have you been processing like the next KPI? Like there's this back and forth with Uber. I'm sure you've seen this where they started token maxing. They're pushing tons of tokens through. Now they got to see what did we get done? How are you actually talking to people about cost optimization, ROI? Like what are you hearing around? The the value that people get? Where are the best use cases? What are the places where you're telling people, hey, you might have gone too far on the token maxing that way?

• 2:11:40Speaker 06

  Yeah, there's a really important trend that we're observing among all of our customers. Sometimes you just don't need Uber Black, but you're you're getting it all the time. Yeah, because you just don't know what else to do. There was a time where everybody was in the pre-product market fit phase for leveraging AI for their needs. And now many companies are past that phase. And they're realizing that most of their OpEx is going to inference. And that's pretty insane. That means that if you make cost-cutting decisions and if you optimize your model usage, that directly flows to your margin. And now the business is directly more efficient. This is not, you know, like optimizing your data dog bill.

• 2:12:21John Coogan?

  Sure.

• 2:12:21Speaker 06

  So, uh, so I think the future is going to be multimodal for many reasons. And that's, that's a big one today. And it's a big one this this coming year. And there are a lot of companies who are also just doing one task that should be broken up into multiple tasks.

• 2:12:40John Coogan?

  Yes.

• 2:12:41Speaker 06

  Served by specific, lower-cost models, and they're getting massive cost savings out of it in addition to improving their recall and accuracy.

• 2:12:50John Coogan?

  Yeah.

• 2:12:51Speaker 06

  So, yeah, it's really important to do, and then down the road, you know, another use case will be getting better than state-of-the-art performance by using multiple models. And that's also helping our customers.

• 2:13:02John Coogan?

  Like mixture of models, like ask the same question to multiple models, synthesize the results.

• 2:13:07Speaker 06

  Yeah. Orchestrating multiple models that were trained by completely different companies to do something for you, and then using a judge or some other set of heuristics to select the best result or combine them together.

• 2:13:20John Coogan?

  Can you talk about opportunities or entrepreneurs or small operations that are bringing compute to bear on OpenRouter? I saw George Hots talking about, he found some building that had a bunch of power, and he was going to rack a bunch of Nvidia GPUs in there and sell the tokens on OpenRouter. Like, what, what, what does he, I think everyone's familiar with what the hyperscalers are doing. People are familiar with what the Neo clouds are doing, but how diverse is the compute supply on OpenRouter these days? What is a small, what does a small shop look like in the modern era?

• 2:14:00Speaker 06

  Good question. Yeah, a lot of people think that basically everybody's just using one model, and that's completely untrue.

• 2:14:07John Coogan?

  Yeah.

• 2:14:08Speaker 06

  We have about 350 models that are being used by hundreds of active users per day.

• 2:14:13John Coogan?

  Yeah.

• 2:14:14Speaker 06

  And while, and the token diversity is growing over time. If you go to our rankings page, we have a chart that just shows the graph getting more and more diverse. We're doing about 120 trillion tokens per month now. So, the, there, there's diversity on model selection, but there's also a ton of diversity in providers for specific models. It used to be the case that like being a provider is, yes, just really hard, because how do you get distribution? Yeah. Um, even if you decide to specialize in like very, very, very uh low costs, but but slow inference. So stuff that's like optimized for batch agentic workloads. Sure. Um, how are people going to discover it?

• 2:14:59Speaker 06

  So we're building all these SKUs in the marketplace so that providers can find a market really, really quickly. And so we become the the go to market strategy for the the long tail of providers. We've built an enormous number of tools to do quality checks and rigorously test these providers on the SKUs that they aim to support. And then we we send them back all this reporting so they can really easily optimize their inference and get better and better over time.

• 2:15:29Jordi Hays?

  Predictions for American open source?

• 2:15:34Speaker 06

  Hmm.

• 2:15:39Speaker 06

  I think American open source will uh become a mixture of taking existing models, some of them uh, some of them might be foreign, might be Chinese, and improving them. And then creating a like new models from a new foundation. And I I it's it's hard to make a prediction. It remains to be seen because we're just seeing so much adoption right now from foreign open source models and domestic closed source models. I think the the the best thing the American open source models have to leverage

• 2:16:19Speaker 06

  is uh some enterprise demand that really wants like only American open source models. Um, they're American companies and uh and they're they're aiming at it directly. So we provide easy ways of like exploring the, you know, like model providers on OpenRouter by like their family type. So you can like easily look at like which models follow a specific family and and only filter down to those. Um, and we do want to help model labs that are like trying to aim for some kind of niche use case in the market or some kind of niche demand in the market, find that market. It's really hard to discover that otherwise.

• 2:17:00John Coogan?

  How are you thinking about personal AI routing? Obviously with companies, you have this very economic calculation around OpEx and there's an agentic workflow that's running for every customer. So millions of times worth squeezing every cent out of the equation. But we are also seeing growth in open claw Hermes, like these personal agents. There will be some closed source providers there. But memory feels like an important piece of the personal agent puzzle. A lot of that can be offloaded to the context window, to MD files. Is, do you expect the shape or the cost constraints to be any different in sort of

• 2:17:45John Coogan?

  personal AI or consumer AI versus enterprise?

• 2:17:52Speaker 06

  Yeah, I think, I mean, this is not going to be that big of a surprise, but local context is the number one difference that we've seen over the last year. If you build an agent that can really leverage the full computer, it works very well for personal AI use cases. And that's because people have a personal computer. What's interesting is that there isn't something that works on the phone very well, even though a lot of context is stuck on your phone. So we may see a cool personal agent develop in that direction. What's also interesting is that we don't have something very social yet. There isn't something that like pulls your social media data

• 2:18:34Speaker 06

  and like leans into that part of a person's life. So I am curious if we'll see something there. And we've also seen like shockingly few games, I think. And there may be like a really good opportunity for something that looks like a game, but turns out to be much more.

• 2:18:53Jordi Hays?

  How big can Open Router become?

• 2:18:58Speaker 06

  I mean, we want, we really believe that the, like, everybody in the future will want to use multiple models in the same way that, like, even if you could hire a 250 IQ, you know, Chief of Staff, and you, but you had the option of hiring five instead for the same, if not lower, cost, you would go for five, because, like, you know, the five people are just going to be, like, significantly more likely to flag issues that one person would have missed. And, and not only that, but, you know, it helps you cost-optimize significantly. You don't need Uber Black all the time. So inference, I think, will be

• 2:19:41Speaker 06

  the largest software market, potentially the largest market in the economy. All, you know, knowledge work will, will need to leverage it. Otherwise, you're just handicapping yourself dramatically. And Open Router aims to be a very large chunk of that. You know, we do help the model labs, like, find customers as well, and we work symbiotically with them. And, and same with our providers. So, a lot of Open Router is about building, like, things that enterprises need. You know, when, when you bundle a bunch of models together, immediately you realize that there are all these boundaries between models that you have to secure, and

• 2:20:21Speaker 06

  observe, and manage the costs. And so, Open Router is a really good way of managing and securing the boundaries between models and between server tools. So, we're, we're building a bunch of, like, new agentic tools that you'll see in the coming months that, that help do this, both, both for enterprises and for individual devs.

• 2:20:42John Coogan?

  What are your scaling challenges? Are you CPU-constrained?

• 2:20:48Speaker 06

  We are memory-constrained, I think, first, on, on, you know, like, server memory.

• 2:20:57John Coogan?

  Yeah.

• 2:20:57Speaker 06

  And, and I don't think we're CPU-constrained quite yet, but memory is-

• 2:21:02John Coogan?

  But uptime is, but uptime is particularly important for you, I imagine, but there are probably other, other considerations around, you know, multi-cloud availability, interactions with different geolocations, and being, like, you have a different set of, of optimization parameters from other companies.

• 2:21:24Speaker 06

  Yeah, so we, that was the first problem we aimed to solve is like, given a large set of providers for a given model, how do we really perfect the router to like send you to the model that will be up as quickly as possible? And send you the provider that can like best serve the parameters requested? So we've been doing pretty well there, but I mean, we can do even better and it will get better soon. We do a lot of like internal benchmarking against, against the rest of the market, against going direct providers. And, and so we can kind of track progress and hill climb internally.

• 2:22:09Speaker 06

  I think, I think what, what becomes like a real constraint for us is like brand new models that don't have much capacity because only one provider is serving them. You know, there isn't a ton. Sometimes we, we host them all ourselves or we work with a provider to do it. And sometimes we just tell other providers, like all the market signals that we're seeing and be like, guys, you should host this model. Like, look, you know, there's in this region of the world, there's like this going on. And we, you know, we, we blast this out and that sometimes solves the problem.

• 2:22:44John Coogan?

  Jordan, anything else? No. Congratulations. I'm very bullish. And thank you so much for taking the time to come chat with us. I'm sure you'll be back. Have a great rest of your day. Congrats to the team. We'll talk to you soon. Goodbye.

• 2:22:56John Coogan?

  Well, we have some words of wisdom to end on. You can lead a horse to Baja, but you can't make it blast. These are wise words. I'm angry that we didn't think of that. We've talked a lot about Baja blasting. If you're in a code red, when you finish the code red, you got a Baja blast. You gotta make sure that that part leaks out. But. We never thought of you can lead a horse to Baja, but you can't make a blast. Also, Michael Timms ran into some problems here. He said he's been trying the whole two grams of creatine per one pound of body weight thing for a month now, and he's never felt worse. How do you guys do it? It's also like a thousand dollars a week of creatine. Hilarious. Also, it's supposed to be, what is it?

• 2:23:40John Coogan?

  One gram per body, per pound of body weight for protein, I think is the joke, but two grams of creatine. What's an normal creatine dose? Five grams, right? Five grams a day, maybe 10 grams a day. About one one hundredth of what he was doing in this joke, of course. Anyway, anything else we need to? We will be off tomorrow and Thursday. We have a short week. We'll be back on Friday. We are heading to New York for some business trips.

• 2:24:09Jordi Hays?

  I asked, I asked ChatGPT for a phrase like you can lead a horse to Bob, but you can't make it blast.

• 2:24:16John Coogan?

  And what did it say?

• 2:24:17Jordi Hays?

  It said, you can leave, you can lead a horse to Taco Bell, but you can't make it live moss.

• 2:24:24John Coogan?

  Terrible, but kind of funny.

• 2:24:26Jordi Hays?

  Good.

• 2:24:30Jordi Hays?

  Well, folks.

• 2:24:31John Coogan?

  Thank you so much for tuning in.

• 2:24:32Jordi Hays?

  It's been an honor. We hope you have an amazing rest of your Tuesday.

• 2:24:37John Coogan?

  We'll see you on Friday.

• 2:24:38Jordi Hays?

  It feels like a Monday.

• 2:24:39John Coogan?

  Leave us five stars on Apple Podcasts and Spotify. Sign up for our newsletter at tbpan.com and we'll see you on Friday. Goodbye.

• 2:24:45Jordi Hays?

  Cheers.