Gas Stations in Space and Carried Interest on the Chopping Block | E2082

This Week in Startups is brought to you by… Squarespace. Use offer code TWIST to save 10% off your first purchase of a website or domain athttps://www. Squarespace.com/TWIST Atlassian. Head tohttps://www.atlassian.com/software/startups to see if you qualify for 50 free seats for 12 months. AdQuick. Visithttps://adquick.com/twist and mention TWIST to get $1000 off your first campaign. Today's show: Jason and Alex discuss the carried interest tax loophole being in Trump's crosshairs, a great interview with Orbit Fab and their plans for the industrialization of space, Deel's $300M secondary and much more! Timestamps: (0:00) Episode Teaser(1:30) Introduction and welcome(2:40) AI startups reaching revenue milestones(9:00) Impact of carried interest tax changes (10:01) Squarespace. Use offer code TWIST to save 10% off your first purchase of a website or domain athttps://www. Squarespace.com/TWIST (11:25) Would ending the carried interest tax loophole hurt startup investing? (19:17) Atlassian. Head tohttps://www.atlassian.com/software/startups to see if you qualify for 50 free seats for 12 months.(21:18) Introduction of OrbitFab's CEO, Daniel Faber(22:24) OrbitFab's market position, fuel standards, and customer adoption(27:14) Financial and logistical aspects of satellite refueling (29:27) AdQuick. Visithttps://adquick.com/twist and mention TWIST to get $1000 off your first campaign.(31:03) Technical challenges in space operations and future applications(34:16) Raising capital and company growth in space startups(38:58) Community updates and secondary transactions in the market(49:32) CapBase acquisition by Deal(50:37) UAE-France data center collaboration and energy strategy(54:34) European AI and nuclear advancements(57:14) US tech employment trends and Meta's layoffs(1:00:51) Opportunities for founders and startup support resources Subscribe to the TWiST500 newsletter:https://ticker.thisweekinstartups.com Check out the TWIST500:https://www.twist500.com Subscribe to This Week in Startups on Apple:https://rb.gy/v19fcp Follow Orbit Fab: X:https://x.com/OrbitFab LinkedIn:https://www.linkedin.com/company/orbitfab/ Follow Daniel: X:https://x.com/_DanielFaber_ LinkedIn:https://www.linkedin.com/in/danielfaber/ Follow Alex: X:https://x.com/alex LinkedIn:⁠https://www.linkedin.com/in/alexwilhelm Follow Jason: X:https://twitter.com/Jason LinkedIn:https://www.linkedin.com/in/jasoncalacanis Thank you to our partners: (10:01) Squarespace. Use offer code TWIST to save 10% off your first purchase of a website or domain athttps://www. Squarespace.com/TWIST(19:17) Atlassian. Head tohttps://www.atlassian.com/software/startups to see if you qualify for 50 free seats for 12 months.(29:27) AdQuick. Visithttps://adquick.com/twist and mention TWIST to get $1000 off your first campaign. Great TWIST interviews:Will Guidara,Eoghan McCabe,Steve Huffman,Brian Chesky,Bob Moesta,Aaron Levie,Sophia Amoruso,Reid Hoffman,Frank Slootman,Billy McFarland Check out Jason's suite of newsletters:https://substack.com/@calacanis Follow TWiST: Twitter:https://twitter.com/TWiStartups YouTube:https://www.youtube.com/thisweekin Instagram:https://www.instagram.com/thisweekinstartups TikTok:https://www.tiktok.com/@thisweekinstartups Substack:https://twistartups.substack.com Subscribe to the Founder University Podcast:https://www.youtube.com/@founderuniversity1916

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

• 0:00Jason Calacanis?

  If they put a hundred fifty million dollar check in, Mubotola and General Catalyst each, let's say they split it.

• 0:06Speaker 01

  Sure.

• 0:07Jason Calacanis?

  That would be a very big check size. You can't put that into a Series A. That's ten Series As, you know, or twenty Series As. That's fifty seed rounds.

• 0:15Speaker 01

  Well, you might be able to put into an AI Series A, but any other normal, non-AI foundation model company of Series A is going to be much, much smaller than that. Well, valuation.

• 0:25Jason Calacanis?

  It's also a good sign, by the way, just so I'll end on this. It's a really good sign that secondary is happening because secondary doesn't happen if the valuation doesn't make sense and there's a clear path to the next milestones. So congratulations to the deal team and to the early investors who get some liquidity.

• 0:44Speaker 02

  This Week in Startups is brought to you by Squarespace. Turn your idea into a new website. Go to squarespace.com/twist for a free trial. When you're ready to launch, use offer code TWIST to save 10% off your first purchase of a website or domain. Atlassian. From MVP to IPO, Atlassian for startups provides your team the right tools to plan, track, and collaborate on work. Head to atlassian.com/software/startups to see if you qualify for 50 free seats for 12 months. And AdQuick. If most of your advertising dollars are going to digital ads, it's time to diversify. Out-of-home advertising like billboards offers low-cost, high-value reach. AdQuick makes it easy to plan, buy, and measure all in one place. Visit adquick.com/twist and mention TWIST to get $1,000 off your first campaign.

• 1:30Jason Calacanis?

  All right, everybody. Welcome back to This Week in Startups. We've been doing this for over 2,000 episodes. I am Jason Calacanis. I invest in 100 companies a year. With me is Alex Wilhelm. You know him from his TechCrunch, Crunchbase, Matterport, all kinds of different journalistic and database experiences covering business, startup, finance, IPOs, all that good stuff and technology, of course. We're here three days a week, Monday, Wednesday, Friday. Subscribe on YouTube. You get to see us do it live around noon, Texas time, 10 a.m. Pacific, 1 p.m. East. We'll go live and we do about 20% more show if you come live and join the Nody Gang. The Nody Gang is the Notification gang, N O T I, notification gang. To join the notification gang, follow at Jason,

• 2:15Jason Calacanis?

  follow at Alex, follow at T W I startups on X, formerly known as Twitter, or just go to YouTube, type in this week in startups, hit subscribe, and then put all alerts on. You want all alerts, and you get to hang with us, and we take messages from the live audience. You can read the docket anytime, thisweekinstartups.com slash docket. And let's get right to work here, Alex. There's just so much on the docket. We should just go right into the first news story.

• 2:40Speaker 01

  I want to start with a chart that blew my mind. So we've talked a lot about startups being high-growth companies. Very important to get out there, triple, triple, triple, double, double, whatever your favorite metric is. Then there came the AI era, and we have seen, I think, Jason, a rapid acceleration in how quickly startups reach major revenue milestones. And this chart was shared by Aaron Levie from Box, and everyone's favorite technology person, showing how fast cursor the AI coding assistant grew to 100 million ARR. And this is not a

• 3:13Jason Calacanis?

  Two years.

• 3:15Speaker 01

  Two years.

• 3:16Jason Calacanis?

  Two years.

• 3:17Speaker 01

  Two.

• 3:18Jason Calacanis?

  Wow. And it looks like after year one, it was at maybe 30. So $100 million in 24 months, that's 4 million of ARR added a month on average. That is mind blowing.

• 3:35Speaker 01

  Mind blowing. And keep in mind that when we think about other companies that have grown very quickly, like, you know, DocuSign was a huge venture when it went public. It did quite well. It took over 10 years to reach 100 million ARR. Now we are seeing with Wiz and Deal and Together AI. I just think that now companies are growing faster. So the outliers are better than they were before, Jason.

• 3:56Jason Calacanis?

  So the question is why, right? Is that the question? Why?

• 4:00Speaker 01

  I mean, in a lot of these cases, the answer is just AI is resonating with the market. But I wonder if just software is now bigger than it was back in the day. And so there's more TAM to attack. So that helps companies grow.

• 4:11Jason Calacanis?

  Yes and no. I mean, when you look at that chart, DocuSign is something that a company signs up for and you change the process of signing documents from the physical world to the digital world. Seems like that is something that takes time. With a co-pilot, it sounds like an individual can just sign up. With ChatGPT, an individual can just sign up and that individual gets massive value and the price point is so low that these things seem to be SaaS companies that are growing like consumer companies. And that was always the dream of Silicon Valley and venture capitalists.

• 4:53Jason Calacanis?

  SaaS, predictable, reoccurring revenue, paid for by the person who uses the software. Consumer, typically Facebook, Instagram, WhatsApp, Twitter,

• 5:06Jason Calacanis?

  Foursquare, you know, pick your viral Yelp app or product or service. They would grow 5% a week, week over week, you know, every 12 weeks they double in size. But it was a free product. So this is free products growing violently. I'm sorry, paid product growing like free products did. It's absolutely astounding. I wonder how many people work at Cursor.

• 5:33Speaker 01

  It's any sphere that makes Cursor, right?

• 5:37Speaker 01

  Any sphere has, duh, between 11 and 50 employees, which is to say, call it 25. That's 4 million ARR apiece. I think Cursor is going to be okay.

• 5:49Jason Calacanis?

  4 million in ARR per employee.

• 5:52Speaker 01

  At the middle of their employee range, yeah.

• 5:54Jason Calacanis?

  Yeah. So if that is the case, that would be one of the highest per revenue companies of all time. If you were to look at a company. You know, a Google, a Facebook, et cetera. They were typically at one to $2 million in revenue per employee. So, you know, a million dollars per employee, every thousand employees, a billion dollars. Hundred billion in revenue, 100,000 employees. You can kind of start to do the math here.

• 6:23Jason Calacanis?

  Yeah, just extraordinary.

• 6:24Speaker 01

  Extraordinary. I'm blown away by it. I'm still very curious about churn, long term. And also like what happens when these products become a little bit more commodified? Like we talked about with self-driving. But no matter what, no caveats needed, growing that fast to 100 million ARR, mind blowing. So I'm very excited about it.

• 6:41Jason Calacanis?

  What is the product cost?

• 6:42Speaker 01

  I think it's a consumer style thing, but I'll pull it up for us just so we have it.

• 6:46Jason Calacanis?

  Guess it's 25 bucks a month. $199 if you pay for the year. So cursor pricing is, you know, the other way to sort of understand exactly how many customers they have, because acquiring a customer takes money or a high net promoter score. So you either have to pay for them, expose them through paid ads, or you can have earned media, which would be getting a TechCrunch story, et cetera, or being here on This Week in Startups. And then the third possibility is virality, high net promoter score. When you see that question in a survey on a, on a website or a product, how likely

• 7:28Jason Calacanis?

  are you to recommend Cursor, how likely you recommend This Week in Startups to a friend? On a scale of one to 10, if you get a nine or a 10, that means you're an advocate, you're a promoter, you're somebody who talks about the product to the public. If you get six and under, you're a detractor. Seven and eight, you're indifferent. In other words, you're not going to say something bad about the product, you're not going to say something great about the product. And net promoter score, for founders who are listening, is a way to determine that. Cursor must have an extremely high net promoter score from customers, or they would have, or they've spent an enormous amount of money and got an enormous amount of press. I suspect they've gotten a lot of press and it's a killer product. And people tell the developer on their team in their Slack.

• 8:14Jason Calacanis?

  You know, or in their Discord, hey, you gotta try this.

• 8:16Speaker 01

  Well, so the pricing is 20 bucks a month for pro or 40 bucks a month per business user. If you're paying a developer, that's de minimis. So why not at least try it out?

• 8:25Jason Calacanis?

  Yeah. 500 employee is nothing compared to what these things provide. If you're paying 500 per employee per year and you make an employee 1% more efficient and they cost 100,000 for a developer on average around the world. I think you could do the math there. You've doubled your money. So yeah. And these things definitely make you more than 1%.

• 8:48Speaker 01

  Absolutely. So I mean, on one hand, I wonder if prices will come down as there's more competition, models get commodified. On the other hand, there's so much value being provided. You almost wanted to charge more. But anyways, cursor is doing well. AI is doing well. Big news though, Jason, that will impact everyone in the venture and startup worlds, which is that it does seem that a favored tax treatment is coming to an end. And you had some relatively clear words about this. You tweeted out, quote, "Getting rid of carried interest exemption is going to result in a lot less investing in startups. A huge mistake to take away that incentive." And the news, of course, here is that Trump has floated a plan to get rid of the carried interest tax loophole, as it's often called. You were more negative than I expected here, Jason. So talk me through how you're feeling.

• 9:31Jason Calacanis?

  So I don't mind paying extra taxes, to be clear, but I saw Jason Lemkin from Saster was tweeting and actually he had taken that screenshot. I mean, I think explaining the carried interest loophole, which means if you have a carried interest, you get 20% of the gains in your venture firm. Should that be capital gains, as in like a share of a company increased in value and you got that share because you're getting the carry? Or should it be income like a salary? Squarespace makes stunning professional websites ridiculously easy. It doesn't matter if you're just selling a product or a service. Maybe you're just sharing your ideas. Maybe you're an artist. Maybe you're a consultant.

• 10:14Jason Calacanis?

  Squarespace is going to give you all the tools to make this happen. And as you know, Squarespace is always adding cutting edge features. This is why. I've been using it for over a decade and Squarespace is actually the longest running partner here on this week in service because every time I need a new feature, Squarespace adds it and the new AI tools are unbelievable. They have one called Design Intelligence. It's like having a world-class designer sitting next to you in your office and you just answer a couple of questions and their AI builds you a fully customized site that's perfect for your brand, that's unique to you, and it does it in just minutes. Personalized layouts, on-brand visuals, premium content, it's all ready to go. So start your year off strong at Squarespace.com/twist for a free trial and when you're ready to launch,

• 10:59Jason Calacanis?

  go to Squarespace.com/twist to get 10% off your first website or domain purchase. Squarespace.com/twist. Thank you to Squarespace for making such a great product that we use year after year at an affordable price and we really appreciate your partnership. It is a share of a company. You're getting a share of the venture firm as the general partner in a venture firm like I am or Jason Linken is, or anybody who's got that title. So if you were to take that away and then the person has to pay ordinary income tax, you're just going to go from capital gains treatment, which is half maybe of income tax to income tax. What does that do? That means venture capitalists make half as much and they pay twice as much in taxes,

• 11:41Jason Calacanis?

  which means less people want to be venture capitalists, less people, uh, well, they just won't work as hard or be in it as long because you don't make enough money, I think, on average, from it to make people want to take that hit. And so, yeah, it's going to lower the number of people who want the job. I don't actually care because I hit a couple of home runs. It's not like, and I'm going to be doing this for another 10, 20 years. I'm kind of on the second half of my career. I'm in the back nine, as they might say. So, you know, it's like, is it going to make me stop investing in startups? I might make me retire a little bit earlier if I'm being honest. Like, what's the point of putting all this work in if I'm going to pay twice as much in taxes?

• 12:26Jason Calacanis?

  Yeah, I mean, if you're, if you sold your equities and had to pay income tax on them and you paid 50% or 52%, I think that becomes the question is how many people quit? Dan Primrack, he actually retweeted me, he did a quote tweet and he said, every time this issue comes up, I ask VC and PE readers if they plan to quit, have never gotten a single yes. So I think people do a little hand reading. Jason Lemkin retweeted it, I'm on Jason Lemkin's reply, I'm just looking at this sort of back and forth. And Jason Lemkin says, let's just see, we will find out what happens when, you know, this actually, if this actually happens, if it happens. What Jason Lemkin said, would I keep seed venture investing, QSBS, that's qualified small business stock,

• 13:11Jason Calacanis?

  for VC ended, and I had to pay ordinary income tax rates on all seed investments? Not sure, maybe not. So I can tell you all the syndicates out there, if you get word of QSBS, if you get, if you make syndicate leads, you know, people who do syndicates on Angel List and other platforms, if you make them pay twice as much tax, I do think it will disincentivize them because the whole business, the economics are based upon hitting a home run and paying capital gains tax, not income tax. If you take that incentive away, I do think you could see 10, 20, 30% of people say, you know what? Not worth my time.

• 13:45Speaker 01

  So that perspective was actually echoed by, again, Dan Primack, he had a great tweet. He says, source on phone just now on the carried interest tax situation. Quote, "It's like the red wedding, Trump collected all the VCs at the White House so we could more easily murder them." Just going to show that some people are really, really mad about this. So my question was, how much money are we talking about? And I actually, I found a bill that was put out, I think it was yesterday, by a couple of reps in the House, and they said that according to the Treasury, closing the loophole, to use that phrase, would raise about $6.5 billion in revenue over 10 years. So 650 million a year, and the differential is 23.8% versus 40.8%, I think is the top marginal versus the current carried interest rate.

• 14:30Speaker 01

  So it's about 17%, 17% yielding 650 million means about 3.8 billion in yearly income that would be taxed at a higher rate. It's money. It's not deficit changing money, Jason, but you know, we have talked on the show about shared pain and, and all that. I guess this is, this is when the rubber meets the road, you know, how, how much do people want to take pain for revenue versus more deficits, I guess?

• 14:58Jason Calacanis?

  Yeah, I mean, cap gains rate versus ordinary income, federal, probably 20% versus 37%. If I'm reading here, California would be 13% added on top of that. So your total rate, if you made a million dollars as a venture capitalist, which means, let's say your firm had a $5 million return, which would be 20% of 25 million, you sold a $25 million, yeah, a $25 million gain on an investment, you get 20% of that 5 million, you split it between four partners and 20% of it between the rest of the staff, each partner gets a million bucks. Instead of getting 60, $630,000, they would get, um, no, instead of paying, yeah,

• 15:39Jason Calacanis?

  getting $630,000, they would get $500,000. So it's actually not double, but it's still very significant. And then it would drive more people to live in a state without income tax, one of the five or 10 states. So it could actually really affect California. More people would live in Florida and Texas and other states, which, you know, is the big trend. All these people from New York, New Jersey, Connecticut, moved to Florida from the private equity space. And in California, they've moved to, I think mostly Nevada and Texas. So that's actually what this will do. It'll drive people out of the major cities where they'll look to get a savings on the difference between cap gains and ordinary income. They'll look for that savings by moving jurisdictions. So that actually could

• 16:24Jason Calacanis?

  be the second order effect as people go, gosh, this isn't enough money to make a living. I'd rather be a founder of a company instead of a capital allocator. Cause the founders and the LPs, they're still going to get cap gains treatment. So what you're doing is you're saying, everybody who works at the company gets cap gains, everybody who is an LP in a fund that invests gets cap gains, the founders get cap gains, the GPs who pick the companies, work on them for a decade, they don't get kept in. So three out of four people participating in this equity creation get cap gains treatment, the VCs don't. That's actually a way to look at it. So again, I don't mind paying more in taxes. I just think if you're going to get rid of cap gains tax, you should just.

• 17:07Jason Calacanis?

  Come up with one flat tax and put it between cap gains and income tax. Right. That would be easier because when you

• 17:15Speaker 01

  So then

• 17:15Jason Calacanis?

  Yeah, I think holistically, yeah.

• 17:17Speaker 01

  Well, we could lower the top marginal rate, right? To call it to 35 and then raise the capital gains to that. And then we're carried interest that I can see ways to do it. I don't think it's going to get killed. This is not the first time this has come up. Trump brought it up in 2016. I think, I think Biden brought it up too. Consistently, it's raised as an idea and then it gets shot down because I think a lot of influential people don't want to endure it. And so I don't think it's going to happen this time. I just found it surprising, given how close Trump has become to a number of people in the venture capital community in the last 12, 18, 24 months. I thought that was going to buy them a bit more.

• 17:54Jason Calacanis?

  Yeah, and private equity, I think this is saber rattling in, I think it's 60% chance of saber rattling, 40% chance of reality. I do think it will push, you know, one in five folks to just retire and be like, yeah. Or maybe of angel investors and people who do syndicates, maybe half of them or a third of them might, a third of them might say, yeah, not worth it for me to syndicate these deals. And it just slows down. The one thing we have in America that really drives investment, which is we incentivize people to make these investments and to create funds and syndicates and all kinds of clubs

• 18:34Jason Calacanis?

  and angel investing clubs to take advantage of capital gains and invest in companies as opposed to just putting it in an index fund and, you know, retiring. And so that's what you got to be careful about. And this qualified small business means you don't pay taxes on the first, you don't pay federal taxes, I think, on the first 10 million in gains. If you invested in a company under $50 million valuation, we created that qualified small business exemption to get more people to invest in startups. So you get rid of that, then people are going to be like, you know, I just put my money in Bitcoin and an index fund and I want to invest in startups. It's easier.

• 19:09Speaker 01

  Those are two very different things to be clear. Bitcoin versus index funds, but I, I, I need DCA to both. So I'm, I'm with you on that.

• 19:18Jason Calacanis?

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• 19:59Jason Calacanis?

  So they would do a Loom where they recorded over a recording of an interview they did with a founder or visiting their website and going through why they want to invest in a company. And this was so great for me. I would be skiing in Japan. I would be on a flight to New York to see my parents. And all of a sudden, I get a notification from one of my team members, "Hey, watch this Loom." And I get the link for the Loom. I click it and then I can put comments at any time. So it's like doing a conference call, but on my time asynchronously. And I can communicate right there on the video. Also included in Atlassian for startups is Pompous, Jira Product Discovery, Bitbucket, so much more, all powered by Atlassian Intelligence. That's their built-in AI.

• 20:40Jason Calacanis?

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• 21:18Speaker 01

  Speaking about things that we incent with our venture capital money, Jason, I have brought on a Twist 500 CEO and co-founder on the show today. It's a company that when I first heard about... About them, I was incredibly excited. Their name is Orbit Fab and they are building essentially a way to refuel satellites and spacecraft and space stations in orbit. So they are doing what I think is one of the coolest things in the world of space technology today. Backed by Techstars, Type One Ventures, a bunch of other folks and they have a lot of cool stuff. So Daniel Faber, we're going to bring him up right now. Daniel, welcome to the show. Thanks for being here.

• 21:50Speaker 03

  Thanks, Jason. Glad to be here.

• 21:51Jason Calacanis?

  Nice to see you, Daniel. So tell us, what is the mission of the company, so to speak?

• 21:56Speaker 03

  We want to see a bustling in-space economy that can support permanent jobs in space. That's our long-term vision. Our mission is to build the industrial chemical supply chain that supports that. To do that, we're focused right now on storing and delivering fuel in orbit. All the satellites in orbit need fuel, otherwise they drift around and have issues. You have to de-orbit them when they run out of fuel. And so we pared that down and we're a gas cap company right now. We're building the gas cap. We built the interface. It's becoming a de facto standard, which gives us an interesting position then in the market on fuel in orbit.

• 22:29Speaker 01

  I have a video of that right now, Jason. While you ask your question, I'll play it in the background.

• 22:32Jason Calacanis?

  Yeah, I was gonna say, it sounds like you're building a gas station and you have confirmed, here is the gas station. I don't know what type of fuel is used in space. I thought people used batteries and solar in space. So what is the fuel in the satellites that you're refilling?

• 22:52Speaker 03

  Yeah, we're using hydrazine is what the US government wants. It's an interesting chemical. It's great for satellites. It's not so great for people. So a lot of requirements come on the ground to make sure that we can fuel safely on the ground. And then we use that equipment to fuel in orbit. You can use batteries and solar arrays to run all the electronics, but you can't move the satellite just off electricity. Imagine putting a Tesla in space. You spin the wheels all day, you don't go anywhere. You have to push something out the back. And so it's really reaction mass or propellant that we're providing. And yeah, there's a few different forms of that.

• 23:26Jason Calacanis?

  So hydrazine is a chemical that goes into satellites that allows some propulsion to occur. That liquid, I'm assuming it's like a liquid propellant?

• 23:39Speaker 03

  Yeah, it's exactly right.

• 23:40Jason Calacanis?

  Yeah, okay. So you get that liquid up in space, you build your space station, you created the standard for the gas hookup.

• 23:48Speaker 03

  Yep.

• 23:49Jason Calacanis?

  What did people do previously? They just, the satellites fall out of the sky and they don't refuel them? And then they just send up a whole nother satellite? Is that how it works today?

• 23:56Speaker 03

  They literally have to ditch them because, because you can't control a satellite without fuel. You can't move it around. It becomes just a piece of debris and it's dangerous. Like we're now putting up thousands of satellites into the busiest orbits. It's a problem with the debris. So we're required by the government to get that debris out of orbit. And in fact, like operationally, you don't want that in your, in a busy orbit. So as it comes to the end of the life, as they get low on fuel, they have to ditch them, which is staggering. So 85% of the satellites, they've got customers still, all the, like the transponders or the, or the imaging sensors, or like whatever the payloads are still working, but they have forced to get rid of those satellites because they're out of fuel.

• 24:34Jason Calacanis?

  That is extraordinary. And so is this an open standard you've created for the, uh, gas caps, as it were? Anybody can put it onto their fuel?

• 24:42Speaker 03

  We make it available.

• 24:43Jason Calacanis?

  Satellite? Yeah.

• 24:44Speaker 03

  Yeah, we, we make it available under an open license. Uh, we're in, in discussion with folks that make a lot of the valves for satellites and rockets to manufacture and, and sell that. So everybody should be able to get the gas cap and use it to fill our satellite on the ground. And then in orbit, we've got the systems and sort of the active side that can dock to the satellite and deliver the fuel. We can sell fuel as soon as people have that gas cap on it.

• 25:05Speaker 01

  I want to ask about commercial progress because in March of 2024, you guys said that you were shipping your first, um, 12 gas caps to customers, including the Space Force. Have those made it up into orbit yet? Or are you guys not yet actually up in space?

• 25:20Speaker 03

  Yeah. Good question, Alex. We, we've sold now 52 units. We just flight qualified them last year. Uh, and in the summer, we got approved by, um, Defense Department in the U S for, uh, using them on some of the biggest national security assets and, and everything else like that. So it's the first commercially available fueling port. And that's why it's becoming a de facto standard. So we sold 50 odd units. We shipped a bunch of those. They're going up on satellites starting this year. So already it's starting to build that, that market. And of course, every one, we expect there's several million dollars of revenue that, that right now we're the only folks that can, can fuel that. So we've built a hundred, uh, a three, $400 million market just from selling those gas caps last year.

• 25:59Jason Calacanis?

  So right now, people buy a car, they drive it, they run out of fuel, and then they abandon the car. Now you'll be able to go fill up their car and then keep the car in orbit. And you'll be able to refill it, I assume indefinitely. So then it's just, what is the, the life of the satellite? It now becomes the issue. So what would the cost be to refuel an average satellite?

• 26:20Speaker 03

  Let me talk about the cost of what they're doing right now and how much that fuel is worth, right? You, you characterize it really well. Imagine buying a car that's got 10 or 15 years' worth of fuel in it, right? Most of the fuel is in a train of trailers behind the car, and you use up most of the fuel just towing the fuel around.

• 26:37Jason Calacanis?

  Oh, is that how it works now? So you basically have an RV, and you've got two people in it, and then the other 90% is fuel. So you have to spend all this money to put fuel up, which means you have to have a bigger satellite, which means you take more space on a SpaceX flight.

• 26:52Speaker 03

  So 50% of the satellites, on average, is fuel.

• 26:55Jason Calacanis?

  Ah.

• 26:56Speaker 03

  Forty, 50%. And that's not make like your money is being made on the payloads, but you've got to have that fuel, and you're using a lot of it just to tow the fuel around. So you're on this exponential, right? Because the last piece of fuel at the end, you've had to pay for with fuel through the whole life. And then you're on a second exponential, because you had to buy it all the day you launched. So the cost of capital is adding up. So when we went out before we started the company, we're asking folks like, what would be the marginal revenue if you had an extra kilo of fuel on orbit? The answer was a million dollars or more, which is a staggering number, but it's not worth putting any more fuel in upfront because of those exponents. So if we can run the logistics and deliver that fuel just in time at the end, like we can get fuel to orbit for $1,000 to $10,000 a kilogram, I've got two or three orders of magnitude arbitrage. I can drive a freight train through that business opportunity.

• 27:41Speaker 03

  So that's why, that's why we went for it.

• 27:43Jason Calacanis?

  Can you make hydrazine in space, or do you also have to get all that hydrazine up in space and pay for that cost?

• 27:50Speaker 03

  Right. You're reading way ahead in my business model. You're absolutely right. We, we actually got asked about doing that because the, the Space Force wanted to know if, if we have an issue, if like if our satellites get taken out in orbit, they're so important to how we operate, how quickly could we replace them? So they brought a satellite, they brought a rocket and they said, go for it. How quickly can you get this to orbit? And the thing that took the longest was fueling because of how dangerous and toxic this hydrogen is. It took them like a day and a half waiting on the pad to get it fueled.

• 28:17Jason Calacanis?

  Got it.

• 28:17Speaker 03

  And so they called us and said, can we buy that fuel in orbit? Could we put inert feedstock in and you could make it in orbit? We actually intend to do that. So phase one, right? Storage and delivery of fuel. Stage two for the company is to become, do the refineries in orbit, right? Stage three, I want to use material that's coming from asteroids and ingest the trillions of dollars of material. That's my 20 year goal. So right now we're a gas cap company, but yeah, we have ambitions.

• 28:42Jason Calacanis?

  Cause it's nitrogen and hydrogen I see here. So you can get it from water, ammonia. So it could be found and it has been found on asteroids in space. So eventually, right now, we're going to be putting that stuff up there. You're gonna have to use like, uh, you know, get a, get a hitch a ride from Elon and get up to space. That's great because all those satellites don't have to put it up there and it's more efficient. And then you gotta just chase them around at 500 miles an hour, a thousand miles an hour and sync up to them. That, that's a little bit of work too, right? The, the chase, I assume?

• 29:15Speaker 03

  Yeah. The, once you match the orbits, like the relative velocity is not, is what matters, not the absolute velocity. It's like being on a highway. You can actually jump from one car to another. As long as the wind doesn't get you in space, there's no wind.

• 29:27Jason Calacanis?

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• 30:12Jason Calacanis?

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• 30:51Speaker 03

  You're coming up and the relative speed when you dock the satellites together is less than a centimeter per second. Right? They do it really slowly to make sure that nothing's getting bumped. So while it takes a bit of fuel to do it, the math is known. And you know, these days that's a, that's a solved problem. Billions of dollars has been spent on self-driving cars. We use a bit of that technology. We make self-driving satellite.

• 31:11Jason Calacanis?

  Love it. Where are you guys based?

• 31:13Speaker 03

  Based in Colorado, set up in Silicon Valley, good place to raise money. But Colorado is an excellent place to hire aerospace engineers. So we had a great time.

• 31:19Jason Calacanis?

  I mean, if you think about the cost of living for an average engineer, if they're making low hundreds of thousands of dollars a year, they are poor in Silicon Valley. They can't afford a home and they're under constant duress. And if they do it in Colorado, you can buy a beautiful home for a half million dollars or a million dollars and go skiing.

• 31:37Speaker 01

  I was about to say, I knew this was going to get back to skiing, Jason.

• 31:39Jason Calacanis?

  I mean, it always does. These engineers, they love to carve. They love to get out there and smash some of that awesome powder. So continued success. This is amazing. And it's just so great to see the space industry finding all the nooks and crannies. It's almost like you're rebuilding the entire internet infrastructure. And it's like watching the internet, just that all that infrastructure. It's like you're like AWS giving people storage. Other people are, you know, the transport layer, you know, fiber lines. And it's just wild to think in 20 years, what space as an industry is going to be like? And how easy it is to get stuff up there now? I mean, how easy is it going to be to go to space in 20 years?

• 32:25Speaker 03

  Well, the starship that is expected actually to get operational this year, that is going to be a paradigm shift. It's absolutely amazing. But let me paint a picture for you as to why VCs are really getting interested in this. We're starting to build this industrial chemical supply. There are companies looking at manufacturing in orbit. And there are things you can do in zero gravity that you can't do on the ground. Like buoyancy doesn't exist. You get orders of magnitude, lower defect densities in semiconductors. You can make drugs that you can't make on the ground because the the gravity effects will destroy them. You can 3D print organs and they won't collapse on themselves. You can actually like this. So many things you can't do. We've barely scratched the surface. So I can see a manufacturing process where you need a bit at the start, a bit at the end in zero gravity. So you just do the whole thing in space. And we end up moving most of

• 33:09Speaker 03

  materials manufacturing to orbit. I can see healthcare. You do a surgery. You could put somebody in a rotating environment where you have this pseudo gravity, but it's lighter on your heart and you can control it. So you could recover better from surgery. You could retire in orbit and lower the stress on your heart and have a better life and three times as long. We're talking already now with with folks that are doing power beaming from space. You get three times as much power because there's no eclipses, there's no nighttime, and that the the atmosphere isn't attenuating the power. And if you want to run nuclear, let's do that in space, not on Earth, that's safer. Let's move power generation to orbit, right? I've just used moved 20 or 30 gigatons

• 33:49Speaker 03

  of CO2 emissions to to orbit. I think we're going to have a bigger economy in space in years than we have on Earth. Because there are so many industries that are going to be up there.

• 33:58Speaker 01

  I love that. But one thing that you and I were talking about before we jumped on was just that sometimes raising money for hardware projects is a little bit harder than software projects. And I'm just, can you tell us a little bit about how hard it was to raise capital at the start of Orbit Fab? And then where the venture world is today? Because it seems to be different.

• 34:16Speaker 03

  This is when we started this, it was like classic pre-seed, massive opportunity. But oh, my gosh, the risks. We had three or four impossible things that we had to achieve. We've now ticked off three and a half of them. And and so our investors are getting pretty interested. But we did the Techstars Space Accelerator program, which is fantastic. And then we're talking to some folks from like the software side of Techstars. And you know, a lot of history and startups are talking about go out and raise money, right? You hit the hit the road when you're when you're prepared. It'll take you sort of two, three weeks to get a term sheet and away you go. And we asked, what about for a hardware company? And they said, oh, that'll take four or five times longer. What about a space hardware company? The guy just said, oh, don't, don't bother.

• 34:55Jason Calacanis?

  Well, these space things, I seem to remember Baiju from Robin Hood was working on a space-based solar energy company. I think it's called Aetherflux, A-E-T-H-E-R-F-L-U-X. So that would be actually a good person to consider for the Twist 500 next, Alex. So let's take a look at the co-founder of, yeah. This is the next, I think, shoe to drop, as you're pointing out, is, well, what if you could collect energy in space and then somehow get that energy, which the density from the sun coming to solar in space is going to be much greater, right? Because there's no

• 35:39Jason Calacanis?

  atmosphere. So my understanding is even solar might work better up there. Then you use a beam, which hopefully you don't miss. But if you go beam to beam, you know, you could send a lot of energy from space down to the ground. So imagine the most remote island in the world, Alex, having not just a satellite with Starlink, but the Starlink and some base station down there getting energy from the sun, from solar arrays in space, and then you don't have to run a cable or burn gasoline or have ineffective solar down there. You could just point and send energy anywhere. Again, this is like some sort of, I don't know if this was like the, I think this might have been Superman 3's theme, which was, there's going to be like a solar array in space that burns a hole

• 36:23Jason Calacanis?

  into the earth. But, yeah, be careful. Was that a James Bond movie, actually? It might have been Moonraker. Yeah, I'm not sure exactly which one, but, man, this energy is going to work, you think?

• 36:32Speaker 03

  It was, it was one of my three industries on the list of, of things that might create the first permanent jobs in space, back 20 years ago, when I got into this, into this industry. I, at that time, ruled it out because the economics did not work. But you have to look at what Starship is doing to launch costs, right? The cost of solar has come down, the efficiency has gone up, all that matters. The technology for getting that power to the ground and doing it safely, which is massively important, that is now maturing, but it's really the drop in launch cost which is the biggest factor. So I was talking with somebody just yesterday at a conference and they said, the number they need on launch costs is $200 a kilogram. As soon as it hits that point, all solar goes to space.

• 37:13Jason Calacanis?

  And at what price point does your business make sense? You have to get the hydrogen up there to run this process. So what's your kind of like maximum viable kilogram launch cost for OrbitFab to work?

• 37:24Speaker 03

  Remember that number that I mentioned, $1 million of marginal revenue per kilogram? There's a Space Force Journal publication that said for US Space Force, the value of just delaying the asset replacements is $800,000 a kilogram. And that's before you think about how contested, like the reason Space Force exists is because we need to be getting out of the way and showing up surprisingly as a photo, right? The real value is just prevailing in conflict. So we have a contract with the US government, the first time that's ever existed. It established the price of fuel at $200,000 a kilogram. My launch costs are $10,000, $20,000 a kilogram. I'm already viable at today's launch prices.

• 38:03Jason Calacanis?

  There's a margin.

• 38:03Speaker 03

  As those costs drop, it just increases what I can do. It increases the amount of customers. We will chase that pricing down and jack up the volumes. That's the future of this industry.

• 38:13Jason Calacanis?

  Absolutely fantastic. This is amazing, Daniel, and we wish you great success. If you're looking for a job, I understand you've raised a little money and I think you're hiring.

• 38:23Speaker 03

  Indeed.

• 38:24Jason Calacanis?

  What's a position you really need to fill? Because we've got a big audience here, maybe you get a couple of resumes out of it.

• 38:30Speaker 03

  Awesome. We need a lot of mechanical engineers, fluids, thermo, a bit of electrical and software, and then all the things that support a startup, right? 80% of what we do is running a startup business. So I need finance, I need FPNA, I need HR, all those kinds of things. The space industry across the board is like that now, right? It's now a mature business, you don't have to be a nerdy engineer. If you are, then there's a hell of a lot of opportunities as well.

• 38:53Jason Calacanis?

  All right. Well done, Daniel, and continued success. Thanks Alex.

• 38:57Speaker 01

  Thanks, Jason. Thanks, Alex.

• 38:58Jason Calacanis?

  Thanks so much for taking the time. Oh, wow. What a great guest. And I'm so excited, Alex, that we're adding so many interesting companies to the TWIST 500. If you go to twist500.com, our friends over at Coda, they're not the sponsors of it, but they make really great software. So we made an amazing database. I think we got 200 companies in there. We're going towards 500.

• 39:17Speaker 01

  230 and plus another 15 today. So basically 250. So it's back half time. Actually, so I'll just take a moment to ask the audience. You know, my email is [email protected] and we spend a lot of time going through funding, news stories, revenue growth, just trying to find these breakout companies that are going to really drive economic success. We only have so many eyes. We're always looking for great suggestions. You can nominate yourself, but you know, minus five points. But if you know a company that's really burning up, just let us know. Cause we're trying to make sure this is the list of the best companies out there.

• 39:50Jason Calacanis?

  The best private companies, you know, most likely to become sustainable, independent companies for a long time. So we're looking for the next Tesla, Uber, Airbnb, DoorDash, Google, Facebook, et cetera. So if you have them, send them along and we'll keep figuring out who those top 500 companies are. And if we do, I might make an index of it and just raise $100 million to try to put, you know, a million dollars into each of 100 of them or 500K into each of them. So that is my long-term play here is we really define these well, and then maybe we'll make a fund.

• 40:23Speaker 01

  Yeah.

• 40:23Jason Calacanis?

  That would go and try to acquire shares in those companies in the secondary market. So twist500.com, we're trying to get this wrapped up in the first half of the year with great companies that have a ton of revenue. So make sure we're looking for ones that have that clear path to revenue and sustainability. What else is on the docket today?

• 40:41Speaker 01

  Well, how about a twist 500 company with tons of revenue that just did a massive secondary? Just hitting all the things you just said. There's a company called Deal, which helps with companies hiring remote employees around the world. Couple of big news items here. One, they just pulled off a $300 million secondary anchored by General Catalyst and a quote sovereign investor. This went to buy out their early investors. The company is not exactly a spring chicken, Jason. It confirmed its $12 billion valuation in this transaction. And so I'm thinking, what's driving this? Why is a nine-figure secondary? Well, it turns out Deal is on an $800 million run rate as of the end of last year.

• 41:19Jason Calacanis?

  That's IPO territory, isn't it?

• 41:21Speaker 01

  We'll get to that, growing 70% a year and it's profitable. So the company is doing tremendously well. But instead of us sitting down here and going, you won't believe it. There's an S1 filing from deal. We just did $300 million in secondary to buy out early investors. And my read is that that means investor pressure to make them go public. It has been dramatically curtailed. So yay, but also I would have loved to not talk about a secondary, instead of talk about an S1.

• 41:50Jason Calacanis?

  Well, you do have this issue because of the wrath of Lina Khan for the last four years. And, you know, by March 1st, I will not bring up her name again, but for the last four years.

• 42:00Speaker 01

  You're sure, man.

• 42:01Jason Calacanis?

  You didn't, you didn't have a lot of M and A and you didn't have a lot of IPOs. You know, the market is a little tough for those type of things. And so a lot of early shareholders need liquidity. When your fund hits year 10, 11, 12, you know, the LPs are like, hey, can we get some of that DPI? Can we get some returns here on our money? And there are large firms like it seems general catalyst and Mubadala. Mubadala is a firm I know well from Abu Dhabi. I've met them a couple of times when I'm there. Really great firm, really smart. The Mubadala team is doing direct investments like this. So I've talked to Alex a couple of times about how I see the Middle East's role in Silicon Valley.

• 42:44Jason Calacanis?

  Well, here you have Mubadala, you know, buying a significant, you know, ticket size here. 300 million between them and general catalyst to buy out the early investors. This is something sovereign wealth funds are uniquely qualified to do. They can come in, do this kind of bridge financing or late stage financing. Get ownership in these and, you know, they'll probably five to 10 X this when the company goes public. If it's been priced correctly, and it seems like in today's market, people are being more disciplined about pricing. And this is going to be the difference. People thought that a firm like Mubadala, and I don't have any insight onto this deal with them, but in general, they thought, oh, Mubadala is going to be, you know, an LP and funds. Some people might think the money in the Middle East was

• 43:27Jason Calacanis?

  the dumb money, quote unquote, at the table. You just go to the Middle East, they take 10% of your venture fund, you go invest. Oh, contraire, mon frère. These are really smart people and they are doing direct deals. So the Mubadala people, you know, the, the folks from the, the PIF in Saudi, Sovereign Wealth Fund in Qatar or Qatar, depending on where you're from, they are now stacked by really smart people. Sanabu is the venture arm of the PIF from Saudi. And those incredibly smart people are not just investing in venture funds. Of course, they do that. But now they're in the, the sort of next phase, which is they are joining the boards and doing

• 44:09Jason Calacanis?

  direct investments, doing secondary investments, doing strip investments where they buy shares from venture funds to clear those out. And so they're, they're sharps now. They have sharps on their team and they, they know, hey, deal is a really good deal. Let's get there and, um, you know, get a seat at the table now before it goes public. So this is really the, the story for me is seeing that Mubadala is a driver here, not just general catalyst.

• 44:33Speaker 01

  So I agree with all of that, I think. But what I'm a little surprised by is just the deal they got, because it feels inexpensive to me. If you said that deal was growing at 30% and was at 800 million ARR and was worth $12 billion, which is 15x ARR, I would have said, okay, 50x, 30% growth, fine. But 70% growth and profitability? To me, it just feels like they're getting quite a large discount on the future exit price of this asset.

• 45:01Jason Calacanis?

  You know, or we're getting realistic pricing. Uber is trading at, you know, two and a half times sales. And then you have, which, you know, I feel obviously talking my own book is like unbelievable when Palantir is trading at 80 times sales. So there is like, there's your range, People can get really enthusiastic and people can get super pessimistic and then in between is reality. If we look at this, if they're doing 800 million in revenue, what was the valuation?

• 45:28Speaker 01

  Twelve.

• 45:29Jason Calacanis?

  Okay, so it's roughly, what is that, 14 times?

• 45:33Speaker 01

  Fifteen.

• 45:34Jason Calacanis?

  Fifteen. So fifteen times sales. If you, if they're growing, would you say 60% year over year or 70%?

• 45:42Speaker 01

  Seventy.

• 45:43Jason Calacanis?

  I mean, that's pretty amazing. You're right.

• 45:45Speaker 01

  Right?

• 45:45Jason Calacanis?

  Yeah. So if they're at 70, they're adding another 500 million in revenue, they'll be at 1.3 billion. So then it's like 10x next year's revenue if it keeps up. You know, 10x, 12x topline revenue is very expensive for a public company. But if you're getting in early, you're securing those shares and it's going to go public and you have a five to 10 year holding window, which a sovereign wealth fund would have, they might want to hold this for five to 10 years because they're public holders of equities as well. You know, if this thing's growing 70% and they overpaid by a year or two, and then it catches up in the public markets in year three and four, and then it keeps growing and you've secured your position years five, six and seven with an outside chance that it could get a Tesla-like valuation or, you

• 46:28Jason Calacanis?

  know, you know, a Palantir-like valuation, that's, that's a sharp bet, right? We start talking about sharp bets. And so I think if you can't get in at the earliest stages, you know, this is what late stage is about. If they put 150 million dollar check in, Mubadala and General Catalyst each, let's say they split it.

• 46:47Speaker 01

  Sure.

• 46:48Jason Calacanis?

  That would be a very big check size. You can't put that into a series A. That's 10 series As, you know, or 20 series As. That's 50 seed rounds.

• 46:56Speaker 01

  Well, you might be able to put into an AI series A, but any other normal, non-AI foundation model company of series A is going to be much, much smaller than that. Well, valuation.

• 47:06Jason Calacanis?

  It's also a good sign, by the way, just I'll end on this. It's a really good sign that secondary is happening because secondary doesn't happen if the valuation doesn't make sense and there's a clear path to the next milestones. So congratulations to the deal team and to the early investors who get some liquidity.

• 47:22Speaker 01

  Yeah, no, I mean, look, I'm not shouting about success. I'm just saying. It's almost a bummer for me that there's so much late, late, late-stage private capital that companies just don't end up needing to go public because I just want more S1 filings. On that note, Jason, a small point, SailPoint, which is going back out, it's an Okta competitor. It was public when private via private equity, now going back out. They did announce this week that their first IPO price share range is 19 to 21. That's about a billion dollars they're going to raise and they're going to have a valuation of about 11 and a half billion on a fully diluted valuation. That's going to happen next week, if memory serves. So everyone, we will have notes about that IPO when it does list. It'll be the first major technology listing of the year.

• 48:03Speaker 01

  And, you know, deal aside, I would like to see another 20, 30, 40. I'll take 100. I mean, whatever.

• 48:10Jason Calacanis?

  And it's a, it turns out it's an Austin, Texas company. So my, my hometown right now, and they were founded in 2005. They've been around for 20 years. They went public, they went private, now they're going public again. So thus is the world of private equity and they do identity management.

• 48:26Speaker 01

  Yep.

• 48:27Jason Calacanis?

  Which basically means, you know, when you go work for some big company and you log into, you know, like Okta, many people know that one, but like Okta, if you log in one time and then all of a sudden it authenticates you in your 20 other accounts and it's all tracked and secure and monitored so that you don't get hacked. That's what this software does. Incredibly boring, incredibly profitable, incredibly important.

• 48:51Speaker 01

  There's a really big connection between incredibly boring and incredibly profitable when it comes to selling to the enterprise. I mean, whenever I think about what SailPoint does, my eyelids begin to droop, but you know, it's going to go out with worth 11, 12 billion dollars. So clearly a big transaction. I'm just hoping it goes well because I feel like if it does perform strongly, so strongly that the IPO scolds complained that it was mispriced, like that level of good, then I think it'll be a big signal to other companies that might be looking at the market right now going, maybe we'll go in the back half of the year or maybe early 26 to get off the sidelines, get off the benches and go forth. I know politics is scary right now, or at least tumultuous, but maybe the public markets are warm and calm and ready to go.

• 49:32Jason Calacanis?

  And full disclosure, we invested in a very groovy company, Capbase, that was making like a cap table software, plus plus plus, a lot of other features, and they were acquired by Deal. And so I have some exposure to this Deal in Deal.

• 49:45Speaker 01

  Oh, I did not know that.

• 49:47Jason Calacanis?

  Yeah.

• 49:48Speaker 01

  Well, talking to your book for you.

• 49:50Jason Calacanis?

  You know, a modest acquisition. It wasn't like, you know, 20 people competing for a company before it goes public. You know, sometimes these companies, sometimes the management of companies decide they want to be part of something bigger, and maybe they can't clear a market. You know, in this case, I think they could have cleared market, but I think they really had some enthusiasm for being part of Deal, if my memory serves me correctly. And so, awesome. You know, it's great to have a little exposure here. And I guess this means somebody might offer us to buy our shares at some point in secondary, or we might be going public. So and then we syndicated that. We run a syndicate called the Syndicate.com, where if you're an accredited or qualified purchaser, you can sign up and then you will see one or two deals a month that we're investing in that we share with

• 50:34Jason Calacanis?

  our syndicate. And yeah, it's a lot of fun.

• 50:37Speaker 01

  Speaking about the Middle East, did you see the news that the UAE is looking to work with France to put together a one gigawatt data center inside of France to help them with their AI efforts? This just happened today. I'm slightly surprised. I feel like the doom and gloom around Europe has reached kind of a fever pitch. And so this struck me as kind of a counter narrative move, but I think it's a great one.

• 51:00Jason Calacanis?

  You mean, every country needs more data centers. That's the law of the land, and it's great to have them distributed. And maybe there's an energy reason. There might be something in the climate or the location. People may not know this, but France was at 1.80% nuclear powered. I think today they might be 60%. They are, they were one of the visionary companies in Europe in terms of embracing nuclear. It might have peaked at 80, and on some days, they might have been like 90%. Then you contrast to Germany, which shut down six reactors, I think, over time. I think three of them immediately after Fukushima, and then the, and then three other ones. And then when they got into this whole

• 51:44Jason Calacanis?

  thing with Nord Stream and Russia, here is the picture. The yellow is nuclear, is that right?

• 51:51Speaker 01

  Yes, sir.

• 51:51Jason Calacanis?

  And I nailed it. It was, it peaked, I guess, in the 2000, looks like, nine era, and that was. Looks like about 80%. Yeah, I think I nailed it. And then it came down. It seems to have come down because of renewables. Their fossil fuels continue to go down. Their hydroelectric is steady. And it looks like because of renewables, they have a little bit less nuclear, which is fascinating.

• 52:16Speaker 01

  I would, I would put nuclear under renewable just personally, but I do think that this is showing that when we consider the world, we might sometimes have too much of a startup narrative focus and we need to look more at what are the assets on the ground perspective? Because this surprised me until I remembered exactly what we just said, that France has so much nuclear energy, low carbon power, stable baseload energy. Why wouldn't you want to build the data centers for Europe? Where you can just plug in to an existing running nuclear power plant? I mean, it's exactly what people want here.

• 52:49Jason Calacanis?

  Yeah, I'm convinced that this announcement, I think we probably nailed it. This has to do not with it being awesome to be able to go to France.

• 53:00Jason Calacanis?

  Uh, and hang out there. Uh, this has to do with nuclear.

• 53:05Speaker 01

  Yeah.

• 53:05Jason Calacanis?

  They probably have extra nuclear capacity because if it peaked in 2009 and some of it got redone by, or it got eaten up by renewables, that means that capacity is probably sitting there. Okay, so France has 18 nuclear power plants with 56 reactors. Almost all are gen two pressurized water reactors, PWRs. Uh, one generation three EPR is under construction, but uh, that's pretty impressive. 18 different nuclear power plants in a country. I think is France 50 million people or so? Um, what's the population of France?

• 53:39Speaker 01

  I can get you that.

• 53:41Jason Calacanis?

  I always like to know the populations.

• 53:44Speaker 01

  68, 69 million.

• 53:46Jason Calacanis?

  Oh, is that how you count?

• 53:48Speaker 01

  So Germany, just for folks who are curious, is around 85 and then the UK is around 60. So France and the UK have about the same population, which explains actually a lot of historic wars, now that I think about it.

• 53:59Jason Calacanis?

  Yeah, yeah. No, Germany and is 85 million, I think, German speaking people, because you got to take in some other countries, Austria, around them, it's closer to 100. So.

• 54:07Speaker 01

  But France, though, is not just nuclear power, Jason, they're hosting. The Artificial Intelligence Action Summit in Paris, and I think the VP is going and other major leaders. So there is some movement to keep momentum going in Europe. And I really do think that more competition amongst, you know, free democratic countries is going to be good for American AI and for startups that build on top of it. So I'm hoping that there's a credible competitor from Europe, be it Mistral, be it someone else. I just, if we end up with three major AI companies and all American, I don't think we'll see as much competition as we would like. So.

• 54:42Jason Calacanis?

  Well, they are still building. They've got a bunch of new reactors I'm seeing here in Gemini Advanced. Just through the same search into both and my Gemini Advanced with deep research says they are building small module reactors and some of these EPR two reactors. And yeah, they're, they're going for it in France. So.

• 55:03Speaker 01

  You know, we're having Helion Energy come on the show next week. There might actually be a live guest. We're sorting out the timing and some, and some things. But they're doing fusion and this is the company Sam Altman backed and he's been very bullish about it. It would be very interesting if people had made these, you know, multi tens of billions of dollars commitments to major data centers predicated on where is nuclear energy? And then fusion just comes in like the Kool-Aid man and breaks the wall down and goes fusion time. Cause then you can build anywhere. There's water.

• 55:33Jason Calacanis?

  Fusion feels like it's this technology that's 10 to 20 years away every 10 to 20 years. It reminds me of self-driving, reminds me of satellite internet. You know, these things are always on the cusp of being here. And the thing about things that are on the cusp of being here, VR being another one.

• 55:54Jason Calacanis?

  You know, it's sometimes it's like the third or fourth time everybody thinks it's going to happen, that it actually happened. So here we have Starlink.

• 56:00Speaker 01

  Yes, we do.

• 56:00Jason Calacanis?

  Here we have Waymo actually doing 150,000 rides a week in a couple of markets. So, you know, fusion to me feels like 20 years out, still feels like a bit of a pipe dream. But I would love to be wrong and it comes in 10 years, but.

• 56:14Speaker 01

  All right.

• 56:15Jason Calacanis?

  Nuclear though is going to take center stage now because who's going to block nuclear? When you have these data centers happening and it's so much commerce available and so much revenue available that if you're a local state or a country like France or. You know, Texas or whoever's, you know, trying to get the next Colossus or Stargate in their backyard, it's going to require approving a nuclear plant or using a nuclear plant that's already there and upgrading it or expanding it. So, yeah, man, this is going to be great for the country. I'm really excited to see unlimited amounts of energy available.

• 56:53Speaker 01

  I'm really happy that the hippies are losing because I grew up amongst the anti-nuclear folks and it's always been a position that makes no sense to me whatsoever. And they kind of won for a while. At least we were shutting down nuclear apartments. You mentioned Germany, but like it's not just the only country doing that. And now that there's growing power demand, the anti-nuclear hippies have lost and I'm just a bullyant over that.

• 57:15Jason Calacanis?

  You know, the only thing I just wanted to touch on was I saw you had a year-over-year change in US technology. That chart was stunning.

• 57:21Speaker 01

  Oh, yeah. Let me pull it up. I gotta find the tab.

• 57:25Jason Calacanis?

  This feels like the chart of the day. It's right under the Google AI spend.

• 57:28Speaker 01

  No, we have a, we have a special version of it.

• 57:30Jason Calacanis?

  Oh, got it.

• 57:30Speaker 01

  Yeah.

• 57:31Jason Calacanis?

  Well, this says you're on your change in US tech employment. It looks like we were adding 100,000, 200,000 people a year. COVID, you had a little dip. 2022, you had a bunch of people hired and then into 2024. This is the AI and the anti-DEI and anti-management movement here. The get fit movement, Facebook, Google and AI. I think all of those things combined are why there's a headwind here. It looks like it went negative for all of 2024 and now we'll see, maybe it's flat for a year or two. The question is, will this

• 58:16Jason Calacanis?

  ever come back or will we have a static team size for some time to come? And this indigestion will just take some time. I think, well, I did see Microsoft fired a bunch of people, Alex.

• 58:27Speaker 01

  Yep.

• 58:27Jason Calacanis?

  For cause, which means for performance. When you get fired for performance, a bunch of people were complaining on my TikTok. For some reason, my TikTok has a lot of this work from home stuff. And I guess I commented on one or two work from home things. So now that's like my TikTok. There's Bulldogs and that. And it's very interesting. People were really outraged that Microsoft fired people without severance. And I'm like, the key word in that sentence is fired. I think you're conflating a layoff with fired for cause. If you're fired, cause you don't get six months of severance. You didn't do your job.

• 59:04Jason Calacanis?

  You were dismissed with prejudice for being incompetent. That happens with one to 5% of people every year. That's not a big deal, folks. You don't get severance for that.

• 59:17Speaker 01

  And just before we jumped on and started to record, so I don't have this in the docket, but I saw the headline from the information. Meta Platforms ready staffer layoff announcement on Monday, and this comes after the company said that it grew its headcount by about 10% last year, which is slightly contrary to what we've seen from other companies, but they do seem to be getting the sisters out as well. And my thought here, Jason, is that we need to stop thinking about layoffs of this, you know, 1, 2, 5, 6% as shocking news. They just now seem to be part of the weather.

• 59:48Jason Calacanis?

  Yeah. So Meta is going to lay people off after adding people and but the concept here is they're getting rid of certain categories of employees and adding another type of employee.

• 59:59Speaker 01

  There does seem to be a swap. So I think it was, uh, worked there at Lassie's cutting staff and they're basically cutting certain positions, investing in AI and still hiring. So I think there's been a bit of like swapping of people inside of companies, some firing for cause, some focus on just keep the high performers, cut the lower performers. But I think what it adds up to in aggregate is what that chart showed us, which is that negative job growth in tech was a real issue for some time. And now we're just about back to break even on job growth for US tech companies. Oh, and by the way, Joseph Politano made that chart. I wanted to give him a shout out. It's lovely.

• 1:00:32Jason Calacanis?

  Great. Yeah. Great job on the chart. And what I'll say is this is going to be a trend. It'll be reducing team sizes at these companies, which means you and your two besties who are great at building products or services should quit. Go to Founder Dot University. We'll give you your first 25K. Go to the launch accelerator. Give you your next 125K. Uh, or go to the syndicate and, uh, launch.co slash apply is our comment application. You can fill it out for all these things. But if you've got a startup idea, founder university for people with ideas and a team, launch accelerator for people with a product in market, getting a little bit of traction, but you need to raise that round and you need to use 125K. And then finally, if you've got 500K in revenue and you're doubling every year

• 1:01:17Jason Calacanis?

  and you're raising around and you need an incremental 250K to a million, that's the syndicate. Those are the three ways we invest in early-stage startups. My email for life is [email protected]. You can email me your business plan anytime and I will CC one of our team members. We'll get you on the horn with them. And we do about 100 meetings a week, first meetings. You can get one of those 100 first meetings at launch.co/apply. Founder Fridays, type in Founder Fridays and we do a meetup in about 100 cities at Founder Fridays. I believe it's founderfridays.tech. Somebody on my team will correct me if I'm wrong. And the goal of Founder Fridays is the first

• 1:01:58Jason Calacanis?

  Friday of every month, founders get together and as a group, they discuss what they're working on, what's working, what's not working, and they mentor each other. You can only have six to eight people in each chapter. That's it. And then you have to start another chapter. You could have like two people in LA, two groups of eight. You help each other grow. For founders, buy founders. First Friday of every month. You can't go if you're a lawyer, accountant, you're trying to sell something into these folks, you're an investor. It's not for you. This is for founders. Buy founders. That's it. You can buy if you want to. If you're a law firm, you can buy everybody. Go to founderfridays.tech. And he's Alex. I'm Jason. We'll see you next time. Bye-bye.