Netflix buys WB + why Jason should run Disney | E2219

This Week In Startups is made possible by: Sentry - http://sentry.io/twist LinkedIn Ads - http://linkedin.com/thisweekinstartups Pipedrive - pipedrive.com/twist Today's show: Netflix wants to gobble up Warner Bros. Do they just want to own Batman and Harry Potter, or is this secretly about destroying movie theaters? Sure, this is usually a startup show, but news THIS BIG warrants attention! So Lon stops by to tell Jason and Alex about the big Netflix acquisition news, why so many theatrical movie fans are terrified for the future, and why this might face particular regulatory scrutiny both at home and abroad. PLUS… are Googlers gaming Polymarket? This is one scenario in which prediction markets are NOT exactly like stocks. THEN we're looking at some of our favorite startups from the Fall '25 Y Combinator cohort (and asking Producer Claude for his picks)… Considering why Perplexity keeps getting sued and how they can stop it… and doing a victory lap for Jason's early investment in breakout AI training project Micro1. Timestamps: (02:05) Netflix buying Warner Bros! Jason, Lon and Alex react. (05:04) Jaytrade Update: J kind of missed the boat on this one (05:36) What does this mean for theatrical cinema? (08:42) Sentry - New users get 3 months free of the Business plan (covers 150k errors). Go to http://sentry.io/twist and use code TWIST (09:52) Jason's pitch to Disney CEO Bob Iger (please send this to him!) (19:36) LinkedIn Ads: Start converting your B2B audience into high quality leads today. Launch your first campaign and get $250 FREE when you spend at least $250. Go to http://linkedin.com/thisweekinstartups to claim your credit. (23:29) Is this deal going to get approval, at home and abroad? (25:52) Are Googlers gaming Polymarket? (28:02) Can you do "insider trading" on a prediction market? (29:23) Pipedrive - Bring your entire sales process into one elegant space. Get started with a 30 day free trial at pipedrive.com/twist (37:00) How accelerators like Y Combinator serve as "finishing schools" for startups (37:52) A Quick Look at some of our fav companies from YC's Fall '25 cohort (39:01) Why startups need to "skate to where the puck is going" (40:08) Why sometimes old ideas (like solar-powered aircraft) are often worth revisiting (45:29) Jason's advice for founders (and investors) in the "feel good" or activist space (50:48) Why Lon, Alex, and Claude ALL thought Hyperspell sounds like a hot startup (52:58) Perplexity getting sued again! Why can't they make friends! (57:51) Meanwhile, Meta's signing AI deals with news publications. (59:21) Micro1, which Jason helped to fund, has hit $100M ARR! Why do AI companies need so many experts? 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 Lon: X: https://x.com/lons 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: (8:42) Sentry - New users get 3 months free of the Business plan (covers 150k errors). Go to http://sentry.io/twist and use code TWIST (19:36) LinkedIn Ads: Start converting your B2B audience into high quality leads today. Launch your first campaign and get $250 FREE when you spend at least $250. Go to http://linkedin.com/thisweekinstartups to claim your credit. (29:23) Pipedrive - Bring your entire sales process into one elegant space. Get started with a 30 day free trial at pipedrive.com/twist

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

• 0:00Speaker 00

  Bidding process is over. Netflix has won the bidding war to obtain Warner Brothers. Now the film and TV studio and all of the Warner Brothers IP, Harry Potter, HBO shows, Barbie, DC Comics, that's all on its way to Netflix should this deal get past the next level of regulatory scrutiny, which is going to be, I suspect, very intense. But I would also say internationally is the huge concern, I think, here for regulators. Netflix plus HBO Max is going to be a dominant player in a lot of international markets. Netflix already has been really tough for a lot of international marketplaces. Like they're already dominating. So that's like the real next thing we have to look out for.

• 0:44Speaker 00

  The deal as of now, 72 billion, so 82.7 billion in total enterprise value. That's for the film and TV assets.

• 0:53Jason Calacanis?

  What's the market cap now of Netflix? If this is a $70 billion deal, what does this represent in terms of the percentage of Netflix?

• 1:00Speaker 02

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• 1:42Speaker 02

  Go to sentry.io/twist and use the code TWIST.

• 1:49Jason Calacanis?

  Hey, everybody. Welcome back to This Week in Startups. I'm your host, Jason Calacanis. With me, of course, Alex Wilhelm. How are you doing, Alex? Fantastic. And? If you see Lonnie Donnie, our editorial director, Lon Harris is here. That means there's something big happening in entertainment and media. Lon, what is it?

• 2:05Speaker 00

  Could not be bigger. So the bidding process is over. Netflix has won the bidding war to obtain Warner Brothers. Now Paramount wanted all of Warner Brothers Discovery. They wanted the cable networks. They wanted CNN. They wanted everything. This deal is going to be for the Warner Brothers TV and film studio. So the cable network, CNN, all those discovery HGTV food network, they will get spun out as a separate company and remain independent or get swallowed up by somebody else most likely. But the film and TV studio and all of the Warner Brothers IP, Harry Potter, HBO shows, Barbie, DC Comics, that's all on its way to Netflix.

• 2:46Speaker 00

  Should this deal get past the next level of regulatory scrutiny, which is going to be, I suspect, very intense. I think that people are sort of focusing on the Trump administration, the FCC. Will American regulatory agencies let this through? Obviously, the Ellison's from Paramount semi-aligned with the Trump administration. We sort of thought they would kind of sail through the regulatory process here. Netflix might be a very different story, but I would also say internationally is the huge concern, I think, here for regulators. Netflix plus HBO Max is going to be a dominant player in a lot of international markets. Netflix already has been really tough for a lot of international marketplaces. Like, they're already dominating.

• 3:31Speaker 00

  Combine that with the power of HBO Max, and I feel like Europe is going to be a really hard nut to crack for this deal. They're already pretty anti-Netflix in terms of theatrical windows. So that's like the real next thing we have to look out for. The deal, as of now, 72 billion, so 82.7 billion in total enterprise value. That's for the film and TV assets. That's the long and the short of it.

• 3:54Jason Calacanis?

  Alex, any data points behind all this that we should know before I give my take?

• 3:58Speaker 02

  Yeah, I want to go ahead and just show the original breakdown of revenue here. I think Lon makes a great point about international. We think quite a lot about Netflix as an American company, but when you take a look at it, you can see that its EMEA revenues are nearly as large as its US, Canada revenues, and it's doing quite well in both Latin America and the Asia Pacific.

• 4:15Jason Calacanis?

  Wait, what is EMA? EMA?

• 4:17Speaker 02

  That's Europe and the Middle East and Africa.

• 4:20Jason Calacanis?

  Oh, they put that together. So MENA is the Middle East, North Africa, but they say EMEA.

• 4:25Speaker 02

  And if you don't know, Jason, these are all enormous companies and they're growing quite well. But the growth, largest growth rates are actually in the APAC region. So something to keep in mind.

• 4:34Jason Calacanis?

  That's Asia Pacific.

• 4:35Speaker 02

  Asia Pacific, yes. And the amount of money here is enormous. Netflix does not have this much cash that it can just throw around.

• 4:43Jason Calacanis?

  What's the market cap now of Netflix? If this is a $70 billion deal, what does this represent in terms of the percentage of Netflix?

• 4:50Speaker 02

  $423 billion, Jason. So this works out to about 17%.

• 4:56Speaker 00

  WB shareholders are going to get $23.25 in cash and $4.50 in shares of Netflix stock for each of their WBD shares.

• 5:04Jason Calacanis?

  I'm an idiot. I made a J-Trade on Warner Brothers years ago. I thought, hey, Zaslov's a killer. You were on the show. You remember me talking about this.

• 5:12Speaker 00

  I do.

• 5:12Jason Calacanis?

  I'm an idiot because I sold it because I was very frustrated with Disney and Warner Brothers not moving. All my other things were moving. And I knew that there was a possibility they would divest us and the sum of the parts would be worth more, but they had this crazy overhang. And I was like, you know, I just don't want to sit around here anymore. So I took the loss against some wins on some other shares I had. It probably would have been a 50% gain for me in four years. But, you know, when you're sitting on three to five X gains, I guess sometimes you gotta, you gotta make some mistakes. Boo hoo for J Cal. What's important about this is when I saw Ted Sarandos speak, and I asked him a couple of questions in a private event, I asked him about movie theaters. And he said, we'll never be in that business. He doesn't like movie theaters. I said, but I'm a member. I have a family. We love the movies and we love Netflix. And we would like nothing

• 5:53Jason Calacanis?

  more than to go to a Netflix movie theater and watch some of these things in the movie theater because my daughters love to go to a movie theater with other kids and have that communal experience. So why wouldn't you? And he's like, yeah, it's just not what we do. And he was pretty adamant about it. So what happens now, Lon? Because I was listening to, you know, I listened to some of the Ringer shows. They have a really good show, The Big Picture. They have The Watch. I love The Watch. I don't really listen to Big Picture regularly, but I listen to The Watch regularly. I really like that. The Watch is a great podcast for TV shows. Putting it aside, you know, everybody's kind of lamenting, if you took Warner Brothers out of the mix and they stopped making theatrical, theatrical would actually collapse because they have the DC franchise and all this stuff. So explain to us if they... Sell the lots?

• 6:38Jason Calacanis?

  If they stop making theater releases or they do what Netflix does, which is like the token, you know, minimum to get Oscar consideration, what happens to the movie business?

• 6:47Speaker 00

  Oh, collapse. The very dark cynical take on this would be that is why Netflix wants Warner Brothers so bad, because it could slowly strangle the remaining life out of their major competitor for your entertainment dollar. So let's consider Warner Brothers slate for this year. Sinners, one battle after another, a Minecraft movie, weapons, Final Destination, Bloodlines, The Conjuring Four, Superman. You're talking about a lot of this year's biggest hits. Add in Barbie, the number one theatrical film of all time was a Warner Brothers release. I mean, they are a major significant tent pole, one of the big five, but along with maybe Disney and Universal, like one of the key players that is driving the movie theater business.

• 7:32Speaker 00

  And if they suddenly pulled all of their films out of theaters, it would be, I think, a shock to the system for the Regals of the world and the AMC's of the world that they might not be able to recover. I'm not saying that is the goal. You could read it that way.

• 7:47Jason Calacanis?

  If they strangle the theaters, then they increase the habit of people watching at home on 83 inch, $400 television.

• 7:55Speaker 00

  Of course. I mean, Netflix has always said they don't see any one particular entertainment company as their rival. They see time, people spending time on other things is what hurts Netflix. And so this would be a chance to snipe one of the biggest leisure time activities cleanly. There is a cynical take. I'm not saying that's necessarily what they're going to do. And Ted Sarandos has sort of already discussed this. People have already sort of asked about it. They're saying for now, they plan to keep WB movies in theaters, but they want to make, Sarandos is calling it more consumer friendly. What everybody is reading that to mean is shorten these windows. So movie WB movies will still come out in theaters, but maybe it'll only be a few weeks

• 8:38Speaker 00

  before those movies are on Netflix instead of a few months like it is now.

• 8:42Jason Calacanis?

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• 9:25Jason Calacanis?

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• 9:53Jason Calacanis?

  I am going to tell you what should happen here. Let me tell you about the chessboard. Everything's a war. Business is a war, especially in a complex space like this. As you know, I, in another lifetime, was a studio head. This was my dream job, okay? And I saw this TV show, The Studio.

• 10:10Speaker 00

  The Studio with Seth Rogen, sure.

• 10:11Jason Calacanis?

  Incredible. And it convinced me even more that I made the wrong decisions in my career. I should have just been a studio head, like The Kid Stays in the Picture or Barry Diller. I was born in the wrong generation. I missed it by one generation. I should have been a goddamn boomer and I should have ran a studio.

• 10:26Speaker 00

  Robert Evans is The Kid Stays.

• 10:28Jason Calacanis?

  I should have been Bob Evans.

• 10:29Speaker 00

  Bob Evans.

• 10:30Jason Calacanis?

  Somewhere between the two of them. This is what has to happen. When I become the studio head and I run Disney and they put me in charge.

• 10:37Speaker 00

  Yeah, take over for Iger. He's looking.

• 10:39Jason Calacanis?

  I will take over for Iger. I am going to quit everything I'm doing in my life and I'm going to run Disney Plus or Disney. And I will run it for Bob Iger for two years. And if I do a great job, then he hands me the baton. And I just jumped the line for everybody else.

• 10:53Speaker 00

  Got to audition for two years, yeah.

• 10:54Jason Calacanis?

  I'll do it. I'll do it because put me in the game.

• 11:00Jason Calacanis?

  Here's what I think should happen. Disney now has a clear path. Disney should buy the movie theaters. Disney, anybody who owns Disney Plus should be able to go for $1 per seat to any Disney film and for $100 per theater, just $100 to rent a theater with your kids and watch anything on Disney Plus or Hulu that they own. So if I've got my kids and they love Ashoka, I can rent a movie theater for 20 kids, bring my kids, the cousins, some friends, well, five or 15, it's up to me, and we get to watch the new Ashoka there. And by having it, all the new series,

• 11:42Jason Calacanis?

  get a one-week preview window in all the movie theaters. So

• 11:46Speaker 00

  Oh, that's brilliant.

• 11:47Jason Calacanis?

  Disney, when I am in charge, is gonna buy the movie theaters or buy out the movie theaters. Your Disney Plus membership, you get a card. Your kids get a Disney Plus card with their name on it and member since. The people who have the longest memberships get priority at the parks for merch, limited-run merch, and there. So, and kids, if they're on Disney Plus since, you know, they were five years old, in 20 years, they're a 20-year-long member. That means they get to the Disney parks ahead of the line, they get to go there. They get to watch all the things ahead of time, they get to rent the theaters, and the theaters, by the way, to get into the theater, you bring your Disney Plus card with your membership, you buzz yourself in.

• 12:27Speaker 00

  Yeah.

• 12:27Jason Calacanis?

  You can walk into any theater at any time. You swipe yourself in for a dollar.

• 12:33Speaker 00

  Disney adults are gonna love this. You keep saying for kids, this is gonna be a Disney adult thing.

• 12:37Jason Calacanis?

  For Gen Xers like you, yes. And you and I could say, you know, with a bunch of our friends, hey, you know, what's a great Disney Plus series or Hulu series that they have the IP for?

• 12:47Speaker 00

  Secret Lives of Mormon Wives, baby.

• 12:49Jason Calacanis?

  Perfect. Okay, sure. Sounds great. We can go and just watch two or three episodes. This would change the dynamics of everything, and then this would make Disney Plus catch up and then exceed Netflix, and then you do it internationally, and you create microtheaters.

• 13:02Speaker 00

  Disney owns several movie theaters in Los Angeles, The Crest in Westwood, and most famous is the El Capitan in Hollywood. They do special events there all the time, sometimes like Ariel or Moana comes out to greet the crowd and say hi to the kids. So Disney already in the movie theater business.

• 13:17Jason Calacanis?

  So if Netflix is gonna strangle, Disney Plus is gonna enable. Now, what this will do when I'm the studio head is when I call Mr. Spielberg and Mr. Cruise, And Mr. Tarantino, and I say, Mr. Tarantino, Mr. Cruise, Mr. Spielberg, may I, may I come see you for 15 minutes to just explain to you our goals to support artists and artistry in the theater? Because this is what we believe in. We believe theater should be preserved. May I come meet with you for about 15 minutes? I'll meet you anywhere you want. If you're in Maui, if you're in the Maldives, I'll come. Yeah, I got a, I got a G6 700, whatever. I'll just go.

• 13:54Speaker 00

  You're studio head now.

• 13:55Jason Calacanis?

  I'm a studio head now. I go.

• 13:58Jason Calacanis?

  Listen, it's not Bob Evans time. I'm not going to show up with a kilo of cocaine. I'm going to show up with the promise of theatrical. And I will say to Mr. Tarantino, we're going to dedicate, you know, 100 screens to you to curate your films, your favorite films, your friend films. Here is, here are the 100, you know, who was just on Brett Easton Ellis's podcast, and he went through his top 20 films. Black Hawk Down was his number one. I agree with him. Black Hawk Down is one of the best films ever. I say to Mr. Tarantino, and to Mr. Ellis, Brett Easton Ellis, I'd like the two of you, they both love the cinema, I'd like you to program these, and you can put whatever you want in them. We trust your judgment. You're incredible curators. And when you do your film, when you do, Once Upon a Time in Hollywood, you can keep it in that

• 14:42Jason Calacanis?

  theater for as long as you damn well want to, because you're Mr. Quentin Tarantino. You want it in for a year, it's in for a year. You want it in for six months, it's in for six months. And you can make that decision in real time. All we ask humbly here at the Disney Corporation is that if you do have another project, you at least give us the chance to support you any way we can. How am I as a studio head? Come on, I got the cigar.

• 15:06Speaker 00

  You would get a lot of the Denisville news and the James Camerons and the Christopher Nolans, like the people who are still very dedicated to the theatrical experience. They are all going to flee for whoever is going to promise them a theatrical release. Tom Cruise, too, for sure. If I have to put a bright side or find the sunny side of this, I do think that Freeing up movie theaters from chasing this like diminishing pool of first run releases to do more creative things, just like you're saying. So the theaters that remain can become sort of half revival houses, half new things, screen older stuff that there's an audience for.

• 15:42Jason Calacanis?

  Even better, Mr. Tarantino, you have this incredible video podcast. May we, Mr. Tarantino and Mr. Brad Easton Ellis, may we debut each episode in the theaters and then play a movie after, double feature, Video Archives Podcast, and then whatever you talk to on the Video Archives, we play that after. So it's a, it's a four hour experience. We'll sell the tickets for a dollar each, or if you want to put a price on it, and then we'll give everybody a Video Archives T-shirt as part of the package. It's $25. This is my pitch. Please, I'm being sincere here. Will somebody please clip this and get this into Bob Iger's email and say, Jake Howe, at the height of his creative ability and career and energy, popped up on Alps and nicotine

• 16:21Jason Calacanis?

  patches, wants to take over the studio. Please, give him a shot. Put him in the game. That's it. That's my pitch.

• 16:29Speaker 02

  AMC is worth $1.2 billion. They're the largest US chain by screens and Disney's worth about $190 billion, Jason. So this would actually be a tiny deal. That would be very easy to afford.

• 16:39Jason Calacanis?

  I can finance that. Let's go.

• 16:41Speaker 02

  I was actually kind of curious, why don't you just get three friends together and buy AMC yourself and just do this?

• 16:44Jason Calacanis?

  I mean, that's not a bad idea. Not a bad idea. You have to own the IP is the reason. You have to have the IP is the reason.

• 16:50Speaker 00

  I think a lot of the reaction to this is like, oh my God, Netflix is going to murder the film industry. Theatrical is dead. And I think the more realistic scenario is they're accelerating a process that we all see has already begun.

• 17:02Jason Calacanis?

  I got an idea. I'm the master at, you know, having worked with so many startups. Forget about the Tate Pride for AMC. I got a better idea. We can do this two different ways. Cause I got, I got the checkbooks. I got the friends who have the checkbooks who like to put them to work. Let's put that on the side for a second. If we were to think about this as a minimum viable product, right? An MVP, this is this week in startups. This is my speciality. I was just meeting with all the accelerator classes after this. I'm going to our demo, dim sum demo day. I always talk to founders, but what's the smallest way we could do this? Smallest way we could do this is to buy a movie theater in Austin, which I've talked to you about already one, or build a 200-seat theater, 100 to 200.

• 17:43Speaker 00

  So much land, you could do that anywhere.

• 17:45Jason Calacanis?

  But I mean, a good one, or buy a classic one and just put a great projector. So I want to find that. So anybody listening, please find me a theater or figure out how I can build 100, 200-seat theater. Okay, put that on the side. Then we start modeling this where we go. I'll go to Bret Easton Ellis. I'll go to Tarantino and the team, Mr. Tarantino, I apologize. And I'll find the Video Archives producer, which I believe is Avery's daughter, who's really spectacular on that show, by the way. She's a great, like moderator, I mean, from the world's greatest. I can tell you, she's on her way. I'm not sure what Avery Jr.'s name is, but she's quite good, actually.

• 18:17Speaker 00

  Looks like Gala, Avery.

• 18:18Jason Calacanis?

  Yes, Gala. I would say Gala, you're doing a great job. May we debut the episodes for Video Archives a week or, you know, a day before they come out in person at this theater. Boom, and we could do a Zoom with whoever's available, you, the crew, et cetera. We could actually model this and show that there's a line outside the door, which there would be.

• 18:37Speaker 00

  Sure.

• 18:38Jason Calacanis?

  There'd be a line out the door. So anyway, there we go.

• 18:40Speaker 00

  To me, this is like the possible bright side of all this is that, well, if we do kind of give up this dream of first-run movie theaters, tons of movie theaters in every city that are showing whatever came out that weekend, like a real revival cinema culture could emerge in its wake where

• 18:56Jason Calacanis?

  Absolutely.

• 18:57Speaker 00

  people don't go to theaters just to see whatever the new thing is, but they purposefully go to theaters to see old stuff, rare stuff, offbeat stuff, personal stuff, stuff that means something to them. You know, there's a wide variety of the kinds of programming we could put. We are also already seeing this with anime. Like, a few years ago, Japanese anime films never really came out in theaters in America. You would catch up with them on physical media or TV or whatever. And now those are some of the biggest box office draws, like the new Demon Slayer or My Hero Academia. So we are already seeing this start to happen where all this kind of alternate content that wouldn't have gotten to see the light of day 10, 20 years ago now can get into theaters.

• 19:37Jason Calacanis?

  If you're selling a business-to-business product, you're looking to reach professional customers who are doing business. And the question you have to ask yourself is where do those business leaders spend their time? And the answer is obvious, LinkedIn. And these are the real decision makers. So when you advertise on LinkedIn, you're not wasting your money. You're going to target your ads based on job title, based on industry, based on skills. So maybe you want a CFO in the technology space who has been in their job for five years, right? You want to zero in on those demographics and behaviors. LinkedIn has over a billion members and 10 million of them are C-suite executives. They're going to help you reach exactly the right person

• 20:21Jason Calacanis?

  with the authority to pay for your product, right? Go right to the top. Use LinkedIn. And we've got a special offer just for Twist listeners. Launch your first campaign and get $250 free when you spend at least $250. Go to LinkedIn.com/ThisWeekInStartups to claim your credit.

• 20:41Jason Calacanis?

  If these young folks are addicted to shorts and junk food, at some point, they look down at some point and say, I feel vapid. I'm having whipped cream. I'd like a steak. I'm eating these empty calorie Cheetos. I want the Otoro.

• 20:57Speaker 00

  I'm gonna go see Antonioni's Red Desert this weekend, damn it. Get some class.

• 21:02Jason Calacanis?

  Yeah, but know what they're gonna want to, and these kids are now doing a thing when they go out, they're all buying point and shoot cameras. I saw one of my friends, she's an influencer. There's like a Leica point and shoot. I don't know what it costs, but this recent one is trending all over the socials. I'm assuming they're doing like an influencer campaign. But this is something that's happening already. People are buying old ones of these for 50 bucks, 150 bucks. Basically, the Gen X parents' old camera that they put on eBay was in a drawer. They get a memory card, they take it out, they're like, I like, I prefer shooting on this and leaving my phone at home. And they bring a flip phone and that. So they basically are unbundling and leaning into acoustic, real experiences. So as a founder, you gotta think. Well, there is a counter to everything and this will happen. People will be self-driving. At some point, there is going to be a movement where people say, I don't want self-driving anymore.

• 21:47Jason Calacanis?

  I want a stick shift. So with the Corvette series, they stopped in the C8 making stick shifts because these Tiptronics and everything, which is so good, like, why would you ever do that? Because it actually slows you down. You gotta learn how to do it. The C7, the last generation that had the stick shift of the C7 Corvette, you can pull one up and that engine in the front, which was considered not the best performance because the computer can do a better job shifting gears and putting the engine, mid-engine, like a Ferrari, etc., is a better driving experience. The C7s now, the C7s like Z51, Z06s, they're the coveted ones. They're the ones that people are trying to buy and there's too many of these other ones.

• 22:27Speaker 02

  Jason?

• 22:27Jason Calacanis?

  That's a C7. Because see, the engine's in the front. You see how big it is? And it's gorgeous. Now, that is the last stick shift they made and the last front engine, which is what the Corvette was known for. But the performance went way out when you put the engine in the back. And if you look at a C8, this is the hypercar, the engine's in the mid, so it's like right behind you, and it's got the Tiptronic. And so now, for five years, you haven't been able to get a stick shift in this gorgeous Corvette. And people are like begging them, bring back the stick shift. You realize with the stick shift, the idea of you texting and driving is out of the question.

• 22:57Speaker 02

  Yeah, that's not gonna work.

• 22:59Jason Calacanis?

  Yeah, it's not gonna work. So this is the one I'm getting, by the way. I'm gonna get one of these.

• 23:03Speaker 02

  This is gorgeous. I will say the stick shifts are a dying breed and we're all gonna miss them when they're gone. But I think as we move to EVs in general, Jason, the idea of having variable set gears just starts to be super archaic. This, though...

• 23:14Jason Calacanis?

  Now, imagine, like, let's get back to my fantasy here. The studio head. I got the Corvette ZRX1. I got the cigar. I got the theater chain. Calling Mr. Tarantino, Mr. PTA.

• 23:29Jason Calacanis?

  And I'm bringing it back, baby. Okay. Any final thoughts? I mean, because Trump's a little, I'm sorry, are amazing, fantastic, astute, insightful president, Trump, even Jason realizes that he's going to probably want to have a say here. And Paramount was the company I believe he wanted to win because Oracle, et cetera, are kind of his guys.

• 23:49Speaker 00

  Exactly. I mean, he's a friendly relationship with the Ellison's that they sort of, they took over CBS and now Barry Weiss is running CBS News. And I think the Trump administration really likes how that is going. I was kind of hoping, oh, maybe these, these allies would take over yet another major news network. The key thing to notice-

• 24:06Jason Calacanis?

  CNN, you mean?

• 24:07Speaker 00

  CNN, not part of the Netflix deal, not going to Netflix. I think clearly that would have faced regulatory hurdles that Netflix would not have overcome. Like, can they take over a TV, major TV-

• 24:19Jason Calacanis?

  They should have been able to. I said this on a previous episode, man, them having a 24-hour news channel globally on Netflix would have been-

• 24:26Speaker 00

  It would have been a game changer, but I think international regulatory approval of that kind of a deal was going to be like a, probably a non-starter for them.

• 24:33Speaker 02

  On that note though, Lon, the EU is expected to pass this through. Everything that I read said that the EU is going to be fine. So it's going to be interesting to see if it's the American regulators that actually are the sticking point here.

• 24:41Jason Calacanis?

  I don't think so. I think they're going to let it fly. I'll be honest. We're going into the golden age of M and A. We've talked about it here. We're seeing a lot of tiki-taki, singles and doubles and acquisitions. I told you, I'm predicting it now. There's going to be a $10 billion to $50 billion acquisition in 2026. And by 2027, there'll be a $100 billion company gets acquired.

• 24:59Speaker 02

  My thought though is that in the wake of the Meta FTC deal that we said was going to be a starting gun, because it said that Meta didn't have monopoly in personal social networking because of competition and changing technology. It was hard to prove. I think that applies directly here, Jason. How can you say that Netflix is going to be anti-competitive here when they still have Disney Plus on the side and they're up against YouTube and they're up against-

• 25:17Jason Calacanis?

  Peacock. I just signed up for Peacock. I had no choice.

• 25:19Speaker 00

  There are certainly, in the US market, there are certainly other players and remaining options. And also, I think the fact that CNN is not part of this deal and is going to get spun off and could still be acquired by a more Trump-friendly voice means there really isn't as big a win in shutting this one down. Like, I feel like, I feel like that there's no clear win for the Trump FCC in putting a stop to this. It's not like they're, they're letting a news network go into the hands of hated enemies or anything. I don't feel like it may raise that much scrutiny as people are thinking.

• 25:54Jason Calacanis?

  I wager, wager to think.

• 25:58Jason Calacanis?

  That Polly Market is in the news.

• 26:02Speaker 02

  They are indeed in the news and they're in the news because someone is particularly good at making bets over on Polly Market. There's one user, it went by the name Alpha Raccoon, now rebranded to Zero A X F E E, that made about a million dollars, Jason, in 24 hours, making very granular bets on Google happenings. Now, people are calling this person an insider. Forbes is covering it. It's viral all over Reddit. And I gotta say, it looks pretty damn suspicious. I presume you've already, you've seen this in the news.

• 26:32Jason Calacanis?

  I mean, I saw the headline. I'll be honest, I've been pretty busy here. I'm on the road. I'm in San Francisco for the All In Holiday Spectacular on Saturday night and my demo day, which I'm gonna go right to after this Friday afternoon. So I have not been following the details of the story, but I do know that Alpha Raccoon has been betting on Google and some of their markets, correct? Am I correct?

• 26:53Speaker 02

  Yes. So there's been a couple of major things that they've done. First off, they made a series of yes and no bets about when Gemini 3, Google's recently released AI model, would come out. They correctly predicted the day and bet against all the other days. This led them to making a $424,000 gain, betting that Gemini would not be released by November 15th. They bet no that it wouldn't come out by October 31st, $114,000. And they bet yes that it would come out on November 18th, netting them $91,000. But that's just the start. They also made a series of yes and no bets on will certain people be in the Google top five most searched people? They bet yes for Pope Leo, $174K profit. They bet no on Zohran Mandami, the mayor-elect of New York City, plus 45K. They bet no, Donald

• 27:36Speaker 02

  Trump, plus 171. And they bet yes on Jimmy Kimmel, plus 15K. And this was all done in a pretty short time window. And when you're 22 out of 23, as Forbes reported, it looks pretty gosh darn suspicious. I think it's the polite way to say that.

• 27:51Jason Calacanis?

  Let's be clear here. Prediction markets are distinctly different than trading public stocks. Or?

• 28:00Jason Calacanis?

  Betting on sports, there are going to be different sets of rules here. The reason prediction markets are unique is that there is no concept of insider trading in prediction markets. There is insider trading. If you worked for Google and you made bets on the stock price of Google based on the release of Gemini 3.0, that would get you in big trouble. And by big trouble, I mean jail. And insider trading, Martha Stewart, plenty of examples. And that one was probably a little tiki-taki and, you know, they went after her, obviously, as a celebrity. This is a bit unfair, but, you know, everybody has to face the music, I guess. I don't know the details of that one, but it did seem a little bit harsh for, you know, a tiny gain. I think they probably shouldn't need to go to jail.

• 28:44Jason Calacanis?

  They could have just given her a big fine and made her do a commercial. But anyway, putting it aside, these prediction markets are different. And if you're on the Warriors or the Knicks, as we just saw with the Justice Department going after people who might have been placing what are called prop bets over unders on the number of rebounds, that also is illegal. So I think this is where the market is going to learn what's allowed and what's not. So where does this one sit? And how are people framing it in the press? Are the prediction markets giving any guidance here? Or, you know, Polymarket, Kalschi, other prediction markets? Obviously, there's going to be a whole bunch of these with the success of Polymarket, which I have a partnership with and I'm a shareholder in, full disclosure.

• 29:25Jason Calacanis?

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• 30:10Jason Calacanis?

  Join over 100,000 companies using Pipe Drive. And when you use our link, you're going to get a 30-day free trial. No credit card or payment is needed. Just go to pipedrive.com/twist to get started. That's pipedrive.com/twist.

• 30:26Speaker 02

  The media commentary about the legality here follows what you're saying that the SEC is not involved. This is not equities-based insider trading, but the CFTC, which does regulate the prediction market world, does ban market manipulation. Now, what's not clear yet, and I don't know if we actually have a legal foundation here to stand on, is does it count as market manipulation if you are an insider and you make a bet as part of a prediction market? Does that action change the market enough to constitute manipulation? The consensus appears to be no, which means that enforcement here is going to come down to individual companies trying to protect their own information and not letting their employees trade on it. Because once someone finds out, Jason, that an insider from, say, Google is making a bet

• 31:08Speaker 02

  about a product release, then they could take that information as a third party and trade on it themselves, or change their own release schedule. I'm sure OpenAI is going to pay a lot of attention to this person when they bet on future Gemini release schedules, because it's going to tell them exactly what's going on. So just as I think sports teams and sports leagues want to ensure that their players are not corrupting the league's performance, I think that companies are now going to have to be super clear about what their employees are allowed to do, because they don't want to accidentally leak secrets through this loophole. And it may be that this particular user is not a Google employee. People seem very convinced that they are. But when they do get found out by Google, if they are an employee, they're going to get canned, because one, they're making Google look really gross. And two,

• 31:53Speaker 02

  they're effectively telling the market ahead of time when they're going to drop market-defining products that Google wanted to keep under wraps.

• 31:59Jason Calacanis?

  Yeah, there are rules about this inside of companies already. Apple is very famous, as well as Tesla, and anybody who releases products on some cadence of explaining this explicitly to employees. And also, they all have security departments. So the security at Apple, security of executives, I'm talking about security of corporate security of secrets. This is like one of the most lockdown organizations. And when the person lost the iPhone 4, and Gawker bought, not Gawker, Gismodo bought it, and committed essentially what I believe is a felony to buy stolen stuff, I don't know where that ever hashed out, but I, you know, I remember the Engadget team coming to me, and we're like, hey, we got offered this too. And I was like, we're not going to... Commit felonies. Thanks, guys, but we'll take a pass. I mean, I'm being serious here.

• 32:43Jason Calacanis?

  I remember them saying like, can we buy stolen secrets? And I was like, absolutely not. That's a felony. Like, can't commit corporate espionage. Now, Nick Denton had a different position on it, which was, let's see what happens, I believe, was his interpretation.

• 32:58Speaker 02

  How did Gawker fare long term there, Jason?

• 33:00Jason Calacanis?

  Yeah, I think, yeah, you gotta be thoughtful about these things because they can be what we call in the gambling business, the risk of ruin. You don't want to ever get to that point. But employees need to know, if you're putting aside the prediction markets, putting aside the CFTC, your employer, you've already signed documents that you're not going to share information. In a way, this is sharing information and you're not allowed to use this information. So this is just going to be in everybody's employee contract. They're going to explicitly put in corporate documents, you are not allowed to participate in any prediction markets related to our work or the information you're exposed to. This will, this will be in documents very soon and you're not allowed to share it either because this is going to be a bummer in some ways because what makes the prediction markets so powerful is that people participate in them.

• 33:41Speaker 02

  This is the thing, right? This is the idea that the sharps, the people that have more information than the average person can essentially tell the world what's going to happen. But if you take that out, Jason, and I don't mean to talk, talk ill of some startups that are doing very well, but I wonder what the value of the predictions will be if you take out insider information, because then it's just reaction to market news.

• 33:59Jason Calacanis?

  You know what people have? Friends. So what's going to happen? Friends, cousins, friends of friends. Here's what typically happens is a person on our sports team is like talking to their friends in group chat and they're like, oh yeah, don't bother coming to the game tonight. LeBron's injured and the injury report hasn't come out yet. And they're like, yeah, no, don't come to another game. Don't buy tickets to this one. LeBron's not even playing. Then they're talking about like, oh yeah, LeBron's not playing. And then a friend of a friend places the bet that LeBron is not going to hit their 32 points and they win. Or like the Lakers aren't going to win and all of a sudden, you know, you're in the money. So that's kind of the danger. Those kinds of things will happen. People talk, people chit chat, etc. If you're a journalist, you have great inside information and like you're one of those like old school journalists who has a network. I suggest you quit your job and you just go full

• 34:44Jason Calacanis?

  time polymarket. And there was a guy that was trending. I don't know if you saw this, but there's somebody who's just doing very small bets and making a fortune on polymarket. Did you see this?

• 34:53Speaker 02

  I did not see the, the small bet guy.

• 34:55Jason Calacanis?

  Yeah, there's a story that's been trending or buzzing around about somebody who's pretty sharp. I'm surprised we didn't pick him up as our like interesting person of the day, but there are a number of people who are full time on these prediction markets and they were. When there was in trade, there was a company called in trade in the 2000s, early 2000s, people became like addicted to doing that. And it was, I think it was in London, but it got shut down or it closed. But there are people who are going to do this full time.

• 35:18Speaker 02

  I think there's also a startup opportunity here. Like all jokes aside, if you can figure out who the traders are on polymarket that do events and information, you can aggregate that and sell it to hedge funds. You can make a lot of money.

• 35:27Jason Calacanis?

  I mean, and all this stuff I believe is on the blockchain for these companies. So.

• 35:31Speaker 02

  That's why when this trader in question, Alpha Raccoon, whatever, changed their name, we knew exactly who they were. And then I, because it's all in the blockchain, you can't, you can't scrub that out, which is the power of, you know, decentralizing and so forth. But it's, it's, it's interesting. All right, let's move on. Let's talk about a couple of companies from the recent Y Combinator fall 2025 class. A couple of stats for folks out there who are curious, where is Y C getting companies from these days? Well, out of 156 launched companies, 130 of them are from the U S and Canada, 22 are remote Jason, four from Europe and one from Southeast Asia. And that's it. So essentially it's San Francisco in the cloud or nowhere. I take it you're not shocked by that. Yeah, exactly. Okay.

• 36:10Jason Calacanis?

  Yeah. I mean, it makes sense. What I'll say is, you know, these are finishing schools. Y C is the most notable of them. I'm not necessarily going to say the best because I think there's five of them now that are competing to be the best where one of them launched accelerator. A 16Z has a speedrun pair VC, Mar and Pajman, uh, Arc from Sequoia.

• 36:31Speaker 02

  Yes.

• 36:32Jason Calacanis?

  Antler has a great reputation. Techstars, Dave Cohen's back running it and rebuilding it. And I saw him when I was in Tokyo. They're doing a great job. You should consider applying there. So there's five or six that I would say are the best. And I think they're probably all equally good. If you are a founder. Not in Silicon Valley, first time founder or a second time founder and your first project, you know, never became like venture backed or had, you know, serious backing. And what these programs do at their core is they're a sorting function. For every hundred people that apply, one get in, where in our case, I think it's like one in 150 or one in 200. I think YC is pretty upfront that it's one in a hundred. So they don't do a perfect job picking companies, obviously, like most unicorn companies don't go to Y Combinator,

• 37:17Jason Calacanis?

  but they do hit unicorns on a pretty regular basis, you know, probably a couple of years. Historically, VCs love the sorting function they provide and they love to draft off of that. And so that's what we're going to do right here. We're going to talk about the companies I see here. A hundred B to B startups, 17 consumer, 14 in industrials. That makes sense, you know, business to business software. People like to accept those to programs. Why? They very quickly get to revenue as opposed to consumers, which take years. Consumers are lightning in a bottle, one in a thousand workout, B to B startups, one in 50 workout. So you have a higher hit rate with B to B, but you have more outliers with consumer. But tell me about the top couple of companies and what they do.

• 37:56Speaker 02

  Yeah. So one that Lon and I both really liked is called Lightberry, called the social brain for robots. And the idea here is if you have a humanoid robot, if you have a robot in your house, you want to program it. What if you could just talk to it and then teach it just from voice? So think of it as the no code for voice AI for at home robotics. It's a very nascent idea. Clearly the market for this isn't there yet because we don't have enough robots in our homes. But I love where they're looking. They're looking a couple of years ahead and that's probably where you need to start robotics. A company called Dome, Jason, is super cool. It's a unified API for prediction markets. Because there's Paul market, there's Kalshi, there's Opinion, there's a lot of these now. And so what if you want to have all that information? What if you want to use it? What if you want to learn from it? They're building one single web hook for that.

• 38:36Jason Calacanis?

  So Dome, a unified API for prediction markets, great idea. They're going to need to have, if the information is public, they're going to be able to not scrape it, but they'll be able to collect it, but they're going to need probably permission. From these markets, if they want to have API access, but a lot of times, small ideas, you know, things start as small ideas and it's a wedge and it opens up into something bigger. So I kind of like the idea, actually. They're skating to where the puck is going.

• 39:05Speaker 02

  That's what I was thinking, kind of looking ahead a couple of years. Speaking of looking ahead a bit into the distance, Zephyr Fusion wants to take fusion power, Jason, and put it in space. Now, you're saying, we don't have functional net positive fusion power on the planet. Correct. But we are going to need it eventually up in space. If we're going to have the in-space economy that we all expect, because solar power will only get us so far. Love that.

• 39:26Jason Calacanis?

  Again, sometimes with the startup, you want to skate to where the puck is going, and you have five years of build time, because this opportunity seems super crazy. But if you can raise the money to do something super crazy like this, as long as you don't run out of money. So a startup like this needs to keep their burn low and have the right investors. So you need to have like a Steve Jervitsen, and I think his fund is future fund now. And I think he told LPs, be prepared for a 20-year hold period as opposed to the classic 10 to 15 years. So you just need to match the investor to the window. And that would be what Zephyr needs to do here.

• 40:00Speaker 02

  It also reminds me of Star Cloud. Previously, they had a different name, but they're building the data centers up in space, Jason. Also going to be a very patient process. You're going to want long-term capital for that. Couple more of my absolute favorites. Icarus, this is high-flying solar planes for defense context. So not satellites, not normal flight heights, much higher solar power. It stays up in the air for weeks, months on end. Really cool idea.

• 40:22Jason Calacanis?

  People have done this before. This was done 20 years ago. There was a plane that used solar that went around the world. So this is a startup doing that idea.

• 40:31Speaker 02

  I think that the gist here is, even though we have SpaceX bringing down launch costs dramatically, even though Blue Origin is getting the new Glenn to launch and then land its first stage, it's still really expensive to get to space. So what can we do, high stratosphere that is similar to low earth orbit satellites? And what's the value trade-off there? I think it's a fun place to be, and people are betting, I think, a lot more on launch costs coming down, Jason, than on the ability to use planes up at the stratosphere.

• 40:54Jason Calacanis?

  What's really interesting about this lesson is, when people do experimental things in the world decades ago, so there was a project called Solar Impulse. This happened like...

• 41:06Jason Calacanis?

  In 2011, it was a Swiss long range experimental solar powered aircraft project. The goals were to be the first to circumnavigate the earth by a piloted fixed wing aircraft using only solar power and to bring attention to clean technology.

• 41:22Speaker 02

  Here's one of the images of the first iteration, Jason, of this. Clearly a stripped down, lightweight, high efficiency looking design.

• 41:28Jason Calacanis?

  What's really interesting about this, if you think, and by the way, it was Bertrand Picard. He created that project and he was very famous, like who was like an environmentalist, et cetera. Anyway, this was all done under the auspices of like clean energy, like as a proof of concept. But as time goes on and you think about the efficiency of solar panels, how much they've changed in 15 years, efficiency of batteries, how much they've changed. And then autonomy and chip technology and AI. These things are going to be able to fly extremely high without pilots, without oxygen, without a bathroom, without safety concerns. You can just fly these things, you know, 50, 60,000 feet where there's less atmosphere and they could be real game changers and they could be flying all the time.

• 42:13Jason Calacanis?

  If these, they could be flying in perpetuity. So I think the interesting thing is how, not can it circumvent the globe? How long can one of these stay up there? And what could they do up there while they're up there? Really interesting technology. I like that one a lot.

• 42:28Speaker 02

  Two more from us and then I'm going to bring up one from producer Claude. Play Health, this is all about peri-menopause care for women. There's been a lot of talk, I think, in the, in the, I don't know, the US community about peri-menopause as a thing to pay more attention to, to provide more accurate care or just better care for women. So I love that there's a startup working on that. It seems like a pretty good market that's not oversaturated.

• 42:47Jason Calacanis?

  No, there's been a lot of this data, a lot of these apps, actually, women's health apps. The challenge with these is people aren't willing to pay for them. So, you know, with all of these, you're going to really need to make sure that insurance companies are willing to pay for this kind of stuff and they tend to be a bit niche. So while it does impact everybody, the key to the success of this company is will insurance pay for it? What will they pay for it? And is it defensible? All that great stuff. So it does seem, looking at their website, they do have a page about providers and they understand this. So that's good. Somebody who advised the company or the founders are very smart and they understand like, hey, to make this work, it's not just about building the app.

• 43:29Jason Calacanis?

  Cause a lot of people build a meditation app, a lot of people build a fitness app, period tracker, premenopause tracker, all this stuff. You have to be able to figure out a sustainable, profitable business model. So it has to provide enough value that an insurance company will pay for it, or enough value that consumers will pay for it. And then you have to ask yourself, both of those things are hard, right? So if you're going to do these kinds of healthcare things, again, find an investor who understands working with, and this would be my counsel to them, and you know, YC is filled with smart people. So I'm sure Gary Tan and his team said to them like, the first question you're going to get with investors, how does this scale? And who's paying for it? And how profitable is it? What are the gross margins?

• 44:12Jason Calacanis?

  And so it's going to be challenging, but if you figure it out, what if it works? So I like it.

• 44:17Speaker 02

  Another one that I have a hard time monetizing, Jason, is Sunflower, but I like this idea. It's using an app to help people form new habits to break away from addiction.

• 44:25Jason Calacanis?

  Have seen this many times, but you went through this kind of thing. And did you use one? Or how appealing would this be to you as somebody who quit alcohol?

• 44:34Speaker 02

  So what people don't know is that rehab is mostly just AA with a wrapper around it. And so I think that what we don't have is a variety of options for folks out there for whom the main, most popular method doesn't work. And so to me, as a person who also believes in harm reduction and helping people just live better lives, if Sunflower is effective, and it claims that it is, and if it can get into the hands of more people, then the amount of human misery that it could potentially take out of society is huge. So I'm just very optimistic about them taking this approach. I don't know if this is going to be the company that cracks it, or if it's going to monetize super well, but.

• 45:08Jason Calacanis?

  You're exactly correct. And what I'm going to point out here is with. What happens with venture capitalists, a very important lesson for founders? If you're doing something that is feel good, and on all these lists, like when I asked my team to put a list together, the press puts a list together, they will pick a couple of the feel-good ones. And it was climate for a while, it could be DEI, it could be women's health, it could be sobriety. All these things make you feel good, right? Oh, great, helping society, you just said it, like if there's like multiple options, reduce suffering. Please understand, you're going to get 100% of your VC meetings, and they're going to lie to you. Venture capitalists are going to lie to you, and they're going to say, I couldn't get my partners around the investment. However, I'm going to be as supportive as I can. Please let me know how I can help. And it's like, well, the way you can help is by making an investment.

• 45:53Jason Calacanis?

  You're a venture capitalist, like we don't, I don't need a high five from you. You know, like I need money. So be prepared. And I told my team internally, because what was happening is we were accepting a lot of feel-good startups, because the team wants to make the world better. I said, I don't, we're not here to make the world feel better. We're here to get returns, and it's, venture capital is really hard right now. And that's what we're seeing. A lot of venture firms are going out of business, they're in like a stasis mode, they haven't been able to raise a new fund, so they're just living off of management fees and managing the existing portfolio while slowly getting rid of partners. That's like these, you know, you talk about zombie companies, there are zombie VC firms right now. So as the management fees taper off, you go from four partners to three, to two, to one, and there's just somebody like, you know, wrapping up the fun halftime.

• 46:36Jason Calacanis?

  That's what happens if you make too many of these feel-good bets. That's why it's really hard right now. So, how do you counter that? You have to be a cutthroat capitalist. And the people who are attracted to these opportunities tend to be the feel-good people who want a virtue signal, or historically, and who want the social credit for it. So when Molly was here and we were working on climate, the big problem I had was, the valuation expectation was really high. The majority of the entrepreneurs, I would say, were not cutthroat killers, who were business builders, who want to build profitable businesses. They kind of were kind of activist-y, and they wanted to save the world. They wanted to save the whales. I would put it in the save the whales category. So you had a high price and the wrong type of founders,

• 47:20Jason Calacanis?

  and that's why climate became such a toxic space for returns for LPs. LPs know that. They quietly have moved away from DEI, quietly moved away from that. And these will have that same thing. So I'm not saying this because it's how I feel about it. I'm trying to explain the game on the field to those founders. The game on the field is, don't give yourself credit. For any kind of high fives or getting included in the list here because we want to have like, oh, you know, when lists are built like this, oh, let's have some of the future tech. Let's have some of the feel good. Let's have some of the like obvious business things. People put lists together. You put lists together. A tech crunch will be there. I put it together when I was at Engadget. Solk and I reported, you have like a little diversity in list. Don't give yourself credit for that. Give yourself credit for a customer being addicted to your product

• 48:06Jason Calacanis?

  and being willing to pay for it and having a high gross margin. Because these founders get led astray.

• 48:12Speaker 02

  Yes.

• 48:12Jason Calacanis?

  The VCs are not helping them by saying, oh, great idea. Oh, great idea. So when I meet with them, I say respectfully, love the mission, love that this exists in the world. What's the way you're going to print money and have a defensible monopoly here and be cutthroat? And kill your competitors and, and, and, and a lot of times the founders, they're virtual signaling founders. They're status seeking founders who want to be the CEO of the company that saves the wells.

• 48:39Speaker 02

  Ah, they want the personal glory for themselves. I see.

• 48:42Jason Calacanis?

  Correct. And so VCs, this is the inside discussion that happens at the poker table, at the, you know, post YC drinks, post tech stories drinks, you know, in the decision-making room at YC or A16Z speedrun. Oh, it's a feel-good company. We're not here to feel good. How do we let them down easy? Take two meetings, give them some advice, introduce them to a friend, some university professor, whatever. Tell them your spouse is going to use the product, whatever, tweet for them, retweet them, but don't put our money in it. So just understand you have a 10 times higher bar. That's reality. If you're in a feel-good space, you're going to win all the startup pitch competitions.

• 49:26Jason Calacanis?

  And man, I've seen it over and over again. These founders, Alex, they start to believe that they're great, but not because they have a great business with great margins, with great virality, with great go-to market strategies, with a great team, with great technology. No, because they won a startup competition. And they won because the person on stage is like, oh, my God. Oh, it's so precious. You're saving the fucking whales, ba, ba, ba. So this is the save the whale trap. Don't get caught. In the saving the whales trip.

• 49:56Speaker 02

  Man, the whales are doomed.

• 49:58Jason Calacanis?

  I think the whales doing pretty good. Actually, I think since we started to stop polluting the oceans and people stopped hunting them as much whales whales doing better.

• 50:05Speaker 02

  We're no longer using whale oil, which is, I think, a really great thing for the whales.

• 50:09Jason Calacanis?

  Isn't that just as a total aside, you know, as two guys from the Northeast, isn't it incredible that the Northeast and Nantucket and like that whole corridor was the Saudi Arabia, the Qatar of the whatever 17th, 18th century for blubber converted into oil to run lamps. So people could read books at night.

• 50:31Speaker 02

  They literally caught whales, cut them up into big pieces and then rendered the fat down on a boat, brought the oil back and then you put it in your lamps. Think about like, think about the air quality in your house. Jason, if you're burning whale fat. Now, I will say my house in Providence, a historical old, you know, town was initially owned by a sailing captain. So little fun, little fun bit of history there. Now, before we move on, Jason, we asked producer Claude to also take a look at the Y C fall 2025 list. And I want to highlight a company that both Lon, myself and producer Claude all liked at the same time. So right here we have the the top list from Claude.

• 51:07Jason Calacanis?

  Claude.ai is exceptional. So we said here, rank the most promising companies from the fall 2025 Y Combinator cohort. Shout out to my guy, Gary Tan. Come back on the program anytime you haven't been on the program in 12 years. East on which you think are most likely to pull through and get additional funding and growth in the future. Oh, I love the prompt. And he says, I'll search for the information about it. Gets all the results. Let me search for more specific information about the class. Great. Let me fetch more specific details about F 25 companies from the Y. Oh, from the directory. And here it is. Top tier, most likely to break out multi-factor security infrastructure.

• 51:43Speaker 02

  So the one I wanted to highlight from this list that I just had on the screen is Hyperspell, because both Lon and myself also this company is very interesting. So I thought the three of us all together worth highlighting. Hyperspell creates essentially a separate memory layer that it caches that sits between the user and AI. So if you think about AIs just as an engine or a brain and you as the person using it, you want to make sure that it has access to your stuff. But what you don't want to do is sit there and wait all the time for it to go read your email again. So Hyperspell pulls in your email and your calendar and your context, all that and provides a contextual blob that then you can use as your own kind of like quick twitch information source for AI usage, which I think makes AI both more personal and faster and therefore better twice over. Other people are working on memory, Jason, in LLMs, but I think this is a particularly

• 52:28Speaker 02

  cool idea and a good place for a startup to build.

• 52:30Jason Calacanis?

  Great idea. AI infrastructure, always a big winner. And what I see here is it didn't say how it's making its decision here, but it has founded by, you know, for the multi-factor company, ex-CIA officer and NASA scientist with PhDs, solving critical AI agent security with post-quantum cryptography, already has a strong investor backing. So it knows some of the signals that we use here in Silicon Valley. So great job to our friends at Anthropic. And producer Claude is amazing.

• 53:00Speaker 02

  All right, Jason, the New York Times is suing perplexity because they're mad about copyright. Now the people mad at perplexity include New York Times, Chicago Tribune, Amazon with a cease and desist, Reddit saying that they're scraping all their content, Cloudflare alleging that they're going around all the robots.txt norms, Forbes gone out of them, Dow Jones sued them. Question for you is really simple. Is perplexity doing the smart thing here by trying to just go forward and ignore the legal threats? Or would you tell them that it's time to slow down and maybe make some friends?

• 53:28Jason Calacanis?

  There is a legal framework that is going to emerge. And I love the comment browser and I use it. And I'm trying to use some other ones. Nobody's got as good as one as comment right now, but I love these agentic ones. Now, if I'm looking at a webpage on my computer and I cut and paste it, I edit it, I can do whatever I want on my computer. And perplexity as a tool can do whatever it wants. Now, there is a gray area here, which is if a user looks at 100 LinkedIn pages, 100 pages of the Wall Street Journal, New York Times that are behind a paywall, does a large language model, et cetera, have the ability to put that into their training or to use that or to scrape it in some way? The answer is obviously no, because that would break the terms of service. But if

• 54:12Jason Calacanis?

  a user uses it, yes. So we're in the middle of this dance, specifically, I believe, around this, because it does feel fair to users that they should be able to, if I paid for the New York Times, summarize in New York Times with the assistant. You know, that I could have from ChatGPT, Grok, or anything. And I can certainly cut and paste a New York Times story and post it and tell you this and say summarize this. Now, am I breaking the law by doing that? No, when you're a user, you have the ability to remix and use content that you buy on your desktop, generally speaking, as long as it's not for commercial output and you're using. But are these things actually benefiting from it? And that's where there's going to be, need to be some rules of the road. And so perplexity is the first out there.

• 54:53Jason Calacanis?

  And I think that they're probably on the margins being very aggressive about it. New York Times, as I said, is not going to be fooled this time around. When they had Google scraping them and search engines scraping them, they made a mistake. Rupert Murdoch said, somebody can go find the quote, that, you know, Google was a parasite or something to that effect. And, you know, if we all just blocked Google and made them pay, you know, the, the industry would do much better. Because Rupert Murdoch was right, Google would be nothing if they couldn't index all this stuff. But Google was fair for some period of time in the minds of publishers because they sent traffic and they didn't take too much content. Now, that's all done. People are summarizing these stories. There needs to be a licensing deal for these.

• 55:36Speaker 02

  Back in 2009, Murdoch said he might block Google searches entirely from his properties. And he said that they have kleptomania and is acting as a quote parasite for including news content inside of Google News pages.

• 55:48Jason Calacanis?

  Right, and he had said stuff like this earlier. So they're not going to wait because remember France, Canada and Australia all had rules around Google News and having to pay a license fee. And then Google said, well, we just won't have Google News in that country. No sweat off our back, we don't make any money off Google News. Long story short here, people need to sit down around a table and come up with a reasonable licensing fee. And there needs to be a tag on the New York Times that, you know, perplexity proposes. And they should just say, hey, we will give you a thousand dollars per story. You produce 100 stories a day, so we're going to give you a hundred thousand a day. We're going to give you $3 million a month, $36 million a year to have the New York Times in perplexity. And the New York Times would say $36 million a year, we'll take it.

• 56:28Speaker 02

  Yep.

• 56:28Jason Calacanis?

  Now, if they said, we want to give you $100 per story, and we're going to give you $3.6 million, the New York Times is going to say, F off, like Logan Roy said to me on, you know, my birthday a couple of years ago. Shout out to Bresh for, did you see that, Logan Roy?

• 56:39Speaker 02

  I did not.

• 56:40Jason Calacanis?

  We'll play it at the end of the show for you. F off is the right answer and the right thing for New York Times to say to OpenAI and everybody else perplexity. And that's what's happening here. And I advise them on this very show, don't back down this time, hold all the LLMs accountable equally. And just for the LLMs, you can't have a $500 billion company like ChatGPT, or a $300 billion company like Claude, which we just mentioned, partner of the program. You can't have

• 57:05Speaker 02

  A $20 billion company like perplexity.

• 57:08Jason Calacanis?

  Without paying for the content that's going to make it great. So just make that decision to say 10%, I think minimum 10% of the revenue of these should go to content providers, a minimum. I might even say 50%, like 55 is what YouTube gives providers. So they should just give a percentage of it's a benefit to those programs to have those partnerships. And I showed on this with my Nostradamus, you know, ideas, login with your New York Times account to perplexity, authenticate, authenticate with ChatGPT to your Disney Plus account, just have an authentication process. And if people have a subscription, you can then access New York Times data and have it represented there in a very proper way.

• 57:48Speaker 02

  That would be so amazing.

• 57:50Jason Calacanis?

  You would have a competitive advantage. People are paying Reddit now, right? They pay Reddit.

• 57:54Speaker 02

  On that point, Meta just announced a number of deals with media properties for its own AI product. This includes CNN, Fox News, Le Monde, People, Daily Caller, Washington Examiner, USA Today, more coming, and they're going to pay when they cite those articles in their AI products. This is a great model. Microsoft also signed a deal with Business Insider recently. We're starting to see this kind of shake out. The worry, though, is if I want to put on the the other hat, if you will, steel man this a little bit, it seems to be that the companies who are making these deals are the ones most able to afford them. Meta, Google with Reddit, et cetera. Perplexity has less profitability to play with, but at the same time, that doesn't mean theft is okay. Now, Jason, I do have your, your Logan Roy clip. Did you be able to see that?

• 58:34Jason Calacanis?

  Sure.

• 58:35Speaker 02

  Play it for fans. Here it is. If you're a succession fan, you'll know who this is.

• 58:41Speaker 03

  Hey, everybody. It's your boy, Logan Roy, today on the pod. Yes, I'm telling you all to fuck off. I'm not doing this. Jason, you wish you could be as rich as me, but you won't be because you don't fly in helicopters. But your team at Launch wants us to wish you a very, very happy birthday and a big fuck off to you.

• 59:06Jason Calacanis?

  I love it. That was a great birthday gift from Prash. Shout out to my guy, Prash, who works for me and now has a great company.

• 59:12Speaker 02

  Micro One reached a $100 million ARR threshold. I think you're an investor in this company, Jason?

• 59:18Jason Calacanis?

  We did the seed round. We were the seed investors in this company.

• 59:21Speaker 02

  I wrote this up and then remembered that, so it does pass editorial guidelines. The reason why this stood out to me, Jason, is that it's another company in the world of connecting experts to AI companies who want to have their knowledge to help them train and tune their models, doing incredibly well. Micro One started this year at a $7 million run rate. Now it's over 100. It was at 50 million when it raised a Series A in September, and it fits into a broader category. Merckor, which we've had on the show, episode 2159, is reported to be about a $450, $500 million run rate. Same idea. We've also seen Scale AI before Meta half bought it, half decapitated it, grow incredibly quickly. They were on the show, episode 1005. And Search AI also in the space, profitable, growing very quickly, over a billion and trillion revenue.

• 1:00:05Speaker 02

  My question here is not to be a W data, because this is insanely impressive. But is this a long-term business? Are they going to need these experts forever?

• 1:00:14Jason Calacanis?

  Yeah, because the world changes over time, and we're out of data to put into these LLMs. Everything that could have been scraped is scraped. We're now fighting over the scraping of it to, you know, per the last story. So what's left? Get some experts in here and say, hey, experts, there's a deal with Warner Brothers, our first deal. You're a media expert, Lon. Walk us through the deal. Oh, there's a 10Q interpreted for us, Alex. Oh, there's a startup here. Interpret it. And for experts, there is going to be a new job category. So we talk about job displacement, which I've talked about a bunch. There'll be new jobs created. The new job that's going to be created is experts. Training LLMs and then there are these intermediary companies like Micro One that

• 1:00:55Jason Calacanis?

  do a great job of managing that process because you need to have these independent contractors accumulated, tested, paid, all this stuff. And it's going to, I would say it's the second inning of these businesses. This is the future of AI. The future of AI is not scraping data anymore. All been done. It's not synthetic data because synthetic data only works in certain areas like making a simulation of roads. You can't make a simulation of like people analyzing M and A, like fake M and A deals. That doesn't make any sense. So what you need is to have experts who were maybe journalists, teachers, PhDs, developers, whatever it is, come in, give their expertise,

• 1:01:36Jason Calacanis?

  and then look at the searches that are occurring. Look at where things are breaking down, where people give the thumbs down to a physics question. Oh, that was a bad response. Hey, now train the LM to fix it. There's a war going on for who can have the best LLM. When we talk about the ranking, switching on all these leaderboards, how do you think you move up the leaderboards? Expertise, Micro One, expert at this. Very proud to have seeded this company. They're doing great. I think they have a bright future. I think it's probably going to go 20x from here. And I think it's a great category. And there's going to be a half dozen important players in it. And we got lucky enough to bet on one of the top three. So here we go.

• 1:02:13Speaker 02

  Very impressive. Curious to see where the revenue goes next year. If they keep growing at this pace, they're going to be doing about a trillion dollars in revenue in about, I don't know, six quarters.

• 1:02:20Jason Calacanis?

  Okay. All right. Well, from your, from your words to God's ears. All right, everybody. Another amazing episode of This Week in Startups. We'll see you next time. Bye bye.

• 1:02:28Speaker 02

  Bye, everybody.