Arm Pumps CPUs, Social Media Addiction, Data Center Ban | Eric Goldman, Nima Jalali, Jon McNeill, Karri Saarinen, Dimi Kellari, Mikey Shulman, Aida Baradari, Zack Kanter, Nik Milanović, Zach Perret

Sign up for TBPN’s daily newsletter at TBPN.com (02:36) - Arm's $15B Chip Bet (14:38) - Sanders & AOC: Pause Data Centers (27:54) - Meta & YouTube Lose Addiction Trial (37:08) - 𝕏 Timeline Reactions (44:34) - "Thou Shalt Not Steal" Op-Ed Reaction (52:20) - 𝕏 Timeline Reactions (01:13:50) - Eric Goldman, Associate Dean for Research and Professor of Law at Santa Clara University School of Law, specializes in Internet Law, Intellectual Property, and Advertising & Marketing Law. He discusses the recent California state court case where a jury awarded $6 million in damages to a plaintiff who alleged that social media platforms contributed to her mental health issues. Goldman highlights the broader implications of this verdict, noting that it could set a precedent for numerous similar lawsuits pending across the country, potentially leading to significant financial liabilities for social media companies and prompting changes in platform design and regulation. 01:29:55 Nima Jalali, a former professional snowboarder from Los Angeles, is the founder and CEO of Salt & Stone, a natural skincare brand established in 2017. In the conversation, he discusses his transition from snowboarding to entrepreneurship, emphasizing the importance of creating high-performing, design-led products that resonate with consumers. Jalali highlights the brand's rapid growth, its focus on quality and authenticity, and the significance of building a lasting legacy through relentless dedication and strategic partnerships. 01:59:21 Jon McNeill, an American businessman and entrepreneur, has held prominent roles including President of Global Sales and Service at Tesla and Chief Operating Officer at Lyft. In the conversation, he discusses the operational framework he developed at Tesla, emphasizing principles such as questioning every requirement, simplifying processes, accelerating workflows, and automating last. He illustrates these concepts with examples, like reducing Tesla's online purchase process from 64 to 20 clicks by eliminating non-essential steps, and highlights the importance of maintaining focus and agility within organizations to drive innovation and efficiency. (02:19:48) - Karri Saarinen, co-founder and CEO of Linear, a software development company founded in 2019, discusses the need to rethink traditional issue tracking systems, emphasizing that outdated processes hinder efficiency in the era of AI agents. He highlights the importance of simplifying workflows and leveraging AI to automate tasks, allowing engineers to focus on more complex problems. Saarinen also introduces Linear's new features, such as the Linear Agent, designed to enhance productivity by providing context and automating routine tasks. (02:35:03) - Dimi Kellari, co-founder and CEO of Neion Bio, discusses how his company genetically engineers chickens to produce medicines within their eggs, aiming to reduce drug manufacturing costs and enhance accessibility. With a background in aerospace engineering, Kellari transitioned to biotech to address challenges in drug pricing and supply chains. He highlights a recent commercial deal to bring up to three biosimilar drugs to market, emphasizing the scalability of their approach, where a few thousand chickens can produce the global supply of a drug like Humira. (02:41:13) - Mikey Shulman, co-founder and CEO of Suno, an AI-driven music creation platform, discusses the company's focus on providing fulfilling creative experiences in consumer entertainment, emphasizing their identity as a consumer and entertainment company rather than a traditional AI lab. He highlights the platform's growth, noting the recent milestone of 2 million subscribers and $300 million in annual recurring revenue, attributing this success to the team's hard work and innovative engagement strategies. Shulman also introduces new product features, including a model that allows users to create music using their own voices, enhancing personalization and accessibility in music creation. (02:52:25) - Aida Baradari, a Harvard physics graduate, is the founder of Valence, a company dedicated to protecting personal freedom through innovative technology. She discusses the development of a smart ultrasonic jammer that detects nearby recording devices and emits targeted distortion signals, ensuring private conversations remain confidential. Baradari also addresses the device's applications for privacy-conscious individuals and organizations, its current price point, and the legal considerations surrounding its use. (02:59:55) - Zack Kanter, founder and CEO of Stedi, discusses his journey from leading an auto parts business to establishing Stedi, a healthcare clearinghouse that processes administrative transactions in the healthcare sector. He explains how Stedi facilitates real-time eligibility checks and claims processing, handling tens of millions of transactions monthly. Kanter also highlights the company's growth, noting that Stedi has raised $142 million to date and employs approximately 125 people in a distributed, remote work environment. 03:07:29 Nik Milanovi, founder of the fintech media company "This Week in Fintech," discusses its recent acquisition by Plaid, highlighting plans to maintain the company's community-focused initiatives and expand internationally. He observes that, following a surge in 2021, many fintech companies have stabilized and are now effectively competing with traditional financial institutions. Milanovi also emphasizes the need for deeper media coverage of fintech innovations and expresses a commitment to enhancing the industry's discourse. (03:14:41) - Zach Perret, co-founder and CEO of Plaid, discusses his selective approach to event participation, emphasizing the importance of attendee quality and event size. He highlights Plaid's recent acquisition of This Week in Fintech, expressing excitement about the collaboration. Additionally, Perret shares Plaid's focus on integrating AI into financial services, mentioning their partnership with Perplexity to enhance consumer-facing AI experiences. 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Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00John Coogan?

  You're watching TVPN. Today is Thursday, March 26th. We are live from the TVPN UltraDome, the Temple of Technology, the Fortune Finance, the capital of capital. Let me tell you about ramp.com. Time is money, save both, easy use corporate cards, bill pay, accounting and a whole lot more. Let me also pull up the linear lineup because we have a monster show. Jordy's back in the TVPN UltraDome. I know you missed him. We have Eric Goldman coming on to help break down the Meta YouTube lawsuit.

• 0:27Jordi Hays?

  By the way, yesterday was the first time we've been live that I was not on the air.

• 0:31John Coogan?

  Yeah.

• 0:32Jordi Hays?

  And so I was watching.

• 0:33John Coogan?

  Watching the show. How'd I do? Here, we can drop the linear lineup. Linear, of course, is the system for modern software development. 70% of enterprise workspaces on linear are using agents. Give me a review. How'd I do?

• 0:43Jordi Hays?

  I thought you did fantastic. I was texting you in real time. I probably sent you like 20 something messages of like, ask me about this, ask me about that.

• 0:51John Coogan?

  It was, yeah, somebody in the chat said I was free soloing TVPN. It was great. But we really were down to our last few associates here. Tyler was out, Jordy was out. Who else? Yeah, Nick was out. We had, we were on, what do they call it? A shoestring or something like that? I don't know. But it worked out. It was a fun show. It's not the same show without the soundboard. I was gonna do this whole bit about like, oh yeah, I got it dialed. You can just, we don't need you on the show anymore. And then, of course, the fans would be like, no, bring back Jordy. And I'd be like, yeah, okay, he's back. But I can't even joke about it because we need the soundboard. I only got two buttons.

• 1:31Jordi Hays?

  It really is. Imagine if you were, I was waiting for you to just be spamming that.

• 1:37John Coogan?

  He's just sitting there having a serious interview.

• 1:40Jordi Hays?

  Apparently, we have some audio issues.

• 1:42John Coogan?

  Okay, we will work.

• 1:43Jordi Hays?

  Bear with us. We're working on it. But I can go through, I can go through a bit of our guest lineup today. We have Nima, friend of mine. He is a founder of Salt and Stone.

• 1:54John Coogan?

  Yeah, he's a person.

• 1:56Jordi Hays?

  Recently exited the business as of this week, a massive, you know, multi hundred million dollar deal. Very excited to get to understand the business better. We have John McNeill coming on. He's an author to talk about Elon Musk's five step algorithm for scaling Tesla. Then we have Karri from Linear on how Linear is evolving in the AI age. And then we have a bunch of different founders, including Mikey from Suno, coming on.

• 2:27John Coogan?

  And then we got back to back Zachs. Zach Kanter, Zach Perret, going back to back Zachs. That's what I like to see. Well, the big news of the day of the week, this has been going on all week, is that ARM, the intellectual property developer that creates intellectual property designs for CPUs, is now getting into the chip game. And they got a big ARM pump in the stock market. So the company is up 15% over the last few days on the news that they will sell their own chips. This is new for ARM. ARM is a very old company. Fascinating history. I actually made a 25 minute YouTube video all about the history

• 3:07John Coogan?

  of the company back in 2023. But we'll recap a little bit of it today. But they normally just license out their intellectual property. And that is a phenomenal business. 97% gross margins. 97% gross margins. Yeah, let's give it up. That's amazing. And, you know, it's a big business. $4 billion in revenue last year, nearly 800 million of net income. They're this new move, they're expecting to ramp revenue to $15 billion by 2031. So they're expanding the market significantly. Now margins will be different. But the market cap for ARM is now around $166 billion. So it's a big company. It trades at a very high multiple.

• 3:51Jordi Hays?

  Yeah, $4 billion last year, currently trading at 165 billion.

• 3:56John Coogan?

  But very, very high gross margins. So this is a big shift in strategy. ARM is not an AI loser by any means, but it hasn't gotten the attention that other GPU makers have received, like Nvidia. CPUs are far from dead, though. In fact, we are in, we are currently in what seems like a little bit of a CPU crunch. Intel can't make CPUs fast enough. Nvidia is starting to sell their Grace CPU that goes with their Hopper. So you get the H100 and you pair it with the Grace CPU. You get the GPU and the CPU all on one system. Well, now you can buy the CPU by itself if you're CPU constrained. So you don't want to just be GPU rich and CPU poor. You got to be rich in both camps and a lot of companies are jumping in to fill this gap.

• 4:41John Coogan?

  So agents, and a lot of this is because of agents. Agents need CPUs. You need to fill the CPUs constantly with new data and tasks. Also, all of the agents use CPUs to make web queries, search the web, run Python, spin up web servers, interact with anything. We've just seen, you know, we talked to some folks at Semi Analysis about this, like uptime is going down for non-GPU accelerated workloads. Like you go to a SaaS product that is basically just a web server that's running on a CPU somewhere in a data center and you're like, ah, this thing isn't loading today. Or like there's downtime and a lot of that's just because we're writing more software, we're using more software as a society, as a country, and we need more CPUs as well

• 5:26John Coogan?

  as CPUs, even though CPUs are like the, the hot thing to talk about. So ARM has a very interesting backstory. As I mentioned, you can go watch my 20 minute, 25 minute YouTube video about it to go all the way back and this, all of the precursor companies. It's a really long story, but you can think about it basically as a joint venture between three groups, Apple, Acorn Computer and VLSI. And so they needed to design a low-power CPU for mobile devices. Before phones, you know what was hot, Jordy? PDAs and have you ever seen a PDA Tyler?

• 6:01Jordi Hays?

  No.

• 6:01John Coogan?

  You've never seen a PDA?

• 6:03Jordi Hays?

  I don't think so.

• 6:04John Coogan?

  Okay, so before the iPhone, you know, everyone had flip phones, but before it's not.

• 6:08Jordi Hays?

  This is not a pager?

• 6:10John Coogan?

  It's not a pager. You don't know what this is either?

• 6:12Jordi Hays?

  No.

• 6:12John Coogan?

  Wow. So there's something called a Palm Pilot and basically it was, it was like a, like a, you know, iPhone sized screen and it has stylus and you could write on it and you could make notes and PDA stood for Personal Digital Assistant. And I feel like that brand is just itching to come back in 2026. Like that's what so many people are.

• 6:35Jordi Hays?

  Everyone is working on a PDA.

• 6:36John Coogan?

  Yeah. Personal super intelligence assistance. There's a whole bunch of things. We're building PDAs, folks. They just live in the cloud and it's not a physical device, but these PDAs back in the nineties were physical devices. This was post pager, pre smartphone and it was the, it was the device that you carried to take notes and do things that you do today in apps you would do on your PDA. But it wasn't always on internet connected, none of that. It was, it was, it was a Palm Pilot and this was like a fantastic business for a while, but there were a lot of problems with this because for the first time you needed a CPU that could live within a plastic like shell. Basically these were like, you know, plastic enclosures, need to run a battery, it needed to be, you need, needed

• 7:21John Coogan?

  to be able to do some things, not crazy compute, but the CPU industry in the nineties was very focused on mainframes, servers, desktops. There were a few laptops popping up, but it was not the mobile phone revolution that's happening now where you have Apple silicon chips and those are of course based on ARM architecture, but that's where all this came from. People said, okay, we need a lower power chip that can actually run off a battery, not overheat, melt the plastic, do all of this and it's can be somebody, can be, can power a device that you carry with you as a personal digital assistant, a PDA. And so.

• 7:55Jordi Hays?

  Chicken in the chat says PayPal started on PDAs.

• 7:58John Coogan?

  That's right. That's right. So PayPal started, originally, the idea was, these PDAs had, they didn't have like Tap to Pay or anything like that, RFID. They had, basically, the same device that you'd see on a TV remote, so IR, and it would flash a light that could be seen by another sensor. And if you flash the light at a certain rate, you can send a message. You can, basically, it's like, advanced. What's that SOS thing?

• 8:27Jordi Hays?

  Morse?

• 8:27John Coogan?

  Morse code? It's like a more advanced version of Morse code. And so, you could send a specific packet of information from PDA to PDA, and this was the original idea for PayPal. That's correct. That's a great, great piece of lore, tech lore. So, the, so, you know, ARM starts to, you know, build these. Later, there's Robin Sacksby, who was the CEO of ARM at the time, he wanted ARM to become the global standard for CPUs. And so, in the 90s, there were lots of different CPU makers, lots of different architectures. There's this whole CISC versus RISC debate. There's the x86 architecture that Intel pioneers. And slight differences in architectures can limit interoperability. You see this with

• 9:12John Coogan?

  what's going on with Mac, where a whole bunch of applications have needed to be rewritten for Apple silicon, because previously, you would have an Intel Mac, before we got to the M1, M2, M3, M4, M5 chips. Those are Apple silicon, those are ARM-based. And sometimes, you'll go to a website and it'll be like, "Oh, do you want to download this for your Mac?" Like, what do you have? Do you have an Intel Mac, or do you have an Apple silicon Mac? Well, it's important, because when you write the software that runs on the Mac, you need to use specific instruction sets. Now, there are ways to abstract that and run on either, but there are lots of pieces of software that interact with the CPU at a low enough level, that they need to be aware of the instruction set. So, ARM sets out to be...

• 9:54John Coogan?

  The global standard for CPUs and they create the ISA, the instruction set architecture and that ultimately let Apple design their own chips. But within the architectural guidelines set forth by ARM. So, Apple pays a license for, to ARM for every chip Apple sells. It's a very small license fee because Apple does a lot of design work. They do the manufacturing, the TSMC fabs it and like, there's a million other pieces of the value chain, but for this one little slice, they have to pay ARM and ARM just takes that and says, "Thanks." Cool. You used our intellectual property successfully.

• 10:28Jordi Hays?

  You know who else says thanks?

• 10:30John Coogan?

  Who?

• 10:30Jordi Hays?

  Masayoshi Son.

• 10:31John Coogan?

  That's true.

• 10:32Jordi Hays?

  Because they own 90%, roughly 90% of the company. It was a full buyout in 2016.

• 10:39John Coogan?

  That's right.

• 10:39Jordi Hays?

  They bought the entire company for something around 25, 30 billion USD.

• 10:46John Coogan?

  Yeah.

• 10:47Jordi Hays?

  Buy the entire company. They still own 90% today. So their purse, their like SoftBank's holdings, just in that one company, are somewhere in the range of 140 billion.

• 11:01John Coogan?

  It's great.

• 11:01Jordi Hays?

  What I was looking at.

• 11:02John Coogan?

  It's the...

• 11:03Jordi Hays?

  And of course, they've massively levered...

• 11:05John Coogan?

  The second time he's made 100 billion.

• 11:06Jordi Hays?

  Well, and they've massively levered up against that position.

• 11:09John Coogan?

  Yes, yes, yes.

• 11:11Jordi Hays?

  They've raised debt against their holdings in ARM.

• 11:16John Coogan?

  Yep.

• 11:16Jordi Hays?

  But certainly Mas is somewhere out in the world seeing it go up 15%. Just smashing a gong.

• 11:23John Coogan?

  I hope so. I hope so. And although everyone knows Apple, my clickbait for my YouTube video was like, "Did you know the iPhone is secretly British?" I think it's funny because it uses ARM deep inside. But ARM licenses to a ton of different tech companies. So, Amazon uses ARM for the Graviton chips. A lot of Android phone makers have ARM-based chips. Tons of other tech companies license ARM's technology to build chips. But now ARM is going to be making the chips themselves and they're going to be working with meta platforms and OpenAI. This means a shift in the economics of the business. So 97% gross margins for just those licensing ISA contracts.

• 12:05John Coogan?

  This will be closer to 50%, but it should be offset by the huge gains in market size and revenue potential. So the company has one of the highest multiples in semiconductors, roughly 90 times forward earnings. So there's a lot to live up to, but there's a lot of value coming from AI agents that have access to plentiful CPU resources. The industry dynamics are also particularly interesting. Ben Thompson pointed this out in Stratechery. So Nvidia sells an ARM-based CPU, that Grace CPU. And so Nvidia is sort of competing with ARM. Jensen showed up and gave like a remote talk at this ARM event where they announced this chip. And so they're competing, but they're also in some ways working together

• 12:47John Coogan?

  because they're challenging x86 options from Intel and AMD that are still really popular. And so if Intel's constrained, it's like if Nvidia sells a bunch of chips for AI workloads, well, then that actually makes ARM more likely to sell their chips as well, because whatever software is built for the Nvidia ARM-based chips will probably run on the ARM ARM-based chips. So there's some sort of like integration there. And the x86 mote is not as strong as the CUDA mote, but there's still this like dynamic of Nvidia and ARM are going up against Intel and AMD in the same way that that different

• 13:29John Coogan?

  GPU makers are going up against the CUDA mote. So there's like this, all these different interactions there. But it'll all be interesting to follow. Let's move on. The big news that drove this was, of course, Meta. Engineering at Meta said, "Today, we're announcing a new partnership with ARM to collaborate on the development of multiple generations of purpose-built CPUs to support compute and AI infrastructure." ARM called it the ARM AGI CPU. What a great name. We love it. Let me tell you about Labelbox. RL environments, voice, robotics, data, evals, and expert human data. Labelbox is the data factory behind the world's leading AI teams. And let me also tell you about Sentry. Sentry shows developers what's broken and helps them fix it fast. That's why 150,000 organizations use it to keep their apps working.

• 14:16John Coogan?

  The Wall Street Journal has another good write-up of this story, talking about how this, the timing is good, it is, there is a boom in CPUs right now, but the stock is already priced very highly, and everything has to go perfectly, because it trades at one of the highest multiples of all the semiconductor companies. So, what else is going on in the timeline?

• 14:39Jordi Hays?

  Well, let's talk about this data center moratorium bill.

• 14:42John Coogan?

  Yes.

• 14:43Jordi Hays?

  I wrote in the newsletter today, "Yesterday Senator Bernie Sanders and AOC introduced a new bill, the AI Data Center Moratorium Act of 2026, that if enacted would require all current and planned data centers to halt construction slash production. It would even block upgrading existing data centers. So if you have an asset, and you want to make changes to it, in theory, as this bill is written today, it would be blocked." They sort of like define data centers based on power demands, cooling capabilities, like how much power you can get to each individual rack. So they have been fairly specific, but trying to be like-

• 15:25John Coogan?

  Because I was thinking, I was fine with this. I was thinking like, I don't need any more AI data centers at this point. We can freeze those. I just want to build AGI data centers and ASI data centers. And so as long as I can just build tons of those, like, it should be fine. But it is interesting that they seem to have figured out the semantic loopholes that might happen if it's defined AI.

• 15:45Jordi Hays?

  Yeah, the bill would halt all new data center construction and upgrades until more legislation is put in place to guarantee the following. And these will be tough to guarantee. So from Sanders' site, "They want AI to be safe and effective, preventing executives in the AI industry from releasing harmful products into the world that threaten the health and well-being of working families, our privacy and civil rights, and the future of humanity. The economic gains of AI and robotics will benefit workers, not just the wealthy owners of big tech. And AI does not increase electricity or utility prices, harm communities, or destroy the environment."

• 16:22John Coogan?

  So this stuff seems good.

• 16:24Jordi Hays?

  Yeah, all generally good, but-

• 16:26John Coogan?

  But no one wants unsafe and ineffective AI.

• 16:29Jordi Hays?

  Well, yeah, and the bigger problem is anytime you're creating, I don't think we've created a technology, ever, that didn't have-

• 16:39John Coogan?

  Some downside.

• 16:40Jordi Hays?

  Some negative impact.

• 16:41John Coogan?

  Car crashes, as an example.

• 16:42Jordi Hays?

  Um, I'm sure this will be rewritten and debated and obviously it has a long way to go before becoming law, but the, this set of requirements seems completely impossible uh to, to, to actually achieve.

• 16:58John Coogan?

  It depends on how you definitely, how you define it. I mean, uh, AI does not increase electricity or utility prices, like the ratepayer protection pledge and behind the meter stuff could.

• 17:07Jordi Hays?

  I'm more, I'm more talking about, I'm more talking about, uh, number one.

• 17:11John Coogan?

  Uh, number one, safe and effective. I, I, I mean, it's, it's, it's, it's all in how you define that. Like some of the, uh, some of the, uh, parental controls are a good example of like how to take that, that overarching thesis and then boil it down into something tractable. And when I hear that, I think like, oh, like I don't know how we are defining safe. I don't know how we're defining effective. Like this feels like this could be like some sort of very vague thing where like if the government, if one particular administration likes this company, they just approve it or not or whatever. Um, but then when we actually talk to lawmakers and you hear something like, um,

• 17:50John Coogan?

  like, oh yeah, we're going to, you know, require parental controls. So if your, if your offspring has a, and you know, an AI account, you can say, hey, like they are this age. Don't show them anything that's inappropriate for that age. That seems good.

• 18:06Jordi Hays?

  Yeah.

• 18:06John Coogan?

  So, I don't know.

• 18:07Jordi Hays?

  Overall, at least this, this first bullet point, preventing executives in the AI industry from releasing harmful products in, in the world.

• 18:14John Coogan?

  Yeah.

• 18:15Jordi Hays?

  That feels like that you could end up having something like an FDA. That's like every product you create needs to go through years of, of studies in order, in order for the government. And it's like, hey, I just wanted to create like a slightly more AI native version of the SaaS tool.

• 18:33John Coogan?

  Yeah.

• 18:34Jordi Hays?

  Do I really?

• 18:35John Coogan?

  I want to make sass.

• 18:36Jordi Hays?

  I just want to make sass.

• 18:37John Coogan?

  Yeah, at the same time, like the, like the, the bull case, I mean, I, I, I think we're, I think the FDA model would really slow things down based on how long the FDA takes to approve things. At the same time, uh, what is the definition of harmful here? Is it net harmful products? Because that is the goal of the FDA. They release drugs all the time that have side effects. You take this, it cures your cancer, but it's going to make you throw up or it's going to make you lose your hair. And people are like, yeah, I'll take that, I'll take that trade. And so, you know, if you, if you went through the government, you said, okay, yeah, I'm going to give you this tool that can like write code, but sometimes it's going to hallucinate and like you might get a code, you might get some code that doesn't pass tests. I'd be like, yeah, okay, like it speeds me up on, on average, I'm, I'm in like that, that's fine.

• 19:19John Coogan?

  Um, and having some of those disclosures and it's the same thing with knowledge retrieval. Like I, I, I do a deep research report. I get something that's 99% of the way there. Maybe there's something in there that's like, oh, that's actually like misattributed or that number is, I, I know that that number is from this report online that was wrong and they, and the model doesn't. And so I need to fact check it. Like I still see that as like net beneficial, but there are of course like, like flaws in every system. And so, you know, again, it's like where, how does this get defined over time? That's like important.

• 19:52Jordi Hays?

  One thing I noticed from the announcement was that they are using AI leaders' own statements against them. And it's easy to see how, uh, this would resonate with their constituents.

• 20:01John Coogan?

  This is really powerful.

• 20:02Jordi Hays?

  Uh, so they, on Sanders' websites, he included this quote.

• 20:06John Coogan?

  Okay.

• 20:06Jordi Hays?

  In December, Elon Musk, who leads XAI, said he had, quote, "A lot of AI nightmares" and would, quote, "Certainly slow down AI and robotics if he could."

• 20:16John Coogan?

  It's so interesting because Elon doesn't talk about that with like the rollout of electric cars or the rollout of, of space travel. He's not saying like, oh yeah, like, you know, 2030 is too soon to get to Mars. Like we need to, we need to slow down on the, on the race to the moon. Like let's really figure out the, the spacesuits first.

• 20:34Jordi Hays?

  Yeah.

• 20:34John Coogan?

  You know, he's like, let's just go.

• 20:36Jordi Hays?

  Yeah. And then another one in January, Demis, the head of Google's DeepMind said he would support an AI pause if he knew other countries and companies also paused development. In February, Dari Amade, the head of Anthropic, said he was absolutely in favor of trying to slow down AI development if other countries also slowed down.

• 20:55John Coogan?

  Yeah, that was Davos, I believe, both January and February.

• 20:58Jordi Hays?

  So continuing, I wrote, but the problem, of course, is that there is zero movement on getting other countries to slow down. I can imagine some companies, it would be like...

• 21:07John Coogan?

  There's already comments in the chat about like, yeah, let China win.

• 21:09Jordi Hays?

  Yeah. I'm not going to name the countries that would be down to slow down, but I think we all know that China, even if they agreed to something like this, wouldn't just automatically do anything about it. But the problem of course...

• 21:24John Coogan?

  Are there any countries that are like, yeah, we definitely should, we're ready to slow down? Like, we're France?

• 21:28Jordi Hays?

  Well, I think if you're way behind, if you're way behind, there's kind of a benefit.

• 21:33John Coogan?

  There's a huge incentive.

• 21:34Jordi Hays?

  Elon had said, I think in 2023, that he supported like a six-month pause.

• 21:38John Coogan?

  Yeah.

• 21:39Jordi Hays?

  And at that moment, that would have been awesome.

• 21:41John Coogan?

  Yeah.

• 21:42Jordi Hays?

  Because hey, if I could just have six months to like get my...

• 21:45John Coogan?

  I feel like if you pull people in the south of France or the Amalfi Coast, like those folks would say we should just slow down generally, like AI, but also just slow down our lives, enjoy a glass of wine, hit the boat.

• 21:59Jordi Hays?

  Yeah, or even like a summer break.

• 22:00John Coogan?

  Just a summer break, yeah.

• 22:01Jordi Hays?

  Kind of like four weeks.

• 22:02John Coogan?

  Yeah. Or even like during the workday, like taking a break, taking a nap, just slowing down generally. I think there's a lot of people that are just in favor of that.

• 22:10Speaker 02

  But, okay, Jordi, like if you're saying like people who are behind should want to like slow down, like doesn't that mean that China should be more in favor of slowing down?

• 22:18John Coogan?

  That is interesting. That is interesting.

• 22:20Jordi Hays?

  Well, I'm just saying, I can imagine, in the same way that like for as many chips as we give them... Advanced CPUs as we give them, you can assume they're still going to put an immense amount of pressure to kind of stimulate

• 22:35John Coogan?

  Yeah.

• 22:35Jordi Hays?

  the local semiconductor industry.

• 22:37John Coogan?

  Yeah.

• 22:38Jordi Hays?

  In the same way here, I'm sure they would love for the United States to just pause all new data center construction. And I think it's possible that they would like gen- generally say like, yeah, like, this seems good, but then what would they actually do? They would just use that as an opportunity to

• 22:55John Coogan?

  Yeah.

• 22:55Jordi Hays?

  catch up, right?

• 22:56John Coogan?

  So, uh, my question is like, where does China actually stand on this? I'd be very interested to know, maybe you could look it up. Um, like, has the Chinese Communist Party actually put out any statements about whether they want to accelerate or pause AI development? Because there, I, I think that they might refrain from taking that stance because it would discourage local, like indigenous, uh, development. Like, if the government is coming out and saying like, we want to slow down, then a lot of entrepreneurs are going to be like, okay, I'll go back to e-commerce, or I'll go back to manufacturing. Like, I, I'm not going to work on this because the government doesn't want me to. And, and so I feel like there's this tug and, like, even though I agree with you, like, it, what

• 23:37John Coogan?

  we would be in their advantage to say, hey, we want to slow down, everyone should slow down, we're pro slowdown. Um, if they actually said that, it would have an immediate slowdown effect on the local, uh, AI progress. Does that make sense?

• 23:51Jordi Hays?

  Uh, yeah, like it would slow down. Yeah, I mean,

• 23:54John Coogan?

  Yeah, because even, even if they, even if they, if they just take that stance because it's a authoritarian country, like there's, like, this, like, like, the, the Bernie Sanders comment stands in opposition to other politicians who are saying like, no, actually, things are going well, and here's how we're going to, you know, eh, eh, like, advance energy and to build more. And so, but if you don't have that, and it comes down as like a dictate, uh, or, or, you know, uh, like, th- this is the stance from the government, uh, it's much harder for local entrepreneurs and local AI labs to like, push back against that because it feels like they're all of a sudden in opposition to the government, I would imagine. I don't know. I'm very interested to hear how China's actually reacting.

• 24:29Jordi Hays?

  Yeah, anyway, so, so just to kind of finish my thought.

• 24:32John Coogan?

  Yeah.

• 24:32Jordi Hays?

  I, all, all these quotes, like, must go extremely hard if

• 24:38Jordi Hays?

  Uh, if you're not kind of acknowledging the full picture, which is that, yeah, literature's saying, yeah, if you get other countries to agree to slow down, we'd be open to it.

• 24:48John Coogan?

  Yep.

• 24:48Jordi Hays?

  But that is like the big elephant in the room. They don't mention any even conversations or dialogue with other countries around slowing down. And I don't think there's been any. So anyways, the act has a long way to go and it seems like the odds of it getting into law are low, but not zero. Safe to say that as written, the requirements in the bill would be an incredible gift to America's adversaries and catastrophic for overall AI progress.

• 25:14John Coogan?

  Yeah. Uh, could be popular though. There are already some candidates who have, uh, you know, made pausing AI or data center, like, like pausing data center build outs. Uh, sort of like their main thing. And, uh, it does seem to be getting traction. I don't know how much of that's just on social media. We'll see what, how it shows up in the midterms. But Sagar and Jetty was tracking this for a long time. Like it is going to be a, uh, like a political stump speech that hits. Like people are going to be like, yeah, I don't like this stuff.

• 25:40Jordi Hays?

  Yeah. The, the, the question becomes if anything like this were to become law, what, what are the, what are the effects of that, right? Space, right? The space data center people are saying like, space data centers don't seem so silly now.

• 25:58John Coogan?

  Yeah.

• 25:58Jordi Hays?

  Uh, taking that angle, although I'm sure they would also be like, you can't put them up there either. We're gonna, we're gonna try to.

• 26:05John Coogan?

  Yeah. I mean, there's also, there's also just like the globalization process that happened, uh, based around environmentalism. In like the nineties WTO ascension for China. Like the reason that a lot of the mining happens in China is because like, we said, like, we don't want that here. Right? It's dirty. It's gross. There's chemicals. There's pollution. And so like out of sight, out of mind, let's push it abroad. And we could do that again with data centers. We could just be like, they're all in Canada or Mexico, or they're all in some, you know, Australia or New Zealand or like, uh, you know, there, there could be a receptive country out there. That just says like, we would love, we, we are an ally now and we'd love to get all these data centers. And then you have to ask the question of like, well, what does that look like in 30 years?

• 26:45Jordi Hays?

  Data centers generate a, they, they don't create a lot of jobs locally. They create. A meaningful amount of work during the development process.

• 26:55John Coogan?

  And certainly some jobs.

• 26:56Jordi Hays?

  They continue to generate massive amounts of tax, local tax revenue.

• 27:00John Coogan?

  Yeah, I actually don't know how you tax.

• 27:02Jordi Hays?

  The data center that was locked, I think in New Jersey, was going to be generating like tens of millions of dollars of local taxes.

• 27:10John Coogan?

  That seems pretty good.

• 27:11Jordi Hays?

  Yeah.

• 27:11John Coogan?

  Yeah.

• 27:11Jordi Hays?

  It seems great.

• 27:12John Coogan?

  Real estate or? I mean, yeah, like one, one medium ground here is like just tax that and then have, and then use the tax revenue.

• 27:20Jordi Hays?

  Yeah, and the environmental concerns.

• 27:22John Coogan?

  Yeah.

• 27:22Jordi Hays?

  I think, I think everybody should want to make sure that if we're investing hundreds of billions of dollars into these things, that, that we're not destroying our lovely mother earth.

• 27:32John Coogan?

  Yeah.

• 27:33Jordi Hays?

  But, and, and the, the energy costs, again, real concern, but we're making, we're making progress there.

• 27:39John Coogan?

  Yeah. Well, let me tell you about CrowdStrike. Your business is AI, their business is securing it. CrowdStrike secures AI and stops breaches. And let me also tell you about the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange.

• 27:52Jordi Hays?

  Uh, do we want to talk about, uh, this Meta lawsuit?

• 27:56John Coogan?

  This, this minor headline on the front page of the Wall Street Journal. It says Meta YouTube Found Addictive Harmful. It's like one of the hardest hitting headlines I've ever seen on the front of the Wall Street Journal. For two companies that are usually relegated to the business and finance section, they made it to the front page because they were found guilty or, you know, by California jurors. California jurors say the tech companies designed their apps to cause injury to kids. Very, very bad. But Brandon Gurrell had a take and a write-up and some explanation of what's actually going on here. And then we are, of course, having Eric Goldman from Santa Clara University come on and break it down for us in more detail.

• 28:40John Coogan?

  Because there is a lot of debate about this and it's been very interesting watching it play out. The total damages are, I think, three million each company, roughly six million total. And I had a friend who's a lawyer who texted me and sent me the number and was like, hey, I'm predicting that it'll be like three, three M. And I didn't read the M and I was like, okay, three billion, like, what does that do? This is not that big of a deal. And then it was 3 million. And I was like, that's extremely low compared to like the numbers that we normally see from big tech companies. But this has much broader implications because this is precedent setting and there will be a flood of other

• 29:17Jordi Hays?

  And Zach's like, I did spend all of my free cash flow on data centers, but if you give me another two seconds, I will have the cash flow to cover this. So just give me like two seconds.

• 29:29John Coogan?

  Yes, but it is, it is a very important case, even though this particular ruling is not changing the cash flow structure of these businesses, because it has a lot of ramifications and there's a lot more plaintiffs that are in the queue. So this is what Brandon Gurrell wrote in our newsletter today, which you can sign up for at tbpn.com. Yesterday, a Los Angeles jury found both Meta and YouTube That's fantastic. I want a lot of soundboard for this. Both Meta and YouTube liable for a 20-year-old woman's mental health crisis in a bellwether trial that treated platforms as, quote, defective products and potentially marks the end to

• 30:10John Coogan?

  the absolute immunity nature of Section 230. In the case, the plaintiff's lawyer, Mark Lanier, argued that Meta and YouTube built, quote, "digital casinos that use neurobiological techniques similar to those employed by slot machines." Fun fact about ARM throwback, the first chip that the company, the precursor company, ever built was a chip that went into a slot machine. They call them fruit machines in, in England.

• 30:36Jordi Hays?

  Fruit machine?

• 30:37John Coogan?

  Fruit machines. They call them fruit machines because they have like the cherries and the strawberries and the bananas and you line them up and, and they needed chips to run those. So the iPhone traces its lineage and, and Apple silicon and all, all this

• 30:49Jordi Hays?

  This goes much deeper than that.

• 30:50John Coogan?

  It all goes back to literally gambling. Very fascinating. Anyway.

• 30:55John Coogan?

  So the jury found that specific features of Meta and YouTube are designed to be addictive. Infinite scroll creates an environment where there are no natural stopping points. Algorithmic recommendation feeds users feeds users highly engaging content. Autoplay removes users' agency in choosing whether or not to watch the next video. Notifications pull users back in by exploiting their need for validation. Instagram beauty filters contributed to the plaintiff's body dysmorphia. Features like the like button exploit users' biological need for societal approval. This is what the lawyer argued, the plaintiff's lawyer argued.

• 31:38Jordi Hays?

  Shake Shack exploited my biological need for food.

• 31:42John Coogan?

  Yes, there is this question. There was Taylor Lorenz has had some great takes here. She said.

• 31:48Jordi Hays?

  So Taylor has come out in the last like 48 hours. I would say is like the number one defender of big technology.

• 31:54John Coogan?

  Yeah.

• 31:55Jordi Hays?

  She does have one of the top technology podcasts in the world.

• 31:58John Coogan?

  She had a she had a take that was like, so does Spotify? Is it Spotify addict you to music by playing like good songs for you on demand?

• 32:07Jordi Hays?

  This DJ, this this AI DJ is simply too good.

• 32:11John Coogan?

  Basically, I mean, that's kind of the argument. They didn't obviously go after Spotify. They went after Meta and YouTube. But yeah, there's a question about like, you know, what UI features? What are dark patterns and how do we regulate those? And it's very interesting. But the decision has been made and these companies will have to pay $6 million to the plaintiff in total damages. This is obviously a trivial amount of money for these companies, but the bellwether nature of the outcome has significant implications for social media. There are over 10,000 individual personal personal injury cases, almost 800 school district claims and 40 state level cases pending nationwide that are similar to KGM versus Meta and YouTube.

• 32:53John Coogan?

  More broadly, the social media industry's reliance on Section 230, which has up to now shielded them from liability for user generated content, may no longer be enough to protect them from litigation like this. Now, to be clear, this case is not it's not attacking Section 230 because it's not making the argument that someone uploaded a video to YouTube that said, you should be sad, you should be afraid, it's over.

• 33:20John Coogan?

  And that made someone sad. That is the content that is user-generated. That is protected under Section 230. You might be able to go after the individual creator of that video. If I make a video that says like, Jordy Hayes sucks and should be sad, and then you get sad, you might be able to sue me, I think. I don't know. But that's a little bit more defensible because it's like me on you. But you won't be able to sue YouTube for platforming that content, for putting that up in just general cases. But this is different because they went after the like button, the infinite scroll, the recommendation feeds, the features that are built by the platforms themselves. So if the decision makes it through appeals, and this might go all the way to the Supreme Court, we'll see, platforms may be forced

• 34:03John Coogan?

  to redesign their user experiences and algorithms, put up age verification, even deprecate infinite scroll. Obviously, changes like this would have an effect on both these platforms' ad-based revenue models. Meta and Google plan to appeal the decision, and it's not hard to imagine this one making it to the Supreme Court. Taylor's also been sounding the alarm bells around age verification. It sounds very good. I feel like I'm pro-age verification, based on like, I have kids and I don't want them seeing adult content. But she was worried about the KYC and needing to be tracked, privacy, tracking anywhere. And that is a good, that is a good argument to be made. Well, let me tell you about Graphite,

• 34:48John Coogan?

  code review for the age of AI. Graphite helps teams on GitHub ship higher-quality software faster. And let me also tell you about 11 Labs, build intelligent, real-time conversational agents. Inbound. Reimagining human technology interaction with 11 Labs. We have to start apologizing to the schizophrenic community. There is a surveillance drone reportedly flown by infiltrator elements and disguised as a natural bird, such as an eagle, that has been spotted in around. This goes back to Taylor Lyons, because I believe she worked with the folks behind the viral stunt Birds Aren't Real. That was sort of a commentary on the conspiratorial nature of the internet. And in that stunt...

• 35:30John Coogan?

  They make the argument that birds need to be recharged and they're all spying on you and no birds are real. Of course, that is very satirical and funny, but apparently there someone made a drone, some, you know, organization made a drone that looks like a bird so it can sneak behind enemy lines and spy during the conflict, which is remarkable. But

• 35:55Jordi Hays?

  Do you think there will ever be video games that are effectively, you're just remote piloting something in the real world?

• 36:03John Coogan?

  Yes.

• 36:03Jordi Hays?

  Do you think there would be demand for?

• 36:06John Coogan?

  Yes. So I have heard of this years and years ago, that there was something along the, along those lines that would allow you to hunt remotely. So you go to a website and you control a weapon that can hunt an animal, which is crazy. I don't know if it's

• 36:22Jordi Hays?

  That's crazy.

• 36:23John Coogan?

  But

• 36:24Jordi Hays?

  Do they close the loop? Like help you actually get

• 36:26John Coogan?

  Yes. Yes. They, so after you down the animal, they will go and ship it to you. So you can mount it on your wall.

• 36:35Jordi Hays?

  Thanks. A lot of people

• 36:36John Coogan?

  Sort of, sort of.

• 36:37Jordi Hays?

  A lot of people are not going to like that.

• 36:38John Coogan?

  I don't think Joe Rogan would approve. He's a bow hunter, you know?

• 36:41Jordi Hays?

  Yeah. He wants to, he wants the connectivity with

• 36:43John Coogan?

  I think so. I think so. It's destroying, just destroying the

• 36:47Jordi Hays?

  Now I'm curious. Is it, is it like a, is it, is it like a, is it a gun mounted to an ATV?

• 36:53John Coogan?

  Not an ATV, but sort of like a, a two axis swivel.

• 36:57Jordi Hays?

  Like a turret?

• 36:58John Coogan?

  Yeah. Like a sniper rifle on a, on a turret with a webcam. Pretty crazy. I don't know if this is real. I heard about this like years and years ago. Anyway, the reactions to the Meta and YouTube trial continue. Ariel Grivner says, or Gibner says, this is disgusting and I can't wait for the appeals. The precedent set by YouTube being liable for screen time addiction is kind of scary. Treating algorithms like a defective product opens the door to endless lawsuits over addictive tech. What's next? Books? Video games? Junk food? I mean, video games, we gotta do something about those things are too, too fun. Too fun. Truly, we gotta make them, we gotta make

• 37:33Jordi Hays?

  Except, except you, you ascended. You beat your addiction.

• 37:37John Coogan?

  Yeah. I definitely did.

• 37:41Jordi Hays?

  You don't, you don't game anymore. You actually did.

• 37:43John Coogan?

  No.

• 37:43Jordi Hays?

  I mean, it might be one of those things like you're still addictive, addicted. You just.

• 37:47John Coogan?

  Might have been playing a game earlier this week. Sneaky little 45 minutes.

• 37:51Jordi Hays?

  Really?

• 37:52John Coogan?

  Yeah.

• 37:52Jordi Hays?

  No.

• 37:53John Coogan?

  Yeah, it was good.

• 37:54Jordi Hays?

  No.

• 37:54John Coogan?

  Player obscura.

• 37:55Jordi Hays?

  I'm gonna go, I'm gonna go look.

• 37:56John Coogan?

  You gotta pull me out. I'm addicted.

• 37:58Jordi Hays?

  No, I'm gonna go look back at our texts and see like, when did it take you 45 minutes to respond to something?

• 38:03John Coogan?

  It was like Tuesday night or something.

• 38:04Jordi Hays?

  Yeah, I'm gonna be coming after Eric Jorgensen.

• 38:06John Coogan?

  Oh, yeah?

• 38:07Jordi Hays?

  For the Book of Evil.

• 38:08John Coogan?

  Yes.

• 38:09Jordi Hays?

  Because that just came out and Eric did a fantastic job.

• 38:12John Coogan?

  Yes.

• 38:13Jordi Hays?

  And I think it's highly addictive.

• 38:15John Coogan?

  We got, we, can we sue this lawyer? Because this is one of the most interesting cases and I, I actually can't pull myself away from it. And I feel like I'm just gonna spend hours and hours.

• 38:27Jordi Hays?

  Obsessing over.

• 38:28John Coogan?

  About this lawsuit. Yeah, and, and I don't know, it's depressing. It's making me sad thinking about these, these tech companies having to pay fines and it's just, it's just ruining my mood entirely. And it was like, you can tell that the, that the, the way the lawsuit was designed, was designed to take an emotional toll on me, suck me in, make me read. The, all of the, all of the transcripts from the court, all the, all the reporting, all the research. And eventually, you know, talk to Eric Goldman from Santa Clara University on my show about this. Like, I just can't pull myself away from this.

• 39:03Jordi Hays?

  The doom loop.

• 39:04John Coogan?

  Yeah, I, I think, I think, should he be held accountable for what he's doing? I don't know. We'll see. But there might be a lawsuit.

• 39:10Jordi Hays?

  Meta, of course, trading down massively today. Almost 9% off of this. And, you know, it, it, there's some real concerns, right? If they, there's new legal risk. There's thousands of other kind of lawsuits floating out there. You might get more copycat lawsuits, class actions. And then the real question is like, do you, do they have to make any product level changes? Does that end up impacting? Time spent in the app, which will impact the advertising business.

• 39:43Jordi Hays?

  Such a weird one because certainly certainly I don't think back throughout

• 39:48John Coogan?

  The NASDAQ is also down 2% today, so there's a general sell-off, but yeah.

• 39:52Jordi Hays?

  Yeah, general sell-off, but like, you know, Meta, Meta down dramatically.

• 39:55John Coogan?

  That's a lot, yeah.

• 39:56Jordi Hays?

  Hundreds of billions of dollars. Um, yeah, this is a weird one on a personal level because like on one hand, my kids, I'm gonna keep away the infinite scroll machine as long as I possibly can.

• 40:08John Coogan?

  Yeah.

• 40:09Jordi Hays?

  Right? Um, and I will, you know, I don't, I don't think back on the time that I've spent on social media and think, you know, uh, well, I'm so glad I, I put in those, those long hours and I really put in the work.

• 40:22John Coogan?

  Yeah. It just doesn't seem that addictive to me. I can pull myself away like anytime. It's not a big deal. It's just not a big deal.

• 40:33Jordi Hays?

  We lost it. It just sounds like, it sounds

• 40:39Speaker 03

  This place. I know Pixar honeymoon, okay, you just gotta get more. Ask you a question. If you follow me, I'll double your bank account. On Instagram, okay.

• 40:47John Coogan?

  I mean, this is good kind of.

• 40:48Speaker 03

  Just follow me.

• 40:49Speaker 02

  This is the route you would have to take if you wanted to go to

• 40:51John Coogan?

  This is my subscriber.

• 40:52Speaker 03

  And this is my subscriber.

• 40:54Jordi Hays?

  This is such a, such a good.

• 40:58John Coogan?

  This is the final mystery box. It's fine. It's fine. We're gonna get back to the show in a little bit. It's not a big deal. I'm not the surprise at college classroom. It's fine.

• 41:06Karri Saarinen?

  I grabbed 100.

• 41:07Jordi Hays?

  We lost it.

• 41:08John Coogan?

  He grabbed 100 people. Okay. I actually have no, he, he took, he took people their ages one all the way to 100 and he's having them taste test lunch leave. I gotta watch this. This is the world's largest LED floor. Okay, it's the wall, it's the largest LED floor.

• 41:21Jordi Hays?

  Are you just scrolling Mr. Beast?

• 41:22John Coogan?

  No, this is just my normal feed. What's yours like? I am scrolling Mr. Beast.

• 41:27Jordi Hays?

  It's so, it's so funny because it, it, um, I, I think, I think whatever that was, was completely inverted from, you know, a meditation soundtrack, right? It's just like

• 41:40John Coogan?

  It's so insane. Anyway, let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just power AI, don't just build AI, own the data platform that powers it. And let me also tell you about Cisco. Sorry. Critical infrastructure for the AI era. Unlock seamless, real-time experiences of new value with Cisco.

• 42:02Jordi Hays?

  Never apologize. Uh, well, no, that's so. The funny thing, the funny thing is how addictive are the apps themselves? Can they argue that the apps themselves?

• 42:11John Coogan?

  Yeah.

• 42:12Jordi Hays?

  It's really not us.

• 42:13John Coogan?

  Yeah.

• 42:13Jordi Hays?

  Right?

• 42:14John Coogan?

  I've seen some people's channels not very addictive.

• 42:16Jordi Hays?

  Yeah. Yeah, in many, in many ways, like our, our content, right? We talk about niche subjects.

• 42:23John Coogan?

  Yeah, yeah.

• 42:23Jordi Hays?

  In technology and business, there's a lot of content on YouTube that is far, far, far more addictive.

• 42:30John Coogan?

  Yeah.

• 42:31Jordi Hays?

  But.

• 42:32John Coogan?

  Yeah, no, I, I, I've generally had a good experience on social media.

• 42:35Jordi Hays?

  You know what else is addicting?

• 42:36John Coogan?

  What?

• 42:37Jordi Hays?

  High-speed trains.

• 42:38John Coogan?

  Oh, you want to skip to high-speed trains? You don't want to do?

• 42:40Jordi Hays?

  Uh, we can come back to that.

• 42:42John Coogan?

  Okay, we can come back to that one. Uh, what's going on with this? So in China, high-speed trains have become a high, a sightseeing attraction. This is a good, I would definitely go to this. I would 100% just go see the, the, the high-speed train rip through the countryside. That looks amazing. I love it.

• 42:58Jordi Hays?

  Also, this is the most incredible video of China that I've ever seen.

• 43:04John Coogan?

  It's so beautiful.

• 43:04Jordi Hays?

  What is it? What is this mountain range at sunset? I think people are posting up there, even if the train isn't there.

• 43:10John Coogan?

  Yeah.

• 43:10Jordi Hays?

  It's like one of the most beautiful.

• 43:12John Coogan?

  You think that secretly everyone there is like, boo, the train ruined my beautiful view? Because like, they could just be sitting there watching the amazing sunset and landscape.

• 43:21Jordi Hays?

  That guy's leaning forward as the train goes by.

• 43:23John Coogan?

  I think they're cheering. I think they're cheering. Uh, that's great. Um, where else do you want to go?

• 43:29Jordi Hays?

  Uh, we can go back to this article.

• 43:31John Coogan?

  Okay, okay. I, I, cause I need to know where everyone stands. I need to know, where, where do you stand on shoplifting? Are you pro or anti?

• 43:39John Coogan?

  Are you pro or anti?

• 43:40Jordi Hays?

  I'm anti.

• 43:41John Coogan?

  You're anti-shoplifting. What about you?

• 43:42Jordi Hays?

  There we go. Uh, I had one moment as a kid when, uh, I think I took a piece of candy.

• 43:48John Coogan?

  Oh.

• 43:48Jordi Hays?

  And my parents immediately. Took me back.

• 43:52John Coogan?

  I'm gonna put you under citizens arrest right now.

• 43:53Jordi Hays?

  Yeah, it's time for citizens arrest. No, it took me back and it was like the most deeply embarrassing

• 43:58John Coogan?

  Yeah.

• 43:59Jordi Hays?

  moment. That's like a core memory.

• 44:01John Coogan?

  Yeah.

• 44:01Jordi Hays?

  Of telling them like.

• 44:02John Coogan?

  Everyone should have learned that.

• 44:02Jordi Hays?

  And I, and I think it was, it was at an age that I didn't really know that it was wrong.

• 44:07John Coogan?

  Yeah.

• 44:08Jordi Hays?

  Still.

• 44:08John Coogan?

  Well, that's not what's going on, actually. So, the Wall Street Journal, uh, wrote a piece about, in free expression, Emma Camp wrote this, uh, op-ed. And, and there's a new generation of, yes, the Campanator. Uh, there's a new generation of shoplifters who aren't children, who have, who should have learned their lesson a long time ago, but are actually, uh, fairly affluent and are just sort of sneaking out luxury good. I think that's a piece of it. Uh, but it was, but she makes a very compelling argument for why this is a very bad thing.

• 44:40Jordi Hays?

  We need to make skydiving more accessible.

• 44:42John Coogan?

  Okay.

• 44:43Jordi Hays?

  Like if skydiving.

• 44:44John Coogan?

  Yeah.

• 44:45Jordi Hays?

  Was, was a dollar.

• 44:46John Coogan?

  Or the thrill.

• 44:47Jordi Hays?

  A dollar.

• 44:48John Coogan?

  Okay.

• 44:49Jordi Hays?

  A dive.

• 44:49John Coogan?

  Yeah.

• 44:50Jordi Hays?

  I think a lot of people might say, I'm just gonna go skydiving today. I don't, I'm not gonna steal anything.

• 44:54John Coogan?

  Well, I mean, Ben on our, on our team is working on, uh, a new weather report.

• 44:59Jordi Hays?

  Or jet ski racing.

• 45:00John Coogan?

  Of thrilling things to do.

• 45:01Jordi Hays?

  Yeah, if we could make jet skis more accessible, universal basic jet ski.

• 45:05John Coogan?

  I like that.

• 45:06Jordi Hays?

  I think a lot of people would say, I don't have time to steal. I'm getting ready for the race.

• 45:10John Coogan?

  Yeah. My cortisol is super low. I don't need to spike it by, by sneaking something out. So, at least once a week, uh, as I begin my commute from home, uh, from a midtown Manhattan subway station, uh, I some, I see someone in a suit and tie Dodge the fare. Well, it isn't always a suit. Sometimes it's a chunky gray J. Crew sweater and ballet flats. Each time I see the fare evader slip through an, an open emergency exit or casually hop over the turnstile, a wave of outrage bubbles within me, says Emma Camp in the Wall Street Journal, free expression. And I consider shouting out after the shameless thief. You should do it. I, I am in favor of, of yelling at, uh, fare dodgers in this case. Uh, but before I can work up the courage, he's melted into the crowd.

• 45:54John Coogan?

  It's tempting to give fair hoppers and shoplifters the benefit of the doubt and assume that they are all Jean Valjean's. Do you get that reference?

• 46:00Jordi Hays?

  No.

• 46:01John Coogan?

  Les Mis. You gotta see Les Mis. Jean Valjean is the pinnacle of morality. He steals a loaf of bread for his family because they're starving, goes to jail, gets revenge. It's a great story. You will love it. You should see it on the, in a theater, because it is, of course, a live stage production many times. But there's also a bunch, there's also a great movie with Liam Neeson. The Liam Neeson one is the one you want to see. The Liam Neeson Les Mis is amazing. I think I have that right. But, but that's far from the truth. Well, according to one 2025 survey, and this was what was interesting about this article, the likelihood that someone would purposefully take an item at self-checkout without scanning actually increased with income. So the rich get richer. The rich

• 46:45John Coogan?

  are stealing from the rich. A viral article in Curb, a site published by the New York Times Magazine, or by New York Magazine, paints a vivid picture of this kind of thief, a member of a certain subset of the city's wealthy-ish, as writer Nora Deliter puts it, for whom a little shoplifting on your grocery run has become as, about as mundane as jaywalking. This isn't exactly surprising. A report from the Council on Criminal Justice released earlier this year found that while reported shoplifting decreased during the pandemic, rates have returned to roughly pre-pandemic.

• 47:20Jordi Hays?

  Wait, did they just decrease because people were ordering groceries online?

• 47:23John Coogan?

  I think so. I think so. If you're not in the store, you can't steal anything. You gotta, you gotta hack the system or something. It becomes a cybercrime to steal from DoorDash. The rates have since returned roughly to pre-pandemic levels. This, this New York Magazine profile in Curb, profiles several, several shoplifters who were caught stealing from Whole Foods. None were acting out of necessity, and most stole what can act, what can accurately be described as luxury goods. Thirty-dollar eye cream, strip steak, fancy organic chocolate. None expressed guilt. And no one, and one explicitly justified her actions as being in a card of, a kind of artist's subsidy.

• 48:08John Coogan?

  Petty theft is a vice for a certain kind of loser. Go off, Emma Camp. I love this. Many of those profiled in this article are creative types. Photographers, graphic designers, sculptors and musicians. Presumably, these people are highly educated but downwardly mobile. They steal because they feel entitled to the kind of life where they can thoughtlessly drop $50 on French cheese and sushi rolls while paying Manhattan rent. They can't, that they can't indulge in such luxuries feels to them like a moral outrage, one that can be rectified in some small ways by taking what's owed to them. When shoplifters justify their actions online, they make themselves out to be Robin Hoods.

• 48:50John Coogan?

  They claim it's good to steal from large and therefore evil corporations. This is a teenager's leftism, one in which fighting the man means ripping him off. It's a post hoc justification for a baser impulse, the belief that everything you want should be free. This motivation is made particularly clear when people justify fare evasion, given that public transportation is inherently not a big private enterprise. It's not a mega corp. It's, it's, you know, taxpayer dollars that you're stealing from. Even when we grant, even when we grant the assumption that large companies are inherently evil, which for the record, I don't, says Emma Camp in the Wall Street Journal, that doesn't justify stealing from them.

• 49:32John Coogan?

  If thou shalt not steal doesn't work for you, consider another argument. Petty theft damages the institutions and businesses in a community, making them materially worse for your neighbors. You may think you aren't hurting anyone. Actually, you're hurting everyone. Businesses hike prices to make up for shoplifting losses. Have you heard of like loss, it's called like loss rates or something? Like every retail store just assumes that they're going to get 20% or 5% or some. Yeah, I don't think it's. It can be high. It can be high in some stores, like significant amount of merchandise just like gets, loss prevention is like the term that they focus on, but it's like a constant problem for these businesses. And they have thin margins. People don't realize, I think people think like grocery stores because like you go and check out and it's a hundred bucks or something.

• 50:17John Coogan?

  It's like they're making a ton of money, but like the margins are very, very thin on those. It's not, it's not, it's not ARM. They're not licensing IP to Apple.

• 50:26John Coogan?

  They may even close. A public transportation crumbles without sufficient revenue from riders. As journalist Kelsey Piper put it in a post on X. When you shoplift, you directly and unambiguously impoverish your community. That bar of chocolate you swiped isn't nothing. That little pot of eye cream you slipped into your purse is more than a rounding error on a corporate balance sheet. What you're doing ultimately creates a worse, less functional, less trustworthy society. And even shoplifters need a place to get groceries.

• 50:56Jordi Hays?

  Yeah, the comment section is agreeing with Emma. It said, well, said, and I'll extend it, but beyond just shoplifting to include things like buying something with the intent of returning it after using it for a few days. I remember someone buying a grill at Lowe's with the intent of using it for the weekend and then returning it, which they did.

• 51:15John Coogan?

  Okay.

• 51:16Jordi Hays?

  Yeah, just didn't, steak didn't really come out that well. I don't think it was me. I think it was the grill.

• 51:23John Coogan?

  I'm not, I'm not a big returns guy. Costco does have a huge return policy.

• 51:28Jordi Hays?

  Yeah, it's so, it's so interesting. The, um, the Coogan or the Hayes mind cannot comprehend the return.

• 51:40Jordi Hays?

  Like it's, I, I've maybe returned two things in the last 10 years. It's just not an impulse that I have.

• 51:50John Coogan?

  Because you're deeply in touch with everyone.

• 51:55John Coogan?

  So funny.

• 51:56Jordi Hays?

  Anyways, we can.

• 51:57John Coogan?

  Okay, let, let me tell you about TurboPuffer. Serverless vector and full tech search built from first principles on object storage, fast, 10x cheaper and extremely scalable. And let me also tell you about Gemini 3.1 Pro. With a more capable baseline, it's great for super complex tasks like visualizing difficult concepts, synthesizing data into a single view and bringing creative projects to life. Uh, and thank you, the clapping in the studios at an all time high now that we're back to full strength in the TBP and UltraDump.

• 52:22Jordi Hays?

  So that's right.

• 52:23John Coogan?

  Will Manitis is giving some more context around anti-AI backlash. He says, "In case you're skeptical that anti-AI backlash will become a central issue in the next election cycle, Sanders just introduced a bill to halt all new data center construction and require the federal government to review and approve AI products before release." Interestingly, this idea of an AI FDA, the first time I heard about this concept was on the All In Podcast. I believe Chamath Palihapitiya was making the point that an AI FDA was something worth considering. I think he's evolved his position, but it was something that, you know, the first time you learn about like the possibility of a

• 53:06John Coogan?

  fast takeoff, the possibility of AI doom, it seems really rational to say, "Well, let's review everything beforehand." But then there's natural effects and there's limitations to the models and we can't even do a puzzle on RKGI. So maybe there's a little bit more work to be done. Maybe there's a few more data centers to build before we actually get good things out of these models. But.

• 53:26Jordi Hays?

  Noah Smith wrote a piece that I think is relevant to the data center moratorium, which is, "AI has the worst sales pitch I've ever seen."

• 53:38John Coogan?

  It's rough.

• 53:39Jordi Hays?

  And he has, quote, "Our product will make you economically useless and possibly kill you." He says, "It's not a value proposition. AI leaders need to change their public messaging and fast." We don't need to read through all this.

• 53:50John Coogan?

  No, I need to read this quote. He opens this quote, "Hi, do you have a moment? I'm from the cursed microwave company. Our product is much better than a traditional microwave. Not only can it automatically and perfectly cook all your food, it also microwaves your whole body. So you and your family are paralyzed and unable to work ever again. Don't worry though, because when everyone has a cursed microwave, our society will probably implement universal basic income and you and your children can just go on welfare. Oh, by the way, we estimate that there's a 2 to 25% chance that our microwaves will put so much radiation, will put out so much radiation that they'd destroy the entire human race. If a door-to-door salesman... Came and gave me this pitch, I would gently see him out the door and then quickly call the FBI. But this is only a modestly exaggerated version that the pitch of the

• 54:35John Coogan?

  pitch that the big AI labs, OpenAI and Anthropic are making to the world about their technology. And I completely agree with this. It's very, it's very important that AI lab leaders, you know, focus on the actual tangible benefits of the, of the technology right now. Like, I think there's this, you, you keep, you keep identifying this disconnect between like, like, people are afraid of AI and there's so much fear-based marketing, but then, like, every single person, like a billion people are just using ChatGPT to like get answers. And, and every person you talk to, no matter how, they, they can, they can tell you for 20 minutes, lay out a very coherent, like cogent thesis of AI doom, what might happen,

• 55:18John Coogan?

  Terminators, they can take you on this very reasonable scenario. And then five minutes later, the topic changes and they'll tell you how they use ChatGPT to like, you know, plan their vacation or something like that. And, and this disconnect just like cannot last.

• 55:29Jordi Hays?

  Yeah. Yeah, I wrote January, on January 9th, the phrase tech clash was originally coined by Adrian Woolridge in The Economist in 2013. He correctly predicted that the big developments of 2014 will be the growing peasants revolt against the sovereigns of cyberspace. The silicon elite will cease to be regarded as geeks who happen to be filthy rich and become filthy rich people who happen to be geeks. Over the coming years, the world experienced the Cambridge Analytica scandal, fear around the mental health impacts of social media on young people, and growing concerns around monopoly power in our digital world. The internet and the platforms that dominated began to test the core foundations of our country and, and the free world, privacy, democracy, censorship and more. The second tech clash has begun, this time because the average American believes that technology,

• 56:13Jordi Hays?

  specifically AI, is now a threat to their very way of life. Starting at the bottom of Maslow's hierarchy of needs, Americans have heard the data centers use a lot of water, they heard their power bill is probably going to go up because of it, or already have. They've seen the movie Terminator and have imagined how that might go from science fiction to reality.

• 56:29John Coogan?

  Watch Terminator. You still haven't seen it, right?

• 56:32Jordi Hays?

  Uh, no, I have seen Terminator.

• 56:34John Coogan?

  You have? Have you seen Terminator 2?

• 56:35Jordi Hays?

  Uh, probably not.

• 56:37John Coogan?

  You're killing me.

• 56:38Jordi Hays?

  John, it's enough to ask me to finish one movie. Now you're like, oh, you gotta see this sequel.

• 56:42John Coogan?

  Two is, two is the best one, I think. Uh, but the end of Terminator, it's a good ending. The humans win. We beat the robots.

• 56:48Jordi Hays?

  Yeah.

• 56:49John Coogan?

  It's a good outcome. You gotta push back on that?

• 56:51Speaker 02

  Uh, no, I was, I was gonna add, so earlier we were talking about like China and like how is China thinking about some stuff?

• 56:55John Coogan?

  Oh, yeah, yeah, yeah.

• 56:55Speaker 02

  I found some.

• 56:56John Coogan?

  Okay, tell us, tell us, yeah.

• 56:57Speaker 02

  Okay, so, um, Xi Jinping is like, if you basically compare like Chinese government to US government, Chinese government is probably like much more concerned about safety than the US is.

• 57:06John Coogan?

  Okay.

• 57:06Speaker 02

  Um, like, there's all these things like, so Xi Jinping.

• 57:09Jordi Hays?

  We don't want us, we don't want other people to be able to do surveillance as well as we have to do.

• 57:15Speaker 02

  Yeah, there's always like the, the take which is like,

• 57:17John Coogan?

  Yeah.

• 57:18Speaker 02

  you know, if you're super concerned about safety, well, what does that mean? You, you need these, this oversight over everything, right? Which is like, if you're China, you wanna be a carrier, and that's like the thing you're gonna do.

• 57:26John Coogan?

  Yep.

• 57:27Speaker 02

  Um, but basically, he was like, uh, he chaired this, it was from time, a rare Politburo study session on AI warning of unprecedented risks.

• 57:36John Coogan?

  Mm-hmm.

• 57:36Speaker 02

  Um, it's listed, AI safety is listed alongside pandemics and cyber attacks in their national emergency research, uh, response plan. Um, he's also said, uh, he, he stressed the need for monitoring early risk warning and emergency response, right? So it's like, sure, that's like about safety, but also,

• 57:52John Coogan?

  Yeah.

• 57:52Speaker 02

  you know, monitoring, right?

• 57:54John Coogan?

  No, no, no.

• 57:54Speaker 02

  It's kind of.

• 57:55John Coogan?

  I wonder, I wonder how this interfaces with the Bernie Sanders position, like, will there be some sort of, uh, like, open discussion? Uh, you know, Bernie's going around doing a lot of different conversations. That would certainly be like the next step if he wants to get through the, uh, you know, the geopolitical pushback.

• 58:13Speaker 02

  Even when you talk to a lot of like the pause AI people, very few of them are, are like ever really say, the US needs to pause regardless of what China does. It's always like, we need to have international, uh, you know, agreement on it, because otherwise, like, it obviously doesn't work.

• 58:27John Coogan?

  Totally, totally, yeah.

• 58:28Jordi Hays?

  Yeah, if everyone could just give their CPUs to Tyler, he will watch after them.

• 58:34John Coogan?

  He can be trusted.

• 58:34Jordi Hays?

  He can be trusted.

• 58:35John Coogan?

  He can be trusted.

• 58:36Jordi Hays?

  A giga cluster.

• 58:37John Coogan?

  Yes.

• 58:39Jordi Hays?

  Uh, anyways.

• 58:40John Coogan?

  Yeah.

• 58:40Jordi Hays?

  So, this story will

• 58:42John Coogan?

  Continue.

• 58:42Jordi Hays?

  to evolve.

• 58:43John Coogan?

  That's good info. Thank you.

• 58:45Jordi Hays?

  Uh, Rune hit 300K. He says, "Time to dox on TBPN."

• 58:50John Coogan?

  Okay, let's do it. 300K with massive. Let's go. Congratulations!

• 58:59Jordi Hays?

  Boom, boom, boom. Spore says-

• 59:01John Coogan?

  I think we hit the gong at 2:52. Every, every time, every time there's a rune milestone, we must celebrate it to the fullest.

• 59:09Jordi Hays?

  Spore says-

• 59:10John Coogan?

  Really quickly, let me tell you about Cognition. They're the makers of Devon, the AI software engineer. Crush your backlog with your personal AI engineering team. And let me also tell you about Consul. Consul builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution to access requests and password resets. Continue.

• 59:27Jordi Hays?

  Let's pull up one of the greatest videos created in the last year.

• 59:30John Coogan?

  Ooh, yeah.

• 59:31Jordi Hays?

  Spore says, "RIP Spore, you gave us the greatest AI video of all time."

• 59:35John Coogan?

  Yes.

• 59:35Jordi Hays?

  Let's play it.

• 59:37John Coogan?

  This was a great video. I did enjoy this one.

• 59:39Jordi Hays?

  Sound, please.

• 59:40Speaker 05

  Hey, it's not that. It's midnight. Give me that. No, sir. No more fiddle tonight. Got it?

• 59:45John Coogan?

  No more fiddle tonight.

• 59:46Speaker 05

  Inside with this thing. Go home.

• 59:50Speaker 05

  Hey, what did I say about the noise? It's the middle of the night. No more stints on the porch.

• 59:54John Coogan?

  The door cam-

• 59:55Speaker 05

  Yep, you're done. I'm taking it inside.

• 59:56John Coogan?

  The Spore model, I don't know what the, what was in the training data, but it nailed this like doorbell footage. Like the graininess really leans into the flaws and it hides the flaws in the model. When you try and do something that's photo real, it looks a little waxy still, but this is just perfect. And it's too, it's too low res to detect like, oh, the finger's perfect or whatever.

• 1:00:19John Coogan?

  That's a good instrument. That's fun. She really, she really hits the cat with that door. It's absolutely insane. Yeah. Well, the didgeridoo? Oh.

• 1:00:32Jordi Hays?

  Here's the thing. Here's the thing. Human creativity. You had to string all these together. This was not one shot it. This is like-

• 1:00:39John Coogan?

  No, no, no.

• 1:00:39Jordi Hays?

  This is like, you know, 10 prompts.

• 1:00:42John Coogan?

  I've done it. I, I've gone to ChatGPT and said like, "Think of a funny prompt." And it doesn't come up with something as novel as this. Otherwise I would be the creator of that. Hey, that's our gong. That's literally our gong. Or a former gong.

• 1:00:55Jordi Hays?

  Our former gong.

• 1:00:55John Coogan?

  Yeah.

• 1:00:57Jordi Hays?

  We made it into the training data.

• 1:00:59Speaker 05

  Hey, midnight aerobics now? The whole porch is shaking.

• 1:01:04Speaker 05

  Volume down, pause off the neighbors.

• 1:01:05Speaker 02

  Silent disco.

• 1:01:06Speaker 05

  Before 3 a.m. Okay?

• 1:01:07John Coogan?

  It's good. I love it. Yeah, the Sora, the Sora news is interesting. I mean, obviously, good to, as a reflection on like, okay, era of focus. We heard that news from like a week ago. This is like a very clear step in like refocusing. There is a question about like the value of models, like Sora jumped ahead of Meta Vibes very quickly. Meta Vibes launched like a week before, and when Sora came out, the consensus was like, oh, wow, this is like definitely a step above of what you can do with Vibes, which was much more like an animated picture from Mid Journey. It had cool, cool aesthetics. But it was, it was way less like, it was, it was very constrained in terms of what you could do with Sora.

• 1:01:51John Coogan?

  You could, you could automatically insert different cuts, generate something that looked a lot more like a native reel, even if there were sort of rough edges. But the question with every model is, you know, you spend money to train it, and then it has ongoing inference costs, the cost of a video model. It feels immense because I went back and looked at some of the first Sora videos that I generated. I'm thinking of me in the orange and white suit.

• 1:02:19Speaker 02

  Yes.

• 1:02:20John Coogan?

  One of the greatest AI videos. We'll have to play it at some point. But that one felt like it had about a thousand times as much compute allocated to it than the last one that I generated. Cause I generated a Sora like a week before this announcement, and it did, it does feel like they had, they had shifted the GPU workloads to other, to maybe Codex, because that was the product that was taking off. What do you think?

• 1:02:43Speaker 02

  Yeah, there were some rumors where they were spending something like 10, 15 million dollars a day on compute for just for Sora, which is like,

• 1:02:49John Coogan?

  That's a lot.

• 1:02:49Speaker 02

  You know, like three and a half billion a year or something, something in this range.

• 1:02:52John Coogan?

  Yeah.

• 1:02:53Speaker 02

  So it's like so much compute just on inference. And it's like, yeah, what's the actual value?

• 1:02:57John Coogan?

  Yeah, yeah. And if it's not monetizing with crazy ad rates immediately or crazy API costs, like, like you just, you're just in GPT-2 territory where Greg Brockman came on and told us that, you know, I don't know, they spent probably millions of dollars training GPT-2. They were like, we had to pay people to use it like every dollar of inference was was negative margin. We were losing money on every on every token generated. And then GPT three was in a similar boat. It was like almost there, but they weren't really making any money for it. And then the GPT four training run happens. And that, I mean, looking back, that has to be an incredibly profitable model. Because I think it maybe cost a hundred million dollars to train. And then the inference cost like they distilled the model pretty quickly.

• 1:03:41John Coogan?

  Uh, got to a place where I think that was very, very ROI positive based on the subscriptions during that time before they rolled out five. And then, you know, you're always facing this battle of like, you know, a little bit of a Red Queen's race, training the new model. You know, depreciating the model across whatever the the inference margin you get during the period where you have the best model.

• 1:04:02Jordi Hays?

  Mitchell Green went on Invest Like the Best. And Patrick, uh, Patrick pulled out one of lead, he said, lead edge is probably most famous for this letter. Mitch Mitchell calls it the hierarchy of BS. It's his way of distilling what he learned from cold calling 10,000 companies. And I will go through it. If companies have good cash products, profits, they report those. If companies don't have good cash profits, they report on adjusted profits. If companies don't have good adjusted profits, they report on gross profits. If companies don't have good gross profits, they report on revenue. If companies don't have good revenue, they're reported on adjusted revenue indicators like GMV. If companies don't have good GMV, they report on monthly active users.

• 1:04:47Jordi Hays?

  If companies don't have good monthly active users, they report on subscribers. If companies don't have good subscribers, they report on downloads. If companies don't have good downloads, they report on page views. If companies don't have good page views, they report on what they revoked. The best place to work in XYZ city.

• 1:05:04Jordi Hays?

  Right now, this

• 1:05:05John Coogan?

  It's very funny because the only news that we've shared from TVP is that we're like the 42nd most innovative company recently. But we're not a public company. If you want to trade a public company, go over to public.com. Investing for those who do this seriously. Stocks, options, bonds, crypto, treasuries and more with great customer service. I want more of your take on this.

• 1:05:23Jordi Hays?

  People that flex how many lines of code they're writing.

• 1:05:27John Coogan?

  Oh, yeah.

• 1:05:28Jordi Hays?

  Like, if your product doesn't have any, if your product doesn't have any users or revenue, you just report on lines of code.

• 1:05:34John Coogan?

  Lines of code per year run rate is a crazy one I saw recently.

• 1:05:39Jordi Hays?

  LOCRR.

• 1:05:40John Coogan?

  That's an insane stat, but we have the solution. It will be released soon. Do you have a general update?

• 1:05:47Jordi Hays?

  Yeah, what's the timeline, Tyler?

• 1:05:48John Coogan?

  I know you're traveling.

• 1:05:49Jordi Hays?

  Did you, when you went on, when you went on the road, did you stop?

• 1:05:53John Coogan?

  Walking in?

• 1:05:53Jordi Hays?

  Work.

• 1:05:54Speaker 02

  The project is, will, can be done today, tomorrow.

• 1:05:58John Coogan?

  Really?

• 1:05:59Jordi Hays?

  Does it have sound effects yet?

• 1:06:00Speaker 02

  It does not yet.

• 1:06:01John Coogan?

  Okay, then it's not, it's not ready to.

• 1:06:03Speaker 02

  Yeah, in a day or two.

• 1:06:06John Coogan?

  Just one more.

• 1:06:06Speaker 02

  The fundamental mechanics, I was fine tuning.

• 1:06:09Jordi Hays?

  Tomorrow at 12:07 chat.

• 1:06:11John Coogan?

  Jordy.

• 1:06:11Jordi Hays?

  Reminds, ask Tyler.

• 1:06:13John Coogan?

  The project, the project is not done yet, but I talked to Tyler and he said he's, he's generating 25,000 lines of code an hour in advancing of this project. So, I mean, he's doing, he's clearly putting out a lot of code and that will translate to a great product eventually.

• 1:06:29Jordi Hays?

  The best entrepreneurs I know are generating millions of lines of code daily just to keep their about page up and running.

• 1:06:38John Coogan?

  About page, rough. Well, let me tell you about Restream. One livestream, 30 plus destinations. If you want to multi-stream, go to Restream.com. Just do it. Gwen Shotwell is on the cover of Time Magazine. SpaceX is racing to build the most powerful rockets yet with the goal of returning humans to the moon. Gwen Shotwell is leading the charge alongside Elon Musk. This is a good deep dive. You should go check it out.

• 1:07:03Jordi Hays?

  Go.

• 1:07:04John Coogan?

  My, the first YouTube video I ever made that went viral or like broke out, because when you have.

• 1:07:08Jordi Hays?

  Was, why is no one talking about Gwen Shotwell?

• 1:07:11John Coogan?

  Literally, literally, that was not exactly the title.

• 1:07:14Jordi Hays?

  So not literally.

• 1:07:15John Coogan?

  But it was, it was, that was the whole premise. That was the whole premise. And, and normally I think I had a thousand subscribers and so getting like a thousand views was like, okay, this is great. And if you can get more views than subscribers, that's like a banger.

• 1:07:28Speaker 02

  The title was, the only reason SpaceX works.

• 1:07:31John Coogan?

  There we go.

• 1:07:31Speaker 02

  In parentheses, Gwen Shotwell.

• 1:07:33John Coogan?

  That might've been retitled that a few times, but. You get the idea.

• 1:07:37Jordi Hays?

  Anyways, no surprise that Gwen shot while

• 1:07:41John Coogan?

  Yes.

• 1:07:41Jordi Hays?

  Running.

• 1:07:42John Coogan?

  Yes.

• 1:07:42Jordi Hays?

  Running a company that is shooting things.

• 1:07:44John Coogan?

  Shooting rockets into the atmosphere.

• 1:07:46Jordi Hays?

  No surprises.

• 1:07:47John Coogan?

  Well.

• 1:07:49Jordi Hays?

  FT has some reporting on the SpaceX IPO.

• 1:07:56Jordi Hays?

  The bankers involved are toying with the idea of allowing existing shareholders to sell out of their positions on day one, two of the people said.

• 1:08:03John Coogan?

  Wow.

• 1:08:04Jordi Hays?

  That would do away with rules to prevent insiders cashing out or trading shares, which are typically imposed for 180 days after

• 1:08:10John Coogan?

  Normally, there's a lockup. I would think there would be rolling lockups.

• 1:08:13Jordi Hays?

  A third person said SpaceX is considering a so-called staggered lockup that would allow initial investors to slowly sell down their stakes over the course of several months. The deal is, quote, "too big of an IPO to just unlock."

• 1:08:26John Coogan?

  Yeah.

• 1:08:26Jordi Hays?

  Musk's influence over the size and timing of the listing has been highly unusual, said one investor close to a banker on the deal. It's kind of scary how Elon is setting the price. It's not being done formally.

• 1:08:36John Coogan?

  Oh, interesting. It's not, it's not a full auction format. He says, this is the price and you can either buy or not, and hopefully you buy. Yeah, interesting. The, the staggered lockup, it feels like it makes a lot of sense. You could just see, okay, this person's held these shares for 20 years. This person's holding it for 10 years. They get 180-day lockup, a 90-day lockup, a, you know, 270-day lockup, whatever you want. I don't know.

• 1:08:57Jordi Hays?

  Just imagine how much money the lawyers are going to make from unwinding all the different entities and the SPVs and the SPVs and the forward contracts with the SPVs and the forward. It's going to be.

• 1:09:09John Coogan?

  Full employment for lawyers, for sure.

• 1:09:13Jordi Hays?

  XAI co-founder Kreuz.

• 1:09:16John Coogan?

  Kreuz, Australian now?

• 1:09:18Jordi Hays?

  Manuel Kreuz.

• 1:09:20John Coogan?

  Okay.

• 1:09:21Jordi Hays?

  Is departing the company, which is, I think officially, the last co-founder.

• 1:09:25John Coogan?

  Wow.

• 1:09:26Jordi Hays?

  Uh, remaining outside of Elon, so.

• 1:09:30John Coogan?

  That's remarkable.

• 1:09:32John Coogan?

  Well, it'll be interesting to see what the next, uh, what the next run, the next version of Grok does. Is there, is there a new 4.2 came out, is that right?

• 1:09:41Jordi Hays?

  Yeah, I mean, that was a while ago.

• 1:09:42John Coogan?

  That was a while ago, so we're expecting like a 5 or 4.3 soon.

• 1:09:46Jordi Hays?

  Yeah, I, I don't know if anyone expected super soon.

• 1:09:49John Coogan?

  Yeah.

• 1:09:49Jordi Hays?

  Right, because they're kind of revamping the whole thing.

• 1:09:51John Coogan?

  Yeah, I wonder what they'll try to do with RKGIV3 because they were the fourth lab that tested and they were the only lab that got 0%. Although I don't know how much worse that is than getting 0.25%. Uh, but certainly, uh, it'll be interesting. Ryan Peterson had an idea for Elon Musk. He said, "If Tesla makes a car with three rows of seats, each with its own pair of doors, so nobody has to climb over everybody else to get in their seat, they will create a baby boom, the likes of which we haven't seen in, in 80 years," and Elon Musk says, "Noted." "Would you buy a car with three sets of doors? It would look extremely odd.

• 1:10:32John Coogan?

  It would be the very iconic, but that sort of Tesla's thing and a Cybertruck stands out on the road."

• 1:10:39Jordi Hays?

  Model YSL.

• 1:10:40John Coogan?

  SL.

• 1:10:41Jordi Hays?

  Size Lord.

• 1:10:42John Coogan?

  Okay, well.

• 1:10:43Jordi Hays?

  Uh, yeah, so, so the YL.

• 1:10:45John Coogan?

  Yeah.

• 1:10:46Jordi Hays?

  Has three rows.

• 1:10:47John Coogan?

  Yeah. But it has two sets of doors.

• 1:10:49Jordi Hays?

  Yeah.

• 1:10:50John Coogan?

  Four doors.

• 1:10:50Jordi Hays?

  I don't know.

• 1:10:51John Coogan?

  A six-door car.

• 1:10:52Jordi Hays?

  How big, I don't know.

• 1:10:52John Coogan?

  Someone has to have done this at some point, a six-door car.

• 1:10:55Jordi Hays?

  Having a kid jump in and just crawl to the back. We did that was when, if, back in my day.

• 1:11:01John Coogan?

  Back in your day?

• 1:11:01Jordi Hays?

  It was up, when you climbed in that door.

• 1:11:03John Coogan?

  Yeah.

• 1:11:04Jordi Hays?

  It was uphill to the third row.

• 1:11:05John Coogan?

  Yep.

• 1:11:06Jordi Hays?

  Both, and then, and then uphill on the way up.

• 1:11:08John Coogan?

  Okay, yeah.

• 1:11:09Jordi Hays?

  So it was a nightmare.

• 1:11:10John Coogan?

  It was a nightmare.

• 1:11:11Jordi Hays?

  We did it.

• 1:11:11John Coogan?

  Yeah, but it made you who you are.

• 1:11:13Jordi Hays?

  Into the man I am today.

• 1:11:14John Coogan?

  Yeah, and so you don't want, you don't want easy street, extra doors in the back.

• 1:11:18Jordi Hays?

  No way.

• 1:11:18John Coogan?

  No way.

• 1:11:20John Coogan?

  Your kids are gonna be climbing, they're gonna be climbing all over the seats.

• 1:11:24Jordi Hays?

  Yeah, it's interesting. It, it feels like Tesla's entire strategy from a merchandising standpoint has just been to make like more and more, as much as possible, just make the, the, the lowest number of cars.

• 1:11:37John Coogan?

  Yeah.

• 1:11:38Jordi Hays?

  And so he's getting all this feedback, but they already have.

• 1:11:43Jordi Hays?

  Like a six seater coming out.

• 1:11:45John Coogan?

  Okay, someone, someone shared an image.

• 1:11:48Jordi Hays?

  Yeah, this is the data that you were talking about yesterday.

• 1:11:51John Coogan?

  The Ambruster Stageway, the world's oldest and largest manufacturer of custom multi-passenger vehicles, and it's a suburban that was converted and it comes with six or eight door models. So you can have rows and rows. I don't know if you can scroll down and find it. It's from Talos Dreams in the replies there. But I don't know. Anyway, where do you want to go?

• 1:12:16Jordi Hays?

  Meek Mill says, I'm getting 250 for a tweet.

• 1:12:20John Coogan?

  Oh, interesting.

• 1:12:21Jordi Hays?

  I, I was fascinated because he's gone on like this big tear of like promoting AI.

• 1:12:28John Coogan?

  Yeah.

• 1:12:28Jordi Hays?

  Specifically Claude. And so.

• 1:12:33John Coogan?

  What is Nikita Beer gonna say about this if he's getting paid not checking that box?

• 1:12:37Jordi Hays?

  Is he basically just saying like, I'm, I'm doing undisclosed paid promotions?

• 1:12:42John Coogan?

  I don't know.

• 1:12:43Jordi Hays?

  Uh, because he's certainly getting more than 250 likes.

• 1:12:48John Coogan?

  Yeah, I don't know. He got about 250 retweets on this, 295. So I don't know. It's possible. Uh, let me tell you about Okta. Okta helps you assign every AI agent a trusted identity. So you get the power of AI without the risk. Secure every agent, secure any agent with Okta. And let me also tell you about Lambda. Lambda is the super intelligence cloud building AI supercomputer for training and influence that scale from one GPU to hundreds of thousands. And I believe we have.

• 1:13:15Jordi Hays?

  Last, last, last thing before we go into our first guest.

• 1:13:18John Coogan?

  Sure.

• 1:13:18Jordi Hays?

  We have to pull up this post from Peace Land. He says, I've seen some fire fits in China, but I've never seen a jacket this hard in my life. And the guy, the back of this guy's jacket just says, Mr. Enjoy the money.

• 1:13:31John Coogan?

  M E D, M E D M?

• 1:13:34Jordi Hays?

  M E D M. Mr. Enjoy the money. This is.

• 1:13:37John Coogan?

  Apparently that's a, that's a legit brand. That is very tough. I like it, Mr.

• 1:13:42Jordi Hays?

  This might be the new meta.

• 1:13:44John Coogan?

  This might be the puffer jacket with the stitching on the back is very nice. There's a lot of fun examples of other swag in the replies. Well, without further ado, let's bring in Eric Goldman, the Associate Professor of Law at Santa Clara University. He's the Associate Dean for Research and Professor there. Eric, how are you doing? What's going on?

• 1:14:03Speaker 06

  I'm all right, thanks. How are you?

• 1:14:05John Coogan?

  I'm good. Thanks so much for joining. Please, since this is the first time on the show, I'd love a little bit of an introduction and then, of course, I want to go into the case today.

• 1:14:12Speaker 06

  Sure. I'm Eric Goldman. I'm a professor of law and Associate Dean for Research at Santa Clara University School of Law. I've been doing Internet law for over 30 years, teaching, researching in the area. And my area of specialization includes how users talk to each other online.

• 1:14:30John Coogan?

  Okay. And when did you start tracking the Meta YouTube lawsuit? How long has this been going on? And then I want to hear about your expectations for the case, your interpretations of the case, how things played out.

• 1:14:42Speaker 06

  So I started tracking the cases when they were filed. I can set up electronic alerts to notify me of new filings of the cases. And I had to give that up after a while. These parties were just beating each other up in court with an enormous volume of very piquant filings. So I stopped tracking at that level a while ago. It's hard to track the state court cases. There isn't an electronic tracker for that. So it's been a little bit harder to get the information in that case. And this has been going on for a couple of years and many millions of dollars have been spent by both sides in these cases.

• 1:15:21John Coogan?

  So take us through what actually happened, how we should be interpreting the verdict, and then we'll go into where we go from here.

• 1:15:31Speaker 06

  So we need to step back for a moment and let me lay the, describe the landscape and then we'll see how this case fits into it.

• 1:15:39John Coogan?

  Yeah.

• 1:15:40Speaker 06

  In... California State Court in Los Angeles, there have been hundreds of plaintiffs who filed lawsuits against the social media services. These cases have been joined together in a proceeding, but they're not a class action. So there's hundreds of parallel lawsuits all sitting next to each other. A similar lawsuit is also pending in federal court in Northern California. It's called a multi-district litigation or an M D L. And there are thousands of plaintiffs in that case as well. Similar format, they're sitting next to each other, it's not a class action. That case also includes entities like school districts and Native American tribes. So there's other entities in that as well.

• 1:16:25Speaker 06

  And then there have been individual filings across the country by state attorneys general and others in the lawsuits. So there's basically just a litigation mania taking place across the United States.

• 1:16:39Jordi Hays?

  Yeah. And what does it, what does it actually take to qualify a plaintiff? Do they just look at their screen time and say like, oh, you used social media for five hours last week, you're addicted? And then they kind of figure out how to, how to kind of, you know. Turn into an actual suit?

• 1:16:55Speaker 06

  Uh, there is no screening for who gets named as a plaintiff. They just raise their hand and say, I think I qualify. And they've been joining these lawsuits. The lawyers, of course, are helping them and each trying to, each lawyer is trying to add to their portfolio of plaintiffs that they have, that they're representing. So, but whether they're actually going to get any recognition from the court or money, they'll have to make their case eventually. So that's part of why the, the trial was held that, that led to the verdict that came out this week. What they did in the California State Court case is they said, we're going to pick three plaintiffs and we're going to do what are called bellwether trials.

• 1:17:39Speaker 06

  We're going to let the parties make their case to the jury and we're going to see what the jury thinks. The goal was to do three, not just one, with the idea that plaintiffs have so many different stories, the victims are. Each in their own unique situation that we wanted to get multiple data representations from the pool of plaintiffs to start to be able to estimate the overall value of the case. So the first one came out and the jury agreed with the plaintiffs, did not agree with the defendants, and awarded $6 million of damages. Now, this is just the first data point of what's expected to be three just in the state court case. There's lots of activity taking place throughout the country.

• 1:18:20John Coogan?

  So how should we think about the actual ruling? The Wall Street Journal has a headline, "Meta and YouTube Found Addictive and Harmful." How are you interpreting the nature of what the plaintiff attorney proved?

• 1:18:38Speaker 06

  At the core, the plaintiff's lawyers had to make a number of novel arguments, both to the judge to get to the trial, and then in front of the jury, they had to convince the jury to recognize the harms that the victim suffered and attribute them back to social media services. And the jury agreed with all of that. And so the way, I think, to interpret this verdict is that we've now heard from some ordinary Americans, I don't want to say metaphorically picked off the street, and asked them, how do they feel about the accountability of social media services for the harm of their users?

• 1:19:20Speaker 06

  And the jury said, "We think that the social media services should be responsible, and we should assign some pretty significant dollar values to that responsibility."

• 1:19:29John Coogan?

  Is that, is $6 million seen as a significant dollar value in the courts? Because these companies are so big, but again, this could just be the beginning of a wave.

• 1:19:42Jordi Hays?

  Well, you have to multiply it by potentially thousands.

• 1:19:43John Coogan?

  Yeah, so where does this go in terms of the damages as they snowball? Will there be a class action, some sort of master settlement that goes way bigger?

• 1:19:55Speaker 06

  Just about the numbers for a moment. Six million dollars is far less than what the plaintiffs requested. It's far more than I think the defendants had hoped. And as you were pointing out, if you multiply it times 3,000 potential plaintiffs that are already in the queue, that translates into something on the order of like 20 billion dollars. Again, maybe numbers that Meta and Facebook and Google have, but TikTok and Snap, if they're also going to be coming along for the run, maybe they don't have that. Maybe that becomes uneconomic. So the numbers grow, I think, really rapidly because not only is it the people who have already filed, it's all the other potential users who will say, just like you were suggesting

• 1:20:39Speaker 06

  earlier, who will say, you know, I've been addicted for five hours on my site. There could be tens of thousands of more plaintiffs coming through. The numbers on this could get extraordinary. Now, remember, this is only one data point. The other two bellwether cases could establish no liability, or they could assign much larger damages. And so we'll see if that 6 million is even the right number for the parties to start estimating the settlement.

• 1:21:04John Coogan?

  Sure. So will those other bellwether cases for sure resolve before this gets appealed? Do you anticipate that this ruling will get appealed all the way to the Supreme Court? How do you think about the interaction between the bellwether cases and then other legal proceedings?

• 1:21:21Speaker 06

  So I believe that the appeals are going to be lodged now, but I would expect that by the time that the appellate court is ready to hear the appeals, the other two cases will have been resolved, and ideally, they'll be all handled together. Whoever doesn't get the results they want in the other two bellwether trials would go ahead and appeal those as well. All these cases are going to be appealed until there's some kind of definitive resolution. And I would expect the appeals to go up all the way as high as the court will take them. The U.S. Supreme Court has discretionary review, so they may not take it, but I expect the cases to be appealed to them. Unless there's a settlement, and you did ask about that, and let me just close the

• 1:22:02Speaker 06

  thought, the difficulty with the settlement is because they are not class actions, the defendants cannot settle against all the potential plaintiffs. They can only settle against the ones who have already expressed, who have already signed up to the case. And so one of the tricky aspects of this case is how could they price the settlement to pick up all these other potential plaintiffs who are waiting in the wings?

• 1:22:24John Coogan?

  Are there any other countries that have gone through this process of litigating social media addiction? It feels like uncharted territory. When I see things like the effect of the like button or endless scroll or feeds.

• 1:22:42John Coogan?

  There's been a conversation about the effect of those technologies for a long time, but this is the first time I've seen them actually been, you know, in the court of law.

• 1:22:52Speaker 06

  That's a great question. I don't actually know if there's been any trials on these questions in other countries and other countries don't always have a jury system like we do. So I do think we are in some new ground here. Having said that, other countries often can regulate the specific mechanics of online publishers in ways that the First Amendment may not permit here. So the other countries might very well have already dictated that certain things cannot be done that are part of the litigation now.

• 1:23:23John Coogan?

  Yeah. So do you think that there's a hope for sort of new federal regulation alongside what is going on with section 230 that sort of sets the rules of the road at a national level that then if you're in compliance to, you can't be held guilty of, you know, this, these, all these lawsuits?

• 1:23:44Speaker 06

  It's possible that we could get some kind of federal legislation that provides some kind of security or safe harbor for the defendants that would also preempt any of the state laws that would conflict with that. I don't see that anywhere in the Overton window, you know, the window of what's actually being debated today. But maybe if the services are feeling a pain, they would be willing to pursue that. The reality is today that states throughout the country are passing laws that govern the same issues that are at issue in the litigation. And so unless there's some federal preemptive laws, the defendants, the social media services are going to have to navigate this ever growing stack of state legislation.

• 1:24:27Jordi Hays?

  Uh, Jordy, please. Do you think we get to a point where when you open a social media app, it has like an addiction warning, like you might see on a cigarette, on a cigarette box, is that where this is headed? Or if this goes far enough, are we, are the platforms running the risk of, you know, needing to remove the like button because it hurts people's mental well-being? Or eliminating the infinite scroll? Or app level usage limits? Like, what are kind of like the extreme sort of downside scenarios for the platform?

• 1:25:08Speaker 06

  So there have been some states that have enacted mandatory warning labels, like you're describing. Those are going to be subject to constitutional challenges. It's not clear to me that they're actually constitutionally permitted. For example, Texas's law has, I believe, been enjoined on that very point. So the warning label approach, I don't think is likely to be the final resolution in any of the disputes here. I think that that's going to be an effort that probably isn't going to either solve a problem or be constitutional. It is already the case that states have passed laws that have done things like tried to ban auto-scrolling, or infinite scrolling, or autoplay, or the like button, or like counts, or whatever.

• 1:25:52Speaker 06

  States are going to get to that level of granularity, and they're already doing so. Many of the things that are already part of social media features today are regulated by state laws that are on the books, but possibly being in the process of being challenged. And I think the bigger question isn't, will we, you know, lose our like button? Or will we lose infinite scrolling? I think we would consider that, for those of us who are aficionados of social media, who think that there's some value to them, we would consider that to be maybe the best possible outcome. I think the more serious outcome is, what social media services drop out of the industry entirely? What social media services add barriers to user populations having access to social

• 1:26:37Speaker 06

  media? And how much we see the circumscription of social media conversations entirely? In other words, I don't think we should assume that social media will exist in its current form in the future. The question is whether we'll even have social media in the future. That, I think, are the states of the cases and the legislation.

• 1:26:56John Coogan?

  Yeah, yeah, yeah, it's fascinating. What other industries have been through this type of pivotal moment? And where should we be drawing analogies? Or where should we avoid drawing analogies? People have said, "Social media is the new cigarettes." Jordy was making a point about the warning labels on cigarettes. It feels like that might not be the actual best analogy. I was talking to Tyler on our team about the risks associated with driving a motorcycle. And I was making the point that there's an instruction manual that you buy, that you get with a motorcycle that, you know, puts a lot of the risk on you if you choose to

• 1:27:37Jordi Hays?

  Yeah.

• 1:27:38John Coogan?

  transport yourself.

• 1:27:39Jordi Hays?

  If this really progresses, like the precedent it sets is like, okay, fast food companies shouldn't be able to use bright colors in their logo.

• 1:27:47John Coogan?

  Yeah, there's a lot, yeah, there's a lot of different stuff.

• 1:27:48Jordi Hays?

  Musicians shouldn't be able to play hooks that are just too good.

• 1:27:52John Coogan?

  Maybe, I don't know. Yeah, but where do you think the best analogies are?

• 1:27:58Speaker 06

  I'm not a fan of analogies between online and offline activities. And in particular, I don't like the analogy to tobacco. And let me make clear why, and I think that'll start to enlighten where the risks and opportunities are. Tobacco, we would generally say, there are no health benefits to consuming tobacco. Nobody is healthier because of that. It's just either neutral or negative. But social media consumption has many social benefits. There are many communities that are thriving online and who are, you know, I think just a little bit concerned that their benefits are at risk in this litigation without them even having a say in that.

• 1:28:42Speaker 06

  So unlike tobacco, social media is a mix of potentially very helpful things and things that could potentially be harmful for some of its consumers. And those kinds of mixed-use technologies that have both benefits and potential detriments are really, I think, a better analogy than tobacco. And I don't know that we have great circumstances where we can point to where mass tort litigation has targeted and potentially removed from the industry these mixed-use scenarios.

• 1:29:15Speaker 06

  And in the end, the things that people are being addicted to, or their lips are causing harm, are people talking to each other.

• 1:29:22John Coogan?

  Yeah.

• 1:29:23Speaker 06

  And that kind of speech-related theme is unlike almost any physical product that we might draw an analogy to.

• 1:29:30John Coogan?

  Mm-hmm. Yeah, but it's a fascinating case. We really appreciate you taking the time to come chat with us about it. I hope you have a fantastic rest of your day.

• 1:29:38Jordi Hays?

  Yeah, come back on us, there's more news.

• 1:29:40John Coogan?

  Yeah, we'd love to talk to you again in the future.

• 1:29:42Jordi Hays?

  Just scratching the surface.

• 1:29:43John Coogan?

  This is really helpful.

• 1:29:43Speaker 06

  Been great talking to you. Thanks for that opportunity.

• 1:29:45John Coogan?

  Have a great rest of your day. We'll talk to you soon. Our next guest is in the TVP Ultra Dome. First, let me tell you about Railway. Railway is the all-in-one intelligent cloud provider. Use your favorite agent to deploy web apps, services, databases, and more, while Railway automatically takes care of scaling, monitoring, and security.

• 1:30:01Jordi Hays?

  We gotta make it illegal if I drop a good one-liner in a group chat.

• 1:30:05John Coogan?

  Yeah.

• 1:30:05Jordi Hays?

  It should be illegal for people not to chime in, react, hopefully get some laughs.

• 1:30:10John Coogan?

  Yeah, the like button's just gonna be like a circle, whatever.

• 1:30:13Speaker 07

  Good to have you here, dude.

• 1:30:15John Coogan?

  Good to meet you.

• 1:30:16Speaker 07

  Nice to meet you.

• 1:30:16John Coogan?

  How you doing? Introduce yourself for those who are not familiar, since it is your first time.

• 1:30:20Speaker 07

  My name is Nima Jalali. I'm the founder of Salt and Stone.

• 1:30:23John Coogan?

  Okay.

• 1:30:24Speaker 07

  And it's founder and CEO.

• 1:30:25John Coogan?

  Yeah, take us back.

• 1:30:26Jordi Hays?

  And I'll give some context. So I met, Nima recently moved into my area, and I think we met within like a week of you moving in. And so I haven't even gotten like the full story, even though we've been hanging out the last couple of weeks.

• 1:30:41John Coogan?

  Cool.

• 1:30:42Speaker 07

  Yeah, full story. I was a pro, yeah, I was a pro snowboarder. I heard you're from Pasadena, is that right?

• 1:30:47John Coogan?

  Yeah.

• 1:30:47Speaker 07

  So I'm from La Cuenca.

• 1:30:48John Coogan?

  No way.

• 1:30:49Speaker 07

  Yeah.

• 1:30:49John Coogan?

  That's awesome.

• 1:30:49Speaker 07

  And so grew up there, was obsessed with skateboarding, and then got into snowboarding and started going to those local mountains.

• 1:30:55Jordi Hays?

  Like Mountain High, Big Bear.

• 1:30:56Speaker 07

  No, like Mount Waterman, and it used to be called Krakka Ridge. Have you heard of that?

• 1:31:00John Coogan?

  Yeah, yeah.

• 1:31:01Speaker 07

  Yeah, and so back in the day, you know, when I was in high school, we had, you know, El Nino winters.

• 1:31:05John Coogan?

  Yeah, yeah, yeah.

• 1:31:06Speaker 07

  Like a ton of snow, and they would actually operate. They don't operate anymore.

• 1:31:08John Coogan?

  Yeah.

• 1:31:09Speaker 07

  And so I just, I would just get out of school at 12 every day and go up there, five days a week.

• 1:31:13John Coogan?

  Yeah.

• 1:31:13Speaker 07

  And I got good and went off and turned into a pro snowboarder.

• 1:31:18John Coogan?

  What does that mean? Does that mean like speed competitions, trick competitions? What are you doing? Because there are multiple, there are multiple ways to become a professional snowboarder, correct?

• 1:31:28Speaker 07

  More like freestyle.

• 1:31:29Jordi Hays?

  Yeah, so there's basically like two paths. There's like, think like a lifestyle guy, who's just like going around making movies all the time.

• 1:31:36John Coogan?

  Okay.

• 1:31:37Jordi Hays?

  And then there's like the competition track, and then there's some crossover. But generally, there's like... You're you have sponsors in both departments.

• 1:31:43Speaker 07

  Yes.

• 1:31:44Jordi Hays?

  But one one person is focused on like winning contests, going to the Olympics.

• 1:31:47Speaker 07

  Yes.

• 1:31:48Jordi Hays?

  Going to the X Games.

• 1:31:49Speaker 07

  Yes.

• 1:31:49Jordi Hays?

  Doing things like that.

• 1:31:50Speaker 07

  Yeah.

• 1:31:50Jordi Hays?

  And there's then there's the more like uh guys that might do backcountry or

• 1:31:54Speaker 07

  Sure.

• 1:31:55Jordi Hays?

  street or park, but they're focused on producing.

• 1:31:57Speaker 07

  Yeah.

• 1:31:58Jordi Hays?

  Uh like parts, basically.

• 1:32:00Speaker 07

  Got it. I didn't know you knew so much about it.

• 1:32:02Jordi Hays?

  I know a lot.

• 1:32:02Speaker 07

  Yeah. Yeah, so I wasn't the contest guy. Okay. I was more in movies and in magazines and stuff. Oh, cool. Yeah. Okay. Um so went off and did that. How long were you doing that? Uh pro for about 10 years, from about from about 20 to 30. 10 years, that's awesome. Yeah. Yeah. Yeah, it was amazing. I mean, that was like my college, really. Yeah, it must be so much fun. Yeah, it was fun.

• 1:32:20Jordi Hays?

  What is the what I feel like entrepreneurs can probably resonate with what like a pro snowboarder is doing, where your job is to basically produce, uh right, like a banger part, a season, potentially multiple, and there's like this pre where you're basically

• 1:32:37Speaker 07

  What is part?

• 1:32:38Jordi Hays?

  Like, that's like a five-minute video.

• 1:32:40Speaker 07

  Okay.

• 1:32:40Jordi Hays?

  That might be released independently or as part of an entire movie.

• 1:32:44Speaker 07

  Okay.

• 1:32:44Jordi Hays?

  And so your job is to do enough tricks.

• 1:32:47Speaker 07

  Yeah, yeah, yeah.

• 1:32:48Jordi Hays?

  Stomp them.

• 1:32:48Speaker 07

  Yeah.

• 1:32:49Jordi Hays?

  As Nemo would probably.

• 1:32:50Speaker 07

  It's a lot, yeah, it's a lot. There's a lot. I mean, there's there's like you pick out a song, you you know, that you want to have in your part. There's first part and then the most prestigious is being in the la the last part, you know, in the in the video, like everyone. So it's like you got this video and everyone's supposed to be on the same like kind of like team to make this best video. There's like probably 10 snowboarders going after it and doing it. Yeah. But there's a little competition within that because everybody wants to get last part. Yeah. You know what I mean? Oh. And so it's it's not a team sport. Yeah. You're really out for yourself and like there there are a lot of lessons that you learn, especially growing up skateboarding, you know, where it's like fail, fail, fail, fail, like trying to like learning how to kickflip takes you six months of just failing and then and then you figure it out. And so.

• 1:33:33Jordi Hays?

  Yeah, then the other, the other thing is these parts come together. It might be like four or five minutes, right? It's just one trick after another. But you're missing, sometimes they'll include it, but they're missing like the blooper reel, which is like, sometimes you have to fall really, really hard 20 times in a row to land the one that you make it look easy.

• 1:33:52John Coogan?

  Sure.

• 1:33:53Jordi Hays?

  And that gets cut out. So I feel like there's so many, there's so many lessons out of that.

• 1:33:58John Coogan?

  Yeah.

• 1:33:58Jordi Hays?

  You know, a lot of successful entrepreneurs would have, would have, you know, failed miserably for years and then they have that breakthrough, kind of like product or feature, whatever it is. And snowboarding, it's happening on like a day-to-day basis where you have like one season, right, to put together your part and you're kind of like racing against

• 1:34:17John Coogan?

  Yeah.

• 1:34:17Jordi Hays?

  Mother Nature in some sense.

• 1:34:19John Coogan?

  Can you chase the winter into the southern hemisphere effectively?

• 1:34:24Speaker 07

  Yeah.

• 1:34:25John Coogan?

  Yeah?

• 1:34:25Speaker 07

  Yeah.

• 1:34:26John Coogan?

  So you would be, how many days would you actually be snowboarding over a year?

• 1:34:29Speaker 07

  I mean, five days a week. Like I, I ended up, I would live, I lived in Tahoe, Mammoth, Utah and all that, but I, I ended up landing in Big Bear just because it was like, the weather's always good for, if you want to just snowboard every day and, and train.

• 1:34:42John Coogan?

  Yeah.

• 1:34:43Speaker 07

  The weather's always, you know, sunny and nice and it's not like icy or cold. So I would just go there and snowboard every day and then fly out of LAX to wherever I needed to go.

• 1:34:51Jordi Hays?

  And Big Bear, Big Bear is like basically one lift that you're just going around and around. And there's

• 1:34:56John Coogan?

  Just practice.

• 1:34:57Speaker 07

  The best snowboard park.

• 1:34:57Jordi Hays?

  Fifty, fifty features you can hit on one. So you like go, you might be hiking like a little bit on one feature.

• 1:35:04John Coogan?

  Yeah.

• 1:35:05Jordi Hays?

  But, but you're basically lapping it. So people that like, don't like park go there and they're like, this is the worst mountain ever. Like if you're used to skiing in Mammoth or Tahoe or Colorado.

• 1:35:13John Coogan?

  Yeah.

• 1:35:14Jordi Hays?

  But if you just want to ride park, Big Bear is incredible.

• 1:35:16Speaker 07

  Jordy, we're gonna have to go, man.

• 1:35:17Jordi Hays?

  I know, I know. No, I went, I went through, I, I did, I did almost like 50 days, I think my junior year of college, a lot at Big Bear. I would just go up and lap, lap the park.

• 1:35:27Speaker 07

  Nice.

• 1:35:29Jordi Hays?

  A lot of good memories.

• 1:35:29Speaker 07

  Yeah, so it's a project, it's a project that you're What's that?

• 1:35:32John Coogan?

  Where do you ski in the southern hemisphere? If it's summer here, I imagine that even Big Bear, there's no snow. And so you have to go to the southern hemisphere.

• 1:35:40Speaker 07

  The only time I snowboarded in the summer was going to Mount Hood where it was like, there's a glacier.

• 1:35:45John Coogan?

  Okay, so it's still, it's still snow. I don't.

• 1:35:47Speaker 07

  There's still snow. So it's in, uh, Mount Hood and they have like the summer camp.

• 1:35:51John Coogan?

  Okay.

• 1:35:51Speaker 07

  And so all these kids go and a lot of pros go and stuff, but honestly during the summer I would just skate. I would skateboard. Yeah.

• 1:35:57John Coogan?

  Okay, that makes sense. Okay.

• 1:35:58Jordi Hays?

  Okay, so the reason you're here is because, uh, you built Salt and Stone over the last eight years. Exit, partially exited this week. I don't know, uh, I don't know which, I know the numbers. I don't know what numbers you're disclosing. Um, but, uh, but yeah, take us through what was, what was the transition like? I'm assuming you didn't just like retire and immediately start Salt and Stone or was it effectively instantly?

• 1:36:23Speaker 07

  Um, so I, I had a couple of ventures within that industry, like the, the surf skate, snow world. And then, you know, Salt and Stone was this idea that I've, that I had had and.

• 1:36:34Jordi Hays?

  Which is like, I don't know if you can give any context on that, but like brutal industry because every single pro and everybody adjacent also wants to start ventures within the industry.

• 1:36:46Speaker 07

  Yeah, yeah, that's true. And, but I mean, there's just such a ceiling in that, in that world, you know? Unless you're like, end up being a Burton or a Quicksilver or something like that, right?

• 1:36:56Jordi Hays?

  Yeah. And even those brands have struggled.

• 1:36:57Speaker 07

  Totally. Um, so I knew, I knew I wanted to do Salt and Stone and, you know, I wanted to do something on my own. To be honest with you, I had, you know, just, I had business partners and everything and, and I wanted to just see how far I could go. If I just went like all in a hundred percent, like not have to, you know, uh, worry about waking up at two in the morning and doing, you know, emails and just, just going so hard and, and just, I could justify that if it's just like all me and I'm just like going for it. And so, um, yeah. And so transitioned over to that full time. And it's been just a rocket ship, man. It's been such a great, such a great.

• 1:37:29Jordi Hays?

  Yeah. You guys did a hundred and sixty-five million last year.

• 1:37:32Speaker 07

  Yeah.

• 1:37:33Jordi Hays?

  Scaling still. What was the first product?

• 1:37:35Speaker 07

  The first product was sunscreen, actually. Yeah, so sunscreen was-

• 1:37:39Jordi Hays?

  Which again is like a brutal, I would say like, from my perspective, sunscreen's like a brutal category because like a lot of people use it throughout the year. But like much fewer people actually are using it enough to like, need to even be on a subscription. And then oftentimes you're buying it like just in a random hotel, like, you know, retail store because you're on vacation. Anyways, but-

• 1:38:02Speaker 07

  Yeah, I always wanted to do deodorant and sunscreen was the, it just, it just happened faster as far as searching for the perfect, you know, chemist, contract manufacturer and all that stuff to bring it to life. And so sunscreen came out, the, the brand was profitable from day one. And then when we launched deodorant-

• 1:38:18Jordi Hays?

  How did you sell, were you just selling it D to C or?

• 1:38:21Speaker 07

  So we had some retail on day one. So I had retailers lined up. We had, I think about 40 to 50 of them. And so as soon as we were shipping orders, we were collecting payment. And so, you know, I funded it out of my own pocket to start. But was able to pay myself back pretty quickly and, and, you know.

• 1:38:39John Coogan?

  Were those 40 or 50 stores, were those individual stores or chains?

• 1:38:43Speaker 07

  There were individual stores for the most part, yeah. Yeah, and then it was when we launched deodorant was really when it, you know, stores started coming to us.

• 1:38:51John Coogan?

  Yeah. What's the, what are the economics of like getting one sunscreen product? It sounds like one SKU into one of those stores. Are they buying like a hundred dollar box or a thousand dollars?

• 1:39:02Speaker 07

  There's a minimum, you know, like and I, from my memory, I think it was like a case pack of 12 sunscreens. That came out to like 300 bucks.

• 1:39:09John Coogan?

  Okay, yeah. And then they can sell it at a markup and then it's R P.

• 1:39:12Speaker 07

  That's right.

• 1:39:13John Coogan?

  Okay.

• 1:39:13Speaker 07

  That's right.

• 1:39:14Jordi Hays?

  How, how quickly did you realize that? Like my, my experience having invested in CPG over the years is the number one, the number one factor that leads to success is not like operational excellence. It's not always just the team. It's just like how good is the product? And I've seen a lot of like exceptional teams that have like all the operational chops, that have all the experience, come out with a product that might be fine or pretty good. But they just don't go anywhere. They can never reach escape velocity because the product fundamentally like doesn't really sell itself. Like you can sell it, might cost a lot to acquire customers. The sell-through is not that great. Retailers don't really love it.

• 1:39:59Jordi Hays?

  And when I first tried your deodorant after trying- Probably like 20 different like better for you deodorants. I was like, wow, this product is like incredible. And I've like retained across years, even though I, I don't even know that I've, I maybe bought it on the website once, maybe bought it on different stores online, or I just buy it in the grocery store. But I'm like permanently retained because I tried everything else and this is just the best. It like goes on well, it smells good. Uh, and so I was just like sold off of that. And you didn't need to be like the best at like email marketing to me or like have the best like retention flows. Because I was just like, it's a good product. I've tried everything else.

• 1:40:39Jordi Hays?

  And so I'm wondering like how you, how, how quickly you realize that from like a product development standpoint? How much of like, what is your ethos around product development? When is a product ready to actually go to market versus just still on that kind of testing phase?

• 1:40:53Speaker 07

  Yeah. And that's why we launched sunscreen before deodorant because we were just trying to get everything perfect. Right? And so we did something in deodorant that hadn't been done before, especially in clean deodorant. You know, whereas deodorants before, um, didn't smell the way I wanted to, right? Like they weren't, they didn't have these sophisticated scents and clean deodorants didn't work. Or they weren't really like a pleasurable experience to use and they certainly didn't look good.

• 1:41:17Jordi Hays?

  Yeah, they'd be like mint.

• 1:41:19Speaker 07

  Yeah.

• 1:41:19Jordi Hays?

  I don't want to smell like toothpaste.

• 1:41:21Speaker 07

  Yeah, exactly. It's like, you know, why shouldn't it smell as good as your, your perfume or cologne, right? And so, um, just hitting it on all cylinders and making sure it's, you know, perfect. And for me, I was really making it for myself, right? Like what do I want? And it turns out what I wanted was what everybody else wanted. So.

• 1:41:37Jordi Hays?

  Yeah. Uh, did the company ever almost die?

• 1:41:41Speaker 07

  No.

• 1:41:44Jordi Hays?

  This story.

• 1:41:45Speaker 07

  It's been, it's been a dream come true, right, man?

• 1:41:51Jordi Hays?

  It's so funny because, because like the, the classic philosophy and. We died 25 times. Yeah, we almost, here's this time we almost died. And, and in talking to you, like, like getting to know you just, just recently, it just kind of seemed like it was just like permanently up, up into the right. And you, you, you told me one story that was like not like kind of annoying around on the. On the capital side, but nothing that was like, I didn't feel like you experienced that much hardship. Kind of just one shot entrepreneurship.

• 1:42:21John Coogan?

  It's amazing.

• 1:42:21Jordi Hays?

  And it's so crazy because I know, I know so many, you started the company at like the peak of the D to C boom. Like this was a time, this was 2017.

• 1:42:30John Coogan?

  2017.

• 1:42:31Jordi Hays?

  Right. And so this was the time that like everyone was like.

• 1:42:33John Coogan?

  Red antler.

• 1:42:33Jordi Hays?

  Like Red Antler, Gin Lane, we're just pumping out brands. There's so much capital flowing.

• 1:42:38John Coogan?

  You've shared many competitors.

• 1:42:41Jordi Hays?

  There was like a.

• 1:42:42John Coogan?

  VC back.

• 1:42:42Jordi Hays?

  Yeah, there was a school on the East Coast. I forgot, I forget the name of it, but they had like an MBA program that was like every single.

• 1:42:50John Coogan?

  Harvard.

• 1:42:51Jordi Hays?

  Not Harvard. It was one.

• 1:42:53John Coogan?

  No, there were a lot of, there were a lot of MBAs that were.

• 1:42:55Jordi Hays?

  Yeah, there was like. Every person in an MBA program would be like, I'm building a D to C brand and they were just picking.

• 1:43:01John Coogan?

  And there were some really good outcomes that people were tracking against like Dollar Shave Club and Harry's and there were a number of companies where it was like, oh, they did Warby Parker, they raised money, they did the VC playbook and it sort of penciled out for everyone. But then later people realized like, oh, those were more like one off exceptions to the rule where you get a unilever who gets excited and buys Dollar Shave Club for a billion dollars and maybe doesn't wind up realizing a billion dollars of value because it's just a young company. So.

• 1:43:28Speaker 07

  Yeah. I mean, honestly, it's, I feel like it's just the power of, of a founder who's just going to be relentless and go up against the big guys, right? Cause I interview people from the big guys all the time and I'm shocked at like how sleepy some organizations are, right? And so if you even have a team of three people that are just relentless and you guys know from like what you guys do.

• 1:43:50John Coogan?

  Yeah.

• 1:43:50Speaker 07

  It's like you can't compete with that. I don't care how much money you have or what incubator you're in or what VC's, you know, starting you. It's if you have a founder who's just going to be relentless and.

• 1:43:59Jordi Hays?

  How did, how did the approach to funding evolve? Like, cause you, you said you were like profitable from day one, you did raise at, at a couple of different points, a little bit of money, but did you, did you care about maintaining profitability or did you ever go to, go through periods of growth where you thought? Okay, we can, we can burn a little bit here to get to the next stage.

• 1:44:21Speaker 07

  We've always been profitable. That's always been important, right? I just want to make sure the bank balance is growing. The, the raises were secondary, right? It was me sort of taking chips off the table. The business has just been so profitable that we didn't really need to inject it with, with, with money. You know, and so it's, it's a healthy business, man. I'm blessed and.

• 1:44:42John Coogan?

  Not really my cup of tea.

• 1:44:44Jordi Hays?

  No, it's just so, it's so crazy. I mean, it just goes back to you guys nailed so many different elements of, of product. And yet I know, I know people that started deodorant brands during that same period that just didn't, they just didn't, didn't go anywhere.

• 1:45:00John Coogan?

  So what was the early team like?

• 1:45:01Speaker 07

  The early team?

• 1:45:02John Coogan?

  Yeah, yeah. So, so you have the idea, solo founder, uh, but, and you mentioned co-packer. Did you work with a formulator? Do you hire a salesperson first, operations manager, somebody just to help you? Personal assistant? Like what was the stack?

• 1:45:15Speaker 07

  Yeah. So first two, the first three years was myself, just, just myself, right? And, um, and then for, for that, it was really, uh, working with contract manufacturers chemists, but also, you know, bouncing off my internal network on like, hey, I got this deodorant sample. Like people I trusted, uh, their taste and what, you know, here's the goal. This is what I'm trying to achieve here. Like let's, let's test it. And so, so that, myself, you know, my wife, like constantly we're smelling each other's underarms, you know?

• 1:45:45John Coogan?

  Is it working?

• 1:45:46Jordi Hays?

  In the lab.

• 1:45:46Speaker 07

  Yeah. You know, it was just relentless, man. It was like, we, we know what we wanted in a product. We see what else is out there. We have all the other products on our shelf, right? Like to just see what, what they're like. Let's make something better, right? And so, um, and then three years in, I hired, um, I hired somebody who really took on all the ops, all that stuff off my plate. That's not where I excel, ops and like finance and like all that. I'm more a brand product. Anything the customer sees, that's what, what I love. And so when she took all that and she really excels at that stuff and it was me and her for like three years, four years after that.

• 1:46:17John Coogan?

  Wow.

• 1:46:17Speaker 07

  Um, or like, like two, three years after that.

• 1:46:20Jordi Hays?

  Still just a couple of people.

• 1:46:21John Coogan?

  This is like 2022 and you're still two people?

• 1:46:26Speaker 07

  No, it was like, yeah, sorry. Nine years or, uh, yeah.

• 1:46:30John Coogan?

  Three years solo, three years with two people and six years.

• 1:46:33Speaker 07

  No, that we started hiring. So she came on board and it really, I saw how it would really excel the business. And I got to focus on what I like to do. She came in and crushed it way better than I could do on the other stuff. Three PL logistics, all that stuff. And then I saw power of team. And then from there, we just started hiring people, hiring people. And then, and then just got the confidence to keep hiring is, you know, cause the more we hired, you know, we hired the right people. Then the business kept growing and growing and growing. And then all of a sudden it's a hundred six six and we're the best selling deodorant on Amazon.

• 1:47:00John Coogan?

  How big is the team now?

• 1:47:01Speaker 07

  Uh, fifty, fifty-five.

• 1:47:03John Coogan?

  It's still really tight.

• 1:47:04Speaker 07

  It's really tight. We have a high bar for who we bring in. Like it's, you know, we'll interview people and I'll know within five minutes.

• 1:47:09John Coogan?

  Are you in the office or remote?

• 1:47:12Speaker 07

  No, no office, all remote.

• 1:47:18Jordi Hays?

  This is like the most insane, the most insane story is.

• 1:47:24Jordi Hays?

  It's like, you know, most, most of the time you get to this moment and just like the most battle scarred.

• 1:47:31Speaker 07

  Telling you, man, we're blessed. It's been a fun.

• 1:47:33John Coogan?

  Okay. So, uh, walk me through the product, uh, portfolio expansion, how that happens. And then are you subdividing sales reps by region or vertical or channel?

• 1:47:46Speaker 07

  We don't have sales reps.

• 1:47:47John Coogan?

  You don't have sales?

• 1:47:48Speaker 07

  No, no.

• 1:47:52John Coogan?

  Sales reps never.

• 1:47:53Speaker 07

  So here's, here's the thing. Here's the thing. Like you gotta create a brand that the retailer wants.

• 1:47:57John Coogan?

  Yeah.

• 1:47:58Speaker 07

  Right? Like you don't want to go and just like push something down a retailer's throat and have your sales guy knocking on the door and that stuff. And that was it. Like really focusing, like this wasn't all just like, oh, it's just happening. It's happening. It's like an obsession, right? Like I got, I turned into an advertising expert for like six months. All I did was want us to have the best ads, the best digital presence.

• 1:48:17John Coogan?

  Okay.

• 1:48:17Speaker 07

  Right? And like create a brand that the retailers needed to have, right? And then from there, then those retailers need to have you knocking on the door.

• 1:48:25John Coogan?

  What was that advertising process? Like, were you looking, were you reading Ogilvy, looking at the greats?

• 1:48:29Speaker 07

  It's just looking at all, looking at all the competitors, seeing how they do, right? And, and really it's like not. Looking at the other indie brands, like looking at the big brands.

• 1:48:37John Coogan?

  Sure.

• 1:48:38Speaker 07

  Like I always want to take inspiration from the brands like

• 1:48:40John Coogan?

  Yep.

• 1:48:40Speaker 07

  Like the Nikes of the world that are gonna be here in a hundred years. Cause that's what I want this brand to be, right? I don't want, this isn't some like influencer brand, I'm not an influencer, right? I'm not in front of the camera, like this is something that um I I want to be a legacy brand that's here long after I'm gone.

• 1:48:53John Coogan?

  Yep.

• 1:48:53Speaker 07

  So those are, those are the brands I look at for inspiration.

• 1:48:56John Coogan?

  And then uh how are you actually instantiating your learnings? Like are you uh directing photo shoots? Are you casting models? Are you

• 1:49:04Speaker 07

  Right now?

• 1:49:04John Coogan?

  Writing copy? No, no, once you go through that, that six month

• 1:49:07Speaker 07

  Yeah.

• 1:49:08John Coogan?

  Brand exercise, you become the expert. Are you, are you like, you know, taking a project, a brand project from start to finish? Or are you picking an agency or hiring people?

• 1:49:17Speaker 07

  It was, it was start to finish. So there was a time where I was picking out models, picking out photographers, videographers, helping with the edit.

• 1:49:23John Coogan?

  Yeah.

• 1:49:23Speaker 07

  Like all that stuff, the edits here.

• 1:49:25John Coogan?

  Yep.

• 1:49:25Speaker 07

  And then go in

• 1:49:26John Coogan?

  Giving feedback.

• 1:49:27Speaker 07

  Yeah, yeah. And if they're static, like still photos, I would go in Figma, drop text overlay, figure out what to say, like all that stuff. And uh yeah, I mean, I just threw everything at it. And all I did, I gave up all, like everything, all my hobbies, like snowboarding, skateboarding, like all that stuff.

• 1:49:42John Coogan?

  Yeah.

• 1:49:42Speaker 07

  Like I got into golf for a second, all of it ended like it was just like, I'm gonna go in on this. But like, when you get a signal that the thing is working, right?

• 1:49:49John Coogan?

  Yeah.

• 1:49:49Speaker 07

  Then you want

• 1:49:50John Coogan?

  Cause the bank balance is going up.

• 1:49:52Speaker 07

  Bank balance is going up, you're having fun. It's like really your purpose. It's just like, nothing else I want, like I wanna build, I wanna build it, yeah.

• 1:49:59John Coogan?

  What'd you think about international expansion?

• 1:50:01Speaker 07

  What do I think about it?

• 1:50:02John Coogan?

  Yeah, well, how has your thinking evolved? What's the strategy? Is that something that a lot of companies uh go through this moment where they're like, maybe it's so operationally complex, it'll change the business, so let's put it off. Let's maybe wait until we're at a point where we can team up with a bigger company and through a merger or acquisition and let them bring their operational force so that you don't need, you know, a person in every locality because they will bring that to bear and you're set up for success.

• 1:50:29Speaker 07

  Yeah. No, so we've already expanded internationally and and

• 1:50:33John Coogan?

  As I expected.

• 1:50:35Speaker 07

  Sephora Canada, Sephora UK, Space NK in the UK, Sephora Europe, we just launched.

• 1:50:40John Coogan?

  Yeah.

• 1:50:40Speaker 07

  Uh Middle East, Southeast Asia, so on, so on. That being said, there's a lot of, a lot more opportunity. And that's one of the reasons I chose Advent to be, to be the uh the partner here. It's because they have a strong expertise in international and I feel really great about them. I mean, look, my, my goal was never to just Exit out fully and just put it in somebody's hands and let it go to shit. Like, that's not what I want.

• 1:51:01John Coogan?

  Yeah.

• 1:51:01Speaker 07

  I want the brand to, I want, I want my grandkids to look at this thing and be like, "Oh yeah, that's what my grandfather built." You know, I want it to be around. I want it to be, you know, what it was always meant to be and not turn into some, you know, discount brand.

• 1:51:13Jordi Hays?

  So. Yeah, what, what was the, how, how many, did you have a bunch of opportunities to sell prior, prior to this moment? I'm assuming people were just like, kind of seeing public metrics and sell-through and all these things and hounding you at different points. What was the process of like, knowing when the time was, was right?

• 1:51:32Speaker 07

  We had a lot of private equity reaching out, a lot of people reaching out in general. And so I, I worked with Raymond James, who, who I love. And I would just forward it to them and they told me when it was time. And it was like, let's go, let's go explore, let's go explore the market. Yeah.

• 1:51:46John Coogan?

  Yeah. So, eh, this was not a story where you met your acquirer like years and years ago?

• 1:51:51Speaker 07

  We, we've been talking for about, you know, for several months, six plus months, you know, and I really, really like them, you know? And for me, it's when I did the deal with Humble Growth, um, two years ago, I, you know, we had like 15 private equity, uh, funds to choose from. And I, I liked them because of, of who they, of.

• 1:52:10Speaker 07

  No, we had a lot, we had, we had a lot of bidders, you know?

• 1:52:12Jordi Hays?

  No, no. I just, I think this is.

• 1:52:14Speaker 07

  You know, you know how.

• 1:52:15Jordi Hays?

  If you were looking for, you know, uh, the, the hero's journey of founder stories, this isn't it.

• 1:52:22John Coogan?

  You can turn it off.

• 1:52:24Jordi Hays?

  I mean, it is, it is, it is in a way. It's missing some plot points.

• 1:52:27John Coogan?

  Yeah.

• 1:52:28Speaker 07

  There's a lot more to it.

• 1:52:29Jordi Hays?

  Yeah.

• 1:52:29Speaker 07

  Um, but yeah, I mean, it's, it's just, I, choosing good people to work with, right? People who can do it with integrity and, and that I want to work with and that like, are aligned vision-wise on like what the brand is going to be in the future and, and let's go build that together.

• 1:52:43John Coogan?

  Yeah.

• 1:52:44Jordi Hays?

  What, uh, what advice have you been giving to people that want to follow in your footsteps? That this is like, kind of what I feel like every CPG founder imagines is just like, "Yeah, I'm going to be building for like eight years and I'm going to sell for, you know, half a billion to a billion to a strategic." Uh, and yet, you know, the hit rate is obviously, you know, something probably like, you know, one, one percent, right? Um, and over the last year, there's, I feel like there's actually been a dip in new, new brand formation. Uh, at least that's what, um, Sean Frank, Sean Frank was, was, um. Was I think mentioning on a, I think at the end of last year and his point of view,

• 1:53:27Jordi Hays?

  he's a founder or the CEO of Ridge and he's like, okay, in two years are people going to want new brands to choose from? And his point of view is like a hundred percent, right? Like there's constantly a desire for newness and that kind of founder-led product development approach that made Salt and Stone what it is today. So yeah, what advice are you giving?

• 1:53:50Speaker 07

  I mean, honestly, like I didn't read any entrepreneurial books or really listen to any like entrepreneurial podcasts or anything until I just went off instinct. Like you gotta fight, we're fighting for our life. My advice would be, would be to go all in. Like you can't, you can't go and be like work-life balance and like, I want to, you know, check out at five because like there's going to be someone right behind you that's going to come and take, take your place and be that brand that comes in and does what you want to do if you're going to just chill. So it's like you gotta, you gotta make sure you love it. You love it because that's the way you're going to be able to do it, you know, basically around the clock from the moment you go to sleep to wake up, you know, it's, it's something you gotta love to do and it's gotta be your passion, right? And so you gotta just, just go relentlessly and know, I would say like,

• 1:54:32Speaker 07

  forget the work-life balance stuff. You just gotta go hard. You gotta go all in and just use your instincts, you know, you just gotta, you gotta be competitive and go after the big guys and don't be afraid and just go, you gotta go for it, go all in.

• 1:54:43Jordi Hays?

  Yeah, I like to focus on, on the actual incumbents. Like a lot of people will focus too much on like, okay, who are the other new brands in my category and just actually studying like, okay, what, what makes the big players actually successful? It's like, okay, massive retail distribution, like actual like IP on the product side, all, all these things.

• 1:55:03Speaker 07

  Yeah. I mean, for, for us, it feels like in beauty, there was such a playbook. Like every brand looked the same. All the content was the same. It was like pay the influencer, have the influencer talk about the product, post it on your social, like over and over again. And that's the playbook. And I didn't want to, I didn't even know anything about beauty, really. Like, I'm not, I don't come as skateboarder. You know, I don't come from beauty. I like, I like fashion brands. I like, you know, lifestyle brands. And so coming in and just being inspired by, you know, the Nikes of the world, the, the big brands. Instead of looking at beauty, I think played in our favor because we came out and it was like, oh, this is different, you know?

• 1:55:36Jordi Hays?

  Did you do any like community marketing? Because sometimes there's a brand that I love. Let's maybe it's like, I would say like, if a deodorant brand was putting together an event, I don't think I'd be like, I wanna, I gotta be there. But did you, did you do anything that like worked, that broke through, that like was material to the business? Because I feel like sometimes it's very distracting for CBQ brands to like do IRL marketing early on. Cause I'm like, I usually will ask a founder like, okay, how many units have you sold in the last month? And they're like, a thousand, a thousand. I'm like, okay, then don't spend $30,000 on like some activation. Like you should just like make a product that actually sells well and then you'll have opportunities to do things.

• 1:56:19Speaker 07

  Yeah, I mean, early on, that was my philosophy too. It's like, why are you gonna go waste money on something that you don't know is, is gonna move the needle? So it's like, spend it, like if our ads are going well, like let's just pour more money into that versus like doing some pop up somewhere. But now we're at the point where those IRL pop ups, it's, I think it's, it's good. It's good brand building, you know? And so we, we do that now. We do pop ups.

• 1:56:37Jordi Hays?

  Yeah, but pop ups are, I would say, different than like a lifestyle event that is just like a bunch of people hanging out.

• 1:56:44Speaker 07

  Yeah.

• 1:56:45John Coogan?

  What about owned retail, like flagship store? Have you looked into that?

• 1:56:47Speaker 07

  We're looking into it. So, yeah, yeah. So, so we're looking at, we're looking right now. Yeah.

• 1:56:51John Coogan?

  Yeah. So I mean, it says a lot that you didn't jump into that in year two, for example.

• 1:56:55Speaker 07

  Yeah. I mean, it's, you know, it would be tough to do that and maintain profitability, right? And so it's like you're fighting for your life. You want to make sure it's, it's profitable.

• 1:57:03John Coogan?

  Yeah, it's balancing act. Like you need enough awareness that you're actually gonna get upside. But then if you have complete awareness, it's probably like you're already stocked everywhere. So it needs to be in the sweet spot.

• 1:57:13Speaker 07

  Yeah.

• 1:57:13John Coogan?

  Makes sense.

• 1:57:15Jordi Hays?

  Such an amazing story. Honestly, it's like, it's like a very unique, it's, it's, it's, it's amazing because it's like, it's exactly what people set out to do. And yet it's so uncommon to just like, go up into the, up into the right every month. It's very refreshing.

• 1:57:31John Coogan?

  It's like, work hard and don't get caught up in a bunch of, you know, friends and stuff that doesn't matter.

• 1:57:38Speaker 07

  Do the things that matter, right?

• 1:57:39Jordi Hays?

  And John, you're gonna be relieved. He's now a David Senra enjoyer.

• 1:57:42John Coogan?

  Oh, really?

• 1:57:43Speaker 07

  Love his podcast.

• 1:57:44John Coogan?

  He's fantastic.

• 1:57:45Jordi Hays?

  So he's, he's getting to enjoy David Senra after climbing the mountain.

• 1:57:48John Coogan?

  That's amazing.

• 1:57:49Speaker 07

  That's funny. I hear that. It's like, I hear the hustle stuff and like, you gotta do this and you gotta go all in. And I'm like, yeah, like I naturally kind of do that, you know, it makes me.

• 1:57:57Jordi Hays?

  It works.

• 1:57:59John Coogan?

  But, but even, yeah, I mean, David talks about this a lot where like, even like a lot of his audience members are not listening to it and saying, oh, I never considered working hard. They're saying like, oh, yes, it's a reminder. It's a, it's a meditation on their current philosophy. And then it's a bunch of other examples and just confidence to continue being different because there's a lot of people, as simple as like, as like focus is, there's a lot of people that feel pressure to continue their golf game.

• 1:58:27Jordi Hays?

  I need to have this super complicated seven part strategy.

• 1:58:30John Coogan?

  That, that, and then also just like the work, life balance thing. Like there's a lot of pressure to not be that person who's not, who's, who's turning down invites to the golf trip. And that's, and, and so the founders podcast definitely like reinvigorates you to like, add more confidence that you're not crazy. You're not the only person doing this on earth.

• 1:58:47Speaker 07

  Hundred percent. Yeah. I love, I love his passion.

• 1:58:50John Coogan?

  It's great.

• 1:58:50Jordi Hays?

  I'm gonna, I'm gonna introduce you guys. You guys are gonna have a lot of, a lot of fun.

• 1:58:53John Coogan?

  This'll be great.

• 1:58:54Speaker 07

  Great. But I'm brand wise though, we're just getting started, honestly, things like that, you know? And so this partnership's exciting and I can't wait to, to keep building this thing.

• 1:59:01John Coogan?

  Yeah.

• 1:59:01Jordi Hays?

  Amazing, dude.

• 1:59:02John Coogan?

  Congratulations. Thank you. Yeah. Thank you so much for taking the time to come to.

• 1:59:07Jordi Hays?

  See you back at the ranch.

• 1:59:08John Coogan?

  This is great. Let me tell you about Phantom Cash. Fund your wallet without exchanges or middlemen and spend with the Phantom card. And let me also tell you about Vanta. Automated compliance and security. Vanta is the leading AI trust management platform. Let me get my headphones back in.

• 1:59:25Jordi Hays?

  Back to.

• 1:59:27John Coogan?

  Our guest.

• 1:59:27Jordi Hays?

  A lightning round of sports.

• 1:59:29John Coogan?

  Yes, we have John McNeill, the author of The Algorithm in the Rooster Room Waiting Room.

• 1:59:38Jordi Hays?

  What's going on?

• 1:59:39John Coogan?

  I put my IEMs back on. How are you doing, John?

• 1:59:40Speaker 08

  Hi, guys. Hey, how are you?

• 1:59:42John Coogan?

  I need to adjust my headphones.

• 1:59:44Jordi Hays?

  Great to meet you. Great to have you on the show.

• 1:59:47John Coogan?

  There we go.

• 1:59:47Jordi Hays?

  We're having, we're having a lot of fun over here. We just had a friend of mine, Nima, come tell a story. He just exited.

• 1:59:54John Coogan?

  He has sort of a one-step algorithm.

• 1:59:56Jordi Hays?

  Yeah. His algorithm was just like, focus, work hard, and he one-shot it entrepreneurship. He was like, I think I'm gonna just be a solo founder, then I think I'm gonna build remote, and then scaled to 165 million of revenue in eight years profitably, and then...

• 2:00:10John Coogan?

  Jordy asked him, like, does the company ever die? He's like, no, we were all profitable.

• 2:00:14Jordi Hays?

  Did it ever almost die?

• 2:00:15John Coogan?

  Come close to dying? He's like, no, no death scares.

• 2:00:18Jordi Hays?

  It was like the opposite of Elon.

• 2:00:20John Coogan?

  Yeah, yeah, yeah. But, you know, that's the beauty of the show. We go all over the place. We like to talk to, you know, entrepreneurs who have all sorts of different paths. And fortunately, we have someone here who can tell us about Elon Musk's journey, which has been much more tumultuous. But why don't you start with the introduction and how you got to a place where this was the book that you wanted to write?

• 2:00:40Speaker 08

  Yeah, I wanted to tell the story of how like Tesla and SpaceX, to a certain extent, work on the inside. Like, there's, and I asked Walter Isaacson, when he was writing his book on Elon, like, why don't you tell the story of like, how Jobs runs this, runs Apple? Because there's a really specific way Jobs ran Apple and his, his other companies. I said, same with Elon. There's a really specific, like, operating system and way inside of Tesla. Why don't you write about that? And Walter said, I don't write business books.

• 2:01:04John Coogan?

  Yeah.

• 2:01:05Speaker 08

  Yeah, I write character books.

• 2:01:06John Coogan?

  Character books.

• 2:01:07Speaker 08

  So he turned to me and said, you gotta write that book.

• 2:01:08John Coogan?

  Yeah.

• 2:01:09Speaker 08

  And so that's the short answer. When Walter Isaacson tells you to write a book, you write a book. You're about to listen.

• 2:01:14John Coogan?

  Okay, so, talk to me first about the process of distilling the work philosophy, how Elon works inside of Tesla, and then, and then actually take me through the algorithm, the steps. Because people hear things like first principles, engineering mindset, but I think all of that is pretty vague, and I think you can concretize it for us pretty well.

• 2:01:39Speaker 08

  Yeah, so basically, this framework came from two things. One was all the mistakes we've made. So you talk about tumultuous, a lot of that was self-caused.

• 2:01:46John Coogan?

  Yeah.

• 2:01:46Speaker 08

  And we would do like postmortems and say like, how the heck did we get ourselves in this situation? And let's not do this again. And so what's the principle that would keep us out of the ditch? And so that's how the algorithm got developed. And it was with the goal of pushing decision-making out to the edge.

• 2:02:03John Coogan?

  Yeah.

• 2:02:03Speaker 08

  And so we wanted... Two-way door decisions, make those at the edge and here's the framework you can use. And it turned out the framework drove innovation too. And so it starts with, no surprise, simplifying. And the first three steps of the algorithm, basically, you've got to simplify. So the first one is, you question every requirement you're given. Is it a requirement of physics? Is it a requirement of safety? Is it a requirement of law? And if you can't answer yes to those questions, then you've got to consider deleting that requirement. So example of that is, we were trying to sell $100,000 things online. Nobody had done that before, sight unseen. And it took 64 clicks to buy a Tesla. And 44 of those clicks were in the auto loan and auto lease documents.

• 2:02:48Speaker 08

  Whoa. And it turns out, an auto loan document is 12 pages of paragraph after paragraph after paragraph of how the bank's going to basically kill you if you don't pay. And so I asked the lawyers, can you come back to me and tell me how many of these paragraphs are a requirement of law or regulation?

• 2:03:06Speaker 08

  They came back not much longer, not much time later, and they said, none. Whoa. And I said, what do you mean? They said, none. All of this stuff, all these paragraphs were inserted by well-meaning corporate lawyers who are trying to save their company's necks. And none of this is a requirement of law. And I said, so literally, I could get down to a one-page, or maybe a one-paragraph loan that said, here's how much the car is, here's how much the interest rate is, here's the time period, here's the monthly payment. That's four sentences. And so, like, we did goofy stuff like that. We would question a loan doc. And it turns out that if you eliminate 44 clicks, you sell a lot more of these $100,000 things online. Yep. And so that's the first step of the algorithm, is just question every requirement.

• 2:03:49Speaker 08

  Second is that you make the new thing or the new product as simple as possible, few steps, delete everything that the customer doesn't pay you for. And then you speed it up because speed reveals all kinds of warts. And if you can make something go fast, it's got to be simple and it's got to be really good. So good, fast and cheap is actually false. You can get all three. And then this is, this sounds nuts coming from a Silicon Valley perspective, but you automate last.

• 2:04:17Speaker 08

  And it's not so nuts when you consider like how DoorDash started. Five Stanford CS majors in a dorm room. They put up a PDF with a phone number so they could figure out the workflow of the business before they automated anything. Same with the Amazon guys. They were, they put up a webpage to order books, but they had no fulfillment. Capability. So they ran down the street to a bookseller, bought the book you ordered, dropped it in a box so they could learn the business. And we found this time and time again, when we automated first, like the auto, the model three production line, we automated it first and it never worked. And so the only way we could save the company was build a tent outside the factory and start building model threes by hand. And we learned automate last over and over and over again, and it became religion.

• 2:05:02Speaker 08

  So that's the five steps to the algorithm.

• 2:05:04John Coogan?

  Yeah. Uh, there's been a lot of speculation about the next Tesla vehicle. Somebody was proposing a three, a car with three sets of doors for big families.

• 2:05:15Speaker 08

  That doesn't sound simple.

• 2:05:16John Coogan?

  Roadster that flies. There's the Cy Bourbon, the Cybertruck turned into a Suburban. Yeah. What's the product that you want?

• 2:05:26Speaker 08

  I do want the Cy Bourbon.

• 2:05:28John Coogan?

  Yeah.

• 2:05:28Speaker 08

  Here's why, like, like when you go to, when you go to Tokyo or you go to China, they have these like really tricked out minivans.

• 2:05:34John Coogan?

  Yeah.

• 2:05:35Speaker 08

  And they have every feature. It's like sitting in the best man cave ever. Uh, and I want that car.

• 2:05:41John Coogan?

  Yeah. I think that'd be a good one. Um, yeah. What do you think translates from a hardware company with very, uh, very sleepy incumbents? Thinking of the car industry, the space industry, uh, what translates to software development? Artificial intelligence, app building, social networking. What's going to transfer of the algorithm of the Elon way of working? And what might not?

• 2:06:09Speaker 08

  That's a really good question. I think what transfers, these principles transfer of like, simplify and kind of go slow to go fast as you're developing like the software, basically your first, your first architecture, what the software is going to look like and what it's going to do and really determine like what are the key, what are the key features of value we're going to ship and just concentrate like heck on that, like keep it simple first. And, and, and a lot of people have talked about this as a minimum viable product, but I think that's still really true. And then try to make the product as perfect as possible. And like they, like you take Claude right now, the reason Claude code is winning is

• 2:06:50Speaker 08

  because it is the best. And that came out of long discussions about how to simplify the architecture so it could actually do things that Codex can't do, that Cursor can't do. And, and I think that's the piece that translates, like simplify down to the two or three things you absolutely have to crush and then literally go crush those.

• 2:07:12John Coogan?

  Yeah. Within Tesla, is there a noticeable bifurcation between the software engineering orgs and the hardware engineering orgs?

• 2:07:22Speaker 08

  No, one of the things that Elon believes in is hiring what he calls orthogonally, which means basically that nobody has any experience in the industry because he doesn't want you coming in with a preconceived like set of frameworks or preconceived notions. And so we were all software people. Like I was a six time software serial entrepreneur. And we didn't know, I didn't know anything about hardware. I'd never been in it before. And so we approached every problem from a software first perspective. So an example that is like, if you say, okay, to your last question, like what do we have to crush in the car business? Well, we got to get an autonomous car. Okay. To run software in an autonomous car, the requirement of that is we have a single chip because if you have

• 2:08:05Speaker 08

  more than one chip, now you've introduced latency and syncing and all this sort of stuff you have to do. So we could only have one chip and that's the software first kind of mentality. We're competing with people who are hardware first, who have 18 to 36 chips running in their car, which means they can never deliver autonomy because they're not thinking about software first. And so that software mentality.

• 2:08:28Speaker 08

  Gives Tesla an edge kind of every day of the week.

• 2:08:31John Coogan?

  A lot of people have been speculating about demotivation from SpaceX liquidity as the company goes out at a 1.5, maybe $2 trillion valuation. There's a lot of engineers who are great. They're about to have a lot of liquidity and maybe they will decide to retire is basically the thesis. But we've sort of run this experiment with Tesla. What was it like post-IPO? Do you have a read on how the culture changed? Did everyone remain interested in the mission? Or were there some people that actually did choose to sort of step back?

• 2:09:07Speaker 08

  Yeah, I think the majority of people that were there for the mission, they're mission oriented. And the size of their bank account over time grew, but it really didn't matter to them. They were showing up every day to solve, just to solve the next thing that was in the way. There were some people that cashed out along the way, but they were kind of the minority.

• 2:09:24John Coogan?

  Sure.

• 2:09:24Speaker 08

  And one of the things that Elon did was something that I had done in each one of my startups and a lot of entrepreneurs do, which is you kind of starve the balance sheet. You raise only as much capital as you need because the first principle is you don't want your company to go soft. And when people see a big number on the balance sheet, you're not close to death and people aren't like really, really moving as fast as they can, aren't as motivated. So even after we were public, we operated Tesla on a quarter's worth of cash, believe it or not.

• 2:09:51John Coogan?

  Whoa.

• 2:09:52Speaker 08

  And I kept saying to Elon, like, I would like a little breathing room. He's like, no, no, like, we got it. Like, we got to think about this like when we're young entrepreneurs. Like, if you're close, if you're two steps from death, you operate differently. So, but I was like, man, we have a quarter's worth of cash, but we have 70 days of payables. That means we have less than three weeks of cash. Like, this is tight. But that kept everybody sharp. And what we started to worry about was post like Model 3 and Model Y, when we actually started to generate cash on the balance sheet, like how we could, how we could make sure the company stayed sharp. And SpaceX has had this advantage of that for a long time. And Gwen and Elon are going to have to manage this now post-IPO. But my sense is most people are there for the...

• 2:10:37Speaker 08

  The experience of working in a Musk company is that you are literally on the biggest challenge you've ever faced in your life with the best people and you are, you're doing the best work of your life. And so that's what keeps most people engaged. It is not the balance in their bank account.

• 2:10:50John Coogan?

  How do people stay engaged and so laser focused on like a singular mission when Elon has like a new hot thing every six months, maybe? And there's like, it feels like if he were to share that cultural tenet of like, try and solve every problem that humanity faces with the rest of the organization, you would have a very scattered organization. But that's not what we see. So how does that dividing line happen?

• 2:11:15Speaker 08

  So like I, I started to get the entrepreneurial itch a few years in. And so I went to him and said, Hey, look, you know, you're, you're starting OpenAI, you're starting Neuralink, you're starting the boring company. Like I gotta scratch this itch too. And he basically said, You can't. Because, because I gotta have you focused so I can go do these things. But then it was pretty cool. Like we designed this way that I could scratch my entrepreneurial itch, which was just doing it inside of Tesla. So we invented mobile service. We invented insurance inside of Tesla, which now is a third of the cash flow. So I got to, I got to scratch those itches, but you start to learn like Quinn's job is keeping SpaceX

• 2:11:56Speaker 08

  focused. My job was keeping Tesla focused. So he could go exercise that DaVinci side of his personality.

• 2:12:03John Coogan?

  Yeah, yeah, that makes sense. Jordan, you have anything else?

• 2:12:10Jordi Hays?

  Where, where are you investing mostly these days outside of the Elon orbit?

• 2:12:15Speaker 08

  Yeah. So we start companies from scratch at my venture firm and we're investing in,

• 2:12:22Speaker 08

  I would say the intersection of AI in the real world. So what that means is like we pulled this amazing team out of Tesla that it did the supply chain automation and optimization. And they've created a business called Atomic that is just slaying it. We created this really cool platform for restaurant hospitality where at any restaurant, you can get up and walk out without having to pay the check because it already knows who you are and what you eat. So every restaurant becomes like a London Supper Club. So we're deploying AI.

• 2:12:51Jordi Hays?

  Which company, which company is that?

• 2:12:53Speaker 08

  That's called Zumi.

• 2:12:54Jordi Hays?

  Okay, I know a friend of mine has another company competing in that category, same pitch.

• 2:13:00Speaker 08

  Yeah.

• 2:13:02Jordi Hays?

  But I'm sure he'll be devastated to know that a Bosco Jason company.

• 2:13:08Speaker 08

  Yeah, there's room for more than one of us. I like having competition and that's a really tough technical solve actually to be able to pull that off. So it'll be protectable if your friend's company's working on it and there's room for both of us to swim in that big ocean.

• 2:13:22Jordi Hays?

  What's your, what's your advice for American auto manufacturers? Because it feels like they're just, you know, they're behind in autonomy, they're behind even from a feature standpoint with a Tesla or BYD.

• 2:13:35John Coogan?

  I see these electric cars out of China where it's like has 1,500 horsepower, it's as big as a Suburban and it drives itself and then you're like, and it'll cost $35,000. That is impossible. How can we possibly compete with that? So what should American automakers broadly do?

• 2:13:55Speaker 08

  Well, this is a real, this is a real challenge that I, that I'm a part of because I'm on the board of GM now trying to help them navigate this. And, and so like when I walk around the streets of Tel Aviv or Mexico City or Paris, you see all the BYDs. It's your point, these are, these are not crappy cars. These are really good cars and at a really good price point. They're at that price point because the government subsidizes the heck out of that business in China. You get free factories, free labor, free parts, basically. So you can sell stuff super cheap. But that is for real competition.

• 2:14:26Jordi Hays?

  What is their, to your knowledge, what is the long-term thinking there? Is it effectively like an employment program where they just want?

• 2:14:35John Coogan?

  Or are they looking at it like CAC where they're like, we'll lose money for a decade, but then we're going to make money for four decades.

• 2:14:41Jordi Hays?

  Or like, what are the kind of pillars do you think of their strategy overall?

• 2:14:44Speaker 08

  It's a combination of both of what you guys just said. So on your point, Jordy, it is. The way that you keep a single party system in power is you provide jobs. So job, uh, job growth is the, is the one metric that every level of government gets bonused on there. Can you imagine like the American government, everybody gets a bonus that doubles their base salary? And that one metric is GDP growth. That's what you have in China. So they start with that framework and they say, we got to provide jobs. And the way we're going to provide jobs is every five years, we're going to announce five industries that we're going to enter and dominate. And, and the second, well, the third pillar of that is then that they subsidize a hundred market entrants to come in.

• 2:15:26Speaker 08

  And then they let evolutionary biology take, take its place. And may the best person win. And so they get down to the top three or five competitors that are winning. So in this case, it's like BYD, Geely, Neo. And they say to those competitors, now we're going to consolidate all of the capacity that we've created with these hundred companies under you three. You get it for free. And your job now is to export and dominate these markets. So they've gotten subsidies to get started, subsidies to operate, and now they're getting capacity for free. And they've proven themselves as the winners in a hyper competitive market. And now they go enter the rest of the world where the competitors aren't, are soft.

• 2:16:08Speaker 08

  And, uh, and that's their formula. And they run this formula across all kinds of industries. They run it in solar panels, they've run it in TVs, uh, they've run it in bicycles, they've run it in electric cars. And, uh, and it's a very powerful flywheel they create, but those are the four pillars.

• 2:16:28Jordi Hays?

  They're also starting to buy legacy brands. Have you, have you seen this? That, that's where, that's where it gets really interesting because...

• 2:16:37Speaker 08

  Yeah. So like people talk about our Chinese cars coming to America and my answer is they already are. It's called Volvo. Yeah. Yeah. Volvo is owned by Geely. Uh, and yeah. And, uh, and Zekir is providing now the new, the new Waymos that are hitting the road because Jaguar stopped the i-Pace production. So the new cars you're going to see are Zekir's. Uh, so we already have two Chinese cars that are, uh, that are on the roads in America. This is not like a theoretical, it's an actual thing that's happening.

• 2:17:04Jordi Hays?

  We interrupted you as you were explaining like, you know, how how you're kind of advising GM and what what American manufacturers need to do to to actually

• 2:17:13John Coogan?

  Or or even America broadly.

• 2:17:15Jordi Hays?

  Yeah, considering they're coming for every every physical.

• 2:17:19John Coogan?

  Like, should we fight back? Or is this like Happy Meal toys where it's like not that big of a deal that they're out there?

• 2:17:24Speaker 08

  I think it's a big deal.

• 2:17:25Jordi Hays?

  You know the answer to that, John.

• 2:17:27Speaker 08

  I think it's a big deal. So the auto industry is 5% of GDP in the US. But let's like, consider you're in Germany is 29% of GDP, or it's close to that in Japan. Like, you can't let your car business, your car industry go because there's so much GDP is tied up in it. So that means we got to compete. And and competing means we got to have like super compelling product. And we've got to have super low cost manufacturing. And what's a little scary is like, Amazon invented this thing called the lights out warehouse. And it's lights out because the warehouses are so automated, there's no humans. So therefore, you don't have to turn on the lights. The Chinese already have lights out factories. So like Xiaomi has a lights out factory where raw materials come in one end of the factory, there are no humans in the factory and finished cell phones come out the other

• 2:18:09Speaker 08

  side. And there's like, a couple of electricians and plumbers keeping the thing running. But the plant manager is actually an AI that's running the plant.

• 2:18:18John Coogan?

  Yeah.

• 2:18:19Speaker 08

  That is something America's got to get ready for. And to get ready for it, we need a bunch of manufacturing engineers. And Tim Cook says this all the time, you could gather the best manufacturing engineers in the country and they would fit in the auditorium at Stanford.

• 2:18:33John Coogan?

  Yeah.

• 2:18:34Speaker 08

  If you gathered all the manufacturing engineers in China, they would fit in three in three Stanford football stadiums. Like, we are so outgunned on the manufacturing engineering. And that's where we've got to like, shift this fast. But that's got to be a demand pull from places like GM and Ford and others who are moving diligently in this direction.

• 2:18:53John Coogan?

  And is the answer, like, literally Stanford? Like, does Stanford need to be training those folks specifically? Or is it more money for trade schools or online courses?

• 2:19:03Speaker 08

  I think it's all the above. Like, yeah, it's all the above. Like, Stanford needs to be training them. So does Purdue. So does Illinois. So does Michigan. So does Penn, etc. Like, we got to like, we got to put a focus around this and really bring supply chains into the US. So that we can have a fighting chance of not only building super automated factories, but but super efficient supply chains next to them.

• 2:19:26John Coogan?

  Well, hopefully we can execute. Thank you so much for at least laying down the algorithm and showing people how it can be done. And we appreciate you taking the time to come out with us.

• 2:19:36Jordi Hays?

  Yeah, fantastic to meet you, John. Feel free to pop on the show whenever you feel like it.

• 2:19:40John Coogan?

  Yeah, we'd love to talk to you more.

• 2:19:41Speaker 08

  Same, guys. Really good to talk to you. I'm a big fan, so thanks for having me on.

• 2:19:44John Coogan?

  Thanks so much. We'll talk to you soon, John.

• 2:19:45Jordi Hays?

  Great hanging.

• 2:19:45John Coogan?

  Have a good one. Let me tell you about Plaid. Plaid powers the apps you use to spend, save, borrow, and invest. Securely connecting bank accounts to move money, fight fraud, and improve lending now with AI. And without further ado, we have Karri from Linear in the Restream waiting room. Let's bring him into the TV and ultrasound. How you doing?

• 2:20:02Jordi Hays?

  What's going on?

• 2:20:03Karri Saarinen?

  I'm doing great. How are you guys?

• 2:20:04John Coogan?

  We're doing well.

• 2:20:05Jordi Hays?

  You've been stirring up the internet this week.

• 2:20:08John Coogan?

  Cooking.

• 2:20:09Karri Saarinen?

  It's my favorite hobby. It's definitely something I like to do.

• 2:20:14Jordi Hays?

  Well, we're excited to talk about it. So yeah, take us through the announcement this week, what led to it, all that stuff.

• 2:20:25Karri Saarinen?

  Yeah, so this week at Linear, we wanted to share more about what is our thinking and kind of read on the market and in our category, which historically has been this issue tracking, project management. And I wrote this essay that tries to talk through some of these topics. And it starts with this somewhat controversial statement saying issue tracking is dead. And I think what I was trying to do with it is to really shake the industries and everyone's thinking around this. And I think what still is happening is that how companies and software companies operate, they still are operating with these old assumptions and processes that are built around the old world, like the world before

• 2:21:08Karri Saarinen?

  AI agents and that kind of development workflow. So I think historically, issue tracking has been this ticketing task system for engineering. So basically, engineer doesn't do anything unless there's a ticket. And then you have to create the ticket, someone else creates it, it goes to engineering, there's some negotiation happening. Eventually, the engineer does something with it. And it's almost like this line cook system where it's like someone yells, like, we need fries and steak. And then in the kitchen, they start cooking it. And it's kind of dumb. And I always thought it was dumb, but it's like how a lot of companies tend to operate. And the second problem, I think, is that these legacy platforms, vendors

• 2:21:52Karri Saarinen?

  have kind of created this This kind of idea that it should be complex and like they're gonna encourage the complexity and the overhead of this process. So we have customers coming for to us and like, hey, we wanna switch to linear. But then they say like, oh, we have this like bug tracking process, which is forty different states. And the bug report needs to have this thirty different custom fields. And then they ask, like, can you do that? And we, our answer is like, I don't think you, we should or you shouldn't either. Like, the point of moving to linear is actually rethink some of this stuff, like, is this still necessary? Yeah, and I think like this becomes even more clear now is that if the agent can fix the bug in five minutes,

• 2:22:34Karri Saarinen?

  but your bug reporting process or the process of running through that process takes a week, it starts to be, look pretty silly that like the actual work takes a lot less time than actually running through the whole.

• 2:22:46Jordi Hays?

  Yeah, and you're sitting here being like, I don't wanna be like part of the bottleneck.

• 2:22:51Karri Saarinen?

  Yeah, and so I think like, my thinking here is like, I think we can start kind of compressing and simplifying a lot of this workflows. And even, I know that companies do need some process where it's like compliance or security or some, some other reasons that you just can't remove. Um, I think like the agent can likely handle that. Um, but like this, this statement was really for us to say that we, I think we should all like kind of look into mirrors. Like, what are we doing here and like, why and do we still need to do these things? And, and from our perspective, our perspective, we don't. Um, I think we should start looking into different problems and that the different problems is like, yeah, like, how do you work with the agents?

• 2:23:32Karri Saarinen?

  And I think the problems I noticed today is one is like the context problem. Like, how does the agent know what to work on or like, how do you set up the agent to work on with the right context? And we think like linear can be that or is already that context system for humans. So it can also be the context system for, uh, the agents. So linear collects custom, like user bugs, it collects like user feedback or customer requests. Um, there's also kind of projects, you have a goals initiatives. There's a lot of context of like, what is your product? What is the state of your product and also like, what is the future state of the product? And then if you can bring that into the agenda like workflow, I think the agents can work a lot better, so.

• 2:24:16Karri Saarinen?

  I think at Linear, we wanna like look into that category of like context problems and try to like find solutions there. And then the second thing, second problem like I noticed is the the agency part that a lot of the systems historically has been quite static, like it doesn't do anything unless you move that thing from one state to another. And we think like now, the system should be with this right context and understanding of what you're doing and what your team or product is doing. It could start moving the work uh on its own, like it should become more self-driving. And so, this, for example, this bug reporting example is like

• 2:24:55Karri Saarinen?

  that if the bugs get reported in Linear, they should just like, the Linear agent should look at it, like start debugging it, connect to other tools, make a fix. Then eventually at the end, like tag in a human to like, hey, can you authorize or verify my fix? And so then this like forty state bug tracking process is now like one state, because the human only has to like verify it. And even if it's not correct solution, you still have the option to fix it and work with the agent. So I don't think we can one-shot problems all the time. But that's just like the direction we wanna go. It's like, is there work that Linear could do automatically? That the humans don't even have to look at and in and at least at the very beginning of the state, and Linear could start doing it for you.

• 2:25:41Karri Saarinen?

  And the last thing I'll say, like, I think that um we we are launching several things over the weeks that the we launched this like Linear Agent, which is a gigantic surface for Linear, so you can ask things, you can like how I use it is I get feature requests from people, then I go there, it's like I wonder what other customers are saying about this problem and like, can I understand the underlying need? Because I think the problem today starts to become like, if you can build anything fast, the problem is not building things anymore, the problem is like deciding what to build and why, and even understanding like what is the problem. So I think like Linear can be a system like where you can understand the problem, shape the problems,

• 2:26:21Karri Saarinen?

  and then pick a direction or solution and then start working on the the the like have the agent work on it with that like correct context and direction. So. Um. And then like in the in the future, we'll also like we're working on our own coding agent, which I think there was some confusion about it. And I think like the goal there is like it's it's it's more like a wrapper around this existing coding agents. And what do we do there? It's like we can like dog food our own platform, which we have this um like agent platform that third parties like Codex and and Devin and Cursor have participated in and like they have their agents in there. But like because we are building our own, we can kind of create the capabilities and the tooling and

• 2:27:03Karri Saarinen?

  the hooks or whatever we need better because we also noticed the opportunities as we built these things. And we also just generally see that there is probably like situations where the linear coding agent can be better than some of the like generalized coding agents.

• 2:27:18Jordi Hays?

  Yeah, I I think I think it's I think it's really smart to to, you know, i- if if linear had been started, you know, uh, ten years prior, you would have been able to just like add like do the the legacy, the legacy SaaS playbook of like, let's just try to add a lot of seats every month and compound forever. And that was a beautiful existence. And now our entire industry is like disrupting itself. And so you can choose, I think Toby Lucky on David Senna's show was talking about like every category is up for grabs. There's going to be an AI native company in every single category. You can wish that this wasn't happening, or you can decide to be that company and the mature, hard thing to do is like

• 2:28:01Jordi Hays?

  admit that things are changing, embrace it, rally the team around it, rally your customers around it. I think it makes a lot of sense. Um. How do you think, taking a step back? Like, how do you, how, what's your view on how like enterprise software categories are evolving? Because I think a lot of people are are kind of like waking up to this idea of like, everybody wants to be, at least in software development, in the in the pipeline of tools, everybody now wants to be the same. Kind of like the same thing. You want to be the place where people go to encourage the machines to do things, right? And kind of do that. And so, and how do you see Linear's

• 2:28:43Jordi Hays?

  role evolving? You know, you've been very open to different agents leveraging the platform. I'm sure you'll continue to be. But yeah, how are like software categories evolving in this era of like, you kind of need to be selling, everyone's trying to sell work?

• 2:29:04Karri Saarinen?

  Yeah, I don't, I don't think I have the complete answer there. I think there's a lot of nuances. It's like depends on the markets. I do think like that's that feeling of everyone's building the same thing. It's, I think partially comes from, a lot of people are noticing the same primitives and from like the same kind of blocks or pieces of this puzzle. And then they're trying to like figure out like, what is the right setup for that? Like, what is the right order of those things? And like, who is actually the best thing, best, that best one to like own part of that puzzle? And I think that's like the, the feeling probably there. But I think like, my feeling, my, my thinking is that it's similar to earlier software days too. It's like, it's like when people

• 2:29:46Karri Saarinen?

  invented databases, now everyone's like, why is everyone making databases?

• 2:29:50Jordi Hays?

  Yeah.

• 2:29:50Karri Saarinen?

  Like, well, everyone needs a database.

• 2:29:52Jordi Hays?

  Everyone wants to be a system of record.

• 2:29:53Karri Saarinen?

  Yeah. So I think there is like a lot of, like, there can be a lot of shared primitives across products. It doesn't mean that every product still like has the same outcome or like the same advantage or something. And I think like, we, we don't know like how this will all play out. And I think the other thing that I'm seeing is that there's this like ideal, like, let's throw everything out, like no SaaS at all. And I think that's an option. But I think like, you can do that. And then you start like, Inventing stuff back from the first principles and you maybe end up like in the same spot again. And I think like that's what we've seen in our space is like everyone's running their agent and now they have 10 agents running.

• 2:30:35Karri Saarinen?

  So then they put them on a campaign board, which Linear has. And then it's like, oh, now I invented the agent orchestration like, no, you invented the campaign board, which has been like around for like 30 years. But you just put the agents on a campaign board. So like kudos to like connecting those two topics, but like it's not like that some things don't need to be reinvented, like it's some things can still work. But like, if you just throw everything out, you kind of like start from the beginning and then I think it's a long journey to like figure everything out again.

• 2:31:08Jordi Hays?

  Yeah, I got a, I got an investor update last year that was just like workflows have been rebranded in the product as agents. That was a funny moment because I was like, okay, some of this stuff is, is, you know, very new approach to software, but some of it is just kind of re, some of it is just repositioning.

• 2:31:27John Coogan?

  Uh, I have one more question, but first we got to give a shout out to Russell Smith from Y Combinator. Summer 2012, we're not beating the YCS 12 mafia allegations on this show, uh, since I believe we all went through that one. But, uh, my last question is, um, uh, you know, in, in, we, we, we, we talk about linear every day on the show. 75% of enterprise work, enterprise companies are using agents. Have you talked to the other 25%? Like what is unique about those businesses that they haven't jumped in? Are they just like asleep at the wheel or is there something unique about their business where they're sticky? And for security reasons or some other reason?

• 2:32:07Jordi Hays?

  Or they're using agents but haven't integrated them?

• 2:32:10John Coogan?

  Maybe. I'm just interested because yeah, it, it feels like, you know, this is such, everyone understands how powerful agents are. Why is it not a hundred percent? That's always an interesting question.

• 2:32:19Karri Saarinen?

  Yeah, and to clarify, the stat is like, like seventy-five, seventy-seven percent of like linear workspaces have cloud agents.

• 2:32:26John Coogan?

  Okay.

• 2:32:26Karri Saarinen?

  So, uh, uh, so there's a difference between cloud agents and the local agents. So we don't track the local agents, but.

• 2:32:32John Coogan?

  Okay.

• 2:32:32Karri Saarinen?

  So I think the, the couple of things like the cloud agents are still somewhat like less developed today. There's like environment problems where like if you have a massive system or some kind of large company system, the environment starts to become kind of complicated and the industry hasn't fully solved it yet. I think it's a solvable problem. And many companies are kind of like solving it with the sandboxes of like you start a sandbox, the agent has the right environment and can do the things. So there's like, just like a timing piece, a similar timing piece. Not everyone has like decided to do this and like go into the cloud agents. The third piece, which is, it's, it's, it's kind of the stupid reason is, is the, uh, policy. Um, so.

• 2:33:18Karri Saarinen?

  Companies are still procurement, IT and, and securities that will run a lot of like decision-making when it comes to tooling in companies. And there, there is a lot of companies that like, the employees ask, can I use the agent? And they say, no, you can't. And they don't have like a reason for it, or like, we have to evaluate it and that evaluation takes months. And I think like what the companies need to look into here is like, what, this has to change. Like you can't like, like it, the, the industry is moving so fast. So you cannot have like a month-long, like many month-long processes to evaluate every single new tool.

• 2:33:56Karri Saarinen?

  Up to like, I think like the, the security standpoint is like valid, but like you, you kind of have to like figure out a new way to think about the security and not like block new tools. So I like want to hack to this. I've seen in some companies is like, they have this friction form. So engineers. That wanna use like feel friction.

• 2:34:15John Coogan?

  Yeah.

• 2:34:16Karri Saarinen?

  And that they wanna use new tools or AI. They form a fiction form, like file a fiction form, and then that escalates it to the higher leadership. And then it makes an SLA that has to be resolved in a week or in 10 days or something.

• 2:34:30John Coogan?

  Yeah.

• 2:34:30Karri Saarinen?

  And so you force the hand of this like procurement, IT and security people to like do something about it because the incentive, a lot of times with this jobs, it's like you don't wanna rock the boat. So you don't wanna change things if you don't have to.

• 2:34:43John Coogan?

  Yeah.

• 2:34:43Karri Saarinen?

  So, so then like the companies do, I think that leadership should recognize that like we do have to like allow people to, to use new tools. Otherwise we will kind of fall behind here.

• 2:34:54John Coogan?

  Well, thank you so much for taking the time to come. Give us the update. Always good to hear from you and we'll talk to you soon. Have a good rest of your day.

• 2:35:01Jordi Hays?

  Awesome. Awesome progress.

• 2:35:02John Coogan?

  We'll talk to you soon. Goodbye.

• 2:35:04Karri Saarinen?

  Yeah, bye.

• 2:35:05John Coogan?

  Let me tell you about Gusto, the unified platform for payroll benefits and HR built to evolve with small and medium sized businesses. And without further ado, let's bring in our next guest.

• 2:35:13Jordi Hays?

  Yeah, it sounds like a lightning round.

• 2:35:15John Coogan?

  Yes, this is the land of lightning round.

• 2:35:18Jordi Hays?

  What's happening?

• 2:35:19John Coogan?

  Good to meet you.

• 2:35:21Jordi Hays?

  You're here with us.

• 2:35:22John Coogan?

  This is TVP and please introduce yourself and the company. Because not only have we not heard of you, but I think you're coming out of stealth. No one's heard of you, or at least this company.

• 2:35:32Speaker 09

  No one has heard of us. I'm Demi Clary. I'm the co-founder and CEO of a company called Neon Bio.

• 2:35:37John Coogan?

  Yeah.

• 2:35:37Speaker 09

  Uh, in a nutshell, what we do is we genetically engineer chickens.

• 2:35:41John Coogan?

  Okay.

• 2:35:42Speaker 09

  To produce medicines inside their eggs.

• 2:35:44John Coogan?

  Wow. How did you get into this? What's your backstory?

• 2:35:48Speaker 09

  So I'm an aerospace engineer, so naturally I went into biotech.

• 2:35:52John Coogan?

  Yeah, chickens.

• 2:35:53Speaker 09

  My, my co-founder is an evolutionary biologist as well.

• 2:35:56John Coogan?

  Okay.

• 2:35:57Speaker 09

  You know, I've always been involved in manufacturing of, uh, uh, complex things. Planes are, are sort of one complex thing. These proteins, these medicines are also similarly complex in different ways. Um, you know, as, um, as some of the, uh, uh, problems facing, um,

• 2:36:17Speaker 09

  Drug, uh, drug pricing and, um, sort of the onshoring of, of, of manufacturing had, had come to bear over the last few years seemed like a good place to hone my, uh, my skill set.

• 2:36:29John Coogan?

  So what do you?

• 2:36:30Jordi Hays?

  Yeah. Where, where did the original kind of concept come from? Did it, did your, was your co-founder, you know?

• 2:36:36John Coogan?

  Making, making an omelet.

• 2:36:38Jordi Hays?

  Hanging out.

• 2:36:39John Coogan?

  Being like, this will cure cancer.

• 2:36:41Speaker 09

  You know, um, we.

• 2:36:42Jordi Hays?

  They're like, these, like, these chickens, they lay eggs every day. We gotta put something in them outside of.

• 2:36:48Speaker 09

  You, you're not far off. I mean, we all know chickens to be sort of incredible sources of edible proteins, you know, the ones that make your omelet. Uh, most new medicines today are, uh, are complex molecules. They are proteins themselves. And so, um, the way they're manufactured today, uh, prior to Neon Bio is, you know, it's expensive. It's sort of reliant on these complex, fragile global supply chains and it sort of makes these drugs inaccessible to most people. But chickens happen to be the universe's best protein factory. Um, you know, they've been honed by 250 million years of evolution to

• 2:37:26Speaker 09

  efficiently turn very simple inputs, grain and water into complex outputs, these proteins inside their eggs. And so we harness that same system to produce, you know, some of the drugs you might see advertised on, on TV like Humira or Ketruda.

• 2:37:44John Coogan?

  How, uh, so, so, I mean, how far away are you from actually doing a partnership with a, a biotech company that owns intellectual property around a particular protein? It feels like there's this dance between like, you need to genetically engineer the chicken, make the chicken, get the eggs, extract the protein, like actually get into the drug. That sounds like years, but then there's only, there's ticking clock on every drug that's out there in the IP landscape. So how do you marry those two?

• 2:38:11Speaker 09

  Yeah, so one of the things we announced today really is is this large commercial deal that we signed with a partner to bring up to three drugs to market.

• 2:38:21John Coogan?

  Up to three drugs, okay.

• 2:38:23Speaker 09

  And and the drugs that we're focusing on to start with are are known as biosimilars. So they are drugs that, you know, have existed. We know they work. They're on the market. They can cost in the thousands or tens of thousands per dose. That's super expensive. We are starting with those because they're they're known molecules. We're not taking on molecular risk there. Over time, we're developing technologies that will make this process way faster, much more efficient, increase the yields. But for now, we have a very good market in the biosimilar space where there's huge demand for these drugs. Coupled to sort of the cost aspect, which is a sort of a big part of a big part of our value proposition is that are.

• 2:39:06Jordi Hays?

  What? How many doses from an egg? Are we talking, was it a single shot? Or can you get potentially multiple doses? And then because I'm just thinking at some point, you're just scaling a facility that has chickens in it?

• 2:39:21Speaker 09

  Yeah, we scale by breeding chickens. That's one of the advantages here, right? It's pretty linear, and we know how to do that. To just give you a sense for scale, you know, with a few thousand birds, and to give you a sense of what that means, you know, a small farm is anything below 25,000 chickens. So with a few thousand, we can produce the global supply of a drug like Humira. So a chicken can treat, you know, depending on what the what the medicine is, anywhere between 10 to 100 people in a year.

• 2:39:54John Coogan?

  Wow, that is remarkable.

• 2:39:56Jordi Hays?

  That is insane.

• 2:39:57John Coogan?

  Do you not have a chicken sound effect?

• 2:39:58Jordi Hays?

  I was just about to text the team. We need a chicken sound effect.

• 2:40:01John Coogan?

  Play the rest of the barnyard.

• 2:40:02Jordi Hays?

  We got the whole.

• 2:40:03John Coogan?

  Well, last, is there a plan to make horses work for us? Goats for us? Sheep? Are you staying in chickens forever? Or will there be other animal?

• 2:40:12Speaker 09

  Work on other animals.

• 2:40:12John Coogan?

  Okay, eventually. Okay, well, call us back.

• 2:40:15Jordi Hays?

  We need horses to save to save us from other from other ailments.

• 2:40:20John Coogan?

  There are actually drugs. That come from uh from horses as well.

• 2:40:23Jordi Hays?

  My my, you know where my mind's going?

• 2:40:26John Coogan?

  Primarily.

• 2:40:26Jordi Hays?

  Partnership with Varda.

• 2:40:28John Coogan?

  Varda, yes.

• 2:40:28Jordi Hays?

  Chicken.

• 2:40:29John Coogan?

  Space chicken. I mean, I was thinking about that one. And you said aerospace to bio. There isn't, there is an interesting overlap there. Well, thank you so much for telling me.

• 2:40:38Jordi Hays?

  On the line.

• 2:40:39John Coogan?

  Yeah.

• 2:40:39Jordi Hays?

  Uh, yeah, we're, we're having a lot of fun, but this is, this is very, this is, uh, one of the craziest pitches.

• 2:40:45John Coogan?

  I think, I think caffeinated capitals, uh, I think an investor in both companies as well. Right?

• 2:40:50Jordi Hays?

  That's right.

• 2:40:51John Coogan?

  Okay. Raymond, Raymond loves making, making drugs in difficult ways, but potentially extremely valuable ways.

• 2:40:59Jordi Hays?

  That is very cool, Demi.

• 2:41:00John Coogan?

  Very cool. Thank you so much for coming on.

• 2:41:01Jordi Hays?

  Thank you, guys.

• 2:41:02John Coogan?

  This is great. We'll talk to you later. Bye. Let me tell you about vibe.co. We're D to C brands, B to B startups and AI companies advertise on streaming TV. Pick channels, target audiences and measure sales just like on Meta. And without further ado, our next guest, Mikey Schulman from Suna. He is the co-founder and we cannot wait to talk to him about AI generated audio. Let's bring Mikey in from the restream waiting room into the TBPL Ultra Dome. Mikey, good to see you again. Thank you so much for taking the time.

• 2:41:32Mikey Shulman?

  Welcome back.

• 2:41:33John Coogan?

  One of the most interesting, do you call yourself a Neo Lab? Is that a fair characterization?

• 2:41:40Mikey Shulman?

  Uh, great to be back. Thanks for having me. Uh, we definitely do not think of ourselves as a Neo Lab.

• 2:41:45John Coogan?

  Okay. But you are training models, you're doing AI, but you're a product company. Are you a consumer company? How do you think about yourself?

• 2:41:53Mikey Shulman?

  We're a consumer company. We're an entertainment company. Uh, consumer entertainment doesn't seem so hot right now.

• 2:41:59John Coogan?

  Yeah.

• 2:41:59Mikey Shulman?

  Not exactly sure why, but, uh, being entertained and fulfilled is like a basic part of being a person. And so, um, often underlooked part of the market. Um, yeah, we're, we're like, the word we use here is creative entertainment.

• 2:42:13John Coogan?

  Sure.

• 2:42:13Mikey Shulman?

  We are, um, giving people the best, most fulfilling creative experiences of their lives.

• 2:42:19John Coogan?

  Yeah. I mean, that sounds maybe broader than music one day. Have you thought about video? Are you thinking about, uh, I mean, I'm on Spotify. A lot of times the video will pop up alongside the, the, the music. Are you thinking about, uh, expanding or continuing to refine the music model itself?

• 2:42:39Mikey Shulman?

  It's a great question. I think there's a lot of reasons why this is going to work really, really well in music, least of which is we love music. This is like really the DNA of the company. But I think creative entertainment is coming everywhere. And I think about it like this, like, I think even Claude Code, or all of its competitors are creative entertainment. I don't know how much you guys play around with it, but it's like really fun to build things, and it's really fun to use what you build. And there's a huge allegory there for music, too.

• 2:43:07John Coogan?

  Sure. Yeah, yeah, that makes sense. The tinker mindset.

• 2:43:09Jordi Hays?

  Talk about progress since the last time you popped on. You guys growing revenue at all? What metrics can you share?

• 2:43:16Mikey Shulman?

  I had heard some rumors. Yeah, so the growth has been great. You know, a lot of things have compounded, a lot of hard work from the team, and kind of some big step changes in how people engage with the platform. So since our last model release, yeah, recently, we kind of announced that we hit 2 million subscribers, 300 million, and we're like, one at a time.

• 2:43:41Jordi Hays?

  Sorry, Dan. And you got cut off a little bit, but it's 300 million of ARR, you said, right?

• 2:43:47John Coogan?

  It's remarkable.

• 2:43:47Mikey Shulman?

  Yes, that's right.

• 2:43:48John Coogan?

  That's wild.

• 2:43:49Jordi Hays?

  Insane. How much have you appreciated? How much have you appreciated the, all the other, the labs just slugging it out, while you guys just kind of stay, stay in your niche focus and, and go after what, what clearly is a massive opportunity, but, but maybe it stays kind of off the radar for some of these other labs long enough for you guys to just run away with it?

• 2:44:14Mikey Shulman?

  Truly, I like wake up six days of the week, and I think, this is great. We're the only ones really playing in consumer entertainment, and I'm really, really excited. And then the seventh day of the week, I wake up and I say, like, we must be missing something that all these other giant companies know. You know, but I think, it's what, it's what I said before, like, being fulfilled is a much elevated state than utility. And everybody's focused on utility because it's straightforward.

• 2:44:43Mikey Shulman?

  But eventually, like, you need something more than that. This is like a basic part of what being a person is all about. So, we love to focus on it. I love watching people slog it out in other domains where scale and compute and dollars are honestly bigger weapons than they are in music.

• 2:44:58Jordi Hays?

  Yeah. Yeah, we've been, we've been, I've been enjoying Suno a lot, throwing out, making, making, making songs for the team. It's just, it's an amazing thing to just like be joking. And in our use case, we're just like joking around about something. And I'm just like, "All right, I'm gonna turn it into a song." It's a, it's a lot of fun. But yeah, talk about the updates on the, on the product side, the new voices, functionality, all that.

• 2:45:24Mikey Shulman?

  Yeah, it's a really exciting launch. We, a couple hours ago, released a new model. It's our best model yet. We'll make the best music. But I think most excitingly is, really gets personal. So, you can use your own voice to make music that sounds like you. And if you're not the best singer, it actually sounds like a better version of you. And so, there's something beautiful about that.

• 2:45:48Jordi Hays?

  Auto-tune?

• 2:45:49Mikey Shulman?

  Uh, yes, yes. And without sounding too like artificially auto-tuning. Go, go try it out. I've, I've learned not to try to demo this for people in large groups. People don't like singing in front of their friends. So, I'm not, I'm not gonna try that here. And then, some other personalization features on the creation side about how you really kind of tailor the system to really know everything that you love. And then, also really exciting is the ability to upload a bunch of tracks from off-platform of your own that you can kind of inspire the model to be more like those. And we've seen some amazing things happen from, everything from like musicians, film composers, producers,

• 2:46:31Mikey Shulman?

  to like uploading tracks there and getting the model to really kind of follow their leads. It's like, an incredible way to fall in love with a particular thing that you already love.

• 2:46:44Jordi Hays?

  I'm super excited to play around with it. John?

• 2:46:46John Coogan?

  Yeah, is there, I'm interested in like top feature requests and what we can learn. I don't, obviously you don't want to spill your entire roadmap, but some of the interesting things that happened in image models where you could at a certain point, you know, take an image and basically just replace the background and it wouldn't sort of regenerate your face. And I feel like there's a, there's a lot of opportunity if artists hop in or I have music to say, okay, I want to keep the song exactly the same and just change out the lyrics to do sort of a remix or keep the lyrics exactly the same and change out the style, style transfer. And I feel like all of those are maybe it's going to be more of a lift

• 2:47:28John Coogan?

  on like the business development side to, to figure out how to do that. But, but what are you excited about in terms of increasing the level of control from the creator or the user?

• 2:47:42Mikey Shulman?

  A lot of what you said is, is coming soon.

• 2:47:45John Coogan?

  Yeah.

• 2:47:45Mikey Shulman?

  I think unlike other media, music has like a very rich history of basically derivatives from covers to samples to remixes to mashups and people riffing off one another is a way to spark creativity.

• 2:48:01John Coogan?

  Yeah.

• 2:48:01Mikey Shulman?

  It is a way to keep old works alive. And so you'll see, you'll see a lot of that come in, in the not so distant future.

• 2:48:08John Coogan?

  Yeah.

• 2:48:08Mikey Shulman?

  Some of it's already on platform, you know?

• 2:48:09John Coogan?

  Yeah, of course.

• 2:48:10Mikey Shulman?

  Something people don't know is like almost a quarter of all songs made on platform are derivatives of other songs on platforms, like a lot of covers basically. And so there's a, a kind of a social ecosystem around these things.

• 2:48:23John Coogan?

  Yeah. What's the B to B side of the business like? We, we talked to a lot of AI video generation platforms and it seems like there's a lot of just ad creative, like ad agencies basically that are using the tool at volume beyond the creativity and just the fun of making a, an AI video for themselves. They actually see it as a way to accelerate creative works on their ad side. And I'm wondering if you're seeing pull from ad agencies saying, hey, we, we need, you know, a new song for this campaign. We have some AI generated video and we're going to partner with Suno on that.

• 2:49:02Mikey Shulman?

  We've definitely had a lot of outreach. Honestly, it's just not a huge focus for us right now. Like, we want to delight everyone, like, just regular people who love music. And we're honestly, like, a lot of the company's DNA is not being,

• 2:49:18Mikey Shulman?

  not trying to do the same thing a little bit faster or a little bit easier, but actually to try to do something that is entirely new. And like, that is changing how people entertain themselves. So there's probably a big business to build, helping people make songs for ads or jingles for companies. Maybe we can work together on a jingle as a side project. But for us, that'll be a side project.

• 2:49:38Jordi Hays?

  What global superstar has embraced AI music the most?

• 2:49:43John Coogan?

  And is it Meek Mill?

• 2:49:46Mikey Shulman?

  Uh, the most? Oh, um, I don't know, there's, there's-

• 2:49:51Jordi Hays?

  Because you kind of have to go on like a villain arc a little bit.

• 2:49:53John Coogan?

  Soulja Boy did an AI-

• 2:49:54Jordi Hays?

  Like, you, like, there, there's, there, we, again, the last time we were here, I was telling you, somebody I know in the music industry is like, every artist is using the Suno. Every artist thinks it's amazing. Nobody wants to talk about it yet because they're kind of scared of the reaction from the world and the creative industry and all this stuff. And so it feels like the first one or two people to go in a huge way will get some pushback and then over time it just is normal.

• 2:50:24Mikey Shulman?

  I, I think it's slowly changing. I don't want to out anyone, but this was, this is a quote that is attributed to me, but it's actually not mine. I'm not this clever of everything that you just said, ascribing this is the, the GLP-1 of music. It's like everyone's on it and no one wants to talk about it. And I think these things just take time. So I'm not, I'm not gonna, I'm not gonna out anyone just yet.

• 2:50:48Mikey Shulman?

  But it feels like things are changing.

• 2:50:49John Coogan?

  Final question from the chat, are there deep cuts on Suno?

• 2:50:54Mikey Shulman?

  Uh, I don't know.

• 2:50:57John Coogan?

  Deep cuts.

• 2:50:57Mikey Shulman?

  What is, what?

• 2:50:58John Coogan?

  You don't know what deep cut is?

• 2:50:59Mikey Shulman?

  Yeah.

• 2:50:59John Coogan?

  Deep, deep, deep cut is like deeply underrated, like from deep cuts in the vinyl. Like everyone knows.

• 2:51:04Mikey Shulman?

  Yeah, yeah, no, I, I understand, but it's not, it's not for me to say.

• 2:51:08John Coogan?

  Sure.

• 2:51:08Mikey Shulman?

  Like what is good and not good. Like we, we never want to be the arbiters of good music and bad music. And like, um, like I have deep cuts of my own that you're going to hate, like that I made. And I promise you'll hate them.

• 2:51:20John Coogan?

  I guess to quantify the question, it would be like, do you think the listener, uh, the, the, the, the, the plays are less power law distributed than on say Spotify? Where Spotify probably has like Taylor Swift, Taylor Swift, Taylor Swift at the, at the tight, tall end that's driving a ton of consumption. Do you think that your curve of consumption is a little bit more even?

• 2:51:43Mikey Shulman?

  For sure, for a couple of reasons. One is that the whole purpose of the platform is actually to enjoy creation.

• 2:51:47John Coogan?

  Yeah.

• 2:51:48Mikey Shulman?

  And not necessarily to go and browse for other people's music. It's actually to get inspired to make your own music. And so we actually see people falling in love as much with their own music on platform as they do with other people's music, which is amazing and new.

• 2:52:01John Coogan?

  So it's more, it's, it's, so the answer is more deep cuts. It's all deep cuts.

• 2:52:04Mikey Shulman?

  More deep.

• 2:52:05John Coogan?

  Tons of deep cuts.

• 2:52:06Mikey Shulman?

  Yeah, okay. But in the, in that lens, it's all deep cuts on.

• 2:52:08John Coogan?

  I love it. I love it. Uh, yeah, no, I mean, obviously not to paint it into a corner. Uh, there, there's a million ways to think about this, but thank you so much for taking the time to come chat with us.

• 2:52:16Mikey Shulman?

  Yeah, great to catch up. Excited to play around with the new model.

• 2:52:19John Coogan?

  Congrats on the progress.

• 2:52:20Mikey Shulman?

  Congrats to the team. Thanks, guys.

• 2:52:21John Coogan?

  Have a good one. Let me tell you about Figma. Agents, meet the canvas. Your AI agents can now create and modify your Figma files with design system context. It's in beta starting today. Uh, and our next guest is Ida Baradari from Devalence, the anti-surveillance company.

• 2:52:41Mikey Shulman?

  What's going on?

• 2:52:41John Coogan?

  I'm very excited to talk to you. Congrats on, on the, uh, the, the viral sensation. But since it is your first time on the show, please introduce yourself and the company.

• 2:52:50Speaker 11

  Definitely. Um, thanks so much for having me. Um, hello everyone, I'm Ida. Um, I graduated with a degree in physics from Harvard and now I'm building Devalence, uh, a company that's protecting your freedom.

• 2:53:01John Coogan?

  How does it work?

• 2:53:03Speaker 11

  Great question. So basically, we're building on top of existing ultrasonic jammer technology, but what we're integrating here is that we're making it a smart device, which takes in information from nearby environment and then targets our distortion signals into the direction of where we detect smart devices.

• 2:53:21Jordi Hays?

  Interesting.

• 2:53:22Speaker 11

  And then simultaneously, we also have an AI algorithm that makes sure that the distortion signals that we send out use artificial tones and voices that make it hard to decode.

• 2:53:32Jordi Hays?

  Okay, uh, let's take it one more step back. What is the actual problem that people are experiencing today and may or not even be aware of it?

• 2:53:41Speaker 11

  Yeah, no, I love the question. So in, at the beginning of 2024, we saw a huge rise in AI variables. I mean, I think everyone in the valley probably knows about Friend, about Omni, all those, you know, promising technologies. The problem there becomes, well, when you have a conversation, and for example, you just forget to turn it off, a lot of confidential information, private information can be used to train AI models that you might not necessarily want to be trained on it. And people already have this problem who deal with a lot of confidential information in their everyday professional lives. So that can be people working in, you know, in jobs that deal with IP with other sensitive info. And this issue is way broader than just, you know, audio recordings.

• 2:54:24Speaker 11

  We also see this with meta Ray-Bans happening, like there's a lot of unwanted recording happening there, a lot of freedom for people to just, you know, go out and do whatever they want. And simultaneously, of course, digital data collection has been a thing for a long time. And the way that it's used in recommendation algorithms, for example, is another thing. So cognitive security is also a big part of this.

• 2:54:47John Coogan?

  How do you not disable someone else's device if you're okay with them using it? I was, I was skiing and a friend had Meta Ray-Bans and he was talking to them and it didn't, I was sort of eavesdropping on the questions he was asking. He was sending texts to friends and whatnot, and he was fine with me hearing it. If I was wearing this device, wouldn't he just not be able to use his device?

• 2:55:15Speaker 11

  In this particular case, I mean, if you don't mind, then you can just turn it off.

• 2:55:18John Coogan?

  Okay, that makes sense.

• 2:55:20Speaker 11

  So it's very easy. It's like an on off thing for you to like genuinely be in full autonomy over it.

• 2:55:25John Coogan?

  Okay. And then what's uh, yeah, obviously it sounds like you launched pre-orders. Who has been buying? Is this corporations that want to make sure that they're, because you could imagine, you know, cell phone jammers exist and Faraday cages exist. Like there are ways to secure a property. Is this just privacy conscious individuals? This is a direct to consumer product mostly?

• 2:55:50Speaker 11

  So for the pre-orders, it's been mainly consumer facing, which means that a lot of people who have pre-ordered it are in the range that, you know, the price point allows, but we are working to like make it accessible and affordable to everyone. Because we really believe in the mission that everyone who wants autonomy, really, and agency over the data, they should have it. But we also are working on a version that is for more like organization based because they usually have different requirements. So we're also working on that.

• 2:56:20John Coogan?

  Why is this?

• 2:56:22Jordi Hays?

  We gotta get TJ one of these. He's a gifted one. Our friend TJ Parker absolutely hates meeting, recording and all these things that are just.

• 2:56:31John Coogan?

  Can you make it into a watch? That would be the killer app. He's a watch guy.

• 2:56:36Speaker 11

  I know. There's, there's a lot of cool stuff with the form factor that we're experimenting with.

• 2:56:40John Coogan?

  But what, um, are you going to be in a little bit of like an economic war here because a $1,000 product to counteract something that costs a hundred bucks? There's just a, there's a, so there's an economy here that's sort of misaligned. I'm also interested to hear about how on earth can it, can a, can a recording device cost a hundred dollars while an anti-recording device costs a thousand dollars? I imagine that you, you, you, you think the price will drop over time, but what is in the device that is expensive?

• 2:57:11Speaker 11

  Yeah, there's a lot of processing that's going on because we have certain algorithms that require a lot of power in order for it to, you know, work.

• 2:57:19John Coogan?

  Yeah.

• 2:57:20Speaker 11

  So that is honestly a big component of the cost that's driving it.

• 2:57:24John Coogan?

  Maybe even a more powerful chip than what would just be in a passive audio recorder.

• 2:57:30Speaker 11

  Yeah, I mean passive audio recorders, they are usually not as complicated to build, right? You basically just need a mic and then you can just detect the stuff, right? But in this case, you wanna, you wanna like find nearby devices, then you also want to make sure that they're blocked.

• 2:57:45John Coogan?

  Yep.

• 2:57:45Speaker 11

  And then you also wanna make sure that the way that you're blocking them is not just reconstructable in post-processing.

• 2:57:52John Coogan?

  Sure.

• 2:57:52Speaker 11

  So there's like three different tasks here that make it way more expensive, unfortunately. But we're working on it.

• 2:57:59John Coogan?

  What are the, what are the laws around this right now? I remember the backlash to Google Glass and then everyone had a phone and it just seemed like if you're out in public, people can just take pictures of you and record you.

• 2:58:11Speaker 11

  Yeah.

• 2:58:12John Coogan?

  Is it legal to block someone from recording me? I don't know anything about this.

• 2:58:18Speaker 11

  Yeah, that's a, that's a good question. In terms of recording, there's one-party and two-party consent states.

• 2:58:25John Coogan?

  Sure.

• 2:58:25Speaker 11

  So, but nobody really follows that, I feel.

• 2:58:28John Coogan?

  Yeah, what's the two-party? Is California two-party?

• 2:58:31Speaker 11

  I believe it's two-party, yes.

• 2:58:35John Coogan?

  Certainly doesn't feel like it when you walk around.

• 2:58:37Speaker 11

  No, it definitely does not feel like it. Exactly, that's why I'm saying nobody really follows it, or it's not really enforced by folks. And then regarding the blocking, so certain blocking is not allowed. So for example, blocking from RF jamming is not allowed because you can get in the way with emergency services, but unless you don't do that, there's certain areas in which we can work in.

• 2:59:00John Coogan?

  Okay, yeah. Very interesting. Well, where can people find it? Where can people preorder if they're interested?

• 2:59:05Speaker 11

  Go on our website, it's devailance.com. That's where you can find it. Otherwise, I mean, in general, we're gonna be posting a bit more also about the development process and the general vision and mission behind the company on our social media platform. So on X, we're on B and Audible, and then my personal X account is just my name.

• 2:59:24Jordi Hays?

  I need a, I need a little jammer for John's mic. Sometimes he, he'll just keep talking, you know, and, and, no, I'm kidding.

• 2:59:34John Coogan?

  Well, thank you so much for coming on.

• 2:59:36Jordi Hays?

  Yeah, great to be here. Very, very cool that the chat is in a positive way, saying that it feels very Harry Potter coded to have this sort of magic device that.

• 2:59:44John Coogan?

  Oh, that's a good one. That's like oddly high praise. Yeah, become invisible. It's the invisibility cloak for the modern era. Well, thank you so much. Congrats on the progress. Thanks for having me.

• 2:59:55Jordi Hays?

  Excited to follow along.

• 2:59:56John Coogan?

  Have a great one. Let me tell you about AppLovin'. Profitable advertising made easy with Axon.ai. Get access to over 1 billion daily active users and grow your business today. And without further ado, we'll bring in Zach Kanter from Stedi. Zach, how are you doing?

• 3:00:11Jordi Hays?

  What's going on?

• 3:00:13Jordi Hays?

  No, no audio. You look fantastic. You have many books.

• 3:00:17John Coogan?

  This lighting is fantastic, and the bookshelf is fantastic. This is, of course, Zach Kanter. He is the founder and CEO of Stedi.

• 3:00:24Speaker 12

  How about now? Can you hear me now?

• 3:00:25John Coogan?

  We can hear you now. How are you doing?

• 3:00:27Speaker 12

  Here we go, guys. Thanks for having me.

• 3:00:28John Coogan?

  Thanks for hopping on. I feel like I'm surprised. I feel like I've never met you in person, but I know you from the internet for so, so long. So, good to finally meet.

• 3:00:36Speaker 12

  We're Twitter friends, you know? That's how I meet many of my reputable and disreputable friends.

• 3:00:41John Coogan?

  Exactly. But for those who haven't been following you and your journey, since it is the first appearance, please introduce yourself and the company.

• 3:00:48Speaker 12

  Sure. I'm Zach Kanter. I'm the founder and CEO of Stedi. It's spelled S-T-E-D-I. We're a healthcare clearinghouse. So, if you're not familiar with the world of healthcare, you know, we exchange the administrative transactions that power all of healthcare. You've probably heard stats like this before, that healthcare is 18% of US GDP. So, it's a pretty meaningful chunk of the ecosystem. But, you know, you go into your doctor's office, they ask you for your driver's license and your insurance card, and then they tell you your copay is $20, and you have three visits left, and all those details. That's a transaction called a real-time eligibility check that happens under the hood. We process those. We process tens and tens of millions of those per month. And then, when, you know, you finish

• 3:01:30Speaker 12

  the encounter, whether it's a surgery, or a, you know, teeth cleaning, whatever it might be, they have to send a claim. There's a series of messages that come back. So, there's an adjudication message that comes back, saying the claim is rejected or accepted, and then the claim gets paid somehow. You know, you get those things in the mail that say, "This is not a bill." Explanation of benefits. Your doctor gets one of those as well. They can get them via paper, but they can also get them electronically. And basically, we process all these transactions back and forth.

• 3:01:59John Coogan?

  And why can't a registered nurse just vibe code a system to do this for them? I'm just kidding.

• 3:02:05Speaker 12

  Well, it's a funny question. Like, you know, it's interesting. So we primarily, you know, we think about our business as selling to other technology companies. You think about us as like the stripe of healthcare.

• 3:02:14John Coogan?

  Yeah.

• 3:02:15Speaker 12

  The, uh, but we've seen a surprising number of these small and medium sized doctors and dentist offices that are, that are signing up. And so we recently did an analysis and spoke with a bunch of these, uh, places. And it turns out that indeed doctors are vibe coding.

• 3:02:30John Coogan?

  No way.

• 3:02:31Speaker 12

  Revenue cycle management systems. So it's not thousands of them, but it's dozens of them.

• 3:02:36John Coogan?

  It has happened. That's amazing.

• 3:02:37Jordi Hays?

  That's very cool.

• 3:02:37John Coogan?

  Yeah.

• 3:02:38Jordi Hays?

  What, what, what have been the key milestones for the business?

• 3:02:41John Coogan?

  Yeah.

• 3:02:41Jordi Hays?

  You're raising new money today. Your name is Steady.

• 3:02:44John Coogan?

  Yes.

• 3:02:45Jordi Hays?

  John was saying how he's known you forever from the internet.

• 3:02:47John Coogan?

  I feel, I feel the same way.

• 3:02:49Jordi Hays?

  Just steadily.

• 3:02:51John Coogan?

  Here we go.

• 3:02:52Jordi Hays?

  Uh, chugging along, but, but yeah, what, what does this milestone represent? Like, what did it take to get here? Healthcare, every healthcare founder will tell you that, that obviously this is a big, massive market, but, but, you know, doesn't move as fast. And it can take, you know, years to make progress that another industry might, might happen in a quarter or something like that.

• 3:03:16Speaker 12

  Yeah, it's, uh, it's interesting. So, you know, we didn't start in healthcare. I don't come from a healthcare background. I previously started a brand of auto parts. So I manufactured auto parts in Taiwan and China. And, you know, follow the typical auto parts to healthcare pipeline as many founders do. And, uh, in building that business, you know, I sold to O'Reilly Auto Parts and Amazon and these different retailers. And, uh, I had to, at some point, it was probably in like 2011, the transaction, uh, volume got such that it wasn't feasible to have these things manually entered anymore. So before AI.

• 3:03:47John Coogan?

  Yeah.

• 3:03:47Speaker 12

  And so I reached out to all the different retailers that I was selling to and asked them to send me the API spec for you, for their, you know, purchase orders. So I can automate the transactions. And, you know, over the next two weeks, they all wrote back and they said, what's an API?

• 3:03:59John Coogan?

  Yeah.

• 3:03:59Speaker 12

  And so, you know, things got a little bit better since then, but what I found out at that point was that this whole world of, of retail logistics, supply chain, uh, transportation, et cetera, manufacturing. Is powered by a technology called X12 EDI. And so if you see steady is spelled S D E D I. It's because we started with this underlying EDI technology. And, you know, long story short, maybe long story long here. I got so frustrated with the various EDI systems that were out there. So like, look, what I want to do is I want to receive purchase orders in. I want to get them into NetSuite. I want to have those automatically sent to a warehouse. I want the warehouse to ship the order. I want the transaction to come back. I want when things come in via Flexport, I want those things to, you know, get automatically pushed into my system. This can't be that hard.

• 3:04:45Speaker 12

  Kind of famous last words. And I was like, I got so sick of the solutions that were out there that I ended up having my own system built. And then, you know, I ultimately sold the auto parts business to a private equity firm. And I started to study. And I spent like 50 grand on, which first, you know, it was a bootstrap business. So spending 50 grand was a lot of money. 50 grand on building this homegrown platform. And I was like, you know, it's going to cost like 10 times as much to do this for everybody, for all transactions. I was like, but to be safe, you know, there's margin of safety. I'll raise a million dollars instead of 500K. And, you know, now we've raised 142 million dollars total. And I think we, you know, still have, still have more.

• 3:05:23Jordi Hays?

  It's gong time. It's gong time.

• 3:05:28Jordi Hays?

  Thank you, thank you. What's your favorite car?

• 3:05:32Speaker 12

  Favorite car?

• 3:05:35Speaker 12

  You know, it's funny, like I grew up, you look at, you know, the Porsche 911. You say like, that's like a car that old guys who don't know anything about cars buy. And then you go and you drive one. And it actually turns out that 911, you know, 60, 70 years of bitter design is, is pretty good.

• 3:05:50John Coogan?

  Yeah. What kind of auto parts were you selling? I'm in the market to pick up a straight pipe exhaust system. I was a birthday present for Jordy. I'm hoping to get him some LED under lighting as well. Maybe stance his car. Were you doing anything like that?

• 3:06:04Speaker 12

  I can, I can hook you up.

• 3:06:06John Coogan?

  You can help.

• 3:06:06Speaker 12

  We're gonna.

• 3:06:07John Coogan?

  That's fantastic.

• 3:06:08Speaker 12

  It's gonna be like, you know, T B P N. Yeah. My ride edition.

• 3:06:12John Coogan?

  Yes, yes, that's what I'm looking for. I want a horse. You like horses? We put a horse in your car. We put a gong in the passenger seat. You can't transport anyone, but it looks good.

• 3:06:23Jordi Hays?

  John, John has been trying to get me to go the Mansori route.

• 3:06:26John Coogan?

  Yes.

• 3:06:28Jordi Hays?

  Years and he will be doing it until he.

• 3:06:30John Coogan?

  You gotta do it until you do it.

• 3:06:31Jordi Hays?

  Out of this earth.

• 3:06:32John Coogan?

  Until you do it with the full sponsored livery rap.

• 3:06:35Jordi Hays?

  You guys hiring, I'm assuming?

• 3:06:39John Coogan?

  Yeah.

• 3:06:39Speaker 12

  Oh, yeah. Engineers.

• 3:06:42John Coogan?

  Talk a little bit about the company culture. Where are you based? Are you in person, remote? Like, what's the, what's the scale of the company right now?

• 3:06:49Speaker 12

  So about 125 people. We're distributed. We have a bunch of people in New York, but we've got people all over the place. I live in the Bay Area. And, um, uh, look, I think, you know, with the talent wars, you know, there's, look, there's obvious pros to being in person. At the same time, you're kind of making the implicit decision that you're going to exclude 99% of your potential hiring pool and saying, we're not going to be able to hire those people. And for us, we think the trade off's worth it. So we're, uh, yeah, we're all over the place.

• 3:07:16John Coogan?

  That's amazing.

• 3:07:16Jordi Hays?

  Awesome.

• 3:07:17John Coogan?

  Well.

• 3:07:17Jordi Hays?

  So great to finally meet.

• 3:07:19John Coogan?

  Yeah, great to finally meet.

• 3:07:19Jordi Hays?

  Amazing progress.

• 3:07:20John Coogan?

  Yeah. Thanks so much.

• 3:07:21Speaker 12

  Thanks, guys. Thanks for having me on the show.

• 3:07:23John Coogan?

  We'll talk to you soon. Have a good one. Let me tell you about fin.ai, the number one AI agent for customer service. If you want AI to handle your customer support, go to fin.ai. And let me also tell you about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds, online, in-store, on mobile, on social, on marketplaces, and now with AI agents. And without further ado, we're going back to back.

• 3:07:42Jordi Hays?

  There he is.

• 3:07:43John Coogan?

  Oh, we got Nick.

• 3:07:44Jordi Hays?

  Nick.

• 3:07:45John Coogan?

  I thought we were having Zach.

• 3:07:46Jordi Hays?

  Great to see you.

• 3:07:47John Coogan?

  I was excited to go back to back Zach to Zach.

• 3:07:48Jordi Hays?

  Look at this, plaid on plaid.

• 3:07:50John Coogan?

  This is a beautiful background. This is a beautiful outfit. Introduce yourself.

• 3:07:53Jordi Hays?

  At plaid.

• 3:07:54John Coogan?

  Tell us how it's going.

• 3:07:55Speaker 03

  This is where I'm living now. It's good to see you guys.

• 3:07:57John Coogan?

  Good to see you too.

• 3:07:58Jordi Hays?

  Good to see you, dude.

• 3:07:58John Coogan?

  How you doing?

• 3:07:59Jordi Hays?

  Just, let's just start with a gong.

• 3:08:00John Coogan?

  Start with a gong.

• 3:08:01Jordi Hays?

  Start with a gong hit. I don't want to wait.

• 3:08:06John Coogan?

  The anticipation was too high for the last one.

• 3:08:09Jordi Hays?

  Congratulations.

• 3:08:09Speaker 03

  You know how long I've dreamed of that moment? I'm going to take a big photo for my mom. Got it.

• 3:08:18John Coogan?

  Very fun.

• 3:08:18Jordi Hays?

  You can, of course, screenshot it.

• 3:08:20John Coogan?

  Yeah.

• 3:08:20Jordi Hays?

  But it's cooler. It's cooler.

• 3:08:25John Coogan?

  Later, you'll be able to screenshot yourself taking a picture.

• 3:08:28Jordi Hays?

  Which is, and then say, look, mom, I took this screenshot of me taking a picture for you.

• 3:08:33John Coogan?

  Give us some background. Tell us the story of how you wound up in this particular situation. Uh, just, just, just take us through it.

• 3:08:40Speaker 03

  Well, I'm excited to talk to you all about it because as pioneers of new media, I feel like you'll understand this more than most people. But, you know, we've been building this week in fintech as what started as a fintech newsletter and turned into more of a fintech media company over the last six and a half years. And the Plaid team approached us about five months ago. And I thought we were going to talk about a partnership. So I came in there ready to sell sponsorship, ready to sell a media deal. And they said, actually, you know, we've been thinking a lot about how we can improve the conversation around fintech. And we want to partner with you guys. And what that means is we want to acquire the business. And they won. They had negotiated me. But here I am.

• 3:09:21Jordi Hays?

  Amazing.

• 3:09:22John Coogan?

  So, so what do you think stays the same? What do you think changes? Are you going to be working in their office? How does all this fit together?

• 3:09:30Speaker 03

  Yeah, I went and did a little office tour this morning and I got a badge. So they haven't given me my gun yet, but they did give me my badge. And so after six and a half years working out of a home office, just seeing another person and that having a conversation in an office was a transformative experience for me.

• 3:09:46John Coogan?

  Yeah.

• 3:09:46Speaker 03

  We are going to keep things mostly the same from now and then we'll just keep adjusting as we go. I think probably the best comp for what we're looking to build is something similar to Bloomberg with Bloomberg Business Week. Where these are two really complementary properties. There's obviously a parent company, they share a name. But you can be a Bloomberg software customer without reading Business Week and vice versa.

• 3:10:06John Coogan?

  Yeah, that makes sense.

• 3:10:08Jordi Hays?

  What is the state of fintech? What are you, I mean, you know, you've, you've been six and a half years, you've seen the boom, the momentary bust, the comeback. During that time, there's been so many companies that have, you know, thrived throughout the entire period, even as the market was, was in turmoil overall. But what are you most excited about today?

• 3:10:35Speaker 03

  Well, I assume most of the half a billion TBP watchers know Jordy's background, but Jordy is an exited fintech founder who built Party Round in Capital. And so you also had a front row seat to kind of the change in the fintech ecosystem over that period. Today, what I've noticed is you had this spike in fintech enthusiasm and funding in the venture community in 2021. A lot of companies got out over their skis because of capital availability, and I think there were sloppy decisions made, and a lot of them took tough medicine. Some of them didn't make it past the downturn in liquidity for fintech startups, but a lot of them said, look, we're going to build real businesses now, we're going to take the tough medicine, and we're going to come out the other side stronger.

• 3:11:20Speaker 03

  And so if you look at the top right corner and see Ramp, like, that's a great example of a company that has been around for a long time, said, hey, we grew too quickly, downsized, and now they're better for it and are just kind of crushing and shipping on a weekly cadence and, you know, really redefining this entire category. And so what we're seeing today is you have fintech companies, we've been talking about this for a long time, you have fintech companies that are actually taking market share from incumbents. I know fintech companies have wanted to say, hey, like, we're the challengers, but we're going to be, you know, the dominant providers of financial services one day, but now that's actually happening. And so, you know, thinking about this with my plaid hat on.

• 3:11:58John Coogan?

  So much merch.

• 3:12:00Jordi Hays?

  I love how you brought, you just came with the same, you came prepared. You understood the assignment, the same entertainment level as we bring. Put on your steel man, John.

• 3:12:13Speaker 03

  Well, you notice that, you know, the tech media conversation hasn't really caught up to how well some of these fintech companies are doing, and it's tough. Technology media is really stretched, and I think.

• 3:12:32Speaker 03

  There are a lot of different areas like AI, like crypto that, you know, command a lot of attention. And so you have really well-run companies like Ramp that are doing generally interesting stuff and shipping at this crazy rate, but nobody's covering them, other than TVPN. And so we're looking to really-

• 3:12:48Jordi Hays?

  Yeah, but even, even we're not, we're not, we're not covering it on a level where if you're a fintech industry insider or builder, you're actually getting alpha from our fintech coverage. And alpha comes into like, okay, what does infrastructure look like? What kind of, what, what bank partners are evolving with the needs of these companies? Like, you know, you guys are going like 10, 10 layers deeper and have been for, for so long. I think it's, it's, uh, it's super important.

• 3:13:17John Coogan?

  Yeah. Last question for me. What, uh, what, what, what media formats, where, like, how would you describe where you are now? And then what excites you? Because, you know, obviously the, the, the newsletter list is over 200,000 subscribers. Congratulations. Massive. Uh, how many newsletters do you want to send a year? Do you want that to increase? Do you want to do more in events, video, interviews, audio? Like what, what's interesting to sort of like, uh, zoom out and think about the next couple of years?

• 3:13:48Speaker 03

  Yeah, you know, our DNA has always been the community initiative. And so, um, events are a big part of what we do. International is a big part of what we do because there's so much interesting innovation happening. You know, American tech companies will go on stage at conferences in Mexico City and in, you know, Lagos, Nigeria and talk about what they're doing. But then they actually start talking to people who are operators in Lagos, Mexico City. And like the level of innovation there is often, you know, more advanced in fintech than you'll see in the US because these are areas that don't have the same level of financial services. And so you actually have to build a lot more there. And that's been a big part of our DNA too. And so I think it's really double down on a community focus, um, really deep- Thoughtful writing and continuing to grow the pie, not just here, but internationally as well.

• 3:14:34John Coogan?

  That's awesome. Well, congratulations.

• 3:14:36Jordi Hays?

  Amazing. Super pumped for you.

• 3:14:37John Coogan?

  Thank you so much for taking the time.

• 3:14:38Jordi Hays?

  Match made in heaven.

• 3:14:39John Coogan?

  A true match between the background and the shirt.

• 3:14:42Jordi Hays?

  Truly.

• 3:14:44John Coogan?

  It's fantastic.

• 3:14:45Jordi Hays?

  Come in person next time. It's great to finally have you on the show.

• 3:14:48John Coogan?

  Catch up soon. Have a good one. We'll talk to you soon. Goodbye. And up next, we have the co-founder and CEO, Plaid, Zach Ray, in the restroom waiting room. Let's bring him into the TV. Off you go. Zach, how are you doing?

• 3:15:01Speaker 13

  Doing well. Thank you for having me.

• 3:15:03Jordi Hays?

  When did you first meet Nick?

• 3:15:05John Coogan?

  That's a great question.

• 3:15:06Speaker 13

  Uh, I think it was at a Money 2020. I think it was maybe like six years ago or something like that. It's been a long time and we've long admired what Nick and team have built. It, look, I feel so honored to get to work with them in this new way and it's been pretty amazing to watch them go over the last few years.

• 3:15:25John Coogan?

  Yeah, yeah. Talk about your experience as CEO at an event. What makes for a good event that you will say yes to? Attending, appearing at, et cetera. Like, what's the, what's the secret sauce to you? Like, okay, that clicks into place and I'm gonna say yes to that because I'm sure you get invites every day.

• 3:15:45Speaker 13

  Yeah, I think, oh man, this is a difficult one because my default answer is no. I have the conversation frequently of no new things.

• 3:15:53John Coogan?

  Yeah, there's a lot of stuff.

• 3:15:56Speaker 13

  I think it all comes down to who's there and the size of the event. Small things where I can meet people that are really high value are super interesting. And, you know, things that have content in an angle that's not covered all the time in the same way are valuable. So I don't say yes to a lot of things.

• 3:16:18Speaker 13

  Which feels fortunate. Also, I really like working, so.

• 3:16:24Jordi Hays?

  We're the same, we're the same way. What, outside of this, this acquisition, what's on, what's on your mind this week? What's the business focused on? What are you focused on personally?

• 3:16:35Speaker 13

  Well, first, I don't want to skip over this week of Pintech. I mean, big deal for us. Like, we've been really excited to push this conversation forward over the past many weeks. We're excited to now finally have Nick and co. as a part of the team. And the future together, I think, is going to be super fun. Aside from that, a big focus is AIify everything. So you might have seen we did a launch with Perplexity. And this was, I think, a week and a half ago or so, where we can power the finance tab of the Perplexity application. And it allows you to do things like see your stock portfolio in real time, get an update in the morning to understand, you know, what stocks you might want to trade in a given

• 3:17:16Speaker 13

  day, lots more that we're going to do with them to bring in more financial data into Perplexity. And I think this is the first step in a lot of consumer-facing AI experiences. And so that's a really big one for us internally.

• 3:17:32Jordi Hays?

  Yeah, that's very cool. I mean, you think about people are using their, they're going to AI tools for intelligence to help them understand the world, but then they lack all of the, you know, maybe you've put something into the context or maybe that has some memory, but it's lacking like that real, real-time data on you individually. And money being at the core of everyone's life just means that it's like very important for it to be in there. So that's very cool.

• 3:17:59John Coogan?

  Yeah, what is, what is integration with AI tools look like? How is it changing? Obviously, you're known for the API, which has had, you know, years and years of development. There's MCP now, there's skill.md files, there's all these different ways to interact. The agents can obviously use APIs and write their own API integrations. Where do you see that going? Are there any changes that you need to make or you're in-flight already making?

• 3:18:28Speaker 13

  Yeah, so sure history is the core of Plaid doesn't change all that much, right?

• 3:18:33John Coogan?

  Yeah.

• 3:18:33Speaker 13

  We are a pipe to bank accounts and we're then a data store on top of that. And then analytics that's on top of that. So like that, that, that chain doesn't change all that much. But the entry point to that change does change a lot. So like, we're doing a lot of work internally to say, how do we build like a one-shot vibe coder, like get started with a thing?

• 3:18:53John Coogan?

  Yep.

• 3:18:54Speaker 13

  Yeah. So, you know, you can go home and build your own personal financial management app. Now, you guys are nerds. You might do that.

• 3:19:00John Coogan?

  Yeah.

• 3:19:01Speaker 13

  Most of the world is not quite as nerdy.

• 3:19:03John Coogan?

  Yeah.

• 3:19:04Speaker 13

  And

• 3:19:05John Coogan?

  I was literally just thinking about that. I was like, okay, so I'm going to go and tell Codex to write a Plaid integration, pull all my bank accounts together, tell me exactly how much money I spent on everything, re-categorize it using LLMs, basically like rebuilding it for myself. And I'm like, maybe there's a tool for this. I don't know. But it'd be more fun to build. So tinkerer mindset.

• 3:19:22Speaker 13

  You should, you should probably just use perplexity or many of the wonderful Plaid apps that are out there. I will say I have spent more hours than I would care to share building like the totally most souped up, like personal financial management tool. It does literally everything in my financial life.

• 3:19:38John Coogan?

  Six, six monitors. Yes. Situation monitor.

• 3:19:43Speaker 13

  Yeah. Not six, but you don't see this room. There are many.

• 3:19:47John Coogan?

  We caught you.

• 3:19:49Speaker 13

  This app is like the perfect thing for me and my wife. It's like, it, it, it, it has everything. Like I can like chat with like our legal docs from like purchasing a house and stuff, all sorts of stuff.

• 3:19:58John Coogan?

  Yeah.

• 3:19:58Speaker 13

  Anyway, so some people are doing that and we would like to make it really easy for those people to do it. I think we saw like, like in like two months, I think we saw a 200% increase in the number of like hobbyist developers that are building stuff on Plaid. Yeah. The, I, I, I don't quote me on that stat. I guess I'm on public TV now.

• 3:20:17John Coogan?

  But this is, I'm just going to turn this into an article for sure. No, we will call it out. But I was about to ask you, like, yes, you are actually seeing some sort of material increase in the number of like small indie developers, vibe coders, hackers, individuals. It's not just, you know, I'm sure there's a lot of excitement from the enterprise to deeper their integrations, but you are seeing a groundswell at the individual level, which is fascinating.

• 3:20:43Speaker 13

  It's that, yeah, that's really big for larger enterprises. They're like, how do I automate all the support stuff and stuff with Plati? Support tools for them.

• 3:20:51John Coogan?

  Yep.

• 3:20:51Speaker 13

  And then there's a lot of, a lot of consumers have questions about like, what data is going where? And so we're thinking about like, how can we smartly build intelligent permissions on top of the data permission? So that, you know, as a consumer, you know, you might not want to link your CalShea spending, but you might want to be able to analyze your stocks.

• 3:21:09John Coogan?

  Sure.

• 3:21:09Speaker 13

  Like, how do we create tools for that kind of thing?

• 3:21:11John Coogan?

  Yeah. Are you, are you seeing, like, I guess the question is like, where are you seeing benefits when the frontier advances? Like, people are, you know, currently excited about GPT 5.4 or Gemini 3.1. And they see a model and they're like, okay, this new release does this new benchmark better, or it has a better smell, or it feels better in this particular area. But as a business owner and business leader, you're, you know, you might have a system that's using an LLM or an API, and it's already at 100%. And so are you, are there systems that you're not upgrading? And then there's some systems that you want to keep on the frontier, like chat or, or, I don't know, going around and doing fraud detection?

• 3:21:56John Coogan?

  Like, what, where are you hitting the newest, most expensive model button? Versus, okay, the system that we build is actually rock solid and like, we're, we're, we're, we're good there.

• 3:22:09Speaker 13

  Yeah, so there's a lot of layers of a stack and it kind of varies based on, on the layer. So for, for coding, like, I want our engineers to be using cutting-edge possible everything.

• 3:22:19John Coogan?

  Yep.

• 3:22:19Speaker 13

  In, in almost all situations. Now, at some point, we will get into like, cost optimization and cost management. We're not in that phase right now. We're in the like, get the best possible thing and go as fast as, as fast as you can.

• 3:22:29John Coogan?

  Yeah.

• 3:22:29Speaker 13

  And within the products, we don't want to actually upgrade our, our, our models too quickly. For example, like, we've, we've built a lot of stuff to improve transaction categorization.

• 3:22:39John Coogan?

  Yeah.

• 3:22:40Speaker 13

  If transaction categorization changes quickly, our customers notice and they're like, oh, well, I built like, you know, my, you know, you, you might say that something's a restaurant and I want to say it's a food purchase. Okay, great. But if you change it all the time, then I'm not going to be able to map restaurant to food purchase as quickly as possible. So it's like different names for the same category.

• 3:22:57John Coogan?

  Yeah.

• 3:22:57Speaker 13

  Those changes are hard. We're flows into our anti-fraud models and like eventually into our credit models. Um, you know, we don't want to be changing the models too quickly because we have to do a lot of back testing every time we make an upgrade. Um, but then anything that's like, you know, customer facing like our improved support experience, so on and so forth. Um, like there, there, there we can be quite iterative and like oftentimes we're not using the cutting edge. We're maybe using a, a turn or two back, um, because the value, it doesn't make a, any better responses, but the cost is, so, um, there's so many different choices that we're making on this stuff. It's honestly really fun.

• 3:23:32John Coogan?

  Yeah, yeah, it seems like a really.

• 3:23:34Jordi Hays?

  What is your, what is your thesis on how agents will use money? Because there's a number of companies that have sprung up and their incentive is to tell you that agents will exclusively use stable coins and generate their, effectively like generate their own real time payment rails on the fly because they don't want to deal with fees. And, uh, I think we've generally, John and I have been pretty like neutral on this. Like we can imagine a scenario where an agent would use stable coins, but we can also imagine a scenario where.

• 3:24:05John Coogan?

  Where an agent like hires a human to be a bad man and carry cash from one place to another. That's another possibility.

• 3:24:11Jordi Hays?

  That's another possibility, or just use the existing, existing rails that I, if an agent's acting on my behalf, maybe they use the existing, you know, set of financial products that I already use.

• 3:24:23Speaker 13

  Yeah, I mean, for as far as I can see, which in this environment is maybe a year or something like that, I think like agents using credit cards is going to be like the, by, by far the, the primary thing that happens. Um, the reason for that is the merchants accept credit cards, right? Merchants don't accept stable coins for the most part, for most of the things that a consumer wants to do. Um, now over time, certain types of merchants might start to accept, accept stable coins, like certain types of payments might, might move in that direction. Um, the question is like, will the companies that care about making credit cards really easy be able to make them sufficiently easy in the amount of time that, um, you know, the merchants actually start to shift, uh, to think about accepting stable coins? And my hunch is like, you've seen, I think, um, I think, uh, like Ramp actually launched, uh, an agentic credit card, like one of our customers,

• 3:25:08Speaker 13

  privacy.com, um, they have an agentic credit card. I know there's a bunch of other agentic credit cards that are out there and like, I can't like imagine that there will not be 5,000 Y C companies that are launching agentic focused credit cards, um, soon. So like, I think we will see more and more options pop up. Um, this is not to say I'm not a believer in stable coins. I think it'd be super cool. Um, but I just don't think it's realistic in a short timeframe.

• 3:25:31John Coogan?

  Yeah, yeah, that makes total sense.

• 3:25:33Jordi Hays?

  What about, um, what, what is your timeline or prediction around, uh, big institutional banks natively supporting stable coins? Like, is there, is there a point where like the default Chase account? You want to make a payment and you have the option of, you know, a Zelle, a Wire, or a stablecoin payment? Or is that not coming ever? Or, you know, what's your general read?

• 3:26:04Speaker 13

  I think it's probably coming. I don't know that it's coming fast. Um, and I think there's like a lot of reasons for them to want to be slow, but I certainly think some of that is coming. Like, I think Wire is not working on weekends. One is actually structurally not true. Um, like, there are many ways to, like, create the effect that a Wire has moved on weekends. So like, if a bank wanted to do that, they could do that. Um, but ultimately, like, it is a thing that bothers enough people that some people will want to move money on weekends and we're gonna have to give them those to do that. So stablecoin seems to be the, the most optimal way to do that, even though you can use a system.

• 3:26:39Jordi Hays?

  Yeah, you wonder, you wonder where that, where that, it, it, maybe, maybe there's not enough consumers that are even asking right now, to be honest, but it might actually come from industry first, where like car dealerships are like, hey, like, we really want better ways to...

• 3:26:56John Coogan?

  I just found, I just found a bit of a potential competitor for you, you might need to watch out for in like the agentic future. I went to Brink's.com and there you can move money via an armored car and the roads are open on the weekends, so you could move a lot of cash. You might want to watch out, Zach. You're certainly retooling the business plan because you're gonna have to deal with, uh, hey, Kodex, dispatch the bring truck, don't make mistakes. This is gonna happen. You gotta watch out, you gotta stay sharp.

• 3:27:26Jordi Hays?

  Uh, what's on, what's on, what else is on the roadmap, uh, for Plaid this year that you could talk about now?

• 3:27:32Speaker 13

  Uh, we've got effects coming up. So effects is our, our, our annual conference. It'll happen uh, uh, here in a couple of months. It's, it's gonna be awesome. Super fun. Um, Nick, we haven't figured out what we're gonna do together.

• 3:27:44John Coogan?

  I was thinking he could fit really well into that, too.

• 3:27:47Jordi Hays?

  MC.

• 3:27:47Speaker 13

  Great. Exactly. Um, if you guys want to come visit, we'd, we'd love to have you.

• 3:27:52John Coogan?

  Amazing.

• 3:27:53Speaker 13

  But yeah, so it's gonna be a big one. We've got a bunch of launches lined up for that. Um, you know, I, I can't spill the beans on all of them, but like there are gonna be a lot of AI related things, um, as you, as you might imagine. Um, and then look, it's, it's been a, it's been a really fun year so far. I think just like e- even for me as a, as a leader retooling the company to think about like, how do we want to operate differently? If the average size of an engineering product and design pod was eight people, now it's four people, like, how can we parallelize things? So like, honestly, just as a leader, it's, it's really fun right now to retool an entire organization around, you know, an improved shipping velocity.

• 3:28:27John Coogan?

  Yeah.

• 3:28:27Speaker 13

  Uh, so, yeah, I'm, I'm nerding out with it. It's great.

• 3:28:30John Coogan?

  Love it. I love it. Well, congratulations on the progress. Congratulations on the acquisition, and we'll talk to you soon. Have a great day.

• 3:28:36Jordi Hays?

  Yeah, great to see you, Zach.

• 3:28:37John Coogan?

  Goodbye. Uh, the Daily Beast got a little bit of a scoop. Here's how they phrased it. They said, "The 75-year-old Disney executive who stepped down as CEO just last week has been busted for leading a secret double life on social media under a different name." And, uh, Taylor Lorenz is on a tear. She says, "Bob Iger had a private IG account for IRL friends and family where he shared kayaking photos with his wife." And this is how the Daily Beast framed it. That is an absolutely, it's like, yeah, I guess he had a finsta. He had a, he had a fake Instagram account where he would, uh, you know, connect with friends. Not an uncommon tactic for someone

• 3:29:19John Coogan?

  who's probably the most scrutinized and watched public figure potentially in, uh, in the business world. Everyone wants to track and read into what is Bob Iger doing? Is he, you know, in, in, is he in the office? Is he in Orlando? Is he at Disneyland? Uh, there's a lot of reasons why people would want to report on everything that he does, and he probably doesn't want to share all that. So he had to do the fake Instagram, the alternate, the private Instagram for friends.

• 3:29:44Jordi Hays?

  We have a good place to end it.

• 3:29:45John Coogan?

  Please.

• 3:29:46Jordi Hays?

  John Palmer's wife's company was more innovative than TVPN and past company.

• 3:29:53Jordi Hays?

  Honestly, fair. What is Row 7?

• 3:29:57John Coogan?

  We got beat.

• 3:29:58Jordi Hays?

  Row 7 makes seeds.

• 3:30:00John Coogan?

  Seeds?

• 3:30:00Jordi Hays?

  A vegetable company dedicated to deliciousness. This is more innovative.

• 3:30:05John Coogan?

  It is.

• 3:30:05Jordi Hays?

  They're inventing vegetables. We reinvented business television.

• 3:30:11John Coogan?

  Well, it ain't over till it's over, so stay vigilant.

• 3:30:14Jordi Hays?

  Just wait for next year.

• 3:30:16John Coogan?

  Cause we're coming for you.

• 3:30:17Jordi Hays?

  We're coming for you. It's personal now.

• 3:30:19John Coogan?

  It's personal now. We're not stopping till we get to number 41. Let's make it happen. Thank you for watching.

• 3:30:25Jordi Hays?

  Thank you for watching today.

• 3:30:26John Coogan?

  Leave us five stars on Apple Podcasts and Spotify. Sign up for newsletter tbpin.com and we'll see you tomorrow at 11 a.m. Pacific. See you tomorrow. Goodbye.