Grammarly's $1B Round, Brain Computers, and NYT Licenses To Amazon | E2133

Today's show: Jason and Alex discuss the hottest tech and startup news: Grammarly secures a massive $1B investment from General Catalyst to fuel its AI ambitions and expand into deeper enterprise offerings; a DARPA-backed brain-computer interface startup emerges as a serious Neuralink rival, signaling renewed momentum in the neurotech space; and The New York Times signs a licensing deal with Amazon, suggesting that traditional media may be starting to find common ground with large language models. Timestamps: (0:00) Episode Teaser(1:26) Jason's take on Singapore's regional cuisine(5:50) Why founders should get permission first and more lessons from Udio, Suno, and Spotify(10:07) Oracle - Try OCI and save up to 50% on your cloud bill at https://w⁠⁠⁠⁠ww.oracle.com/twist(15:54) The New York Times and Amazon signed a landmark AI deal: what's in it?(20:18) Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain at https://www. Squarespace.com/TWIST(25:36) Why is Grammarly worth so much money?(30:14) Notion - Try it for free today at https://notion.com/twist(39:15) How does Autopilot make money?(43:03) So how long until we all have a computer in our brain?(54:43) How much does revenue predictability really matter?(59:26) Laurene Powell Jobs and Jony Ive go FULL DOOMER(1:03:35) Perplexity, Samsung, and the rest... Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com Check out the TWIST500: https://www.twist500.com Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp Links from episode: Udio: https://www.udio.com/ Jason's Stolen Voice: https://x.com/Jason/status/1928995534276088151Autopilot: https://www.joinautopilot.com/ Follow Alex: X: https://x.com/alex LinkedIn: ⁠https://www.linkedin.com/in/alexwilhelm Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis Thank you to our partners: (10:07) Oracle - Try OCI and save up to 50% on your cloud bill at https://w⁠⁠⁠⁠ww.oracle.com/twist (20:18) Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain at https://www. Squarespace.com/TWIST (30:14) Notion - Try it for free today at https://notion.com/twist Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland Check out Jason's suite of newsletters: https://substack.com/@calacanis Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com Subscribe to the Founder University Podcast: https://www.youtube.com/@founderuniversity1916

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

• 0:00Speaker 00

  They did their first insertion of their brain computer implant and then took it out again with the patient that was undergoing brain surgery already to kind of prove it out. But this means that there's now four companies that have done this Neuralink, Precision Neuroscience, Synchron, and Paradomics. That are all working on brain computer interfaces. Is this the next self-driving project? The thing that's currently in the lab, but in five to 10 years, we're actually going to get to use because I want one of these. This sounds awesome.

• 0:27Jason Calacanis?

  I don't know when this comes to civilians or soldiers or body hackers. But if there's four people working on it and, you know, it can make person who's paralyzed eventually walk. Or, you know, a blind person see or, you know, any kind of these neurological diseases. I mean, that's incredible.

• 0:52Speaker 02

  This Week in Startups is brought to you by Oracle. Oracle Cloud Infrastructure, or OCI, is a single platform for your infrastructure, database, application development, and AI needs. Save up to 50% on your cloud bill at oracle.com/twist. Squarespace. Turn your idea into a new website. Go to squarespace.com/twist for a free trial. When you're ready to launch, use offer code TWIST to save 10% off your first purchase of a website or domain. And Notion. Notion combines your notes, docs, and projects into one beautifully designed space with AI built right in. Try it for free today at notion.com/twist.

• 1:26Jason Calacanis?

  Hey, everybody. Welcome back to This Week in Startups. Alex, Jason, we're here. I'm in Singapore. He's in Providence, Rhode Island. Crazy trip. Came out here for a speaking gig and to do some meetings. Meeting's going very well. Word got out that I was here because I made it public and I spoke at a university this morning. I spoke for the Singaporean Governments, like Economic Development Council tonight.

• 1:53Speaker 00

  What's going on here?

• 1:56Jason Calacanis?

  Oh, we did a meetup. So this was This Week in Startups, an all-in meetup at, there is a concept of like a Hawker. Uh booths of food.

• 2:05Speaker 00

  Okay.

• 2:05Jason Calacanis?

  Uh, so they have, uh, it's very hot here and humid, like 95 degrees hot and a hundred percent humidity. I mean, like dri- dripping in sweat hot. Uh, and so, um, on Saturday night, we just for an hour and a half, two hours, a bunch of fans showing up, like literally a hundred people showed up.

• 2:27Speaker 00

  Nice.

• 2:27Jason Calacanis?

  We, I emailed our mailing list. I tweeted, we're gonna have a public meetup. Uh, the folks at River Race set it up.

• 2:33Speaker 00

  Uh huh.

• 2:34Jason Calacanis?

  And a bunch of fans came and I bought from booth number eight, tons of satay, including mutton, which is really good.

• 2:41Speaker 00

  Interesting.

• 2:42Jason Calacanis?

  You know, they're just like those little sticks, the skewers.

• 2:44Speaker 00

  Yeah.

• 2:44Jason Calacanis?

  Satay and, uh, people went crazy for it. And, uh, yeah, I took a hundred selfies apparently. And I bought a bunch of coconuts for folks. And so it's been that kind of an event, but it's a really interesting place. It's like Hong Kong. If you've, I don't know if you've ever been to Hong Kong.

• 3:00Speaker 00

  I've not.

• 3:00Jason Calacanis?

  Or London or New York. Okay.

• 3:02Speaker 00

  Yeah.

• 3:03Jason Calacanis?

  Yeah. So in the same way, like Hong Kong and New York and London became centers of the world. Singapore is like the center of Southeast Asia, and you have people from India, Australia, New Zealand, Hong Kong, China, America, everywhere here and doing commerce. There's six million people here. Uh, I got to see Balaji and he's doing his network state thing here.

• 3:26Speaker 00

  That's right.

• 3:26Jason Calacanis?

  Which is in Indonesia, just like over the border. So I went to see him. He's got like 200 of his like tech bro type, you know, crypto people hanging out, building stuff. It's, um, yeah, there's a lot going on over here. It's pretty exciting.

• 3:42Speaker 00

  I do want to start though with something that's a little interesting. So, uh, we've talked a lot about AI and IP and all this. And, uh, Google had their big I O event, dropped some new models, including Vayo three, which is blowing up. And a company apparently put together a video and I want everyone just to listen to this to see if you can catch something that may be a wee bit familiar to, uh, fans of the show. So here we go. Listen to this.

• 4:08Speaker 02

  Okay, we're listening.

• 4:09Speaker 00

  Yep.

• 4:10Jason Calacanis?

  I'm the C I M.

• 4:13Jason Calacanis?

  And my budget is bloated by a few million. I have no idea.

• 4:18Speaker 00

  And that, my dear friends, is not actually Jason Calacanis. That is some random A I avatar who said, I thought you were exaggerating. I thought the tweet was fun, but I thought you were exaggerating. You're not. That's actually you.

• 4:31Jason Calacanis?

  It is literally me. So somebody from Google was like, is this, has Jason done so many ad reads on his podcasts? That when you ask A I to make, uh, you know, like an enterprise software ad, it just uses J Cal. Maybe, or the person who, uh, posted this, I think they were just doing like a test video. I don't think it's for an actual product. I think this is like a fake thing. So I have a feeling I could be being trolled and baited into talking about this, but.

• 5:00Speaker 00

  Oh, you're so you're engagement bait. Yeah.

• 5:03Jason Calacanis?

  It might be engagement bait, but who knows, whatever. But there is a right to like, uh, privacy or celebrity voices and stuff like that, that you do have. And this celebrity privacy kind of concept is very clear. If the public is confused, you're in trouble. And the, so if this was a real thing, which I don't think it is, um.

• 5:27Speaker 00

  Yeah, yeah, yeah.

• 5:28Jason Calacanis?

  And if it was, and somebody actually used this in an ad, like it would be quite actionable. And actually people have taken clips of me and put me into an advertisement, talking about something. You, you probably see that with Joe Rogan sometimes. He'll talk about like a supplement and a supplicant company will then will take him and put him into something. Elon and Chamath have had it happen with crypto currency scams where they're like, hey, I'm offering my latest crypto. Go here and, but this is one of these issues that's going to happen over and over again. As will, it will happen to you, Alex, and it will happen to everybody where they'll take your voice, call your spouse and say, or, or mom or dad and, hey, I'm, uh, I'm in Spain and I got arrested and I need to send money to this big. And drives working wire money to this place.

• 6:14Jason Calacanis?

  Those scams have been going on for a while. Now they're going to be powered by A I. These tools are. Pretty close to indistinguishable. That sounded machiny, but if you weren't paying attention, you probably wouldn't have caught it, I don't think, right?

• 6:27Speaker 00

  No, no, I don't think so. But also, here's an interesting question. So in the video, so this is a video. If you're listening to the audio version of this, there's a video that goes along with the audio you heard, and it shows a clearly non-Jason man using the Jason voice, which to me would make it easier to say that there's no confusion, because clearly it's not you. So I wonder if there's an audio versus video component.

• 6:47Jason Calacanis?

  It was a white guy, like, sort of. But if you weren't paying attention, you would think it was me. But in all these cases, it generally gets settled. And the thing you've probably seen is the following ad has celebrity voices, and then they go and do a celebrity voice. So I think you can make a parody if you're not confusing the public. But it's image rights is the concept where celebrities have the right to monetize their images.

• 7:15Speaker 00

  Yeah, image and personality rights. The right of publicity is a state level legal right that allows individuals to control commercial use of their likeness, name, and other identifying characteristics.

• 7:27Jason Calacanis?

  Yep.

• 7:27Speaker 00

  There it is. And there's been a ton of these lawsuits recently. And this is the backbone of name, image, and likeness deals with sports athletes, because otherwise you could just take them and then clone them. I am less worried about being cloned myself, Jason, but I do think that everyone who is very prominent is going to have a problem with this. No, this is a great segue, because a big news item for a couple of Twizz500 companies is that Udio, Udio, maybe, and Suno, the two AI music generating companies, give them a prompt, you know, give me, I don't know, Benson Boone within the style of Dire Straits or whatever.

• 8:03Jason Calacanis?

  Yep.

• 8:03Speaker 00

  And they'll kick out a song for you. They are actually working with the labels right now, Jason, to come to some sort of agreement about royalties. This would go in kind of exchange of lawsuits we talked about on the show before.

• 8:15Jason Calacanis?

  Yep.

• 8:16Speaker 00

  I'm not surprised to see that they're coming to the discussion table here. My question is just, will the Udio and Suno business models work when their central cost of revenue goes up quite a lot?

• 8:28Jason Calacanis?

  What happens in this industry is the music industry is extremely coordinated. There are a couple of different groups. There's like the people who own the mechanical rights, the lyrics, the songwriters, the performance. And there's different studios, Warner Brothers, Sony, which owns Columbia Records. And they all basically hit you from all different sides, multiple lawsuits. And then you're put into the position to having to settle. And the settlement is typically like, how much money have you raised? We'll take that plus 50%. It gets really gnarly because once they have you having infringed, you will never be able to recover. Peloton got themselves in trouble because the teachers were teaching and the music was in the background.

• 9:13Jason Calacanis?

  If you remember that one, and man, it was a very painful settlement. I have been involved with startups who've had to go through this. The music industry does not play around. I think they will demand 80% or 90% of the revenue generated from these startups and millions of dollars in settlements for back infringements. And it is absolutely brutal. The thing I'm seeing in the marketplace is people are actually having musicians record chords and, you know, different types of music. And there are royalty free licenses to music. So you will not allow people to make prompts like dire straits,

• 9:56Jason Calacanis?

  but you could say, give me, you know, blues or guitars or finger picking guitars, you know, in a raspy voice, you'll be able to describe it otherwise.

• 10:09Jason Calacanis?

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• 10:54Jason Calacanis?

  Thousands of businesses have already upgraded to OCI, including Vodafone, Thomson Reuters, and Suno AI, who we had in the pod last year. So here's your call to action. Oracle is offering to cut your current cloud bill in half if you move to OCI for new US customers with a minimum financial commitment. But act fast. This offer ends March 31st. So see if your company qualifies at oracle.com/twist. That's oracle.com/twist. Yeah, and I think that'll be one of the settlements, but that will happen or one of the workarounds. There is stock music that people will use for exercise videos now as but one example. So you can buy royalty-free stock music for your podcast, for your movie,

• 11:40Jason Calacanis?

  et cetera. And yeah, so that's the workaround here, but this is going to be absolutely insane. And they'll take equity as well in the companies. And I think that happened with Spotify, right?

• 11:51Speaker 00

  Yeah, exactly what I was going to get to, Jason. So I think they might be able to get away with paying a little bit less because they're essentially going to give up a chunk of their flesh to the labels in these discussions. So if you go back in time to 2008, as you just said, Spotify got its deals in part because it gave up single-digit amounts of equity to a number of labels. And according to Music Business Worldwide, who had kind of some old accounting documents, Sony got 6% of the company at the time. Now that got diluted, but Universal got five, Warner got four, and a group called Merlin that does indie rights distribution, as far as I can tell, got a point as well. So these equity packages, if you will, could be quite large. We're talking maybe 10, 15% of these companies. But if that lets them keep operating, okay. I can see that.

• 12:36Speaker 00

  But I mean, if I'm an investor like, you know, Andreessen led the last Udio round and Lightspeed led the Suno Series B. I mean, you had to see this coming. So I presume that

• 12:46Jason Calacanis?

  I mean, we predicted it would absolutely happen. Yeah. Um, you know, sometimes people go for this like beg forgiveness, you know, don't ask for permission. I would say that's a very bad strategy when it comes to IP law. For founders listening, this is an area where you don't want to F around and find out. Because what you will find out is that the music industry has incredible lawyers and they will make an example of you and they will just grind you down forever. And basically you will have to shut your company down in all likelihood. I wouldn't be surprised if these companies get shut down based on this.

• 13:23Speaker 00

  It's interesting to see how consumers are reacting. I have a chart pulled up here of Google Trends interest data over time. And if you're watching the video, red is U D O, blue is Suno. And these are relatively stable. So there was a spike towards the beginning or sorry, early 2024, Jason. And since then, interest has been flat but sustained. So to me, this shows that they definitely are on to something. But I could not find any recent data points about, oh, we've added X number of users or X million songs or whatever. So I wonder if they're at a bit of a plateau as they sort out the licensing side of things. And then if it works out and they don't die, as you said, they can hit the gas pedal and, uh, and really make some progress. But you know, we've, we've talked about these because they're fun and cool. But I do get sent fewer tracks in my group chats than I used to when these were new. I do, I will say.

• 14:08Jason Calacanis?

  Yeah, I, I think they, these tools will be used by professional musicians. And that's where it gets actually really interesting is does this money flow like sampling down to the people who inspired it and do they have like essentially citations? So that is unclear from all of this and that will be the sort of next shoe to drop. And then will these artists, you know, if you do something in the nature of Taylor Swift, does any of that money actually make it to Taylor Swift? Does it go to the music label? There's a lot of questions here. And do they have to approve it? So depending on how they do their contracts, these contracts used to be when you, when they buy the music, they own it in perpetuity in any medium or, or a format now or in the future.

• 14:53Jason Calacanis?

  But this isn't a format. This is a transition thing. So, you know, there, I don't know if the music industry is going to be able to exploit this without getting permission from the artists. That's going to be the really interesting issue. And I wonder if you could, going back to my favorite band and artist, you know, Dire Straits and Mark Knopfler, I wonder if you created a couple of new tracks that were as good as Sultan's of Swing or better than Brothers in Arms or whatever it is, would Mark Knopfler and Dire Straits have to approve that because it is their body of work, I guess. And yeah, super interesting.

• 15:34Speaker 00

  It comes down to who owns the masters versus who owns the songs and then who owes the recorder. I mean, there's a lot of, the music industry is very difficult financially. If you haven't looked into it, just poke around a bit and you'll see why we're talking about this. On this front though, Jason, last week, just as an update for everybody, the New York Times secured an AI deal with Amazon. And this surprised me because as we know, New York Times has sued OpenAI and Microsoft over copyright infringement. And so to see them go land a deal with Amazon's AI arm Alexa, a couple of things. So the deal is going to provide summaries of Times content inside of Amazon products like Alexa, and then also provide information to quote, "train Amazon's proprietary foundation models."

• 16:18Jason Calacanis?

  Wow. Yeah.

• 16:20Speaker 00

  That's incredible. Yeah. Now, what, what Amazon foundation models, I hear you asking. Wow. What a great question. It turns out they have a bunch. So here is a screenshot from their late 2024 dump of the latest Nova models, including, Jason, Nova Micro, Nova Lite, Nova Pro, Nova Premier, Nova Canvas, and Nova Reel. I had never heard of any of these.

• 16:43Jason Calacanis?

  This is the first I'm hearing of. I've never heard the Nova name. And these are in-house models that they're making with their own team. And I guess they're offering them through AWS, I'm gonna guess. So we knew this was coming. And they've also invested in a bunch of companies. I don't know if they were in Anthropic or. But they invested in.

• 17:05Speaker 00

  Yeah, yeah. They were Anthropic's biggest backers, if I recall correctly. I think they put in several billion more. Uh, yeah, it was four billion more this March. So they have a lot of money in that company. But also, I think much like Microsoft has money in OpenAI, they also have their own models as well. Um, and then also Google has the Gemma Open Source Group. So there's quite a lot going on here. But I'm just, I'm curious why the Times did this. Uh, it does feel to me like they were leading the charge and now they're almost hedging their bets in a way.

• 17:34Jason Calacanis?

  No, no, I think they want to do licensing deals for their content. They just want to get paid for it and have controls. So I think this is a way for them to say to OpenAI, look,

• 17:47Jason Calacanis?

  this is the value that you stole from us. Amazon is willing to give us this level of deal and you just took it. So now they're proving in the market the value of their content to a language model. So I'm assuming this is a nine-figure deal and I'm assuming it's a five to 10-year deal. And, you know, if that's the case, I wonder what this would be in terms of the overall mix of the Times's revenue eventually, because we had talked previously about,

• 18:18Jason Calacanis?

  gosh, you know, the New York Times has got, are they past 10 million subscribers or something like that? And some extraordinary number. I wonder if this could eventually be some significant double-digit percentage of their revenue, which would give them the ability, let's say this became eventually licensing deals like this, 20% of their revenue, 30% of their revenue. That means they could theoretically hire, if they put it all into journalists, maybe they could hire twice as many journalists.

• 18:42Speaker 00

  Yeah. So your numbers are incredibly close. So the Times closed, uh, Q1 of this year with 11.66 million subscribers total across all of its platforms. And what I found was interesting is that they actually have a line item in their earnings called affiliate licensing and other. So I presume we're going to see all of this Amazon money flow directly into that, which means that we'll be able to track pretty closely how much money actually comes in from this partnership. Because that was only 63 million in the last quarter, 64 million, which was about 10% of its total revenue. So if this does double in size, I mean, that solves the Times' growth problem because they only grew 7% in Q1. Now they do pay a dividend, they're healthy, but 7% growth is never where any company wants to be. So this buys them four to eight quarters of growth, which is awesome.

• 19:28Jason Calacanis?

  Yeah, I mean, their expenses are probably growing at 7% year over year. People are expecting 2% or 3% cost of living, you know, raises that, you know, their real estate might go up, whatever costs go up. So yeah, there, this is slow growth company and they probably do need these opportunities. And I'll tell you, the truth is these language models should be excited to pay a license to a content company. OpenAI, if they're willing to give Johnny Ive $6 billion for God knows what, and you know, they're willing to buy the cursor competitor, WinSerp? WinSerp? Yeah, like it just shows they're willing to pay like 20 people at Johnny Ive's company for $6 billion. 300 million.

• 20:12Jason Calacanis?

  But they need to steal, yeah, they need to steal the New York Times' content? No, of course not.

• 20:19Jason Calacanis?

  All right, founders, let's talk about your website, huh? It might be a little bit of a sensitive subject. You might be a little embarrassed about it. Let's fix that right now. If you're launching something new, give your brand the refresh it deserves. You're working so hard on your company and your website looks terrible. Do what I do, use Squarespace. It's the all in one platform to make a stunning professional website. And it's ridiculously easy to use. It's going to work for everything. If you're selling products, it's got all that e-commerce built in. If you're selling services, it works perfectly. And they have a new AI product called Blueprint. Want more control? Well, of course, you can choose one of the award winning templates and use the intuitive drag and drop tools to make it your own. Easy peasy.

• 21:00Jason Calacanis?

  Squarespace equals the most functional and beautiful website on planet Earth. Go ahead, Squarespace.com/twist to get a free trial. And when you're ready to launch, go to Squarespace.com/twist to get 10% off your first website or domain purchase. That's Squarespace.com/twist. Pay people what their content's worth and then build a trusted relationship with them. And you could even ask them, hey, we're seeing a lot of queries around cooking. Can you make more cooking content, right? That would be a very world positive way to look at this. I know, you know, the things we say on the show make it back to Sam Altman. And so somebody send him this, like Sam, just you've got a $350 billion company.

• 21:46Jason Calacanis?

  Carve out 10% of your revenue every year, which would be a billion, right? They're, they're going to break $10 billion. Just carve out 10% of your revenue to build the content base. And, you know, if a billion dollars, you could give 10 million to the New York Times, 10 million to the Washington Post, 25 million, whatever it is, they'll put it to good use.

• 22:04Speaker 00

  They will.

• 22:04Jason Calacanis?

  Then you could even extract exclusives from you. You could say, hey, I want you to do more science and technology reporting. I'll give you another 10 million to hire, you know, 50 journalists for 100K each and some managers. We'll give you an extra 10 million if you give us an exclusive on just 50 great journalists, 100 great journalists doing science, technology, whatever. This could totally solve the problem we have in, you know, journalism to increase the investment and, and, and say, hey, as part of that, we want fact checkers and we want that all the stuff put in the semantic format. When you're a customer, then you could make demands and you could say, hey, instead of giving this money to the New York Times, we're, we also are offering it to the LA Times

• 22:48Jason Calacanis?

  and the Washington Post, and the three of them are then competing to provide additional science, technology, you know, and, and now we're, the whole industry could come back. This would be a great way to fly in the face of what China is doing, which is stealing content and IP. We could show people, and there's an important thing, you know, when I'm on this trip here in Singapore, I'm getting like some really interesting feedback, which I'll, I'll save for a little later in the show because I don't want to go into politics and take it too hard of a term, but I'm getting a lot of feedback on the United States in the last five months from folks, and it's not pretty. This, you know, could be a way for us to set an example for the planet. So great story. Yeah, it's a great pickup.

• 23:28Speaker 00

  Can I just show you how different some views are in the industry are to yours, Jason? Cause it, look, I'm a writer. You and I make podcasts. I'm on your side here just financially, but here's, here's Nick Clegg.

• 23:38Jason Calacanis?

  Fairness.

• 23:40Speaker 00

  That, that too, but I'm just trying to say that I'm biased, but Nick Clegg, who previously was, uh, Metis Head of-

• 23:45Jason Calacanis?

  This guy.

• 23:48Jason Calacanis?

  Anyways, Nick, seriously, this guy 100% Nick Clug, bleep that out, obviously, but Nick Clug. And just like the meta guy, right? Oh, it's gonna kill the AI industry. Bullshit. And if that's true, then he should go work for Facebook for free. And give all the stock options back. He doesn't work for free. Why should we?

• 24:08Speaker 00

  Amen to that. This, of course, is about the UK's current debate about IP licensing. The UK is in kind of a weird spot, stuck between the US and the EU, trying to figure out its own economic path, wants to have an AI industry, gonna sort out what's gonna happen. But that is one perspective from, you know, Nick was at Meta for a while, and Meta's in the AI game. So I just don't, I just don't get why I have to respect their IP if they're not gonna respect mine. It just.

• 24:29Jason Calacanis?

  So right there goes, I mean, Facebook, if you, if you went onto Instagram and you scraped all the Instagram profiles, I know this because companies try to use the Facebook data, they send legal letters constantly for their IP. Their IP is their social graph. You can find countless lawsuits about people using the Facebook profile data, you know, the Instagram data. Just, and that's for like, just to tell you top level, like here are the people on Instagram who are car enthusiasts who are into Corvettes. So if, if this is true, that Facebook should be able to build their LLM without compensation? Okay, great. So then I can, should be able to build a social network and a social graph and an LLM

• 25:14Jason Calacanis?

  based on scraping Instagram's data. You do that, you took, if you took 10,000 Instagram profiles, the top 10,000 and made a database and sold that to people and let people query it, they would sue you, you know, till the end of the earth, and they have.

• 25:28Speaker 00

  It's almost like turnabout's fair play, or to quote the former senator, Mitt Romney, sauce for the goose is sauce for the gander. All right, let's move on. Grammarly, Jason, this actually came out last Friday. We didn't get to talk about it. I knew you'd want to hear this. So Grammarly, couple of important things. One, Grammarly is the AI assisted grammar checker. You're a big fan of it here at Launch. We all have the license to it. And we have the CEO, Shashir, on the show because it merged with Coda, which we use to build the Toast 500 database. An interesting matchup. We were curious about why they were coming together, what they were going to build. But today we're talking about something a little bit different. General Catalyst was the investor behind both companies, which we thought was probably why they came together because, you know, one of their major shareholders liked the deal.

• 26:12Speaker 00

  Now, it turns out GC has a thing called the Customer Value Fund, which pulls from its major funds. But what it does is it provides capital to its portfolio companies without taking an equity stake. In return, they get, quote, "a capped return linked to revenue generated from the capital." So essentially, this is like revenue-based financing, which we've heard about ad nauseam five years ago. But they're going to put a billion dollars into Grammarly under this rubric, which is a huge amount of money. And the idea here, as far as I can tell, is the go-to-market motion for Grammarly works. You can put money in, you get more money back. They want to do product work with their money with the, you know, Coda, a deal to build this AI future writing platform thing.

• 26:57Speaker 00

  So they're going to use General Catalyst's money to keep growing at the same time. When, when, Jason or Risky, I'm curious what your experience in the industry tells you about this deal?

• 27:06Jason Calacanis?

  Yeah. So number one, these two products are two of my favorite products in business. Like I legitimately pay and use both of these products daily. So shout out to the teams at both of them. And I think they probably came together because, as you said, they were both portfolio companies of GC's. And so SaaS is a difficult business and maybe they thought, hey, we could put these two companies together, have a stronger company. This will help increase the value of the company that GC has already invested in. So if they have some LPs who want to get a return on capital, you get the double benefit. You're loaning them money instead of having them take the money from a bank.

• 27:50Jason Calacanis?

  So it's all in the family. And then you increase your equity stake without adding more shares to the company and selling shares to other investors. So GC, you know, if they own 20%, let's say they own 24%, 5% of these two companies. They don't want another person to come in and own another 25% and dilute them down to 20 by issuing new shares, the same number of shares in the company. You give them this revolving credit line, I guess. And who knows the terms of how you can tap it. It might be up to a billion. There's probably, there's a term called covenants. And the covenants are things you have to, you know, live up to. So in a venture loan, you have to keep a certain amount of revenue, a certain debt to revenue ratio, et cetera.

• 28:33Jason Calacanis?

  In this case, I wouldn't be surprised if they said, hey, you can pull down 10 million. But then you have to show the results of it. You have to keep your customer acquisition costs here. So it's a big number. Yeah, I think it could work. Now, you, you checked with them. Do they have 700 million in revenue for grammarly?

• 28:51Speaker 00

  Yeah. So they announced this number. They said, we have, I think, annualized revenue of more than 700 million and they're profitable. So I reached out and I'm like, month times 12, ARR, quarter times four. And profitable is, and I say this with nothing but love to startups, a flexible metric at times. So I wanted to kind of dig in and they were like, we have nothing to add past our blog post. So I'll interpret this for everybody.

• 29:15Jason Calacanis?

  But you did check the facts. Yeah.

• 29:16Speaker 00

  Yeah. Well, I mean, we, well, we had the, we had the facts. We just wanted to go one layer below, but they're being tied to the chest with it. So my thought of this is, is simple. 700 million in revenue, no matter if it's ARR, quarter times 12, four, whatever, is incredibly impressive. This is an at scale business. It's IPO ready. Profitable, I don't care if it's on a cash basis, a GAAP basis, an adjusted EBITDA basis, whatever. It means that the company is healthy. So we have a very large, healthy company. And that to me undergirds why they would get up to a billion dollars in this sort of like non-equity capital assistance, which is essentially a loan, by the way, I guess.

• 29:52Jason Calacanis?

  That's what it is. That's what it is. It's a revolving credit line. It's a loan of some type. It probably has some conditions on it. And I don't think it's one of these things where they actually put a billion dollars into their bank account.

• 30:05Speaker 00

  Yeah.

• 30:05Jason Calacanis?

  Usually when you have these things, you can tap them. So you pull some down and then when you pull it down, that's when the interest starts.

• 30:15Jason Calacanis?

  All right. If you're a startup, you need to sign up for, huh? Notion. That's right. N O T I O N. Notion.com/twist to sign up for free right now. Why? Because your whole company should run on Notion. My entire company runs on Notion. We've built all these tools to run our venture firm, to run our production for our podcasts inside of Notion, and we don't need to have developers, but we can build databases. And those databases now have thousands of startups in it, and we can put all kinds of information in there. Everything in one simple place. Wikis, document sharing, note taking, project management, all powered by AI now. We just upgraded to the AI. It's awesome. Everything in one space. Simple, powerful, beautifully designed on your mobile

• 30:57Jason Calacanis?

  phone. Get started for free. Notion.com/twist. To start for free, I'll say it again, third time, you gotta do it right now. Notion.com/twist to take the first step for getting organized and productive and having all the chaos in your life make sense. That's what it does. You go from chaotic to flawless with Notion.com/twist. So you wouldn't want to pull the billion dollars down on day one and be paying 10% on that, or 12% on it, or whatever it is, because that would be that you'd have to service it at a, you know, a very large rate, you know? It'd be 10 million a month or something. You'd be, it'd be crazy, right? 12 million a month that you'd be paying back just to sit on it. So you pull down 25 million, you do some huge ad campaign, and then you

• 31:40Jason Calacanis?

  make that money back, and then you pay it back, you know, that kind of thing. So. Great, great to see this. And I think this is a sign of strength in the SaaS market, which is a important. Yeah, it's a sign of strength in the SaaS market that the number of seats at companies, because of static team size, because of the layoffs, we talked about the 3% at Microsoft on, we had a big debate about like, is management going away? And, you know, my position on All In this past week was like, I think management and these layoffs, you know, are coming to white collar. They're happening right now. Management is using AI tools and everybody's doing more work. Everybody who's working right now in business sees AI replacing people

• 32:24Jason Calacanis?

  or making people bionic. If that's the case, then if you're Grammarly and you were selling into Microsoft, just as an example, and they laid off 3%, now you have 3% less revenue from Microsoft. So you need to come up with new ways to charge, which means either raising your prices per seat or moving off the per-seat model. And moving to a consumption model, which people really didn't like the consumption model. They like the, you know, per seat model because it was like, oh, I can kind of put this against a person's salary and I'm going to spend 5% of the person's salary. So if the average person on Microsoft is getting a hundred thousand, we spend $5,000 on the tools they use. It almost seems like, yeah, a chef might spend 5% of their salary on the knives and cutlery and equipment they use, right?

• 33:09Jason Calacanis?

  It kind of makes sense, but I'm a little worried about the SaaS companies with that headwind of, hey, our customers, we can't land and expand if the companies we sell into are contracting.

• 33:20Speaker 00

  Yeah.

• 33:20Jason Calacanis?

  Right. It's, this is a TBD, but it's, it's great to see a company like this. Wouldn't be surprised if next year we see them file 700 billions, 700 millions, plenty of revenue to go.

• 33:33Speaker 00

  I would love to see that, but I have one last intra venture capital thought here. So we've talked on the show pretty much three times a week about the lack of liquidity, not enough DPI from investors back to LPs. You like to put it under the umbrella of the wrath of Khan. Here's my, here's my question. If general catalyst is going to give Grammarly, let's just call it $50 million blocks for the sake of simplicity, put that capital into them and then receive back pretty quickly that capital plus some, does it return the gains on that to LPs? Could it? Is this a way that it could unlock faster returns?

• 34:12Jason Calacanis?

  Yeah, it's basically a way for those LPs to make a different type of return. And there are some people who like to be in corporate credit and there's some people who like to be in venture and they tend to be the same people. So they probably went to their LPs and said, does anybody want to also have this as a vehicle to return X amount of money, corporate debt and corporate credit, which I think is what this would technically be termed as corporate, corporate credit. And, you know, they could pay it back over time. They could have warrants. So it could be non-equity, but there could be an opportunity for Grammarly to say, we...

• 34:51Jason Calacanis?

  Would like the option to give you equity, you know, instead of cash back. But either way, it's it's done from a position of strength, it seems. And these companies are so big, not yet public, people are starting to see an opportunity. So there is a lot of talk about SaaS rollups right now. And venture companies working on SaaS rollups. There's firms that are specifically designing funds for this or taking over companies. Because maybe the company's been around for 10 years. And the founders don't want to work on it anymore. They're exhausted and the company's not growing quickly. So this private equity style takeover by venture capitalists who have very large funds is the other shoe that's dropping at the same time.

• 35:34Speaker 00

  So you're describing, though, the rolling up of software companies themselves. There's another model out there that's burgeoning in venture. And Tegren's just talked to Elad Gil about this because he's invested in some companies that are doing this. But essentially, instead of just backing vertical SaaS companies, going after vertical SaaS companies that also then purchase the end user companies. So if you make, I don't know, software Jason for barber shops, just actually buying barber shops, employing AI and SaaS technology to make them more efficient, boost their effective operating margins, taking that cash and then buying more and repeating the playbook, which to me really blends the line between startups, venture capital and private equity

• 36:14Speaker 00

  in a way that I'm, that sounds great on paper, but I wonder if will manifest in the style of returns people like, because once you buy buildings full of people doing stuff, you're going to be doing a lot more just day to day management. And I wonder if venture companies have the muscle to do that sort of on the ground work.

• 36:32Jason Calacanis?

  This services business thing, there's, God, I forgot what they're called, but MBAs were creating these funds. That were kind of like opportunistic funds where they would get a bunch of money to go buy a classic business from some real entrepreneurs in the middle of America, HVAC businesses.

• 36:50Speaker 00

  Is the canonical example.

• 36:51Jason Calacanis?

  The canonical example of these. So it does not surprise me that folks will want to roll up SaaS companies and put Coda and Grammarly together. Maybe you grab an Airtable or, I don't know, a sauna, which I think is already public. But, you know, seeing a bunch of those being put together and then sharing customer acquisition costs, sharing design and making more efficient. IAC did this. Barry Diller did this in a previous life and IAC brought together all the travel companies, Expedia, et cetera, bookings.com, VRBO. That was one roll up. The other roll up was all the dating sites and then that got spun out into its own. Match.com, I think it's called. So these kind of roll ups exist when a market hits like some sort

• 37:35Jason Calacanis?

  of maturity and then going and buying real world assets and combining them with the software makes total sense.

• 37:42Speaker 00

  The whole argument about startups or venture capitalists buying real world businesses to apply an AI or a SaaS model to them to make them more efficient, actually to me, really resonates in one particular way, which is that I have long thought that business software is too cheap. Because you talked earlier about, you know, Microsoft employees call it 100, call it a 5K tooling budget. That means that any individual product that you purchase for them has to be a fraction of that budget for tooling. So call it 1K that you might be able to access per employee. Well, that means that, you know, most of their comp is effectively, their comp is just a huge multiple of their software spend. And that to me, always, always felt that the software that people were buying was too cheap. Like, we couldn't run without

• 38:24Speaker 00

  Slack and we probably pay 15 bucks a month for my individual Slack seat.

• 38:28Jason Calacanis?

  Something like that, yeah.

• 38:29Speaker 00

  That's insane. Like, it should cost you $1,000 because it's that important to me.

• 38:34Jason Calacanis?

  Well, then there's always like, is there another solution out there that you can get? If it was $1,000, I would use the open source one. There's an open source version of Slack and I would put my own server up. So there is a breaking point where buy or build does come into people's thinking.

• 38:50Speaker 00

  So that's why I like the idea of saying, okay, we can't get the full value for our software because it's too cheap to make. So we're getting screwed on price essentially. Yeah. So what if we just go buy the business and then get the upside? So that resonates with me. I just think that. Venture capital funds have gotten too large for their underlying asset market. And so to see this happen is not a surprise, but it's not going to be easy.

• 39:12Jason Calacanis?

  And it's another way to, it is another way to put more money to work.

• 39:14Speaker 00

  Yeah. All right. Autopilot, Jason, we have talked a lot about these companies that allow you to mimic someone else's portfolio, be it a hedge funder via their 13F filings, or perhaps a favorite politician who does very well in the public markets. One of them is called Autopilot. They're a very cool company.

• 39:30Jason Calacanis?

  I know them very well. Yeah.

• 39:32Speaker 00

  Very impressed to discover the other day that they have reached $750 million in AUM, assets under management, kind of, but the way Autopilot actually works is that your money stays in your Fidelity or Robinhood account, whatever. And then they just execute trades for you, but it means they have now three quarters of a billion dollars in linked funds that are tracking these portfolios. And that to me is starting to smell like actual market share because once you get to a billion in AUM, in my view, you've kind of proven market demand for this. And with their business model of charging just quarterly or annual payments to track a fund, it's a pretty recurring, easy business. So I'm kind of in love here and I wanted to get your take on if this number is as big as I think it is.

• 40:15Jason Calacanis?

  No, it's not a huge number and they don't actually custodian the stuff. I just sent you a link. They've been tracking my trades that when I was publicly doing them on J. Trading and they were using me in their marketing. So I had to tell them like, hey, pump the brakes. And I guess they still have a page up with my name on it because I, you know, I, I don't like people to use my image to promote their products, but they're a nice group of people. I actually went to the Knicks game with them. And what they do is you can like copy the trades of Michael Burry from, you know, the, the big short fame or Nancy Pelosi's trades, you know, people who put their trades out there. Of course you wouldn't be trading them exactly in real time. It's a decent idea, but I think their idea is to have people pay to subscribe.

• 40:58Jason Calacanis?

  So you would pay me a subscription fee, which I don't like, I don't want that heaviness on me. That you're following my trades. You could also, I could, somebody pitched me on creating an ETF for J. Trading. Like you can create your own exchange trading fund. But then again, I don't, I already have people like following me into startup investing from the syndicate and from our funds. I don't want to like do that for day trading as well and then have people lose their money or whatever.

• 41:24Speaker 00

  Would you pay 30 bucks a quarter to track Nancy Pelosi's trades? Because 400 million of the 750 million is tracking Pelosi.

• 41:33Jason Calacanis?

  Yeah. So, you know, they, I don't think they make any money on that number. So if they were making 1% or 50 basis points on it, that would be interesting, I guess. They would be making seven and a half million dollars a year and they could keep growing it. Like Wealthfront has a certain amount under management. So AUM, if you were getting paid for it, it'd be cool. But no, I wouldn't. I, you know, I'm a big fan of like you are like index funds and, you know, advise people to not do this, but there are people who like to trade and, but I think they need people to actively participate who are explaining their trades while they're doing it. But I think it's a small market. So I think it's, it's going to be challenging for them to figure out an actual business model. But they're very good. This team over there is incredibly good at social media.

• 42:16Jason Calacanis?

  So they have the Nancy Pelosi tracker that they do.

• 42:18Speaker 00

  Yes, yes.

• 42:20Jason Calacanis?

  On social media. Yeah. And it's not like disclosed. So they, it's like a very interesting thing. We talked about, I think, last week or the week before, doing viral things like that.

• 42:32Jason Calacanis?

  The thing Cyan Banister was doing, showing her iPhone usage, right? And so these little viral hooks, like the Nancy Pelosi tracker or whatever, they can help you get customers and get attention, but you still have to build a really core, strong business.

• 42:47Speaker 00

  Elsewhere in this space is a company called Dub that is similar and backing autopilot. Just to give some venture shout outs here, Incline Ventures Group, Nomad Ventures, and your friends over at Kraft, Jason, are also part of the autopilot capital base. All right. Um, let's talk really quickly about brain computers. We didn't get to this the other, the other week, but Cimfor did drop some news that Neuralink, which makes the kind of brain computer insert thing, they say has closed 600 million at a $9 billion valuation. There had been reporting about a $500 million round at 8.5. Seems that that went well, but even more recently, a competitor to Neuralink called Paradomics,

• 43:28Speaker 00

  which I know about because NEOM, the Saudi Arabian

• 43:34Jason Calacanis?

  City?

• 43:35Speaker 00

  City project thing.

• 43:36Jason Calacanis?

  Yeah.

• 43:36Speaker 00

  Invested in them. Scratch your head about that one. Uh, anyways, they just, for the first time in May, they just announced this. They did their first, um, insertion of their brain computer implant and then took it out again with the patient that was undergoing brain surgery already to kind of prove it out. But this means that there's now four companies, uh, that have done this Neuralink, Precision Neuroscience, Synchron, and Paradomics that are all working on brain computer interfaces. Neuralink is the most famous, of course, but there's four of them now, Jason. Here's my, here's my thought bubble. Is this the next self-driving project? The thing that's currently in the lab, but in five to 10 years, we're actually going to get to use because I want one of these. This sounds awesome.

• 44:17Jason Calacanis?

  I don't know when this comes to civilians, uh, or soldiers or body hackers, but, uh, if there's four people working on it and, you know, it can make person who's paralyzed eventually walk. Or, you know, a blind person see or, you know, any kind of these neurological diseases. I mean, that's incredible.

• 44:40Speaker 00

  Uh, and for those of you watching the video, I just pulled up a image. It's a chart, uh, from Neuralink from their February blog post showing the number of monthly hours of independent brain computer interface usage. In 2024 for, uh, their first three implants, I believe. So it's, uh, three gentlemen, Nolan, Alex and Brad. And Jason, as you can see, the chart goes up and to the right. So these people that got these implants are using them more often.

• 45:05Jason Calacanis?

  Independently, so is it brain BCI is brain computer interface? Am I correct? Okay, so they're use, it says here that the top user, Nolan, is using it for 350 hours a month for the last three months up from.

• 45:22Jason Calacanis?

  Yeah, I guess when he got it in January, February, using it for 50 hours a month. So that means he's learned how to use it, wants to use it, comfortable to use it, I guess. Um, but 350 hours, that's 10 hours a day?

• 45:37Speaker 00

  Yes, that's what I was going to get to is 10 hours a day is essentially all the time because otherwise you're sleeping, using the bathroom, whatever. Like there's some other stuff you do in the day. But 10 to 12 hours a day, that's essentially your waking, working hours. So to me, that's full time. That's impressive.

• 45:52Jason Calacanis?

  I, I would love this for, uh, dreaming. Like I would love to. I mean, speaking of LLMs hallucinating, like imagine you had this and you were like, I would like to have a dream about being Indiana Jones tonight, or I would like to dream about like my life and what's possible for me. I'd like to have a dream, you know, to do creative things. I know it sounds crazy. It was this awesome Catherine Bigelow movie. I don't know if you ever saw it, Strange Days. If you haven't, you should watch it and we should talk about it next week. It's a, we'll have Lomb back on the show and talk about Strange Days. It was a brain computer interface.

• 46:27Speaker 00

  Oh.

• 46:28Jason Calacanis?

  And you could record and replay other people. So if I was in Singapore, I could record my trip for my first person.

• 46:36Speaker 00

  Uh huh.

• 46:36Jason Calacanis?

  You could then wear my helmet of me at that Hawker, you know, getting the satay and you could experience eating the satay just by wearing that and playing essentially that movie. And I won't spoil it for you with Strange Days, but it's essentially people doing crimes while wearing these helmets and then people playing it back and all kinds of weird stuff occurs. Every permutation, yeah.

• 47:01Speaker 00

  Yeah, but if we get to that point, I'm shorting every airline stock there is because if I can just put on a helmet and go eat the best hot pot, you know, I'm, I'm gonna stay home.

• 47:10Jason Calacanis?

  Or you could like experience going on a, you know, SEAL Team Six, you know, and go whack Osama bin Laden yourself and have that experience of like flying in, landing. I mean, forget about Call of Duty. Can you imagine?

• 47:25Speaker 00

  Yeah.

• 47:26Jason Calacanis?

  You could play that back. Like that is literally possible. Or I could ski down, you know, Everest or something. Like there was somebody who, you know, boarded or skied down some part of Everest. Like they could record the experience and then you could experience it. Like whoa. Or Alex Honnold, the guy who climbs without a rope. Imagine experiencing that.

• 47:48Jason Calacanis?

  Pass.

• 47:49Speaker 00

  No, no, no, no, thank you on that one. But what I care about mostly is I I'm trying to remind myself every day that the future that I thought a lot about when I was a kid is kind of here. Like, private space industry is going is going to be a real thing. Voyager Technologies is going public. They're working with Airbus on Starlap, a private space station. We have functional AI. We have brain-computer interfaces. We have self-driving cars. No, I don't have a hoverboard yet. But like, a lot of stuff is kind of getting its way here. And I'm trying to remain optimistic and excited about it while we deal with the ins and outs of the daily news cycle. So that's kind of, I wanted to bring it up really under that umbrella, that this is awesome and we should be pretty excited, like, we should be jumping up and down, man.

• 48:32Speaker 00

  Brain-computer interfaces are real and they're not good enough yet. They're still experimental, but it makes me very, very happy to see. All right, Jason, let's talk about some IPOs really quick. We have some news for some, uh, some major liquidity. First of all, Chime, the American neo-bank that raised a roughly $26 billion valuation back in 2021, has declared its first actual IPO price range. And, uh, they are targeting a $24 to $26 per share price, which would put their valuation, according to the information, I did not get time to actually recalculate this myself, but they say that puts them at between a $10.3 and $11.1 billion valuation. We had heard, Jason, they were looking at an $11 billion price tag.

• 49:16Speaker 00

  So my guess is they're going to try to raise this range at least once before they list. But, uh, they would be worth at $11 billion, 5.3x their Q1 revenue annualized. And I pulled the numbers. New Bank, the very high-performing, uh, South American neo-bank, is 4.5x its Q1 revenue annualized. So they're going to get a slight premium to New Bank at their current valuation, which, all things considered, it's a down IPO, but it still seems pretty healthy to me. Thoughts?

• 49:44Jason Calacanis?

  Incredible, yeah, no, I'm, I'm a New Bank shareholder, one of the venture firms I was in. At some point a couple of years ago, shipped me a bunch of New Bank shares. I looked into it. Warren Buffett loves this company. These new banks are crushing it. Yeah, I'm, I'm holding it. It's at $12 a share or something, and it's worth $40 or $50 billion and growing, so.

• 50:04Speaker 00

  So we got Chime setting their valuation range. Circle is going to be going out.

• 50:10Jason Calacanis?

  And do we have any other ones that are going out?

• 50:12Speaker 00

  Or? Well, the Circle thing is really interesting because not only are they going to list very soon, and I'll talk about dates in a second, but they just increased the size of their IPO. So they were going to sell 9.6 million shares. Now they're going to sell 12.8. And also they raised their range from 24 to 26 to 27 to 28. Back of the envelope math that brings their valuation up to 6.8, 6.9 billion up from 6.2. Bullish for stablecoins shows institutional demand for it. So I think that's pretty good. And then finally, Voyager Technologies, the company that I mentioned earlier, Jason, it's kind of a roll up of space technologies. And then the Starlab partnership with Airbus, they're going to list at a $1.6 billion valuation, we think. And Circle is going to go out public this week and then Voyager and Chime next week.

• 50:55Speaker 00

  So by June 12th, we should have all three of these companies through the IPO cycle.

• 50:59Jason Calacanis?

  That's wild.

• 51:00Speaker 00

  Public, I know.

• 51:02Jason Calacanis?

  Wow. And we had all this M and A, we had two DoorDash acquisitions, two OpenAI acquisitions, and one Salesforce acquisition, a big one, so.

• 51:12Speaker 00

  Is it enough, though? My question is just this, let's say we get these three IPOs out, we had CoreWeave earlier, we've had a number of exits. Has enough value been unlocked that VCs have had a cool drink of water after a long walk in the liquidity desert? Or is this still just an absolute dusting?

• 51:29Jason Calacanis?

  There's going to need to be a lot more IPOs. I think SpaceX and Stripe and, you know, all these other major things are going to need to make their move for, or one of those two probably, I think Stripe more likely. But that, you know, they keep doing these secondary shares. So I think a lot of the shareholders in those ones specifically could get liquidity if they wanted. But the public can't participate in these things and the public really wants to participate in these things. So I think that will be a big boost for confidence when Stripe goes out. Or SpaceX or Starlink if they were to spin it out. I don't have any information on any of those things.

• 52:10Jason Calacanis?

  But what I like about all of these is these are all sub $10 billion valuations. Very significant companies, but these are companies that are priced like private market companies we saw over the last 10 years. So, you know, then we just talked about Grammarly and Coda. You know, maybe it's time to start saying, you know what? This inventory has been 10, 15 years in the market. Start putting two or three of these companies together, consolidate the management. Lower the costs, increase the earnings and get these companies public so that, you know, people can participate in the next generation of great companies. And we really do need to see M and A in, you know, a lot of this mid-market space. The fact that Lyft

• 52:54Jason Calacanis?

  and DoorDash and Uber and, you know, Grab, where I was, I hung out with the Grab founder, Anthony, when I was here in Singapore. The fact that all these companies are still independent, you haven't seen like the next wave of major consolidation there is weird to me. I would very much like to see like Pony AI and We Ride and some of those Chinese companies merge with Uber or DoorDash or whatever. We could see so much more interesting stuff happening, which would allow things to move even faster and solve even bigger problems.

• 53:28Speaker 00

  And this is what I said about the Grammarly general catalyst deal the other day in the blog. I can't read this out loud because it involves profanity, Jason, but the gist is if you want access to capital, you could go public and then have a liquid currency and then you wouldn't have to, you know, rent capital from your, your private market backers who are supposed to be equity investors. So I'm on, I'm on board with you here. I just don't see why a company with 700 million in revenue, a potentially what 10, 12, 13 billion dollar market cap when it goes public, needs to operate like it's still getting an allowance.

• 53:59Jason Calacanis?

  Yeah, I mean, I think even if they were public, they might have a credit line. You know, that's, that's not atypical. We don't really, a lot of times when we're on the outside, we don't know what they need to accomplish to get public or feel confident about it. It's probably having predictable growth is the other piece. So you have top line revenue, then you have the predictability of the revenue, which is critically important. And I guess in their case, they wanted to also, you know, get towards that profitability. So I wonder if money losing companies could go public into this market. Could Uber, you know, losing money go public today? I don't know. You know, that's a, that's another issue. You know, how profitable do you need to be? How close to profitability do you need to be?

• 54:43Speaker 00

  Can we, can we turn that bit of advice back on the early stage? Because I think a lot about revenue predictability in a SaaS context, as in SaaS has a lot of it. And also, as you said, in a pre-IPO context. But when you're a seed stage company, pre-seed stage company, how predictable is your revenue? And how much do investors care about that? I'm actually not sure, so I'm just kind of curious.

• 55:02Jason Calacanis?

  Oh, yeah. I mean, when you're on a small number, let's say you have a thousand customers and they're paying you $5,000 a year each and you're at 5 million. And then you release like a VIP part of the product and it costs a million dollars a year and you start going after big customers. Like all of a sudden, one customer could increase your revenue 20% and then one of them cancels, your revenue can go down 15%. So this actually kind of thing happened to Slack. If you remember Slack was working on these seven-figure deals, was like a big push with them, seven and eight-figure deals. They were trying to get people to pay $10 million for Slack. I don't know if they ever did that, but they were definitely getting people to pay low millions, like I think, you know, a Twitter or whatever, it might be paying a million

• 55:44Jason Calacanis?

  or 2 million to have Slack in their organization, which when you think about that versus buying and building, like, why wouldn't, if it's a million dollars, or once it gets past a million dollars, you gotta think, well, maybe I could put three developers on building our own and make something proprietary and better, which is what Google does, right? Google has their own, Facebook has their own. So back to that earlier pricing conversation, but yeah, it's, it can be lumpy. You have a small number of customers, you lose one, one of them doubles their spend and takes you national, because a lot of times you're in pilots. We actually saw that with CoreWeave, didn't we? Like, didn't CoreWeave have a, what, they had one customer who was 60% of the spend?

• 56:26Speaker 00

  Yes.

• 56:27Jason Calacanis?

  And I was like, whoa, what happens if they're?

• 56:30Speaker 00

  It was, it was the most extreme revenue concentration we've ever seen, except for Cerebus Systems, who mostly sells to G42, and they had actually even worse revenue concentration. But I mean, there's only so many hyperscalers in the world, Jason, who had this much need for, for compute power. So I think it's going to be lumpier for them. But I appreciate the context about startups, because when you don't have a lot of customers, maybe having lumpy revenue is good, because it means you've got a new big customer, which implies that you're doing something right. But maybe that's not as attractive later on when you're going to go public. But I just like to think about what startup founders need to have to reach that next, you know, milestone of funding or milestone of maturity. So I appreciate that.

• 57:11Jason Calacanis?

  Yeah, talking to customers is always what investors do. You know, you start talking to the top two or three customers and understanding them and those customer references do drive the deals. What's going on with Lauren Powell and Johnny Ive doing an interview in the FTA? I saw that go across the wire and I saw that on the docket. What's going on there?

• 57:30Speaker 00

  All right, so Lauren Powell Jobs has invested in some of Johnny Ive's work, not a huge surprise, given their long ties to the Apple empire, let's say. And they gave an interview to the FTA talking about technology. And I just pulled out the two quotes that I think are the most interesting. So Johnny Ive, for more context, he's working on his design collective called Love From. He had a project with OpenAI that eventually became called I/O. That's what was sold to OpenAI for six and a half billion. And Johnny Ive is now going to work with Sam Altman on design and such. You and I were generally bullish on this because it's about 2% of OpenAI's value. So why not take a flyer on this, et cetera?

• 58:12Speaker 00

  Anyways, Ive said in relation to humans plus devices, and I quote, "Many of us would say we have an uneasy relationship with technology at the moment. I'm guessing this includes screen addiction and the harms caused by social media. Whatever the device is, driving its design is a sense of we deserve better, humanity deserves better." And like on one hand, yeah, but on the other hand, Johnny, where did you get all of your money? Was it from iPhones?

• 58:39Jason Calacanis?

  Yes, but I think he's actually throwing Zuckerberg and social media under the bus, which they didn't participate in. Like they were trying to do something for families, for iMessage, smaller groups. So I think he actually, they have a leg to stand on there, which is, and they also put in the screen time tools. So it's not like you see, it's not like you see Zuckerberg being like, "Hey, by the way, you've been using Instagram a whole bunch. You want to slow it down? And here's what you've been doing and how much time you're wasting on Facebook and Instagram." So they, and they, they never liked Zuck and they never liked, you know, the, you know, the way they were tracking people for advertising. And they created all this technology inside the iPhone to block and kind of stick it to Zuckerberg.

• 59:22Jason Calacanis?

  I think that's kind of what he's doing in that. That's how I read that statement. But what did Lauren Powell Jobs have to say?

• 59:29Speaker 00

  All right. So she said, After noting that technology is very, very cool. So she's not a downer here, but she did add, "We now know unambiguously that there are dark uses for certain types of technologies. You can look at the studies being done on teenage girls and on anxiety in young people and the rights of mental health needs to understand that we've gone sideways. Certainly, technology wasn't designed to have that result, but that is the sideways result." And I'm sympathetic to this. Jason, you've got older kids than I do.

• 59:57Jason Calacanis?

  I've been talking about this like crazy and I think she's also going after Zuckerberg and specifically Instagram because those studies were about Instagram. So this to me seems like a setup. The two of them are going after Zuckerberg and the addiction of social media through those devices. I wonder if they're going to do something that is maybe a little more stripped down and maybe pushes you to make better use of your time. What if the device through AI pushed you to make good use of your time?

• 1:00:33Speaker 00

  So let's talk about good use of your time and that would mean spending time with other humans, going outside, the things that I should do more.

• 1:00:40Jason Calacanis?

  Educational content.

• 1:00:42Speaker 00

  Okay.

• 1:00:43Jason Calacanis?

  Catching up with old friends. You look at Apple's cohort of applications. What do they focus on in their products? Journaling was that recent product. Meditation, breathing, your health, your heart rate. You know, they real sharing of photos, making these emoji characters to share them FaceTime. So they always felt like bringing people together, making people more human, making them more creative, creating equanimity. I wonder if like the device in question, you know, with Steve, with Johnny Ive that he's doing is going to be something more stripped down. That's an AI that points you to things that are better for you and takes you away from things that are worse.

• 1:01:28Jason Calacanis?

  So if it said to you, hey, you know, you've been spending a lot of time on your, on your social media. What do you think about maybe setting up a dinner with somebody? And or can we give you some ideas of things that you might be interested in? You know, you showed some interest in these two stories. Would you like to, you know, pursue that and do something more educational? In the Southeast Asia, all these countries are turning off video games for kids at 6pm.

• 1:01:55Speaker 00

  China was big on that for earlier.

• 1:01:58Jason Calacanis?

  Indonesia is doing it. I mean, it's becoming like a thing here because they had the addiction problem and they can, you know, pass laws in a, in a more extreme way, but I'm super for this Texas law and making kids be 16, 17, 18 before they use social media. So I, I get the sense that they're doing this discussion with FT strategically around the new device that they're working on and trying to protect Steve Jobs' legacy, that this wasn't an iPhone issue. This is a social media Zuckerberg. That's my read.

• 1:02:27Speaker 00

  I really, that framing is much better than mine and I, I appreciate it. I'll just say this, it does put a lot of pressure on what the device eventually is and what it does because this is, if you criticize before you release, you're saying, you know, it's a put up or shut up moment. And so that's, I have higher expectations now for what this device is going to be. So I think that's important.

• 1:02:48Jason Calacanis?

  They think they have the goods, I'm sure. And I think this puck idea that is listening to you and doing all this stuff, I just have one thing to say, the puck. I don't like this idea. I don't like the idea of wearing pendants or pucks and recording your day. That, you can bleep out the Fs, please, Chris. But I hate this stuff. I hate the idea that people are going to want to record everybody. I just got these meta glasses. We talked about it in a previous show. These lights are, need to be blinking red. And same thing for these pendants and the puck, the same thing. I don't like any of it.

• 1:03:23Speaker 00

  All right. So those two are saying, you're saying the puck, which means that we're going to have no friends at all by the time this is over with.

• 1:03:32Jason Calacanis?

  I don't care. Why should this week be any different?

• 1:03:35Speaker 00

  No, we're gonna, we're gonna let everyone go. But just before we do, a last note, perplexity is reportedly talking to Samsung, Jason, about a potentially huge tie up. Samsung could put money into the current perplexity round and also potentially ship perplexity as the AI of choice on its hardware starting next year. If this happens, a big contra Google move. We have our eyes on it, everybody. And Jason, I just want to ask, are you going to be back in the States for Wednesday's show? Are we going to be at regular time? Are we going back to Texas time? All right. So on Wednesday, folks, we'll see you then at the usual time. Until then, I'm Alex.