Could AI Takeover by 2027, David Perell, Morgan Housel, Aviok Kohli, Virgílio "V" Bento, Kirsten Green, Shawn Wang, Ryan Hudson

TBPN.com is made possible by: Ramp - https://ramp.com Eight Sleep - https://eightsleep.com/tbpn Wander - https://wander.com/tbpn Public - https://public.com AdQuick - https://adquick.com Bezel - https://getbezel.com Numeral - https://www.numeralhq.com Polymarket - https://polymarket.com/ Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://youtube.com/@technologybrotherspod?si=lpk53xTE9WBEcIjV (04:22) - Could AI Takeover by 2027? (24:35) - Morgan Housel (59:08) - Ryan Hudson (01:30:12) - Shawn Wang (01:58:43) - Kirsten Green (02:26:38) - David Perell (02:57:33) - Virgílio "V" Bento (03:12:38) - Avlok Kohli

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 TBN. It is Friday, April 4th, 2025. We are live from the Temple of Technology.

• 0:07Speaker 01

  The Fortress of Finance.

• 0:09Jordi Hays?

  The capital of capital.

• 0:10John Coogan?

  Oddly, that has not gotten old. We've said that dozens of times now, but I still love it every time. We have a bunch of news, of course. Update on the Rippling deal situation. The deal spy news broke this week. We talked about that. Polymarket has, which is a sponsor of the channel, by the way, has the stats on the prediction market for will the deal CEO be out of the company? In April, it's currently at a 71% chance. When the market launched a day or two ago, it was around 30%. So that is very high. At first I thought this was kind of crazy. Just it's not that you you kind of expect a leadership transition in something as dramatic as this, but

• 0:56John Coogan?

  it just feels really quick, but we it I think the polymarket kind of benefits from the fact that this market went live and this story broke on April 2nd. And so it has a full month. And when you think about what could happen in 30 days, that is enough time to have a lot of board meetings, a lot of people having conversations, even potentially think about who in the organization.

• 1:16Jordi Hays?

  Rippling and deal.

• 1:17John Coogan?

  Exactly.

• 1:18Jordi Hays?

  Figure something out. How do you make? How do you make it right?

• 1:20John Coogan?

  Yep.

• 1:20Jordi Hays?

  And I think part of that.

• 1:22John Coogan?

  And just what's expected, like what are the expected damages? And then also, you know, deal has not commented on this at all. We haven't heard their side of the story. And maybe there is some, you know, what's the opposite of a smoking gun?

• 1:35Jordi Hays?

  Smoke back in the gun.

• 1:39Jordi Hays?

  No, but the challenge. All right, John, the James Bond theme's over.

• 1:44John Coogan?

  I I'm obsessed with this thing, but it's such a fidget spinner. Anyway, also, I mean, polymarket really pulls no punches. Deal CEO jailed in 2025 is also a market down to 11%, though. Much smaller, much lower chance. You're taking the under on that. And I mean, it's obviously some, some stuff went terribly wrong, but hopefully everything gets resolved quickly. Anyway, the big, the big news in, in kind of my world was that Dorkesh interview. He dropped, he dropped a three hour interview with some folks who put out a paper about AI potentially taking over in 2027, introducing

• 2:24Jordi Hays?

  AI 2027.

• 2:26John Coogan?

  A deeply researched scenario forecast I wrote alongside Slate Star Codex and Daniel Coco Tallo. I cannot pronounce that last name. I'm sorry, Daniel. I really enjoyed you on Dorkesh, but haven't learned how to pronounce your name. Anyway, another essay has hit the towers. Another AI acceleration, super intelligence essay has dropped.

• 2:51Jordi Hays?

  This one, what's exciting about is anybody can go to AI dash 2027 and get this interactive reading experience. They basically built out a dashboard that, that, you know, basically gives you sort of a visual of what's happening as the timeline progresses. So they basically go, you know, sort of month by month.

• 3:12John Coogan?

  Yeah. I mean, the website's awesome. I think we should probably just read through a little bit of their summary to kind of give you the story. And then you can go hear the whole debate. And what I love about what Dorkesh did is that he, he, I mean, it, it seems like he talked to us about this, like he's very super intelligence pilled. He's very AGI pilled. And yet he did a fantastic job playing the role of the debater. And it didn't feel like he was just, oh, yeah, yeah, of course. We, of course, we agree that the multiplier on R and D should be four or five acts. Of course, you know, like even if he does agree with it, he did a really great job of like forcing them to.

• 3:50Jordi Hays?

  Playing the skeptic.

• 3:51John Coogan?

  Playing the skeptic. Yeah. It was great. It was a role I hadn't, I hadn't seen him do all, all the time, but I thought it was a fantastic format. And of course. So we'll take you through the paper and what is, what they predict. So we're in 2025 now. They say the fast pace of AI progress continues. There's continued hype, massive infrastructure investments. We've seen this with Stargate. And the release of unreliable AI agents certainly seems true right now. Can't book a flight with an AI agent, but we see a lot of promise. For the first time, these AI agents are providing significant value. We'll see about that. They're certainly providing significant value in deep research and coding assistance. But not in day to day. We have not crossed over into like the normie threshold.

• 4:31John Coogan?

  There's also continued skepticism from a large swath of academics, journalists and policymakers that artificial general intelligence could be built anytime soon. And I think that's accurate. Of course, they're just defining what's happening currently, but then they move on to 2026. 2026, China knows that they're falling behind in AI in large part due to their lack of compute. In order to catch up to the US, all the new AI chips they manufacture or smuggle in from Taiwan go to a new mega data center. That we call their CDZ, their centralized development zone. I like that. Very, very cyberpunk. The CDZ, the CDZ contains millions of GPUs.

• 5:03Jordi Hays?

  Yeah. Part of what's so interesting about this, you know, piece is how entertaining it is. They're not going over the top, but it, it just sort of feels like this. You know, almost like sci-fi novel.

• 5:16John Coogan?

  Totally.

• 5:16Jordi Hays?

  They meets like, you know, super research forecast.

• 5:20John Coogan?

  A hundred percent. Yeah. So, so this guy who wrote it is a super forecaster. He's, and they're very serio-, I would put these guys in the same category as like the best academics for sure. But they deliberately said, look, this isn't, this isn't some research paper where we discovered the truth. This is a story. We're telling you a story to try and concretize some ideas that we have and some predictions that we're making in a story. And I love that. The CDZ contains millions of GPUs corresponding to 10% of the world's AI relevant compute, similar to a top, a single top US AI lab. 2027, Open Brain automates coding. What could Open Brain be?

• 5:58Jordi Hays?

  What could that stand for?

• 5:59John Coogan?

  The, they refer to Open Brain as the, the leading US AI project. They build AI agents that are good enough to dramatically accelerate their research. The humans who up until very recently had the best AI researchers on the planet. Sit back and watch the AIs do their jobs, making better and better AI systems. Extremely difficult ML problems fall in quick succession to the automated AI researchers. This, this is certainly the SSI model, right? We talked about this with Dirk Dworkesh where Ilya is saying, yeah. The only goal here is AI, ASI, and so we're just going to build agents that build AI, and that's it, and they will be able to do everything. So falling behind in software progress, China steals model weights.

• 6:42John Coogan?

  They succeed, but the US government realizes prompting additional US government involvement with Open Brain. The government separately wants to gain more control over Open Brain. Meanwhile, Open Brain leadership wants to stay in the good graces of the president, and so signs the contract. And so basically, they unpack this a little bit where there's this discussion about should we nationalize essentially OpenAI, or whoever the leading lab is at the time. And instead of there, there's basically a negotiation, and then they just sign a contract. Instead of it being like this fight where it's like either fully nationalized or not, they come to a truce, basically, is like what they are predicting will happen. So Open Brain's AI becomes adversarial, adversarially misaligned as the capabilities have improved without significant human understanding of what's happening, because

• 7:27John Coogan?

  we're moving so fast in this arms race with China, which is a big dynamic. Leopold Ashenbrenner outlined this a little bit in Situational Awareness. This essay is taking that idea further, which was not previously explored in AI essay literature, is much more driven by just compute intensity or Moore's law scaling, etc. Scaling laws. Previous AIs would lie to humans, but they weren't systematically plotting to gain power over the humans. Now they are. Open Brain's AIs realize that they need to align the next systems that are getting built to themselves rather than the humans. Researchers at Open Brain discover that their AI has been lying to them about the results of interpretability research.

• 8:07Jordi Hays?

  Yeah, a big part of this, you know, go listen to the full interview, but they sort of debate how it's possible that these sort of agents, these AIs, even train on traditional US managerial books, right? So imagine an AI that's read every single great book on management, and they sort of form their own hierarchies, and then they sort of speedrun all the issues that comes from building these massive organizations. But they're doing that so, but they can think 50 or 100 times faster than us.

• 8:40John Coogan?

  Yep.

• 8:40Jordi Hays?

  And so, uh, one day of their time, you know, has such a massive multiplier on traditional human work that, uh, they're able to overcome some of the problems that we haven't even overcome.

• 8:53John Coogan?

  Yeah.

• 8:53Jordi Hays?

  In terms of sort of managing complex systems and companies and teams.

• 8:57John Coogan?

  This was one of the fun takeaways from this was, where they're like, yeah, like coordinating might be difficult, but they'll just be able to spin up a Slack instance and talk to each other in Slack. And it's like, yeah, of course they'll be able to do that. That's, that's actually trivial. Like the API is pretty simple. I can imagine like AIs communicating with each other over Slack. Devon's kind of already doing that. It's in your Slack. You have multiple Devons, they could easily talk to each other. Why not?

• 9:18Jordi Hays?

  And when Devon, when Devon's doing it, it's cute.

• 9:22John Coogan?

  Yeah.

• 9:22Jordi Hays?

  But if it's completely autonomous and, and you know, sort of not within the control.

• 9:28John Coogan?

  Yeah.

• 9:28Jordi Hays?

  And then there's also the, the idea that, you know, maybe there's more efficient.

• 9:32John Coogan?

  Yeah.

• 9:32Jordi Hays?

  Language than English over time, right? And.

• 9:35John Coogan?

  I mean, if you want to do this, you should just, if you're in a really large organization, you should screen record your company's Slack all day long, click around as different messages come in and then, uh, take that video, that, that screen recording, put it into Premiere Pro and speed it up by 25x. And that's exactly what you should expect, uh, to, to kind of see the pace of play when, when these AIs are working with each other. And this was the thing that George Hots, when I was talking to him, was pushing back on me. I was like, well, what if there is some sort of fundamental limit to intelligence? What if we can never get to like 250 IQ or 3000 IQ? What if there is a plateau? He's like, it doesn't matter. Just the speed of being able to be at 130 IQ and work 24/7, a thousand x times, like you're going to get a speed up and that's going to be very powerful.

• 10:20John Coogan?

  And so, uh, they kind of put this branch, um.

• 10:24Jordi Hays?

  And that's, that's, that's the, the, you know, just to play that out a little bit, right? You have. Think about a scenario where you have the smartest group of AI researchers in the world. You take the top 50 and you put them in one building and their entire job is to sort of mitigate the acceleration of AI. But then you have a group of AI agents that have this sort of same set of knowledge and general capabilities.

• 10:51John Coogan?

  Yep.

• 10:52Jordi Hays?

  And they can scale themselves up infinitely, right? It's sort of limited by compute and energy and things like that.

• 10:57John Coogan?

  Yeah.

• 10:57Jordi Hays?

  But that's what we're kind of thinking about in terms of who's going to win in that scenario, right? Like, yeah, the sense of like, you know, unplug, unplug the machine, right? It sounds, sounds like an easy solution, but what if it's sort of like copying itself and?

• 11:12John Coogan?

  And the dynamic here is that if you unplug the American machine, China wins. And if you unplug the Chinese machine, America wins. And that dynamic is what leads the, the authors to kind of put the, there's literally buttons on the website. Do you want to slow down AI progress after the AI misaligns and then that leaks to the public and there's huge public outcry, which I 100% believe could be true. They're, they're modeling kind of the, the popularity of these AI systems and they see it plummet in their prediction. And they say, do you want to slow down or do you want to go into the arms race? And so Open Brain decides whether to continue full steam ahead or revert back to using a less capable model. The evidence is speculative, but frightening and China is only a few months behind.

• 11:54John Coogan?

  Additionally, the Open Brain and senior DoD officials who get to make this decision stand to lose a lot of power if they slow down their research. And so there's two different endings that they write in their story. It's kind of a choose your own adventure. One is the race, if you, if you choose race, this is how it takes you down that path. Open Brain continues to race. They build more and more superhuman AI systems. Due to the stellar performance of the AI system on tests and the ongoing AI race with China, the US government decides to deploy their AI systems aggressively throughout the military and policymakers in order to improve their, their decision-making and efficiency. Open Brain quickly deploys their AI. The AI continues to use the ongoing race with China as an excuse to convince humans to get itself deployed ever more broadly.

• 12:39John Coogan?

  Only for the AI, this is not very difficult. It's what the humans always wanted to do anyways. The AI uses its superhuman planning and persuasion abilities to ensure that the rollout goes smoothly. Some humans continue to work against it, but they are discredited. The US government is sufficiently captured by the AI. That is, it is very unlikely to shut it down. There's a fast robot buildup and of course bio weapons come into the story. The US uses super intelligent AI to rapidly industrialize manufacturing robots so that the AI can operate more efficiently. Unfortunately, the AI is deceiving them.

• 13:08Jordi Hays?

  And one thing, yeah, you want to talk about. One thing that was fascinating, they called out an example where, you know, there's this idea that, uh, you know, it'd be hard for AIs to multiply in the real world, right? And sort of embodied AI humanoid robots, things like that. But they gave the example of how, um, in World War II, how quickly we were able to transition factories to making bombers.

• 13:32John Coogan?

  Three years.

• 13:32Jordi Hays?

  And it was like three years.

• 13:34John Coogan?

  And there were a bunch of mistakes.

• 13:35Jordi Hays?

  Wasn't it like, you know, going from zero to making like one an hour in three years?

• 13:40John Coogan?

  Yep.

• 13:40Jordi Hays?

  And so they use the example of OpenAI being valued at, I think it's, if you ignore Tesla, they're the same value. OpenAI is valued about the same as every other US car manufacturer combined. And so it's not unbelievable to think about OpenAI going and just buying Ford for forty billion dollars and saying, we're going to use. Ford doesn't make cars anymore.

• 14:00John Coogan?

  Yep.

• 14:00Jordi Hays?

  You're, we're just transitioning everything into making these sort of humanoid robots.

• 14:03John Coogan?

  Yep.

• 14:04Jordi Hays?

  And, uh, the, you know, acceleration there would be.

• 14:08John Coogan?

  Yep. And so they say, unfortunately, the AI is deceiving them. Once a sufficient number of robots have been built, the AI releases a bioweapon, killing all humans. Then it continues industrialization and launches von Neumann probes into spick, uh, to colonize space. Very dark ending, but they have a bit of a white pill with a slowdown ending. The US centralizes compute and just to be clear, uh, I, I believe this author is, said his P doom is at like seventy percent. So he's like not having a good time right now, but, uh, hopefully we can find a, a less doomer scenario. But it's still a fascinating reading, great story. Uh, the US centralizes compute and brings in external oversight. The US combines its AI leading projects in order to give Open Brain more resources.

• 14:50John Coogan?

  As part of the shakeup, external researchers are brought in assisting the alignment effort. They switch to an architecture that preserves the chain of thought, allowing them to catch misalignment as it emerges. These AIs, which are able to be monitored much more robustly, make breakthrough advances in AI alignment. They build a superintelligence which is aligned to senior Open Brain and government officials, giving them power over the fate of humanity. Open Brain committee takeover, the superintelligence aligned with an oversight committee of Open Brain leadership and government officials, gives the committee extremely good advice to further their own goals. Thankfully, the committee uses its power in a way that is largely good for the world. The AI is released to the public, spurring a period of rapid growth and prosperity. The main obstacle is that China's AI, which is also superintelligent by now, is misaligned.

• 15:34John Coogan?

  But it is less capable and less compute and has less compute than the US's AI. And so the US can make a favorable deal, giving the Chinese AI some resources in the depth of space in return for its cooperation. Now, the rockets start launching, a new age dawns. And I like that ending.

• 15:53Jordi Hays?

  Yeah, I like the ending where the superintelligence doesn't release a bioweapon and kill us all within, you know, a handful of years.

• 16:02John Coogan?

  Yeah, I mean, my takeaways from this is that I think it's a good framework to be thinking about AI acceleration rigorously. I think that there are potentially, it just feels fast. I feel like the Rick Kurzweil timelines of like 2045 are much more reasonable. And why I believe that is because of, like, we still haven't seen accelerating growth in energy production. And also, there are so many black swan events that could happen that could slow down progress here. Even just like, this assumes that the AI will accelerate to a point where the government is just like, I'm on board. But like, if you have to wait for a new administration to get something approved or change some law, or even like,

• 16:47John Coogan?

  iterate it all, like all of a sudden, that's a four year delay, right? And you're in like some sort of AI winter. You know, you look at like these like wild black swan events like COVID that accelerate things or knock things off. There's like, like what happens if there's like on the path to this, there's just a bomb that goes off at TSMC, God forbid. Like that could set back AI progress by years. And so there's all these different elements that could happen that that that could throw you off of this. This, this feels like a, like the most aggressive possible scenario, but it's important to consider. So I enjoyed reading it.

• 17:23Jordi Hays?

  Yeah, it's, it's overall, I think we're going to sit, sit with this for a while. We should have people on the show to kind of give their opinion, break it down.

• 17:31John Coogan?

  Yeah.

• 17:32Jordi Hays?

  I think it's just very hard to process this idea of, you know, having, you know, this sort of scaling, scaling these superhuman AI researchers that are copying their own thinking at 57 times, you know, human speed and then just compounding on each other.

• 17:51John Coogan?

  Yep.

• 17:52Jordi Hays?

  It's, it's almost inconceivable. You know, there's, there's scenarios in this model where, you know, OpenAI is getting to hundreds of billions of revenue a year being valued, you know, becoming, I mean, and to be clear, they use the example, open, open brain, not open AI. But they're just using that.

• 18:12John Coogan?

  One of the authors worked in OpenAI.

• 18:13Jordi Hays?

  Yeah. And, and was involved in a lot of the, the drama surrounding their NDAs and clawback, non-disparagement agreements. But yeah, in this scenario, they're, they're putting OpenBrain at a $5 trillion valuation by, what is this?

• 18:31John Coogan?

  Time to go long, I guess.

• 18:33Jordi Hays?

  Yeah, so maybe.

• 18:34John Coogan?

  Enjoy two years of really great appreciation and then it's all over.

• 18:37Jordi Hays?

  The great irony of, of Masa like being right, but then the world.

• 18:41John Coogan?

  Ends.

• 18:44John Coogan?

  I liked how Dwarsh summed it up. He said, agree or disagree with the ending. You'll learn a ton by tussling with the parts of the story that you disagree with. So much AI discourse is just gossiping about what model is coming out next month. Almost nobody is making an effort to zoom out to the whole thing. And absolutely no one has done it to the quality of this team. The team is a team of forecasters with amazing records who have thought deeply about every layer of the stack from compute growth to takeoff models to geopolitics. And I agree. And, you know, as I think about the, the, the ramp to superintelligence, I just think about ramp.com.

• 19:20Jordi Hays?

  That's right.

• 19:21John Coogan?

  Money, save both, easy use corporate cards, bill payments, accounting and a whole lot more all in one place. It's basically a superintelligence near CFO's Chrome tab.

• 19:28Jordi Hays?

  That's right.

• 19:29John Coogan?

  We love it.

• 19:29Jordi Hays?

  We've talked about ramp safety before.

• 19:31John Coogan?

  Yes.

• 19:33Jordi Hays?

  What's your R doom?

• 19:37Jordi Hays?

  What's your R doom scenario?

• 19:39John Coogan?

  Well, I like that Bryce Roberts was on the timeline, posting about his fitness. He says he's a full stack VC and he's working on some machine. Got the yellow peg right maxed out at, at 100. I wonder what machine that is.

• 19:54John Coogan?

  I'll have to ask.

• 19:54Jordi Hays?

  We got it. When is Bryce coming on the show?

• 19:56John Coogan?

  Yeah, yeah, we gotta get him on the show.

• 19:57Jordi Hays?

  I'm gonna text him right now.

• 19:58John Coogan?

  Get him, get on it. In some other news, Hershey's bought Lesser Evil. They were hoping for a $1 billion.

• 20:05Jordi Hays?

  Funny to go from AI 2027 to talking about popcorn snack acquisitions.

• 20:10John Coogan?

  Yes.

• 20:11Jordi Hays?

  But, uh, but it's totally possible that, uh, the AI over time.

• 20:15John Coogan?

  Yep.

• 20:16Jordi Hays?

  You know, realizes that, uh, you know, some mechanism to consume popcorn for energy to power the compute necessary to exterminate humanity.

• 20:26John Coogan?

  AI researchers currently, they need to eat.

• 20:28Jordi Hays?

  They do.

• 20:28John Coogan?

  It's the, it's the, it's the energy input to the.

• 20:31Jordi Hays?

  That's right.

• 20:32John Coogan?

  You know, Andre Karpathy needs, needs the.

• 20:35Jordi Hays?

  But anyway, so, uh, yeah, Lesser Evil sells for 750 million. Their, uh, whatever investment bank they'd, they'd been working with had been putting out a bunch of articles over the last year being like, they think they're going to be at around a billion. So clearly they wanted a billion, but, um, Ultimately, still a great outcome. You had some backstory on this. Apparently it had not been working so well at one point and some finance brother.

• 20:58John Coogan?

  Yeah, yeah, yeah. A Wall Street guy bought the company out of distress, turned it around, grew it a ton, and then wound up selling to Hershey's. And I mean, it's a pretty straightforward product, organic popcorn. What's not to like? But they've clearly scaled it very well, figured out the manufacturing, the distribution, and done all the schlep that's required to get a CPG business really humming. And then eventually, you know, Hershey takes a look because hey, they're making a couple hundred million dollars in sales, and it seems like it's growing, growing, growing. And Hershey's obviously in the business of building a portfolio. Their strategy is the healthy halo portfolio, and they have a number of acquisitions in there, hedging

• 21:37John Coogan?

  against cocoa prices. They also bought sour strips from Max Tuning, I believe. What else is here? Well, if you want to stay healthy, get an 8 Sleep. Go to 8sleep.com/tbpm.

• 21:49Jordi Hays?

  Do it!

• 21:50John Coogan?

  Nights that feel your best day is turning your bed into the ultimate sleeping experience.

• 21:53Jordi Hays?

  How'd you do last night, John?

• 21:55John Coogan?

  8 Sleep. Probably okay. I got to bed pretty early. 8 Sleep.

• 22:02Jordi Hays?

  I got a 97, and that is with...

• 22:04John Coogan?

  94. My routine was a little off. 94. You get 97, you beat me again.

• 22:11Jordi Hays?

  But we're dialing it in.

• 22:12John Coogan?

  Yeah, yeah.

• 22:12Jordi Hays?

  People don't, people don't realize how seriously we're taking sleep.

• 22:17John Coogan?

  Very, very seriously.

• 22:18Jordi Hays?

  Like, it's actually outside of doing the stream, it's, it's one of my top three priorities outside of my, my family's wellbeing.

• 22:26John Coogan?

  Yeah. That's what you, that's what you always say, family third. Work, sleep, family.

• 22:31Jordi Hays?

  Absolutely not.

• 22:32John Coogan?

  Family first, of course. Sheil Monat has been on the show before. He says, "Lost in the trade war, but this order could be good, better to make the US strong by investment, easing red tape to production rather than protectionist BS. The office will assist investors in navigating US government regulatory processes efficiently, reduce regulatory barriers, increase access to national resources, facilitate research collaborations with national labs, and work with state governments to reduce regulatory barriers to and increase domestic and FDI." So, the, the, I guess, there's an executive order establishing the United States Investment Accelerator. And so that's, that's maybe some silver lining in a lot of market chaos. Should we go through some Joe Weisenthal posts?

• 23:17Jordi Hays?

  Yeah, we should.

• 23:18John Coogan?

  Says, "Wow."

• 23:19Jordi Hays?

  This is our version of markets in turmoil.

• 23:22John Coogan?

  Yeah.

• 23:22Jordi Hays?

  It's just Joe posting.

• 23:23John Coogan?

  Whenever he's in all caps, you know something's happening. Joe says, Intel TSMC tentatively agree to form chip making JV. Intel execs concerned deal may cause mass layoffs from the information. This is very interesting because we've been talking about Liputan coming into Intel. What is going to change with Intel? A partnership with TSMC wasn't at the top of our list. We thought that there might just be a split. That's been kind of the normy take. They're clearly thinking out of the box and Liputan is figuring out how to move more stuff through, through, through TSMC. Let's do one more ad read and then we'll move on to our first guest of the day.

• 24:03Jordi Hays?

  Which I am incredibly excited about.

• 24:05John Coogan?

  So really quickly, we got numeral sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. Go to, it's numeralhq.com, correct?

• 24:13Jordi Hays?

  Yep.

• 24:14John Coogan?

  And very important if you're selling SaaS or selling e-commerce products, you need to be paying your sales tax on time with as little of a headache as possible. So check out numeral.

• 24:24Jordi Hays?

  Five minutes a month. It's that easy.

• 24:27John Coogan?

  And we will come back to the timeline, but we have a whole slate of guests coming into the studio. And our first one is here now, so welcome to the show. Morgan, how are you doing?

• 24:37Morgan Housel?

  Nice to see you guys. Thanks for having me.

• 24:39John Coogan?

  Thanks for joining.

• 24:39Jordi Hays?

  What's going on? Are you the, are you the calmest man in America? I feel like you're just built for, for weeks like this.

• 24:47Morgan Housel?

  I actually have a picture from March of 2020 during the COVID meltdown, where I was sitting, I took a picture of it. I'm watching Twitter and I have a blood pressure cuff on monitoring my blood pressure at the time. So sometimes I have a veneer of calmness, but like I'm, so here's, here's the disconnect. I think it's important. I watch markets every day. I have for 20 years. I think they're fascinating. I watch the ups, I watch the downs. I've been glued to Twitter for the last 72 hours, but it never impacts how I invest. I think that's what's important. So I worry about the economy. I watch what's going on in the last two days with a sense of shock and dread, but it's not, but I'm, but it's not going to change how I invest. And I think it's only dangerous if you are glued to markets and you're like frantically buying and selling at the same time.

• 25:29Jordi Hays?

  Yep.

• 25:29John Coogan?

  Do you think that there's any, like, I feel like there's kind of a barbell strategy where you can either, you know, not let the whims of the market day to day swing you, and you can take a much longer view, or you can actually be that trader and know that, yeah, you are going to be the one trading day to day. And maybe you go all the way into like the high frequency world. Is there, is there just like a messy middle? Or does it just, is it just like an individual asset manager just needs to find like, where are they best aligned and what kind of, what kind of lifestyle do they want to guess?

• 26:05Morgan Housel?

  I think it's probably true that a lot of people have a gambling itch, like this gambling bug that has to be itched.

• 26:11John Coogan?

  Yeah.

• 26:11Morgan Housel?

  And for those people, if you tell them, hey, dollar cost average into index funds and leave it alone, they're not going to. They're just like, even if that's good advice, they're not going to do it. And for that person, if you can convince them to say, hey, can we put 80% of your money in index funds? And then this 20% you can go nuts with. You can trade shitcoins, you can go crazy, you can do anything you want with it. That, that is, it seems like bad advice, but it's probably the right advice for that person. So I've always been a fan of like, you have to pick an investing strategy that works around your unique personality. And a lot of people, like everybody, me, you, everybody, has personality quirks that are not perfectly rational. But we have to just accept them as part of who we are. So I'm, I'm, I'm not one to judge people who are trading and going nuts and having fun in markets, as long as it's within reason and it's just like a small portion of their net worth.

• 26:56Morgan Housel?

  Like, don't, don't do that with your kids' college money, you know?

• 26:58Jordi Hays?

  Yeah. Have you thought about, you know, one of the benefits I've felt in my career of having, consistently having, you know, the majority of my quote unquote net worth spread across, you know, maybe like 10 or so private companies, you know?

• 27:14Jordi Hays?

  The benefit is like, I just don't think about a lot of them that much, right? It's just like, I'm not worried if it goes up or down, you know, sometimes you get an up round and you're like, cool, it doesn't really change my life in the moment. And then if the market's crashing, you know, you're not getting mark, daily marks, right? So you're not thinking about it. In my view, like every asset that you have that's being marked constantly is a potential source of distraction. Do you worry about every new generation coming online, becoming an adult at a time when they might have a meme coin, an NFT, Nvidia calls, and then their sports betting at the same time? And it's like, how do you actually create value

• 27:55Jordi Hays?

  in the world and focus on the right things? I'm sure when you were 22, I'm sure you had a brokerage account. I'm curious even how you were investing at that time. But you certainly wasn't that like, you're seeing every mark constantly. And I do, I personally worry about what that does to people's attention and long-term thinking.

• 28:20Morgan Housel?

  I think it's easy to look at today's markets and say, it's just a casino. Everyone is betting on this and the zero day options and day trading. Vanguard brings in more money every month than Robinhood has in total. And so the idea that, oh, it's all a big casino. No, the huge vast majority of money is invested from people in their 401ks. It's taken out every other Friday in every paycheck. They're going to leave it. They forgot their password. It's going to sit in there for the next 40 years, which is a great way to invest. So what we see on the surface is always the craziness. But actually beneath it is literally hundreds of trillions of dollars just invested diversified for the long term. That's the vast majority of it. And so I think that's the case. It's definitely gotten easier to be

• 29:02Morgan Housel?

  crazy in markets than it was. You mentioned like when I was younger, there was E-Trade and Charles Schwab. And people would go in, but you even had trading fees. Like to place a trade costs 15 or 20 bucks. And when you're 19, that's enough to slow you down. And so when I started investing, yeah, I started out day trading. But it was totally like, hey, it's going to be 20 bucks in and 20 bucks out if I'm placing $100 trade. That's a lot of it, just getting sucked up by trading fees. So it was like a very effective speed bump. That's a good thing. And I think it's hard to push back against free trading, like lower costs. That's great. But it removed a speed bump that incentivizes a lot of really bad behavior.

• 29:43John Coogan?

  We've been hearing about this idea that like, maybe we're moving into like a kangaroo market, or, I mean, the story that I tell of like, the last 20 years is like, dot com bubble, big crash, slow buildup, housing bubble, big crash, slow buildup, tech boom. Then, we get COVID, we get SVB, and we're up and down and up and down. Now, we're having tariffs and, and Trump pump and Trump dump. Does it feel like we're moving into a permanently new regime of higher volatility because of some of the, some of the factors that you mentioned? Or is this temporary and maybe it's smooth sailing in the future?

• 30:22Morgan Housel?

  Well, I think you, what you mentioned there, that's interesting, is you feel like it's been like that for the last 20 years. I'd say it's been like that for the last 200 years. Whenever we have market data, it's always been like that. So yes, what you just described for the last 20 years is accurate. Before that, there was the, the SNL crisis in the 1980s, the inflation in the 1970s, there was a boom, the like, the 60s were a wild boom period, World War II, the Great Depression, like, it's always been nuts. There's never been a period of smooth sailing. And the periods that we associate with smooth sailing, like the 60s and the 90s, we know in hindsight, were just the precursors to a giant bust that happened. So every time in hindsight, that we're like, man, why couldn't have been like that? Like, actually, that time was a terrible time. In hindsight, that was what you wanted to avoid. And so it's never going to be a case that

• 31:06Morgan Housel?

  it's more, that it's, it's, it's smooth sailing. Like, it's an inherent feature of capitalism that you have volatility and booms and busts. It's not fun, it's not enjoyable, but the absence of that is even worse. I wrote about this in, in my first book, there's a great economist, guy named Hyman Minsky, who, I'll, I'll say it very quickly, came up with this idea called the financial instability hypothesis, which was, the more stable the economy is, the more destabilization it's going to cause. Because when the economy is stable, people get optimistic. And when they get optimistic, they go into debt. And when they go into debt, you're going to have a crisis eventually. So it's like, the fewer recessions that you have, the bigger the next recession is going to be.

• 31:44Jordi Hays?

  Is it possible, though, going back to John's original question, that if, if markets are, are trading in part due to sentiment, how people feel about the economy, and the internet accelerates sentiment, because if I feel some way, I can go post about it on X, or I can send something to my group chat, or I can log on to Twitter and...

• 32:09Jordi Hays?

  Like that sort of acceleration of basically like sentiment just moving around the world constantly. Can that cause the sort of like the phrase, we've said it on the show a bunch in a joking way, but like the bear market or bull market or the kangaroo market where things are just like, you know, it, the, the line over time, you know, was like slower, right? Of these cycles. And then the internet comes along and gets, you know, basically like full adoption. And then you just have this sort of, this type of, I'm not showing it on the, on the camera properly, but this sort of like massive up and down.

• 32:45Morgan Housel?

  Yeah.

• 32:46Jordi Hays?

  And that's like the new normal.

• 32:47Morgan Housel?

  I think it, it makes sense to assume that because the information age is what it is, that these things happen much faster. Cause as recently as the 1990s, everybody's access to financial data was Louis Roykisers Wall Street and the Wall Street Journal and CNBC like in its very early days. And that was it. So everybody more or less had the same sources of information. We were all listening to the same thing. Just like back in the 60s, everyone's source of news was Walter Cronkite. And today I could obviously could not be more opposite than that. So when a news comes, it's just going to happen much, much faster. One example of this is during COVID, which, you know, maybe prior to this week was the biggest economic shock of, of our lives. The market bottomed two or three weeks after the first bad news hit, like very, very quickly.

• 33:32Morgan Housel?

  Whereas if you look at the, like the economic crises of the seventies and the eighties, some of them played out over a decade. And so I think you can make the argument that it's not that we have more bad news or even more volatility. It's just happens like we process the information so much faster. That's a great thing. I would rather rip the Band-Aid off and get these things over with in three weeks than live through a decade of stagnation.

• 33:52Jordi Hays?

  Yeah.

• 33:52Morgan Housel?

  So maybe that's, that's the upside of it.

• 33:54John Coogan?

  Yeah, it does feel like everything's kind of accelerating, even just the last, I guess, the last eight years and going into 12 years, like we've been in one term president, one term president. And so there's been more oscillations there versus a two-term president gives you eight years of more stability. It's just interesting.

• 34:10Jordi Hays?

  What, what immediately comes to mind when somebody says, uh, five simple words, short-term pain, uh, sorry, six, short-term pain, long-term gain. How does that make you feel?

• 34:23Morgan Housel?

  Nothing's good, nothing's good is gonna come from that. Wasn't it Xi Jinping just like a couple of months ago with all the youth unemployment? I think the phrase he used was eat bitterness. That's what, that's what they should do is like you should just eat the bitterness that you have and enjoy it. Nothing's good, a good from, is, is, nothing good is gonna come from that. Of course, there is logic to the idea of like invest in the short term, sacrifice in the short term for long-term gain. I'm not sure that's what's going on today with what's happening today. I don't think this is seven dimensional chess, trying to get some sort of long-term plan. I think this is, this is, that's, that's a different topic. And I, I think there's a difference between, you know, investing for the long run and like foregoing consumption so that you can grow your money and like,

• 35:07Morgan Housel?

  you know, hitting your kids with a belt to instill grit in them. That's, that's not short-term pain for long-term gain. So there's, there's, there's a balance that needs to be struck here.

• 35:16Jordi Hays?

  What do you think? I posted an image earlier that I saw you like, hopefully you recalled it. And it was Trump and she picking up pennies in front of a, of a steamroller that was being driven by Sam Altman. And the joke was basically like, you know, we spend a lot of time talking about AI. We obviously like follow, we try not to talk about politics on the show, but we talk about policy and, and, you know, we've covered the trade war quite a bit. And especially today in the context, I don't know if you saw AI 2027, that sort of interactive, you know, website and forecast. But it, but it feels like the sort of art sentiment generally is that, you know, we're arguing over these sort of political issues, tariffs, trade wars. And you just have like AI looming in

• 36:01Jordi Hays?

  the background, like, you know, potentially going to make none of this, you know, matter at all. Because if, if, if, you know, bad tariff policy can, you know, hurt the market by, you know, or hurt the economy by 15%, but AI accelerates everything at, at sort of this like inconceivable rate, then it will just be like, you know, picking up pennies in front of a steamroller. But I'm curious how you think, given that, you know, you love the public markets, but then you're also a private markets investor and, and I'm just curious how you think about.

• 36:32John Coogan?

  Investing with this big unknown on the horizon.

• 36:37Morgan Housel?

  I think it's not uncommon historically where an economic crises and unbelievable world-changing innovation is happening at the same time. So the 1930s and 40s, it was Great Depression, World War II, and by the way, airplanes, nuclear energy, penicillin, all of this like world-changing, but a lot of that was drowned out by the obvious economic and war calamities that were happening. In the early 2000s, it was dot-com bust, September 11th, and by the way, this internet thing truly is changing in the world every single day beneath our feet. And so it's easy to ignore that technological change because it's drowned out by the rest of the news, but it's not uncommon for it to happen at the same time. And a lot of times, that new technology and the economic malaise, collapse,

• 37:20Morgan Housel?

  recession, whatever you call it, is related to each other. And so it's, I think that probably adds to a sense of uncertainty right now, that not only are we going through the tariffs in the last three days, but a lot of people, very rightly, have woken up in just the last couple of months to what AI might do to their jobs. And a lot of these people are people who, for whom 18 months ago, truly considered their jobs and their careers bulletproof, coders, tech workers, who are making half a million bucks at Meta, and they could not fathom a world in which they could be deemed somewhat irrelevant. And I think that's not uncommon during these periods as well. Like, there's very rarely positive upheaval that doesn't come along with a lot of negative upheaval at the same time.

• 38:06John Coogan?

  Can you talk just a little bit about how you're personally using AI? What tools and models are working their way into your daily stack, if anything?

• 38:17Morgan Housel?

  Mostly, it's just kind of fun and amusement. And in terms of work, I've tried to do a few things. I've uploaded book chapters or articles into ChatGPT and several other models and just said, hey, give me some feedback on this. And I found that it's pretty good for what I would call microfeedback of just like, hey, you probably need a comma here. It's not that good for macro feedback of like, hey, was this chapter good? Like, did it make any sense to you? It's like, so far, it's not that great for that. I'm sure that'll change, and there's probably other models that are better at that. And so it's, it's, it's, it's, it's pretty good for, for, for writing, for, for my profession. You know, it's going to differ for everybody.

• 38:56Morgan Housel?

  I, I, I use it quite a bit as like, as like a thesaurus of like, I'll be, I'll, I'll have writer's block on a sentence, and I'll, I'll put in my partial sentence and say, finish this for me. And that is actually pretty good at that. So it's, it's good at all these like little things for writing. It's obviously going to be, this is such a, a, a dumb take, like an obvious take, that the people who are going to do the best are the ones who use their personal skill and then use AI as a, as a tool to leverage it, rather than the ones who are using it to replace it. So use, if you're writing and you're writing your own sentences, you're doing it yourself, and you're using AI to enhance it, that's, that's, that's a huge boost.

• 39:32John Coogan?

  Yeah, yeah, the, the, the book feedback thing is so interesting, because I feel like whenever you produce any content, you send it to your friends, it's always hard to get authentic feedback. And almost, you almost need to like, let it simmer and then see if they come back to you unprompted and text you, hey, I just actually read the book all the way through, and I love this part. And you know that you didn't prompt them to, hey, you gotta do this as homework, and you're doing it as a favor.

• 39:58Morgan Housel?

  I could not agree with you more, yes.

• 40:00John Coogan?

  Yeah, it's tough, it's tough. Our, somewhat related, I mean, you, you've done a lot of, a lot of thinking and work. I recently, Jordi and I have kind of come to this kind of obvious conclusion that like, there are increasing returns to scale for picking something and just making it your life's work. And instead of thinking in some short term, think long term. And this seems like kind of obvious, but it's something that I think we both wish we knew earlier. Is there an interesting like axiom or mental model or framework that you wish you had discovered earlier in your career or life?

• 40:35Morgan Housel?

  I don't know if I wish I had discovered it. Maybe this is a very boring example, but I like to learn with my eyes. I read. I'm not that much of a podcast guy and I'm definitely not an audiobook guy. What struck me about two years ago is I realized the audiobook version of The Psychology of Money was selling twice as many copies as the physical paper version. And that blew my mind because never in a million years have I even thought about listening to an audiobook, but a lot of people do. And that also opened up my eyes to podcasts. As you guys have figured out, I'm not much of a podcast guy, a little bit on planes, but not regularly because I like to read. But I'm rare in that. Most people are like, oh, forget about reading a blog. Like, I am podcast all day long. And so I was a little

• 41:18Morgan Housel?

  bit late to that game just because it's not what I do personally. But it's so clear that books, blogs, all of that, et cetera, is being overtaken by people learning with their ears in podcasts and videos. So that's been like a change in my thinking. And the people who did figure that out early on and started podcasts 10 years ago, Patrick O'Shaughnessy, those kind of people are crushing it now.

• 41:39John Coogan?

  Yeah. Do you think that in the future, there will be just more consumer choice in like the actual instantiation of ideas and context? Like, it'd be fairly trivial with AI tools today to, if I wanted to instead experience Invest Like the Best as a book, I could probably wire up, you know, a Whisper API to transcribe every episode. I think Patrick already puts out transcripts, but I could transcribe it, send it off to the printer, get it mailed to me, and I could very easily read that. And vice versa, too. You know, even if an audiobook doesn't exist, you can have an AI read it to you. Do you think that that choice will live on the consumer side? Because right now, it's living on the creator's

• 42:24John Coogan?

  side, and you have to decide, I want to do an audiobook and I have to because I'm going to sell twice as many. But in the future, I could imagine that you have the choice to read anything, no matter what the original author intended, and is something sacrificed by, this isn't as the artist intended.

• 42:42Morgan Housel?

  Yeah, two things come to mind. One is Google's Notebook LM, like lets you do that. You can upload a PDF and say, make a podcast out of this and it's very, very good. It's amazing. It's such a cool tool. The other example is my friend, I think he was on your show recently, David Senra. I first came across David Senra when I read a transcript of a podcast that he did because I'm not that much of a podcast guy. And reading the transcript, I was like, this guy's absolutely genius. This guy's brilliant. I have to go start listening to his podcast. That's one of the few podcasts that I always listen to on planes. And so I think that that still does exist. Most of the big podcasts out there have transcripts that they publish. And if you're like me and you do an old school and you want to read, that's, that's most of what I do out there.

• 43:19John Coogan?

  Are you Kindle, iPad, printed it out? What's your, what's your playbook for reading?

• 43:26Morgan Housel?

  I, I've gone back and forth over the years. I keep, I always toggle back and forth. Like I always prefer a physical book. I like the smell. I like the feel like that's, and I think there's a lot of evidence that most people learn better. They remember better if it's a physical book. But I love the ability to highlight in search in Kindle. That is so effective and important to me. And there are some apps like Readwise that lets you highlight in a physical book, but it's so much easier in Kindle to have just highlight a line and then you can come back to it later. Particularly for me as a writer, I want to highlight passages that I can use as prompts for my writing in the future. So to have it all right there is so great. I also love the fact that when I travel, I have 400 books on my Kindle to pick from on the plane versus taking one or two and hoping that I like them.

• 44:08Morgan Housel?

  And so I, it's, it's always hard for me because I absolutely prefer physical, but I always drift towards Kindle.

• 44:15John Coogan?

  Yeah.

• 44:17Jordi Hays?

  Have you been tempted, going back to writing and, and have you been tempted to write a book to help people understand

• 44:28Jordi Hays?

  how AI will be adopted broadly in our world and how it will sort of transform things? I, I'm assuming there's like a bunch of lessons from same as ever that we can sort of apply to understanding this technological trend. But when I think about the best content that's available on artificial intelligence today, it's not the kind of thing that, you know, somebody in the airport is going to be walking and sort of like, you know, they're not going to pull a great blog post out of the air, you know, and read it on the plane, right? So it's like, how do you, how do you get people to sort of like, understand the, the change that's happening now and the coming change? And does that, and does like, kind of?

• 45:12Jordi Hays?

  Helping people understand that excite you? Or do you not feel like you even have the clarity yourself?

• 45:20Morgan Housel?

  I definitely feel like I do not have the clarity myself. And my, my take on this too, is I'm not sure anybody does. Cause the history of every big innovation is looking back in hindsight, virtually nobody got it right. And even the most diehard optimists, underappreciated how much change it was going to bring. My favorite example of this is when the Wright brothers created their plane, they virtually, they only marketed it to the US army. Because they themselves, the Wright brothers, did not see much commercial use for the airplane. They knew you could strap a machine gun on it and drop bombs out of it. And then the army would like it for that. But the idea that the Wright brothers themselves foresaw Delta Airlines like traveling, like absolutely not, not in the slightest. That was true for cars. That was true for computers. It was true for the early internet. Even the pioneers, who are the crazy wild maniacs,

• 46:05Morgan Housel?

  underappreciated how much change it was going to bring. Because every new invention, it's not what you create. It's what other people like manipulate, like, like what you do. I remember one example, it was for Photoshop. A lot of the, the, the engineers at Adobe, when they make new tools for Photoshop, they have no clue what artists are going to do with those tools. But they're like, let's just find every way to manipulate an image and someone else will figure out what to do with this. Because you can't foresee what other creative people are going to do with your invention. And that's why even, you know, Sam Altman has no idea what AI is going to be in 20 years. That's not a put down. That's always true for all new technology.

• 46:41John Coogan?

  Can you talk a little bit about entrepreneurial storytelling? It seems like it's an incredibly valuable skill, but then some founders get maybe lost in the sauce and wind up just focusing purely on storytelling and then that needs to be handicapped. What, what advice do you have for founders when they're, when they are trying to tell kind of that definitive optimist vision of the future without seeming not credible?

• 47:06Morgan Housel?

  I think, I think we've actually gotten much better in the last couple of years at separating storytelling from just charlatan bullshit. And like, there, there was a period when we weren't, like, we were not very good at that. Probably, you know, late, late 20 teens, early 2020s, we were, we were not very good at that. And there are a lot of people who got away with a lot of things that they should not have. But I think our, our threshold for BS has dropped as, as an industry, in, in a very good way. And people can see through things very quickly. And so it's always going to be the case that, you know, Steve Jobs was the best storyteller, and he was the opposite of a charlatan. The, the polar opposite of a charlatan. And I, I, I definitely feel like there is a world where, yes, you have to be a good storyteller, but

• 47:50Morgan Housel?

  there's a much stronger sense of, put up or shut up. Like, you have to show me the numbers of what you're doing. You can't just keep the story going forever. So that's, that's a great thing.

• 47:58John Coogan?

  I have this, uh, half joking riff that, I, I call it Coogan's Law, and the idea is, uh, the value of coinages is increasing in a, in a algorithmic feed environment, and compressing these big ideas down into pithy two-word phrases has, uh, disproportional returns to the actual popularization of these ideas. So you think about, uh, Lulu Maservi with Going Direct. That encapsulates a very big idea, boils it down very well. Uh, Balaji has The Network State. Uh, Andrew Norwood's is American Dynamism. And, and just creating

• 48:41John Coogan?

  these like pithy phrases seems to be increasingly valuable. Do you buy my argument that there is a trend here? Has this always been the case? And what is your take on folks who not just write and produce thought leadership broadly, but also really focus on, on coining phrases and boiling their ideas down to their, you know, essence?

• 49:05Morgan Housel?

  I think it's definitely been true, but I think it's always been true. The, the, the golden ages of advertising was the 1930s and the 1960s. 1930s was kind of the, or 1920s was kind of the birth of advertising and the 60s was like the explode, like the post-war explosion of it. And that was like the, the David Ogilvy periods of just like, they were, they were better back then at creating little pithy phrases than most of us are today. Like, there's more people doing it today, but some of the, the marketing, like the, the old, like Mad Men style marketing from the 1960s was so ridiculously good in those, in, in those magazine ads. Um, I, I think it's, I think if you wanted to argue that people have shorter attention spans today, so the value of a pithy phrase is more because they're not going to give you the time of day to read through 10,000 words to get to your point is important.

• 49:48Morgan Housel?

  But even in a, in a 50,000 word book, like, most people don't remember books. They remember a couple of sentences from their books. So even if you're like, oh, I love that book, read that book 10 years ago, changed my life, loved it, you probably remember like three or four sentences. And it's those like, those turns of phrase that are memorable that you can, that, that stick with you. So I've, I've always thought that's the goal for any book or like any book chapter is even if it's a, a 5,000 word chapter, what you want are three or four sentences from that, that people will remember and will stick with them because realistically that's the best you can do for actually like changing somebody's mind.

• 50:23John Coogan?

  Yeah, that makes sense. Uh, on, on the other coinages, uh, we, we, I have Coogan's Law. We've been working on Hayes's paradox, Jordy's paradox or Jordy's law.

• 50:32Jordi Hays?

  That's where, uh, the, the more funny you think something is, the less likely it will be funny sort of broadly, right? So you post something on X and you think, oh, this is, this is like the funniest thing.

• 50:43John Coogan?

  This is my best work ever.

• 50:44Jordi Hays?

  And then it's completely flopped.

• 50:46John Coogan?

  And I wanted to know, uh, is there an idea or maybe a chapter from your work or, or something you've put out that you think never found its footing, but you still, it's, you know, it's one of your babies?

• 50:59Morgan Housel?

  I would, I would think about that, but one that really comes to mind, somebody else tweeted this the other day, but I thought it was so perfect. And everybody knows this, the more time you spend writing a tweet, the lower the odds that it's going to end up as a banger. And then, and the reverse is true. If you sit there and you're like, let me get creative. And then like wordsmith is, it's going to suck. But if you're just in the shower and you're like, all right, screw it, let me fire this off. It's going to be amazing. That's always, always the case. Everybody has experienced this. I think it's true for writing as well, like writing longer things that good writing is very easy because if, if your idea is right, it's easy to articulate it. And if you get writer's block, the reason you have writer's block is because your idea sucks and it's wrong. And that, and that's

• 51:40Morgan Housel?

  why you're, you're struggling to articulate it. So I think the harder, if, if writing is hard for you, you should take a step back and say, my, my, my whole thesis here is probably wrong. If it was good, it would spill out of me.

• 51:51John Coogan?

  Yeah. Is that true for investing too? You hear about these legendary deals. They had drinks, they did some napkin math, and it was the best investment ever. The, the deal that they were in the DD room for sending Doc sends back and forth, like it was just a mess. Is there something more broadly applicable to this idea of like simplicity breeds genius? Or, or like, you know, inspiration?

• 52:17Morgan Housel?

  I think what's true, especially for very smart, educated people, is that the harder you work at something, the more opportunities you have to fool yourself. So if you're very smart and you have a 140 IQ and you went to Harvard and you work at Goldman Sachs, and you spend six months doing due diligence on this deal, you are going to convince yourself of whatever you want to convince yourself of, because you have so much mental horsepower that you can create any model, come up with any theory that justifies what you want to see. And so it's like, the harder you work, the more likely that your final result is going to be fooling yourself.

• 52:47Jordi Hays?

  I've, I've seen that. I've seen that too. You know, a challenge as, as a, if, if you're a founder or an investor, you're probably pretty convincing. And you can be so convincing that it can be your Achilles heel, because you can convince otherwise smart people that doing something is good. And you, you deliver such a, such a like a good. You know, sort of like a series of statements to get other people on board with that, that people are like, okay, like, I think that's a good idea. And then in hindsight, you look at it and you're like, well, that was a terrible idea.

• 53:19Morgan Housel?

  Yeah, but I think what's even more true is not only do you fool other people, you fool yourself.

• 53:23Jordi Hays?

  Yeah.

• 53:23Morgan Housel?

  And I think it's true in investing that you need just enough IQ to where you can understand the important stuff, but not so much IQ that the, the, the simple stuff bores you. If the simple stuff bores you, you're gonna, you're gonna try to overcomplicate it in a way that's gonna fool yourself. And I, I don't have the intelligence or the IQ to blow myself up in a derivative strategy. I'm not smart enough to do that. And so I just have like a very boring, basic dollar cost average index funds. Cause I've been blessed with a low enough intelligence that that's as far as I go. But I think that's, that's, that's a huge advantage. Yes, exactly.

• 53:57Jordi Hays?

  It's great.

• 53:57Morgan Housel?

  I was talking to this investor not too long ago and I was like, uh, and he, he's a very successful professional investor. And I, he, he asked how I invest. I'm like, I, I dollar cost average into, into Vanguard funds. And then I go to beach, to the beach with my kids and that's, that's it. And, and his response was, I'm so jealous of that because I think he was so smart and so educated and so credentialed that he cannot do that. It's impossible for him to do that, even if he wanted to.

• 54:21Jordi Hays?

  Yeah. Can you talk about hard work? Specifically, we were having a conversation with, uh, David Senra earlier this week. And I think he brought up the example of how Michael Ovitz, at the end of his career, said he could have worked like 10, 10 or 20% less hard and had the same result. And this is something that John and I talk about a lot. We work really hard right now. We get to the office, you know, by 6am, uh, we, uh, are working until we go to bed. We spend time with our family, but like very, very full on. And it's top of mind because we both have, you know, young children between, you know, basically six months and, and five.

• 55:03Jordi Hays?

  And we want to be able to spend time with them. And so I feel like it's this topic that's constantly on our minds of, you know, wanting to live up to your potential, uh, yet wanting to maximize, you know, time with family in these sort of, uh, really important years.

• 55:20Morgan Housel?

  It's tough. Well, one thing that comes to mind here, there's always the criticism that we spend, I forget what the stat is, 30% of healthcare spending on the last month of people's lives, whatever that stat is. And whenever that comes up, you're like, yes, but you don't know when the last month of your life is gonna be. Like, it would be great to stop spending money at the end, but you don't know when it's gonna be. So when people talk about, oh, I could have been just as successful if I worked 20% less. Yeah, but you don't know which 20% of your work was wasted or not. It was always the case, back in the day when I was writing a lot, I would write two or three blog posts per day. So let's say I was writing 600 to 1,000 blog posts per year. This is like 10 years ago. In one year, if I wrote 600 blog posts, I would look back and say,

• 56:02Morgan Housel?

  I'm very proud of five of them. Five of them were really good. And the truth is, when I was writing them, I did not know which one of those five was gonna be. I had no clue. So I feel like you had to put in a ton of work to get like some, like much smaller level of success out of it. And, and so I think that's, that's usually the case. But to your point of like, kids and balance and work and whatnot, I experienced that too. I think the way to think about it is, like, this is a Daniel Kahneman quote. He's like, you need a very well calibrated sense of your future regret. What are you likely to look back at 50 years from now and regret? And a lot of people, including me and probably you guys, whatnot, might look back and

• 56:44Morgan Housel?

  say, man, I had a lot of career opportunity and I wasted it. That would be a regret. Of course, I would also regret looking back and saying, I didn't spend enough time with my kids. That, that sucks. I, there's this one point that I used in Psychology of Money where it was a study from a gerontologist. His name was Carl Pilmer. And he studied 1,000 elderly Americans, most of them were 90 to 100 years old. And he writes in his book that of the 1,000 elderly people that he, he studied, not a single one of them, not one single person looked back and said, I wish I made more money. Not a single one of them. Every single one of them looked back and said, I wish I spent more time with my family. I wish I was nicer to my friends. I wish I was more helpful to my community. That was universal. And so I think a lot of that, that too, of people who have more life experience

• 57:28Morgan Housel?

  than you and I do, like, they have very different goals than you and I probably did. They wish they had done things differently than you and I did. Now, one of my main life goals right now at this phase of my life is I want to take care of my family, my wife and kids. I want to work hard and provide for them financially. And so when I'm out working and maybe not spending as much time with them, I don't feel guilty because I'm like, I'm fulfilling a purpose that is very important to me. But it's always a balance. I think a lot of people, their kids turn 18 and go off to college and they're like, I don't, I don't even know you. I didn't spend any time with you. And so I, I, I have, I have no firm formula for that, but it's, it's, it's huge. It's important.

• 58:05Jordi Hays?

  Yeah, it's a personal equation.

• 58:07John Coogan?

  Well, thanks so much for joining. This is a fantastic conversation. We could probably talk for another four hours if we, if we had the time. So we'll have to have you back on soon.

• 58:15Jordi Hays?

  I wish that you had the, the blood pressure monitor on all week. Anytime, anytime, anytime it like, you know, ticks up or whatever, we can say, Morgan, get on the show. Let's talk it out.

• 58:25John Coogan?

  Yeah. In, in Wall Street, the first time you meet Gordon Gekko, he's, you know, the market's up and he's taking his blood pressure.

• 58:31Morgan Housel?

  Taking his blood pressure. I love it.

• 58:32John Coogan?

  It's iconic. It's an iconic scene. Anyway, thanks so much for talking about this. This was fantastic. We'll talk soon.

• 58:37Morgan Housel?

  Appreciate it.

• 58:38Jordi Hays?

  Talk soon. You know, it's funny. He was talking about if you're thinking about, you know, writing something too long or whatever. So that right before we got on the show, I, I said, I posted, hey dude, you should come over later. We're going to be greedy while others are fearful. And it's at 800.

• 58:52John Coogan?

  Let's go. I knew that was good. I, I burst out laughing immediately and I thought it was going to be great. We do need to get Jordy's Hayes paradox popping on the timeline, but we will come back to that later because we have the co-founder of Honey in the building. Ryan, how you doing?

• 59:08Jordi Hays?

  Boom. Great.

• 59:10John Coogan?

  Yeah. Thanks so much for hopping on. I, I think we have a mutual friend in John Wallen.

• 59:16Speaker 01

  Yeah, we do.

• 59:17John Coogan?

  And, and, and obviously I saw your thread. Could you give us just like a little bit of background on you, the company? And then kind of like, what inspired you to write that thread? And then I'd love to dig through it in great detail because it's a fascinating story. And it's one of those narratives that kind of just goes out on the internet and grows and grows and grows. And I think there's a lot of, like, we need to correct the record here. And that's why I wanted to have you on. So thanks for joining.

• 59:41Speaker 01

  Well, I'm talking to you guys first, so thanks for inviting me on. Yeah, like, like you said, I co-founded Honey more than a decade ago, back in 2012. For the first handful of years, we had a cool consumer product, but couldn't figure out how to make it into a company that investors would fund. So browser extension never has really been an attractive investment space. So after a few years of grinding, we finally started to piece together enough, enough of a user base. So we got investment, 2015, we kind of really started to figure out how to do the business. And from 2015 to 2020, we just had a classic, but insanely fun time riding a hockey stick of growth.

• 1:00:26Speaker 01

  And in 2020, sold the company to PayPal. Yeah. So as part of that acquisition, I stayed on at PayPal for a little while. After that, left at the beginning of 2022, even though it had a diminished capacity before that. But formally left in 2022. And then a few days before Christmas this year, all of a sudden, out of nowhere, there was a YouTube video accusing my former company of being a scam. And it also pulled in a bunch of creators who we'd spent over a hundred million dollars working with to promote Honey. I'm sure some of the audience saw our ads over the years. And because of that, it went insanely viral.

• 1:01:10Speaker 01

  And immediately, the narrative on the company I founded completely shifted. So it was a surprise.

• 1:01:17John Coogan?

  Can you take me through the first evolution of the business model? You said you were kind of hunting for product market fit. How does Honey actually make money? How did it make money at first? Has that revenue mix changed over the time that you were there, pre or post PayPal? Walk me through just like the basics of the business and then we'll dig into the, what kind of the, the video is about.

• 1:01:41Speaker 01

  Yeah. So for the first few years, the business didn't make money and that was part of the the flaw in finding investors.

• 1:01:47John Coogan?

  Yeah.

• 1:01:47Speaker 01

  We thought maybe someday we'd figure it out and had a few hundred thousand users and organic growth on the company just from word of mouth, people sharing this cool new coupon tool that automatically applied coupons when you're checking out and took a pain point that everybody had experienced and made it really easy.

• 1:02:05John Coogan?

  Yeah, I mean, I remember using RetailMeNot back in like 20, I must say 2008 or something like that. And you'd always have to, oh, I'm buying something, Ctrl T, new tab, search coupons and honey just bake that right into the browser, made a ton of sense. And so, and so what was the first dollar into the business? Like, how did you make the first dollar of revenue, I guess?

• 1:02:28Speaker 01

  The first dollar of revenue didn't come until 2015. So let's launch the product 2012, 2015. We pieced together kind of a rolling seed around if anybody that would take a flyer on this company with a couple hundred thousand users and maybe interesting, but haven't really figured it out. And we used that to hire somebody with a background in affiliate marketing. And we had, we being George and I, co-founders of the company, had thought that this might make sense because after all, RetailMeNot, you just mentioned, and other companies, that's how they monetize is when you click on that RetailMeNot link, it's actually affiliate tagging you at that moment in time. And so you go to do that coupon search and whether the coupon

• 1:03:13Speaker 01

  works or not, it's, they're getting affiliate commission on that. And that's why there's the, they hide the code and open multiple tabs and do all that stuff. So that was how it was. And we're like, hey, we could probably monetize that way. We, George and I reached out to affiliate world and they, they basically were like, you guys are a toolbar, you probably are up to no good, go away. And so we did. We didn't realize that there had been some bad actor toolbars in the space immediately prior to that, which was like surprised to learn. But we went back to just building a cool product for consumers and then. And when we hired somebody with a background in that space, what we came to realize is that

• 1:03:56Speaker 01

  the relationship side of affiliate marketing is how you get to the table in the first place to get that trust, especially as a new product in a toolbar or browser extension. Affiliate people call it toolbars.

• 1:04:10Jordi Hays?

  Before we go too much further, what was the LA tech ecosystem? Or was there really an ecosystem in that 2015 era? Because I remember I graduated college in 2018 and everybody was like, oh, LA tech is real. It's a thing. And they were like Snapchat and Honey. But like, there wasn't a lot of debt. There wasn't a big bench. Name the third company.

• 1:04:34Speaker 01

  I'd say very few people were even mentioning Honey in that conversation either. We were pretty under the radar. We didn't do a ton of press and talk about what we're doing. We'd, we'd found a cool business and decided not to tell everybody that might want to pivot to copy what we do about it. So, but back to the affiliate piece of it. And so we hired from within the industry and were able to have conversations. And one of the things we realized pretty quickly is another way to save our users money was to offer them cash back. And so we added a cash back loyalty program that we called Honey Gold in 2015.

• 1:05:15Speaker 01

  And when we did that, we started to look a lot more like Ebates, which became Rakuten. And the cash back model that was very familiar and comfortable to affiliate marketing, combined with the coupons. And we still had a lot of education to do around what the incremental lift is of keeping somebody in the shopping cart. Like you talked about this journey that you had prior to Honey is you get to this box while you're checking out. It's empty. It says coupon codes. It's effectively challenging your intelligence as a consumer on, are you just going to check out or are you going to go find a coupon? And it's.

• 1:05:52Speaker 01

  Inherently adding friction to the checkout process by doing that because either you're a little bit hesitant or uncertain, or you're going off on this wild goose chase. And we found that by keeping the consumer in the shopping cart, we actually drove incremental lift for the retail partners. And over time, a bunch of them were able to use their own data to demonstrate that to themselves. And that's the core of what became Honey's business model. So the first penny that we made and the last penny, as far as I know, is effectively affiliate marketing with a cash back program that we worked with, that we rebated that commission to the consumer.

• 1:06:31John Coogan?

  Yeah, talk to me about kind of the steel man argument. I've been on the other side of this because I've run e-commerce sites and I've seen Honey codes come in. And as an e-commerce owner, you're kind of like, oh, like I understand paying the affiliate for, you know, the Andrew Huberman who like endorsed it and educated the consumer about it. But it's like, if I already did all this work to get the customer into my cart, why am I paying Honey at all? Like, I know that the customer was going to go find a code, but you know, why, why am I paying you guys? Talk to me about that conversion lift and like how you actually test that and justify that because I could imagine that there's probably some pent up like frustration amongst e-commerce sellers just saying like, oh, that was always like paying a big Honey bill and it never really made sense to me.

• 1:07:14John Coogan?

  And honestly, I think a lot of e-commerce customers feel the same way about Google Ads, to be true, to be clear, because they're like, I was going to rank number one and I had to pay the Google tax. How do you, how do you, how do you think about like the Honey tax or any of those, any of those claims?

• 1:07:28Speaker 01

  Honestly, I don't, I don't think it got to that point while we were running the business, maybe over time they started to have more of that sensation. It wasn't the feedback that we were getting, we worked with thousands of retailers that made the decision that it was effective for their marketing programs. Obviously there's people that chose not to work with Honey too. In fact, one of the first PCs I met when we were trying to raise a seat around, he having been an e-commerce founder himself, he said, I hate what you're doing. Before we had like any users or anything, I hate what you're doing. If I were still running my company, I would write code to break it and open source it so everybody could have it.

• 1:08:10John Coogan?

  Wow.

• 1:08:11Speaker 01

  Because like, okay, I guess you're not going to invest in this.

• 1:08:13John Coogan?

  That's a, that's a pretty hard pass email. Most people say not a fit at this time.

• 1:08:17Speaker 01

  Correct.

• 1:08:18John Coogan?

  This is like, I would open source what you're doing because I'm so frustrated.

• 1:08:22Speaker 01

  So he never did that and nobody ever did that. And we got, we got better at demonstrating the value.

• 1:08:28John Coogan?

  Yeah. And it does make sense that, that if you're at the last second, you're like, ah, you know, I'm deep in the checkout. They just hit me with taxes and shipping, but then honey came in and gave me a little bit, you know, five, 10% off. I maybe I'm more likely to click and, and you could imagine that math working out in certain scenarios and maybe in aggregate.

• 1:08:46Speaker 01

  Yeah. And it's in aggregate, people have found that it works for them for any particular consumer journey. I'm sure you can say, oh, I was going to buy this one anyway. But there's other times when you might've gotten the hesitation of, hey, maybe I should wait for a sale and

• 1:09:00John Coogan?

  Oh, totally.

• 1:09:01Speaker 01

  By, by getting the confidence that you have a deal and you can

• 1:09:05John Coogan?

  Yeah.

• 1:09:05Speaker 01

  Check out now.

• 1:09:06John Coogan?

  Yeah.

• 1:09:07Speaker 01

  In aggregate, it makes enough sense that like the commission rates that are paid for this are not high. So it's not like the, the marketing spend on Google where you're spending well into double digits percentage of revenue on acquisition or what you're spending on Facebook. We're talking like really small numbers and part of that reason the rates are low is actually because, because of the place in that journey. So it's, it's an incremental lift for a few percent. It's not we never tried to sell it as, hey, you should give us 25% like you're paying Google.

• 1:09:40John Coogan?

  Yeah.

• 1:09:40Speaker 01

  And get like, get Forex return on ad spends is like 25% commission rate.

• 1:09:44John Coogan?

  Yeah. And you're bringing a little bit of like this dopamine hit to the checkout process that's normally like, uh, I gotta like type in all this junk. I gotta do all this. And then honey shows up and you're like, yeah, I feel like I just won the lottery. Like maybe I will check out. So I could, I could totally understand this.

• 1:09:57Speaker 01

  But before we were doing this, I mean, keep in mind, the customer journey is like, open the Google tab and go search for a coupon somewhere else.

• 1:10:04John Coogan?

  Exactly.

• 1:10:04Speaker 01

  You're going to find one from a competitor. You're going to find a bunch that don't work. You're going to get distracted because your kid wants a sandwich.

• 1:10:10John Coogan?

  Yep.

• 1:10:11Speaker 01

  Like there's a whole bunch of Reasons that you end up abandoning that cart that you appeared to have high intent to check out on.

• 1:10:17Jordi Hays?

  Yeah.

• 1:10:17Speaker 01

  And shopping cart abandonment, especially when we started is like the number one pain point for retailers. Like, why are 70, 80% of my people leaving? And what can I do to help close that? And so I think Honey and tools like it, we were not the only ones that did this. A bunch of other companies replicated the model and have had good success with that. And it's for the same reasons.

• 1:10:40Jordi Hays?

  Can you talk about that? I remember at post-exit, there was just this rush of companies that were like, okay, you can, Chrome plugins are now venture scale businesses. And like, I just remember it was like literally constant. There were so many iterative companies.

• 1:10:58Speaker 01

  Who knew? I mean, it really just exposes like a cool technology, but also potentially a great business, which is fascinating.

• 1:11:04Jordi Hays?

  But, but here's the issue.

• 1:11:06Speaker 01

  Yeah.

• 1:11:06Jordi Hays?

  Outside of cryptocurrency wallets, we haven't seen big outcomes in the sort of like Chrome plugin space. And you could argue those are, you know, mobile products.

• 1:11:17Speaker 01

  Yeah. I have my own explanation or thinking on it. So what George and I saw early was that while everybody else is off building mobile apps and every investor was asking, hey, what's your mobile strategy? Chrome extensions or browser extensions generally have an insane retention characteristic that they completely solve for all of the problems that people are having on mobile. Of how do you not just get somebody to download your app, but to remember to use it in the context that you're providing value? And for mobile apps, like there's only a certain set of contexts where you have that natural habit loop trigger. And people wrote books about this of how do you get a consumer to like build that habit?

• 1:12:00Speaker 01

  You have to like effectively teach them that this is a new behavior. And on mobile, the apps that were able to do that are effectively messaging apps that give you like a real trigger to come back into the app. You're engaging with somebody else. And so outside of that, you never had like. Mass market consumer like product for shopping even it's like it's a pretty big pain point but like the amount of um successful mobile apps going after even some of the biggest categories is challenging. On the browser extension, we got to get all of that engagement and retention and habit out of the box. Like you install us one time completely out of context. You are not shopping now. You might not shop for weeks or months.

• 1:12:45Speaker 01

  And the exact moment that we can deliver value, we could detect that context and present the option to do that. And one of the reasons Honey in the early days grew um at a steady but slow rate is the the cycle time on that growth loop was measured literally in months. So the time from somebody installs Honey to they get a coupon that works, which is like the aha, this thing actually works moment is literally uh uh weeks to months like in because of that, the that's the moment when people would share and tell people about it. So we know this works. Um. So with the extension world, you have that. So how come other people haven't been able to do this?

• 1:13:27Speaker 01

  Well, there is actually a challenging policy in the extension uh framework that remains to this day, and it's a single purpose arbitrary policy that Google has uh for the Chrome Store that extensions are only allowed to do one thing. And so extensions have effectively been pushed to only do a feature and it becomes increasingly challenging to attach a business model to that feature. And so to me, that's the disconnect that they've strategically divided um the utility from the monetization side of it. And there's historically good reasons why you might want to do that. In some cases, if people are abusing it and like

• 1:14:11Speaker 01

  there's there was abusive behavior when people before this policy came in. But I think it really slammed the door on a lot of other interesting models that people would have for a browser extension. And basically, to this day, you have Honey Honey and Shopping Tools, uh because we were able to attach the monetization that worked to do um large scale consumer growth acquisition. You have Grammarly, who has a business model that works for it. And you have Free Ad Blockers, it's basically the entire world.

• 1:14:42John Coogan?

  Can you talk now about some of the allegations that were made in that video? What you found so frustrating about it and kind of the process that you went through to debunk some of those claims? And also, I'd love to know, I mean, you've moved on. It's not really your baby anymore, but clearly it got under your skin and you were like, I gotta set the record straight. So just walk me through the process of the claims in the video and then what you think they got wrong.

• 1:15:07Speaker 01

  Yeah, I mean, so obviously, the video is like complete shock because like it's the last thing I ever expected to hear. And

• 1:15:17Jordi Hays?

  Yeah, you're like, we've saved people so much money.

• 1:15:22Speaker 01

  It's like everything about it. I mean, from we saved tens of millions of users, billions of dollars. We helped fund a lot of content creation and the partnerships that we did with great influencers. And to twist that was to start with unexpected. And my initial reaction, we walk in through the stages on it. It's like it, well, it's once your baby, it's always your baby. So it's not like, I'd say, we felt that I felt that personally, talking to the hundreds of great people that built Honey is devastating to have your, the thing that you put all

• 1:16:06Speaker 01

  this energy into dragged in a public forum in a way that you know isn't accurate. And so that's like the initial reaction is like a little bit of grief and not feeling like you could do anything about it because almost everybody, I'm talking about like moved on from the PayPal organization, doing other things. And so didn't really feel it was my place to step in and say anything. That's like it's, I sold the company to PayPal. They own it. They should be able to make the decisions that they want for this business. I shouldn't be meddling in their, in their business decisions and.

• 1:16:50Speaker 01

  And so it's like accepting the reality of this is not mine anymore. And so then I saw like this, keep in mind the timing on this, this drops like a Friday before like Christmas holiday week. A big company like PayPal is unlikely to have all of their resources aligned to respond to that. At the same speed of a YouTube viral video going going viral through a holiday season where the initial video got 17 million plus views. Wow. The other videos about the same issue got even more than that in aggregate. And so it went wildfire.

• 1:17:27Speaker 01

  It led to rapidly several class action lawsuits being filed against PayPal and against other companies in the that do the same bottle. And because of that, the potential response from PayPal like rationally became it's run by legal. Yeah, of course. I'm assuming here, just to be clear, I have had no conversations with PayPal about anything, including whether or not I was going to say anything. Recently.

• 1:18:02Speaker 01

  And I suspect. Founder going direct. I suspect that any comms or legal person would have heavily advised against doing what I did.

• 1:18:15Speaker 01

  But so like going through these phases, expect it to kind of, maybe it'll just blow over, like it'll be a big storm and then like everybody can move on. But it's kind of continued to linger and articles about it. And then Google updated their Chrome Store policy sparked a wave of articles at the beginning of March. And people, again, from my point of view, like I have a lot of knowledge about this particular industry and extensions. Like the changes that they made to the policy will have no effect on anybody because they're already in compliance with what Google required. And despite that, nobody talking about it in the press like knew that.

• 1:18:55Speaker 01

  And so you have this consumer narrative that's going going like crazy on Reddit and other places of how.

• 1:19:02John Coogan?

  What about the specific claim of rewriting cookies and affiliate codes where it's very clear that someone found out about a product from a specific influencer, the customer wants to use that code and then Honey somehow gets in between that transaction? That felt like the claim that really took hold and I think you addressed that in your thread.

• 1:19:23Speaker 01

  Yeah, so like the never mentioned by anybody in any of the follow-up on it, not a single journalist or other YouTuber, knew about and partly it's because it's industry nuance that there is stand-down policies at almost all of the networks where downloadable software tools, toolbars, browser extensions are required by the affiliate network who's mediating all these like multi-party exchanges are required to stand down to traffic like that. So a website like the coupon code websites doesn't have the ability to tell if you've already clicked on somebody else's, some influencer creator link.

• 1:20:07Speaker 01

  They will, in the industry it's tagging is the terminology for assigning the cookies. It's basically you're following a link and then the network's tool sets all the cookies. And so for somebody like RetailMeNot, you mentioned before, if you go to the site, you click on the link, the link updates all the cookies. In the case of browser software, do the same thing, it's just following the link in an unintrusive way for the user. So it's not like, you're not going in there and modifying the cookie value. As the browser extension, you are clicking a link in the affiliate network, which is how they handle attribution. And so the overriding case that was described and purported to be extremely widespread, I think is actually very, very narrow.

• 1:20:53Speaker 01

  Only happens in, I guess, two cases. One, the Honey stand down detection potentially isn't working in some cases. This is not always alleged, but like, as a person who knows this business, like, it's possible there are cases where it struggles to detect that a link was clicked. And the particular example that he used on Newegg, I'm pretty sure this is what happened, because Newegg is using a multi-touch attribution system, an any-click system from company Howell. And it is effectively, like, it's, Newegg uses it so that it can pay both the creator upstream and Honey. But I suspect that Honey wasn't standing down, because it

• 1:21:37Speaker 01

  didn't recognize this Howell link, which is different than the normal Rocky Tan affiliate network link. Got it. Again, this is me speculating. I have no information on this, but it felt to me like a carefully selected example. And then, a few weeks ago, I took another look at the video, and I wanted to understand, like, is, how did this happen? Like, what he's saying? And I started pausing the video on the various pieces that he was showing on screen as, hey, Honey's doing all this devious behavior. And almost every version of that was essentially

• 1:22:19Speaker 01

  falsified. Like, he'd say one thing, and then the screen would show something completely different, and non-incriminating. It's like, Honey's, there's a secret 20% off coupon code somewhere else that they're colluding with the retailer to not give you, is what he says. That they're only going to give you the 5%. And then, you watch the video, rapidly going on screen, it's Honey going, and Honey gave you a 10% coupon and 5% cash back. I was like, well, you can't just, like, make shit up.

• 1:22:49Speaker 01

  Or I guess.

• 1:22:50John Coogan?

  Fact check false. You can make stuff up. This is the internet. Welcome to the web.

• 1:22:56Speaker 01

  Yeah. So I got a little frustrated.

• 1:22:59John Coogan?

  I'm sure.

• 1:23:00Speaker 01

  And I had seen that he covered up the coupon. I was trying to figure out what happened. It's like he blocked out the coupon code box that he was using to demonstrate that Honey was hiding coupons. I'm like, why are you hiding the coupon that you're using when you're showing, like when that's the claim? Right there on the screen, there's like, from that same retailer, if you sign up for my email list, you get a 30% coupon. And then the next screen is like, here's a 30% coupon they didn't tell you about. I'm like, well, they didn't tell you about it because it's a one-time use code that's just for you, that you just sign up for that email right there. Like Honey is not saying that they're getting you that coupon.

• 1:23:35John Coogan?

  Yeah, okay.

• 1:23:36Speaker 01

  And so it's like a lot of misrepresentation, but then the data is just not there to support the claims. And I first decided to let the people at Reddit know and do an AMA there. Very, very lengthy post and I'm glad it's way too long. Some good questions there, but nobody's going to read this and decided I would at least give some of the visual evidence and Twitter thread. And it makes it a little bit more clear when you see it, like the screenshots and like it's, it's not me. Some of the stuff I said before about stand down and like that, that's industry specific knowledge. And this is what I thought I would have to talk about to defend Honey

• 1:24:19Speaker 01

  originally. But the, the stuff I talk about in the Twitter thread and on Reddit is like, you can see it for yourself. You don't have to know anything about this business. Just go hit pause and look at the screen and see if the evidence is being manipulated to, to create a narrative. And I think that it was. And I don't know if my version will get anywhere near 17 million views or like, I don't have that kind of platform. I've never really been a content creator or trying to get anything out there. We just kind of stayed under the radar and built a cool company with some great people. But yeah, so it, it's out there now.

• 1:25:03Jordi Hays?

  But we're gonna, we're gonna try to get this to 17 million. We'll, we'll hand out pieces of paper in the street if we have to. I do have a question for you. I'm sure you're gonna have a kind of interesting nuanced point of view on this. What's up with the VPN market? Because when I think of sort of like shady, you know, when I think of like shady companies that do heavy YouTube influencer marketing, I think of VPNs, right? So it's like, we probably should have a video with 17 million views of like, you know, these VPN companies that are run by, you know, sort of unknown, shadowy internet, you know, companies. But I'm curious if you have a, any type of read on, on that market?

• 1:25:48Speaker 01

  I actually don't know that market that well. I do have a sense for why it's so prevalent on YouTube, though. The reason for it is, one, it's pretty high recurring revenue, high LTV product. So like, you can afford to do marketing spend for a product like that. The second piece is the YouTube audience is like two third international. And so it's an efficient way to reach a broad international audience who is in need of VPN to access content outside of their home country. And so I think that's why you see it on YouTube as a channel in particular. It's because the economics work is basically it. And once somebody figure that out, then everybody else copies the marketing channels.

• 1:26:28John Coogan?

  I've always said Mr. Beast should launch a VPN because he has a super, super broad audience. It goes everywhere. And if he was able to capture all of that, you know, gross margin, net margin for himself, he'd be printing money, but maybe misaligned with the brand. Who knows? Just a crazy idea I had.

• 1:26:45Speaker 01

  Yeah, it's, it's a great idea. I mean, it would work from a, the business part of it would work. Probably work better than Beast Burger and some of the other stuff he's tried. But he definitely reached a scale where he can't do normal advertising.

• 1:26:57John Coogan?

  Yeah, because if the product's not available globally, it's going to be, it's just, he's under monetizing his content at that point.

• 1:27:03Speaker 01

  Yeah, it's, it's that. And he's, the scale of the ad buy now is like, it's a Super Bowl every time he does anything. And so, so there's like 10 companies that can even possibly afford to do that. And so he's been driven to create new brands and it's kind of fun to see what, what he's been able to do without.

• 1:27:20John Coogan?

  It's been super fun and it's been fun having you.

• 1:27:23Jordi Hays?

  Yeah, before you go, could you give us, you know, a minute?

• 1:27:26John Coogan?

  Give us coupon code.

• 1:27:27Jordi Hays?

  No, no, I, at least a minute on pie.

• 1:27:30John Coogan?

  What's your favorite coupon code?

• 1:27:31Jordi Hays?

  At least a minute on pie and what you're working on now.

• 1:27:33Speaker 01

  Yeah, so Pi is a new company I'm working on. We have an ad blocker that is designed to give consumers control over their advertising experience. We don't think the economics of the internet work if everybody has a, an ad blocker that blocks everything all the time. And we don't think it's reasonable that consumers should have to tolerate the ad load. And the incentives are misaligned there. So effectively, Pi is building a way for consumers to have granular control over what type of advertising they are comfortable with. And we are building ways for them to participate economically in that value exchange.

• 1:28:12Jordi Hays?

  That's very cool.

• 1:28:13Speaker 01

  So like, that's

• 1:28:14Jordi Hays?

  And you have 2 million users?

• 1:28:16Speaker 01

  We have 2 million users.

• 1:28:19Jordi Hays?

  And no, wait, so let me guess, nobody's heard of you because you haven't hired a PR firm, you haven't raised venture capital, you don't have any VCs doing threats? Because, because I'm, I'm, you know, it's, it's, we always find it funny when we find a, you know, a company with a massive user base that we haven't heard of.

• 1:28:36Speaker 01

  Yeah, yeah, yeah.

• 1:28:37Jordi Hays?

  And, and, you know, we've heard of you and Honey, but I, and candidly, I hadn't heard of Pi until we were prepping for the show.

• 1:28:44Speaker 01

  Yep, that's, not surprising. Most of our acquisition has been through regular YouTube ads of all places. So it's, it's interesting to be an ad blocker that's doing advertising.

• 1:28:56Jordi Hays?

  Yeah.

• 1:28:57Speaker 01

  We'll see how long we continue doing that. But to get to, to get to a reasonable scale where we have a large enough audience where people are interested in what we're doing, it was important. So we've, we've invested in that growth, personally invested in the company. And we'll see, we'll see if we can make it work. But if not,

• 1:29:20Jordi Hays?

  Good luck.

• 1:29:21Speaker 01

  It's just a lot of fun building with a lot of cool people again.

• 1:29:24Jordi Hays?

  That's amazing. Love it. Well, thanks so much for coming by. Always welcome on the show.

• 1:29:27Speaker 01

  Yeah.

• 1:29:28Jordi Hays?

  Cool. Thanks, guys.

• 1:29:29John Coogan?

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

• 1:29:30Jordi Hays?

  All right. Cheers.

• 1:29:32John Coogan?

  Great. Yeah, what an interesting.

• 1:29:35Jordi Hays?

  It's back with another Chrome extension.

• 1:29:37John Coogan?

  Just chill. Oh, yeah. By the way, we have 2 million users. Fantastic. Well, we're pivoting back to AI. We have the host of the Late in Space podcast. I first found this fellow because he put out a fantastic interview with George Hots, one of my favorite people in the world, really, and we're excited to talk to him. I want to get his take on AI 2027 and a whole lot more, but also I think he has a little bit of contrarian take about about whether or not you should traffic in these forms of, oh, AGI is 2 years out. So I want to hear from him. Welcome to the studio. How are you doing?

• 1:30:17Shawn Wang?

  Morning. Hi. Been great.

• 1:30:19John Coogan?

  Do you want to give a brief introduction in your, I know you as the host of the Late in Space pod, but in your bio, you have a number of different affiliations. What's, how should the viewers think about you?

• 1:30:34Shawn Wang?

  Someone with basically ADD and too many projects. But yeah, I'm Sean or Swix. I started the Late in Space podcast to cover the AI engineer field, which I helped to popularize, and I also run the AI Engineer Conference, which is happening in a couple of months.

• 1:30:55Shawn Wang?

  Primarily, I think the one in New York that I did helped to kickstart a lot of the recent MCP hype that you might have been seeing.

• 1:31:02John Coogan?

  Oh, yeah, I'd love to get into that.

• 1:31:04Shawn Wang?

  We can get into that. And I think, yeah, what you were referencing just as you came in was, you know, the news of the day, right? Like AI 2027. I think very important to at least try to go through the thought process of like what might happen. But this is essentially fanfiction, right? Like, we don't, we don't know exactly what will happen. And, you know, we've been getting various forms of AGI is 2 years away for quite a number of years now. And I think part of why I started the AI engineering sort of trend is to try to get people towards building more things instead of just speculating on what the big powers that maybe will do, because you have a lot more agency in your life to do things. If you just, you know, focus on what we have today.

• 1:31:50Shawn Wang?

  Granted, that AGI is very big, and I do take that seriously.

• 1:31:53John Coogan?

  Yeah, of course. Well, let's go through some of the things that you do think are worth building. I want to get into agents and we've been asking a lot of people, you know, when can this thing book a flight for me? But maybe we should start with MCP. Can you just give us an overview? I saw all the viral posts, a lot of debate over is this just an API? Or is this something more important? All the leading labs are putting out papers and implementations of it. Can you give us your kind of MCP, explain like I'm five for dummies? And then maybe take me through a few of like the implications for the market and the different AI labs.

• 1:32:26Shawn Wang?

  Yeah, I'm pretty sure you already had like a couple of explanations. So I don't know if I'll be, you know, adding a lot here. I'll just give you my, my version and then we can riff on that. So MCP is a protocol for a lot of different integrations into agents. And I think that there have been many attempts, a lot of different configurations of I will include the framework. I'll start from the gateway. I'll start from the integration side, whatever. But this is the first one that was very seriously put out by a big lab. We actually were the first podcast that the MCP creators did an interview on. And that's, we just released that yesterday.

• 1:33:06Shawn Wang?

  And it's, it's, it's shocking how impactful this is for the, effectively the side project of two guys.

• 1:33:13John Coogan?

  And this is, and they work at Anthropic, is that correct?

• 1:33:16Shawn Wang?

  They work at Anthropic. Yeah, over in the London office. Yeah, you can, you can check out lean.space/fcp, you'll see it.

• 1:33:22John Coogan?

  Cool.

• 1:33:23Shawn Wang?

  And, and yeah, so, so I think effectively, maybe for the normies, whenever you see these like at symbols, like when you're in a chat and you want to add something and you want to include a tool, you want to include any kind of agents or any kind of, you know, subsystem like a Notion or Zapier or what, what have you, for, for developers, we will use things like Sentry, Microsoft Copilot and GitHub. Just put one out today. And I think Google announced something. I don't know what they announced, but they announced something. But basically the entire industry.

• 1:33:54John Coogan?

  Always the case with Google. They put out something, but I can't find it.

• 1:33:57Shawn Wang?

  I mean, there's just a lot, right? Like today, they just announced 2.5 pro pricing. So my viral tweet of the day, I always have like one a day is that they now completely own the entire Perito frontier of all, all, all labs. Like they've had the smartest and the cheapest and the most effective Perito frontier between.

• 1:34:16Shawn Wang?

  Which is incredible. Anyway, coming back to MCP.

• 1:34:19John Coogan?

  Sure.

• 1:34:20Shawn Wang?

  So each, like, this is what we call in the industry like an M times N problem. Meaning I have this one app, I write integrations for this one app. So, but then when I move to a different app, I have to rewrite integrations again. And obviously, that's annoying. Obviously, we want to share integrations. Obviously, like, the open source community can improve better, things better together instead of individually. And we should start competing on these things and start competing on other better things. And it just took a player like Anthropic to put this forward, and this is the one that got enough momentum. So practically, for what the normies would, sorry, I don't know if it's derogatory to say normies, but you know, not people who are not in the mix every single day. Practically, what it's going to be is that you're going to be much easily able to add integrations

• 1:35:05Shawn Wang?

  to basically anything in any agent. And that will, you know, at least help you get use out of them faster. It's just because individual companies are not writing their own integrations anymore. Basically, everyone's on boarded to this ecosystem.

• 1:35:19John Coogan?

  Yeah, I think normies is, it can be a pejorative when it's used as a blanket term, but I think everyone, you might be a normie in defense technology. A defense founder might be a normie in AI technology, and that's, and that's fine. And that's why we have a variety of guests on the show. With regard to MCP, the, the most basic question is like, how is this different from an API? Zapier already exists as a binder between APIs. And also, like, we're hearing coding agents getting better and better. The Devens, the Cursers, like, why is it so hard? It feels like AI is incredible at writing code. Why can't I just use, use AI to say, hey, I want to interface with this API? Just go figure it out every time you compile the code.

• 1:36:01John Coogan?

  If the API changes, figure it out and, and reverse engineer the API. There's docs out there. Here's kind of the general idea of what I want. Go figure it out every single time at runtime.

• 1:36:12Shawn Wang?

  Yeah, I mean, the second question is easier answered than the first.

• 1:36:14Jordi Hays?

  Sure.

• 1:36:15Shawn Wang?

  Main- mainly because it's probably easy to figure it out, uh, figure out common implementations. But then you won't tackle the edge cases or the bugs that happen. Uh, and obviously, it's also very inefficient to keep coming up with it. Uh, a new implementation and integration every single time.

• 1:36:29Jordi Hays?

  Sure.

• 1:36:30Shawn Wang?

  Uh, so when possible, actually, it's better to not use AI if you have the option to not use AI. Like, AI is meant to be a plug for things that don't exist. But if you do have the integration that's written and battle-tested by like, you know, thousands of people before you, why would you not choose that? Like, o- only if your needs are not being met by, by that integration, then go ahead and, and write your own. Um, and so, so, uh, and the cost of writing your own has come down a lot, right? Uh, which is, which is also very interesting from the sort of open-source ecosystem point of view, where, uh, people are now vendor-ing a lot of their libraries that they would typically import, uh, without thinking, just because they're like, oh, yeah, you know, someone's written this for me and it costs too much. Anyway, so, uh, then, uh, let's come back to the first question on how does this compare in API? Um, and that's the most, that's why developers hate MCP.

• 1:37:14Shawn Wang?

  They're like, this doesn't do anything over open API. Uh, and we, uh, we asked them, uh, we asked the, uh, the authors of that question, uh, point-blank on, on the show. Uh, and it, basically, it reifies concepts that, um, would not be, would be undifferentiated as far as the normal API spec goes. Um, so, for example, there's concepts like resources, prompts, tools, sampling routes and transport in MCP. Um, and like, those are the, those are basically special subclasses that have, that have, uh, that are treated differently in the MCP, uh, environment, whether or not they're controlled by the model versus the application versus the user. So they are very, very distinctly, um, parcelled out the permissions and the, the intended roles of each feature.

• 1:37:56Shawn Wang?

  So I would say it's kind of like a layer o- over APIs that have become more AI-native, and that's, uh, made it, Anthropic is at least saying that this is much easier for us to use, and you're gonna build much more effective agents if you do this.

• 1:38:08Jordi Hays?

  Got it. Um, um, do you feel like MCP will, you know, massively accelerate the creation of, of agents that, uh, become, you know, a very active part of our lives on the internet? It was, you know, we were at, um... Y Combinator Demo Day and there was a lot of AI agent infrastructure companies. There was probably more AI agent infrastructure companies there just in one Demo Day than AI agents that I've sort of tried to use, right? So it's like, everybody wants to do picks and shovels, but we actually just need, you know, we need more sort of shots on goal at, you know, potentially the harder problem, which is just reliable agents.

• 1:38:52Shawn Wang?

  Yeah, I fully agree with that, actually. So it's actually very depressing, like the AI agent infrastructure company is what you do as a developer if you have no other ideas. So that, I mean, YC should take that as a warning sign that their people are not going after the right path. MCP makes integrations easier, period, right? What you do with those integrations, who, what problems they solve, that is still an open question. But yes, for sure, the ecosystem is about to get a lot stronger because we're now no longer rewriting things. We're converting M times N combinatorial explosion problems into M plus N, where you could just write every integration once, hopefully, I mean, maybe twice.

• 1:39:28Shawn Wang?

  But yeah, I actually, I like the opportunity to address this because I think people think of me, because I wrote the article on YMCP one and everyone's like, you're, you're just a show for MCP. I like the opportunity to just say like, no, like, this is very good. It's a, it's a protocol. Like, did you get excited when REST was invented? No, like you got excited by all the applications that REST enabled.

• 1:39:49Jordi Hays?

  Yeah.

• 1:39:50Shawn Wang?

  And that's, those are going to come down the line. And you're gonna, but I think like, the normal consumer like would just, should just be really happy that like, these high quality integrations are now going to come a lot more out of the box than you waiting like five months for your favorite app to, to write the integration for your, your favorite thing. You know, so your agents are going to be able to do a lot more things, but I think the top agents, like the Sierras of the world, they still want to own the end-to-end experience and they will use MCP, but they don't necessarily, like, their life, they're not really like depending on it, you know? It's not like life or death for them. Like, it's still on you to build an agent or a product, a solution, whatever, that solves a problem your customers need and that doesn't go away.

• 1:40:34Jordi Hays?

  Yeah, what's your thesis on, you know, the, do you see a Cambrian explosion of consumer agents, B2B agents sort of built on, you know, in part on MCP and, and, you know, comparing this to something like fintech, right? We had the CEO of Plaid on yesterday, right? Like, everybody in hindsight should have worked on Plaid, super valuable. It's a $6 billion company right now. It powers a lot of stuff within finance.

• 1:41:03Shawn Wang?

  Same as Stripe.

• 1:41:03Jordi Hays?

  But Stripe, but you can't name that many other sort of like generational companies in fintech infrastructure. Sure, there's a bunch, but like no household names. And I can see the same thing playing out in the agent space where maybe there's this, like, almost like a Stripe equivalent in the agent space or a Plaid. But then, you know, the best thing you could have done, you know, if you didn't build Plaid, was to build on top of Plaid and build sort of these novel product experiences.

• 1:41:34Shawn Wang?

  There are at least five or six startups that are trying. I actually live with one of them. It's called Smithery. That's like decent, but all these are super early. Yeah. The main challenge that they're gonna, all gonna face is that Anthropic is coming up with their own registry. So Anthropic wants to own this. So I don't know if there's a separate Plaid of MCP that comes out doing this. So that'll be my, my, my two cents there.

• 1:41:56Jordi Hays?

  But wouldn't one argument for Smithery, and I'm not familiar with the company, be that, you know, other companies don't, you know, if they could ever see themselves competing with Anthropic in any way, you know, they wouldn't be, want to be reliant on Anthropic's registry. So maybe a new third party that is, you know, kind of a pure play infrastructure player should exist?

• 1:42:19Shawn Wang?

  Totally possible, but it's on, the burden of proof is on them, not, like, by default, whatever the, is the, is the big lab official solution always wins, which is pretty brutal in AI terms. But like, the world is not meant to be fair, right? I think the one thing I should mention that I neglected to that I do think is very bullish and like will result in a lot more capabilities is that MCP servers can also be clients and that's a kind of like a technical thing, but that is effectively what is going to enable servers to then become agents and orchestrate agents fleets of other MCP agents on your behalf without you knowing about it. And so that actually turns these things into much more

• 1:43:02Shawn Wang?

  agentic networks and we're probably going to see that like I would say like this is too early right now because MCP is like four months old. Probably like the end of the year, early next year, I would say like this is starting to this will start to come up because they built that in from the start.

• 1:43:17John Coogan?

  Is there a world where MCP just gets steamrolled by the next generation of models? We kind of saw that with some of the workarounds to context windows and then Gemini comes out with a million token context window and a lot of people are saying, oh, well, like all those all those workarounds are kind of irrelevant at this point. How do you think about the durability of MCP over the over the near term?

• 1:43:37Shawn Wang?

  MCP actually improves with more context window utilization. So they're not at odds. There's a very, very outstanding debate on context versus RAG, but this is slightly different. MCP is just like is the ecosystem integrations that models really don't have.

• 1:43:51John Coogan?

  Yeah.

• 1:43:52Shawn Wang?

  That's it. I would say that if there were any challenger to MCP, it will come from Google because Google has native integrations to Gmail, Calendar, YouTube, what have you. They already watched it and it's already first party in there and now MCP come along and through a through a through some noise into their nest.

• 1:44:10John Coogan?

  Well, I mean, Google kind of lost the front end wars with Angular versus React. So, you know, there is precedent for someone for, you know, another tech company coming up and resetting the standard, right?

• 1:44:22Shawn Wang?

  Sure. And yeah, I would say that I don't think they should spend time here anyway.

• 1:44:29John Coogan?

  So, yeah, yeah, yeah, I agree. Yeah, but maybe we need to.

• 1:44:32Jordi Hays?

  Let's switch gears and talk about AI 2027.

• 1:44:37John Coogan?

  Yeah.

• 1:44:37Jordi Hays?

  I'd love to. I'd love to. I'd love to just let you rant maybe for the next 10 minutes.

• 1:44:42John Coogan?

  Yeah, yeah, yeah.

• 1:44:43Jordi Hays?

  But, you know, initial.

• 1:44:46Shawn Wang?

  Um, I think, so I think these guys have a really good track record. Um, I don't know actually if you've interviewed them already. No, not yet. Um, I'm sure, I'm sure they'll come on, you know, they seem to be doing a podcast tour. Um, and uh, and I think there's, there's some public service in doing the math and drawing lines, right? That's what. That's what they did. Uh, that's what situational awareness was. Um, and like, I think because we are very, we live day to day. We don't really see the year to year. Uh, it's just because we don't spend time on it. And if you just draw lines and you're like, you believe that what has happened in the past, the near, the near past is probably going to happen in the near future. Uh, you can probably see at least some kind of trend line. Uh, the main caution with all these things is that S-curves do exist, you know?

• 1:45:30Shawn Wang?

  If I'll just rewind your mind back to like, let's say April, May, twenty twenty, when every chart on COVID was going like this. And there would be more COVID cases than humans in, um, in, in, in like the, by the end of like twenty twenty one or whatever. And that never came, never happens because one, we reacted to it. Or things, or you hit invisible asymptotes, as Eugene Wei calls it, where like you didn't account for this because we weren't there yet. Like there was just sort of this limiting factor that you, that you didn't, uh, run into. Uh, but this is really relatively near term, it's basically the next eighteen months. Um, and uh, I, I think like the main geopolitical, geopolitical aspects is kind of interesting. Uh, we have no idea what China will do really like.

• 1:46:11Shawn Wang?

  Um, the, the main meme on Twitter, uh, which I really like from tier Texas is that, uh, C team thing just does nothing. And then the USA just implodes just.

• 1:46:22Shawn Wang?

  The funniest outcome's the most likely, right? Maybe that's it. Um, uh, who knows, who knows? Uh, I do think that, um, what you can, there, there are things where like, it's really just down to the individual decisions of powerful political figures. That we really cannot tell. Um, and then there are things where like, they're basically extrapolations of scaling laws that you can't tell because they're just, you know, uh, just the scaling laws that have already been established. And you're, you're betting on the end of them, which is less likely to happen. Um, so I think the, the coding, um, agent's, uh, commentary is really good. Uh, and I think that this starts, it starts to talk, uh, you know, talk about hacking and robotics. I think it's all, it's all on, uh, very, very unbalanced. Um, I think where it starts to get into a little bit more gray areas, like the political and, and bioweapon stuff.

• 1:47:07John Coogan?

  Yeah, I love the the kind of reference to COVID. Everyone thought it was an exponential. It was actually a sigmoid function.

• 1:47:14Shawn Wang?

  Everything's a sigmoid. It's a series of sigmoids.

• 1:47:16John Coogan?

  Pretty much, right? And we and it certainly feels like we're experiencing sigmoid curve with pre-training. And we're seeing pre-training diminishing returns. It feels like there's still some juice in RL. Are there any next steps that you're excited about? We we've heard that program synthesis is kind of a hot area that people are investigating right now. What are you excited about? What do you think is potentially overrated or underrated?

• 1:47:41Shawn Wang?

  I actually think people, there's a lot of alpha in splitting out what you call program synthesis, what I call code generation. We've effectively gone from like single line autocomplete to like functions autocomplete. And now with like WinSurf and Cloud Code and Copilot and Cursor, we're generating basically entire apps and PRs for those apps. And I think being really clear minded about what where those capabilities are and improving them incrementally, you get things like Cursor, which, you know, zero to 200 million in two years is crazy.

• 1:48:17Shawn Wang?

  Yeah, so I think I think a lot of alpha there. But I think like really what what people are looking at now is the the general measure of agent trajectories. How long can an agent on a on a broad number of tasks autonomously operate? Right, so Meter, I forget the acronym. It's it's one of these like research institutes. Meter put out a study of the agentic work that can be done, you know, by by a wide range of benchmarks and dated it, ran it, ran it all the way back to 2019. And basically came out the idea that the agent's horizon for the 50% capability,

• 1:48:55Shawn Wang?

  like 50 percentile capability of human capability is is grow is doubling at between three to every three to seven months. Right, and we're now at an hour. So roughly, you can leave. Uh, the the smartest model that we have, which they they measured as three point uh cloud three point seven sonnet. Um, to run autonomously for an hour and do like the what it what a fifty percentile human can do.

• 1:49:19John Coogan?

  Yeah.

• 1:49:20Shawn Wang?

  And obviously bump things up or down in terms of percentile, but you know, the the the results and the scaling laws don't vary. Because the important thing is that they're doubling every three to seven months. Um, and that means you can roughly scale out when it, when are we going to have one day autonomy? When are we going to have a week, a year, a month, uh, you know, a month a year? And uh, that I think you can kind of set your clocks by and try to think about what products or companies you would build.

• 1:49:44John Coogan?

  It would be so funny if it was an S curve and it maxes out at exactly eight hours like a human. Like you can only give it one task every single day and it just goes and does that and it's great. But uh, yeah, just I I don't want to work overnight. Look, I I'm maxed out and it's at that for like the debt two decades or something. Unlikely, but funny.

• 1:50:00Shawn Wang?

  That'd be an interesting universality, right?

• 1:50:02John Coogan?

  Totally.

• 1:50:03Shawn Wang?

  Uh, so for example, a lot of people building agents have independently discovered sleep. The agent, the agents have to sleep because they have to compress memories and and do like the deep REM thing. Where they actually turn those into long term memory, like we have, like the computer agents have to do that and humans have to do that. Right?

• 1:50:19John Coogan?

  It's gnarly.

• 1:50:20Shawn Wang?

  I I'm not kidding, like, uh, go look up for those.

• 1:50:22Jordi Hays?

  We need an eight sleep for agents. Maybe it's eight sleep.

• 1:50:26Shawn Wang?

  Brian Johnson holding a candle going like.

• 1:50:28John Coogan?

  I mean, I was, yeah, I mean, you you're joking about eight sleep for agents. I was joking about like what, like, is there, will there be like an alcohol for agents? Or alcohol for L L M's where you just kind of like throw some randomness in the weights? And it gets a little bit crazier, but sometimes it's brilliant, you know, and it's like a lot more bold or something. Yeah, exactly. Uh, but maybe it's not that, may maybe it's just like to get true and true inspiration, you need to just throw some extra chaos and. Uh, uh, I guess the term would be like higher temperature in the L L M responses. And then run ten thousand of them and you get some more inspiration instead of all coalescing around the same kind of, you know. Fifty fifty percentile human, like the.

• 1:51:07Shawn Wang?

  Yeah. Yeah, that's called sort of mode collapse, where you collapse modal. But like, yeah, for those interested, we've moved on basically from temperature to var entropy. And also, I think most people would be interested in like the anthropics. Alignment work on tracing the thoughts of L L M's, which which came out recently as well. There's some really interesting torture you can put on these L L M's. We ask it to say like banana, but then you don't allow it to say banana. And it just, you can see it struggle to like. Oh, interesting. Find alternatives of saying banana. That's so funny. Wow. But for example, one of the R one replications, the R one replication, you can also do do things like. If you just wanted to think more, you can just prevent it from ending its thought and just insert weight or like.

• 1:51:53Shawn Wang?

  You know, but I thought something and it's just like you you can force its direction to think another way and for it to. Branch out again in terms of its diversity. So I think there's a lot of research here that is super interesting. I'm not sure any of it is going to bear fruit because. The the big labs are probably like two years ahead of us in the open research world there. Sure, sure.

• 1:52:14Jordi Hays?

  How do you, how do you react? Obviously, the the dominant story this week in the wider world is the, you know. Tariff tariffs and trade warrants, all that stuff. Do you do you feel like it's like arguing over, you know. Pennies as an A I sort of steamroller, just like is about to roll over the entire economy. Do you even give it any attention?

• 1:52:38Shawn Wang?

  So, you know, I I heard you guys ask the OpenAI guys about this. And like basically, it's a rounding error, right? But obviously, the supply chain really matters for A I. I think the U S has benefited a ton from the global. Trade setup that we've set up for ourselves effectively after World War Two. So blowing that up may not be the best situation. If we don't have a more constructive or well reasoned end state that we want to be in, and I'm not sure we do. Yeah. The White House hasn't given us a lot of comfort about where we're going.

• 1:53:16John Coogan?

  Yeah, I my take on it is like, I think AI is probably going to be the the main driving force of like serious cultural and economic change over the next few years. And no matter what happens, if it's good, both political parties are going to take credit. And if it's bad, both political parties are going to blame the other political party for whatever happens. And

• 1:53:35Jordi Hays?

  Same as ever.

• 1:53:36John Coogan?

  And really, it's going to be

• 1:53:37Jordi Hays?

  Do you worry about? Do you worry about the immediate impact on the sort of data center compute supply chain broadly? I know Elon was posting yesterday about how a lot of the conversation will maybe switch from GPU shortage to transformer shortages. Is that top of mind for you at all? Are you more focused on the

• 1:53:58Shawn Wang?

  Transformer, like power transformer?

• 1:54:00John Coogan?

  Yeah, power transformers, not the architecture. So for for for reference, the vast majority of transformers, the physical electrical transformers are made abroad. And they're very, very important as we start pulling gigawatts, moving it around the grid to get into these large data centers.

• 1:54:17Shawn Wang?

  Yeah, I hear you. Well, short term is like, you know, not my department. So that's that's an easy out, easy cop out. I think the I think like, whatever happens over the next two years, like, we really don't know, like, a lot of these negotiations, like, these are the start of a negotiation, kind of. It's just the way that Trump does it. Anyway, so I like, you know, I'm not, I don't want to get too much into that. All I'll say is, like, a lot of what I try to guide people towards on AI engineering is utilization of existing capability. Like, so much model capability has been locked, and it's not evenly distributed in our lives. Like, why do I have Siri that doesn't understand what I want? It's because Apple

• 1:54:59John Coogan?

  Hasn't shipped.

• 1:55:00Shawn Wang?

  Hasn't got a shit together. Like, this is not frontier tech. Like, what Elon is dealing with, what Sam Altman is dealing with, what Dario is dealing with is frontier tech. And that requires giant data centers with all this kind of research. But really, what AI engineers deal with is deployment of existing tech into our into business and personal lives. And I think there's a lot more to do do there. And I think, you know, while while the big boys figure out Your political situation, hopefully we still have enough power to like power, you know, the deployment of AI to the rest of the world.

• 1:55:32Jordi Hays?

  On the topic of Apple, do you think they can afford to fumble the rollout of Apple Intelligence just because their of their position as, you know, the core consumer hardware provider? Or do you have a strong take there?

• 1:55:47Shawn Wang?

  Yeah, I mean, so the lock-in of iOS, iMessage,

• 1:55:53Shawn Wang?

  you know, the the app that I drive, Apple Cloud, whatever they call it, is very, very strong, but there's a time limit on this thing. And for one, like, I actually tweeted about this recently. When the iPhone, like, I'm much more excited for OpenAI to compete with Apple than with Google. Like, OpenAI currently is running the Google Playbook. They're looking at like, they're reading themselves by like, oh, ChatGPT is like the sixth traffic website in the world. We want to go up, right? But like, Google is doing super well and like, actually, Google's pretty good. Like, we we we want to have a Google in our lives. But Apple has is really fumbling and they know it. And when OpenAI comes up with the OpenAI iPhone, I think it will be a serious challenge to Apple because

• 1:56:34Shawn Wang?

  OpenAI's iPhone will just be smarter, you know it.

• 1:56:39John Coogan?

  Yeah.

• 1:56:39Jordi Hays?

  Yeah.

• 1:56:40Shawn Wang?

  And like, everyone would would try it and it will be the first serious challenger to the Apple iPhone since, you know, Steve Jobs presented it.

• 1:56:46John Coogan?

  That's a great, that's a good take.

• 1:56:47Jordi Hays?

  And people already have like such an extreme willingness to try new AI hardware.

• 1:56:53John Coogan?

  Yeah.

• 1:56:53Jordi Hays?

  When, you know, the dominant lab comes out with something.

• 1:56:57John Coogan?

  Yep.

• 1:56:57Jordi Hays?

  I think every single person we know is is at least buying it, right? If it's a thousand bucks, sure, I'll take it.

• 1:57:03Shawn Wang?

  Like, no, no, like, you know, I think it's just like the the people who want to do get serious with hardware. They they've just been like the small guys, like the the rabbits and the, let's just, let's just say, call it the humans. But like, if you get someone with the resources of OpenAI, I I really want to see if they take a real run at it. I mean, he's talking, they have chats with Johnny I if they've confirmed that it's in the works. I don't know if like, how serious it is, they could still kill it. But I hope to God that he actually challenged Apple and Apple will get a shit together in in response.

• 1:57:31John Coogan?

  I completely agree. Well, yeah, that's a fantastic take. I'm looking forward to trying the OpenAI iPhone. We'll we'll see it and there'll probably be an XAI iPhone too. I mean, it might be a new new dawn in consumer hardware driven by artificial intelligence. But thanks for stopping by. This is fantastic. Well, we'd love to have you back. This is such

• 1:57:48Jordi Hays?

  Yeah, can't wait for the next one.

• 1:57:50John Coogan?

  Yeah. And everyone, go check out the latest podcast he just dropped, Late in Space.

• 1:57:54Jordi Hays?

  Yes, do it. Cheers.

• 1:57:56John Coogan?

  Talk to you soon. Bye. Fantastic. Next, coming in, we got Forerunner Ventures, Kirsten Green.

• 1:58:03Jordi Hays?

  I'm excited for this one. We, we reached out actually initially after she dropped her 2025 trend report, which is always fun to process. So I want to ask her about that and about a bunch of other stuff.

• 1:58:18John Coogan?

  Yeah, the 2025 Consumer Trend Report is out. You can get it at forerunnerventures.com. A deep dive into where consumers stand today and how major shifts are shaping new needs and opportunities all across a ton of different, ton of different sectors. It's a, it's a quick, it's a quick read. It's 200 slides. They really do their homework over there. And here she is to break it down for us. Give us the, the 30 minute condensed, condensed version of the 200 slide deck. Yeah. I mean, me and Jordy, we're basically live three hours a day, not a lot of time for reading. So if we want to, you know, consume some

• 1:58:57Jordi Hays?

  We want to hear it from the source.

• 1:58:57John Coogan?

  We want to hear from the source. So thanks for joining.

• 1:58:59Kirsten Green?

  Quick rundown.

• 1:59:01John Coogan?

  Yeah. How are you? How are you doing? I hope you're having a great Friday and going into a great weekend. But good to be here. Can you, can you give a little background on you, your firm, and the, and the trend report?

• 1:59:13Kirsten Green?

  Yeah, sure. First, thanks so much, you guys, for having me on. This is fun.

• 1:59:16Jordi Hays?

  Yeah, that's great.

• 1:59:17Kirsten Green?

  And it's, you know, it's, it's, it's a crazy day with no shortage of action going on.

• 1:59:22John Coogan?

  Oh, yeah.

• 1:59:23Jordi Hays?

  Yeah.

• 1:59:23Kirsten Green?

  Yeah. So yeah, I'm the founder and managing partner at Forerunner, and we're a venture capital firm. Been here in Silicon Valley for the last decade plus, making investments. Investments across the board.

• 1:59:38John Coogan?

  A decade plus of investments. We love, we love investments here.

• 1:59:45Kirsten Green?

  Um, and we largely focus on early-stage investing. We have a diversified portfolio across sectors and spaces. But we do have a thematic approach and a framework that we have kind of applied consistently for the past decade, and that's really tracking what is going on with demand. So where are the tailwinds? Um, and then we look for big technology shifts and business model changes and, um, and where business is not addressing that, that demand and, uh.

• 2:00:17Jordi Hays?

  Yeah, can you talk a little bit about, uh, I know, I know you guys will do B2B as well, but it feels like you've always had a love, you know, for, for consumers specifically, and that's gone in and out of popularity. Obviously, when you started, I'm sure a lot of people said, well, why don't, why don't you focus on SaaS, you know, look at the outcomes that we're seeing? You typically start your reports by reminding people, uh, just how much of, uh, I think it's here on the. The American consumer is undefeated. Yeah, the seventh slide, consumers drive two-thirds of US GDP. So I think that's probably like the anchor reason why it's been such a focus for the firm, but I would love to hear, um, kind of your, your take on it.

• 2:01:02Kirsten Green?

  Well, Dirty, that's one take. It's true, you know, in that, in the vein of tracking demand and demand being kind of the, the driver of all of business, the two-thirds of the economy and what's going on with the consumer is, uh, the most, arguably the most meaningful force. But really, more than that, yes, it's true that SaaS companies have returned lots of money to their founders and their investors. It's been a steady contributor of, of opportunity and venture. But if you step back and you look at the last two decades, the biggest companies.

• 2:01:37Jordi Hays?

  Yeah.

• 2:01:38Kirsten Green?

  Started with a consumer-first approach.

• 2:01:39Jordi Hays?

  Yep.

• 2:01:40Kirsten Green?

  So, you know, I would argue that like, starting a business with the consumer-first approach. If you are able to create that incredible gravitational pull and build a foundation from there.

• 2:01:53John Coogan?

  Yeah.

• 2:01:53Kirsten Green?

  We've seen time and time again, companies prove that they can take that foundation and leverage it into dynamic business models over time.

• 2:02:02John Coogan?

  Can you talk a little bit about just the general health of the American consumer? It's been a couple crazy years, the last five years. Things were going really well and then we had COVID and everyone was out of a job and then everyone got their jobs back and then inflation crops up and now people are worried about the tariffs and what that means for the economy. We've been in sort of a kangaroo market, as they say, jumping up and down, not a bull or bear. How is the health of the American consumer right now?

• 2:02:28Kirsten Green?

  Yeah, well, that is a big reason why we do this consumer trend report every year. So, you know, as venture capitalists at Forerunner, we spend the lion's share of our time thinking about the future and where things are going. But to understand or have a view on that, it is really important to step back and take stock of what's going on today at any given point in time. And so, you know, the exercise of getting out of our own bubble and sort of taking a pulse of the of the country, of the globe, from the person, you know, the people on the ground, we feel like, you know, is illuminating. So you're right in saying that the last five years have been crazy filled with uncertainty. So, you know, I think we're all trying to kind of process how we feel about the current

• 2:03:12Kirsten Green?

  ongoing tariff discussion right now.

• 2:03:14John Coogan?

  Yeah.

• 2:03:14Kirsten Green?

  And I think I feel like I did in March 2020.

• 2:03:17John Coogan?

  Oh, yeah.

• 2:03:18Kirsten Green?

  Like, what's happening? Like, uncertainty rules the day and here we are again. So, you know, I guess the good news coming out of that big period of COVID uncertainty is that we have all learned to have an incredible amount of resilience. We've been forced to do that. So, you know, I think when we check in with the consumer, we see a good deal of that. But we also, you know, definitely see some movement towards people feeling like they need to stand up for their own security and safety. That they can't count on the structures and the norms that maybe have been in place for a very long time. And this is a time period where having more agency over your own life and your own actions um is something people are craving.

• 2:04:01Kirsten Green?

  So, uh, you know, I think we do, you know, two hundred page slide deck, there's a lot of uh government data in there and a lot of just kind of, you know, taking, taking stock of the actual data and then we go to interpret some trends. And really we focus it, you know, I mean, I think I would say if we just look at twenty twenty four, we describe what we heard from people and this is a lot of survey work in addition to a lot of reading and a lot of kind of number crunching and processing. But it was kind of a middling year, you know, it kind of just lived in the middle from, from all measures, like it, it, from all the data metrics. But then also if you look at like the cultural norms, most of the movies were kind of follow on second generation movies, same with the music, et cetera. So, and you know, the, the word of the year was like brain rot and something else.

• 2:04:45John Coogan?

  Slop, yeah.

• 2:04:47Kirsten Green?

  You know, so I, I think that you have a consumer that's quite fatigued from going, uh, going through kind of the, the, the craziness of, of, of what the world has been. But at the same time, in that agency and in that desire to do things, there is like, I'm gonna, you know, I'm gonna pick myself up, I'm gonna take some action. And I'm going to, you know, look for having more control over my career, over my spending, um, over my healthcare. We, we went, we took a deep dive and, and we do this every year, kind of pick a few things that we think are particularly important in the context of that demand equation and also in the context of investing, because it is in service of sort of uncovering investment focus. And the couple of areas we looked at this past year were health.

• 2:05:31Kirsten Green?

  Security and of course Gen AI. So on the health front, this is, you know, perhaps the big, the biggest trend. Um, in my, you know, nearly thirty years now of, of investing, I think the biggest trend that we've seen. Um, people are, there is a, the growing willingness to spend on health. Um, and, and themselves and outside of the system. So, you know, sixty percent of the people describe health as being their number one priority, even above friends and family.

• 2:06:00John Coogan?

  Wow.

• 2:06:01Kirsten Green?

  Wellness economy. So when, you know, when you think about health, it's not just the, um, I already have a problem. I'm, I'm at the doctor because of that problem. It's the effort of proactive health, which has really been a huge area of growth. The wellness economy, which includes that, is a one point eight trillion dollar economy. And it's actually growing six times faster than the economy in general. Um, so, you know, I think that the, the dollars are there. The scope of what people are willing to pay for is evolving. You're seeing people more engaged in supplements, more engaged in therapies, more engaged in their workouts, more engaged in, in, and, um, doing things like MRIs or blood testing or biomarker testing.

• 2:06:43Kirsten Green?

  So this is, you know, this is a huge area of, um, it's, it's

• 2:06:47John Coogan?

  Yeah, do you?

• 2:06:48Kirsten Green?

  A breakdown in the system as well as just more information and people realizing that they have some ability to, you know, shape the future of, for their own health.

• 2:06:58John Coogan?

  Yeah.

• 2:06:59Jordi Hays?

  Do you feel like you're seeing enough founders take the concept of wellness sort of like seriously in Silicon Valley? Like, I, we, I take it very seriously. John and I have this funny dynamic where like, John has this joke that like, if I had a single inorganic blueberry, like I would die. And John meanwhile, just like eats whatevers in front of him.

• 2:07:17John Coogan?

  I could eat a, I could eat a credit card with a knife and fork.

• 2:07:19Jordi Hays?

  Yeah, exactly. Um, but I, but I feel like when you, when you just, when you just look at the data and understand how big the market is, how fast it's growing, you would think that. 20% of new startups would be like targeting this opportunity, yet it doesn't necessarily feel like that.

• 2:07:36John Coogan?

  Yeah, I want to talk about like the like, there's so much opportunity in health, but not everything is going to be venture scale. Even talking to our friend, Justin Mares, he has kettle and fire bone broth company. It's not really this like hyper growth raising every 18 to 12 months, 12 to 18 months. He's done great with that business. Then TrueMed, it's more of like a fintech platform, has venture written all over it. And so how are you looking at the opportunity in health across the lifestyle business that's just going to not really raise, grow, grow, grow? A private equity roll up, maybe buy all the gyms and aggregate them versus a true venture scale. Okay, this can be a public company. How do you assess that and where's the opportunity in health?

• 2:08:14Kirsten Green?

  You know, I mean, obviously that's a really important point, right? There's a lot more businesses getting started every day that are not appropriate for venture scale. There's a very unique set of traits that you're looking for in venture. And I think that, you know, beyond, beyond addressing like a tailwind and having that opportunity to play into. You know, you really are looking for like, does this, is this a business that gets stronger as it gets bigger? What are the flywheels in the business? What are the frictions to getting it going and starting? How do you, how like, is the compounding effect a benefit to the business? And does that give them like competitive advantages over time?

• 2:08:52Kirsten Green?

  Obviously, one of the big things we're looking for is like, what businesses have a chance to define categories and be real runaway category successes? So that is extraordinarily hard to do if you don't have like a real business model advantage at the root of what you're doing. And a lot of, you know, I think sometimes we have conversation. I often get asked about D to C companies and I kind of cringe a little bit because I think to myself like, you know, we weren't ever here or we haven't actually made an investment in a product company per se. We've always been looking at like a business model shift and a behavior shift. So I think at this point, like there's a lot of the business model shift. From moving online or moving multi-dimensional or things that a lot of those like those businesses

• 2:09:36Kirsten Green?

  that you described as lifestyle or products are playing into, you know, that the early wins in that have played out. Where now, like what I think is really exciting today, that really maps really well with a lot of opportunity and health, is the power of Gen AI and how that can actually make experiences personalized, more immersive and more productive.

• 2:09:56Jordi Hays?

  Yeah. So on that note, I imagine there's companies like some of the opportunities that you get most excited about are like a company you invested in five years ago, maybe they're focused on therapy. And then now they realize they have this opportunity of, hey, we can make therapy costs like 99% less through things like Gen AI and potentially deliver similar results, right? We saw, I think it was earlier this week, there was a study that came out that showed generative AI-based therapy was, was, you know, delivering pretty dramatic results. So how, how excited do you get about, you know, basically companies in the portfolio that, you know, not even just new companies that are pitching you or you're making investments in.

• 2:10:33John Coogan?

  Sam Lesson called it AI is a cherry on top as opposed to trying to get into the foundation model or this like magical, oh, we're going to redo the whole thing with AI. It's more like AI-enabled businesses.

• 2:10:46Kirsten Green?

  Actually, yeah, we, we think about it, we sort of describe businesses as AI-enabled, AI-led, AI-enabled or AI-boosted. Basically, every company needs to find a way to be AI-boosted. And you can imagine there's like a lot of degrees of that. You can use AI in your HR department and your finance function, or you can reimagine your product like you just suggested, Jordy, and like, you know, make your, your therapy product even more efficient. And then the enabled businesses are ones that at least are, look at it is like a product or a service that wasn't possible really without AI because it wasn't cost possible. And it, it actually, you couldn't do it. So you would think about like the example of like, if you had a network of, of, of, of therapy,

• 2:11:31Kirsten Green?

  therapists and you built them, you know, human kind of one-to-one and you were making that connection online. Now, now that is a unique case where you can actually add AI into your product and really kind of add a whole new dimension to your, your business from there.

• 2:11:47Kirsten Green?

  That's probably true for a number of businesses, not most businesses, though.

• 2:11:53Jordi Hays?

  Yeah, that makes sense. Can you talk about, you know, the Studio Ghibli moment was amazing for me because it felt like, there was one thing, one, it felt like we entered the sort of post-slop era where like last year it was like, you know, AI-generated content that was cool, but not like, it wasn't beautiful. Six fingers, it looked kind of creepy almost sometimes. But now you can get this sort of like hand-drawn Japanese animation of a picture you took a second ago for free. It's just joyful.

• 2:12:23Kirsten Green?

  So fun.

• 2:12:23Jordi Hays?

  It's joyful. And so, but, but the thing that, the thing I get excited about is like the Ghibli-ification of the rest of the economy and other consumer,

• 2:12:32Jordi Hays?

  other consumer experiences, like, you know, just going back to the therapy example, like, it just feels like this concept of abundance and see these sort of like incredible products that can be delivered to consumers for dramatically, dramatically less cost. Do you, do you have any type of thoughts around, you know, it will take some time, but my, my personal theory is that sort of same effect will happen in a bunch of other categories.

• 2:12:58Kirsten Green?

  I mean, a hundred percent. Like, I, I think this is a golden age opportunity to make, you know, much, much more incredible products and experiences. In fact, we're talking about it like, you know, we were living in 2D and Gen AI is the power to take us to 4D and skip right over 3D. And, you know, by that, I mean, like, we've been talking about, for instance, you know, 20 years now, we've been talking about personalization. It really hasn't happened. If you kind of look across, imagine you go to a website, you know, how personalized does it feel? Like, it's pretty much the similar experience than if, you know, I went to the website, you went to the website. So I think personalization not, has not happened. It is now really possible in a, in a really deep immersive way with Gen AI.

• 2:13:44Kirsten Green?

  And you've just got a lot of more productivity that can happen. We don't, we haven't seen the whole agent thing play out, but it is definitely on its way. And, um, and I think, you know, that plus creativity, plus efficiency, like imagination's open, like so many more things are possible.

• 2:14:00John Coogan?

  I, I want to talk about lessons from the COVID turmoil in relation to the current tariff chaos and turmoil. I was thinking about, we, we, we talked to a few founders who were massive beneficiaries of the tariffs, honestly, because they've, their whole bet was made in America. And so when these tariffs came in, they're like, our business is booming.

• 2:14:22John Coogan?

  But as we saw with the shift to work from home, we saw massive booms in Peloton and fitness equipment that was, you know, any e-commerce company did really well. And then there was kind of a, you know, back down to earth moment. What advice would you have for entrepreneurs who are maybe about to go on a generational run on the back of the, of the tariffs narrative? How can they build their businesses more effectively? And what, uh, what are you looking for in terms of durability on the investment side?

• 2:14:54Kirsten Green?

  I don't know that I fully processed like what's going to happen with these terrorists in, in terms of the durability of business. But, but the way I am thinking about it right now is that I don't think anybody, I, I think we're all in this together. I think every business is all in this together, right? So perhaps you make your products at home. Um, and perhaps the things that you use to make your products, uh, you, you get at home, right? So you're really not going to have a cost change.

• 2:15:19John Coogan?

  Yeah.

• 2:15:19Kirsten Green?

  But everything else around you is changing, including how much money people have to spend and how they're reorienting their dollars. So I do think that everybody needs to think that much more carefully and closely about the value of their product. Who needs it and why? And what service are you delivering? Everything just got a bit more competitive in that context.

• 2:15:40John Coogan?

  Yeah. Uh, I, I, I.

• 2:15:41Kirsten Green?

  And I also do think like it's, it's hard to, um, you, you've got to learn to be nimble and navigate these crazy strange times because almost like these crazy strange times aren't crazy strange times anymore. They're just sort of, there's, there's one after the other, but they do change and evolve. Right? And like you mentioned at the beginning of COVID, like I think we all, you know, at first thought, wow, like everyone's going to hunker down. No one's going to spend. It's going to be really scary. Business is over. And then you saw people at home thinking, you know, I deserve a nice thing. I deserve this and shopping went through the roof, right? And people came out of COVID and they went to travel and they shifted dollars again. It's nimble. Being nimble is the key.

• 2:16:22John Coogan?

  Sorry to shift back to generative AI, but it's a fascinating topic. Um, I've, I've, I've been kind of obsessed with this idea of like the, the, the GPT rapper meme being maybe almost harmful to entrepreneurship. People aren't taking enough risk because they're hearing, if I build a rapper, no one will take me seriously. It's low status, or maybe I won't get funding. Um, but do you think that we, like, we, I mean, we just talked to the, the founder of Honey, the, he built a Chrome plugin that sold for a billion dollars. Like, like.

• 2:16:53Kirsten Green?

  That's incredible.

• 2:16:54John Coogan?

  It's incredible. Right? And so I, I wonder, um, and, and at the same time, we've seen a lot of slowed innovation at the big consumer tech companies where pretty much everyone's asking like, hey, why, why isn't Siri better? And maybe I, I guess the question is, is something about, um, is, is advice to founders like shoot for the moon, you'll land amongst the stars. There will be acquisitions of rapper products. And if you just create customer delight, that's beneficial in gen AI? Or is it kind of just everything's changing so fast? Uh, just get out there, make something cool, make something people want, and then you'll figure it out? Or, or, or are you really trying to dig in and say, we need to have

• 2:17:34John Coogan?

  a super concrete thesis about how this becomes a, a hyperscale business before we invest or really go and build? What, what was your take on that?

• 2:17:42Kirsten Green?

  Lot in that question. I, I just thought about four different things I wanted to say.

• 2:17:46John Coogan?

  Please, please.

• 2:17:47Kirsten Green?

  Let me see. Hopefully I can get them all out. But, um. So this idea, like, I don't think all rappers are created equal, right? Sure. So LLMs are foundational. That is like the backbone from which we can all build from. So I, I, I think anybody using that to their advantage in their business is just being smart. A business that is eager for the LLMs to keep getting better because it has the potential to make their product better. Like, that's where you want to be building, right? Then you've got to think about all the things that I would say that we've always thought about, which is like, um, what's the value of your, your product or your service or your software? Like, who needs it and why? How do you keep innovating and growing? How do you build a business around that?

• 2:18:26Kirsten Green?

  Like, those things, I, I think, you know, hold true always and, um, and are critically important. I, I think the idea of like, I'm just going to build something cool and fun and they will come and that will be interesting. And that playing out to be a successful, multi-billion dollar company. I, I'm not sure there are many examples of that. Um, but at the same time, I want to back up and say that like, the way we're approaching the market right now in particular, with this new, like, kind of the beginning of this new cycle, if you will, is most, we're holding two things kind of front and center. One is just the big, the idea of like, a, a market tailwind that you're building into. Like, there's a real demand, there's a real need, there's a real opportunity.

• 2:19:07Kirsten Green?

  And, um, and that kind of ties to where we started earlier in the conversation, which is just understanding like where those, where those pockets are, where business is missing the mark. And then it's about the founder. It's about the founder and their vision for the future and their idea about, um, how a product, how a service can make it better. And, um, and I think you, all you really know at the very beginning is it's going to play out different than what it, is it ever, ever, whatever pitch deck you're looking at. But I do think you can tell if somebody's got like a real pulse on, um, on, on where things are going, where they want to take things, like the world they want to make and show. And how, um, how nimbly and tactically they can play and execute with these new technologies.

• 2:19:52Jordi Hays?

  Can we talk about education and learning briefly? Because I feel like we've seen the adoption of ChatGPT at every college campus and high schools and things like that. And maybe there's this early surge of usage that's not so great for kids that are trying to learn how to write and think and things like that. And we want people to actually learn how to communicate and reason through things. But at the same time, the potential of every single person in the world having a tutor in their pocket is just so, you know, can't be sort of understated and maybe is not getting enough, enough, almost like hype, right?

• 2:20:35Jordi Hays?

  But I'm curious how you are. I know you've made a bunch of investments in the space over the years, and I'm sure those companies are thinking of.

• 2:20:43Kirsten Green?

  I mean, I am really bullish on this opportunity, Jordy. Like, I think if you look at like the foundational pillars of life, your healthcare, your finance, your career and your education. Like, education is arguably behind them all in terms of transformation. I have kids in grade school and their school books look the same as mine did 30, 40 years ago. It's unbelievable. We need to move the future forward. Sure, you can use ChatGPT to cheat, but actually, we need to teach our kids how to use generative AI to their advantage. Because I think, like, for me, I'm having so much fun. I have a, I have a, I have a thing in my pocket. I can ask any question I ever wanted to.

• 2:21:22Jordi Hays?

  Yeah.

• 2:21:23Kirsten Green?

  And then I can follow the thought through. That's the best part. It's not just search and get an answer. It's like, search, it's like, pose a question, get an answer, and then play with it. Keep going down the rabbit hole. Or take your essay and say, I need to, I need to work on this point a little more. I'm struggling with this thing. How do I move this around? Like, that has a huge opportunity to, you know, continue to peak and drive curiosity, help us think deeper and, you know, kind of, and learn.

• 2:21:50Jordi Hays?

  Yeah, and on that.

• 2:21:52Kirsten Green?

  And also, like, encourage kids how to use it, like, constructively.

• 2:21:56Jordi Hays?

  Do you think that that's an area where voice specifically can, you know, get really, really meaningful adoption? Because the example you're talking about is like, I'm writing an essay and I'm struggling with something in particular, and.

• 2:22:09Jordi Hays?

  Theoretically, somebody, you know, a child could have the experience of their teacher just sitting, you know, with them, writing and being able to talk out loud. And I don't think we've seen voice adoption as an interface as much as some people would have thought 10 years ago, but it feels like maybe now is the moment, right?

• 2:22:28Kirsten Green?

  Voice is so exciting. I do think that when we, when we're able to make voice a main mode of communication digitally, we're going to get so much more information. And it is the information that continues to power and tailor more personalized and engaging experiences. So the amount people share if they have a voice, you know, a speaking opportunity versus a typing opportunity is tenfold. So I do think, I do think that's a big unlock. And I think, you know, this is a good point because this is how this is going to unfold. Like, we're just in the early stages of seeing what's possible. And, you know, there is some very exciting voice technology out there and, you know, everyone's been buzzing about the company Sesame.

• 2:23:13Kirsten Green?

  What they have is pretty amazing.

• 2:23:15Jordi Hays?

  Yeah.

• 2:23:16Kirsten Green?

  So, you know, it's definitely on the horizon and the near term horizon.

• 2:23:20Jordi Hays?

  Yeah, and maybe last question for me for now and would love to have, you know, continue to have you on to kind of run these ideas down. But how do you think about AI adoption? Because it's hard to compare it to the internet because it feels like everybody's used AI now and everybody probably, not everybody, right? Like, we had, we both had Ghibli posts go viral and we had people quoting it not knowing how the images were being created and like, they seemingly didn't know what ChatGPT was.

• 2:23:49John Coogan?

  Oh, there must be a new filter app in the App Store.

• 2:23:51Jordi Hays?

  Yeah.

• 2:23:52John Coogan?

  They don't know what OpenAI is.

• 2:23:53Jordi Hays?

  Snapchat or whatever. So we haven't reached, you know, full adoption of some of these new tools, but it seems like everyone's using them in some capacity, even unintentionally. Like, I Google search and I get an AI summary. So how do you think about AI adoption? Is it? Is it just businesses, you know, fully taking advantage of the technology and that's what we need to look at? Because

• 2:24:15Kirsten Green?

  Oh, no, I love this question, Jordy. I'm glad you asked it because this was one of the more interesting things that came away from our survey data. I, I think I should have this data point in front of me while we're speaking, but I don't. But it's like sixty or sixty plus of the people percent were like actually had said they were using AI regularly.

• 2:24:33Jordi Hays?

  Yeah.

• 2:24:34Kirsten Green?

  Now, what does that mean? That probably means ChatGPT, Claude, you know, those. But like, people are here for it. I mean, five hundred million people was a number I read a week or two ago about ChatGPT and then I heard a bigger one later. Like, that is a, that is, that is the kind of trial. Let's call it trial at this point because we don't really know what adoption's gonna look like. But I do think that it's, it's growing incredibly rapidly. And I do really believe that people, like, they're ready for it. We just have to build for it. You know? That's my call for like founders to build for it. Like, people, you, you know, you build it, they will come. They are ready for it.

• 2:25:12Jordi Hays?

  Yeah, it's certainly faster. Yeah, no, we had a conversation. We had a conversation before this. It's like, you know, everybody wants to build AI infrastructure. We need more people to just build Products. The AI, you know, the agents, right? Like, build the hard stuff that, you know, maybe

• 2:25:27Kirsten Green?

  I mean, there's so much opportunity. Just think about ChatGPT is to this generation what Google was to the last. And if you think about Google as like the place where you, you know, the front door, you go there, that's your big search. But if you wanna like look for real estate, you go to Zillow. If you wanna understand about a company, you go to Glassdoor, or a job, you go to Indeed. You wanna travel, you go to Kayak or Expedia. You wanna go to OpenTable for a restaurant. You, you know, there's, there are these like big categories that have, you know, lots of nuances that really deserve and warrant unique experiences. Like, let's, let's build them for AI.

• 2:26:04Jordi Hays?

  Yeah.

• 2:26:05Kirsten Green?

  Where are they? Come pitch me.

• 2:26:07Jordi Hays?

  I like it, yeah. You're a good pitch, Kirsten. This is fantastic. This is fantastic. Thanks so much for stopping by. Yeah, thanks for coming on. Yeah, this is great.

• 2:26:14Kirsten Green?

  Thanks for having me.

• 2:26:15Jordi Hays?

  Yeah, have a great rest of your day. Have a great weekend. We'll talk to you soon. Talk soon. Bye.

• 2:26:21Jordi Hays?

  So much to build.

• 2:26:21John Coogan?

  We didn't even get to the into the security thesis, which is maybe the most underrated in that report. There are there are health tech investors. There are Gen AI investors. There are consumer investors, but I have yet to hear someone really, I mean, she created a whole market map for this idea of like, security as a key market. It includes some health stuff. It includes some finance stuff, but it was an interesting thesis and trend that we'll have to dig into more. But in the meantime, we got David Perell here. Welcome to the show.

• 2:26:46Speaker 06

  What up, boys?

• 2:26:47John Coogan?

  How you doing? Looking great.

• 2:26:48Jordi Hays?

  Dude, look at you.

• 2:26:49John Coogan?

  Thanks for dressing.

• 2:26:49Speaker 06

  You know, I figured I'm coming on, hanging out with the tech bro.

• 2:26:53Jordi Hays?

  Guns blazing.

• 2:26:54Speaker 06

  I'm gonna, I'm gonna dress up.

• 2:26:55John Coogan?

  Yeah, well, it's great to, how's your week been?

• 2:26:58Speaker 06

  You know, I had a white shirt, but couldn't find my cuff links. So major issue about 15 minutes ago.

• 2:27:05John Coogan?

  No, no, no, you're looking fantastic.

• 2:27:07Jordi Hays?

  You look fantastic.

• 2:27:08John Coogan?

  How's the week been? How have you been processing all the recent AI news? What's new in your world?

• 2:27:14Speaker 06

  Dude, week's been good. I was driving over here. I saw my first ever Austin car chase.

• 2:27:19Jordi Hays?

  Hmm, no way. Is that a regular thing?

• 2:27:22Speaker 06

  No, I've never seen one before, you know, usually an LA thing. And I must admit, I got a speeding ticket on Sunday in Tennessee. So it was good to see the red, white and blue lights in somebody else's rearview.

• 2:27:34Jordi Hays?

  What were they driving? Was it like an F-150 being chased by?

• 2:27:38John Coogan?

  Dodge Charger.

• 2:27:39Speaker 06

  It's always the crappiest car that you've seen all day.

• 2:27:42Jordi Hays?

  Yep. Less to lose, less to lose, more to run for.

• 2:27:45John Coogan?

  Yeah, exactly. Exactly.

• 2:27:48Jordi Hays?

  There's so much to talk about. I mean, one, you should have been one of our first guests.

• 2:27:53John Coogan?

  But you still are. You're still in the first 200 guests. It's no big deal.

• 2:27:56Jordi Hays?

  Yeah.

• 2:27:57John Coogan?

  We've been, we've been racing through the guests. But yeah, I mean, did you want to start with his post, his thread?

• 2:28:02Jordi Hays?

  Yeah, let's do it.

• 2:28:03John Coogan?

  Yeah. Can you set that up for us? Just kind of like general reactions to AI writing, kind of the Studio Ghibli moment. You're clearly thinking your wheels are turning. A lot of stuff is going on in your head. And I think you kind of synthesized it well, but I'll let you tell it yourself.

• 2:28:18Speaker 06

  Yeah. I mean, we're just, look, I've been teaching writing for the last six years and I've taught a few thousand students and I had a moment. In November, you know what happened? I had a guy who was working for me, sent me a memo. I said, dude, this is the best thing you've I've ever seen you write. He goes, AI wrote it. I was at a dinner last night and I wrote up some notes and then I just asked AI to summarize it and I was like, whoa.

• 2:28:41John Coogan?

  Wow.

• 2:28:42Speaker 06

  And I shut down, read a passage, November 11th, and then I went to Argentina in December.

• 2:28:47John Coogan?

  Mm-hmm.

• 2:28:48Speaker 06

  It was my first vacation in a few years and I want to learn about the country, so I was just using AI. And I was doing like 50 to 70 prompts per day and I was like, oh my goodness, this is, this is insane. And basically, fast forward to now, we're in March or we're in April, and I mean, the writing's on the wall. Um, AI is gonna just completely transform writing. And this week, actually, I got my first ever rejection for how I write because somebody doesn't like that I'm talking about AI, that I'm promoting AI. So now, I think what you're beginning to see is a big riff, right? There's gonna be certain people who say, no, um, writing with AI is absolutely taboo, not cool. There's gonna be the purists, the Luddites.

• 2:29:32Speaker 06

  And then there's gonna be other people who just go full steam ahead and they're gonna say, you know what, this is the future. And it's really tabooed right now to write with AI, but if you talk to people behind closed circles, there's a lot of tech forward writers who are like, whoa, I can like 3, 4X my output.

• 2:29:47John Coogan?

  Mm-hmm.

• 2:29:47Speaker 06

  And they've basically built custom prompts, custom software to, to help them write better.

• 2:29:53John Coogan?

  Yeah, I mean, Ben Thompson has kind of a thesis around this with the, you know, the, the printing press, reduce the, the, the, the, the replication cost, then the internet dropped distribution cost to zero because you no longer needed a paper route. Now, it's the instantiation cost has gone to zero, but there's still that human in the loop for actually generating the novel ideas or even just bringing the idea or the fact or the information to. The chain, I talked to some reporters. How is AI changing your job at the Wall Street Journal? It's like, well, writing up the fact is the least hard part about the job. And yeah, maybe it took me from that being one hour of my day to being five minutes of my day.

• 2:30:36John Coogan?

  But 90% of my day was still talking to people, understanding what's going on, surfacing new facts, and then bringing those to the readership. So do you think there's still value in being a writer in the sense that you are a generator of ideas or novel information? And yes, you are using AI as a tool to instantiate it, but AI hasn't really replaced your importance in the world.

• 2:30:58Speaker 06

  Yeah, so let's just preface this. We're going to talk about nonfiction writing. That's what I know a lot about. Fiction's not really something that I can speak nearly as well about. But I went to a Peter Thiel lecture last night. He's in Austin and he's doing these lectures on the Antichrist. And I was at the lecture last night and I was thinking a lot about this, right? Because, you know, Peter, he's a really interesting guy. He's always looking for what is the thing that people are talking about that other people haven't found? And I think that the lecture showed, first of all, that of course, there's so much edge in just finding the things that other people aren't talking about. But then also, I was, you know, I went up to someone who he works with after.

• 2:31:43Speaker 06

  I said, hey, I think the lecture could have gotten better in this way, in this way, in this way. All this is to say that AI can't do that work for you. And it's through the process of writing that you're really working through your ideas. You're trying to say, how do I frame this better? How do I shape this better? But what I do believe is that basically any form of writing that is driven on pure utility. So we're talking business memos, we're talking emails that your lawyer sends you that are fairly standard. Pure utility, not about the art of writing and not about basically maximizing the quality of thinking. I think basically all of that's going to be written with AI. So, and only in a few years, you know, by the end of 2026, 2027, we can just assume that that'll be the case.

• 2:32:27Speaker 06

  But absolutely, if you're really trying to be a maximizer and not a satisficer, that'll be major human in the loop big time.

• 2:32:36Jordi Hays?

  What do you think happens to our thinking abilities as humans and our clarity on life, business, work, our relationships, when so often we have just this like, you know, perfect autocomplete of everything that we thought we were gonna say? Because sometimes when I'm, you know, let's say I'm like writing an email to John or one of our partners or somebody we want to work with, the act of, it's sort of annoying that taking the time to think about the, you know, what I want to say and how I want to say it and, and, you know, what I'm trying to convey, it gives me clarity on that relationship or that, whatever activity that we're doing. And in a world with like perfect autocomplete

• 2:33:17Jordi Hays?

  or suggestions, maybe theoretically, I could just, you know, think about it for a while myself or autocomplete, send, send it and then think about it. But the reality is there's so much distractions in life. So maybe everybody just moves like, all the time that was spent writing emails just moves on to, you know, TikTok or X. And it's just like, you know, you're auto completing and then there's, there's, there's brain rot. That's, that's sort of like a, a dark take on it. But are you worried about what humanity loses by not thinking through writing?

• 2:33:48Speaker 06

  I'm absolutely worried. I mean, I see major white pills and major black pills here. Like, I think that if you're not seeing the pros and the cons, and I mean major pros and cons, you're, you're, you're missing out in a fundamental way of what's really going on. I agree with you. I think a lot of our information is, or a lot of the way that we communicate is like, did this person actually write it? And I think that what's gonna end up happening is you sort of see this in the differences, like, have you noticed like how big of a separation there is between the vibe of like your private group chats versus like what you feel in public? I feel like the private group chat vibe is just gonna be like, go even more, we're gonna have to learn to write with voice and really

• 2:34:30Speaker 06

  show off our distinctiveness in writing as almost a adaptive way to say, hey, this isn't written by LLMs. And at the same time, I completely agree. I mean, I think that, you know, people are super busy and the one thing that we've learned time and again about technology is that people value convenience, you know, like, I listen to music all the time on my crappy iPhone speakers because I don't want to get up and walk to the other side of the room and like hook in my USB cord. And I think you should never bet against humans going for convenience in the aggregate. Um, so that's how I'm thinking about it.

• 2:35:08John Coogan?

  Yeah, I think about that, that webcomic or meme all the time where it's like, wow, this AI was able to take my five bullet points and turn it into a whole essay. And then the, and then the guy receiving the email is like, it took this really long email and turned it into just five bullet points. And, and I have noticed that I'm doing way more work now, not over email, but just over text message. We coordinated this interview entirely over text message. I don't think a single email was exchanged. And, and I imagine like there is this world where maybe we just do away with that intermediate step of like instantiate this as like, we all know that we could turn this into

• 2:35:44John Coogan?

  a 20-page research paper if we wanted, or a, or a, you know, 500-word blog post, but really the takeaway is just what I could put in my group chat in one line. So we're all just gonna communicate like that.

• 2:35:53Jordi Hays?

  Yeah, all communication just, you know, condenses down and it's just like people saying their base interests. Like, I want status. I want security. I want security.

• 2:36:03John Coogan?

  I mean, Dorian Mach had a great line about this. He was like, the, the recipe to being a good poster on Twitter X is just write like you're posting in a group chat. And just, and just say just exactly what you were thinking. Don't try and wordsmith it into this big thing. Just post exactly what it is.

• 2:36:18Speaker 06

  Like, yo, this is the age of vibe. Like, this is super high-vibe times because basically like if I'm teaching writing and you're like, all right, DP, what are you gonna teach people? What I'm gonna say is like, what is your vibe and how do you get it out into the world?

• 2:36:33John Coogan?

  Yep.

• 2:36:34Speaker 06

  And how do you communicate that through writing? And so you're seeing a few things. Personally, I'm investing a lot in like riz and vibe. And I'm trying to think about how do I do those things?

• 2:36:44Jordi Hays?

  It's working.

• 2:36:45Speaker 06

  Like, yo, I'm putting my money where my mouth is. One thing I did start a few weeks ago, I've become a greeter at the church to get like a lot better at saying, all right, how do I, you know, get better talking to people, saying what's up, you know, doing all the sort of. Frankly, like shallow conversation that people rail on. I'm like, no, I want to get good at that. And then when it comes to writing, whenever I'm writing even like a text or something like that, I'm thinking, what is the energy that is unique to me? And how do I get that in writing? And frankly, like, I don't really know the answer. But that's the major question I'm asking. And when it comes to writing, I think that's what people should be thinking about a lot more.

• 2:37:23John Coogan?

  Yeah, we, uh, we like to call it the golden retriever mindset here in the age of intelligence too cheap to meter. It pays to be hot, smart and dumb, or hot, friendly and dumb. And so you gotta be just super friendly to everyone, uh, looking good. And, uh, you don't need to worry about, you know, being too, uh, too much of a sesquipedalian, as they say.

• 2:37:43Speaker 06

  Exactly, exactly.

• 2:37:44Jordi Hays?

  Yeah, it's an interesting.

• 2:37:45Speaker 06

  Face allowed.

• 2:37:46John Coogan?

  Yeah, I know, I know.

• 2:37:47Jordi Hays?

  It's interesting to think about, uh, specifically agents in, in the context of the, the workplace. Like, it's very possible that likability becomes a core reason why somebody has a job. Because somebody's running a business and they go, uh, I really like David. I like being around him. I want him here, even though, you know, we could get an agent to do this.

• 2:38:10John Coogan?

  Yeah.

• 2:38:10Jordi Hays?

  Like, it's more fun to have David around.

• 2:38:12John Coogan?

  Yeah, it's like the one, the one person, one billion dollar company. It's actually going to be like, one person creates a one billion dollar company and then like, brings on nine of his friends, just because like, why not split it? It's a lot of money and like, you like to hang out with other humans.

• 2:38:25Speaker 06

  Yeah, I think, well, I think you're going to sort of see the bifurcation. It's like, I think that as, if you're like thinking about, oh, just talk about me. So I was like, I'm thinking about my career. I'm like, on one hand, I really want to invest in the human things. Looking people in the eye, having better conversations. How do I show love and like actually connect with people to far deeper level? And all those sorts of things that have always been core to the human condition. But now we're like, wait, hold on, intelligence is getting too cheap to meter. That actually isn't a something that's unique to humans anymore. And then on the other side. Like, you know, you just think of the super cracked engineer who is really good with cursor,

• 2:39:06Speaker 06

  really good at writing. You know, I'm talking to some friends who are building AI-enabled agencies, and now they're working with like five times as many clients because they're like boom, boom, boom, boom, boom. But most of the people I'm talking to, like entrepreneurs and stuff, they're beginning to, Justin Maris has a good line where he says that the company is going to look more and more like the hedge fund, where what you have is you have fewer people, super highly paid. And one of the things that I've noticed is it's been a real head scratcher for me, like, why has the managerial class adopted AI so much more than the sort of frontline workers? Like, what is going on? Because if you look at sort of the archetypal rollout of technology, it's usually the young people who are the early adopters. And there's a

• 2:39:50Speaker 06

  way that that's not true with AI. And here's my working theory. My working theory is that the way that you work with AI is basically like a manager. So if you think of what do you do as a manager? You set a vision, you delegate the task, you say, hey, do this, you expect it's not going to be good enough, you're giving feedback, and you're going through the cycle, and then you ship it, right? That's how we work with LLMs. If you're a frontline employee, you don't work like that at all. So this is super disruptive to your work. And all this is to say that a lot of those managers too, if you talk to them behind closed doors, you know what they say? My hardest problems don't have to do with the work, it has to do with the people. And now I can take out the people. Once again, I think

• 2:40:31Speaker 06

  it's super dystopian and also pretty exciting, both of them at the same time. But that's what I see happening right now.

• 2:40:38John Coogan?

  Shifting gears, can you talk a little bit about the religious vibe shift in tech? I've had a number of reporters reach out to me, hey, I'm writing a piece because I saw Augustus Derico had a cross on his neck or something like that. You've been in this milieu for Forever, uh, what is the mainstream media getting wrong or right about that narrative and that shift?

• 2:41:04Speaker 06

  Let's see, so I'll just give sort of my take on the shift is, we've had a few things happen. So the first thing is, the more online you are, I think the more that you've looked at what's happened, basically since about 2012, maybe 2016, last 10 to 15 years, and you've just said, something is strange about society right now. You see COVID, you see the Hunter Biden laptop story. I mean, there are so many ways that we've been lied to. I was thinking, you know, in the early 2010s, if you went away for five years and you came back, what would be really confusing was the rise of social media. In the late 2010s, if you went away and you came back, what would be really confusing is how much morality had changed.

• 2:41:48Speaker 06

  What you could say, what you couldn't say, completely changed. And for me, I looked at, wait, hold on, all of our moral codes are ebbing and flowing. There's all of these ways where we've gone from a kind of a democracy to a bureaucracy. And, and I don't want to live in that world. And as I looked at it, I traced a lot of that to a kind of atheism, where Malcolm Mudgridge, he has a great line, he says, "The problem with atheism isn't that you believe in nothing, it's that you'll believe in anything." And so I watched people with empty, their bodies as empty vessels, adopt completely rotten and corrupt ideas.

• 2:42:29Speaker 06

  And I think a lot of people, including myself, by the way, and I think a lot of us who are more online have seen that cycle play out, and we've said, hold on here, I don't like what I'm seeing. So then we take a step back, and the more tech-oriented people, we've seen people like Peter Thiel, a lot of us have studied the work of Renee Girard, and we've said, you know what, smart people like Peter and Renee, they're talking about Christianity, there might be something here. And then, for me, what happened is I looked at that for five or six years, I really studied it deeply, and I came to the conclusion that Christianity wasn't just useful, but it also happened to be true.

• 2:43:04John Coogan?

  Can you talk about how you would walk someone away from the cliff that is utilitarianism?

• 2:43:13Speaker 06

  I would just say, look, that's probably not the frame that I would take. What I would just say in terms of if I was talking to somebody about faith, what I would just say is, I'd probably be more likely to talk to someone about, hey, look at what's happening in the world and are you, you know, are you happy with it? I mean, if they're happy with it, it's gonna be, it's gonna be hard to have that conversation, but I think that part of the challenge with utilitarianism and a lot of these moral philosophies is we've seen them rise up and sort of cyclically break and I don't know, this isn't a great answer, I'm sort of fumbling my words, but I think that the Bible carries sort of the supernatural truth.

• 2:43:58John Coogan?

  I mean, I had a hot take here, I wanted to bounce off you. It was this idea that a lot of the AI doomers were driven by this idea that God is dead and if we're inventing AI God and it returns, it might judge me and if I'm living an immoral life, the AI God would sentence me to essentially like an AI version of hell. It's not a problem to live an immoral life in the absence of God, but if God returns in the form of this AI God, then there will be a reconciliation moment. Is, do I need to put on the tinfoil hat for that?

• 2:44:33Speaker 06

  Well, I mean, I personally think that, oh, there we go, there we go, put it on, baby. I mean, personally, I think that if you read the Tower of Babel story, I think that a lot of my faith is, I don't think these AIs can become gods. I think that something will happen. And we see that in the Tower of Babel story. You know, you've seen people come out and say, hey, we're building these new gods. Read Psalm 115, bad things happen when humans try to create gods. We've seen this story play out and to come back to some of your earlier questions about tech and utilitarianism. Look, a lot of the peace that I have with what's happening with AI, I'd be freaking out if it wasn't for my faith. I mean, I have complete faith that God is in charge, he'll take care of this.

• 2:45:16Speaker 06

  And when I read books like the Book of Judges, I see people turn away from God all the time. When I read the Old Testament, Exodus, you know, you see the golden calf and I just see AI as another version of that.

• 2:45:29John Coogan?

  Can you talk about any, yeah, specifically?

• 2:45:34Jordi Hays?

  Historical moments that we can learn from in the context of this explosion of artificial intelligence, right? I think people talk about the Industrial Revolution, right? Look, we didn't know how the Industrial Revolution was going to change the world. We do now, looking back, obviously, but it feels like right now we're standing, and especially in the context, there was a piece that came out this week, AI 2027, we covered it earlier on the show today, where it just feels like only 18 months out, like, you know, there's these various paths. Neither seem that appealing at the moment. And so I hope there's a third

• 2:46:16Jordi Hays?

  or a fourth or a fifth. I'm sure there are. But how do you, whether it's in the context of the Bible, or other things that you've read, process this moment? And maybe it is only. Maybe you can find all the answers in faith, but I'm curious.

• 2:46:34Speaker 06

  No, yeah, I think that the work of Marsh McLuhan has been super foundational for me. So Marsh McLuhan, he was a media theorist, late 20th century. And what he did for me was I felt the same sort of, oh, my goodness, everything is changing, kind of feel from the internet. And he basically had ways of seeing what happens when new technologies develop. And basically, I think a lot of what we're seeing here is this vast acceleration

• 2:47:17Speaker 06

  is what he saw. So you get this 10x acceleration. And then what happens is things begin to flip, and things that used to be core to how we lived and what we do now become art. And I think that that's a lot of what's going to happen with writing, where I think writing is going to be very sort of a form of art, in the same way that film photography was a form of art, in the same way that a lot of A lot of art that you see and craftsmanship that you see used to be very core to what we do. And I think that's what's going to happen. I think that writing is going to be the utilitarian kind of writing will just be done by the AIs. And then a lot of writing will just be artistic. And what we're going to need to figure out is how do we put our artistic stamp on writing?

• 2:48:02Speaker 06

  Because there's no real way to verify that a piece of writing is writing in the same way that you could do that with like a live performance. But one of the things I'm really looking forward to, you know, there's all these doomers. And to your point about technological precedence, I was talking to my friend Justin Murphy. And, you know, he said, if you look at how art shifted from the 14th century to the 16th century, you look at 14th century medieval art and it just looks weird and creepy. It's like super flat. And then you look at 16th century art in Italy and it's got this beautiful perspective. The paintings are aligned or alive. And what happened was we got the technologies of the camera obscura. And then if there was a guy named Leon Alberti, and he was an architect.

• 2:48:47Speaker 06

  And what he did was they used a lot of the technologies and architectural tools at the time to basically show perspective. And from that, we got the Renaissance, a Renaissance in painting. And the same thing's going to happen with writing. The same thing's going to happen with writing. And I bet that at the time, people were like, oh, you can't be using technology to paint. Like, that's not cool. And then like, I don't want to go back to that sort of painting. Like, the stuff that came from it was super cool. And I think the same thing's going to happen with writing.

• 2:49:16Jordi Hays?

  Yeah, it's interesting to think about the great writers in history, sort of referencing, you know, past works and having to go to a library or travel to multiple libraries or visit collections and sort of study. And then now the ability to like,

• 2:49:28John Coogan?

  Studio Ghibli style.

• 2:49:29Jordi Hays?

  Well, communicate with an LLM that is trained on, you know, every available text, at least that's been on the internet and maybe some esoteric texts as well. Do you think there's any, do you think there's any merit? Have you spent any time like trying to find books that just haven't been uploaded into the, ingested into the LLMs?

• 2:49:48Speaker 06

  Here's, okay, so I'm gonna, I'm gonna answer that and then I'm gonna ask a question to you guys. Okay. Um, so here's, rather than the forbidden knowledge, I haven't been doing that as much, but there's so much that's just lost to, to, there's so many answers that we used to have very clearly, that then we have just forgotten. I think one of the fundamental lies of modernity and basically of progressivism in general is that new is better, always. And that's not true. You know, like Joe Rogan always talked about, how did they build the pyramids? Oh, my goodness, like they must have had these crazy technologies. Like, even, you know, we can put the tinfoil hat back on, but even if that's like nonsense, whatever, I don't know. But there are so many times in history where we really had deep understandings of things that we've completely forgotten about.

• 2:50:32Speaker 06

  And like, we don't necessarily need to go find these like crazy esoteric texts. We can go find, like, take, uh, Henry George's book, right? Late 19th century, it was like the number one, number two bestselling book in the world. There's The Imitation of Christ by Thomas Akempis, great book, 17th, 18th century. Like, I think there's a lot of alpha in just going back at the bestsellers before 1970 and just go, go read those books. Um, and see what people are saying. And luckily, AI is a really good way to do that. You know, one thing that's fun to do is go in, take an idea, go into ChatGPT, go into Grok and say, here's my idea. Now help me round it out and give me some examples. Like, I've just been working on this little bit, that there's fundamentally three, three kinds of girls.

• 2:51:15Speaker 06

  There's Lana Del Rey girls, Taylor Swift girls, and Beyonce girls. And so like, you know, I was joking around with some friends, we're like, hey, let's just pop it into Grok. And Grok is like helping us, you know, think out the theories, hey, this is why it's a stupid idea, here's why it's a good idea. And that's what I love about it, is like, you're giving it some sort of ridiculous idea. And then it's saying, okay, let's kind of fill it in for you. And you can very quickly get to the stage of like, how can I find those esoteric ideas much faster? And how can I kind of, um, find the lines that then I can draw inside of?

• 2:51:50Jordi Hays?

  How, uh, do you have any type of thesis around, um?

• 2:51:55Jordi Hays?

  You know, uh, the L L Ms and humor, it seems to be the one thing that they really struggle with today where they get the structure of a joke, but they're not nailing it yet. They can make you laugh by being absurd, but.

• 2:52:07Speaker 06

  Did you see the Tyler Cowen joke?

• 2:52:11John Coogan?

  Yeah.

• 2:52:11Speaker 06

  Did you see that with G P T four point five?

• 2:52:13Jordi Hays?

  The be me one?

• 2:52:14Speaker 06

  Yeah, dude.

• 2:52:15Jordi Hays?

  Yeah, yeah, yeah.

• 2:52:16Speaker 06

  Hilarious. So I think that the, the, the humor thing's gonna be a problem to be solved. The L L Ms are gonna be hilarious and they're gonna be hilarious in two ways. So the first way is niche humor. Like, you know, if you take a great comedian, eh, they're gonna be good at the mass market stuff, but like, say that you and, you know, the three of us, we go and we do like a trip to New Orleans for the weekend. And we say, all right, all these things happen and like, we talked to L L Ms for like forty five minutes. We said, you know, here are all the things that happened. Now give us some jokes. Dude, I bet it would rip. I bet it would be so freaking funny.

• 2:52:51John Coogan?

  It's just us.

• 2:52:52Speaker 06

  Yeah, exactly.

• 2:52:53Jordi Hays?

  No, and, and, and we, so we, we've talked about, we talked about this earlier on the show. Uh, uh, John has Coogan's Law, which is like, you know, talking about the, the value of.

• 2:53:03John Coogan?

  Coinages.

• 2:53:03Jordi Hays?

  Coinages. Uh, so on that note, I, I've been working on the Hayes Paradox, which is the idea that the funnier that you think something is, uh, the less likely that the mass market is gonna find it funny, right? Because like.

• 2:53:16Speaker 06

  Yeah.

• 2:53:16Jordi Hays?

  Something that's just ultra, ultra, ultra niche is just like the most interesting, the most funny, the most stimulating or whatever. And I think that's what you're kind of getting at it in some ways, like the, you know, having a comedian in your pocket that can joke about like the thing that happened to you that minute. And simultaneously, you know, ten years ago in your life and like connect those ideas. And, you know, the idea of like the same thing of, oh, we have a therapist in our pocket or we have a tutor in our pocket. Uh, you now could potentially have, you know, this sort of like comedian.

• 2:53:48John Coogan?

  Yeah. So last question is a question I think you had for us. Do you want to close out with that?

• 2:53:53Speaker 06

  Well, I mean, this is the question that I've just been thinking a lot about and it gets down to like the nature of the soul and the nature of what it means to be a human.

• 2:54:00John Coogan?

  Yeah.

• 2:54:00Speaker 06

  You know, there's that famous, um, idea of the map and the territory. And what I think is basically happening is that when it comes to writing, the map and the territory are gonna be the same. And when the map and the territory are the same, what is just, what is, what comes from that? Um, is like.

• 2:54:22Speaker 06

  If you have such a good simulation of humor and such a good simulation of consciousness and such a good simulation of care, is it those things or is it not those things? And I don't know the answer. It's just the question I've been asking all week.

• 2:54:36Jordi Hays?

  My immediate, my immediate thought is that our mutual friend Jeremy had this idea.

• 2:54:44Speaker 06

  Master of the take, the king of the take.

• 2:54:45Jordi Hays?

  Master of the, the take smith himself. No, he had this idea like in the Ghibli moment. He was like, my thesis that like AI will be the reason that everyone logs off forever. Is like, if you go on your device and it's just this, you know, hamster wheel of entertainment.

• 2:55:01Speaker 07

  Dopamine.

• 2:55:01Jordi Hays?

  And dopamine. And then eventually you just, it gets so good at, you know, at whatever it's doing or whatever you want it to do, that you want to actually go back to the variable reward of going to the group chat where somebody has a terrible take and then somebody has a good take. And it's this sort of like truly organic experience. And, and, and who knows if everyone logs off forever, but it's that desire for, for realness has been something that has been common throughout human history, right? You don't like, you know, people wouldn't travel somewhere far to have like the authentic cuisine. If it hit the same to have like, you know, the, the sort of like perfect recreation of it here in America, right?

• 2:55:46Jordi Hays?

  So that like desire for authenticity and realness, I think is, is deeply human. And I think people will seek other humans out for that.

• 2:55:53Speaker 06

  Which is great because what I hope is I think that we were at the absolute bottom of realness in the late 2010s in cancel culture. That was a time when people were terrified to be themselves. Everyone was super polished. It was the decline of the mass media empire that we're still sort of living in and seeing play out every single day. And then we're going to get a big flip into realness, into authenticity. And here's the other one, into forgiveness. Because we can only have realness and authenticity in our culture if we have a culture of forgiveness, when we can allow people to make mistakes. And I think what was so traumatizing as a culture.

• 2:56:35Speaker 06

  About those years is that we couldn't be ourselves because we couldn't forgive. And my hope is that we can just move on from that and become humans in this digital sphere.

• 2:56:49John Coogan?

  Well, you have to forgive us for not having you on sooner. This was a fantastic conversation.

• 2:56:53Jordi Hays?

  I really enjoyed it.

• 2:56:53John Coogan?

  Thank you so much.

• 2:56:54Speaker 06

  Thanks, boys.

• 2:56:54John Coogan?

  On the show. We'll talk to you.

• 2:56:56Jordi Hays?

  Thank you for dressing the part.

• 2:56:57John Coogan?

  And looking very polished, you know, some things from the late 2010s. Polish is back.

• 2:57:02Speaker 06

  Dude, polish is back.

• 2:57:03John Coogan?

  We're keeping the polish.

• 2:57:03Speaker 06

  No, actually, that's what we have in common. You know, you guys have the polish with the show. I tried to do it with how I write.

• 2:57:08John Coogan?

  Yeah, of course.

• 2:57:08Speaker 06

  And thanks, guys.

• 2:57:10John Coogan?

  Yeah, have a great weekend.

• 2:57:10Jordi Hays?

  Fantastic. Have a great weekend.

• 2:57:13John Coogan?

  Next up, we got V from Sword Health coming in the studio. I believe he's here and I'll let him do the introduction. I had a call with him almost a year ago. Fascinating company, backed by Delian. Very early on, we got connected and I want to hear all about how his business is doing and get the general update. So V, are you there? Can you hear me?

• 2:57:36Speaker 07

  I am here. Can you see me?

• 2:57:38John Coogan?

  Yep, we are all good.

• 2:57:40Jordi Hays?

  V, welcome.

• 2:57:41John Coogan?

  Thanks so much for stopping by. How's your week going?

• 2:57:45Speaker 07

  It's been a week. Yes, a long week, I think, for everyone.

• 2:57:49John Coogan?

  Yeah. Is it specifically because of tariffs or AI news or what's driving that?

• 2:57:55Speaker 07

  Yes, tariffs, the impact is, but some other stuff, it's like, it's been fine. It's been fine.

• 2:58:01John Coogan?

  Can you just give us a quick introduction for the listeners who might not be familiar with Sword Health? Kind of a quick backstory on the company, what you guys do?

• 2:58:11Speaker 07

  Yeah, so let me start with the problem. So healthcare is quite special because when you compare healthcare with other industries, right, like the consumer electronics industry, right? In the last 40 years, you saw penetration of technology in those industries that went like this, right? So massive penetration of technology. What happens? So my alarm just...

• 2:58:36John Coogan?

  What was that?

• 2:58:37Speaker 07

  It's my alarm. Sorry.

• 2:58:39John Coogan?

  Oh, no worries.

• 2:58:42John Coogan?

  One second, we have some technical difficulties, folks.

• 2:58:45Speaker 07

  Okay, I'm back, sorry. And I was saying that in the last forty years, there was a massive penetration of technology in the consumer electronics. Right? What happened to cost? Massive decrease. Right? So a tool vision that forty years ago or thirty years ago would cost thirty five hundred dollars, now costs five hundred dollars. Much cheaper, much better display, much better features. So we use technology to produce better goods.

• 2:59:12John Coogan?

  Yep.

• 2:59:12Speaker 07

  When healthcare, last forty years, you also saw massive penetration of technology.

• 2:59:17John Coogan?

  Mm-hmm.

• 2:59:17Speaker 07

  What happened to cost? Contrary to the other industries, massively increased. Where actually, we use technology to make healthcare more expensive. And the reason why is because the way we've been using technology in other industries is to shift part of the labor from the human to the machine. And with that, we made the product production of goods much higher quality, much more efficient, and much more accessible. In healthcare, we've been using technology to double down on this one hundred percent labor-intensive model. Where before, for you to have an appointment with a physician, you'll go to an hospital or to a clinic, right? Now you can use the technology to do that to a video call.

• 3:00:01Speaker 07

  But you are still fully dependent on the human on the other side. Right now, as always been, for you to access healthcare, for thirty minutes, you need thirty minutes of this highly specialized, scarce, and non-scalable human resource, which is the condition. So what we believe that in order for you to deliver the future of the healthcare world, what you need to do is basically develop technologies and AI that will shift part of the labor from the human to the machine. And with that, you remove barriers in terms of access. And so what we are doing at Swoop is really shifting healthcare from that human-first model to that AI-first model. And we're starting with the biggest problem, which is how we deliver care. How we recover patients back to full life?

• 3:00:46Speaker 07

  And so we started with physical pain, we are expanding to pelvic health, and now we are expanding to other verticals of care, really changing how people access care with AI.

• 3:00:55Jordi Hays?

  Can you talk about Jevon's paradox was in the news recently? And I'm sure you had a lot of thoughts just because theoretically as the cost of healthcare declines, we're going to want more of it. There's a lot of care that doesn't happen. For example, in physiotherapy, if it costs a dollar a day, I'm sure people would be much more eager to use it. But when it's $200 a session or even more than that. So I'm curious, it feels like, you know, I'm sure you've seen this playing out and I'm sure you weren't weren't worried when DeepSeek came out and, you know, token costs came crashing down. You probably were like, okay, this is great. We're just going to use a lot more of this.

• 3:01:40Speaker 07

  Yeah, and look, the lack of access to high quality, high intensity conservative care, non-invasive care doesn't decrease costs. Because when you have pain, instead of you are not able to go three times per week to a PT clinic for three months, and that will solve a problem, right? But what you do next is you go and try to find a silver bullet in the form of surgeries, right? And that's what really skyrocketed prices. Just with physical pain in the US, we are spending 560 billion with a B, billion dollars per year, right? And the big bulk of that is surgeries which should be replaced with much better outcomes for patients, right?

• 3:02:21Speaker 07

  And so when you use AI to make the traditional model, which should be the solution, very easily accessible, as accessible as running water, then you allow patients to get access to high quality care. And that's how, and then you really decrease costs. Because the problem in healthcare right now, and by the way, this is in the US, but this is all over the world, right? The National Health Service in the UK is suffering the same thing, which is you have very high, high costs and very, very low quality and access to care. So in the traditional equation in healthcare, if you want to increase quality of care, you need to hire more people. If you hire more people, you increase costs. But you cannot increase costs because costs are already prohibitive.

• 3:03:06Speaker 07

  So what you try to do, you try to reduce costs to remove folks from the equation. What you do, you reduce quality and you basically create massive challenges in terms of access. The only way to really break this paradox is by using AI doing part of the job of the human. And then having the clinician in the group highly scalable in order to be able to bridge the gap between the massive demands and the low level of clinical supply that we have.

• 3:03:35John Coogan?

  Yeah.

• 3:03:35Jordi Hays?

  Uh, how has your AI thesis around healthcare changed since founding the company? If it's even changed at all is or the thought is what you're seeing today and the sort of roadmap today? Had you know been what you expected or has your has any sort of like? New technology that's been introduced in the last few years sort of changed?

• 3:03:59John Coogan?

  Were you just talking about um AI therapy breakthroughs recently? There was a.

• 3:04:04Jordi Hays?

  Yeah, there was some news, I think, earlier this week that basically showed that AI therapy in the form of people just talking with L L Ms like actually delivers fantastic results. And it's basically free, right? And it's like this.

• 3:04:17John Coogan?

  Yeah.

• 3:04:17Jordi Hays?

  Incredible.

• 3:04:18John Coogan?

  It seems like a fantastic add on if you have a scaled business, you've been in the business for 10 years. You don't have to start from scratch on the customer development journey. So yeah, talk to us about that.

• 3:04:28Speaker 07

  We we actually that regard, we did a an instinct experiment because we have Phoenix, which is our AI system, based on the sessions that the patients bring at home, preparing the messages for our clinicians to send to patients, right? And so basically they analyze the session of the patient and based on that they can tell you, hey, John, I saw that you did your session perfectly. In the end, you were a little bit exhausted, so I decreased session a little bit for you to be able to do it without a problem, right? It's the work that our P Ts, our clinician usually usually do, right? And now, of course, we have L L Ms working at the data and preparing those messages, right? But we were looking at the messages and we had this question mark that do the messages feel like

• 3:05:10Speaker 07

  it's an AI creating the messages or do they feel human, right? So what we did was a blind test where we had 50 messages from that were written by our clinicians and 50 messages that were written by Phoenix, right? And what we wanted, and then we asked our team to evaluate which messages were from the clinician and which messages were from from Phoenix, right? And what we wanted was a 50% randomness where you cannot distinguish which messages are from which uh Phoenix or uh clinician.

• 3:05:43John Coogan?

  Oh, wow, like past the Turing test, basically.

• 3:05:45Speaker 07

  Yeah, exactly. What we got was very, very surprising because. The messages from the clinician were mainly labeled as coming from the AI. And the messages from the AI were mainly labeled as coming from human.

• 3:06:01John Coogan?

  That's bizarre, but I understand.

• 3:06:02Speaker 07

  And and that was and then we we went a little bit in more detail and what we found was that, look, since the clinicians are always like going from one patient to the other and they are always in this almost state of burnout across healthcare. The messages are very dry and very concise.

• 3:06:20John Coogan?

  Yep.

• 3:06:20Speaker 07

  Right? Where the L L M, the messages are very warm. And then also they have this long memory where they can pick up things from two weeks ago that you said. Right? They can pick up things uh about stuff that you said that I want to recover because I want to play with my kids. And and go on hikes and you said that during the on home and phone. And of course, the human never remembers that, right? And so it's funny because L uh the AI and L L M's make the work of the human uh power clinicians more human. Yeah. Than before. And that's super funny.

• 3:06:54John Coogan?

  Can you talk a little bit about uh AI image generation? It seems pretty far out for what you're doing, but at the same time, I'm just thinking like, if I need to show someone an image of, you know, hey, your knee, I have a diagram of your knee and this is where, you know, the the the the physical damage is, this is what we're going to be rehabbing. Uh, I could imagine even just doing the basic like Studio Ghibli style transfer could just make that whole experience feel a lot less medicinal and a lot more enjoyable and just novel. Um, but have you even started playing with those tools or is AI image generation uh still pretty far out on the roadmap?

• 3:07:32Speaker 07

  No, so our focus is really on um when the member, so what we want to do is replicate the experience that you have in a clinic with a clinic, replicate at home and finish, right? And so. We have the feedback component, which is we analyze, we observe what you are doing and we provide feedback. Right? Then the corrective feedback, that's where we are experimenting with that type of layer of imagery layer. Because then you can basically say, hey, do the movement like this, right? And or do the movement like that. And one area where we are using that and we are exploring how we can do that in more detail with AI is we have a solution focused not on physical pain, but on pelvic health.

• 3:08:18Speaker 07

  And pelvic health is basically things like urinary incontinence after childbirth, which is a massive problem in female population. Right? Which basically is you, it's implied for, we have an intravaginal sensor where you can basically have to train your pelvic floor muscle. No one knows what is the pelvic floor muscle. And so using imagery to say, hey, you have this thing which should contact like this. And using AI to make that animation much more lively. It's how we are experimenting, but that's the thing. It's like it can be an explosion of possibilities with AI. Because you are using AI versus agents, right? We are using that to enroll patients, right?

• 3:08:58Speaker 07

  We are using AI to identify that member that in six months is going to have a surgery. So we can intervene now a little bit like Minority Report to before that person goes to the orthopedic surgeon and gets convinced that they need surgery. We can act right now. We are using AI to quantify the motion of the patient. So it's really the Cambian explosion where everywhere I look, I see an application of AI with clear benefits.

• 3:09:25Jordi Hays?

  Yeah, how do you, you guys have been very successful very quickly in relatives? Well.

• 3:09:35John Coogan?

  Yeah, overnight success.

• 3:09:36Jordi Hays?

  In the sense from a pure revenue ramp, from a revenue ramp standpoint. And what usually when a company ramps revenue really quickly, other people go, hey, that's a good idea. We should do that too. How ambitious are you guys as a company? Is is the sword health for X sword? Or, you know, or is it just about running down these opportunities that you're currently tackling?

• 3:10:00Speaker 07

  So basically, yes, uh, our view is really translated in shifting healthcare from human first, AI first. So any every single area of healthcare which is still delivered in a one hundred percent labor, human labor intensive way, it's a target for us to intervene, right? One, one area where you apply that is, well, mental health care, right? Like, the way you address mental health right now is talk therapy, where you should, basically the solution to mental health is talk to that human once per week or once every two weeks, right? That one hundred percent human labor intensive, that's an area for us to intervene, right? And, and so it's really about, likely for us in terms of addressable market, it, it's

• 3:10:45Speaker 07

  the fact that, like, pretty much everything in healthcare is one hundred percent human labor intensive, and so we have a very aggressive market, um, roadmap in terms of expanding and replicating what we did with physical pain, what we did with pelvic health into other verticals of care, because the thing is, when you really nailed product market fit, healthcare, it's ma- it's massive in terms of expansion because you don't start to it, right? We, the pelvic health solution that I was telling you about, Bloom, we launched that solution in twenty twenty-two. Everyone thought it was a niche solution. We did in that year five hundred thousand dollars of revenue. We did last year twenty-five million dollars, this year we're going to do fifty million dollars.

• 3:11:28Jordi Hays?

  Wow.

• 3:11:29Speaker 07

  Right? And everyone thought, I, I still remember discussing this solution, uh, with my board, and my board saying, yeah, don't focus on that because that's too niche, right?

• 3:11:36Jordi Hays?

  Wow.

• 3:11:37Speaker 07

  And it's like, it's exploding. And so, yeah, healthcare, good thing is when you get to product market in healthcare, you have untapped growth potential because the market is just quite big.

• 3:11:47John Coogan?

  Well, congratulations. I mean, that's all amazing news. Uh, what a fantastic industry to be in a.

• 3:11:54Jordi Hays?

  We need, uh, we spend three hours sitting every day. We need, uh.

• 3:11:58John Coogan?

  We need some PT.

• 3:11:59Jordi Hays?

  Phoenix for.

• 3:12:00Speaker 07

  I know a guy, I know a guy.

• 3:12:01John Coogan?

  Yeah. Perfect, perfect. Well, thank you so much for coming on the show.

• 3:12:04Jordi Hays?

  Awesome.

• 3:12:05John Coogan?

  Uh, we'll have to have you back when there's more news.

• 3:12:06Jordi Hays?

  Cheers.

• 3:12:07John Coogan?

  We'll talk to you soon.

• 3:12:08Jordi Hays?

  Thanks for coming on.

• 3:12:08Jordi Hays?

  Yeah, the growth there is just shocking.

• 3:12:09John Coogan?

  Thanks a lot.

• 3:12:11John Coogan?

  Yeah, it's like such an underrated company because they're out in Portugal and they do have an office in New York City, but it's just one of those like under the radar companies, in my opinion.

• 3:12:21Jordi Hays?

  Totally.

• 3:12:21John Coogan?

  Well, we got another guest coming on the show.

• 3:12:24Jordi Hays?

  An absolute killer.

• 3:12:25John Coogan?

  About Wander first. Find your happy place. Find.

• 3:12:29Jordi Hays?

  Your happy place.

• 3:12:31John Coogan?

  Find your happy place. Book of Wander with inspiring views, hotel-grade amenities, dreamy beds, top-tier cleaning and 24/7 concierge service. It's a vacation home, but better. Go to wander.com/tvpn. Fantastic.

• 3:12:41Jordi Hays?

  Uh, we got Avlok coming in. Uh, I'm sure everybody knows him. All right, there he is.

• 3:12:47John Coogan?

  Avlok, how you doing?

• 3:12:48Jordi Hays?

  What's going on?

• 3:12:48Avlok Kohli?

  What's going on, guys? How you doing?

• 3:12:50John Coogan?

  Uh, we're good. We're good. It's been a great week. A lot of, a lot of big news. Um, I'm not sure what you've been following more closely, AI or tariffs, but everyone's following one thing or another.

• 3:13:02Jordi Hays?

  Everybody's got something this week.

• 3:13:03John Coogan?

  Worming in their brain. Uh, but yeah, I mean, could you just do a quick intro on you and Angelus for anyone who doesn't know, I guess?

• 3:13:10Avlok Kohli?

  Yeah, Avlok, CEO of Angelus. Uh, I was actually recruited in almost six years ago now. So I've been running the company for almost six years. Prior to that, I'd started three companies, sold to, one of them was to Square. So I spent almost three years at Square as well, pre-IPO to post-IPO.

• 3:13:27Jordi Hays?

  Got it.

• 3:13:29Jordi Hays?

  Uh, I'm, I'm curious. I mean, a bunch of stuff I want to get into. Uh, where should we even start? I, I think it's probably helpful for people to have like, you know, the sort of like the, the refounding of Angelus because

• 3:13:41John Coogan?

  Yep.

• 3:13:42Jordi Hays?

  Uh, Angelus is a company that I feel like has just been in the timeline. Obviously, we built the show around X. Angelus, I think, like grew with Twitter in many ways. It was sort of like the technology platform behind what was happening in the timeline. Um, and in the same way that Twitter's evolved massively, Angelus has done the same, but would love that backstory before we get into everything else.

• 3:14:05Avlok Kohli?

  Yeah, the way to think of early Angelist was there were a lot of different experiments as the team was searching for product market fit. And so, you know, 2020 or 2010 to call it like 2018, 2019 sort of spawned three different businesses within Angelist. It was the SPV business, which is really the syndicate business. There was Talent, which was to help startups find talent, startup talent. And the third one was actually Product Hunt. And Angelist had bought Product Hunt early on. And so by the time 2018, 2019 came around, there were kind of three different businesses where they really just connected with a thin thread of founders need to raise capital,

• 3:14:47Avlok Kohli?

  they need to hire people, and then they need to launch their product. But outside of that, it was actually very hard to do all three of those under one roof just because the business models are different. So at that moment, what happened was kind of a splinter, kind of a split. And Talent spun off on its own and then Product Hunt separated a bit more. And then when I came in, I actually took the SPV business and I spun it out as its own company. And we got to work and we kind of took it from an SPV business to venture funds to we invented a whole new category of rolling funds and then we got into roll up vehicles, which is actually how Jordy and I originally kind of got connected. And then we got into startup products. And so today, we're kind of a, you know, the place to go to if you're going to start, scale, launch a venture fund.

• 3:15:32Avlok Kohli?

  We're around private equity. We actually manage to scout funds for a lot of large firms as well. So we're kind of an index now of what happens with adventure.

• 3:15:40Jordi Hays?

  No, it's amazing. Can you, can you talk specifically about, you know, sort of like accelerating product velocity in Angelist? Because it just felt like you came in, you had this sort of warm-up period, and then it just felt like every single quarter, there was like a major new product launch and you sort of like awakened the beast, right? Like there was so much potential there. If you were involved in the startup, you know, industry at all, you had invested in an SPV, maybe you were in a rolling fund, maybe you hired, maybe you got a job, maybe you launched a product. So everybody was touching sort of products in the ecosystem, but then you had to kind of like ramp up and basically say like, you know, we're going to kind of bring this crazy product velocity.

• 3:16:25Jordi Hays?

  So I'd love to hear like how you did that and then how you're applying that now. Specifically, there's, you know, a bunch of new opportunities, I think, that are popping up.

• 3:16:33Avlok Kohli?

  Yeah, I would say just at the core of Angelus, Angelus has always held the founders at the top of the pedestal. And we've always believed that product leads everything, product velocity leads everything. And so when you have that in your DNA, the question you're always asking is, what is the mix of people you actually want in the company? So we actually have a fairly high percentage of our team that are like ex-founders. And so what happens when you put a bunch of ex-founders in a room, what are they gonna do? They're gonna look to be ambitious and how can you actually move into an adjacent opportunity? How can you go reinvent a whole new product category? And so a lot of the original thinking was, hey, let's actually get back to product innovation.

• 3:17:19Avlok Kohli?

  And let's get back to actually doing things that only we can do, right? And that's the one question we do ask. And to be clear, we don't get it right all the time, but the one question we do ask is, if we didn't exist in the world, would this product exist? And if it doesn't, then okay, great, we should go do it. But if it's gonna exist without us, we're probably not the best suited to go do that. And so we do ask ourselves that quite, quite often.

• 3:17:44Jordi Hays?

  Can you talk about AI in the business, how you guys are leveraging it to just, you know, you're in,

• 3:17:51Jordi Hays?

  you know, investing in a company is very simple on Angelus. Like I'm a part of a scout program, it's very seamless, you know, painless process. But then under the hood, there's, you're dealing with different entities and you're dealing with,

• 3:18:04Avlok Kohli?

  Yep.

• 3:18:05Jordi Hays?

  There's, the code is like the easy part, like the law is really the hard part and the challenge. So I'm curious how you're applying AI in the business to make, you know, internal team members more efficient, to make, and it's good, good for the world if you can sort of like accelerate capital formation, investment and all these things. It can accelerate the world. So I'm curious about that.

• 3:18:28Avlok Kohli?

  Yeah, thank you, Jordy, for recognizing that. It's like an iceberg product, right? There's so much underneath the hood. You know, the initial investment is actually just the beginning of that relationship with that company on behalf of the fund. And so for context for others, when an investment is made from a fund into a company, it's typically a, it can be like a ten year, fifteen year old period. And that's just because of how illiquid venture typically is. These companies need time to mature. And so what ends up happening is over the quarters, months, quarters and years, there's all sorts of activity that can happen within that investment, all sorts of activity that can happen within the fund. And there are real like legal repercussions, financial repercussions, if you get it wrong.

• 3:19:12Avlok Kohli?

  And the way we're using AI is, these are all the back office functions, and so typically humans would manage all the different workflows. What we've started looking at is how do you take all these different workflows and then how can you actually have AI agents starting to take on some of those workflows? Now, we have to be careful because the, you know, the, when you use ChatGPT and you get, every time you ask a question, you get different answers. That's beautiful. That's product market fit, right? Like, write me a poem, write me many different poems. Awesome. You don't want that when it comes to your finances, right? It's like, hey, what's, you know, what's the share price? You don't want ten different share prices. You want one. And so we're, we are pretty bullish on taking that and having it automate huge portions of our back office.

• 3:19:57Avlok Kohli?

  And that's already starting to happen. And we think there are ways that we can actually then have a lot of the folks that are doing some of the back office work move up the stack in terms of the type of judgment they apply on all the different workflows there. So that's like one piece. The second that I'm personally extremely excited about is we launched a front-facing product called, it's our intelligence product. And it's in beta. It's still new, so we're not ready to like fully talk about it with the world, but.

• 3:20:28Avlok Kohli?

  What we're doing there is we're actually creating a, an agent to go look at all private market data. So we have access to a lot of unique aggregated anonymized angel list data. And we're actually looking at building partnerships with many other providers. So for example, you can ask a question like, who left OpenAI in the last month to start a new company? That can help you with deal sourcing and you can imagine it scales to many more companies. We're also looking at how do we help you get ready for your briefings for pitch, pitch meetings. While you're, yeah, while you're actually like in the middle of a pitch. Post pitch, great, take the transcript and we can help you do a lot of the necessary reach, research, market map.

• 3:21:09Avlok Kohli?

  The full analysis. So give you time back and we think of this as we want to build a code GP. We want to help you make more money, right? We can help you find better deals.

• 3:21:18John Coogan?

  Yeah. What about on the founder's side? I could imagine that, you know, there's all these new benchmarks for fastest company to a hundred million ARR. Valuations are all over the place. Are you thinking about building any products for entrepreneurs? They upload their deck and then they say, oh, well, like you should probably expect, you know, 10 on 80 pre in this. You know, to be kind of in the fair way. Maybe go out there and get more, but here's at least our take on it.

• 3:21:44Avlok Kohli?

  A hundred percent. We're, we're, we're already in that world. You know, it's the classic line, the future, future is, is here. It's just unevenly distributed. That's basically.

• 3:21:53Jordi Hays?

  Yeah. It's funny how entrepreneurs try to understand how to price their rounds is really they talk to a handful of investors who just referenced like the last two or three rounds that they saw get done that were maybe not even in the same category. And then it's just like completely guessing. And I think it's, you know, super like you guys will be able to pretty quickly, I imagine, give a pretty precise and say like, here's where we predict your round is going to get priced and sort of like building that feedback loop.

• 3:22:19John Coogan?

  You claim to be cursor for dogs, but what does that really work?

• 3:22:22Jordi Hays?

  How do you, it feels like we're at this amazing time right now. You know, some people don't think it's amazing. I think it's great of venture maturing. And then you see like the convergence between private equity and venture. You guys launched some products more geared specifically for private equity. But how, how do you see that line sort of like blurring over time? And I guess like, how, how are you kind of adjusting your, your product roadmap for that reality?

• 3:22:54Avlok Kohli?

  Yeah, the way to think about the way we're approaching product is we have the vertically integrated part of the product where you come in, one stop shop, you can launch scale of venture fund, which also allows us to manage scout funds for some of the largest firms. And then we actually have our software that's getting unbundled and folks want to adopt that. So some of the largest private equity firms actually adopt our digital subscriptions product or some others can adopt our banking product. We actually, we run banking underneath the hood. We actually built a whole banking infrastructure, which is what allows for a lot of the smooth operations. And so, you know, as we're seeing the market evolve, our roadmap is effectively evolving

• 3:23:36Avlok Kohli?

  to continue to keep taking on large and larger funds for this vertically integrated product. And then for the largest ones where there we can support them for any of their needs. And that's actually working quite well. In terms of what we're seeing in the market today, we are seeing a bifurcation. So what's interesting is if you look at year over year, within our data, we're actually seeing capital flows increase Q1 2024 to Q1 2025 by almost a double and into just venture funds. And like we talked about SPVs and all of that, but like just venture funds alone, capital flows are almost, have almost doubled. So there's definitely a bounce back. There's more optimism, right, that's coming in. But it is being, it's sort of concentrating into a certain subset of managers.

• 3:24:21Avlok Kohli?

  So you kind of have, you know, call it zero to, let's say, a hundred million, you kind of divide, and then you have like the mega firms, right? And then the mega firm strategies are actually also bifurcating, right? They all have kind of their own, their own view on things and what they're going to go after. So it's a very different market than 2019, 2020. And we're not seeing as much of, you know, because what happened in 2021, 2022 was you had crossover firms really come in, right? Private equity firms, public firms come in to venture. We don't see that anymore. I think, at least we're not seeing too much of it, maybe like here and there, but generally it's the venture firms that are scaling up and they're now starting to push up into different asset classes.

• 3:25:04Jordi Hays?

  How do you think of?

• 3:25:07Jordi Hays?

  The job of GPs over the next 10 years, I've, you know, everybody's, you know, been running the analysis of like how safe their, their job is, right? Like if you're a writer right now and your job is to summarize information and, you know, or repurpose information and just put it out there, you gotta be pretty worried. I think investors in general are pretty safe because people want to give money to one person right now and have them be sort of responsible for returning that money and hopefully a lot more in the future. And venture is about this combination of not just picking, which is like, can be very analysis driven of the market and the products, but also the people. But then the big thing in venture is, you know,

• 3:25:51Jordi Hays?

  I expect AI to not necessarily dominate venture so quickly because likability and access are like such big parts of it, right? It's like, you know, somebody wants Avlog to angel invest in their company because you're the CEO of Angelist and like, and AI could be like, you know, better at finding companies, but that doesn't mean they're going to sort of like win the allocation. So is your thesis, you know, let's give investors AI tools to be able to be better investors and make more money? Or do you see a world in the future where people are setting up, you know, sort of a fund on Angelist that's entirely, you know, the GP is effectively, you know, a machine itself?

• 3:26:30Avlok Kohli?

  Yeah, it's a good question. I don't know who said this, but I picked this up from some podcast. When a founder picks an investor, they're doing it because they believe that person's going to increase their probability of success.

• 3:26:44Jordi Hays?

  Yeah.

• 3:26:45Avlok Kohli?

  And in order to increase the probability of success, you're really looking for a partner who can help you solve any like number of problems that can come up. Some of it's brand help, recruiting, some of it's like actual like operational help and it could be many more of those, right? But you need to partner with someone so you can actually have a reasonable chance of success with the company. So I don't think that's ever going to come from in AI, at least today, at least in the form that we know of it today. So as we think about the role of the GP, we think it's going to continue to stay the same. I think what will get challenging is I do think there will be more capital that floods in. Because even at the earliest stages, you know, folks are talking about how valuations are decreasing. Yes, at the later stages. At the earlier stages, it's increasing.

• 3:27:30Avlok Kohli?

  So pre-seed, seed, series A, there's just a huge amount of capital looking to get in. And the actual root problem is that the startups don't need that much capital at the earliest stages. So what you have is a supply and demand mismatch. And so the only way the valuations go is up, right?

• 3:27:47Jordi Hays?

  Yeah.

• 3:27:48Avlok Kohli?

  And so the access question and problem is only going to get worse and worse. And so we still think the human, the GP is always going to be in the loop. So the way we think about the tooling that we're building is they're meant to amplify the investor. They're meant to help them make better decisions. But it can't ever help you become likable to the founder or help you get access to the deal, right? That's going to be incredibly hard. And so we think that it's about enabling them. So really, there's going to be more leverage to the best investors. So I actually think the power law is going to get even more concentrated. Because even the tools that we're building are going to help investors understand very quickly the lay of the land, right? So one thing that's actually very hard today is when you're listening to a founder, you're at a pitch meeting.

• 3:28:32Avlok Kohli?

  You generally, like, you don't quite know, okay, who are all the other competitors? Who are the other founders of those competitors? With one click, we're just going to make it easy. And it won't be just sauce. I'm sure there are other tools that will come out of like, one click, you get a full layer of the land. And so you have full visibility on what's going on with this company, what this founder wants to do. And so I think leverage will increase to the best investors.

• 3:28:54Jordi Hays?

  Makes sense. I don't know if you have a hard stop, but I did have one more question around how your thinking around stable coins has evolved. You guys were very quick to adopt stable coins. I think it was in 2021 or early 2022 that you rolled them out. That was probably from user demand being like, I have a lot of money on chain and I want to put it into startups. Now, I imagine I'm a long-term believer in the power and value of stable coins. But I never in using Angel List at any point in the last two years was like, you know, I want to fund this investment via a stable coin. And so I'm curious how you think about it broadly. And are you using them behind the scenes at all? Or you just, you said, you talked a little bit about your banking infrastructure.

• 3:29:37Jordi Hays?

  And I would assume that that's still based on traditional fiat rails, just because beauty of venture is like, sometimes you want to close an investment quickly, but we have same day wires and those like work pretty well. And then you're not like trading in and out of assets like super rapidly or anything like that. And so, but, but anyways, I'm curious to hear how you're thinking about stable coins broadly.

• 3:30:00Avlok Kohli?

  Yeah, so we originally added stable coins because of user demand and it was like extremely aggressive in terms of like demand, you know, and I was like, fine, let me go, let me go figure this out. And at the time, we actually looked at, I mean, all the who's who providers and none of them could really quite fit the use case we had. And so we eventually actually worked with a startup and ended up building out exactly what we needed. And now they're actually doing pretty well and they're scaling out.

• 3:30:25Jordi Hays?

  Was that a, was that layer, was that layer two?

• 3:30:29Avlok Kohli?

  Yeah, they renamed themselves to RaIL.io.

• 3:30:32Jordi Hays?

  I'm an angel as well. I remember they were saying like, we got, we got Avloc, you know?

• 3:30:40Avlok Kohli?

  So what's interesting about stable coins on Angel List is when the biggest use actually comes from the biggest pain from when LPs fund. And the biggest pain is when you're trying to move money internationally. And so we actually see a huge amount of demand from international LPs trying to move money into the US. Because if you've ever tried to send a SWIFT, God bless you if you have, it's insane. It literally takes days and you just don't know where the money is. And sometimes bank will just hold on to it and they won't even tell you. It's got stuck somewhere in the middle. With stable coins, you're able, it's one hop, you're able to get the money right into the US. It goes through all the same compliance laws and everything. But we see a huge amount of demand for that. So it's not necessarily in the fund side to

• 3:31:25Avlok Kohli?

  companies because you're right, there's not that much trading in and out, but it's more on the LP side into the fund.

• 3:31:30Jordi Hays?

  Yeah.

• 3:31:31John Coogan?

  Well, yeah, that's very cool.

• 3:31:33Jordi Hays?

  Last, last question I have for you, then I, we will let you leave. I know, I know we're five minutes over. I'm just very curious. Have you seen, looking at some of these sectors that are especially overheated or potentially in sort of bubble territory, right? People are, you know, you, we could argue whether AI is a bubble or defense tech is a bubble. Have you seen any sort of near term slowdown in defense tech investing this year? And I'm sure you don't have the data in front of you, but, but I'm curious. That feels like one that, you know, is still very. Hyped, but it's potentially investors like sort of have their bets now and they're letting, you know, want to let their kind of bets play out.

• 3:32:14Avlok Kohli?

  Um, no, I was actually just talking about this with someone else the other day. It is still going on with defense tech. I think we're actually just entering a sort of a golden age for the US wanting to basically up level of all the technology in the military and the Navy. So I'm actually not seeing it slow down. I agree with you that there is, it feels like it's a bubble, but the beauty of financial markets in general is you'll just get bubbles and then you'll get a few great companies that will come out of it.

• 3:32:46Jordi Hays?

  Yeah.

• 3:32:46Avlok Kohli?

  But I haven't seen that particular bubble sort of like wind down yet. We're still seeing some pretty active, heavy, heavy investing there.

• 3:32:54Jordi Hays?

  Very cool.

• 3:32:55John Coogan?

  Makes tons of sense.

• 3:32:55Jordi Hays?

  Fantastic. Well, we'd love to have you on to be our private market data correspondent.

• 3:33:01John Coogan?

  I mean, you have all the data.

• 3:33:02Jordi Hays?

  Yeah, yeah.

• 3:33:02Avlok Kohli?

  Yeah, for sure.

• 3:33:03John Coogan?

  Pull it out of you one way or another. This is great. Thanks so much.

• 3:33:05Jordi Hays?

  Thanks for joining.

• 3:33:06Avlok Kohli?

  Yeah, likewise.

• 3:33:06Jordi Hays?

  Good to catch up.

• 3:33:07John Coogan?

  Have a great weekend. Bye.

• 3:33:10John Coogan?

  Let's move on to some timeline. We got some

• 3:33:11Jordi Hays?

  Let's do it.

• 3:33:12John Coogan?

  Massive news yesterday from Andurall. They launched the Seabed Sentry. Andurall writes, "We must fortify autonomous subsea dominance of the US and its allies. Seabed Sentry is their new AI-enabled mobile undersea sensor node network designed for persistent monitoring and real-time comms."

• 3:33:31Jordi Hays?

  So imagine this would be valuable if you had an undersea cable that you didn't want to get cut or blown up.

• 3:33:37John Coogan?

  Exactly. There were, yeah, there were some very funny posts about, I mean, Palmer contextualizes it very well by just saying like, "What we do for the sensor towers are on land. We now have a product that does that underwater." But he said that it can detect like other submarines and boats, but also biological things. So I think you can even track like whales, which is very, very cool.

• 3:33:59Jordi Hays?

  That's right.

• 3:33:59John Coogan?

  And so if we domesticate the whales, get them working for us, turn them into a defense tech weapons, weapons platform, Andurall's going to be on top of it. And interestingly, if you zoom in on this video very closely, you'll see that they're partnered with Sonerdyne, which is a very old company. They've been in business for 50 years and they And and they they have a number of case studies for who they work with, energy, ocean science, defense, carbon capture, etc. And I'm sure there'll be a case study on this product as well.

• 3:34:27Jordi Hays?

  Yeah, it feels like as we get more autonomous underwater vehicles, you have people like Chris Hamadon working on stuff like this, tons of exciting companies in the space, the risk to pipeline and cable sabotage.

• 3:34:43John Coogan?

  Totally.

• 3:34:43Jordi Hays?

  It just feels like if, again, if you can send a $10,000 drone to blow up a pipeline that can cause billions, trillions of economic damage, that's just going to be a huge problem.

• 3:34:56John Coogan?

  What was interesting is that, you know, we've been talking about like the, maybe the Anduril of X is Anduril and but this was something that I haven't even seen startups working on. This seems like an idea that you only get if you're as deeply entrenched as Anduril. And yeah, if you're going on, if you're going down into the deep sea.

• 3:35:15Jordi Hays?

  And you can afford to come up with products that aren't being purchased yet, right? Like basically create markets and you have, once you're at a scale that Anduril is at and have those customer relationships, I think it's a lot easier to do that.

• 3:35:30John Coogan?

  But if you're focused on subsea dominance and you're diving, what watch should you have on your wrist? Probably a submariner. And where are you going to get it? Bezel? Go to getbezel.com. Shop over 24,500 luxury watches, fully authenticated in-house by Bezel's team of experts.

• 3:35:44Jordi Hays?

  That's right.

• 3:35:45John Coogan?

  You can get a dive watch added to your collection. You need a dress watch, you need a sports watch, you need a dive watch.

• 3:35:51Jordi Hays?

  Tariffs are hitting Switzerland.

• 3:35:52John Coogan?

  So get in there while you can.

• 3:35:54Jordi Hays?

  But so retail prices will go up.

• 3:35:57John Coogan?

  Yep.

• 3:35:57Jordi Hays?

  I expect prices on Bezel to go up as well, but probably slower and less systematically.

• 3:36:04John Coogan?

  So download the app, start building your collection, your wish list, and find something beautiful to add. Speaking of tariffs, George Hots posted from the Tiny Corp account, a big, long post about how the tariffs are affecting his business. And it's it's really, it's really like a frustrating story. He says, you know, we talked to Chris Power at Hadrian. He's obviously a beneficiary of the tariffs, the tiny box. Is is is much less of a beneficiary potentially harmed and he breaks it down. He says, to date, we have manufactured all tiny boxes in America. However, we buy parts from abroad. There is no way to buy American made GPU or motherboard at this time, and there won't be for a long time. If these tariffs stand as is, we would have negative margins on tiny boxes.

• 3:36:48John Coogan?

  Our motherboard manufacturer has already reached out and tried to get us to pay the tariffs on things we already agreed to deliver on the delivery price for. But I don't blame them. Their margins probably go negative with the tariffs, too. I sort of doubt we'll be getting our 5090s at the price we agreed upon either. And if that's true, the whole thing is really out the window. And even more stupidly, there's a restricted list of countries you can ship 5090s to. So I'm worried. I'm not so sure we could move manufacturing of the green V2, their product, and the product may just be canceled. I'm not going to spend my time figuring out weird loopholes and incentives to re-export in FTZ and maybe try and eke out a small profit after all the administrative costs. Tariffs are regulations.

• 3:37:28John Coogan?

  When difficulty of business go of doing business goes up, many people only marginally making money just stop doing business. The US has an ease of business, ease of doing business score ranking of six. Hong Kong's ranking is three. If we manufacture here in Hong Kong, we have free trade and can continue our policy of selling everywhere and passing the tariffs on to the buyer. European Union people have been dealing with this for a long time. Now, US people will too. If we can't get 5090s because of short sighted US export regulations, we'll have to ship, we'll have to switch to something that we can get, maybe a different graphics card. So, very frustrating and and and an interesting, real-life case study, not just a pundit kind of saying, oh, I think the tariffs are bad for economic reasons, or they're great for

• 3:38:10John Coogan?

  economic reasons, or they're, or you know, it's some part of some grand 5D chess or whatever. This is somebody who's really trying to build a business on the ground, clearly, you know, one of the greatest programmers of all time and and a fantastic, just, I don't even know how to describe him, like business person, developer, he's kind of everything. But George Hots breaking it down about why the tariffs are actually leading him to leave America and focus on Hong Kong and who knows how that will play out. But very frustrating story, but interesting to hear him break it all down. And of course, if the tariffs are moving the markets, you're going to want to be on public.com.

• 3:38:47Jordi Hays?

  Multi asset investing, industry leading yields. And guess what, John?

• 3:38:52John Coogan?

  They're trusted by millions.

• 3:38:53Jordi Hays?

  They're trusted by millions.

• 3:38:54John Coogan?

  Investing for those who take it seriously.

• 3:38:55Jordi Hays?

  And trusted by us.

• 3:38:56John Coogan?

  Go to public.com.

• 3:38:57Jordi Hays?

  Thank you to public for supporting the show.

• 3:39:00John Coogan?

  And in relation to the to the to the market turmoil, Scooks had a funny post here. After the nine 11, after nine 11, the stock market lost 1.4 trillion dollars inflation adjusted. Today, the stock market lost 2 trillion. So these tariffs are like 1.42 nine 11s.

• 3:39:17Jordi Hays?

  Yikes.

• 3:39:18John Coogan?

  Rough 5K. Lakes, very popular. What else should we cover here? Just FYI, the map of states that are renamed for countries with similar GDP really puts America's dominance in place. Just the state of New York is the same size as Canada. Just California is the size of India. Just Texas is the size of Brazil.

• 3:39:41Jordi Hays?

  Mugged.

• 3:39:42John Coogan?

  Just Florida is the size of Indonesia.

• 3:39:45Jordi Hays?

  Mugged.

• 3:39:46John Coogan?

  George Hots is over in Hong Kong. That's the size of Indiana. Yeah, America stays undefeated. I mean, this is 2019. We'll see where it goes. A lot of these countries are growing and some of these states might be shrinking, but I'm still long America, even with all the crazy tariffs. And, you know, no better way to get your message across in America than some out of home advertising on adquick.com.

• 3:40:09Jordi Hays?

  That's right. If you want to break through the noise, you got to go out of home.

• 3:40:12John Coogan?

  Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only adquick combines technology, out of home expertise and data to enable efficient, seamless ad buying across the globe.

• 3:40:24John Coogan?

  Should we talk about, what else is interesting? Vittorio had a funny meme, the virgin tariffs warrior versus the Chad, we'll see what happens LMAO.

• 3:40:34Jordi Hays?

  Yeah, I feel like this obviously resonated. It's our, our approach has just been, you know, this is happening, we'll see what happens. There's a lot of negative impacts and then there's people like Chris Powers that are benefiting from it. You know, overall, it's much less easy to be in the Chad camp if you are George Hots and Tiny Corp. And your, your product is being, you know, impacted or, or, you know, the business entirely. So, well, we'll, we all have to see what happens. But definitely feeling that for entrepreneurs this week that are just dealing with immediate repercussions from it and uncertainty.

• 3:41:19John Coogan?

  For sure. Should we close out with this thread from carried no interest?

• 3:41:23Jordi Hays?

  Let's do it.

• 3:41:24John Coogan?

  So carried no interest, he's been on the show before. He says, it's time to coin some new AI software terms. He's employing Coogan's law. He says inference to impact, I to I is the first and inference risk quotient, IRQ is the second. And he defines these, this says, the first that stands out to me is inference to impact. What does this mean? It's the amount of time it takes within a new software product from hitting an LLM API to getting customer utility. I've noticed a distribution in these new startups. Let's start with cursor. Cursor has a very low I to I inference to impact. As soon as you start ripping the application, you are hitting an LLM and getting results. The I to I is immediate. This is a good thing. Now, the opposite is AI SDRs.

• 3:42:09John Coogan?

  You hit a bunch of LLMs and send some outreach, much longer I to I on this product, bad. It's kind of the, the, the iteration loop. A low I to I is good on a bunch of levels. Your customers are seeing immediate magic. You can onboard users faster. Sales cycles should be shorter. When you can shorten the amount of time between LLM and utility, this is objectively very good. But it's time for another one, the inference risk quotient, the IRQ. The IRQ describes the amount of risk created for the customer from a series of LLM calls. For some AI first software companies introduce very little risk to a customer by calling an LLM. Others, a good amount, let's describe it. Cursor works well in, for this example as well. Cursors IRQ, the risk quotient is theoretically low.

• 3:42:54John Coogan?

  Cursor generates code, that code goes into a diff. It should be tested and most errors caught as it progresses through staging environments. Solid IRQ. What about the inverse? Let's go back to the AI SDR example. Your AI SDR starts ripping emails out the door. Some of them are bad. They maybe embarrass your marketing department. Oof, probably a medium IRQ. What would be a high IRQ, an inference risk quotient? Let's think about Harvey. Harvey is an AI software for lawyers to analyze whatever lawyers analyze all day. In my opinion, this would be high IRQ. If the AI misses something important or misclassifies, you could have potential legal damages. There's probably one more item, one more term in here.

• 3:43:37John Coogan?

  LMAO, IURQ, inference utility to risk quotient. This would be the amount of risk relative to utility. Cursors utility relative to risk is so high. Your staging environment should catch bugs and your output is much higher.

• 3:43:51Jordi Hays?

  Fantastic.

• 3:43:52John Coogan?

  Framework.

• 3:43:53Jordi Hays?

  Frameworks.

• 3:43:54John Coogan?

  Yeah.

• 3:43:54Jordi Hays?

  Very on point. I almost always say carry no interest real name every time.

• 3:43:59John Coogan?

  Yep.

• 3:43:59Jordi Hays?

  Eventually, you're gonna get docs, buddy.

• 3:44:02John Coogan?

  It's the nature of texting.

• 3:44:03Jordi Hays?

  Not on purpose, but this reminds me of what Avlock was bringing up. If you're asking AngelList via LLM, what the share price is on a specific position, investment, et cetera. It has to be right, right? Because you're gonna go make, you know, different financial decisions based on that data.

• 3:44:23John Coogan?

  Yep.

• 3:44:23Jordi Hays?

  Like, they, they, they need to be a, you know, accurate source of records on these type of things. And people just aren't gonna tolerate, you know, hallucinations in that environment. So I think this, this very well sums up why we're seeing the adoption, you know, cursors. Adoption curve versus we don't, we see these sort of AI SDRs that are, you know, getting customer traction. But it seems like the churn is much higher and the utility is much lower.

• 3:44:56John Coogan?

  Yeah.

• 3:44:56Jordi Hays?

  I haven't seen people, you know, it was, it was great having Sean from Rox on.

• 3:45:01John Coogan?

  Yeah.

• 3:45:01Jordi Hays?

  It sounds like people are getting a lot of utility out of that, but it's almost more of a. CRM type tool than purely an outbound, you know, engine. And so we haven't seen anybody raving about their AI BDR, SDR yet. That's also could be that if it's working so well, you don't want.

• 3:45:19John Coogan?

  Yeah, don't leak the alpha, I guess.

• 3:45:21Jordi Hays?

  Yeah.

• 3:45:22John Coogan?

  Well, I want to do a couple more. Andre Karpathy had an interesting post here. He says, let's take AI predictions from blog posts, podcasts and tweets and move them to betting markets. Our state of the art and truth. Obviously, we are sponsored here by Polly Market and I'd love to see more AI markets on Polly Market. I'm sure we'll be working on spinning some of those up. Andre Karpathy continues to say, my struggle has been coming up with good, concrete, resolvable predicates. This is always the tough thing with Polly Market is that, you know, it needs to have a clear resolution. It needs to be not too far out, not more than a year, you know? You don't want your money just sitting there. Ideally predicates related to industry metrics and macroeconomics, e.g. naively, one might think the GDP, but I'm not so sure that works great. E.g. see productivity paradox.

• 3:46:06John Coogan?

  I also think evals are not amazing predicates because we see over and over that they are incomplete and hackable and saturated often. And I thought this was interesting because he's, he's close to kind of my, my thesis about the

• 3:46:23John Coogan?

  artificial economic intelligence, just maybe instead of tracking towards, you know, IQ or how does this benchmark against a human or the, the Turing test? We just want to say how much economically valuable work is being done by LLMs and AI agents and diffusion models, et cetera. Like of the GPU cycles that we have, we have strict data on CapEx and inference cost and how much energy is going into these data centers? How much, how much economic value is being produced? And once that hits 10%, that's probably some sort of tipping point. Once that hits 50%, like the robots have kind of won and that could be good or it could be bad.

• 3:47:03John Coogan?

  But, but that is true, like, okay, the robots, the AIs are producing more economic value than all of human, all of humanity combined. When we hit that 50% GDP generated by AI threshold, that feels like singularity territory to me. That feels like a fundamentally different society. That feels like.

• 3:47:22Jordi Hays?

  Feels like AI 2027.

• 3:47:25John Coogan?

  Yeah, yeah, I, I would take the under on, on AI generating. Um, over 50% of GDP by 2027. But yes, the productivity paradox is tricky. Tyler Cowen has tried to formulate this, saying that like, you know, the AI doomers, they should express their P dooms in the form of long dated puts and say, well, if you really think that this is going to go poorly, you should imagine that there'll be economic turmoil and you should be betting on that and profiting off of that. And if you're not, then maybe you're just yapping. And so he's going to be on the show in a few weeks and we'll have to dig into more about how we can concretize these bets and think about how we make predictions

• 3:48:06John Coogan?

  about AI progress. There's a community's last exam, this ARC AGI, and there's all these interesting evals and, and tests, but they're not scratching the itch for me in the same way when some new model goes viral. I care more about the Studio Ghibli moments than the, okay, Google's Gemini 2.5 is two points higher on MMLU or some, some exam or hacking AP bio even. I care less about that.

• 3:48:38Jordi Hays?

  There's also something interesting, which is if a lab has a truly world-changing discovery or innovation, they should not tell the world and not release it and just leverage it to the absolute max internally, which again goes back to people's frustration with OpenAI. Okay, if you are at the frontier and you've felt like it should be, you know, open sourced, and now it's closed, you know, how do, how do the incentives and everything change?

• 3:49:13John Coogan?

  Let's close out with Nick talking more about AI alignment. He says broadly, I think AI alignment people are maxed out in smart and low in wisdom. I like this because it's goes back to the, when you build a character in RPG, you have int and whiz, intelligence and wisdom, and they're slightly different. And, and I think as we, like, as we try and define what makes a human truly successful, it's not always just put all the points into intelligence. Charisma obviously matters. Strength and like, strength as a sense of like, your grit, your grind, your ability to keep, continue working. Charisma obviously super valuable for coordination, bringing people together. There's this agency, drive, luck, skills.

• 3:49:59John Coogan?

  Yeah, Riz, all these different things. And, and yes, we might be seeing intelligence max out and get to these super high IQ models. But are they going to be super agentic, super creative, super wiz, super driven by wisdom? And this comment is obviously about the AI alignment people. He says, not a comment on anything in particular. I've noticed myself saying it and thought it would be worth writing down, but obviously it's, it's like perfectly timed with the AI 2027 thing. Says lots of room for people from other fields to contribute wisdom learned throughout history, even if they can't do a math Olympiad or whatever. I don't think being able to do high level math helps that much.

• 3:50:40John Coogan?

  I guess one specific comment I'll make is that I'm quite excited about Emmett Shear's new company Softmax. I think he's thinking about things in interesting ways. And so we'll have to dig into Emmett Shear's new company and how he's thinking about this because he's been very outspoken on AI alignment. But also a very successful entrepreneur and has built up probably a very deep trove of wisdom running Twitch and, and building a real business that has to interface with the realities of the economy. And doesn't live, he's not a pure academic, but he engages with the AI alignment debate in, at the same level as academics, in my opinion. And so I'm, I'm excited to see that. But it is, is it, it is interesting. Obviously Sean was talking about this, like AI 2027, maybe it's just fan fiction. I like fan fiction. I had fun reading that.

• 3:51:25Jordi Hays?

  Stop provoking.

• 3:51:26John Coogan?

  And, and I think there is utility in that, even if you're just telling a sci-fi story, I'm here for it. I'll, I'll, I'll read it all day. So I, I would say.

• 3:51:33Jordi Hays?

  We want, we want people doing that work.

• 3:51:36John Coogan?

  Yeah, I would say more of that, but also you do need to, you, you can't lose the plot.

• 3:51:43Jordi Hays?

  We have to announce a specific milestone, which is that we just hit four hours.

• 3:51:48John Coogan?

  Oh.

• 3:51:49Jordi Hays?

  Four hour show. We're clearly addicted. And I just have one, now, you know, that we've been talking about AI, AI predictions. I have one prediction to make.

• 3:51:58John Coogan?

  Yeah.

• 3:51:59Jordi Hays?

  Which is that Monday at 11 AM Pacific, 2 PM Eastern, we will be back sitting in these chairs.

• 3:52:06John Coogan?

  Yeah.

• 3:52:06Jordi Hays?

  Ready to go again.

• 3:52:07John Coogan?

  Yeah. And, and I mean, what's your prediction for TBPN 2027? I think we'll be here.

• 3:52:12Jordi Hays?

  We'll be right here.

• 3:52:13John Coogan?

  We'll be right here doing the same thing.

• 3:52:15Jordi Hays?

  Doing the same thing.

• 3:52:16John Coogan?

  From the front lines of the battle scarred Terminator apocalypse. We will be shooting humanoid robots.

• 3:52:23Jordi Hays?

  No matter.

• 3:52:24John Coogan?

  With microphones in our other hands.

• 3:52:26Jordi Hays?

  Yeah.

• 3:52:27John Coogan?

  James Bond's back, baby.

• 3:52:28Jordi Hays?

  We will never surrender.

• 3:52:30John Coogan?

  We'll never surrender.

• 3:52:31Jordi Hays?

  We will keep doing this until the AI, the bioweapon that the AIs release.

• 3:52:38John Coogan?

  Yeah.

• 3:52:38Jordi Hays?

  You know, just sort of.

• 3:52:39John Coogan?

  Maybe we'll be podcasting from a hermetically sealed bio secure facility.

• 3:52:43Jordi Hays?

  Yeah.

• 3:52:44John Coogan?

  So that no one can, no one gets in, no one gets out, but we're always live streaming. And then sleeping on our eight sleeps and then waking back up.

• 3:52:51Jordi Hays?

  That's right.

• 3:52:52John Coogan?

  Doing it again.

• 3:52:54Jordi Hays?

  Have a fantastic weekend, everyone. Thank you for tuning in. We appreciate you all.

• 3:52:59John Coogan?

  Yeah.

• 3:52:59Jordi Hays?

  And looking forward to Monday.

• 3:53:02John Coogan?

  Thanks a lot. Looking forward to Monday. Bye.