SpaceX Launch: Deep Dive & Reactions | Josh Reeves, Keller Cliffton, Will Brown, Julia Steinberg, Olivia Moore, Flo Crivello

(00:11) - SpaceX Launch Reactions (16:35) - History of SpaceX (29:53) - Mature Startups Get Venture-Debt Boost (41:38) - Timeline Reactions (01:28:52) - Josh Reeves, CEO of Gusto, discusses the company's acquisition of Guideline, a retirement benefits provider, to enhance services for small businesses. He highlights the long-standing partnership between the two companies and emphasizes the potential for deeper integration to simplify retirement benefits and ensure compliance with state mandates. Reeves also touches on the role of AI in improving user experience and operational efficiency within Gusto's platform. (01:45:26) - Keller Rinaudo Cliffton, co-founder and CEO of Zipline, discusses the company's rapid growth in autonomous drone deliveries, highlighting a 25-30% week-over-week increase in flight volumes and a net promoter score of 94. He emphasizes the transformative impact of their services, noting that customers are ordering multiple times per week, with some placing orders several times a day, leading to significant time savings and changes in daily routines. Cliffton also underscores Zipline's commitment to safety, reporting over 120 million commercial autonomous miles flown without any safety incidents, achieving a safety level ten times higher than that of cars. (01:57:54) - Will Brown, a researcher at Prime Intellect, discusses the recent launch of their Environment Hub, designed for reinforcement learning (RL) environments and evaluations. He explains that RL environments function as evaluations where models interact with tasks to receive performance scores, facilitating both training and assessment. Brown also highlights the challenges in scaling RL environments, emphasizing the need for efficient infrastructure and the importance of developing automated evaluation processes to enhance model performance across various applications. (02:25:15) - Julia Steinberg is the GM of Books at Arena Magazine. In this conversation, Steinberg discusses her recent experiences, including a car accident that necessitated a drive to San Francisco, and reflects on infrastructure challenges in California compared to China's rapid development, referencing Dan Wang's book "Breakneck" (02:39:53) - Olivia Moore, a partner at Andreessen Horowitz specializing in AI investments, discusses the firm's release of the "Consumer AI Top 100," a data-driven ranking of the top AI-native web and mobile applications based on user traffic. She highlights the prominence of single-purpose AI tools like Remove.bg and the rise of AI-powered coding assistants such as Replit and Cursor. Moore also notes the increasing involvement of major tech companies in AI, with Google's Gemini ranking second on the list, while Meta's AI initiatives have yet to gain significant traction. (02:52:09) - Flo Crivello, founder and CEO of Lindy, an AI assistant company, discusses the launch of Vibe, a new feature enabling AI-generated code to test its own work autonomously. He highlights the limitations of existing no-code tools, which often require manual testing, and emphasizes Vibe's ability to build complex applications, such as a functional Airbnb clone, by integrating testing capabilities. Crivello expresses optimism about the future of AI-driven development, suggesting that the industry is progressing up the "slope of enlightenment" in the technology adoption lifecycle. (03:00:28) - Timeline Reactions TBPN.com is made possible by: Ramp - https://ramp.com Figma - https://figma.com Vanta - https://vanta.com Linear - https://linear.app 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 Attio - https://attio.com/tbpn Fin - https://fin.ai/tbpn Graphite - https://graphite.dev Restream - https://restream.io Profound - https://tryprofound.com Julius AI - https://julius.ai 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://www.youtube.com/@TBPNLive

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

• 0:00John Coogan?

  Today is Wednesday, August 27th, 2025. We are live from the TVPN UltraDome, the Temple of Technology, the

• 0:08Jordi Hays?

  Fortress to finance the capital of capital.

• 0:11John Coogan?

  Massive news from SpaceX last night.

• 0:15Jordi Hays?

  They did it.

• 0:15John Coogan?

  They did it. Flight 10 made it back, took off from Starbase, South Texas. The booster landed in the ocean in the, I think the Gulf of America technically.

• 0:30Jordi Hays?

  That's absolutely right.

• 0:32John Coogan?

  And the actual starship executed a successful flip maneuver, deployed a mock payload of a bunch of non-functional Starlink satellites, survived re-entry, just barely, as we'll see. It was a really dramatic video. It was amazing. And then splashed down on target in the Indian Ocean.

• 0:54Jordi Hays?

  It was a full send.

• 0:55John Coogan?

  It was a full send. It was, it was a crazy, crazy

• 0:58Jordi Hays?

  NASA could never.

• 0:58John Coogan?

  Video to watch. Yeah, let's watch the recap video that the Wall Street Journal put together. This is pretty interesting. Starbase, Texas. This is yesterday. They scrapped two attempts on Monday and Tuesday because of some, some problems with the vehicle, but they got it off the ground. Look at that. They lit the candle.

• 1:19Jordi Hays?

  Stunning.

• 1:19John Coogan?

  Go into space. And so

• 1:22Jordi Hays?

  I wish we could get a better sense for just how massive it is from those angles.

• 1:26John Coogan?

  And so that, those are the dummy Starlink satellites, the dummy payload.

• 1:29Jordi Hays?

  You can see that little motor conveyor belt on the left.

• 1:32John Coogan?

  Yeah, just the number of things that have to go right to actually release something from this rocket is insane. And then this is the crazy part. There's just a bunch of debris.

• 1:42Jordi Hays?

  That's not what we want to see.

• 1:43John Coogan?

  Where did the stuff come from?

• 1:44Jordi Hays?

  We clearly didn't need it.

• 1:47John Coogan?

  You would think that as soon as I saw it, I was like, okay, it's over. The whole thing's gonna blow for sure. It doesn't, it definitely doesn't make it back because if it's like losing parts, like every part should be important, right? Like what's going on here? And so, and they're also, the whole time they were like testing the, the flaps, like really pushing them to the limits, going farther. There it is, splashing down in the Indian Ocean.

• 2:09Jordi Hays?

  You were mentioning earlier, there's a soundbite of them saying they were, they were actually testing the flap.

• 2:14John Coogan?

  They were going further than they needed to. So they were doing things like, like, okay, let, let's stress it.

• 2:18Jordi Hays?

  The final moment?

• 2:18John Coogan?

  And then boom.

• 2:21Jordi Hays?

  Convenient cut, you would have thought the Journal and the legacy media would have let that

• 2:25John Coogan?

  Yes, yes.

• 2:25Jordi Hays?

  A little bit longer, the massive explosion.

• 2:28John Coogan?

  Yeah, I mean, the vibes, the vibes going into this were rough, honestly. Lots of people with the Elon's been distracted by politics take, lots of people with the Elon too focused on AI romantic companions take, we covered that on the show.

• 2:41Jordi Hays?

  You can imagine the conversation between Elon and Ani yesterday, right before the launch. You got this, babe.

• 2:47John Coogan?

  I mean, you know that, you know that Ani, apparently, allegedly, the, the original Ani romantic companion model runs on the non-reasoning model, just Grok 3, I guess.

• 3:02Jordi Hays?

  Just pure love.

• 3:04John Coogan?

  Pure love. And, and if, if there's any evidence out there in the just market of AI chatting and companions is that you don't need a reasoning model when you are chatting with a romantic companion. So, a lot of like the backlash to the GPT-5 launch was something like, you know, people were using it not just as a romantic companion, but just as like a life coach, somebody to talk to, it was very conversational. And that quick back and forth was what people actually enjoyed. They liked the tone. They didn't care that it wasn't, you know, incredibly good at solving hard math problems or like the IMO or whatever. What you got for me, Tyler?

• 3:39Speaker 02

  I think there's also something to be said for like, reasoning models kind of mess with the vibes, right? It's like, it's like the music thing where.

• 3:46John Coogan?

  Yeah, yeah, yeah.

• 3:47Jordi Hays?

  Sometimes you want a friend that's not going to think too hard. They're just going to.

• 3:50John Coogan?

  Yeah, yeah, 100%.

• 3:52Speaker 02

  In, in the musical, like, taste thing.

• 3:54John Coogan?

  Yep.

• 3:55Speaker 02

  All the reasoning models gave like these weird answers because they would like subtly prefer, you know, artist names with numbers, stuff like that.

• 4:01John Coogan?

  Yep, yep. Although, I mean, I think the reasoning models actually had the best taste of all, but that's a bit of a hot take.

• 4:07Jordi Hays?

  Well, we got to pull up this post from Red Bull Futurist. It's very important. He says, "Super heavy, the effing goat." Wow. And I just needed to highlight this because obviously. Red Bull, uh, some of Red Bull futurist's work actually has, uh,

• 4:21John Coogan?

  Oh, no way.

• 4:22Jordi Hays?

  went into this.

• 4:22John Coogan?

  Yeah, it's amazing.

• 4:23Jordi Hays?

  So absolute legend. A win for Red Bull, really.

• 4:26John Coogan?

  For sure, for sure. Um, yeah.

• 4:28Jordi Hays?

  I'm sup- it's actually surprising that, that, uh, Red Bull and SpaceX haven't tried to collab yet. You'd think that Red Bull would just be like, we'll give you millions of dollars if you just put Red Bull branding over this.

• 4:40John Coogan?

  Yeah, yeah, yeah.

• 4:41Jordi Hays?

  Why not? It'd be good. It'd be good for both parties.

• 4:44John Coogan?

  Even the, even the explosions are feel like on brand for Red Bull.

• 4:47Jordi Hays?

  Totally.

• 4:47John Coogan?

  Red Bull's down for the crazy risk taking.

• 4:49Jordi Hays?

  I could see Elon going with White Monster, too.

• 4:51John Coogan?

  That would be really good.

• 4:54Jordi Hays?

  Something here.

• 4:55John Coogan?

  He really should do that.

• 4:56Jordi Hays?

  That's an entire advertising.

• 4:57John Coogan?

  Is special and maybe you don't want to delete that.

• 4:59Jordi Hays?

  I mean, it, are you, would you go so far to say the White Monster brand isn't special? Would you say that?

• 5:04John Coogan?

  I guess it would be additive.

• 5:05Jordi Hays?

  Red Bull?

• 5:05John Coogan?

  It would be additive, yeah. Um, they, uh, the reason I was bringing up the reasoning models was because apparently, um, uh, Elon wanted Ani to use the reasoning model, like the, the AI, the AI companion has to be able to do the hard math problems, which is funny. So, so, so maybe, maybe she really was, uh, in use, uh, making, doing rocket science and, and calculating the last, uh, final decisions before this, uh, this rocket went out. But it was a huge success. Um, the Wall Street Journal has kind of the play by play here. Uh, SpaceX, SpaceX pulled off a smoother test of its Starship rocket, managing a more complete mission. After setbacks earlier this year,

• 5:44John Coogan?

  the Starship spacecraft flew through space after launching from the company's South Texas complex Tuesday around 7:30 PM ET. The vehicle successfully deployed a batch of dummy Starlink satellites and re-entered Earth's orbit, facing intense heat and forces before splashing down in the Indian Ocean. This is the 10th launch of Starship. I believe this was the, this was ship like 37 or something. They've built a lot of these. Uh, not all of them have launched. Some of them have been scrapped. Um, some of them blew up in the test stand. Like, they really push these things super hard. So it's a 403 foot tall rocket. They started testing this in 2023. Uh, there's been a series of explosions, mishaps, uh, previous test flights that have been cut short.

• 6:23John Coogan?

  Uh, Elon Musk has much riding on the rocket envisioned to one day carry satellite scientific devices and eventually astronauts.

• 6:30Jordi Hays?

  Just to put this into context, the White House is 70 feet tall.

• 6:33John Coogan?

  Wow.

• 6:34Jordi Hays?

  So this is.

• 6:35John Coogan?

  Yeah, it's like the size of the, isn't it closer to the Statue of Liberty? I think it's like around that tall, 403 feet. I'll have to look that up.

• 6:44Jordi Hays?

  The Statue of Liberty is 305 feet.

• 6:46John Coogan?

  Oh, mugged, absolutely mugged.

• 6:48Jordi Hays?

  Mugged.

• 6:49John Coogan?

  An extra 50 feet on that. For now, the company is pushing to show it can consistently fly Starship and experiment with its design SpaceX setup Tuesday's mission to stress test parts of the Starship spacecraft. We certainly saw that on display with the parts flying all over the place. Seeking to give engineers information to continue developing the vehicle. Basically, the calculus here is like, how cheap can you make this thing? If you use, you know, duct tape, will that work? Well, if you use tin foil, will that work? Like, they really are pushing these things like crazy, crazy hard.

• 7:22Jordi Hays?

  I think the other, the other way to put this into context, not everybody is fortunate to be able to launch, build and launch rockets for a living, but anybody that's built software knows that even if you're launching a relatively simple feature,

• 7:34John Coogan?

  Oh, yeah.

• 7:34Jordi Hays?

  it'll oftentimes break and have issues and bugs and things like that.

• 7:38John Coogan?

  Yeah.

• 7:38Jordi Hays?

  And it's a little bit, you have a little bit more leeway to ship stuff and make changes on the fly.

• 7:44John Coogan?

  Yep.

• 7:45Jordi Hays?

  In this case, they're doing it in this incredibly public setting where the internet is going to have a very strong reaction one way or another. So the pressure is just insane.

• 7:57John Coogan?

  So Musk wants both the Starship booster and spacecraft to be fully and rapidly reusable, more akin to an airplane than a traditional rocket. SpaceX has made major strides with reusability with its Workhorse Falcon 9 rockets, which are powered by boosters that can be used many times. SpaceX faces self-imposed and external deadlines with the much larger Starship. Musk wants to launch an uncrewed version of the vehicle to Mars next year, but has said, meeting that goal will be tough. Of course, there's a Mars transfer window that only comes up, I think, every 18 months or so. So it's really critical to hit it in 2026, or else you gotta wait till 2028, I believe. In 2027, a lander variant of Starship is supposed to be ready to carry astronauts on a NASA moon mission through the agency's Artemis Exploration Program.

• 8:41John Coogan?

  That's gonna be really hard because I think they have to refuel in orbit and then also make it safe enough that astronauts can fly on it. Like, they have a lot to do there.

• 8:48Jordi Hays?

  This is why we need to get Ani to be able to solve complex physics.

• 8:52John Coogan?

  For sure, for sure. And so, you know, Elon's obsessed with saving costs, saving time and money. You should go to ramp.com, save time and money. Time is money, save both. Easy to use corporate cards, bill payments, accounting and a whole lot more all in one place. Go to ramp.com. Speaking of ramp, ramp, of course, sponsors the founders podcast, which David Senra had a fantastic episode that just dropped called how Elon works. And it really contextualized how insane it must be to work on the starship project. And there's three quotes that I want to run through here that I absolutely loved. So first, when an engineer told Elon, the air cooling system for the Falcon nine would cost $3 million, he shouted over to Gwen Shotwell, Gwen Shotwell, to ask her what

• 9:34John Coogan?

  an air conditioning system for a house cost about $6,000, she said. So the SpaceX team bought some commercial air conditioning units and modified their pumps so they could work atop the rocket. And like my take is like, like, yeah, obviously like three millions, a lot, 6,000 is like nothing, but like, if you're spending $3 million on the air cooling system, like it probably has been tested in aerospace environment. It probably comes with a team to help you get it working reliably. There's probably lots of nice to haves that go into that.

• 10:04Jordi Hays?

  Yeah, this is, this is, I mean, you know, you would, a lot of companies that have this much access to capital would not be fixated on things like this. They would just say, what's the best solution for our problem? Let's use that. And so to have, again, to have that much access to capital and be that fixated on costs. Like most billionaires with a space company are just going to say, well, let's use the best of the best.

• 10:27John Coogan?

  Exactly. Let's use the best of the best and let's just do one. Let's do one, let's do the first rocket and then let's worry about cost control later.

• 10:34Jordi Hays?

  Later.

• 10:34John Coogan?

  And that's very different. So you can probably like spending the $3 million probably speeds up the time to get a single rocket to space, but that's not the goal here. Elon's obsessed with building a system that will get to space like over and over and over again. And so there's another quote here that's wild. Elon's just consistently questioning things. This is David Senra talking, trying to find the limit. And then he's quoting Elon, "Why do we have to have four bolts there? Who set that specification? Can we do it with two? They would say, "No." He said, "We'll try it, see if it fails." And then on and on and on. And he just moves down the line. "You need to be decisive or you're going to be dead." Elon calculated that he made 100 command decisions a day as he walked the floor. "At least 20% are going to be wrong," he said, "but we're going to alter them later.

• 11:18John Coogan?

  But if I don't make decisions, we die." And so like, it's very clear that looking back at the Starship tests, like, there are so many gambles going on and so many design decisions that are basically irrational. If you're just trying to get one to space, but you're really building up like-

• 11:35Jordi Hays?

  Playing the game on hard mode.

• 11:36John Coogan?

  Minimum, just the bare minimum, the cheapest possible rocket to get there. And he's probably just adding costs just dollar by dollar. Like, okay, completely blew up. Let's add one more thing that might stop it from blowing up. Like, as opposed to the opposite, which is like, which is like-

• 11:53Jordi Hays?

  That can never happen again.

• 11:54John Coogan?

  Yeah, Bill, everything that stops it from, any, any system or feature or function or part that stops it from blowing up, start there. And then maybe we'll pull one of those out if we're really sure that it cannot blow up without it. Instead, it's like, "It's gonna blow up. Let's, let, let's add the minimum amount of parts to make it not blow up." And so, uh, everyone in the space community always quotes this, uh, Latin phrase, "Ad astra per aspera," "To the stars through hardship." I always thought it was just "Ad astra to the stars." But "Ad astra per aspera" is "To the stars through hardship, through hardship specifically." And I thought that hit really hard. Um, this, this Founder's Podcast is, is fantastic. There's a bunch of-

• 12:35Jordi Hays?

  Potentially one of the greatest episodes of all time.

• 12:38John Coogan?

  It really is like, uh, there's this great story in here. Well, it says Elon saved money by questioning the requirements when he asked his team why it would cost $2 million to build a pair of cranes. "These are cranes. They're supposed to lift rockets." He was shown all the safety regulations imposed by the Air Force. Most were obsolete. So SpaceX then goes to the Air Force and they start questioning them. And it says that SpaceX was able to convince the military to revise them. The cranes ended up costing $300,000. Like, that's like 85% savings. It's crazy. He does this over and over and over again. But, but the way he does it is just really, really smart. He's consistently comparing costs for parts, materials to other industries and other cases. Here's an example. Elon consistently pressed his team to source components from non aerospace companies.

• 13:22John Coogan?

  The latches used by NASA cost $1,500 each. A SpaceX engineer was able to modify a latch used in a bathroom stall and create a locking mechanism that only cost $30. And so, again, it's like a 98% savings on the latch. And you just do that for every single thing and it adds up to something that when the economics change, it's not just a cheap rocket. It's like, it's the type of rocket that you can launch every single hour. Whereas it's just impossible to underwrite that if you're going to the taxpayer and saying, "We need $50,000."

• 13:58Jordi Hays?

  And convert an entirely new industry.

• 13:59John Coogan?

  Exactly, exactly.

• 14:00Jordi Hays?

  There was another line in here, but you guys should go listen to the episode. David highlights how Elon has this interesting problem where his employees like become so wealthy that they lose like the work ethic that like made the company what it is. And so this frustration of like, okay, we're making all this progress, but then eventually, early employees end up with a nice house, a vacation house, and they don't want to spend quite as much time at the factory grinding. So a good problem to have.

• 14:33John Coogan?

  Well, hopefully you enjoyed the SpaceX stream yesterday. I think they used Restream. If you want to stream, you should use Restream. We are powered by Restream. One livestream, 30 plus destinations, multi-streaming to reach your audience wherever they are. You can sign up for free. There's one last funny story in here. The day before a launch, a final inspection revealed two small cracks in the engine skirt of the rocket's second stage. That's the piece of the bottom. Everyone at NASA assumed we'd be standing down from the launch for a few weeks. The usual plan would be then to replace the entire engine. "What if we just cut the skirt?" Elon said, like literally cut around it. "Why not just trim a tiny bit off the bottom that had the two cracks?" Using a big pair of shears, the skirt was trimmed and the rocket launched the next day.

• 15:17Jordi Hays?

  It's wild because another way to, if you had somebody working on your house and they were applying this approach, you'd be like, "What are you doing? This is so janky."

• 15:26John Coogan?

  Are you insane?

• 15:27Jordi Hays?

  But it works when it's part of the system.

• 15:29John Coogan?

  It took less than an hour to make the decision. Three more principles combined that repeat over and over again. Elon's anti-outsourcing, pro-control, and pro-daily iteration.

• 15:38John Coogan?

  And David has an interesting context here about offshoring. By sending factories abroad, American companies saved labor costs, but they lost the daily feel for ways to improve their products. Elon bucks this trend. He wants to have tight control of the manufacturing process.

• 15:54Jordi Hays?

  That's why he puts tents up in the parking lot.

• 15:58John Coogan?

  Yeah. He believes that designing the factory to build the car, the machine that builds the machine, was as important as designing the car itself. It's a fantastic episode. You should go check it out. Do we want to run through the history of SpaceX? The history of these launches? We have Tyler Cosgrove with some beautiful work on the TBPN yet-to-be-sponsored whiteboard. You could easily be a sponsor on there. Maybe Figma. Think bigger, build faster. Figma helps design and development teams build great products together. Get started for free. For now, Tyler, take us through the history of SpaceX, the history of these various projects.

• 16:37Speaker 02

  Professor, yeah. Okay, so I think we should...

• 16:39Jordi Hays?

  The intern becomes the professor.

• 16:41John Coogan?

  Class is in session.

• 16:41Speaker 02

  A lot of people, I think, when they hear about these launches, they aren't even really sure what rocket is even going on. So I think you can classify SpaceX rockets into three distinct types. These are the active ones that are still going on. So there's Falcon 9. This was the first really, you know, commercial, not just tests, 2010. This is the ninth iteration.

• 17:05John Coogan?

  They were doing Falcon 1 before, which was one engine, right? But those were mostly tests. They weren't really reusable. It wasn't really a business at that point.

• 17:14Speaker 02

  Yeah, so that was 2010.

• 17:18John Coogan?

  Perfect.

• 17:18Speaker 02

  All right, can you still hear me? Yeah, you sound great. So, okay, so that's Falcon 9. Then Falcon Heavy comes out 2018. This is essentially just three Falcon 9 boosters, just strapped together. But it's kind of a separate thing, right? These are also always built to be reusable, at least some parts of it.

• 17:36John Coogan?

  And that's a big piece of, the Falcon 9 has literally just nine engines strapped together. It's all the same engine, so they get the reusability there, right? So they're thinking like one thing.

• 17:44Speaker 02

  Yeah. And then we go down to Starship. I mean, this is what's currently being tested. This is not doing commercial missions yet, obviously. But this is the next iteration. So this one, they're all kind of two parts, right? But this one has 33 engines on the bottom. That's like called a super heavy and then Starship is technically just like the the second stage.

• 18:05John Coogan?

  Sure. Okay, yeah, yeah, yeah.

• 18:07Speaker 02

  Yeah, okay, so then let's go through, let's first go through just like kind of general SpaceX launches.

• 18:13John Coogan?

  Yep.

• 18:13Speaker 02

  So here 2006, this is the first Falcon 1 launch, this is what we were talking about earlier.

• 18:17John Coogan?

  Okay.

• 18:18Speaker 02

  Kind of, none of these like really do a lot until they get to...

• 18:22John Coogan?

  Didn't they like three failures, it took them, and they were almost out of business? That's when those pictures of Elon in the rubble.

• 18:27Speaker 02

  Yeah, where he's kind of sitting down.

• 18:29John Coogan?

  Yeah, yeah, yeah.

• 18:29Speaker 02

  Yeah.

• 18:30John Coogan?

  And Kwajalein Atoll, in the Pacific.

• 18:33Speaker 02

  Yeah, yeah. And then we go to 2010, this is Falcon 9 first launch. 2012, this is the grasshopper landing test, okay, so these are when the first test of like propulsion landing, right, which we kind of have seen later with the Starship where it catches it, right? Lands down.

• 18:48John Coogan?

  Yep.

• 18:49Speaker 02

  2012, this is the first ISS cargo mission.

• 18:52John Coogan?

  Yep.

• 18:52Speaker 02

  So this was on Falcon 9 Dragon.

• 18:56John Coogan?

  The story of the grasshopper legs, that's Doug over at Radiant Nuclear now, he worked on that project. It was like, no one had done that before, crazy decision. And then Starship is unique in that Elon's basically factoring out the legs because if you take the legs off the rocket, that reduces weight so you can get more payload to space. And then instead of legs, you have, you basically have a pair of chopsticks that catch the rocket.

• 19:23Speaker 02

  Yeah.

• 19:24John Coogan?

  And so the legs never leave the earth, right? That's the strategy.

• 19:27Speaker 02

  Yeah. So then...

• 19:28John Coogan?

  ISS cargo.

• 19:30Speaker 02

  Yeah, ISS cargo. This was the, on the drone ship landing.

• 19:34John Coogan?

  I didn't realize that took four years to get the drone ship right.

• 19:36Speaker 02

  Yeah.

• 19:37John Coogan?

  They have that crazy video we should pull up after this, that like, all the landing failures on the drone ship with, I think it's like in the Hall of the Mountain King, it's just like...

• 19:43Speaker 02

  Yeah.

• 19:44John Coogan?

  Crashes after crashes after crashes.

• 19:46Speaker 02

  Yeah.

• 19:46John Coogan?

  Okay, so...

• 19:47Speaker 02

  And then we go to, this is the first, 2017, the first reflight of a booster.

• 19:51John Coogan?

  Okay.

• 19:52Speaker 02

  First time they actually like... Kind of reused it.

• 19:54John Coogan?

  Fully reusable at that point.

• 19:55Speaker 02

  Yeah.

• 19:55John Coogan?

  Got it.

• 19:56Speaker 02

  And then 2018, this is Falcon Heavy. This is the three Falcon 9s put together essentially.

• 20:00John Coogan?

  Yep.

• 20:01Speaker 02

  Then this is where they they basically just start to get the cadence record of launches per year.

• 20:05John Coogan?

  Yep. So this was. You see those like, there's like time lapse videos if it goes from like one Falcon 9 launching to like one launching like every second.

• 20:13Speaker 02

  Yeah.

• 20:14John Coogan?

  Like this is when they really ramped up.

• 20:14Speaker 02

  Yeah, I mean, it's pretty incredible. I think the record before this was the USSR in.

• 20:18John Coogan?

  Oh, really?

• 20:19Speaker 02

  I think it was like 1979 or something.

• 20:21John Coogan?

  No way. Okay.

• 20:21Speaker 02

  Yeah, it's pretty insane that they had that record.

• 20:23John Coogan?

  Yep.

• 20:24Speaker 02

  But then, yeah, we get Starship. So then let's go through.

• 20:26John Coogan?

  Starship launches.

• 20:27Speaker 02

  Let's go through Starship launches.

• 20:28John Coogan?

  Okay.

• 20:29Speaker 02

  So first one, April 20th, 2023.

• 20:31John Coogan?

  Yep. So it was fully stacked and it took off, but it blew up after four minutes.

• 20:37Speaker 02

  Yeah, basically immediately.

• 20:38John Coogan?

  R U D, rapid unscheduled.

• 20:40Speaker 02

  Not all of the engines started. There's 33.

• 20:42John Coogan?

  Okay.

• 20:42Speaker 02

  They didn't all start.

• 20:43John Coogan?

  Okay.

• 20:44Speaker 02

  But that was the first like kind of, everything is put together, it goes up.

• 20:48John Coogan?

  Got it.

• 20:48Speaker 02

  Then the next test, 2023 November, this is all 33 engines started.

• 20:53John Coogan?

  Okay.

• 20:53Speaker 02

  That was the big, big upgrade.

• 20:55John Coogan?

  Yep.

• 20:55Speaker 02

  Then we see it reached orbital velocity.

• 20:58John Coogan?

  Okay.

• 20:58Speaker 02

  So another big step.

• 20:59John Coogan?

  Yep.

• 21:01Speaker 02

  June 6, we see both stages kind of go up and then they both re-enter.

• 21:05John Coogan?

  Yeah, so they both hit their max altitude.

• 21:09Speaker 02

  Yeah.

• 21:09John Coogan?

  So they weren't, they weren't trying to go any farther, but coming back is rough because you're going through the atmosphere and then they blow up on the way back.

• 21:16Speaker 02

  Yeah.

• 21:17John Coogan?

  Okay, but they're making progress.

• 21:18Speaker 02

  Yeah.

• 21:18John Coogan?

  Cool.

• 21:19Speaker 02

  Then we go to October 13th. This is like kind of the famous Tower Cat.

• 21:22John Coogan?

  Yeah, I remember that.

• 21:23Speaker 02

  This really blew up the.

• 21:24John Coogan?

  The Chopsticks.

• 21:25Speaker 02

  Yeah, Chopsticks.

• 21:26John Coogan?

  Yeah.

• 21:27Speaker 02

  Okay, then we see November 19th, this is the Raptor relates, so Raptor.

• 21:33John Coogan?

  And the Tower Cat, did it blow up in the tower? No, they caught it, right?

• 21:35Speaker 02

  They caught it. Yeah, yeah.

• 21:36John Coogan?

  That's so crazy. But then they probably have to like tear it down and like rebuild it because it's not like fully reusable yet, but it proves that they can actually.

• 21:43Jordi Hays?

  That one was wild because it was so sci-fi.

• 21:45John Coogan?

  Yeah.

• 21:46Jordi Hays?

  But it had been almost programmed into people's brains that that was like a thing.

• 21:49John Coogan?

  Yeah.

• 21:50Jordi Hays?

  Through sci-fi.

• 21:51John Coogan?

  Yeah, yeah, yeah.

• 21:51Jordi Hays?

  The reaction broadly, like people, tech were. You know, pretty blown away, but at the same time, it just, it felt like something that

• 21:58John Coogan?

  Yeah.

• 21:59Jordi Hays?

  Space company would do.

• 22:00John Coogan?

  And the really crazy thing about the tower catch was that it emphasized how high cadence the actual process of reusability can be because I believe that the, the, the, the lower stage, the booster goes up and is only in the air for like a couple of minutes. It's not actually that long. Like the, the upper stage was in space for like a full hour.

• 22:23Jordi Hays?

  Yeah, yeah.

• 22:23John Coogan?

  The mission yesterday was over.

• 22:25Speaker 02

  That's actually a starship. And then super heavy is the booster.

• 22:26John Coogan?

  But super heavy just goes up and is back in like four minutes or 10 minutes or something like that.

• 22:29Speaker 02

  Yeah.

• 22:29John Coogan?

  And so you see it go up and then come right back and get, and, and, and get caught in the tower and then they can just rotate it over, start refueling it and it can just bring the next thing up.

• 22:38Speaker 02

  Yeah.

• 22:38John Coogan?

  So like the pace of iteration is, is, the, the system is designed to be like not launch every day. It's like launch every five minutes. It's like truly like airport level.

• 22:48Speaker 02

  Yeah.

• 22:48John Coogan?

  So continue.

• 22:49Jordi Hays?

  Spaceport.

• 22:50Speaker 02

  Let's go to first block two launch. Okay, so block two is.

• 22:53John Coogan?

  Yeah, let's block two.

• 22:54Speaker 02

  That's like, when you look at the starship, like basically the top section.

• 22:57John Coogan?

  Mm-hmm.

• 22:59Speaker 02

  There's been a couple, it's kind of like this part, there's been a couple of iterations of this.

• 23:02John Coogan?

  Mm-hmm.

• 23:02Speaker 02

  So this was kind of the next big like upgrade.

• 23:04John Coogan?

  Yeah.

• 23:05Speaker 02

  And then we see March 6th, we see a payload attempt. So, so this is what you were talking about earlier where they try to.

• 23:10John Coogan?

  Open the doors.

• 23:11Speaker 02

  Open the doors, put out, they're, they're not real Starlink.

• 23:13John Coogan?

  Yeah.

• 23:14Speaker 02

  Satellites, but they're like, you know, mock ones.

• 23:15John Coogan?

  Yep.

• 23:16Speaker 02

  Then we see super heavy re-flight. So, so this was, um, super heavy again is this booster. That's the first time they like actually reuse the same one.

• 23:25John Coogan?

  Caught it and then put it back up.

• 23:27Speaker 02

  Yeah, like it, it didn't actually go back up, but they like reignited it basically and it worked.

• 23:31John Coogan?

  Wow.

• 23:32Speaker 02

  And then this one just yesterday was payload deployment and then we talked about this earlier, but.

• 23:37John Coogan?

  Yeah.

• 23:38Speaker 02

  They, both stages had controlled splashdown in the ocean.

• 23:41John Coogan?

  It's amazing.

• 23:42Speaker 02

  Yep.

• 23:43John Coogan?

  What a journey. Well, congrats to everyone.

• 23:45Jordi Hays?

  On a small note, uh, the, the, it exploded.

• 23:47John Coogan?

  Exploded.

• 23:48Jordi Hays?

  But, uh, next time.

• 23:50John Coogan?

  Next time, next time.

• 23:51Jordi Hays?

  All that matters, there was a controlled touchdown.

• 23:54John Coogan?

  Thank you for the breakdown, Tyler.

• 23:55Speaker 02

  Thank you. You feel free to keep the helmet on for the rest of the chat.

• 23:59John Coogan?

  And feel free to sign up for Vanta. Automate compliance, manage risk, prove trust continuously. Vanta's trust management platform takes the manual work and security, out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program. Philip Johnston was clearly inspired by what's going on, but a little bit frustrated, wanted to highlight this. Nothing pisses me off more than VCs proclaiming they don't invest in deep tech companies outside of LA and SF. Starlink is quietly building one of the biggest cash generators of our time in Redmond, Washington. It's also where Coopier, AWS and Azure are. 80% plus of all satellites launched globally in last year were designed, built and tested in Redmond. There's a reason we put StarCloud Inc. in Redmond and we're on the lookout for more amazing talent. So, good luck to Philip

• 24:44John Coogan?

  Johnston. Hopefully, the VCs come around to the good work that folks are doing in Redmond, Washington.

• 24:51Jordi Hays?

  What if we moved Redmond to the Gundo?

• 24:54John Coogan?

  We could, we could. I think there's probably, for all these companies, there's assets in all the different places. I haven't heard of a company really going deep into South Texas and like, because a lot of the Gundo companies are beneficiaries of the work that SpaceX did in Hawthorne and El Segundo. And in fact, I think that there's a space company that's in the, maybe it's Rivian is currently, not a space company, but Rivian is currently owns the original SpaceX factory in El Segundo, because they've moved out, because they, obviously they scaled up. But a lot of the Gundo companies are beneficiaries of the work that SpaceX did in El Segundo to kind of bring back that industrial capacity. Of course, before SpaceX,

• 25:39John Coogan?

  there was Lockheed and Northrop and a few other primes that were in the area and still are. But the Gundo's been like a great home for defense tech broadly. Maybe Redmond's the next one. Maybe, maybe you gotta do some, if you're doing satellite R&D, gotta get a Redmond, an office. If you're doing launch stuff, you want to head out to South Texas, because they do seem pretty friendly out there. At the end of the SpaceX stream, the announcer kind of like thanked all the different parties, like, "Thank you to the county where Starbase is," because Starbase is like this chartered city within the county, "and thank you to the people of Texas and the people of this and that."

• 26:15Jordi Hays?

  Well, they got a stock exchange now.

• 26:16John Coogan?

  They do.

• 26:17Jordi Hays?

  Yesterday. Got Nicetexas.

• 26:20John Coogan?

  Nicetexas.

• 26:21Jordi Hays?

  Something, something down, something happening in the Lone Star State.

• 26:25John Coogan?

  Yeah, I haven't been to Texas in years. Last time I actually went was for David Center's thing.

• 26:29Jordi Hays?

  Really?

• 26:30John Coogan?

  Yeah. Other than that, I don't find a lot of random time to go there. It's been a lot of New York, a lot of SF, a little Miami.

• 26:38Jordi Hays?

  I have been a bunch.

• 26:39John Coogan?

  When was the last time you went?

• 26:41Jordi Hays?

  Last year, I think I went three or four times for different portfolio companies.

• 26:45John Coogan?

  Yeah.

• 26:46Jordi Hays?

  Great place, great place.

• 26:47John Coogan?

  Do we have the video of the SpaceX explosions over time? They have this montage reel. I'd love to play that. If you can find that.

• 26:58Jordi Hays?

  Try to pull it up.

• 26:59John Coogan?

  As I tell you about graphite.dev, code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster.

• 27:08Jordi Hays?

  All right, I'm throwing it in the timeline. This is the best video that I could find.

• 27:13John Coogan?

  We will be talking about venture debt and what's going on in that market, but in the meantime, I believe we have a video of SpaceX's launches.

• 27:22Jordi Hays?

  This is from SpaceX themselves, how not to land an orbital rocket.

• 27:27John Coogan?

  Yes, this is the video I want to watch. Can we go full screen on this? This is great. And just immense, immense confidence to release something like this that on the face of it makes the company look bad, but actually demonstrates what makes the company look great, which is not being afraid of failure. Let's play it.

• 27:46Jordi Hays?

  The top comment is this is 100% the most expensive YouTube video ever made.

• 27:49John Coogan?

  It just comes down so fast. It comes down so fast. The first one is just like you didn't stop at all. Here we go.

• 28:01John Coogan?

  Uh oh, uh oh, uh oh, uh oh. Oh no, wow, there we go.

• 28:06Jordi Hays?

  Beautiful, but.

• 28:08John Coogan?

  This is great.

• 28:09Jordi Hays?

  Unfortunately.

• 28:10John Coogan?

  Get all this equipment.

• 28:12Jordi Hays?

  The smoke's still coming off.

• 28:15John Coogan?

  That, yeah, how is that not just gonna blow? That seems dangerous to me around there.

• 28:19Jordi Hays?

  Yeah, that's a lot of confidence in your product for you.

• 28:21John Coogan?

  Especially for something that like it actually blows up. Yeah, here it is on a drone ship, I believe, just smashing down constantly. This one trying so hard, lands, and then it's definitely gonna blow. There we go. You know it's gonna blow up.

• 28:36Jordi Hays?

  Oh.

• 28:38John Coogan?

  Every time.

• 28:39Jordi Hays?

  The music?

• 28:40John Coogan?

  Yeah, the music's great. I thought they had a different one with Hall of the Mountain King. Wait, what is coming off of that? Why didn't they use the chopsticks? Yeah, Tyler, do you know why they didn't go for chopsticks on this one? Instead did this.

• 28:53Jordi Hays?

  Like originally?

• 28:54John Coogan?

  Yeah, yesterday, can you look up why they didn't go for chopsticks grabbing? Because it seemed like they were able to do that a few flights ago. I'd be curious to know why they didn't do it.

• 29:03Jordi Hays?

  This is brilliant marketing.

• 29:05John Coogan?

  Yeah.

• 29:05Jordi Hays?

  It's the yes and.

• 29:06John Coogan?

  This is so good.

• 29:07Jordi Hays?

  The yes and approach. Yes, we blow up.

• 29:09John Coogan?

  Just tilting all over the place. Why is it tilting? It's not even going. Is it just like?

• 29:13Jordi Hays?

  Well, it's a ship on the sea.

• 29:14John Coogan?

  On the ship and it's just about to fall? This is crazy. Oh, it actually made it. It seems like this one's coming down. Oh, that was a tough landing.

• 29:23Jordi Hays?

  Solid.

• 29:24John Coogan?

  You call it solid? It's going to explode. You know it's going to explode. This is insane.

• 29:35John Coogan?

  So good.

• 29:37John Coogan?

  Oh, I could watch these all day.

• 29:43Jordi Hays?

  Not bad.

• 29:45John Coogan?

  Um, anyway, uh, on to venture debt.

• 29:48Jordi Hays?

  Yeah, let's get into the really.

• 29:52John Coogan?

  No, you know what's really burning up the timeline? What is the, the audience is clearly celebrating? Uh, Gulfstream Aerospace says, join us in officially welcoming the world's first, the world's longest range aircraft to the skies. The first 8,200 nautical mile G800 has officially been delivered.

• 30:11Jordi Hays?

  World's longest range business aircraft.

• 30:13John Coogan?

  To a customer at our Appleton, Wisconsin completions facility. Look at that plane. So let's give it up for Gulfstream Aerospace.

• 30:23Jordi Hays?

  They don't have the luxury of having the, quite the number of explosions that.

• 30:27John Coogan?

  They said, they said to join us in welcoming the world's longest range aircraft to the skies. We are happy to join Gulfstream in welcoming the world's longest range aircraft to the skies. Anyway, let's go to venture debt. Uh, there are some changes in the market.

• 30:42Jordi Hays?

  Um, yeah, the journal has a story. The asset class has shifted to late stage lending as companies remain private for longer. Venture debt firms are shifting their focus to larger deals with mature private companies as more startups stay private for longer. Venture debt value hit a record 53 billion in 2024, up from 27 billion the prior year and more than a previous high of 42 billion in 2021. Of course, uh, SVB would have been a big, uh, player. So it's actually still, you know, given, given, um,

• 31:12Jordi Hays?

  Given how significant SVB was in that market, it's pretty incredible to see the growth.

• 31:18John Coogan?

  Yeah.

• 31:19Jordi Hays?

  As the value of deals rose, however, venture debt deal count fell to 1,300 transactions in 2024, the lowest level since 2016. The trend continued during the first half of 2025 with little more than 19 billion of venture debt deal volume, according to a separate report by Capital Advisors Group. Great, great name, very, very, very generic, but if you can own it, it's powerful.

• 31:42John Coogan?

  Yes.

• 31:43Jordi Hays?

  Debt must react to equity, said Stefan Spazik, director of debt placement at Capital Advisors Group. Venture debt providers have to target stable companies with solid revenue if there is a lack of equity or sponsors decide to pull back on equity commitments to their portfolio companies, he added.

• 31:58John Coogan?

  I didn't fully understand this because it feels like there is very much not a lack of equity right now, but is it like, what is he?

• 32:06Jordi Hays?

  Well, I mean, he's saying, I mean, he's saying there's that's the big risk, right? If a company is running in the red and they don't raise their next round, that's when you can get.

• 32:17John Coogan?

  Okay, yeah, yeah, yeah, yeah, yeah. If the if the current backers aren't doubling down at series C, D, E, F, which is the vast majority of companies, like there we focus on the companies that successfully raise every single round. Anyway.

• 32:30Jordi Hays?

  Startups and growth companies are turning to venture debt as an alternative to raising what is often more expensive equity capital that stands to dilute existing shareholders in an environment where traditional exit opportunities remain heavily constrained. Venture debt providers say credit also allows venture investors benefits such as retention of company board seats, which would have to be given away in an equity financing. The quote liquidity constraints on the part of venture equity are still a big driver in the market, said David Sprung, the founder and chief executive of Runway Growth Capital, adding that he expects the venture industry's liquidity constraints to continue into next year. Runway typically writes checks of roughly 30 million and it lends to tech, healthcare and consumer. Earlier this year, for example, data and AI company Databricks announced

• 33:14Jordi Hays?

  a 52, uh, 5.2 billion. Uh, you never know with Databricks, they might be raising 52, 52.

• 33:21John Coogan?

  52 billion.

• 33:22Jordi Hays?

  Announced a 5.2 billion credit facility shortly after it closed the final close.

• 33:26John Coogan?

  We want to be 50% debt to equity on this company, on this high-growth tech company.

• 33:30Jordi Hays?

  Uh, after Databricks.

• 33:33John Coogan?

  It's like a $150 billion company now or something. It's over 100. It's, it's a huge.

• 33:36Jordi Hays?

  Yeah, they, they just used the, the, the greater than symbol in the last announcement.

• 33:40John Coogan?

  Yeah, that's right. That's right. Yeah.

• 33:41Jordi Hays?

  Which is like, yeah, who's counting it?

• 33:42John Coogan?

  The last, the last deal was a $10 billion Series J.

• 33:46Jordi Hays?

  Well, now they did the Series K.

• 33:47John Coogan?

  They did the K?

• 33:48Jordi Hays?

  They did the K. Uh, the company said it plans to use the debt for general corporate purposes. The debt financing was provided by a consortium of investment banks, including JP Morgan Chase, Morgan Stanley and Goldman Sachs. Let's give it up.

• 34:00John Coogan?

  And Blue Owl's in and Apollo Global's in and Blackstone's in.

• 34:03Jordi Hays?

  Just a couple of names.

• 34:05John Coogan?

  They really, they really got the murderers.

• 34:07Jordi Hays?

  Technology companies are looking to diversify their capital sources and debt is increasingly attractive as a non-dilutive way to fund growth and lower the overall cost of capital.

• 34:15John Coogan?

  Yeah. As companies scale and stay private longer, we see a significant opportunities to support high-quality businesses with flexible credit solutions. Uh, earlier this month, on the smaller side, Runway committed 20 million to Swing Education, an online marketplace that connects schools with substitute teachers, which is backed by firms including Apex Partners and Reach Capital. Runway's commitment consisted of a first lien term loan and revolving credit line. Uh, what's interesting is like, we hear a lot about the venture debt boom in the context of like, uh, the hadrians of the world or like, you know, hard tech industrials, like, makes a lot of sense to have relationships with debt providers because you're buying a lot of land or you're buying a lot of equipment and like, you want to finance.

• 34:57Jordi Hays?

  That has durable value.

• 34:58John Coogan?

  Yeah, yeah. Even if you're buying, you know, when you, when you read about Crusoe building a massive data center, it's like, well, of course there's going to be some credit involved because a piece of that business looks like a traditional mortgage and it looks like a real estate deal almost. And so you want a certain, a certain tranche of capital to be focused on earning real estate-like returns as opposed to every, paying for everything with venture, uh, capital.

• 35:22Jordi Hays?

  Yeah. So since the 2023 collapse of SVB, one of the most active venture debt providers, more lenders have entered the market or stepped up their existing lending, creating a more competitive landscape. Borrowers not only have more appetite for debt, but they now have more choices as well. One firm that has capitalized on the opportunities created by SVB's collapse is longtime venture debt lender Hercules Capital. A great name, which typically invests around forty million in debt deals. The firm's deals generally have a fifteen percent loan to value ratio, meaning the borrower's loan volume represents fifteen percent of its total value. Hercules is focused on tech and life sciences. Earlier this year, Hercules entered into an agreement with publicly traded biotech company Moonlight Immunotherapeutics to provide up to five hundred million in non-dilutive capital.

• 36:07Jordi Hays?

  At the close, there was a seventy-five million dollar drawdown with additional tranches becoming available upon achievement of certain specified milestones. Our biggest competition is the equity market. Again, this should be obvious to everyone listening, but founders are kind of going out and saying, I need, say, I need a hundred million. Do I want to, do I want to take the potential risk that comes with equity financing? Even if I'm going to be, or sorry, potential risk that comes with leveraging debt? Even if I'm benefiting from the lack of dilution? Or do I just want to go and raise a fresh primary round?

• 36:49Jordi Hays?

  Anyways.

• 36:52Jordi Hays?

  Good to, good to see the market recover.

• 36:54John Coogan?

  The, the thing that stuck out to me about this was the fact that the deals are getting bigger. So venture debt value hit a record of fifty-three billion last year. The prior year was garbage, twenty-seven billion in twenty twenty-three. Obviously, high interest rates, a major pullback in the startup and venture community. Kind of healing from the, from the turmoil of like the SVB crisis.

• 37:23Jordi Hays?

  It was March tenth, twenty twenty-three.

• 37:24John Coogan?

  Was when SVB went bankrupt. So it's like, it's like, yeah, of course, twenty twenty-three was going to be a bad year. Twenty twenty-one, two years prior, was up at forty-two billion. So we went from forty-two billion down to twenty-seven billion, but are now at a new high watermark of fifty-three billion. But what's changed is the fact that the deal count fell to 1,341 transactions in 2024, which is the lowest since 2016.

• 37:51Jordi Hays?

  More lenders doing less deals.

• 37:52John Coogan?

  Exactly. Bigger deals, fewer deals, you know, more embracement, more concentration, more focus on the power law winners. And that makes sense when you see all the capital that's flowing into the really, really big companies, OpenAI, Anthropic, the crusoes of the world that are able to marshal like a lot more capital. There used to be a time in the SVB era where you could go do a $10 million Series A and get $2 million in venture debt. And you would just add that on top to kind of build the relationship, build the credit, stretch the balance sheet a little bit more, extend the runway. Maybe you pay, it was always like, kind of, it all goes into one cash bucket and you kind of spend

• 38:31John Coogan?

  it however you want. But it kind of set you up to stretch your financings a little bit further. And a lot of companies just by default got on that, on that, on that train pretty early. And I think that SVB leaving the market, obviously, really led to consolidation. So we're seeing venture debt go way, way up the stack to, to, you know, a $5 billion venture, you know, credit facility for Databricks.

• 39:01Jordi Hays?

  Yeah. And if you remember.

• 39:02John Coogan?

  Even the $20 million series, like, like venture debt round, like, that's pretty big for swing education.

• 39:08Jordi Hays?

  Bench, if you remember, got in a rough spot with venture debt and ended up being acquired by that, that company, employer.com. I guess they had, they were a decent business, but had tripped some debt covenants and were forced to abruptly shut down.

• 39:25John Coogan?

  Yeah.

• 39:25Jordi Hays?

  And then they were ultimately acquired.

• 39:26John Coogan?

  Yeah, yeah. And that's the thing is like, you say like, oh, well, I don't, I don't give the venture debt lender a board seat, but, you know, they do have debt covenants, they do have the, they're at the top of the cap table, even above the preferred. If there's liquidation, they're going to get their money out first. And so even though. They don't have a board seat. They do have incredible leverage over the company and they actually have a sort of control that should be definitely considered.

• 39:52Jordi Hays?

  It's very, one could call it senior.

• 39:54John Coogan?

  Senior, it is senior. The other interesting thing is Hercules is targeting 15% loan to value ratio. That feels higher than what I've seen in the past. So loan to value means if your company is worth $100 million, they would loan you up to $15 million in venture debt. In the previous era where I was more familiar with this, it was like you would raise $20 million Series A at $100 million post, the VC takes 20% of the company and a board seat.

• 40:25Jordi Hays?

  Back on low, single digits of.

• 40:28John Coogan?

  2 million in venture debt, 3 million in venture debt, like loan to value of like 3%, 4%. But I think this, I think this reflects them being more selective about going into companies that are not just post-product market fit and have some like VC hype behind them, like they have a real rep.

• 40:45Jordi Hays?

  Well, yeah, and you don't, we don't know what the terms are on these 15% loan to value deals. It could be that you need to keep a multiple of the, of the loan on your balance sheet.

• 40:55John Coogan?

  Yep, totally.

• 40:56Jordi Hays?

  Otherwise, we're going to, you know, require.

• 40:59John Coogan?

  And, and also they probably have done some sort of like private equity breakup valuation to say that, you know, even if this doesn't, even if the company completely plateaus and all the VCs bail, there's still base case, you know, we can get 15% of the value out here as opposed to the, the, the previous era, which was maybe more risk on in the sense that they were backing earlier companies, but in, in another way, more risk off by, because they were writing so, so much lower.

• 41:29Jordi Hays?

  Jason, Jason O'Connor says, this show is like a Buddha statue I have in the background to hopefully bring in good luck and fortune.

• 41:35John Coogan?

  Thank you, Jason. That's exactly what we're going.

• 41:37Jordi Hays?

  We're praying for you and your capitalist endeavors, always.

• 41:41John Coogan?

  I want to pull up this chart on Polymarket of SpaceX Starship, fully reusable in 2025. Of course, yesterday was a major market mover. It does not. Looked like anyone, anyone had any inside information because the market spiked right as the launch was successful. It jumped from 11% chance that Starship is fully reusable in 2025 to 71%. Now the market's hovering at 40%. And the rules here are on February 28th, Elon Musk posted that it was likely Starship would become fully reusable in 2025.

• 42:23John Coogan?

  The market will resolve to yes if SpaceX or Elon Musk announces that Starship is fully reusable by December 31st, 2025. Otherwise, the market will resolve no. So you are, you are, you know, riding on SpaceX and Elon's comms, which of course will be hotly debated. And obviously, there's not a pure binary in terms of what reusability means. Like clearly, this rocket came down and exploded, they need to rebuild it. But even when it comes down, they still need to swap out parts and fix things. Like they were saying that during this last SpaceX flight, they deliberately took off a bunch of tiles just to kind of like see if they could do it.

• 43:02Jordi Hays?

  What would happen?

• 43:03John Coogan?

  And so like you can tell as the rocket comes down, like a lot of those tiles got roasted. And so they might have to, you know, swap those out. There are elements that aren't reusable, but.

• 43:12Jordi Hays?

  They're definitely going to swap out the stuff that was flying around.

• 43:17John Coogan?

  All the insulation or something. That was one of the wildest, wildest bits that I've seen. Anyway.

• 43:23Jordi Hays?

  Well, we have this chart here.

• 43:24John Coogan?

  Yeah, we have a chart on, we love to trust the experts on this show. We are specifically trusting the experts on the White House Intel deal. If you haven't been paying attention, living under a data center, the US government is now the proud owner of 10% of Intel's shares.

• 43:41Jordi Hays?

  You.

• 43:42John Coogan?

  You, the US taxpayer now have a small slice of Intel, which also means you have a smaller slice of Figure Robotics, because apparently Intel Capital invested in Figure Robotics. So.

• 43:53Jordi Hays?

  If you were worried that you didn't have exposure, you can.

• 43:56John Coogan?

  Yeah, yeah, you can, you can, you can, you can send the. The layered SPV emails that you've been getting to the archive and just be riding with Uncle Sam on that one. But we did a little whirlwind tour of who is saying what about the White House intel deal. Semi analysis seems pretty bullish, gave the latest, the last, it gives the US, the last US chip maker an actual chance to catch up, spur the domestic sector. The bid here is that the intel story with the government is not going to stop here and that there will be some sort of pressure or incentive applied to other American tech companies to buy from Intel. Jordan Snyder, friend of the show over at China Talk, is also bullish.

• 44:41John Coogan?

  He says it's Intel's only chance is government support. The US needs domestic chip fabrication capabilities and this is a good path. Ben Thompson has a slightly positive bias. He pulled out the steel man term and kind of steel manned it. He said, national security and the economy concerns are too accurate, too acute to not keep Intel foundry viable, although there, he does cite Scott Linscom, who's extremely bearish. And this says this will lead to widespread inefficient capital allocation in the chip sector. That of course is the fear. The Wall Street Journal is also somewhat bearish. Pitting essential US partner Samsung and TSMC against a government owned competitor is a bad idea. I was talking to a few other folks that both they predicted this, but they didn't think

• 45:26John Coogan?

  it's necessarily the good.

• 45:27Jordi Hays?

  Yeah, and it has ripple effects if other companies are getting the, are getting strongly encouraged to use Intel's services.

• 45:35John Coogan?

  Yeah, it could make those companies less competitive potentially. The Asianometry was constructive on the, on the deal, said could make the deal work by using Intel as an Nvidia second source. And of course, this could potentially hurt Nvidia's margins because the CPUs that Nvidia makes, I believe at TSMC, are probably high margin. If they have to pay Intel, their margin will fall. But this is a small piece of Nvidia's overall business and so it shouldn't, shouldn't completely upend the amazing business they've built. Of course, Nvidia is reporting earnings today and we are looking forward to tracking that.

• 46:11Jordi Hays?

  I have a post here from Buco Capital Bloke, the third technology brother.

• 46:16John Coogan?

  Yes.

• 46:17Jordi Hays?

  Says the fate of the world is in Jensen's hands. Good thing he's a psycho. And he has an excerpt from an article here. That constant kind of relentless improvement, looking down at himself, he never rests on his laurels. One guy told me that after a blowout quarter, Jensen came into the room and said, "This morning, I looked into a mirror and I said, 'You suck.'" He does these mental tricks to make sure he doesn't get over because he's so scared. He's a student of history that the big thing for technology companies to start thinking your hot stuff and then start becoming complacent. He is so scared of that, so he tricks himself to not do that.

• 46:53John Coogan?

  That's amazing. Yeah. So, closing out our Trust the Experts infographic, Bill Bishop is slightly bearish. He says, "Intel fabs haven't proven they can deliver US government ownership in private companies." That's a slippery slope. So, we will be monitoring the slope to see how slippery it is. Hopefully, it's the slope of illusionment. What is the Gartner hype cycle again?

• 47:18Jordi Hays?

  The

• 47:19John Coogan?

  Slope of enlightenment?

• 47:20Jordi Hays?

  The slope of enlightenment.

• 47:22John Coogan?

  Plateau of productivity.

• 47:23Jordi Hays?

  The trough.

• 47:24John Coogan?

  So, let us know where you are on the Gartner hype cycle.

• 47:28Jordi Hays?

  We are working on some more

• 47:29John Coogan?

  We're gonna crunch all this data. Maybe we'll throw it in Julius?

• 47:32Jordi Hays?

  Of course.

• 47:33John Coogan?

  What analysis do you want to run? Chat with your data and get expert level insights. I want to know how people are tracking on the Gartner hype cycle.

• 47:40Jordi Hays?

  Yep. Alex Heath just shared a link. He said TikTok's parent company is making more revenue than Meta and is worth less than 20% of its market cap. So, there's some reporting here from Reuters.

• 47:54Jordi Hays?

  ByteDance, the owner of short video app, TikTok is set to launch a new employee share buyback that will value the Chinese technology giant at more than 330 billion. Driven by continued revenue growth, the company plans to offer current employees $200 per share in the repurchase program. The people said up 5.5% from $189. Each, it offered them about six months ago. The buyback is expected to be launched in autumn.

• 48:24Jordi Hays?

  And the latest buyback at a higher valuation will come as ByteDance consolidates its position as the world's largest social media company by revenue, with its second quarter revenue up 25% year on year. The jump resulted in the company's second quarter revenue hitting about forty eight billion, most of which is from the Chinese market as it continues to face political pressure to divest its US arm. And apparently TikTok's US operation remains unprofitable. So.

• 48:54John Coogan?

  The US operation?

• 48:55Jordi Hays?

  Yes.

• 48:56John Coogan?

  How is that possible?

• 48:57Jordi Hays?

  Good question.

• 48:58John Coogan?

  They have so many ads and stuff, and I thought they were taking a big cut of them.

• 49:01Jordi Hays?

  I think TikTok, TikTok shop is wildly unprofitable for TikTok.

• 49:05John Coogan?

  That's right. They were subsidizing a bunch of stuff there. Wow. Well, maybe it's got to go to Jensen. Maybe it's got to go to Oracle. We'll keep monitoring.

• 49:13Jordi Hays?

  Let's give it to Larry. I'm in favor of giving it to Larry.

• 49:18John Coogan?

  Anyway, if you're going beyond getting your brand mentioned on TikTok, you're trying to get your brand mentioned on ChatGPT, head over to Profound, reach millions of consumers who are using AI to discover new products and brands. AJ over at Semi Analysis says, feels like the fact that Zuck poached only a small amount of researchers for Anthropic is really under discussed. They have something that really works with respect to culture, mission, and values.

• 49:44Jordi Hays?

  And remember, Cursor poached the Claude, two people on the Claude code team that went over to Cursor for a couple of weeks and ended up back at Anthropic.

• 49:52Speaker 02

  I think it was only one week.

• 49:53John Coogan?

  One week?

• 49:54Speaker 02

  Yeah.

• 49:54John Coogan?

  That is a crazy short stint. Droid says, the market implied mandate of heaven. I mean, yeah, they like the, the, the culture at Anthropic is extremely unique. Like, they really do believe that they are on an exponential curve. They believe in straight lines on log linear graphs, as they say. I was, I was thinking about that quote the other day, because if you look at the data center capacity and the, and how pre-training is scaling, like, it is a straight line on a log linear graph. We're, we're getting orders of magnitude improvements every few years, and it does seem extremely predictable. Except the last time I was looking at straight lines on a log linear graph, it was COVID, and that, of course, like, completely flatlined at a certain

• 50:36John Coogan?

  point because there are only so many people that can get a disease. And so, I, I'm not, I believe in the straight lines on log linear graphs, but I also believe that straight lines can become flatlines on log linear graphs, and we'll have to keep seeing. What do you think?

• 50:52Speaker 02

  Then the question is, like, where are we on the?

• 50:54John Coogan?

  On the S curve?

• 50:55Speaker 02

  Yeah, where are we on the S curve?

• 50:57John Coogan?

  I don't know. I think we-

• 50:59Speaker 02

  I think we're pretty early.

• 51:00John Coogan?

  Pretty early. Uh, yeah, I, I, I do think we're early, but I, I think that there's a, I don't know, th- there's just a, there's like, there's a number of like small percentage chance things that could result in,

• 51:14John Coogan?

  in like that S curve hitting, like everything from, uh, like bottlenecks in the supply chain that are somewhat intractable. We run out of a certain like bottleneck product that causes a delay in the next boom of data center build out. We could also see some regulation. We could see the business models not quite like, like the, the business community could just panic and it could just become a meme that's like, oh, that actually like, you know, we over invested. We need to pull back for a few years. This is what happened during the, the, the, the, the dot com boom. Like, like a lot of those fiber investments made sense over a 10 year, 20 year period, but they were overheated in the short term.

• 51:53John Coogan?

  And so that just created like a freeze and all of a sudden we didn't get a continuous build out, or we did, but we didn't get continuous capabilities. Um, I don't know. We'll see. What do you think?

• 52:05Speaker 02

  I mean, I'm bullish. Yeah.

• 52:08John Coogan?

  What do you think about the fact that it feels like, uh, model capability is, is like very discontinuous?

• 52:16John Coogan?

  Like it feels like-

• 52:16Speaker 02

  How do you mean discontinuous?

• 52:17John Coogan?

  Like it feels like, it feels like we get, we like, like we are on a, we are on a smooth path of like bigger models, chopping wood, training things, but like only, this is the rune take, like, like, uh, as technology rolls out, it rolls out in this like smooth curve. But then you experience like a few discontinuities with like new capability comes on, comes online. Where like the chat GPT moment, like there wasn't really that much, like, like if you were to, if you were to just look at the, the straight line on a log linear graph, like it would be very hard to say like, that's the chat GPT moment because it was really like in between GPT three and in between GPT five and in between like, you know, like medium sized models, big models, and then even bigger models.

• 52:56John Coogan?

  And, and like you, you couldn't, you couldn't see, there's no kink in the graph at, at, at the chat GPT moment. There is on the user side, there is on the revenue side, but there's not on the actual like scale of data center side. It's not like we went from like nothing to something on the actual data center build out side and that caused the like, so it's hard to predict where there will be new breakout successes along the curve. Maybe that doesn't matter. I don't know.

• 53:23Speaker 02

  Yeah. I mean, I don't think it matters that like- You're probably gonna see another kink in user

• 53:28John Coogan?

  Yeah.

• 53:29Speaker 02

  usage when school starts again and everyone's like, wow, G P T five is so good because no one's ever used a reasoning model before.

• 53:34John Coogan?

  Yeah. Did you see this? Did you see this post about someone said that G P T five caused like a draw, a major drop off? Uh, this is from Marie Martins. The model giveth and the model taketh away. User registrations coming from A I. Search Chat G P T was like this huge boom. Did you see this, Drew? And then G P T five launched and uh, this is like way deeper in the slides.

• 53:58Speaker 02

  Yeah, I saw, I mean, there was another like somewhat similar chart.

• 54:04John Coogan?

  Yeah.

• 54:04Speaker 02

  That was like going around a couple of weeks ago where it was like, basically you could like tie it to when like schools, it was like in May or something, then usage completely dropped off. Do you remember this chart? But then it was actually like, oh, this is just some like weird.

• 54:17John Coogan?

  Yeah.

• 54:17Speaker 02

  This is like for one organization, it was only like a hundred thousand tokens. Like it was obviously not the actual usage.

• 54:22John Coogan?

  Yeah, I would be very surprised if if we're if we're at a phase of uh, Chat G P T adoption where like the school usage is still like a major factor.

• 54:31Speaker 02

  Yeah.

• 54:31John Coogan?

  Just because like the the install base is so big, it can't just be students, right?

• 54:35Speaker 02

  Yeah. And then so I, I mean, I'm a little hesitant to like

• 54:38John Coogan?

  Yeah.

• 54:38Speaker 02

  pull a lot of stuff from from that graph.

• 54:40John Coogan?

  Sure.

• 54:41Speaker 02

  But it seems, it seems very weird.

• 54:44John Coogan?

  Yeah.

• 54:45Speaker 02

  I don't know.

• 54:45John Coogan?

  Anyway.

• 54:46Jordi Hays?

  This is super interesting chart from from Mary.

• 54:50John Coogan?

  Yeah.

• 54:50Jordi Hays?

  Martins. She is the founder of Tally Forms.

• 54:55John Coogan?

  Yeah.

• 54:55Jordi Hays?

  And yeah, basically calling out, they were getting a ton of registrations from people just in Chat G P T.

• 55:00John Coogan?

  Mm hmm.

• 55:01Jordi Hays?

  And then all of a sudden dropped off a cliff. Uh, so.

• 55:04John Coogan?

  Yeah.

• 55:05Jordi Hays?

  We'll see.

• 55:05John Coogan?

  Figure out.

• 55:05Jordi Hays?

  There's some debate in the comments around how G P T five started, stopped adding U T M parameters to requests.

• 55:13John Coogan?

  Oh, interesting.

• 55:14Jordi Hays?

  There could be an attribution.

• 55:16John Coogan?

  Yeah.

• 55:16Jordi Hays?

  Uh, issue there, but they're saying, um.

• 55:20John Coogan?

  Yeah, I mean, we definitely want her to zoom out and look at overall registrations and see if there's a falloff in those because was this was this purely additive or was it just like an attribution thing? And then and then I'd love to know, like, is this actually like affecting her business? Or is or is tally still growing at the same rate? And it's just like, it feels like it's coming from a different from a different source, but in fact, it's all

• 55:46Jordi Hays?

  Well, it's not impacting Popmart CEO and founder Wang Ning. He's now the 79th richest person in the world. According to Morning Brew, his net worth has grown by 20 billion this year. It makes him richer than names like Peter Thiel, David Tepper, and Steve Cohen.

• 56:03John Coogan?

  Steve Cohen, wow.

• 56:04Jordi Hays?

  Laboo billionaire.

• 56:06John Coogan?

  Laboo billionaire.

• 56:07Jordi Hays?

  And we helped, we contributed to this by buying a Labubu for Bill Bishop's

• 56:13John Coogan?

  Oh, we did, for Bill Bishop's dog.

• 56:14Jordi Hays?

  So it's on the way. Bill?

• 56:16John Coogan?

  Tashi.

• 56:17Jordi Hays?

  Yep, very excited for that one.

• 56:19John Coogan?

  Anyway, back to Anthropic, Dario was talking to John Collison on Sneaky Cheekypite about how he approaches LLM economics in an interview with with John Collison. I thought this was interesting. So Dario says, get kind of burned. There's two ways you could describe what's happening right now in the business model. So let's say in 2023, you train a model that costs $100 million, and then you deploy it in 2024, and it makes $200 million in revenue. Meanwhile, because of scaling laws, in 2024, you also train a model that costs $1 billion. And then in 2025, you get $2 billion of revenue from that $1 billion. And you've spent $10 billion to train the model that year. So if you look at it in a conventional way, the profit and loss of the company, you've lost $100 million

• 57:02John Coogan?

  the first year, you've lost $800 million the second year, and you've lost $8 billion in the third year. So it looks like you're getting worse and worse.

• 57:08Jordi Hays?

  Exponentially.

• 57:09John Coogan?

  If you consider each model to be a company, the model that was trained in 2023 was profitable.

• 57:16John Coogan?

  You paid a hundred million dollars and then it made 200 million in revenue. There's some cost to inference the model, but let's just assume in this current Tunisian example that even if you add those two up, you're kind of in a good state. So if every model was a company, the model in this example is actually profitable. And I thought about this in the context of GPT-4. That was obviously, I think that was like around a hundred million dollar training run, something like that. And they've clearly made a ton of money back from that because GPT-4 is the backbone of something that generates like billions of dollars in revenue. Of course, they've also trained other models that have been used less and maybe were less additive. But this was framed as like, oh no, this is like a nightmare. Like he's exposing the truth that like these will never make money because they're just going to continually invest endlessly. I didn't see it that way at all. This makes perfect sense to me.

• 58:01Jordi Hays?

  At some point, you could just stop training. The question is, can you just stop training new models and just reap profits of old models?

• 58:09John Coogan?

  Yeah, well, it's more just like at a certain point, you run out of, you run out of, you kind of tap the capital markets because maybe you can't raise 10 trillion dollars for, to fund the next model on debt or equity or whatever. But there's no reason that you can't, like in each of these models, if you wait 10 years, you can afford the next run, right? Because you train the model for a hundred million. Let's say you were like, I'm bootstrapping a foundation model company. Crazy, but you could do it. Here's how you do it. You, you, you invest, you know, one dollar in a model that makes you a dollar next year, two dollars next year. Then you take, you wait 10 years, you save up 10 dollars, then you do the 10 dollar run.

• 58:52John Coogan?

  And you expand until you do the hundred million dollar training run that makes you 200 million dollars the next year and 200 million dollars the next year. And you know what you have after five years? You have a billion dollars in profit. What do you do with that billion dollars? You train the next model, then you wait five years. And then you train and then you've saved 10 billion, then you train the 10 billion dollar market.

• 59:10Jordi Hays?

  This assumes that this assumes, of course, that you would have a competitive offering in the market and you wouldn't be getting.

• 59:16John Coogan?

  Well, yes, yes, but but that is a broader market dynamic of whether the market is willing to put up like currently the market's 100% cool putting up 100 million dollars into a foundation model company. There were like 20 companies that raised 100 million dollars to train foundation models. There's only a few of them left. Then those few, a bunch of them put up, you know, a billion to train the billion dollar model. Now you have who's who's going to put up 10 billion to do the the really big training run? It's going to be a few labs. It's going to be OpenAI, Anthropic, Meta, Google, right? As we get to the 100 billion, yeah, we might have to wait a little bit. We might have to kind of like accrue savings and pay that down over time.

• 59:54John Coogan?

  And this is another thing that might cause a kink in like the log linear graph if you have to if you can't immediately marshal 10 trillion dollars, 100 trillion dollars.

• 1:00:03Jordi Hays?

  Yeah.

• 1:00:03John Coogan?

  Like right now, we are in the phase of like snap your fingers and the capital marshals because we're we're in this, we're in this era where the the games are clear.

• 1:00:10Jordi Hays?

  Yeah, if you remember, Anthropic's round was so oversubscribed, they ended up, I think, doubling the allocation.

• 1:00:15John Coogan?

  Yeah, and so this could continue for a while.

• 1:00:16Jordi Hays?

  Yeah, I mean, the concern, I mean, the, yeah, the concern is that you can't can't really, it seems difficult for even the big labs to do another 10x on on these pending training runs.

• 1:00:29John Coogan?

  Yeah, I mean, that's what Stargate is, right? It's a 500 billion dollar project. And so that's probably like 100 billion dollar commitment in the medium term or getting into the trillion territory. Maybe it continues forever. Maybe everyone on earth kind of just says like, yes, we're willing to like.

• 1:00:48Jordi Hays?

  Yeah.

• 1:00:48John Coogan?

  Everyone sell all your gold and convert that.

• 1:00:50Jordi Hays?

  But I think if you're, I think if you're on, if you're on Wall Street.

• 1:00:53John Coogan?

  Yes.

• 1:00:53Jordi Hays?

  Traditional finance.

• 1:00:54John Coogan?

  Yes.

• 1:00:55Jordi Hays?

  Guy.

• 1:00:55John Coogan?

  Yeah.

• 1:00:55Jordi Hays?

  Or girl, and you're looking at this and and in in biotech, you might have something where it's like, hey, we need to spend. Five billion dollars developing this drug.

• 1:01:06John Coogan?

  Yeah.

• 1:01:06Jordi Hays?

  But then it's going to be good and we're going to be able to sell it for a really long time.

• 1:01:09John Coogan?

  This is every business ever.

• 1:01:10Jordi Hays?

  So it's like having massively uncertain future capital requirements.

• 1:01:13John Coogan?

  Yep.

• 1:01:13Jordi Hays?

  Is going to just be a concern and an asterisk on the business.

• 1:01:16John Coogan?

  Yeah.

• 1:01:17Jordi Hays?

  I think that's like Finhub IQ is really the concern here. You have exponentially increasing costs and just wildly uncertain future capital requirements.

• 1:01:27John Coogan?

  Yeah. And so the, it like the way to deal with that, like uncertainty, those jitters and like the later stage investors who are, who you have to talk to, to marshal. Like, once you run out of masses, who are willing to take wild swings. The way to allay their concerns is show them that, yeah, we spent 10 billion and we're making 2 billion in profit. And five years we'll be able to pay that. So you can, you know, give us the money now to pull forward. What's obviously going to pay off again, and we're confident that the next 10x is going to get us another 10x in, in profit. And so you can underwrite these at any level. Right now, we're underwriting them every single year. We might stretch out a little bit. We might compress. We might go faster. We'll, we'll see.

• 1:02:11Jordi Hays?

  Well, Dan Ratliff in the chat says Elizabeth Holmes has hit the timeline. She has been posting, ripping posts. She quoted, quote, quoted Brian, a quote tweeted Brian Johnson earlier.

• 1:02:25John Coogan?

  Yeah.

• 1:02:25Jordi Hays?

  Brian said defeating death would be humanity's greatest achievement. Elizabeth says, amen. She gives another quote here. There comes a point where we just need to stop pulling people out of the river. We need to go upstream and find out why they're falling in. Archbishop Desmond Tutu. And yeah, she's ripping some comments. She's getting active on the timeline.

• 1:02:48John Coogan?

  Now, this is, this is probably not her, right? This is her husband.

• 1:02:52Jordi Hays?

  Mostly my words, hosted by others.

• 1:02:54John Coogan?

  Yeah.

• 1:02:54Jordi Hays?

  So I wonder if she's getting paper printouts of.

• 1:02:58John Coogan?

  Probably over the phone.

• 1:02:59Jordi Hays?

  She just said, um, she was responding to Brian and said, first they think you're crazy, then they fight you. Then you change the world. And, uh, somebody quoted and said, she's going to launch Cash Tag Theranos meme coin, isn't she? And Elizabeth says, never. So.

• 1:03:18Jordi Hays?

  Anyways, having, having fun on the timeline.

• 1:03:23John Coogan?

  Yeah, imagine thrill of having posts read to you over the prison phone and then replying, "Okay, yes, like that one."

• 1:03:31Jordi Hays?

  She said last time, Signal said, "Dreams do come true if you put your mind to it." And Elizabeth Holmes followed him. And VC Bragg said, "Never deleting this app." And Elizabeth Holmes said, "Last time I deleted the app, it looked different. Where did the little blue bird go? What happened?"

• 1:03:51John Coogan?

  This is funny lore. This is like an odd, it would be weird to be offline for so long.

• 1:03:56Jordi Hays?

  She's, she's responding to an Elon Musk quote, saying, "For my part, I never, I will never give up, and I mean never." And Elizabeth says, "This is one reason Elizabeth, oh, sorry, this is one reason Elon Musk wins. He never gives up. That's what it takes." It doesn't sound like, it doesn't sound like Elizabeth Holmes is giving up either, but she seems to be a big Elon Musk fan.

• 1:04:19John Coogan?

  I have been shocked by the out of home campaign. Have you seen this?

• 1:04:22Jordi Hays?

  Which is not by her.

• 1:04:25John Coogan?

  Someone is working on a redemption arc for Elizabeth Holmes and justice for Theranos. I think it's a promotion for the new company of some sort, but it's all over. Yeah, there's a new company. I think they're out raising. But the, the, the, the billboards are all over LA and they've been up for a long time, like months and months and months. It's been crazy. Anyway.

• 1:04:51Jordi Hays?

  Ben Gilbert says, "If you think your app needs more polish, always remember Google Maps, Shift Maps without Europe."

• 1:04:58John Coogan?

  That's awesome.

• 1:04:58Jordi Hays?

  That is a crazy screenshot.

• 1:05:00John Coogan?

  It's crazy that they didn't even.

• 1:05:01Jordi Hays?

  A crazy mog.

• 1:05:02John Coogan?

  Yeah, they didn't even think to put like the rough outline of Europe, you know, and be like, "Ah, we don't have details on it." But instead, it's just like you can zoom out and you only see America, the States and, and England, and we got Ireland in there, of course. Got to keep Ireland in there. Well, if you're building the next Google Maps, get on Linear, linear.app. Linear is a purpose-built tool for planning and building products. Meet the system for modern software development, streamline issues, projects, and product roadmaps. It's a good building.

• 1:05:28Jordi Hays?

  Travis Kelsey, right after the announcement, launches American Eagle collection.

• 1:05:33John Coogan?

  Yes.

• 1:05:34Jordi Hays?

  And Michael Mirflor says, "Nothing is sacred, monetize everything." Let's see, let's check in on the American Eagle stock. It is up another 9% today, so they're just on an absolute tear.

• 1:05:49John Coogan?

  Yes. Everyone in tech has been focused on the Taylor Swift wedding, particularly what it means for Nvidia earnings. I have a little thesis here, so obviously Taylor Swift getting engaged, that's going to draw a ton of attention towards the NFL. We've already seen the NFL had a measurable swift effect from 2023 to 2024. They saw 9% gain in female viewership year over year and game level spikes like a 63% jump among women, 18 to 49 for a Chiefs game. So imagine this, NFL and streamers, they lean in broadcasters. If they escalate moment capture, more shoulder programming, alternate feeds, multi-language clips,

• 1:06:33John Coogan?

  real-time highlight reels, what do you need? You need real-time media. It's an AI problem. You need clipping, scene detection, player ID, small object tracking. All of this is going to run on Nvidia GPUs. Globalization, you need translation at the edge.

• 1:06:47Jordi Hays?

  Another.

• 1:06:47John Coogan?

  Classic speech AI.

• 1:06:49Jordi Hays?

  Another 100 billion for Jensen.

• 1:06:50John Coogan?

  Tech to speech translation, that's an Nvidia product right there. They have a product Riva that does that. Creators pile in, UGC explodes, reaction videos, podcasts, shorts, consumer AI effects, noise removal, eye contact correction, studio voice, increasingly GPU intensive workloads. People are going to be running RTX PCs with Nvidia broadcast software to get this stuff. Ad dollars also falls attention, incremental audience, especially for the new female demos. This is going to pull premium dollars to sports ads budgets. This pushes ad tech recommender systems, ranking, creative optimization, frequency control. These are among the most compute hungry inference workloads and an Nvidia sweet spot.

• 1:07:33John Coogan?

  They have Merlin for recommendations of ads and Triton for serving ads. Stream quality is going to be an arms race. The women, the Swifties, they're going to demand 4K feeds. Platforms are going to race to improve video. They're going to need to accelerate this with CUDA. This means more GPU accelerated pre and post processing in cloud workflows. Sports production is going to modernize autonomous cameras, analytics are a blueprint for low tier games. These techniques climb the stack for tent pole events, more AI in the truck, more GPUs at the edge in and in cloud transcode farms.

• 1:08:16John Coogan?

  Hyperscale hyperscale CapEx is the real lever here. AWS, Google, Microsoft Meta, they fund the compute behind all of this. Imagine 2026 CapEx guys are going through the roof.

• 1:08:27Jordi Hays?

  I can see it.

• 1:08:28John Coogan?

  We're going to be in hundreds of billions of dollars just supporting the Swifty demand for NFL content.

• 1:08:34Jordi Hays?

  Yeah.

• 1:08:34John Coogan?

  Powered by Nvidia. Exactly. And so all of this is going to translate into earnings, of course. Showcases durable, broad-based inference, demand in media and ads. Exactly the vector analysts want to see as the AI cycle tilts from training only to training plus always on inference. So that's what the Taylor Swift engagement means for Nvidia's earnings today.

• 1:08:56Jordi Hays?

  Groundbreaking. Gabriel says, this is the music that Keith or Boyd listened to in 2019 while doing a thousand burpees and right before logging on to reply wrong to a political scientist posting about Pete Buttigieg's South Carolina polling results.

• 1:09:10John Coogan?

  Can we pull up this video?

• 1:09:11Jordi Hays?

  Play this video?

• 1:09:11John Coogan?

  This video is hilarious. In the meantime, while they're pulling it up, I'll tell you about Numeral. Sales tax and autopilot spend less than five minutes, five minutes per month on sales tax compliance. Numeralhq.com and you know who's going to need to use Numeral? Travis Kelsey's new American Eagle line. If you buy some American Eagle, they said inside Travis Kelsey's new American Eagle line, an ad with athletes, including Suni Lee and Kian Anthony. The day after it was revealed that Travis Kelsey put an eight karat engagement ring on Taylor Swift's finger. American Eagle had announced it had a limited edition clothing line with its sportswear brand True Colors. AEX True Colors by Travis Kelsey will launch in two drops today and on September 24th.

• 1:09:55John Coogan?

  So get ready and make sure that you're paying your sales tax on

• 1:09:59Jordi Hays?

  True Colors TK.

• 1:10:01John Coogan?

  Michael Miraflora says, nothing is sacred. Monetize everything. Let's pull up the, the DJ that

• 1:10:07Jordi Hays?

  The video, the video is going to be

• 1:10:09John Coogan?

  Bad?

• 1:10:09Jordi Hays?

  Almost impossible to find.

• 1:10:11John Coogan?

  Okay. It's deep in the, oh, they got it.

• 1:10:13Jordi Hays?

  They did it.

• 1:10:14John Coogan?

  The team got it.

• 1:10:14Jordi Hays?

  The impossible.

• 1:10:15John Coogan?

  Let's pull it up. Let's play this.

• 1:10:16Jordi Hays?

  Get the audio.

• 1:10:17John Coogan?

  Get the audio. The audio is key.

• 1:10:21John Coogan?

  Let's go fullscreen on this.

• 1:10:24John Coogan?

  This is like so annoyingly, I don't know, I was not a fan of this. Did you listen to this? You think it's good?

• 1:10:33Jordi Hays?

  Very Reddit-coded.

• 1:10:34John Coogan?

  Yeah.

• 1:10:36Jordi Hays?

  But this is-

• 1:10:37John Coogan?

  I can't believe there's so many people at this putting up with this Mario song. What, what event is this?

• 1:10:48John Coogan?

  It doesn't, it doesn't inspire me. You know what we need?

• 1:10:51Jordi Hays?

  Like great Reddit drop.

• 1:10:53John Coogan?

  We need, uh, we need this, uh, you see the, the, it's like they blow this fog around? Look at this.

• 1:11:03John Coogan?

  Yeah, though, though there's like, uh, CO2 canons, for sure. Like that to blow the smoke everywhere.

• 1:11:09Jordi Hays?

  We got something good out of this. Ben, we need the CO2 cannons.

• 1:11:11Jordi Hays?

  You want CO2 back there?

• 1:11:13John Coogan?

  Yeah, whatever those DJ equipment are. During the lightning round when we were interviewing a CEO.

• 1:11:17Jordi Hays?

  And Nick, can you look into the health impact of being in a studio space with CO2 cannons?

• 1:11:22John Coogan?

  Regus, this is very David Solomon-coded.

• 1:11:27John Coogan?

  Yes. Uh, you have to be a Mario fan to understand. Yeah, I, I, I get it. Um, I don't know if this would be for me in a big crowd, but, uh, who knows? Maybe, maybe it's fun. It seems like they had fun and I'm happy for them.

• 1:11:39Jordi Hays?

  These days not, not big into paying to be in a crowd.

• 1:11:42John Coogan?

  Yeah, that's-

• 1:11:43Jordi Hays?

  Or pay to avoid one.

• 1:11:45John Coogan?

  Yeah, yeah, yeah. That's, that's rough. Uh, anyway, let's go to Will Monitis. He says, "Hard to think of a piece of writing that's had a greater impact on my life than John Ludig's index mindset in 2021. This pro-index tendency," writes John Ludig, "pervades the private tech markets, startups, and even our culture through what I call the index mindset. A focus on preservation over creation, optionality over decisiveness, general over specific. Public companies are an obvious thing to index, but the index mindset manifests in many domains. In wealth, you, instead of risk-seeking expansion, you focus on steady-compounding preservation."

• 1:12:24John Coogan?

  Venture capital, instead of concentrated bets, you focus on deployment pace and IRR. In public markets, instead of active funds like hedge funds, which we'll talk about later in the show, we focus on passive funds and diversification. In employment, instead of four plus, four to five year tenures and being focused, you focus on one to two year tenures, portfolio building, lots of logos on your resume. In research and development, instead of being radically radical and innovative, you focus on being incremental and defensive. And in your personal life, instead of spiky and committed, you focus on being well-rounded and committal. Internet software companies are far less risky than they used to be. Even at the early stages, there hasn't been a venture vintage since 2002 with negative median returns.

• 1:13:09John Coogan?

  Big tech is now huge tech, so the VCs are not taking nearly enough risk because they're not losing money. They should, they should, like, it is indictment of the venture community if there's not a single fund out there that has a negative, or a single vintage that has negative returns because they weren't taking enough risk.

• 1:13:24Jordi Hays?

  Well, it's median.

• 1:13:25John Coogan?

  Yeah, yeah, median, but, yeah, and it's vintage, so it's broadly, of course, there are funds that don't do bad, but it's like, as an asset class.

• 1:13:33Jordi Hays?

  Well, we might be turning it around.

• 1:13:36John Coogan?

  Anything's possible. Risk-averse people and money have flooded in. When people have something to lose, they protect their downside. Think of wealth managers encouraging a safe mix of stocks and bonds. The tech industry has too much to lose. And I love, Will Manitis has the most chaotic way to highlight I've ever seen. You can just use boxes in iOS if that's where he's editing this, but he's just drawing crazy.

• 1:14:03Jordi Hays?

  Really draws you in, drawing all over it.

• 1:14:04John Coogan?

  Drawing all over it. And then he switches colors at some point. I have no idea why, but Ben Gilbert says he's so good, and I agree. Shout out to John Ludwig. Sitrini says, "Time to bust out the no sequel Negronis again."

• 1:14:18Jordi Hays?

  So I think this was a picture from 2021.

• 1:14:20John Coogan?

  I think so. There was a Tiger Global meetup.

• 1:14:23Jordi Hays?

  And this is when, I think it was roughly 30% of all dollars in the venture industry were going to founder dinners and little, and little events like this.

• 1:14:35John Coogan?

  Essentially, essentially.

• 1:14:36Jordi Hays?

  It felt like that at the time.

• 1:14:37John Coogan?

  It was close.

• 1:14:39Jordi Hays?

  No SQL Negroni.

• 1:14:41John Coogan?

  Yep.

• 1:14:41Jordi Hays?

  And.

• 1:14:42John Coogan?

  The Tiger Tonic, the machine learning margarita, the AI artificial inebriation special.

• 1:14:48Jordi Hays?

  Which is a non-alcoholic beverage.

• 1:14:49John Coogan?

  Interesting, interesting.

• 1:14:51Jordi Hays?

  I say bring it back Tiger.

• 1:14:52John Coogan?

  Yeah, I think you could go further, further. We gotta come up with our own little menu of funny.

• 1:14:57Jordi Hays?

  So.

• 1:14:58John Coogan?

  We didn't have a menu at our, at our event in New York.

• 1:15:00Jordi Hays?

  This was an interesting.

• 1:15:02John Coogan?

  Yep.

• 1:15:02Jordi Hays?

  Uh, screenshot.

• 1:15:03John Coogan?

  This one from fin.ai, the number one AI agent for customer service.

• 1:15:07Jordi Hays?

  That's right.

• 1:15:08John Coogan?

  Number one in performance marks, number one in competitive bake offs, number one ranking on G2, fin.ai. Uh, I will never apologize for cutting you off.

• 1:15:17Jordi Hays?

  For an advertiser.

• 1:15:18John Coogan?

  For an advertiser. Continue, Jordi.

• 1:15:19Jordi Hays?

  Event. Uh, fewer people can bench 225 than are worth 10 million. In the US, about 0.4% of the population, around 1.3 million people can bench, uh, 225 pounds. Globally, the percentage is likely below 0.1%.

• 1:15:34John Coogan?

  Wow.

• 1:15:35Jordi Hays?

  With some estimates as low as 0.07%. 2.13 US households have a net worth of 10 million or more, constituting approximately 1.6% of all households. If you can bench two plates, you're already stronger than 99% of people on the planet, just maybe not richer. And Zach Vaul says, what everyone is thinking, only job is to do both. And, uh, we firmly.

• 1:16:03John Coogan?

  Both are grind, but well worth it. Uh, it's, uh, the grind to 225 was, was serious for, for many on the team. And, uh, I think almost all of us have gotten there and are now beyond. It's, uh, it's well, well worth it, well worth it.

• 1:16:18Jordi Hays?

  Buco Capital.

• 1:16:18John Coogan?

  Good luck out there.

• 1:16:19Jordi Hays?

  Says, your stock trades at $59, but we can make it trade at 62 if we manufacture a crisis by changing the logo and immediately change it back to the original logo. Uh, this strategy, uh, I don't think this was their strategy, but, uh, feels like something out of Nathan, Nathan.

• 1:16:37John Coogan?

  Does.

• 1:16:38Jordi Hays?

  For you episode. Uh, and I would. It's hard to, it's hard to properly manufacture a reaction like that. Of course.

• 1:16:47John Coogan?

  Wow, did you, so the Cracker Barrel story is in the Journal today. Logo change spawns firestorm. It's, oh, this is actually yesterday.

• 1:16:56Jordi Hays?

  And Trump said something about it?

• 1:16:57John Coogan?

  Cracker Barrel planned to celebrate a fall menu and logo makeover with a festive country music concert in New York City. I had no idea that's what they were planning. But its new logo stole the show, and not in the way the company intended. On Monday, the company apologized for how it communicated the changes, but didn't pivot from plans to keep updating the brand. The chain replaced its longtime logo featuring a man in overalls leaning against a bar, a barrel, with a streamlined version featuring just the chain's name. The move engulfed the restaurant in a culture war firestorm, with some commentators online and some customers accusing Cracker Barrel of eschewing its country charm and heritage for a sanitized image. Critics have lobbied, have lobbed personal attacks on social media

• 1:17:41John Coogan?

  against Julie Fels-Massino, chief executive of the nearly 56-year-old chain. She scrapped a beloved American aesthetic and replaced it with sterile, soulless branding, wrote the woke war room on X in a message shared by Donald Trump Jr. She should resign and be replaced with leadership that will restore Cracker Barrel's tradition. The fallout has shaved tens of millions of dollars from the company's market cap, spawned calls for boycotts and risked the casual dining chain's turnaround plan. Cracker Barrel has defended its changes, saying, "The all the more campaign was meant to honor its legacy while bringing new energy to the brand. Our values haven't changed, and the heart and soul of Cracker Barrel

• 1:18:24John Coogan?

  haven't changed," the company said. The new logo, the fifth iteration in its history, is a callback to the original one with its barrel shape and word design. On Monday, Cracker Barrel said the dust-up over the past several days had shown how deeply people care about the chain.

• 1:18:38Jordi Hays?

  Trump said on Truth Social yesterday, "Cracker Barrel should go back to the old logo, admit a mistake based on customer response, parentheses, the ultimate pull, and manage the company better than ever before. Make Cracker Barrel a winner again." And they immediately responded, reverting it back to the old logo.

• 1:18:56John Coogan?

  Wow.

• 1:18:56Jordi Hays?

  And if you had invested, invested in Cracker Barrel and Nvidia exactly a year ago, you would have outperformed buying Cracker Barrel.

• 1:19:07John Coogan?

  Wait, wait, sorry. What?

• 1:19:08Jordi Hays?

  Up fifty-two percent in the last year.

• 1:19:10John Coogan?

  Cracker Barrel is?

• 1:19:11Jordi Hays?

  In the last year.

• 1:19:12John Coogan?

  No way.

• 1:19:13Jordi Hays?

  And Nvidia is up forty-one and a half percent.

• 1:19:16John Coogan?

  Well, if you're looking for exposure to Cracker Barrel, either, either long or short, go over to public.com, investing for those that take it seriously. They got multi-asset investing, industry-leading yields, and they're trusted by millions, folks. This weekend, says Jeff Morris Jr., Martin Casado dropped a tweet that took over VC Twitter. "I wrote about it and what being consensus versus non-consensus actually means into today's market. Every weekend, there's a new hero," says JMJ, "that takes over venture capital group chats. This past weekend was clearly slow on the news front because what I initially read as a fairly standard take ended up dominating my timeline." This is, we talked about this. Martin Casado said, "The idea that non-consensus investing is where the alpha is, is actually quite dangerous in the early stage. Following capital tends to be more and more consensus-aligned. For whatever reason, this concept triggered

• 1:20:01John Coogan?

  a bunch of investors. We're living in an era where consensus categories like AI, crypto, robotics, bio, defense, autonomous systems, manufacturing are big enough to carry entire generations of startups. You don't need to invent a new category to generate massive outcomes." And that is an interesting, that is an interesting take because like, there's, VCs are supposed to be like tech investors, internet investors, and yet, like,

• 1:20:23Jordi Hays?

  Consumer.

• 1:20:23John Coogan?

  Consensus categories include crypto, bio, defense, manufacturing, AI. It's like, everything is now, is now like, backable. There was an interesting quote in here that I wanted to highlight, something about, "You can still, yes, you can still find non-consensus companies within consensus categories, but at some point, calling ourselves non-consensus investors is just glamorizing the job. Take American Dynamism as an example, a venture category branded just a few years ago by A16Z that now feels like it's industry in itself. Palantir in 2003 was truly contrarian. Nobody else was building forward deployed CIA software. Palantir was one of one company that probably only Alex Karp, Joe Lonsdale, and Peter Thiel could have created. Two decades later, it's more relevant than ever

• 1:21:08John Coogan?

  with a $370 billion market cap." Anduril was equally contrarian, but for different reasons. In 2025, he says, "Fast forward, American dynamism is a full-blown investment category. Hundreds of startups and dozens of funds are chasing defense, aerospace and manufacturing. I live 15 minutes from El Segundo, which has famously become a dense hub of these companies." There was another one in here about, about D to C and saying something about like that category being even, even, even that category.

• 1:21:39Jordi Hays?

  One, one note here, I was talking with, I was talking with a buddy over the weekend and he was like, "What's going on with El Segundo or, or, or is it, is it legit? Are these, are all these companies, are they actually going to build big companies?" And something, something Jeff says here, oh, my, my reaction was some, a small number of them will be massive and most will have middling outcomes or, or will shut down. But that is, that is what our entire industry is based on and it's okay. But it's still good that we have this excitement and energy and momentum and, and a center of gravity in El Segundo.

• 1:22:22John Coogan?

  Yeah. There was something in here, I, I can't exactly find it, but it was basically saying that like, like consumer is, is contrarian right now. It's not very hot. Very few people invest in consumer D to C companies, but that's just in like Silicon Valley Venture. There are still plenty of funds, both on the private equity side and on the venture side, that are doing deals in consumer all day long. Some brands have kind of expanded and shifted away from it, but there still are lots of funds out there that are doing that. So it's a, it's just a, it's just an interesting noodling on what, what, what stands for consensus or contrarian right now. Anyway, let me tell you about Adio. Customer relationship magic. Adio is the AI native CRM that builds, scales and grows your company to the next level. You can get started for.

• 1:23:07Jordi Hays?

  With a new $52.

• 1:23:08John Coogan?

  Do you want to do this John Woo post?

• 1:23:10Jordi Hays?

  Series. The, yeah, this John Woo post is great. We should run through this. So John Woo says, "Do not trust millennials to run your brand. Their vision of the way the internet works was informed by the web 2.0, Facebook, 2011, Instagram, vintage filters era, and their priors have not been updated since. The internet is no longer deterministic. It's algorithm driven and not even among your own followers. Your posts are constantly being shown to a panel of users." If they like it, the panel is expanded. If they don't, you don't get reach. That means putting out a high volume of posts isn't noise, spam, or quote, "low signal." Volume is necessary so the algorithm can pick up your winners and make them viral. You have to experiment with high volume, learn quickly, and double down on your winning

• 1:23:53Jordi Hays?

  formats. The cost of failure is zero. The tree falls in the forest and no one sees it.

• 1:23:58John Coogan?

  This is huge for content creation.

• 1:24:00Jordi Hays?

  Yeah, but the cost of-

• 1:24:01John Coogan?

  No one sees, no one sees the flopped posts.

• 1:24:04Jordi Hays?

  Yep.

• 1:24:05John Coogan?

  It hurts.

• 1:24:05Jordi Hays?

  The cost of experimenting, but the cost of not experimenting is astronomical.

• 1:24:10John Coogan?

  Yep.

• 1:24:10Jordi Hays?

  Sure signs of incompetence in the attention age. We don't want to put out noise. We need to protect our brand. We need more followers. That's ignorance. Low-quality posts are no longer distributed. Follower count doesn't matter. The news cycle is shorter than ever. People will only remember your winners.

• 1:24:26John Coogan?

  Yep.

• 1:24:26Jordi Hays?

  Pump up the volume. Totally agree. I think if you look, you know, on X specifically, if you look at your favorite poster, if you actually scroll their feed, they'll have a bunch of just like flops.

• 1:24:35John Coogan?

  Yeah, you'll think of a person as like, "Oh, every time I see one of their posts, it has thousands of likes." And then you go to their account and you see so many flops and, and, and the real secret is that they're trying a lot of experiments. When the current thing happens, they're putting out every possible variation of the current thing. Uh, it's a good strategy. I like this, uh, reply by Holin. She says, "Millennials are still good brand builders, but the execution should be left to the terminally, terminally online." And so there is something about like, it's probably not enough just to have like pure slop. It's more like, you need a seed of something good, some sort of north star, and then, uh, and then, but the execution in the modern era does require a lot of aggression. Uh, anyway, um, we have our first guest of the show joining in just a few minutes in

• 1:25:18John Coogan?

  the Restream waiting room. Uh, we will get to, uh, the Numerai story in just a little bit. Should we talk about, uh, the app mafia quickly? Uh, if you haven't been following this, uh, some folks that we're familiar with, one of them who did, uh, PMF or DIE,

• 1:25:38John Coogan?

  Had put out a course on how to build an app that makes money. Don't raise venture capital. They sort of took over the timeline with a viral video showing them driving Lamborghinis. Kind of all the, all the classic hallmarks of the, of the guru that you previously found on YouTube. With the here in my garage, that guy and folks on Instagram. Sort of the first time we really saw it on Twitter or on X. And it caused a lot of, you know, people, people going back and forth. Harry Gestenter, I don't know how to pronounce his last name, but Harry says, Apparently I mentioned in the first few minutes of the at mafia course. So here are my thoughts. I went to college with Blake Anderson and no Zach and Hunter too. There are a lot of threads going around about profit margin, et cetera.

• 1:26:23John Coogan?

  It's not, it's not that relevant, given these kids are clearly netting a minimum six to seven figures. Probably for the first time in history for anyone that age. This represents a major shift in the education system that platforms like WAP are have pioneered. People are talking about audience IQ. This course is clearly targeted at kids slash younger founders and certainly something I would have loved 10 years ago. It also represents a shift away from venture backed consumer apps dying from over raising hundreds of apps like Headspace calm. Raised eight to nine figures and were stuck with companies that couldn't quite IPO, but also couldn't cash flow for the founders. There's entitled socialist mentality of quote, why do I have to pay? The reality is if it's free, it's not very valuable.

• 1:27:04John Coogan?

  I have watched the, I haven't watched the course, but these guys are extremely sharp and can provide value to young founders. They, so they deserve to be compensated for their time. Now there's a wrinkle where the course is now free. Is that right?

• 1:27:15Jordi Hays?

  Course is now free.

• 1:27:16John Coogan?

  Okay.

• 1:27:16Jordi Hays?

  So, um, I, you know, I think they, they, the, the original video was, uh, was, in their words, designed to elicit a dramatic reaction.

• 1:27:27John Coogan?

  Yes.

• 1:27:28Jordi Hays?

  Designed to bring out hate, right? They're sitting there in a mansion.

• 1:27:33John Coogan?

  Blake loves poking the bear of the algorithm.

• 1:27:35Jordi Hays?

  Yeah.

• 1:27:36John Coogan?

  Like he, he's very good at that and very deliberate about that.

• 1:27:38Jordi Hays?

  But yeah, I, it is fascinating. I mean, and then immediately people piled on and were saying like, oh, the apps must not be making a lot of money. Otherwise, why would they do this? Which, uh, I didn't, um, it seemed obvious to me why they wanted to do it. They want to build their personal brands and this is like a business model for building a personal brand.

• 1:27:57John Coogan?

  Yeah.

• 1:27:58Jordi Hays?

  This, it's a, it's a.

• 1:27:59John Coogan?

  What's interesting is I don't think I've ever paid for a course on specifically on like entrepreneurship or something broad like that, but I have paid for courses on like very specific technologies. Like I went to a like a bootcamp for iOS development where they taught us Objective C for two days straight. That had like a real cost and I was able to expense it against the business. I also paid for like a course to learn Houdini, a particular visual effects software. And that kind of had, I thought it wasn't like a get rich quick scam at all. They didn't make any promises. They just said, hey, we're going to teach you this software. We're going to teach you this thing. And so buying books is great. Buying courses on specific topics is great. Lots, lots of what you can learn about entrepreneurship is just available out there for free. You can read Paul Graham's

• 1:28:44John Coogan?

  blog. You can listen to Founders Podcast. There are plenty of resources. Maybe this is useful. You'd have to try it out. Now it's free, so you can make your own decision. Anyway, we have our first guest of the stream in the TV PM. Welcome to the stream.

• 1:29:00Jordi Hays?

  Announcement.

• 1:29:01John Coogan?

  Josh, good to meet you. How are you doing?

• 1:29:02Jordi Hays?

  What's happening?

• 1:29:03Josh Reeves?

  Hello. Good to see you both. Hi, John. Hi, Jordy. Another day joining the group.

• 1:29:06John Coogan?

  You sound fantastic today. Whatever microphone you have hooked up is working flawlessly.

• 1:29:10Jordi Hays?

  Similar to what we have here. Congrats on the news. Break it down for us.

• 1:29:15Josh Reeves?

  Yeah, so I'm Josh, head of Gusto. We love serving small business. We've worked with a company called Guideline for a number of years, close to 10 years at this point. And the news is that we are joining forces. Guideline is going to be joining Gusto.

• 1:29:30John Coogan?

  Amazing.

• 1:29:31Jordi Hays?

  Amazing. I think I've, I've actually used Gusto and Guideline together for my entire career.

• 1:29:39John Coogan?

  I've used Gusto at four different companies.

• 1:29:40Jordi Hays?

  Company I started in college.

• 1:29:41John Coogan?

  And we have an employee sitting over there that wants a 401k.

• 1:29:43Josh Reeves?

  You have no excuses anymore. Time to set out.

• 1:29:48John Coogan?

  Yeah. Talk about the, the, the pre-history here. The company's been, what, was it YC 2013, 2012 or something? I remember.

• 1:30:00Josh Reeves?

  2012.

• 1:30:01John Coogan?

  2012. Yeah. I remember implementing it at my YC company in 2012, back when it had a different name. And, and I remember that, that for a number of different HR functionalities, I would have to kind of go to a different platform and then the data would be, would be fed back. What informed the strategy back then and then why are you shifting it? It like, it seemed like it was working for a long time.

• 1:30:26Josh Reeves?

  Yeah.

• 1:30:26John Coogan?

  So why, why kind of, what is it horizontally integrate, I suppose is the term?

• 1:30:31Josh Reeves?

  I don't know what other business. We just, we just try to make the life of a small business owner easier. But yeah, first off, I mean, thrilled to serve you and your companies and we're always trying to get better. So send me feedback on how we can get better, by the way.

• 1:30:44Josh Reeves?

  But yeah, no, I'd say we need to go way back. We launched Gusto back in 2012 and our first product was payroll. If you don't pay someone, they quit. So it's the least optional part of the stack. And so we've made progress there. You know, we've served over 400,000 businesses. We love helping tech companies, but I love. There we go.

• 1:31:03John Coogan?

  That's a lot of.

• 1:31:03Josh Reeves?

  But I also love reminding folks, there's more dentist offices in the U.S. than tech startups. So like very focused on that mainstream small business owner. And yeah, to your point, you know, we, we listen to customers more than anything and, and they guide us. And so they told us, hey, there's all these other pain points we want your help with. Our second product was health benefits, but you know, we're not going to build everything ourselves. And so when retirement came up and like generally speaking, what we like to do is take stuff big companies have and bring it to small companies. Right? So from almost a fairness lens, it's like, we need to bring great retirement benefits to these small businesses. They deserve it. And that was basically KB, that, that one of the co-founders of Guideline. It's kind of a funny story. He was previously the co-founder of Task Rabbit.

• 1:31:47Josh Reeves?

  And so back in like 2015, we were in the same building. They were on the second floor, we were on the sixth floor and we, there's a slow, slow elevator, the slowest elevator you've ever seen. And so we would sometimes just be on these long elevator rides and that's how we got to know each other.

• 1:32:02Jordi Hays?

  Yeah, I was gonna, I was gonna ask, when did the conversation first start?

• 1:32:04John Coogan?

  People say you meet your, you meet your acquirer like years before, but what they don't say is in a very slow elevator.

• 1:32:09Jordi Hays?

  You're gonna hang out for minutes at a time.

• 1:32:12Josh Reeves?

  But yeah, to answer the heart of your question. We started partnering with them when they launched in 2016. And yeah, there's an integration, you can kind of connect the two systems. Like, we have tens of thousands of shared customers. You know, KB, I can say this stat very proudly on his behalf, like, over 10, around $10 billion of retirement savings in the accounts of our shared customers.

• 1:32:35Jordi Hays?

  Let's hit the size gong for that.

• 1:32:37Josh Reeves?

  I mean.

• 1:32:37John Coogan?

  Yeah, Jordy, you hit the gong. We like to hit the gong around here for big returns. Congratulations.

• 1:32:43Josh Reeves?

  I like it.

• 1:32:43Jordi Hays?

  I like hitting the, I like hitting the gong for retirement funds.

• 1:32:46John Coogan?

  Yeah, yeah.

• 1:32:46Jordi Hays?

  That feels good.

• 1:32:47Josh Reeves?

  That's, that's, again, that's their people's money, that's their retirement peace of minds. But yeah, what we, what we realized is, there's a couple of things happening. One, we can do even more together. So, we're going to continue to partner with third parties on other products, but especially with 401K and retirement, like, we're going to really go deep. And that's what Guideline has done. They're a broker dealer, so there's all these different parts of the stack. Like, if you cut out the middleman, you can create better cost savings.

• 1:33:13Jordi Hays?

  I'm sure you had investors along the way that said, "You're sending so many customers to Guideline, why don't, why don't you just build this? You know, if you need, if you need more capital, we'll provide it." What, what, why did that not make sense? And why, why, why, why buy versus build in this situation?

• 1:33:32Josh Reeves?

  So, I think all options are always on the table when you're building a company, buy, partner, build. And for what we're doing, it's going to be a lot of connected problems. So, you know, how do we bring it together as one, simple, easy-to-use product is the key. But I'd say, yeah, the catalyst for shifting from partner to being one company is, like, there's just products that we can do that we can't do unless we're combined. I can give you a couple of examples if that's helpful.

• 1:33:57John Coogan?

  Yeah, please.

• 1:33:58Jordi Hays?

  Yeah.

• 1:33:59Josh Reeves?

  Yeah, so like, the journey of, of building a company or the employee journey, we think a lot about kind of the person by person, what happens in their life. But let's say someone gets promoted, right, and they get a pay increase. So that's obviously coming through our system because it's going to affect their salary. And in that moment, right, whether it's in the app or in an email, the, "Hey, like, you now have more money coming into your pocket." You know, "Your choice, but do you want to set aside a bit more in your 401K?" Or, someone has a kid, you know. In our system, that's a dependent, but that's a human being. Someone just had a kid, right? Like, maybe you want to go do something there in the context of retirement planning, or something related to health benefits. So, kind of thinking through the person-by-person journey piece of it.

• 1:34:41Josh Reeves?

  There's just things we can do that we think will drive more folks offering retirement benefits. There's also a compliance reason too, which I can get into.

• 1:34:50Jordi Hays?

  Let's get into it. We love this stuff.

• 1:34:51Josh Reeves?

  Yeah, so like government, right? We're here to like abstract government and sometimes there's carrot stick that government does. So 401K is a good example of a carrot. Like it's pre-tax dollars. So literally the government is making it hopefully a no brainer to like put aside money for retirement with meaningful amplification of that money than just, you know, putting it post-tax. But they also have compliance requirements. I think over now 20, close to 25 states have rolled out what's basically a mandate that businesses have to provide some type of retirement benefit for their teams. And so that's good intent, but it's still stressful because there can be penalties or fines.

• 1:35:31Josh Reeves?

  And so we're also excited that basically we can give peace of mind to more small businesses. So they're not stressed out, definitely not getting fined or penalized. And if they want to or need to set up a retirement benefit, we can make it brand dead simple through Gusto plus guideline.

• 1:35:44John Coogan?

  What's the anatomy of a partnership look like in this category pre-acquisition merger? We were talking a few days ago about the relationship between Apple and OpenAI. And we were kind of like, wait, like, should Apple be paying for the right to have good AI on their phones? Or should ChatGPT be paying because they get all these extra queries? And we were kind of, and I think like the rumor is they netted out to be like, there's no money transferred. And I could imagine that sometimes that comes up. Sometimes it's like, hey, I'm getting you customers. You gotta give me a fee. Like what are the structures? Do you have companies that are in one camp and the other? Or do you, can you share anything about the relationship beforehand?

• 1:36:26John Coogan?

  I'd be interested to know, just like, like channel sales is something I'm like learning about now.

• 1:36:31Josh Reeves?

  So the first thing to start with is Gusto's entire engine of growth, you know, here's another metric we can tee it up. But we're gonna, we're on track to add about 150,000 customers this year.

• 1:36:43John Coogan?

  That's a lot. Is that, is that businesses? That's small businesses. Wow, that's a lot of businesses.

• 1:36:49Josh Reeves?

  Yeah.

• 1:36:49John Coogan?

  Yeah, yeah, okay.

• 1:36:50Josh Reeves?

  And so

• 1:36:50Jordi Hays?

  You're talking to some guys that absolutely love business. So this is fantastic.

• 1:36:55John Coogan?

  The best news I've heard all day.

• 1:36:57Josh Reeves?

  We can get into our whole like, what is AI going to do in the world tangent if you want to.

• 1:37:03Josh Reeves?

  But yeah, we'll come back to that.

• 1:37:03John Coogan?

  Yeah.

• 1:37:04Josh Reeves?

  But no, so. Yeah, so basically, like, we are an engine to go bring in more and more small businesses, especially new employers, folks starting out, right? If you don't pay someone, they quit. So it's right off the bat, like, an important key thing for you to do if you're building a team or adding even your first employee.

• 1:37:20John Coogan?

  Yep.

• 1:37:20Josh Reeves?

  And so there's a lot of folks, as you can imagine, that would love to distribute through Gusto because of the scale that we're at. And so what that looks like first is not us starting with a partner, but starting with the small businesses and finding out, like, what are their pain points? Who are the products? What are the products they like or want to use already? They're voting with their actions that come in through our integrations. And then we do a lot of vetting, so I think more Apple approach than Android. We want to make sure quality experience, accuracy, reliability, and then, like, just this obsession with user experience comes through of whoever we're working with. And then, yeah, we'll do partnership deals across multiple product areas. Time tracking is another example. Sometimes we'll have first party, like, we'll do our own product and still have best-of-breed third party.

• 1:38:05John Coogan?

  Sure.

• 1:38:06Josh Reeves?

  And then that's a negotiation. There's usually, if we're going to drive a lot of customers to someone, there's some type of rev split.

• 1:38:11John Coogan?

  Yep.

• 1:38:12Josh Reeves?

  Because we're creating value for them, there should obviously be value for us.

• 1:38:14John Coogan?

  Yeah, that makes sense.

• 1:38:16Jordi Hays?

  What is your, what is your guidance for a ton of startups sign up for Gusto today? When they're one or two people, it's just the founders? And what is, what is your kind of framework for, you know, the right companies to use Gusto? And because, you know, again, companies today, they might start with a couple founders today and be thirty, thirty people in six months, right? These things happen.

• 1:38:41John Coogan?

  We're like, we got a vibe coder on.

• 1:38:42Jordi Hays?

  But how do you?

• 1:38:43John Coogan?

  We got to rip this out and vibe coder on. What could go wrong?

• 1:38:46Josh Reeves?

  Are you counting the, are you counting the AI agents as people or not? Is my question?

• 1:38:50Jordi Hays?

  Yeah, that's a good question. But yeah, how are you, how are you thinking of serving startups as of today? It's obviously, from my understanding, a lot of where you guys started, but it's always evolving.

• 1:39:01Josh Reeves?

  Yeah, I mean, as a quick backdrop, you're alluding to three founders. We all started here in Silicon Valley. We went through Y C. You know, I was born and raised here. My, my parents aren't from tech, though. They came from like, uh, my dad was a teacher, my mom was a teacher. Um, and so

• 1:39:14Jordi Hays?

  Same here.

• 1:39:15Josh Reeves?

  But we are physically here. Oh, yeah. Where did you teach?

• 1:39:18Jordi Hays?

  Uh, in high school that I went to.

• 1:39:20Josh Reeves?

  High school. My dad, my dad's had high school.

• 1:39:23Jordi Hays?

  Very cool. But yeah, it was funny. I, I think, uh, I don't know if I asked my dad this. I don't think he would have had a great answer, but I do remember asking somebody back in the day, how do I pay myself? I was had a company who was starting to make money. I was like, how do I pay myself? And they're like, oh, you just set up like gusto and you're just on board yourself. And I was like, oh, that's cool.

• 1:39:43Josh Reeves?

  Well, we love serving small business. Obviously, tech startups are a part of what we do. We love serving them too. I guess from a like target customer lens, you know, broadly speaking, like one to 100 person companies is our sweet spot. That's 98% of the employers in America. But I always love like also kind of blows people mind usually there's there are 6 million employers in America, give or take. Two thirds are less than five employees.

• 1:40:07Jordi Hays?

  Wow.

• 1:40:08Josh Reeves?

  Right? Two thirds are less than five employees. So whenever I meet a small business owner and there are three people and they say I'm small. I'm like, no, you're not small. You're like the common business owner in America. You are the average. Yeah.

• 1:40:19Jordi Hays?

  Well, uh, quick thoughts on AI, cause you alluded to it earlier.

• 1:40:23John Coogan?

  Yeah, I'm interested in, I'm interested specifically in how you think about surfacing AI. Like, do you want to put a chat box in some, in front of someone? And then that's an interface to all of the

• 1:40:34John Coogan?

  the deterministic workflows you've built? Or do you want to just turn AI loose within your, you know, behind the scenes development team? And have flows that are working just to improve things, reality check things like you're probably using machine learning for fraud detection for years. Is it an evolution of that?

• 1:40:53Josh Reeves?

  There's a product manager inside of you. I would say yes to both and more. So like, we do a lot of complex kind of backend processing of either money movement, filings, documents. There's a lot of ways to use AI tooling for productivity there. So that's great. And we've always used technology for how we scale, right? Like, we serve over 400,000 customers today. It's only possible through using a lot of software. But from a customer experience lens, actually, again, both, I really think there's this massive, I mean, understatement here, but paradigm shift around how we use software and how software helps us. You know, when I got into software in high school, like, what I loved about it is it felt like it gave you superpowers. And then every time I saw, like, books on how to use a tool, or I learned, like, someone

• 1:41:38Josh Reeves?

  would brag on LinkedIn, "I can use this tool," it like, really, really annoyed me. Because software is not something you should have to learn how to use. It should just work. It should just make sense. It should be intuitive. It should give you superpowers. So conversational interface, I think, is going to be a pretty, I mean, again, understatement, but like, much more accessible way for a lot of folks to use software. And it'll work in combination with web workflows and stuff like that. And so we have a conversational interface for Gusto called Gus. And to your point, it can take actions, right? You get it. You get it. But like, you can like, set up a shift schedule. You can go run payroll. Like, you can leverage all of our APIs that we spent 14 years building, and Gus can do stuff for you, not just give you information.

• 1:42:18John Coogan?

  Funny story. My dog's name is Gus Gustavo, and I have a friend who could never, he was so into B2B software, he works in the B2B software industry, that he didn't understand that my dog's name was Gustavo, and for a long time, he would call him Gusto. I was like, I didn't name my dog after the software platform. But, speaking of dogs, Bill Bishop is in the Substack stream from Sinusism, and he says he's a happy Gusto client, so you have another fan listening right now.

• 1:42:50Josh Reeves?

  Thrilled to serve you.

• 1:42:50Jordi Hays?

  I have one, I have one question, and I'm curious. When, when I got onto Gusto, back in the day, it was, it was close to a decade ago at this point. I was, I was confused that I had to hit the button to run payroll. I was like, is this not a payroll platform?

• 1:43:08John Coogan?

  Yes, yes, yes.

• 1:43:09Jordi Hays?

  Why do I have to? And I remember there was a couple of times that I would get an email and it'd be like, I'd be like, you're like, you need to run payroll now. And I was like, why? I, I, I think you do, you can automate it now, but is there,

• 1:43:20Josh Reeves?

  yeah.

• 1:43:21Jordi Hays?

  Yeah. Is there, is there kind of a generational divide there in some ways where there's like a generation that understands like payroll is something that you hit a button and you run it? Versus payroll is just something that is just humming.

• 1:43:33John Coogan?

  At the first startup I ever interned at, uh, the CFO hated me because I would always turn in my timesheets late and he's like, I need to run payroll. And I'm like, just pay me the same every month. I'm fine. Like you can just put it on autopilot. And they're like, autopilot doesn't exist. This is 2006 or something like that.

• 1:43:50Josh Reeves?

  So we, we rolled out autopilot for payroll back in like 2013, 14.

• 1:43:54John Coogan?

  It was fantastic.

• 1:43:55Josh Reeves?

  Yeah. So the key, the difference here between both of your use cases was if you have nothing to input. So if it's like, let's say all salary versus some hourly, um, and/or like no one took PTO. But again, there's, there's inputs that go into payroll. Now, assuming that's all there, like it should just work and that's the way it does work. We, way back when, this is now 2013 ish, like we have a Penny the Pig is kind of our, like kind of a, part of our company, kind of brand, culture, mascot.

• 1:44:21Jordi Hays?

  I could see Penny and Gus potentially beefing over who's the most important.

• 1:44:26Josh Reeves?

  I mean, they're, they're, they're, they're friendly with each other. There's a friendly competition, but, but we had to have the gif. It was a gif for like running payroll when you clicked run and it went too fast. And we had customers back then go, like, it can't be that fast. Something is broken. So we had the gif just run longer for the sake of it. Just to make people be like, hey, there's actually hard processing happening behind the scenes here. And, and the world's come a long way since then. So people expect stuff to be fast, simple. Um, we want to automate. I mean, a good example is 401k. So if you want to go change the contribution that's being made, like that can now be done easier by us being one company. But yeah, I, we think eventually payroll becomes something like flowing water. It just works. And, and you don't have to do much, um, direct action yourself.

• 1:45:08John Coogan?

  Fantastic. Well, thank you so much for hopping on.

• 1:45:10Jordi Hays?

  Chatting, uh, the acquisition makes a ton of sense and congrats to both teams.

• 1:45:14John Coogan?

  We'll talk to you soon.

• 1:45:15Josh Reeves?

  Yeah. And make sure you give that teammate a 401k.

• 1:45:17John Coogan?

  We will.

• 1:45:19Jordi Hays?

  It's happening.

• 1:45:20John Coogan?

  Have a good one.

• 1:45:20Jordi Hays?

  Thanks, Josh.

• 1:45:21Josh Reeves?

  Good to see you.

• 1:45:22John Coogan?

  And we have Keller from ZipLine in the restream waiting room. Big news. Chipotle is now live. Chipotle partners with ZipLine for aerial delivery.

• 1:45:34Jordi Hays?

  Let's go. Welcome back Keller. We missed you.

• 1:45:37John Coogan?

  Stream. How you doing?

• 1:45:38Jordi Hays?

  Even more dramatic background this time.

• 1:45:40John Coogan?

  Every time you deliver, thank you so much for hopping on.

• 1:45:43Keller Rinaudo Cliffton?

  That's our job, right?

• 1:45:45John Coogan?

  Yeah. That was unintentional. Anyway, how did this come together? It seems, it seems like the perfect partner. Walk us through the, the evolution, actually what went into the announcement.

• 1:45:58Keller Rinaudo Cliffton?

  Yeah. I mean, we, we've been talking to Chipotle for a while. We obviously have announced a few other restaurant partners. I mean, you know, for reference, like there was a time in my life where I lived on Chipotle. Like that was my primary.

• 1:46:09Jordi Hays?

  Every entrepreneur has like a Chipotle era.

• 1:46:12John Coogan?

  Raise your hand in the studio if you've lived on Chipotle. I think everyone's raising their hand.

• 1:46:16Jordi Hays?

  Yeah. You're getting more, it's just a period of your life where you're getting more calories from Chipotle than anywhere else.

• 1:46:22John Coogan?

  Oh, yes, absolutely.

• 1:46:23Jordi Hays?

  I can distinctly remember those moments.

• 1:46:26Keller Rinaudo Cliffton?

  It's the base of the pyramid. I also remember, I also remember, I feel like you guys would appreciate this. You know, there was a time when I was living out of my car action, like eating Chipotle and you know, $10, you could get like two full meals out of it.

• 1:46:37Jordi Hays?

  And then you could, you could get like the tortillas too. Those were free. That was a hack.

• 1:46:41Keller Rinaudo Cliffton?

  Plus the tortilla. There's a lot of optimization that you can do. And I remember thinking that like, one day I will know, like, like how will I know if I'm rich? I will be able to get the guacamole every time without feeling guilty about it.

• 1:46:58John Coogan?

  I have the exact same story. When I went through YC in 2012, my business partner, my co-founder, would always get double meat. And I was like, we're trying to save money. We don't, we can't afford double meat.

• 1:47:10Jordi Hays?

  Get double beans. Double beans are free.

• 1:47:12John Coogan?

  It was tearing us apart. And then I finally just defaulted to like, look, if you, if you're going to get it, I'm going to get it too. And we will both fall on the sword of higher burn. And to this day, if I,

• 1:47:23Keller Rinaudo Cliffton?

  That's called moral hazard.

• 1:47:24John Coogan?

  Yeah, moral hazard. But to this day, if I eat out with him and we're at a restaurant, I'll just be like, get whatever he gets. Cause I know he's going to get something ridiculous and he's getting the most expensive thing on the menu. And at least then I get stuck with the half of the bill and I'm happy. I'm not like, ah, I got stuck. We're paying for his expensive thing. Anyway, congratulations. We love Chipotle. What else? What else can you share about the progress of the business? It's felt like, you know, classic overnight success as we love to talk about on the show, but.

• 1:47:50Jordi Hays?

  Also, how did you get them to actually name it Chipotle?

• 1:47:54Keller Rinaudo Cliffton?

  That was their idea. That was their idea, not ours.

• 1:47:57Jordi Hays?

  That's amazing.

• 1:47:58Keller Rinaudo Cliffton?

  I think, you know, look, I think that what we're, you know, obviously there's this like big transformation coming in AI and robotics. And there are a lot of, you know, very fancy hyperscalers that get talked about all the time. But the reality is that like all the basic businesses and brands that we use and love also want to be able to take advantage of this kind of technology. And so I think a lot of, you know, some of the biggest brands like Chipotle are asking themselves like, hey, how can we use robotics? Automation to like accelerate or, you know, dramatically transform our own brand and the kinds of experiences we can provide to customers. So, yeah, them choosing Chipotle, us starting to deliver for them. I mean, I think that we did a delivery in five minutes yesterday from like order made to the thing arriving at a customer's house.

• 1:48:42Keller Rinaudo Cliffton?

  That's not possible every time, just to be clear. It does take time to make the food. But like, you know, I think that if something's showing up super, super fast like that. In fact, we've found it has been necessary because we've only started really rapidly scaling these food deliveries in the last couple of months. It's actually necessary to tell customers to slow down and make sure to blow on the food. We've had people accidentally burn themselves.

• 1:49:04Jordi Hays?

  Good problem to have.

• 1:49:05Keller Rinaudo Cliffton?

  It's like a weird, yeah, weird, weird thing, right? People are just used to it being cold or smoosh. Yeah, it's just not, not that great. So, you know, really cool to see that starting to scale, especially for a brand that's like very near and dear to my entrepreneurial journey and heart. I mean, yeah, you know, other things that we're seeing, even since we were last talking, which I think was like, I don't know, 10 weeks ago or something. Yeah, a couple, couple of months ago, we have seen, you know, a problem that we were having in July was that the service was growing extremely fast. Between 25 and 30% week over week in terms of flight volumes. In fact, yeah, like, so, you know, Saturday, new record high flight volume. Sunday, we actually beat Saturday by 20%. This is just two days ago.

• 1:49:49Keller Rinaudo Cliffton?

  Yesterday, you know, Monday was a record day. Tuesday was a record day.

• 1:49:53Jordi Hays?

  That's amazing.

• 1:49:53Keller Rinaudo Cliffton?

  Really cool.

• 1:49:56Keller Rinaudo Cliffton?

  If you keep giving us records, I'm gonna keep hitting the air. We can just do the horns. Cool it with the records. No, but even cooler is that, you know, right now, the service has a net promoter score of 94. So, you know, very few services in the United States are close to that today, let alone delivery services. Customers are ordering, a lot of customers are ordering like three to four times per week. In fact, we have many customers who are ordering a couple of times a day via this service. I think that, you know, when you realize you can get stuff in five minutes, it actually starts to change the way that you kind of live your lives. It's giving people back like three or four hours a week when they can just be focusing on their kids or on their family rather than like stressing out with traffic and trying to get somewhere.

• 1:50:42Keller Rinaudo Cliffton?

  At this rate, in a couple of months, our deliveries in the US are going to exceed all of our global flight volume across eight other countries. So, yeah, US is growing super, super fast now. We're launching a new Walmart Supercenter every week at this pace. It's just, yeah, I think, you know, I think the moment for automation and autonomous delivery has arrived.

• 1:51:03John Coogan?

  So is Walmart...

• 1:51:05Keller Rinaudo Cliffton?

  It's a 10-year overnight success.

• 1:51:06John Coogan?

  Should I think about the expansion as driven by go where the Walmarts are and then talk to the city officials to get support? And Walmart's kind of like the backbone? Or is it more like find other cities like Dallas, whether they're in Texas or not, and then partner with companies and businesses that are in those kind of friendly cities that understand the value that this can bring and the demand? And then, and then kind of roll out that way? Like, is there a particular path that you're taking? How should I imagine the map of zipline growing, or the coverage map growing over the next few years?

• 1:51:43Keller Rinaudo Cliffton?

  Yeah, that's a really prescient question. I mean, Walmart has been a key partner. We're building a lot of charging infrastructure across these metros with them. We're also building independent charging infrastructure that's just designed to serve a lot of different customers at once. So, for example, we just opened a big charging site in Rowlett. It's a small city inside, a small town inside Dallas, where like that one site is going to be able to serve, I think, upwards of 40 or 50 restaurants that are all within range. And then from there, we can deliver out to customer homes as long as they're within 10 miles. So like, one key thing to think about here is it's kind of a network optimization problem, but we go a lot farther than normal delivery. You know, where you have a human driving a car wants to go any from any given restaurant,

• 1:52:27Keller Rinaudo Cliffton?

  you can typically reach 10 times as many people via instant delivery.

• 1:52:31John Coogan?

  Wow.

• 1:52:32Keller Rinaudo Cliffton?

  As as via, you know, traditional delivery. So and again, you know, 10 times as fast. So we're really focused on going metro by metro right now. A lot of our costs, you know, maintenance kind of happens on a metro basis. So we're we're going to go tall, like the goal is to go very tall in each metro. We have a lot of metros now that are like super, super excited and basically on the roadmap for us to launch.

• 1:52:53John Coogan?

  Yep.

• 1:52:54Keller Rinaudo Cliffton?

  And we're and we're, you know, we're trying to build the capacity and launch them as quickly as possible. But, you know, building this kind of infrastructure across the US, it's like it's a big undertaking. And, you know, the other, the other cool thing to mention, just really quick, is that like, you know, one thing I'm very, very proud of, more proud of every day. I mean, ZipLine now has 120 million commercial autonomous miles. It's the largest commercial autonomous system on earth. Zero safety incidents.

• 1:53:19John Coogan?

  That's crazy.

• 1:53:19Keller Rinaudo Cliffton?

  That's the main point.

• 1:53:20John Coogan?

  Yeah.

• 1:53:20Keller Rinaudo Cliffton?

  Zero safety incidents. Actually, if you just look at the basic safety of cars globally, the system is already provably about 10 times as safe as cars. In terms of fatalities or injuries. And, you know, from that safety perspective, I mean, like, you know, ZipLine is actually right now about, we have, we have already achieved a level of safety that is 2X the goal that we had set by the end of this year. So like, again, safety and reliability is kind of everything. It's like the core of what we do. And it's a big part of like, why I think cities are starting to understand like, this is a incontrovertibly good thing.

• 1:53:52John Coogan?

  Is this a problem for Pizza Hut? Pizza Hut, famously, the buildings are huts. You can't land on the roof. How are we going to get pizzas from Pizza Hut in?

• 1:54:00Keller Rinaudo Cliffton?

  Important questions.

• 1:54:01John Coogan?

  The important questions. But but seriously, like, is there?

• 1:54:03Keller Rinaudo Cliffton?

  I thought you were going to ask about the size of the pizza.

• 1:54:05John Coogan?

  Oh, no, no, no, no.

• 1:54:05Keller Rinaudo Cliffton?

  Because actually, because actually, we are working with it.

• 1:54:07John Coogan?

  You are working on a pizza compatible.

• 1:54:10Keller Rinaudo Cliffton?

  We just, we just cut it in half.

• 1:54:11John Coogan?

  Okay, oh, great, calzones. The comeback of the calzone.

• 1:54:15Keller Rinaudo Cliffton?

  We already have, we already have the box designed for a couple of different pizza partners. It works great.

• 1:54:19John Coogan?

  Should, should, should franchisees be thinking about a flat roof? Is that relevant? What does the actual infrastructure look like as and like, should, should restaurants and businesses be thinking about ZipLine compatibility as they roll out the next like version of their, of their retail infrastructure or their, their residential plan or the real estate plan?

• 1:54:42Keller Rinaudo Cliffton?

  Yeah, so it's pretty cool. I mean, first of all, one of the things we announced just in the last couple of months is something we call zipping points. And zipping points are really simple infrastructure. We pay for it. We can drop it in two hours. It does not have to be permitted. There's no construction. As long as we drop a zipping point with a restaurant, or a retailer, or a hospital, or primary care facility, they're instantly enabled with zip line delivery.

• 1:55:03Jordi Hays?

  Got it.

• 1:55:03Keller Rinaudo Cliffton?

  No power, no permitting, nothing.

• 1:55:05Jordi Hays?

  Yep.

• 1:55:05Keller Rinaudo Cliffton?

  Do not have to do anything for the building. Interestingly, we are talking to like a lot of hotels, a lot of apartment buildings, and a lot of even these restaurants as they because for example, a lot of these big restaurant brands, they'll only have like two or three or four total designs of buildings that they'll build.

• 1:55:20Jordi Hays?

  Yep.

• 1:55:20Keller Rinaudo Cliffton?

  And they are in fact now starting to take into account zip line and they're starting to design specifically for autonomous delivery. You don't have to do that, but you can. You know, one big point I would make here is that like the thing that blows my mind, I mean, starting to see this like exponential takeoff from a demand perspective. I would emphasize, by the way, we freaked out enough about demand four weeks ago that we turned off all marketing, all demand generation marketing in the company. We turned off all the in-app notifications. We turned off all the field marketing that we were doing and it basically made no difference. Like we've continued to grow 25 or 30%, you know, week over week. I think that the reason this is happening in retrospect is kind of obvious.

• 1:55:59Keller Rinaudo Cliffton?

  Which is, you know, we're now starting to deliver to a lot of offices. We're delivering to a lot of apartment buildings. We're delivering to universities. Like I think the product is way more viral.

• 1:56:09Jordi Hays?

  Yeah, when you think about the virality of the product, I mean, I'm sure this is already happening or will happen, which is a How can you not make an Instagram story about this? Yeah, my brain goes to some guys at a fraternity order a 30 rack. It's dropped into the backyard and I don't know if you're doing that. You're probably not doing that yet, but that is a very viral moment that people will be taking videos of for a long time.

• 1:56:32Keller Rinaudo Cliffton?

  You can see, I mean Tons of people are doing TikToks and a lot of those TikToks are getting seen like seven, eight million times. We were actually initially asking customers to not like, you know, put stuff on social just because like we wanted a chance to do an early access program and kind of like, you know, iron out the kinks. But yeah, even, even people who aren't customers are sometimes like videoing their neighbor, getting a delivery and then putting it on TikTok and having it get seen millions of times. So it is cool.

• 1:56:59Jordi Hays?

  Amazing stuff. Always, always great to chat with you. Shout out to Danielle, your, whoever's running your comms program because your remote call-in setup I think is the best of any.

• 1:57:11Keller Rinaudo Cliffton?

  This is, this is the main, I mean, this is the manufacturing line. So this, this line is ultimately capable of producing about 55,000 aircraft a year and that's scaling to that as fast as we possibly can. We have to, we have to learn how to build drones in the US.

• 1:57:25John Coogan?

  Yeah. Yeah. I'm very excited. Thank you. We will talk to you soon.

• 1:57:29Jordi Hays?

  Always welcome here.

• 1:57:30John Coogan?

  Anytime.

• 1:57:31Jordi Hays?

  Talk soon, Kelly.

• 1:57:32Keller Rinaudo Cliffton?

  Awesome, you guys. All right.

• 1:57:33Jordi Hays?

  Cheers.

• 1:57:33Keller Rinaudo Cliffton?

  Talk soon. Thanks.

• 1:57:35John Coogan?

  Up next, we have 8sleep.com. I get a pot five ultra. I put on a clinic last night. Jordi Pele, my favorite soundboard cue. I got a 90.

• 1:57:45Jordi Hays?

  Oh, good for you. I got an 84.

• 1:57:48John Coogan?

  Roasted. 100% quality, 88% consistency, six hours and 31 minutes slept. I'm on a run. Got a five year warranty, 30 night risk free trial, free returns, free shipping. Head over to 8sleep.

• 1:57:59Jordi Hays?

  TBPM. I'll be right back.

• 1:58:01John Coogan?

  And I will talk to Will. How are you doing?

• 1:58:04Will Brown?

  Hey, how's it going? Great to be back.

• 1:58:07John Coogan?

  Jordi just plays a sound cue and steps away. What's new in your world? Just, yeah, what's, what's the latest?

• 1:58:18Will Brown?

  Yeah. So about half an hour ago, we did a big launch of something we've been building for quite a while at Prime and Elect. So for those who are not met me, I'm Will Brown. I work at Prime and Elect for a open source research company as well as a compute platform.

• 1:58:33Will Brown?

  We've released something today called an Environment Hub, which is for RL environments as well as evals. And it's something we've been kind of working towards for quite a while. But I think it's also something that like a lot of people are talking about, but also like wondering like, what does this even mean?

• 1:58:46John Coogan?

  Yep.

• 1:58:47Will Brown?

  Um, like I, I saw like over the weekend, like Google Trends for RL environments like shot up. Um, and you guys had made some joke tweets about this recently that I thought were great about like.

• 1:58:58John Coogan?

  Ender, that's not an RL environment you were in. That's, you place real Amazon orders. Um, uh, it, it perfectly encapsulates my level of understanding here, so I'd love to go deeper. Uh, it feels like a bull case for distributed infrastructure generally because we're maybe like it's, maybe it's additive. Maybe it's, maybe it's, uh, replacing, but, uh, certainly less of the focus is on like, get a hundred thousand H100s in one single cluster. There's more to be done in different places, but well, you try and concretize it for me a little bit more like, like what is an RL environment? How are they being used? Uh, what are the, what are the, what are the trade offs in terms of compute and design of the infrastructure?

• 1:59:42John Coogan?

  Um, that, that actually delivers some sort of valuable product at the end of the day.

• 1:59:48Will Brown?

  Sure. Yeah. So I think we can get to the distributed aspect of it, but just like first, I think like an environment is essentially it's an eval. Like a lot of the things people make as like popular evals, like Sweetbench or like ArcAGI, like these are environments.

• 2:00:01John Coogan?

  Yep.

• 2:00:01Will Brown?

  Uh, they're a thing where you have some input tasks, you have some kind of harness, and then you have a thing at the end that looks at what your model or agent in the harness does and then says a score at the end. And so this is like the exact setup we use for evals, but it's also what you use for RL training. And so when people are talking about, oh, we're like gonna make a bunch of RL environments, what they really mean is they're making evals that are designed for like agents to, uh, do some task interactively.

• 2:00:27John Coogan?

  Yeah. Is the Amazon order, like we saw that report that, uh, some folks are building like full digital replicas. I mean, I guess it's already digital, but like a, like a, like a simulated environment of amazon.com or DoorDap.

• 2:00:41Will Brown?

  Yeah, totally.

• 2:00:41John Coogan?

  Are, are, are those kind of the power law opportunities that people are really focused on? Uh, what are some other examples? Are people, um, building these environments for like, you know, old, old enterprise software systems that people want agents to interact with? Like, how, how wide is this, is the scale of RL environments right now?

• 2:01:01Will Brown?

  Yeah, it's pretty huge, actually. So I think I think there is like these kind of like flagship websites or things, but I think there's also like a long tail of like increasingly niche applications that go down towards like these very fine-grained narrow things all the way up towards like broad domains where models really struggle because we don't have a good like interface for them. Like Excel is one of it's like everyone uses Excel, but like no one is really like an L M power user in Excel because it doesn't integrate very well. Um, no, we don't have the cursor for Excel yet as a broadly deployed thing.

• 2:01:31John Coogan?

  Yep.

• 2:01:32Will Brown?

  I think it's easier to have an environment for a terminal or for a coding agent because the harness is a little simpler. And so that's one sort of thing you'd want as like an environment. And that's one of the sort of things that like the mechanisms of the world, I imagine, are like building these sorts of things.

• 2:01:44John Coogan?

  Yeah.

• 2:01:44Will Brown?

  Um, I'm sure that like the labs all have their idea of like what tasks their customers want models to be better at.

• 2:01:50John Coogan?

  Yeah.

• 2:01:50Will Brown?

  They're currently not being used for as well as just like what sorts of products are people trying to build? So like you can build the greatest agent harness in the world, but like if your model hasn't been trained for it.

• 2:01:59John Coogan?

  Sure.

• 2:01:59Will Brown?

  Like some models might just like not be very good because it's not very ergonomic for them. And so you can think of environments as like a way of taking a model like having an interface that you really want your models to be great in, like a harness and then just like a feedback loop that lets it get better at being a model or agent in that harness.

• 2:02:16John Coogan?

  Yeah. Help me understand the Excel case more specifically. Uh, Copilot exists there. We're hoping that Microsoft rebrands it as Clippy eventually, but uh, there are also like seven different startups that are building, uh, you know, a cursor for Excel. Uh, what, help me understand the context of verifiable rewards and what that would look like in Excel because if I, if I'm trying to do an analysis, I'm trying to understand a company's financials, build a DCF, like there are templates, but then to actually get the correct valuation, that's something that like even if I have the perfect DCF and it tells me that Nvidia is worth five trillion, like I can't verify that against the market. I could wait a year,

• 2:02:58John Coogan?

  but the DCF could still be right and the market could be wrong. So, um, like what does verifiable reward look like? What are people actually building towards in that environment, you think?

• 2:03:07Will Brown?

  Right, yeah, so the easiest recipe, which uh like we've done work on as well as I've seen a lot of papers about this and it also is just kind of like the obvious only real thing you can do is have a correct answer.

• 2:03:18John Coogan?

  Yeah.

• 2:03:18Will Brown?

  Where it's like, there is a gold standard, like someone made this DCF.

• 2:03:21John Coogan?

  Yep.

• 2:03:22Will Brown?

  Um, and we, the agent doesn't see the finished one.

• 2:03:24John Coogan?

  Sure.

• 2:03:25Will Brown?

  And it's like, new enough that it's out of the training distribution from pre-training.

• 2:03:29John Coogan?

  Yep.

• 2:03:29Will Brown?

  Um, like past six months is perfect. And then you want to train your model to like be in the harness where it could make the DCF.

• 2:03:36John Coogan?

  Mm-hmm.

• 2:03:36Will Brown?

  And then look at what it produces and then you have all these different things you can check of like, did it get all these fields right?

• 2:03:41John Coogan?

  Yeah.

• 2:03:41Will Brown?

  Um, and this, those evaluations are a combination of like, uh, like vibe checks, spot checks, when humans are looking at it for like, this is how kind of people have been doing this historically, is you just like, you build a thing, you try it out, you look at it, you try to make a list of what's wrong and that doesn't really scale, so to scale it, you need to automate this evaluation trunk.

• 2:03:59John Coogan?

  Yeah.

• 2:03:59Will Brown?

  Um, where you want to have a thing that comes out like a DCF, a spreadsheet or a paper or a piece of code, and have a way of programmatically checking this, and this checking usually is going to involve LMs in the loop. Maybe fine-tuned LMs or customize LMs for grading whether the thing has been done correctly and then this like, you got to iterate on this meta process a bit to have a good grader. Um, and see like, does the, does the result of your grader match your human vibe check, your spot check, based on having some kind of experts in the loop? But what you then want to do is take that kind of evaluation process and freeze it as a kind of piece of code.

• 2:04:33John Coogan?

  Mm-hmm.

• 2:04:34Will Brown?

  And now you can plug this into your harness. So the harness plucks some like input tasks to like, do this for every company. Um, and your like gold standards for every company of like whatever work should look like made by some analyst. You're grading against like the golden answer and now you scale this up.

• 2:04:48John Coogan?

  What was industry standard before you rolled this out would, it would like the actual AI researchers or, or AI engineers who were going to uh, do reinforcement learning on a model in a particular domain, actually design and implement the environment with the reward all internally and it didn't exist as an external function whatsoever? Was that the status quo?

• 2:05:14Will Brown?

  Uh, in terms of like open source infrastructure or like the, in terms of like

• 2:05:18John Coogan?

  Just broadly, yeah.

• 2:05:19Will Brown?

  Very few people have been doing this. The amount of people who have successfully trained a large scale agent model with reinforcement learning is very small.

• 2:05:27John Coogan?

  Yeah.

• 2:05:27Will Brown?

  It is not broadly deployed. Like the companies that are like on the periphery of maybe doing it are like cursor perplexity.

• 2:05:35John Coogan?

  Yeah, so.

• 2:05:35Will Brown?

  It's not a thing that like.

• 2:05:37John Coogan?

  Yeah, when I hear a lot of like, we're an AI agent startup, what that really means is like, maybe you're leveraging another agent or some sort of agentic API in that particular case. And then maybe.

• 2:05:49Will Brown?

  They're using.

• 2:05:49John Coogan?

  Yeah, you might, you might train your own. Um, and maybe that's the, is there a significant cost to this? Like, does this affect? If I, if I just take the landscape of like, everyone who's building cursor for X right now, that implies that at some point they, like, if we see this bifurcation in the, in the market for cursor for X really is, you know, highly fragmented and there's not just one

• 2:06:13Will Brown?

  Yeah.

• 2:06:13John Coogan?

  foundation model company that just eats everything. Um, are you going to see small RL uh, reinforcement learning environments with verified rewards in every single sub niche of SaaS that these companies are going after? And would they have like material costs to that? Is it expensive?

• 2:06:30Will Brown?

  Uh, so like, I think you have to build the harness anyways. I think one of the hardest things to scale is building good evaluations and criteria.

• 2:06:37John Coogan?

  Yep.

• 2:06:37Will Brown?

  If you can do the evaluation bit, um, depending on like how, so one thing is like the infrastructure problem of like doing this for like a frontier scale model.

• 2:06:46John Coogan?

  Yeah.

• 2:06:47Will Brown?

  Uh, is not broadly accessible. It's not the thing that you can just like put in money and it comes out. That's what we're working on building.

• 2:06:52John Coogan?

  Yeah.

• 2:06:54Will Brown?

  But you can do it with like these like tiny models, like the non-mix, so kind of technical thing is like to serve models at scale, you really want them to be like large mixture of experts, models

• 2:07:04John Coogan?

  Sure.

• 2:07:04Will Brown?

  that are efficient for inference. The current ecosystem for tooling for doing that yourself is not great. Um, most people are doing like Lama and Quan experiments and these models are like, they're good models, kind of, but like, they're not really what you want to deploy.

• 2:07:18John Coogan?

  It's a good model, sir. Okay, so. Um, yeah, is that, uh, wait, can you give me a, like a rough order magnitude for the, for the level of cost that it would, it would, if I have a problem, a specific domain where I think I need to, uh, train an agent in an RL environment. I have the verifiable reward. My AI researcher has, you know, defined the harness and the reward, and I go to you to actually do, uh, the, the RL on top of maybe an open source model. Am I, am I talking about tens of millions of dollars of GPU costs? Like, like, try and ground it for me a little bit more.

• 2:07:58Will Brown?

  Uh, like, I would say this is like napkin math.

• 2:08:02John Coogan?

  Yeah.

• 2:08:02Will Brown?

  Like, if you want to do like a serious run that would like meaningfully improve a model of like the DeepSeek or Kimi scale, we're talking like hundreds of thousands for like a so big boy serious one. Um, you can do a lot for thousands, actually.

• 2:08:17John Coogan?

  So it's kind of like, yeah, like those old.

• 2:08:18Will Brown?

  In terms of raw compute.

• 2:08:19John Coogan?

  Yeah, like when, when people were like, oh, I fine tuned Llama on this thing and now it, now it does this funny thing. Or I fine tuned this image model on my face. Like, those used to be like, kind of like prosumer level projects. Now we're getting into the, okay, this is like a enterprise level effort, but it's probably not gonna, you don't need to call up SoftBank to get it done.

• 2:08:41Will Brown?

  Right. I mean, there's like a, there's a whole spectrum of these things. And that's why it's hard to like say like, what's the bucket? Because you can like, you can fine tune Llama on your laptop.

• 2:08:48John Coogan?

  Sure.

• 2:08:49Will Brown?

  But you also, you can't fine tune like Kimi or DeepSeek, the big ones on your laptop.

• 2:08:53John Coogan?

  Yep.

• 2:08:53Will Brown?

  Um, and also it's like, how long running is the task?

• 2:08:57John Coogan?

  Yep.

• 2:08:57Will Brown?

  How many samples do you need? How much do you really want to crank it? Like, it's one of those things where you can kind of just like get more as you dump in more compute.

• 2:09:05John Coogan?

  Yep.

• 2:09:06Will Brown?

  Um, but currently people are spending a very large fraction of their total compute costs on experimentation and rebuilding the same shit. Like, there's not, it's not easy to do this stuff. Like getting your GPUs to work correctly, getting your like libraries to work correctly, um, deciding what hyperparameters to use. Like, people spend, and this is one of the reasons that like the labs that needed so much compute and why the expenses are so high is that like, they have all these researchers and researchers are all doing experiments, and each of these experiments is like thousands of dollars of compute. Um, and you multiply this over a year and a hundred researchers, that's a lot. Um.

• 2:09:43John Coogan?

  Okay, I want you, sorry, you can finish, sorry.

• 2:09:47Will Brown?

  Oh, sure. Yeah, just that like, I think there's some of these pieces that like, once you can get the the hard questions answered once, you don't need to keep redoing them for every new environment. You can kind of have some very cheap spot checks, like a kind of one-shot eval, like how good is the model to start is kind of be a bellwether for like, is the running going to work?

• 2:10:04John Coogan?

  Okay, loosely related to somewhat of the concept of generalizability, I want your reaction to this Rune to this Rune post. Rune said, "My bar for AGI is an AI that can learn to run a gas station for a year without a team of scientists collecting the gas station data set. What do you think about that as a bar for AGI? We don't need these RL environments for specific, for specific tasks." What are your thoughts?

• 2:10:32Will Brown?

  I mean, one thing you might have that look like is the, like, I think that could be answered by an agent who realizes it's not good at gas station stuff and figures out how to kind of create its own training environment. It's like, okay, I need to practice. The same way that like, if you want to learn how to code, you got to go find stuff to practice on. Maybe that's one way of thinking about what that level of AGI means of like truly self-learning, like build your own tasks and curate your own tasks in a way that allows you to check whether you've been doing them correctly or not.

• 2:10:58John Coogan?

  Yeah, yeah, it does feel like we're in this era where there are a few really obvious things that we want to RL on and get really good at. And you see that with the IMO and the math and the deep research reports and they're very reliable. But then, once you come up with some random task, then you need the gas station data set. And so, yeah, maybe the future is, is go and find those autonomously and, and set up the reward function train and then iterate and bake that in.

• 2:11:26Will Brown?

  Yeah, but I think, yeah, sorry, go ahead. Oh, yeah, just because I think one way to do this is just like, the environment can be the thing you're going to serve. It's like, Cursor is an environment, lovable is an environment. All these things, people are already kind of building things that could be environments if they connect the, like, the wiring correctly, but like... I think we're not quite there yet in terms of having this be a thing that people are scaling. And now like every company wants to like hire like environment builders and RL people.

• 2:11:55John Coogan?

  Yeah.

• 2:11:55Will Brown?

  And it's like, you're not, they're not all gonna hire people for this.

• 2:11:58John Coogan?

  Yeah.

• 2:11:58Will Brown?

  We need to kind of better ways of like scaling this out to more people and like infrastructure as a service, kind of.

• 2:12:03John Coogan?

  Yeah, that makes so much sense.

• 2:12:04Jordi Hays?

  Wanted to ask about Dario's comments in his interview with John Collison.

• 2:12:09John Coogan?

  Oh, sure.

• 2:12:09Jordi Hays?

  Talking about, uh, basically, I'll, I'll read the quote. He says, there's two different ways you could describe what's happening in the model business right now. So let's say in 2023, you train a model that costs a hundred million and then you deploy it in 2024 and it makes 200 million of revenue. Meanwhile, because of the scaling laws in 2024, you also train a model that costs one billion. And then in 2025, you get two billion of revenue from that one billion and you've spent 10 billion to train the model. So if you look in a conventional way at the profit and loss of the company, you've lost a hundred million in the first year, 800 in the second and eight billion in the third year. So it looks like it's getting worse and worse. If you consider each model to be a company, the model that was trained in 2023 was profitable. You paid a hundred million, then it made 200 million of revenue. There's some cost inference with the model, but let's just assume in this cartoonish example.

• 2:12:53Jordi Hays?

  Um, and so FinTwit has just been like freaking out about this, like being incredibly bearish. It's obviously a bu- a bubble, um, you know, and, and just kind of worried you have exponential, uh, increases in costs. And then unpredictable kind of like capital, uh, needs in the future. Why do you think they should stop freaking out, given that you were just over at, uh, at Goldman?

• 2:13:18Will Brown?

  Uh, more or less, but, uh, yeah, so, um, like, there's an element to the freaking out that's like kind of a good point, which is like, you can't keep doubling every year.

• 2:13:28John Coogan?

  Yeah.

• 2:13:29Will Brown?

  At some point, there's a plateau, um, and you can grow every year. You can still have like exponential growth, but the percentages are not gonna, there's only so many people to adopt AI products. Um, and once they adopt it, like, if they were gonna be spending more and more, it has to be delivering like a very large multiplier of new value per year. And there's some laws of physics of like how good models are gonna get, how like fast we can possibly make the chip. Like the chips are only gonna scale so quickly. We can only build so many GPUs year after year with the current like rate of growth. And so like, I do think there will be kind of like this basin we end up in where like stuff broadly works quite well. There are like a few big labs who have very good models that are like, you can deploy them. And then there's also like this kind of Pareto curve of like.

• 2:14:15Will Brown?

  How much can you spend? Uh, how fast does it need to be? How hands-on do you want to be for it? Um, like, how, like, uh, ni- narrow is your, like, thing you wanted to do? So if your thing is like, oh, I want to build a great browser agent? This is super broad. There's so many things you can do on a browser. If your thing is, I want to build an agent for writing Rust? This is my corner. Um, and so like, if you only, if you're making like the product for Rust developers, like the, uh, cursor, for example, you can make a model that's just as good as Claude for Opus, but that's much smaller and much cheaper, most likely, um, because the, the focus is like more narrow. And so this is kind of how I think about generalizability is like, you can spend more on compute, you can make the model bigger.

• 2:15:00Will Brown?

  These are all different axes to spend. And you can also make it like more narrow and go deeper on one thing. And so we're going to have a lot of knobs to turn, I think. Yeah.

• 2:15:08John Coogan?

  Are you broadly long RL environments, short normal pre-training data? Do you have a, do you have any like extra color on the relative value? Or like where the low-hanging fruit is across those two?

• 2:15:23Will Brown?

  I'm long both, but I think they're going to kind of turn into the same thing. Like, like one thing, for example, that people have been doing for like, pre-training recently is that people are just using like DeepCigar1 and generating tons of like reasoning samples from it. And then mixing those in at the end of pre-training and calling it mid-training. And it's like, is, in some sense, this is RL. Because it's just taking the juice from doing RL on like DeepC P3. But it's also pre-training. Um, and so I think one thing that we're excited about with environments and scaling these is like, you can get a lot of good data out of these by you have a, like a task set. You have the ability to generate agent data inside of this task set. You have a filter for throwing out the bad stuff and keeping the good stuff.

• 2:16:08Will Brown?

  And so can you just like do trillions of tokens this and put it into pre-training? Why not?

• 2:16:15John Coogan?

  Do you have insight into what's happening in the video or image world equivalent of RL environments, Verifib rewards, etc. Like, I was just shocked by the level of quality of text in images in ChatGPT.

• 2:16:31Will Brown?

  Yeah.

• 2:16:32John Coogan?

  We're seeing the same thing with Nano Banana from Gemini. And it felt like, it felt like images in ChatGPT particularly was like uniquely good at Studio Ghibli and uniquely good at text. And that felt like, I was, I was almost like putting on my tinfoil hat and saying like, they're using Photoshop here and they're doing two different layers or something. Or like, there's something else going on here that's just like, one really good model. Like, it feels spiky. It feels particularly good at text and particularly good at cartoons, but it hadn't gotten like way, way better at, you know, super photoreal imagery or whatever.

• 2:17:09Will Brown?

  Sure, sure.

• 2:17:09John Coogan?

  So, do you have, do you have any view on how you translate all the stuff that's happening in the, in the agents and text-based LLM world into sort of the diffusion and an image or video world?

• 2:17:21Will Brown?

  Sure, yeah. So like, I am not a diffusion expert or anything, but like, I, I imagine it's a mix of essentially these kind of environments where you have some grader.

• 2:17:30John Coogan?

  Yep.

• 2:17:31Will Brown?

  As well as like good old fashioned RLHAP, like the stuff people were doing for like InstructGPT, ChatGPT era, where it's like you have like a downvote.

• 2:17:38John Coogan?

  Yep.

• 2:17:38Will Brown?

  And then you're training a reward model to like check these. And I think the image domain is easier to kind of spot errors.

• 2:17:44John Coogan?

  Yep.

• 2:17:44Will Brown?

  Whether it's a human or an automatic grader, like if text is wrong, you can like do OCR on the image, get the text back out and see, is it the right image from the prompt? And so you, it's, this is like pretty easy to verify versus like, if a ChatGPT answer is like slop, how do you verify that it's slop? Like, what's the algorithm that checks if it's slop or not? Like, that's pretty hard.

• 2:18:04John Coogan?

  Yeah.

• 2:18:05Will Brown?

  And so in some sense, like, the image models were just like, for a while, they were bad at things that we could very easily measure. And it's getting, it's gotten harder to measure the things LLMs are bad at much faster. And so I think some of this is like the old fashioned tricks that made ChatGPT original version as good as it was, being applied to the image domain for kind of patching up the, the obvious fixes.

• 2:18:30Jordi Hays?

  Give me your hot take. How much, how much do you think Meta is paying mid-journey with that new deal they, they announced?

• 2:18:37Will Brown?

  It's a good question.

• 2:18:38Jordi Hays?

  Do you think it's nine figures a year?

• 2:18:42Will Brown?

  Hopefully, I mean, I'm like.

• 2:18:43Jordi Hays?

  It feels like, feels like it would be.

• 2:18:45Will Brown?

  More, maybe, I don't know.

• 2:18:46Jordi Hays?

  Yeah, yeah, yeah.

• 2:18:46Will Brown?

  They're spending crazy amounts on everything.

• 2:18:48Jordi Hays?

  Well, that's what I was saying, and it makes sense for mid-journey to want to have like a low-key announcement about it. But there's like another team that would have been like, we just signed a $500 million a year, 10-year deal, or something, something obscene, obscene that, that looks more like an acquisition, even though clearly, from a, from a dollar value standpoint, even though clearly, they're going to continue to operate independently.

• 2:19:16Will Brown?

  Yeah, I would kind of think of it as like mid-journey's version of doing an API business. So like, it could just be based on usage to, to, I'm sure there's a big picture from one of it. But like, think of like what, you can kind of do the nap and math by saying like, okay, what are other image providers like charging for API usage, like Val or like, um, Replicate, or like all these other services, like you can kind of nap and math the cost of an image or back it out from mid-journey's subscription prices, and how much they give you, and then say like, okay, how many of these are good people going to be doing? If they're doing like generative ads for Instagram, that's a lot. If they're doing like, every person has the ability to apply it to their Instagram posts or their stories, that's a lot. And so you can, the numbers can get crazy pretty quickly.

• 2:20:00Will Brown?

  And I think it does kind of depend on like, like if it's just ads, or if it's just to like certain customers, or it's not like deeply integrated, then it, like the scale is not as crazy as if it's like, no, you're really getting like mid-journey stuff everywhere for everyone instantly at volume.

• 2:20:17John Coogan?

  Yeah, I was, I was thinking when Studio Ghibli moment happened, that the response from Meta should be to pre-render or pre-generate a Studio Ghibli of every single person on Instagram's profile photo as a Ghibli? Because that's basically what people were doing in ChatGPT. Um, like pre generate that and then just when you, when you open Instagram, it just says, hey, we did this for you. Uh, do you want to share? And that would probably be like the biggest day of usage on Instagram, but it would also probably bankrupt the company because it'd probably be like fifty billion dollars worth of inference or something like that. I don't know.

• 2:20:56Will Brown?

  It's a lot of.

• 2:20:57John Coogan?

  It's a lot. And those images are expensive.

• 2:21:00Jordi Hays?

  Got some breaking news.

• 2:21:02John Coogan?

  Breaking news.

• 2:21:02Jordi Hays?

  Nvidia beat on revenue and earnings per share, but is down five percent.

• 2:21:07John Coogan?

  Wait, why?

• 2:21:09Will Brown?

  That's all.

• 2:21:09Jordi Hays?

  They beat hard enough. They didn't beat hard enough.

• 2:21:11John Coogan?

  Can we ring the gong for the?

• 2:21:12Jordi Hays?

  I mean, let's ring it. Yeah, four and one percent.

• 2:21:18John Coogan?

  Nvidia is Nvidia is, uh, like, uh, uh, both a competitor and a supplier partner, right, to you like?

• 2:21:25Will Brown?

  Yeah, I mean, we sell it. We resell the GPU. So like, we like, we're a big Nvidia fan.

• 2:21:29John Coogan?

  So you're rooting for them. That's great.

• 2:21:30Will Brown?

  Yeah. And I think Nvidia has been very friendly to like the ecosystem of players. Like Nvidia is not trying to be the like single, you can even like buy GPUs on their website. Like they don't sell GPUs to people.

• 2:21:42John Coogan?

  Yeah.

• 2:21:43Will Brown?

  They, they sell them to like data centers.

• 2:21:44John Coogan?

  Yeah, totally.

• 2:21:45Will Brown?

  Big companies.

• 2:21:46John Coogan?

  Yeah. And I, I know that there was that news that they were coming for the Neo clouds with DJX Lepton and it felt like, it felt like they were dipping their toe in that area, but it didn't feel like this was existential for anyone else in the, in the ecosystem. It felt somewhat additive. I don't know if you have a take, but.

• 2:22:04Will Brown?

  Oh, yeah. So I mean, I think it's also like a different, like they're gonna kind of offer that as like a very premium, like white glove sort of thing to certain enterprises.

• 2:22:12John Coogan?

  Sure.

• 2:22:13Will Brown?

  I think we are much more on the end of like, get all the data centers we can find, like partner with every Neo cloud and have like really cheap pricing and then like build features on top.

• 2:22:23John Coogan?

  Yeah.

• 2:22:23Will Brown?

  Um, where part of this is like doing like core research. So like, we like have friends at Nvidia, we like, we talk to them about like, they're, they've released a lot of cool, like open source, um, like research stuff. And so like, that is like very in spirit of like the sorts of things we are like aiming to do. And I think we're like.

• 2:22:40John Coogan?

  Yeah. Are there any RL tasks that you think are like truly intractable? Something that like is is fundamental to humans creativity or comedy or something like? What what what's the Mount Everest of of developing an RL environment around?

• 2:22:58Will Brown?

  I think the hardest is stuff that and a friend of mine was tweeting about this early today. Actually, one of our collaborators who from PUD evals is doing some cool open source evals work for computer use, but things that need a human in the loop to have a like fine grained accurate simulation, like stuff that if a human if the models are not good enough at replicating human behavior yet and that human behavior is key to the environment, then you're not going to have an environment that faithfully captures the task because there's a kind of chicken and egg problem. And so like Twitch streamer was one example of like, like having a model that can like be good in Twitch chat kind of requires like an accurate sim of Twitch chat. And it's like, how do you build that or like a physical

• 2:23:40Will Brown?

  streamer? Like there's a this real time interaction problem that you need to kind of solve before you can get started because the the scale at which these things move, you can do it if an LLM is simulating the user.

• 2:23:50John Coogan?

  Yeah.

• 2:23:51Will Brown?

  You can't do it if you need a real human.

• 2:23:53John Coogan?

  Yeah, I feel like the the the time horizon is really it feels really, really tricky to simulate when you think about like

• 2:24:00Will Brown?

  Yeah.

• 2:24:01John Coogan?

  the the the impact on a life of a certain behavior. I mean, we'd struggle with this with like drug development, understanding like, does something in childhood affect you as a retired person? It's like, you okay, now you have to create a simulation of the entire human body to understand that if you did this thing at 18, it's going to cause you to, you know, have your like knee blow out when you're 65 or something like that feels much harder to simulate one shot, but maybe maybe we'll get there. Who knows?

• 2:24:27Will Brown?

  Yeah, at some point, you just got to let the error of time run forward and see what happens.

• 2:24:31John Coogan?

  Exactly. Well, thank you for hopping on. Always great to see you. Congratulations. Congrats on lunch.

• 2:24:35Will Brown?

  Yeah.

• 2:24:36John Coogan?

  We'll talk to you.

• 2:24:36Will Brown?

  Check out the Prime and Elect Environment Hub. We are live now. We're on Twitter, X. See you around.

• 2:24:42John Coogan?

  Send it, chat. See you. See you, guys. Talk to you later. Bye. And yes, we have the Nvidia market chart here down 2.75%. Is that what I'm seeing here? Correct? Let's see. Fluctuating. Nvidia is doing as well.

• 2:24:59John Coogan?

  But high expectations, but you know, after hours, it's down 1.42%. It's bouncing back right now. The company's trading at $179 a share. Was it $181 a share? Something tells me Jensen's gonna shrug this off. If you look at the six months, the stock has just been smoothly climbing upwards. Anyway, we have our next guest, Julia Steinberg, in the studio.

• 2:25:26Jordi Hays?

  What's happening?

• 2:25:27John Coogan?

  How you doing?

• 2:25:27Jordi Hays?

  Welcome back.

• 2:25:29Julia Steinberg?

  I am doing well. I was thinking about wearing like a little hat that said Chinese Communist Party on it to, you know, establish what I was talking about.

• 2:25:38John Coogan?

  Yes.

• 2:25:39Julia Steinberg?

  But unfortunately, I came up with this idea 20 minutes ago and because I am dealing with California infrastructure and not China infrastructure, I could not get it delivered to the house in time.

• 2:25:48John Coogan?

  Yeah. Are you driving from LA to SF or vice versa? Where are you going?

• 2:25:53Julia Steinberg?

  Yeah, so this may be a bit TMI for the good listeners of TBP, but I was rear-ended a few weeks ago. So my car has since been fixed, but I must drive it up to San Francisco. And I was actually sort of thinking about the drive north. It's a lot of what Dan Wayne talks about in Breakneck is sort of like, look, China's able to build these good things. And I was thinking about it. I'm like, why do we not have a functioning highway for Highway 1?

• 2:26:19John Coogan?

  Yep.

• 2:26:20Julia Steinberg?

  Why, like PCH, Pacific Coast Highway, it's one of the most iconic American landmarks. One of my favorites personally. It's ridiculous that it shouldn't work. And I tweeted, I just sort of had a frustration, like, I'm really frustrated that I have to, you know, do this ugly, annoying drive where my car is gonna smell like cow shit for six hours, rather than see the beauty of the Pacific Ocean.

• 2:26:44Jordi Hays?

  That was my favorite, favorite thing as a kid. My parents, we'd be on a road trip. My parents would say like, okay, we're going through the cow zone, we're at the big cattle ranch.

• 2:26:53John Coogan?

  Yeah, you have to turn on the recirculate.

• 2:26:55Jordi Hays?

  Yeah, recirculate. And I would just be like, I'm hitting the window down.

• 2:27:00Julia Steinberg?

  If you were my child, you would have been booted out of the car window at that point.

• 2:27:05Jordi Hays?

  I was surprised, so PCH between Malibu and LA was shut down after the fires for a while. And then it was open to like specific people based on your address. And then it got actually opened pretty quickly. And I think that was probably Newsom, knowing that like this stretch of PCH is like critical to my popularity in the state because there's just a lot, I mean, for no reason other than celebrities drive on that route. And if they're, and if he doesn't get it open, so it was open ahead of schedule.

• 2:27:43John Coogan?

  Yeah, yeah, yeah.

• 2:27:43Jordi Hays?

  He was taking a victory lap of like.

• 2:27:45John Coogan?

  But the one is not really critical to many people's commutes. It's more of this.

• 2:27:49Jordi Hays?

  Especially up by, it's Big Sur that's shut down, right?

• 2:27:53Julia Steinberg?

  Yeah, Big Sur, so I can drive from San Francisco or however, for North on the one to Big Sur, but I can't, the sort of Cambria region is cut off that sort of it fell into the ocean. A lot of people on Twitter were sort of, I wasn't expecting the tweet to blow up, but people on Twitter were like, how can this like girl expect Mother Nature to want this freeway here? I was like, this is absurd. Like, we've sent men to the moon, we can't have a bridge? Like, I'm not a structural engineer, but Dan Wang in his book Breakneck, he was like, oh yeah, the Chinese government has built X amount of like the bridges, like the top 10, some of the biggest bridges in the world in this like record short amount of time. And it's frustrating to me that we can't do that.

• 2:28:37Julia Steinberg?

  We somehow is admitting that like as a civilization, we're just gonna let the mudslides win.

• 2:28:42John Coogan?

  Yeah. Here's the solution. If you want one, the highway one to open, you gotta put a Harris Ranch out there because that's the highlight of I-5. You stop for the A5 Wagyu ribeye. You get a big steak at Harris Ranch. This is the highlight of my trips up and down.

• 2:29:00Jordi Hays?

  Harris Ranch is the really smelly ranch.

• 2:29:02John Coogan?

  That's the really smelly one.

• 2:29:03Jordi Hays?

  But I didn't realize you could pull over and get a meal.

• 2:29:05John Coogan?

  Oh, yeah.

• 2:29:06Julia Steinberg?

  No, I didn't realize that either.

• 2:29:07John Coogan?

  Oh, well, you're not doing the five correctly then. Yeah, when you're driving from LA to San Francisco, you run out of gas halfway because you're driving a terrible car. This is my experience in like 2012. And you always stop at Harris Ranch, you get a big steak and it's fantastic.

• 2:29:20Jordi Hays?

  Yeah, I think most people are flying by.

• 2:29:22John Coogan?

  The other alternative that is actually scenic and nice is there, even though we don't have a high-speed train, we do have a train that goes from...

• 2:29:29Julia Steinberg?

  It takes 24 hours. Like, it just takes an absurd...

• 2:29:31John Coogan?

  Skill issue. Get a book. I thought you were, I thought you were into books.

• 2:29:35Jordi Hays?

  You're the GM of books.

• 2:29:36Julia Steinberg?

  I do like books.

• 2:29:37Jordi Hays?

  The general manager of books.

• 2:29:39Julia Steinberg?

  But I like being able to read books while I'm not in a moving vehicle.

• 2:29:42John Coogan?

  Oh, it's so nice.

• 2:29:43Julia Steinberg?

  One of my more controversial book takes is I like being, sitting still.

• 2:29:47John Coogan?

  Okay.

• 2:29:48Julia Steinberg?

  When I'm reading a book. Planes are fine. I can read many books on planes. I've read many books on planes.

• 2:29:53John Coogan?

  Okay, well, speaking of books, take us through your review of Dan Wang's book.

• 2:29:57Julia Steinberg?

  Yeah, so I sort of was introduced to Dan Wang about a year ago. I was actually on The Five, listening to one of his articles put through some voice reader technology, how technology grows, which is how I first got acquainted with the ideas of process knowledge, which is basically that engineering requires a great deal of like verbal transmission from one person to another, or sort of one like elder ment- elder mentor to a mentee. In the United States, we've like lost a good deal of that process knowledge in how to make things because we've off-shored it to China. And Dan Wang, really, in Breakneck, does a really fantastic job of describing

• 2:30:39Julia Steinberg?

  how these communities of engineering have maintained this process knowledge, this ability to build things, which in the United States, we've just voluntarily shrugged off and lost. He, I would say like the big idea, if you're going into The Atlantic, this is the excerpt they chose. Was that rather than thinking of the United States and China as a capitalist society versus a communist one or socialist one, we should think of the United States as a lawyerly society and China as an engineering society. So in the United States, a lot of our elites go to top law schools, you know, Supreme Court clerkship, one of the most prestigious things you can get. Maybe even Supreme Court is one of the most prestigious positions you can get. Whereas in China, the Politburo is made out of engineers first and foremost.

• 2:31:24Julia Steinberg?

  I think Xi Jinping doesn't have that big of an engineering background, but pretty much most people in the Politburo do. And in the United States, when we focus around rules and regulations, what's getting us from point A and point B is like, well, what is this going to look like? Is this going to violate people's rights? Can we do this? In China, it's get from point A to point B. It's like, okay, how do we do this? And building something from the ground up.

• 2:31:46John Coogan?

  Yeah, I was listening to Casey Hanmer on Dorkish and he was talking about how he's trying to install solar panels in the desert. He needs to get some like environmental report that says that like, if he puts a solar panel over it, it'll kill this tuft of grass that like a bird might come and eat. Meanwhile, like if he was building like a chemical plant, it would be like fine because like, like the chemical lobbyists have like lobbied to like get it, make it easy. And so it's just like nonsense. But my, my question is, um, the, the, the, the engineering, uh, what, what, what's the phrase he uses? Engineer?

• 2:32:20Julia Steinberg?

  Engineering society.

• 2:32:21John Coogan?

  Engineering society and lawyerly society, right? Engineering empire or something. So I, I understand that and it's very, it's very alluring. Like I like engineering more than I like lawyer, lawyers, I suppose. But my prior, my prior is that America is number one and America's the best. So, uh, should we really try and change horses in the middle of a stream here? Maybe the beauty of America is that we have so many lawyers, uh, keeping us great. What do you think?

• 2:32:50Julia Steinberg?

  Well, my dad, who's probably watching right now, is a lawyer. So shout out to the lawyers keeping America great.

• 2:32:58John Coogan?

  I guess the bigger question is like, is there a world where we say, okay, let's try and pivot from lawyerly society to more engineering focused? We get halfway there and we actually are worse off because you want to just like lawyer max or engineer max? And if you're halfway in between, it's just a nightmare. I don't know.

• 2:33:16Julia Steinberg?

  Well, how I view it is that the United States is very good at engineering maxing in the private market, whereas China is very good at engineering maxing, just having the state do it, you know? Chinese Communist Party.

• 2:33:28Jordi Hays?

  Well, both. Both, but the state capacity for engineering.

• 2:33:32Julia Steinberg?

  The state capacity is a lot bigger, but it's also like, this is my biggest issue with Breakneck is that it was just like way too Keynesian. It was like, oh, it's so great that the government is, you know, basically getting these people in the middle of nowhere in China to dig holes. And by dig holes, I'm sort of exaggerating a bit, but it's digging these bridges that no one is going to use, or these airports in the middle of nowhere that have fewer than half a dozen flights a week. Like, I just don't think that's a good use of market resources. There, it's a sort of interesting question that Wang raises, though I don't think he says it straight up, is like, is capitalism even a useful sort of metric in the 21st century? And I would say absolutely, but we need to prove that in the United States by doubling down on free markets.

• 2:34:14Julia Steinberg?

  Free markets could bring us great things like a beautiful bridge that would make PCH work. I'm a huge believer in market incentives. I think the issue that Wang sort of highlights, though, when he talks about Xi Jinping not wanting like a services economy, is just that in the United States, maybe the culture is a bit broken, where our best minds want to do, I don't know, like B2B SaaS rather than building bridges or building nuclear power plants or other infrastructure. I do think this sort of culture is changing a bit, we're returning a bit to wanting.

• 2:34:51Julia Steinberg?

  Physical manifestations of American excellence, that's not just my app is like point oh two percent more productive than your app in delivering an AI girlfriend. But I think that overall, what Wang talks about in China is sort of engineering society. It mixes two, it conflates two things. It conflates engineering and it conflates culture. And when the government is in charge of culture and they can say, everyone from this district should want to be a guitar manufacturer, which is true in one of the districts in the book that he talks about, which makes guitars, which is pretty random, considering that there's not really a historic guitar industry in this city, in Guizhou. It's just something that they sort of was like, we're just gonna make guitars here. And it happened and they got very good at it.

• 2:35:37Julia Steinberg?

  But with the United States, culture is a lot more organic. It's harder for the United States to say, we're going to make this value really well adopted. And this is something that's sort of bad about China, too. Dan Wang talked a lot about the one child policy in China. He talked a lot about zero COVID in China, where people

• 2:35:57Jordi Hays?

  John presented the multiple children policy. Have three kids, please.

• 2:36:03John Coogan?

  And Dan rejected that roundly.

• 2:36:06Julia Steinberg?

  I like the three kids policy. I think, I think it's a, I think it's a good policy.

• 2:36:11John Coogan?

  I think they have the money, there's incentives and, and if you, if you really, really tilt the field, the, the playing field in the favor of having more kids, like, people will have more kids.

• 2:36:21Julia Steinberg?

  I agree. And it's like talking, of course, you know, I have to bring up Tavis, the engagement that happened yesterday.

• 2:36:27John Coogan?

  Oh, yes.

• 2:36:28Julia Steinberg?

  I was talking to my boyfriend at the end of the day and I was like, Jake, I have to tell you something, but you're not gonna be interested in this at all. And he was like, oh my God, like, what did she do this time? Like, did she get another car accident? And I was like, Travis and Taylor got engaged. He's like, I don't know who those people are. And also, like, I'm really not interested in that.

• 2:36:43John Coogan?

  He doesn't read the Wall Street Journal? Because Taylor

• 2:36:45Jordi Hays?

  Come on, you guys need to write something about

• 2:36:47John Coogan?

  Taylor wrote a 2014 op ed about Spotify.

• 2:36:50Jordi Hays?

  Well, yeah.

• 2:36:50John Coogan?

  From that.

• 2:36:51Jordi Hays?

  Also, I want to know the, I want to know what this engagement means for America.

• 2:36:55John Coogan?

  It's a good question.

• 2:36:56Jordi Hays?

  From Arena, from you guys specifically.

• 2:36:58Julia Steinberg?

  But it's like this, it's one of the weird things. It's like a Taylor Swift baby boom. Like, how, China is, it's not, who's a Chinese pop star who's gonna get pregnant from a football player and have kids?

• 2:37:11John Coogan?

  I don't know. That's a good question.

• 2:37:12Julia Steinberg?

  I do think there should be a Taylor Swift Orchid collab, you know, she's on the older side. I hope she has many kids. Orchid could be a sponsor, you know, there and having D1 athlete that's also world famous superstar kids.

• 2:37:25Jordi Hays?

  That's true. I mean, they're they're certainly, they don't shy away from the economic opportunities associated with their

• 2:37:34Jordi Hays?

  with their announcements, that's for sure.

• 2:37:37Julia Steinberg?

  No, but I but I do really think that the the Tavis sort of engagement announcement, the what the royal wedding that will happen in a few years. Like, I unironically do think this will cause a baby boom. Um, because people are very charismatic, women are very charismatic. And if number one pop star has kids.

• 2:37:54John Coogan?

  They found the answer. Jackie Chan, born in Hong Kong, has two children. That's the answer. We just need to promote Jackie Chan's children in China. That will cause the boom.

• 2:38:05Julia Steinberg?

  Well, maybe the thing with Nepo babies, like Nepo, the sort of like weird take on Nepo babies is that we need to have more Nepo babies. And just shit out of them. So it's like your kids, if you are successful, your kids will be successful too.

• 2:38:17John Coogan?

  Yeah.

• 2:38:18Julia Steinberg?

  Because the line about kids now is like, oh, if you have kids, especially if you have kids young, they'll draw away from your success.

• 2:38:23John Coogan?

  Yeah.

• 2:38:24Julia Steinberg?

  But if I'm like, oh, my child is heritably going to be like a Kung Fu superstar. Because I am a Kung Fu superstar, I would totally have kids. Of course, when you do that.

• 2:38:34John Coogan?

  I mean, that certainly happens in Hollywood. There's a ton of celebrities that have that have kids. I mean, John David Washington, George, uh, is Dan Zell's son, uh, played football and then was in Ballers, I believe, and in Tenet.

• 2:38:46Julia Steinberg?

  I I have a sort of funny story about that. I I grew up in L.A. and I was on the debate team at my high school. And there is a lot of sort of overlap between girls who wanted to do the debate team and girls who wanted to do the school play. And this one girl, whose parents were both very, very famous, like super A-plus list actors, was deciding between doing the debate, doing the debate team and doing the school play. And our debate coach, he said to me, he's like, well, it's usually pretty easy to convince them that they're not going to have a famous career as an actor and they're a lot more likely to become a successful lawyer. But if both of your parents have stars in the Hollywood Walk of Fame, then that's a lot less likely.

• 2:39:21John Coogan?

  Makes sense. Sorry, I'm prepping a chart. Jordy, you have anything else?

• 2:39:27Jordi Hays?

  Chart for what?

• 2:39:28John Coogan?

  Our next guest, who's in the restream waiting room.

• 2:39:30Jordi Hays?

  Uh, Julia, it's always great to see you. You gotta come on more often.

• 2:39:34John Coogan?

  Yes, we should have scheduled more time, but we have someone else in the waiting room.

• 2:39:37Julia Steinberg?

  Well, next time, I expect a custom chart to be pulled up.

• 2:39:40John Coogan?

  Next time you're in L.A., come do the show in person.

• 2:39:42Julia Steinberg?

  I said, I said, I'm here.

• 2:39:44John Coogan?

  Okay, fantastic. Fix the car, drive over to the TV and ultra them.

• 2:39:48Jordi Hays?

  Glad you're okay after the accident.

• 2:39:49Julia Steinberg?

  Thank you. Appreciate it.

• 2:39:51Jordi Hays?

  Always great to catch up.

• 2:39:52John Coogan?

  California to fix the one so we can drive scenically in the future. Thank you so much for hopping on. Our next guest is in the restream waiting room.

• 2:40:01Jordi Hays?

  Olivia Moore.

• 2:40:03John Coogan?

  From Andrus and Horowitz. How are you doing?

• 2:40:04Jordi Hays?

  What's happening?

• 2:40:06Speaker 07

  That is great to see you guys. Thanks for having me.

• 2:40:07Jordi Hays?

  Great to see you.

• 2:40:08John Coogan?

  I was just sharing with the team the news today, but you break it down for us first. What are you announcing today?

• 2:40:15Speaker 07

  Yeah, so we're announcing what we call the Consumer AI Top 100, which is where we literally, thank you. I appreciate when other people are this excited about data as I am.

• 2:40:25John Coogan?

  We love data.

• 2:40:26Jordi Hays?

  We live for market maps.

• 2:40:27John Coogan?

  Yes.

• 2:40:28Speaker 07

  Yes. This one has, I would say it's market map adjacent in that we, every single website and every single mobile app around the world in descending order of traffic, and then we pick out the top 50 in each that are AI-native companies to just get a look at what consumers are actually using.

• 2:40:45John Coogan?

  I consider myself a bit of a list connoisseur myself, actually. I enjoy making lists from time to time. Uh, I'm sure you're gonna get yourself in hot water with this list. People are gonna say, take me off this list. I want to be under the radar. Put me on this list. I want, uh, I'm doing better than that other company on here. Uh, talk about the methodology. Uh, how confident are you? Is there an element of like vibe and curation? Is this like the New York Times Bestseller list?

• 2:41:08Speaker 07

  No, there's no element of vibes. It's all data. So we literally, for the web list, we go, we have a provider called Similar Web, and we literally just look at monthly number of visits. We pick the first 50 that are AI, and then on the mobile list, we do, um, Sensor Tower, and we pick the top 50 by monthly active users. But we do get lots of, uh, fun texts, emails, inquiries, and people either wondering about their rankings or wanting to be on the list. So I'm happy to inform everyone that it is completely unbiased.

• 2:41:39John Coogan?

  There are some things on here that stand out to me as completely unsurprising. Chat GPT number one, Gemini number two, DeepSeek, Grok up there. That seems obvious to me. Stuff that's standing out are specifically like

• 2:41:53Jordi Hays?

  Janitor AI?

• 2:41:54John Coogan?

  Tool like hyper-specific tools like remove background, remove BG. I've actually used that tool.

• 2:42:00Jordi Hays?

  Janitor AI is number eight.

• 2:42:02John Coogan?

  Yeah, what else stuck out to you as surprising? What did you learn?

• 2:42:05Speaker 07

  Yeah, every time there's apps that are kind of like literally single purpose. Remove dot BG is a great example. It was a company that was acquired by Canva, but grew to like thirty-two monthly active users, literally by being the best product to upload a photo and get the background removed from it. And it's a catchy URL that people remember, so it keeps getting usage.

• 2:42:26John Coogan?

  Yep.

• 2:42:27Speaker 07

  The Janitor one is a good call out too, because one of the surprises for me, list after list, is how many companion products make the list. Like it's always a dozen or so each time. Janitor is one of them and one of the highest ranking ones behind Character. So it doesn't seem to be

• 2:42:42Jordi Hays?

  This looks, because you don't have to pull up, it looks very Grok XAI.

• 2:42:47John Coogan?

  I would have thought Janitor would be like back office, B2B, like I, I, I thought that would be something to clean up my data warehouse. But you're telling me that it is in fact a companion of some sort.

• 2:42:58Speaker 07

  It is.

• 2:42:58John Coogan?

  I also see spicy chat.ai, that sounds like something we shouldn't push, pull up on this stream. Cushion.ai has a, has a heart there that seems a little suspicious. Juicy chat, these, there are a lot of these use cases there. Is this a new thing? Is this the first time you've done the top one hundred? Like what are the biggest movers that you're noticing or that you expect?

• 2:43:22Speaker 07

  Yeah, this is the fifth list. We do it every six months. We've done it for about two years now. We started it like six months after Chat GPT came out.

• 2:43:31Speaker 07

  Interestingly, there's fourteen companies that have made every single list. Most of them are in kind of creative tools, so think like Mid Journey and Eleven Labs.

• 2:43:39Jordi Hays?

  Sure.

• 2:43:39Speaker 07

  Quite a few of them are general L L M players like Chat G P T, Perplexity, Poe.

• 2:43:45Jordi Hays?

  Yep.

• 2:43:45Speaker 07

  Uh, one of the big, I say surprise, but probably not a surprise. Anyone who's been on Twitter is like vibe coding completely exploded on the list this time. So lovable.

• 2:43:55Jordi Hays?

  Sure.

• 2:43:55Speaker 07

  Wasn't on the last list and now they're like number twenty three. Replits also on there.

• 2:44:00Jordi Hays?

  Yeah.

• 2:44:01Speaker 07

  It's just below the cutoff. Cursor is on there as well. Um, and it's interesting because like you would think that the developer market is much smaller than the consumer market. So for developer facing products to make an app like this is pretty impressive. And it shows that like a, a significant majority of developers are using them.

• 2:44:19Jordi Hays?

  Well, I think the way that I look at that market is there's so many people in the world that have had an idea for an application without the engineering co-founder, like a C T O. And so that's just like decade, decade plus now of like pent up demand for people that had an idea for an app. And then all these companies, whether it's lovable or replit or things like that, have people on TikTok saying like, you can make an app now. Or they're running ads that say like, you can make an app, right? And so that's just like a flood of demand for people, yeah, non-developers becoming developers for the first time.

• 2:44:57John Coogan?

  How are you thinking about Meta's strategy? I noticed Meta A I ranked forty six. That feels pretty low compared to the amount of effort Mark Zuckerberg is putting into that project, although it's early days. Um, also the Meta A I app, I went to go test it. I realized I had it downloaded because I had bought a pair of Meta Ray Bans and they kind of, you know, iterated on that product to turn into Meta A I. But, you know, L L Ms are vended into Instagram and yet Instagram's not on here. Uh, do you think that you'll see more companies that are in the A I bolt on narrative era of their business? Kind of jump on here? Do you want to keep them separate? Is it, what is your thinking about all of that?

• 2:45:41Speaker 07

  Yeah, Meta is really interesting. It's funny, the the larger tech companies, I think, have really stepped up in the past year or so on the AI front. Like, Google is probably the best example of this. And I was number two on the list.

• 2:45:54John Coogan?

  Huge.

• 2:45:55Speaker 07

  They also had the AI Studio on the list, Notebook LM on the list, Google Labs, which is where you get VO.

• 2:46:00John Coogan?

  Oh, wow. They have four, four companies on there.

• 2:46:03Speaker 07

  Yes. Four, four separate entities on the list, which were all ranked separately with their own traffic.

• 2:46:08John Coogan?

  Yeah.

• 2:46:09Speaker 07

  Grok had a big debut on the list from, from X, formerly Twitter. Um, Meta, I think, has struggled a little bit, both on web and then on mobile. I don't know if you guys remember the big scandal where they realized that a bunch of the users were accidentally posting their very private posts of the public feed.

• 2:46:26John Coogan?

  Yes.

• 2:46:27Speaker 07

  Um, and so usage fell off a little bit.

• 2:46:30John Coogan?

  Oh, interesting. Okay. Yeah, yeah.

• 2:46:32Speaker 07

  They didn't even make the mobile list. But to me, it's like, if you guys have tried the Meta AI products, they're a little bit overwhelming. Like, quality of the images generated, they did the weird celebrity companion thing. So now that they're working with Midjourney, I would expect to see them make some improvements here, but it might take a little while.

• 2:46:48John Coogan?

  Yeah, even the Midjourney thing, it just feels so natural in the other apps. And if you have a billion people opening one app every day, like, where Meta's been successful has been put stories into Instagram. Put videos into Instagram. They used to launch sidecar apps, like, Facebook had an app called Facebook Camera that was supposed to compete with Instagram. And then they were like, we gotta shell out for Instagram.

• 2:47:12Jordi Hays?

  Do you think Midjourney's ranking gets hurt because people still use it in Discord? Or is, or is, or do they shift? Because it feels low at twenty-eight.

• 2:47:20John Coogan?

  Sure, sure, sure. Yeah, yeah, yeah. It just recently kind of rolled out the web.

• 2:47:24Speaker 07

  I think that's true for both Midjourney and Suno and a couple of other creative tool apps that also have Discords. It's funny, because in the first iteration of this list, like, no one had a website, everyone had a Discord. And now a lot of those companies are really trying to shift their traffic over.

• 2:47:39John Coogan?

  That's interesting. Yeah, I bet you could do a different list of just like the top Discords, because all of that's very quantitative and available. And even relying, relies on even further data. Um, Jordy, do you have anything else you want to take through this? I'm wondering. I can continue.

• 2:47:54Jordi Hays?

  Go for it.

• 2:47:55John Coogan?

  I I I'm just interested in understanding your predictions for what the next version might look like. What are you tracking on the earlier stage side that isn't quite ready for breakout adoption in as measured by unique monthly visits, but we might see an uptick of in the next year or two on the consumer AI top one hundred.

• 2:48:17Speaker 07

  Yeah, I'm definitely expecting to see more in prosumer and productivity. Where I feel like both the models are just now reliable enough to actually do work for you. Or getting there. And they're also agentic enough to like perplexity comic can draft an email and put it in your Gmail. Draft folder, which is amazing.

• 2:48:36John Coogan?

  Yeah.

• 2:48:37Speaker 07

  So we saw a couple of companies like Manus make the list this time around that thesis. But I'd expect to see things like Fixer or Serif and others in that category. Gen Spark is another big one that I would not be surprised to see on the next list.

• 2:48:51Jordi Hays?

  What's what's been happening to all the companies that actually were GPT rappers? Where they were for a while, you could build a business to a few million of ARR, probably more, just basically.

• 2:49:06John Coogan?

  I remember one.

• 2:49:07Jordi Hays?

  Just advertising against.

• 2:49:08John Coogan?

  It was called like Talk to PDF.

• 2:49:12Jordi Hays?

  Well, yeah, there's those, but I'm saying there's other ones that would be called like Open Chat.

• 2:49:16John Coogan?

  Oh, sure. Yeah, yeah. When you would search Chat GPT.

• 2:49:19Jordi Hays?

  And they would have in-app subscriptions.

• 2:49:21John Coogan?

  Literal rappers. Yeah.

• 2:49:23Jordi Hays?

  Chat GPT.

• 2:49:24Speaker 07

  That was a loophole that was open on mobile. So we we've only done the mobile list, I think, four times now, and it was complete chaos the first three times because the App Store was not policing what we call fleeceware, which was like all developers, mostly abroad. That were just kind of ripping off the free version of Chat GPT, putting it in an app and acting like it was the same thing you got if you paid for Chat GPT premium. And they were called things like chat and ask AI or chat GPT or chat GPT or something. But they finally cracked down on that over the last six months. So now we have a mobile list that's like

• 2:49:59John Coogan?

  Yeah.

• 2:49:59Speaker 07

  maybe more representative of true products, but it's all like beauty cam filters now and scan your homework and get answers.

• 2:50:06John Coogan?

  Oh, really?

• 2:50:07Jordi Hays?

  What's your read on how Apple's done from a curation standpoint? There's like a lawsuit happening right now between XAI and OpenAI and Apple.

• 2:50:18John Coogan?

  I mean, this is probably going to get printed out and blown up on a big chart in court soon because Grok looks great here. But yeah, I mean, I'd love to know your thoughts on how Apple's curating the App Store.

• 2:50:32Speaker 07

  Apple is a little bit struggling overall with AI. Like, we've even seen this with Siri and the fact that they're now potentially going to turn to Gemini and Google Google to fix it for them, which would be kind of unheard of. I think they do an okay, but not a fantastic job with curation. It's definitely not like a pay to play situation from what I've, you know, what I've heard, but I also don't think that they're necessarily kind of at the cutting edge of what's truly the best products that are coming out next that people should be spending time on.

• 2:50:59John Coogan?

  Yeah, they also

• 2:51:00Jordi Hays?

  They should hire you.

• 2:51:02John Coogan?

  They should. They, I mean, they also obviously prioritize editorialize in what they recommend. And so I would be surprised if they're pushing companionship anytime soon, since the lineage going back to Steve Jobs was this is a very clean productivity, creativity.

• 2:51:19Jordi Hays?

  Well, and Apple

• 2:51:20John Coogan?

  I would imagine gets promoted, mid journey, I would imagine gets

• 2:51:22Jordi Hays?

  Apple comms is going to be every, every day, there's an article in the New York Times about how somebody had some, something tragic happen to them while getting advice from a model. And so Apple comms doesn't want to be like, we recommended, you recommended companions and the companions went haywire. It's just very

• 2:51:38John Coogan?

  Anyway, we got to hop on with our next guest. Thank you so much for

• 2:51:40Jordi Hays?

  Thank you for joining.

• 2:51:41Speaker 07

  Thanks for having me. This was so fun.

• 2:51:43Jordi Hays?

  Thank you for list maxing.

• 2:51:44John Coogan?

  Thank you for list maxing. It doesn't get said enough.

• 2:51:46Speaker 07

  Thank you for reading it.

• 2:51:47John Coogan?

  Let's hit the gong for the big list.

• 2:51:51Jordi Hays?

  We hear, we hear the song is too loud now.

• 2:51:54John Coogan?

  Too loud, yeah.

• 2:51:54Jordi Hays?

  We updated some microphones. Sorry for your ears, everyone, but great, great to catch up.

• 2:51:58John Coogan?

  Thanks for hopping on. We'll talk to you soon.

• 2:52:00Jordi Hays?

  Talk soon.

• 2:52:00John Coogan?

  Bye. Up next, we have Flo from Lindy.ai. Big announcement today. We will bring him in from the restream waiting room. While we are waiting for him to join, let me tell you about adquick.com. 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. Flo, how you doing? Sorry for keeping you waiting. What's new in your world?

• 2:52:25Flo Crivello?

  Yeah, good. Don't worry. I'm doing great. You know, it's a, it's a good day to build B2B SaaS.

• 2:52:30John Coogan?

  Yes, let's go. Let's hear it for B2B SaaS. Finishing out the show with some just amazing news. Tell me more.

• 2:52:38Flo Crivello?

  Yeah. We just announced a vibe coder today. I just saw Olivia's appearance here. She mentioned Loveable and Rocket and a few of those. They've been blowing up. What we announced today is a vibe coder that can test its own work.

• 2:52:52John Coogan?

  Okay.

• 2:52:52Flo Crivello?

  And it's kind of, it's kind of insane to say it because you would assume like, of course you can, but actually none of those products check their work. Like imagine a software engineer that's just like, here. And it's like, it doesn't work. Did you even test it? And it's like, oh no, I didn't do that. So basically these vibe coders rely on you to, to test the work yourself and then like work with them to debug it. And it's like, it ends up being a lot of fucking fools and painful work.

• 2:53:13John Coogan?

  Are you talking about, are you talking about generating a test suite in code? Or spinning up a web browser, interacting with the, with the vibe coded product?

• 2:53:26Flo Crivello?

  It's, it's the latter. Thanks for asking. Is it okay if I show my screen? I feel like it'd be better.

• 2:53:31Jordi Hays?

  Always.

• 2:53:31John Coogan?

  You can share your screen, but we are live, so anything you share will be shared with the internet forever. Burned into the training data of GPT-12.

• 2:53:41John Coogan?

  Yeah, vibe code us something right now. Let's see. Live demos, they never go wrong.

• 2:53:44Flo Crivello?

  Well, I'm not, I'm not going to do like a live, live, live demo because it does take like three minutes or something. So it'd be boring. But like, you know,

• 2:53:50John Coogan?

  Singularly delayed.

• 2:53:54Flo Crivello?

  Built a Scrabble checker.

• 2:53:56John Coogan?

  Okay.

• 2:53:57Flo Crivello?

  And this is when we realized it's actually an emergent behavior that comes out of this agent that we gave a computer to. It was like, all right, I built this Scrabble wheel checker for you. Uh, I'm gonna open it, okay? I'm gonna type a wheel that exists like thunder. And yeah, it tells me it's valid. Now I'm gonna type a wheel that doesn't exist like ZZQXW and oops, it tells me it's valid as well. I noticed there might be an issue. It's showing ZZQXW as valid even though it shouldn't be valid. Let me fix the API to improve the validation. Fix the API, try again, doesn't work.

• 2:54:27John Coogan?

  Okay.

• 2:54:28Flo Crivello?

  So that's, it does have its own computer, its own browser, and it sees the work and can click around and actually test its work.

• 2:54:35John Coogan?

  Yeah, very cool. What, what do you think the landing, uh, the landing, not landing page, but like, uh, what do they call it? Like, the, like, the, the, the landing market, the first, the first, like, product market fit moment? Do you have any glimmers of hope? Like, is this gonna be used by restaurants who want to spin up a landing page? That was kind of like the previous boom of, it wasn't vibe coding, but when you saw folks, uh, stand up landing pages with, uh, you know, Squarespace or, or any of those, Weebly, like, there was a whole boom in that. It feels like there's another boom in, in vibe coding right now. Uh, do you have expectations about where the sweet spot is? Because I, I would imagine that people aren't going to build like, you know, they're, they're not gonna go out

• 2:55:17John Coogan?

  and raise a hundred million dollars for a company that's built on the back of a vibe coded solution. It's more of like a prototyping tool right now, but then for small businesses, this could be something that they really rely on for a long time. Like, talk to me about the shape of the early customer.

• 2:55:30Flo Crivello?

  I, I think that's actually the perception of trying to fight. I think the reason why vibe coding so far has been limited to these landing pages.

• 2:55:37John Coogan?

  Yeah.

• 2:55:37Flo Crivello?

  Is because the, the tools have been so limited. And landing pages are just like the, the, the, the fastest, dumbest thing you can build. Same for like this perception, they're like, oh, it's like a cute prototyping tool, but you're not actually going to build your company on this. Uh, you know, we, we, the thing that is unlocked by this new paradigm of... Something as simple as like testing your work. If you can't test your work, you can only build very, very simple stuff. If you can't, if you test your work, we're seeing instances of like this running for hours and building, like one of the craziest examples we've built internally, we could eat like Lindy B and B. So it's like an L B and B clone and it's functional, like you can, you can select things, you can book them, you can put your place up for, for, for rent. Uh, it's functional. Um, you can, you can sign in, you can sign up.

• 2:56:19Flo Crivello?

  It's got Google ass, it's got all of that stuff. So, um, you know, we're actually seeing a lot of, so yes, we're seeing the landing pages, but now we're also seeing a lot of like internal tools. So you're almost getting into like retool territory.

• 2:56:30John Coogan?

  Sure.

• 2:56:31Flo Crivello?

  Because people are like, ah, I'm just gonna hook it up to my API and I'm gonna build like all like calculators and like various uh internal tools for the, for the team in like a couple of minutes.

• 2:56:38John Coogan?

  Yeah. Do you think of this as like a separate product? Uh, or does, does this like kind of sit on top of everything that you've already built? Um, and can you, is there a way to like hook in the traditional like Lindy's into what your vibe coding?

• 2:56:54Flo Crivello?

  No, it's, it's super integrated with the rest of the product that we built, which is like agents, obviously. And so that's the whole value prop is like, hey, building your website is step one. Like, once you've done that, you actually have to build the rest of your business. Like I, I joke, like building your website is sort of the equivalent of getting your, your, your business cards. Like, okay.

• 2:57:10John Coogan?

  Yeah.

• 2:57:10Flo Crivello?

  That you did that. Now you need to like build a business. So like now that you built your website, then you can like market it for you, find customers, do the entire customer support for you fully autonomously. I, I have want to actually launch Lindy B and B and have it fully, cause I've got enough of one business. I don't wanna run like Lindy B and B, but have it fully managed by agents, you know, and see how far we can go.

• 2:57:31John Coogan?

  Yeah. Uh, it's great. Uh, yeah. Uh, keep sharing demos. I'm, I'm excited to check them out. Anything else, Jordy?

• 2:57:37Jordi Hays?

  Yeah, just I, I, uh, I'm interested, you know, clearly, I think it's almost contrarian at this point to launch another prompts to app builder, right? And, and you're insanely, uh, insanely intentional about everything that you do. Um, do you think that the category actually needs a bunch more people to try to be experimenting here, right? You see some of these revenue ramps. I think a lot of entrepreneurs would assume that the market is, is run away. I should focus on something else, but you've clearly made a different decision.

• 2:58:10Flo Crivello?

  From the traction we're seeing, there is plenty of room in this market. I think it's like the very, very, very beginnings of this market, as crazy as that sounds.

• 2:58:18John Coogan?

  Yeah.

• 2:58:18Flo Crivello?

  Also, and you know, we've not told that story yet to anyone. The way this came about was like, we actually built the V1 of this by accident. So you know, we had this released, this release that like I went on the show a couple of weeks ago where we were like, hey, we gave a computer to Linde. And then we realized that though we gave it to computer, it's like, oh, fuck, it can build websites and it can QA them. Because that's what happens. Once you have a computer, you can do everything. So then we've basically packaged it up and released it as as Linde Build and improved it, obviously. But I think it's basically an emergent capability of the platform. And the reason why we've decided to release it is like, well, one, we were like, fuck, it's all the working. And two, we then started to look into the other products and we were like, I can't believe none of them checks their own work.

• 2:59:00Flo Crivello?

  Like this is actually turns out it's like a massive deal. And, and when we A B tested like, okay, same prompt on like lovable, right plate Linde. This scrabble example, for example, every vibe code are there. It's a simple example. It's like a very mini app. Every single vibe code got it wrong, every single one, including Linde. Like it got it wrong first shot as you saw. And then the difference is like Linde has then tried it on work, saw that it got it wrong and fixed it. So I, I, I think it's, it's day one for this product.

• 2:59:29John Coogan?

  That's very cool. Well, congratulations on the launch. Keep us posted.

• 2:59:32Jordi Hays?

  Last, uh, last very quick question. Where are we on the Gartner hype cycle? Peak of inflated expectations, trough of disillusionment, slope of enlightenment, or plateau of productivity?

• 2:59:46Flo Crivello?

  I have this conversation every day with a different friend. I, I forgot the different labels here, but like, look, you know.

• 2:59:51Jordi Hays?

  Are it's basically, are we, are we, are we coming down from the peak towards the trough? Or are we headed up the slope of enlightenment?

• 2:59:59Flo Crivello?

  I think we're heading up the slope of enlightenment.

• 3:00:01Jordi Hays?

  Wow. Bullish, bullish. Bull market continues.

• 3:00:04Flo Crivello?

  Very bullish, very bullish.

• 3:00:06John Coogan?

  Well, thank you so much for hopping on. We'll talk to you soon. Have a great rest of your day.

• 3:00:09Flo Crivello?

  Thanks, everyone.

• 3:00:10Jordi Hays?

  Cheers.

• 3:00:11John Coogan?

  Well, if you-

• 3:00:12Jordi Hays?

  Shout out to Ilhan Valani-

• 3:00:15John Coogan?

  Yes, shout out.

• 3:00:16Jordi Hays?

  In the chat.

• 3:00:17John Coogan?

  Yes.

• 3:00:17Jordi Hays?

  He is in a dorm-

• 3:00:18John Coogan?

  At Boston University.

• 3:00:19Jordi Hays?

  At Boston University.

• 3:00:20John Coogan?

  Let's hear it for BU.

• 3:00:21Jordi Hays?

  Watching with five others.

• 3:00:25John Coogan?

  Having a window in Silicon Valley.

• 3:00:27Jordi Hays?

  Bullish.

• 3:00:27John Coogan?

  Well, let me tell you about Wander. Find your happy place. Book a Wander with inspiring reviews, hotel-grade menus, dreamy beds, top-tier cleaning, and 24/7 concierge service. It's a vacation home, but better, folks. Not going to find a Wander on Lindy's vibe-coded Airbnb. He's got us all getting good inventory. That's what Wander's done. Jeff Dean is, I don't want to say he was inspired by us, but he posted a beautiful, one-of-one, AI-generated trading card of him playing soccer. He's the chief scientist at Google, of course. He says, "Our latest Gemini image generation and editing model is quite good. See the examples in the thread below. It lets you indulge in a bit of creative fun, helps you make new business cards, etc.

• 3:01:09John Coogan?

  Try it out at gemini.google.com." Jeff Dean, of course, one of the greatest to ever do it. Very, very cool. We gotta, I mean, this-

• 3:01:17Jordi Hays?

  So Logan, Logan one-shot a card generator-

• 3:01:22John Coogan?

  Oh, yeah, yeah. Can we play with it? Maybe we should play with it after the show and we'll bring it up tomorrow.

• 3:01:27Jordi Hays?

  It's looking good. He sent me a preview.

• 3:01:29John Coogan?

  Yeah.

• 3:01:29Jordi Hays?

  Love it.

• 3:01:29John Coogan?

  Also, Paki said, "I've had, I've mostly had X deleted from my phone for the past month or so, but every now and then I re-download it briefly. It's been funny seeing the slow Nikita-ification of the onboarding flow, like this new pulsing blue orb on the allow notifications button. I didn't even know Nikita could pull this off. I had no idea."

• 3:01:49Jordi Hays?

  There's levels to the game.

• 3:01:50John Coogan?

  There are levels to this. Very, very smart. That's obviously going to increase the amount of people that turn on notifications because it draws your eye right to it. Also, just nicely designed, too. That little subtle gradient there to highlight allow. Not, not-

• 3:02:05Jordi Hays?

  Brian Halligan-

• 3:02:06John Coogan?

  This is interesting.

• 3:02:07Jordi Hays?

  Saying, "Re, Sonos, I have two ideas offers. One, it has a big-ish brand, tons of customers, no real competitor, and absolutely horrible products. I'd love to help a PE firm who would want to take it private, fix it, and take it public again for a big gain. Two, if you're a very sharp, qualified entrepreneur that wants to disrupt them, I'd like to hear your pitch."

• 3:02:27John Coogan?

  This is the, this is the curse of being Sonos. You know, so many capital allocators, private equity guys probably have thousands of dollars of Sonos products that they are dis- Uh, you know, uh, unhappy with, and they're all, every time they go and turn on their TV or their sound system, they're like, I should take this company over. Should go do it.

• 3:02:46Jordi Hays?

  Keith Raboy in the comments.

• 3:02:47John Coogan?

  Keith Raboy.

• 3:02:48Jordi Hays?

  Let me know if you want to work together on this.

• 3:02:49John Coogan?

  Yeah, Keith Raboy's getting in the game. Naval is also there. Naval's in. Uh, he's, he's, uh, talking about another company that has an amazing product that needs to be distilled to a lower mass market price point.

• 3:02:58Jordi Hays?

  Kenneth Castle has a fantastic post here. He says, uh, uh, I guess his wife says TS and TK are engaged. He says, question mark. Travis, Taylor Swift and Travis Keller. He says, oh, I thought you were talking about TK from Uber slash cloud kitchens. What?

• 3:03:15John Coogan?

  What?

• 3:03:16Jordi Hays?

  Locked in. Absolute banger.

• 3:03:18John Coogan?

  Uh, well, did you notice what, uh, Taylor was wearing in her, uh, in her engagement photo?

• 3:03:26Jordi Hays?

  Absolutely not, but I did.

• 3:03:27John Coogan?

  Cartier Panthea.

• 3:03:28Jordi Hays?

  Oh, the, the watch. I did see that, that, um.

• 3:03:31John Coogan?

  Eight carat diamond ring, but more importantly, she was wearing a Cartier. Where could you get a Cartier?

• 3:03:36Jordi Hays?

  Bezzol.

• 3:03:37John Coogan?

  Get Bezzol.com. Your Bezzol concierge is available now. Source you any watch on the planet, seriously, any watch. If you're going to be proposing to a pop star.

• 3:03:43Jordi Hays?

  NASCAR.

• 3:03:44John Coogan?

  Yes.

• 3:03:45Jordi Hays?

  NASCAR has joined Substack. I don't think anybody would have called that four years ago.

• 3:03:51John Coogan?

  We gotta do a collab with them. This is the whole thing on Substack. We, we, we're going to do collabs with other people. So we gotta get a live video going with them. Get NASCAR. We've already talked to folks, folks at NASCAR. This will be the second time we're collabing with NASCAR.

• 3:04:02Jordi Hays?

  An absolute tear. Well, folks, thank you for tuning in today.

• 3:04:06John Coogan?

  Thank you for tuning in.

• 3:04:07Jordi Hays?

  We've had a fantastic time. We hope you have too. We hope you have an amazing afternoon. Follow our Substack, tbpn.substack.com.

• 3:04:15John Coogan?

  Yes, please.

• 3:04:16Jordi Hays?

  We're growing very hard over there and, uh, we will see you tomorrow.

• 3:04:19John Coogan?

  See you tomorrow. Have a good day.

• 3:04:21Jordi Hays?

  Cheers.