Meta's Dangerous Chat, Protect AI & Founder Fridays Pitch Comp | E2118

Today's show: we break down the wild story behind Meta's AI chatbots going completely off the rails — including a bombshell WSJ exposé about bots flirting with minors. Then they cover Palo Alto Networks' huge $500M+ acquisition of Protect AI, and sit down with the founder of Formulate, who's building a robotic kitchen for chemicals and cosmetics. Plus, we get into some spicy takes on the secret group chats shaping tech behind the scenes, whether AI can clean up bad code faster than humans, and a Founder Fridays Texas showdown between Osprey and Wispr. * Timestamps: (0:00) Jason kicks off the show. (1:45) Jason's recent trip to Detroit. (7:47) The influence of group chats on tech, politics, and Trumpism (10:54) Northwest Registered Agent. Form your entire business identity in just 10 clicks and 10 minutes. Get more privacy, more options, and more done—visit northwestregisteredagent.com/twist today! (19:48) The importance of proactive communication in media (20:04) Fidelity Private Shares℠ - Visit ⁠ https://www.fidelityprivateshares.com! Mention our podcast and receive 20% off your first-year paid subscription. (21:44) Palo Alto Networks acquires Protect AI (28:57) ARX Robotics and the future of autonomous military platforms (29:31) Pilot - Visit https://www.pilot.com/twist and get $1,200 off your first year. (35:27) Sentra's $50M Series B in data security posture management (42:16) Lightrun's $70M Series B and venture capital trends (51:28) Meta's AI chatbots, ethical concerns, and Founder Friday competition (1:05:19) Formulate interview with Osmaan Shah (1:11:52) Scaling microfactories and the benefits of Formulate's platform (1:21:10) Business model and future of robotics in manufacturing (1:24:38) Potential applications in food and agriculture for Formulate Robotics * Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com Check out the TWIST500: https://www.twist500.com Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp * Links from episode: Check out Formulate Robotics: https://www.linkedin.com/company/formulaterobotics/posts/?feedView=all Check out Protect AI: https://protectai.com/ Check out Lightrun: https://lightrun.com/ Check out Sentra: https://www.sentra.io/ Check out the WSK article on Meta's "Digital Companions": https://www.wsj.com/tech/ai/meta-ai-chatbots-sex-a25311bf?st=6jzH4S&reflink=desktopwebshare_permalink Check out ARX Robotics: https://www.arx-robotics.com/ * Follow Osmaan: LinkedIn: https://www.linkedin.com/in/osmaanshah/ X: https://x.com/osmaanshah * Follow Lon: X: https://x.com/lons * Follow Alex: X: https://x.com/alex LinkedIn: ⁠https://www.linkedin.com/in/alexwilhelm * Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis * Thank you to our partners: (10:54) Northwest Registered Agent. Form your entire business identity in just 10 clicks and 10 minutes. Get more privacy, more options, and more done—visit northwestregisteredagent.com/twist today! (20:04) Fidelity Private Shares℠ - Visit https://www.fidelityprivateshares.com! Mention our podcast and receive 20% off your first-year paid subscription. (29:31) Pilot - Visit https://www.pilot.com/twist and get $1,200 off your first year. * Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland * Check out Jason's suite of newsletters: https://substack.com/@calacanis * Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com * Subscribe to the Founder University Podcast: https://www.youtube.com/@founderuniversity1916

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

• 0:00Jason Calacanis?

  When I was in high school, I had a session with like a guidance counselor. I said, hey, you know, he said, what's your plan? I said, well, you know, I was, I read about Brown. I said, you know, they let you make your own degree. You can kind of roll your own concept. So my concept is psychology and like human behavior plus computers. Cause you know, I'm into computers and online services specifically. He laughed in my face. This is when I was like 16 years old and the guidance counselor like spit out his coffee laughing. He said, you're, you're barely going to get into any college. You have like a 72 three year average. Like, aren't you going to take the cop test? I said, yeah, I took, I'm taking the cop test with my brother Josh and other one beat a cop. I almost was one. And he said, you know, do that. Like it's better. Like you're not barely getting into Brooklyn college.

• 0:43Jason Calacanis?

  And I got into Brooklyn college and then I wound up getting into Fordham. But just imagine like a young person getting laughed in your face. And you know what that did to me? That was like, made me who I am. That pissed me off so much. I was like, this guy. Made me be like, you know what? I'm going to show this guy. I'm going to get into a good school and I'm going to have a career.

• 1:02Speaker 01

  This week in startups is brought to you by Northwest Registered Agent. Starting your business should be simple. With Northwest Registered Agent, you can form your entire business identity in just 10 clicks in 10 minutes. From LLCs to trademarks, domains to custom websites, they've got you covered. Get more privacy, more options and more done. Visit northwestregisteredagent.com/twist today. Fidelity Private Shares. If you want the all in one equity management platform, Fidelity Private Shares has you covered. Visit fidelityprivateshares.com. Mention this podcast for 20% off your first year subscription. And Pilot, focus on your product. Let Pilot handle your bookkeeping. Pilot provides the most reliable accounting, CFO and tax services for startups and small businesses. Head to pilot.com/twist and get $1,200 off your first year.

• 1:43Jason Calacanis?

  All right, everybody. It's Monday. Welcome back to this week in startups. I'm back from the sixth borough of New York. Known as Detroit, where my New York knickerbockers had a wonderful time. I was only threatened to be beaten up by one person this trip. You know, normally when I go to a city like Detroit, I'm expecting like the over under to be four.

• 2:03Speaker 02

  Yeah. It's a tough town too, Detroit. They don't mess around.

• 2:06Jason Calacanis?

  It's not a joke.

• 2:07Speaker 02

  Yeah.

• 2:08Jason Calacanis?

  Yeah. You have to stay on the right street.

• 2:10Speaker 02

  That's what they say. Yeah.

• 2:11Jason Calacanis?

  But here's what I'll tell you about Detroit. Great people, great city.

• 2:15Speaker 02

  I've never been.

• 2:16Jason Calacanis?

  A great, great city. I've never been either. I was talking to a bunch of entrepreneurs I met there. My friend Jonathan Treese is there. And he's been doing entrepreneurship there for a while. They bought all the old buildings downtown.

• 2:27Speaker 02

  Right.

• 2:27Jason Calacanis?

  When the whole thing bottomed out for like 12 bucks.

• 2:29Speaker 02

  Yeah.

• 2:30Jason Calacanis?

  Then they slowly said, hey, what if we like cleaned up where the arenas are? So they have a beautiful, like a Little Caesar's arena where the Detroit Pistons play. They've got a baseball thing. It is gorgeous, Alex. It's gorgeous downtown. And then everything built out from there. So they built like townhouses, restaurants, but like Austin, where there's a lot of warehouses and space, people are drawn to affordable real estate in a country like the United States, that is, let's face it, not affordable. So now we have a not affordable country and a place like Austin, a place like Detroit will draw people. Why? Lower your cost of living with remote work or people being more open to, you know,

• 3:14Jason Calacanis?

  hybrid, you get some affluent people moving to places that are dirt cheap.

• 3:19Speaker 02

  Wow.

• 3:19Jason Calacanis?

  Like you had a great experience with dirt cheap here in Austin.

• 3:24Speaker 02

  Yeah, and people in Austin don't feel like it's dirt cheap. But if you're coming in from Los Angeles, the difference is night and day.

• 3:30Jason Calacanis?

  Incredible. And you had that same thing going to Province Town, right?

• 3:34Speaker 03

  Oh, my gosh. Providence was was about forty percent cheaper. Well, Province Town is nearby. But it was funny because I got here, everyone's like, the the prices are unbelievable. Inflation's out of control. I can't afford a house. I'm like, you would not like California at all.

• 3:47Jason Calacanis?

  Well, you know, when your benchmark is California, it's absolutely crazy. So I had a great time. I think actually we talked on Friday, right?

• 3:54Speaker 03

  A little bit about Detroit. Yeah, yeah, yeah.

• 3:55Jason Calacanis?

  The restaurants are great. I went to this place Ghost, had the best burger of my life. I stayed at the Shinola Hotel. Amazing. The watch company, I guess, made an extension. You know, just everything delightful. But one guy, I guess, recognized me and I was wearing my Kith. K I T H is like a designer the kids are into. They do drops.

• 4:14Speaker 02

  Okay, sure. All right.

• 4:15Jason Calacanis?

  Anyway, the guy Ronnie, who runs it, who's a great designer, like they make these really great jackets and crossovers between brands. And they did like a crossover between.

• 4:26Jason Calacanis?

  A old athletic brand with an A, I forgot the name of it, plus Kith, plus Knicks. And they do these kind of crossovers, but they only release 50 jackets, 25 jackets. So I happened to get one of these really gorgeous jackets that Karl Anthony Towns wears. I'm wearing it down the street and that guy's like, take out F you and the Knicks or whatever. And I kind of waved and I was like, yeah, what's up? So this jacket, man, everybody had to comment on it. People love this iconic jacket. I didn't realize Kith is considered like the height of fashion for urban streetwear or whatever. And Knicks, and then this crossover with the athletic.

• 5:02Speaker 02

  Averex.

• 5:03Jason Calacanis?

  Averex.

• 5:03Speaker 02

  Yeah, I found it.

• 5:04Jason Calacanis?

  So Averex plus Kith plus Knicks. And then this guy decided, cause he was like, I guess he had a couple of pops and beverages. These gorgeous jackets, they basically say, talk to me about my team. So I get absolutely, you know, a ton of attention for it. There's a lot of conversation, people in Detroit are surprised, but this one guy is like, kind of keeps up the F U's.

• 5:26Speaker 02

  Hmm.

• 5:27Jason Calacanis?

  And I said, uh, you know, if you want a selfie, I'm totally fine with it. And he's like, no, I'm gonna beat your ass.

• 5:32Speaker 02

  Yeah.

• 5:32Jason Calacanis?

  He starts saying, I'm there with my little brother who's a former cop, a firefighter. You know, Josh, he's a bulldog. He's like, what'd you say to my brother? That's the one I got.

• 5:39Speaker 02

  Yeah.

• 5:40Jason Calacanis?

  You know, it's kind of a strategic error for me to wear this jacket maybe and walk from the arena to my hotel. It's a little bit on me.

• 5:47Speaker 02

  You know, you're, you're, you're.

• 5:49Jason Calacanis?

  I was pushing the.

• 5:49Speaker 02

  Yeah, you're sort of announcing yourself.

• 5:52Jason Calacanis?

  A bit, but it was great to wear in the arena. The people were great. We won the fourth game. Uh, Knicks will do the gentleman's sweep as I predicted, but a great town. And I actually, I want to go back to Detroit. I was thinking maybe doing like a this week in startups live in Detroit or.

• 6:04Speaker 02

  I'd love to go check out.

• 6:06Jason Calacanis?

  Great restaurants, great people. Did you know you can swim from Detroit like across the.

• 6:12Speaker 02

  To Windsor, Canada. Sure.

• 6:13Jason Calacanis?

  You have the right to Canada.

• 6:14Speaker 02

  Yeah, yeah.

• 6:14Jason Calacanis?

  For some reason I never knew that and we're talking about the border. There were 50 little swimming fishing vessels.

• 6:22Speaker 02

  Yeah.

• 6:23Jason Calacanis?

  People are just fishing in dinghies.

• 6:24Speaker 02

  I mean, that's what people, I mean, I think even Trump today was talking about the Canadian border as some loose, like, ah, who cares, they're basically already the 51st state. But the Mexican border militarized the whole thing, guys on

• 6:37Jason Calacanis?

  Well, you think about how many people live south of the border. You got, what?

• 6:41Speaker 02

  Forty.

• 6:42Jason Calacanis?

  Forty different countries?

• 6:43Speaker 02

  Yeah, there's a lot of countries.

• 6:44Jason Calacanis?

  So of those countries, how many have a revolution or, you know, you know, turned into dictatorships? There's gotta be like three or four at a time at any point in time. So there is reason to leave. And whereas like, I don't know many Canadians who are like, I hate this place. Most Canadians I know are like, this place is pretty dumb.

• 6:59Speaker 03

  Very, very few. And also, the numbers are quite different. So Mexico, 130 million people, Canada, 40 million. So just, just the sheer numbers across the border.

• 7:06Jason Calacanis?

  That's just one country, right? This country's below Mexico too.

• 7:09Speaker 03

  Absolutely.

• 7:10Jason Calacanis?

  Yeah.

• 7:10Speaker 03

  The whole, the Canada-US border thing actually became a, a plot point in the Canadian, uh, serial epic Trailer Park Boys, which if you haven't seen that critical bit of Canadian cultural export, you really owe it to yourself.

• 7:23Jason Calacanis?

  I can tell you this right now. You could make a homemade drone, pack it with as much fentanyl as you want, or H100s. I'm not suggesting anybody do this. And you could zip all day long, two feet over the water, as much fentanyl as you want.

• 7:40Jason Calacanis?

  There but by the grace of God, for whatever reasons, the Canadians must be doing a tremendous job of policing that side.

• 7:47Speaker 03

  Yeah.

• 7:48Jason Calacanis?

  Because I am not kidding. You could do a T-shirt cannon and shoot enough fentanyl to kill Michigan.

• 7:53Speaker 02

  Yeah, it's the, you're only a tiny amount of fentanyl.

• 7:56Jason Calacanis?

  I mean, it was crazy.

• 7:57Speaker 02

  That's what makes it so hard.

• 7:58Speaker 03

  It's incredible, though, that Jason just pointed out that there's two things you want to traffic around the world today. Drugs and Nvidia GPUs. And he's not wrong.

• 8:05Jason Calacanis?

  Basically, these are the pound for pound, I think.

• 8:08Speaker 03

  Yeah.

• 8:08Jason Calacanis?

  You know.

• 8:09Speaker 02

  The most valuable.

• 8:10Jason Calacanis?

  Most valuable, for sure. Like diamonds, gold and Bitcoin. I mean, they're, whatever, three, four and five, but I think H100.

• 8:16Speaker 03

  Yeah, yeah, yeah.

• 8:17Jason Calacanis?

  It was a crazy story that I am tangentially, uh, next to. There is a

• 8:23Speaker 02

  Group chat gate.

• 8:24Jason Calacanis?

  There's group chat gate. Now, I don't know, a year ago, six months ago, before the election. Eric Torreberg, who fancies himself like a micro J. Cal. He started his podcasting network and did a bunch of, well, he did like a little all in knockoff that lasted like five episodes and then a bunch of other niche podcasts.

• 8:45Speaker 02

  Right.

• 8:45Jason Calacanis?

  He's a great kid and he joined Andreessen Horowitz. But, you know, whatever year ago, he's like, hey, J. Cal, check this out. Can I invite you to the Signal group? I'm like, sure. And then like, it was like 50 people, then 100, then 150. And you know that like whole preference stack that happened in Silicon Valley?

• 9:00Speaker 02

  Yeah.

• 9:01Jason Calacanis?

  Kind of watched it up close and personal. Mark Cuban's in there, like, this is all public now. And I never talked about it all that much because, you know, like, I kind of felt it was quasi-private. You know, based on the people in there, that there are some people who are journalist type people who would take pictures and share them, I guess. Lot of influencers, maybe a little like, maybe white supremacist adjacent folks. You know how there was like a little bit like at the far end of MAGA, there are people who are not Nazi or white supremacists, but they're kind of adjacent to the next group of people. There's a little bit of that sprinkled in. And then a lot of tech people, a lot of media people. Anyway, they made like some big deal about it because there was a leak.

• 9:38Speaker 02

  Yeah, well, Ben Smith in Semaphore just wrote this whole piece about it.

• 9:42Jason Calacanis?

  Yeah. So, anyway, people have been dropping off of it, like five people a day are like, yeah, I'm kind of done. But I, I'll be honest, it's a snore. It's essentially the same discussion, Alex, happening on Twitter, happening there.

• 9:55Speaker 02

  Yeah.

• 9:56Jason Calacanis?

  And maybe people use the R word a little more, but it's not like anything different than anything you're seeing. So it's kind of a big nothing burger.

• 10:04Speaker 02

  I mean, that's kind of what I was saying when I first read the article. I mean, it sort of got previewed. A few of the people from the group chat kind of leaked ahead of the article that they had been.

• 10:12Jason Calacanis?

  Yeah, Joe Lonsdale.

• 10:13Speaker 02

  Right. They had been interviewed by Ben Smith or he was sniffing around and so it was going to come out. And I, I think my reaction was, yeah, like, well, of course, like, I just assumed these kind of back channel conversations are happening on Signal every day. Like, why, why would that? I'm in a bunch of group chats. Of course billionaires have their own group chats. I just feel like it's obvious.

• 10:33Jason Calacanis?

  Yeah. It's a, and sent to millionaires.

• 10:36Speaker 02

  And sent to millionaires.

• 10:37Jason Calacanis?

  Deca millionaires. They're all, and this all.

• 10:40Speaker 02

  I'm not trying to be proud of them.

• 10:41Jason Calacanis?

  The oppression of the 0.01% of the 0.1%.

• 10:45Speaker 02

  Yeah. Bernie Sanders never shouts you guys out either. It's always right to the billionaire class.

• 10:49Jason Calacanis?

  I know. I mean, come on.

• 10:50Speaker 03

  I, we got to do better, but I mean, to expand our circle of hate.

• 10:55Jason Calacanis?

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• 12:26Jason Calacanis?

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• 12:39Speaker 03

  Jason, actually, I want to point out that last summer, you and I, before Lon joined us, I asked you, what is the technology argument in favor of Trumpism? And you gave me a pretty interesting look. And you framed it something like, here's what's happening behind the scenes. And you were very clear to obfuscate sources and where it came from and so forth. But were you polling at that time, kind of from this group chat?

• 12:58Jason Calacanis?

  Among other group chats, I mean, yeah, sure. I mean, I think one of the things that happens on social networks, whether it's Blue Sky is Falling, Twitter X, Reddit, is you have a mixture of the elites, the known people, the powerful people, people like us and others, uh, more powerful and more influential. And then you have the hoi polloi. You have the civilians and that's kind of the magic of it, but it also kind of kills it. Because if Mark Cuban and Joe Lonsdale are getting into it with Mark Andreessen and Ben Shapiro and JD Vance and they're in the same chat, like, whoa, that's kind of entertaining.

• 13:34Speaker 03

  Wait, JD Vance was in the group chat?

• 13:36Jason Calacanis?

  Well, anyway, I don't know if I'm saying too much, but I think he might have been. I could be wrong.

• 13:39Speaker 02

  He is not mentioned in the, in the semifinals.

• 13:41Speaker 03

  I know. I was about to say, we're gonna break some news here, ladies and gentlemen, the VP.

• 13:44Jason Calacanis?

  Maybe I'm wrong. I don't know. Maybe he was in the early days. I don't know. It could have been anybody. I mean, they, they, I'm not saying they put the plans to blow up the Houthis in there.

• 13:53Speaker 03

  Yes.

• 13:53Jason Calacanis?

  Well, let's just say, let's just say.

• 13:57Speaker 02

  Seth was going through the context, like, let's see, who's in? Who should I invite? My mom and good girlfriend, obviously.

• 14:03Jason Calacanis?

  So, um, yeah, I think I do get some signal from group chats, in Signal, in WhatsApp. It's, people will, I think, probably, that's actually a really interesting point, Alex. I would say, even though people are speaking as if they know it's being screenshotted and sent to journalists and they don't, everybody knows, don't put anything in text. Cause your phone could get dumped, get hacked, whatever. So don't say anything there. That would be career ending or you wouldn't put your name up publicly. But that's an interesting point, because it's more interesting to be there than on social media, because of the sort of spam and the bots and the chaos, whatever. I do think maybe people will talk about things first in the group chat, floated in the group chat and then go public. I know I do that in some of my group chats.

• 14:45Speaker 02

  Oh, for sure.

• 14:46Jason Calacanis?

  So I'll be having a conversation with you, Lon, in one of our group chats, and then I will. Take what I just said and say, oh, I'll adapt that into a tweet. I'll copy it. Not, I'll copy what I said, not somebody else's, to be clear. And then said, was there any like, I don't know why this is a number one story on tech meme.com, but.

• 15:02Speaker 02

  That's what I'm just saying, like, I don't know, it feels like a.

• 15:04Speaker 03

  Ah, I can, I can explain that.

• 15:06Speaker 02

  Tempest in a teapot?

• 15:07Speaker 03

  It's because if you're plugged in, you watched the technology luminaries that were part of these group chats shift to the right slowly incrementally. But for a lot of folks out there, it kind of went, okay, everyone's a normie Democrat amongst the VC class. And then suddenly a bunch of people came out in favor of Trump. I mean, I remember Sean McGuire, who was part of these group chats, dropping his X essay on why he supported Trump and being surprised. Because I, one, didn't know Sean McGuire was, and also it struck me as a surprising move to make in that political climate. But if I had had this context, Jason, it wouldn't have been a surprise whatsoever. Also, I do think that the end of the article is the most interesting bit when they discuss how the post liberation day tariffs are fracturing some folks on the right who are technologists.

• 15:49Speaker 03

  Because I, I think it's fair to say that this show is a free trade fan club. And I think that has been the traditional position of business leaders and especially on the right. So to see now people having to defend Trumpism, uh, contra to what I would call traditional GOP economics, is fracturing these groups. And that's interesting because it didn't last long as a coalition, Jason.

• 16:13Speaker 02

  Yeah, I think the other interesting thing that people are noticing, I've seen a lot of people going back on social media, finding members of these group chats that have been identified. And noticing when their tweets and their rhetoric started to align, like I saw a screenshot of a Matt Iglesias post. And then, I don't know, some, somebody else from the group chat, Jill Lonsdale, maybe. And there was like, look, they're making the same argument like within a week of each other because they were both pulling from this group.

• 16:39Jason Calacanis?

  Yeah, I, that is kind of like the phenomenon. You go to a dinner party. You have a conversation about, you know, in Hollywood, I don't know, Tar. Remember that movie Tar?

• 16:48Speaker 02

  Oh, of course.

• 16:48Jason Calacanis?

  That I've talked about?

• 16:49Speaker 02

  Yeah, yeah.

• 16:49Jason Calacanis?

  Cate Blanchett. I remember listening to Bret Easton Ellis and he didn't like Tar. He actively didn't like.

• 16:56Speaker 02

  Yeah, sure.

• 16:57Jason Calacanis?

  And then he had conversations with people and everybody loved it and he's like, let me watch it one more time. He watched it again, which is a three hour plus film. That's a little bit of a task.

• 17:04Speaker 02

  Yeah.

• 17:05Jason Calacanis?

  And all of a sudden he came back and said, you know what, on second watching, I can understand what people appreciate about it. And I kind of like it now. So there is something to working through issues and changing your mind. Or peer pressure, you know, whatever.

• 17:18Speaker 02

  Or even just hearing somebody speak to something and it been put a spin on it you hadn't thought of before. You go, oh, they're right. I, I like that argument. I'm going to sort of adopt that myself.

• 17:27Jason Calacanis?

  Yeah.

• 17:28Speaker 02

  I think, I think that's what is fascinating to people is the anthropology of going back and watching these arguments sort of spread.

• 17:35Jason Calacanis?

  Yeah, yeah, yeah. Well, and now we're watching it sort of come apart because there is a, Trump really does drive ratings. On podcasts, so you know, we'll, we'll put in the first sentence here. You know, Trump, if we, let's do an experiment for our YouTube, the Trump or, or, uh, Trump group chat.

• 17:53Speaker 02

  Yeah.

• 17:53Jason Calacanis?

  Just, we'll name everything, Trump group chat.

• 17:55Speaker 02

  The Trump tech.

• 17:56Jason Calacanis?

  Exposed.

• 17:56Speaker 02

  Yeah.

• 17:57Jason Calacanis?

  Trump tech. Trump tech group chat exposed.

• 18:00Speaker 02

  There you go.

• 18:00Jason Calacanis?

  Let's start with that as the thing. You put that as the top of the YouTube or the thing, people are going to want to know.

• 18:05Speaker 02

  It'll get clicks. Yeah.

• 18:06Jason Calacanis?

  So, you know, Trump equals box office. So everything kind of revolves around that. And you are seeing now, a lot of the arguments people had for why they wanted Trump over Kamala was the economy. And now people don't feel like, oh, it's kind of like some of the neo cons who are like, I feel like maybe we should fight against like, uh, Putin. Maybe we should have global trade. Though that neo con or Clinton Democrat position, I think is a large part of the middle. And that middle, that is like, yeah, Putin might be a bad guy. And we should stop him from invading countries. And maybe we don't want to shake the economic snow globe too hard with these tariff things.

• 18:46Jason Calacanis?

  Maybe we should just do it gradually and not, you know, have the economy do these kind of crazy roller coaster ride. I think those group of people are the ones who maybe. Uh, left the Democratic Party. They may have pinched their nose or were peer pressured or just changed their opinion on Trump and said, that's a better choice of the two bad choices. That group of people now, I think, are maybe saying, eh, I'm not happy with this. And that's what you're seeing in the polling.

• 19:13Speaker 03

  I was just about to say, not, not, not alone.

• 19:17Speaker 02

  The third plank. Americans are strongly in favor of deporting people who are here illegally, who have committed crimes.

• 19:24Jason Calacanis?

  Yes.

• 19:24Speaker 02

  But that's it.

• 19:25Jason Calacanis?

  Yes.

• 19:25Speaker 02

  And Trump is going so much further than that now, to the point of rounding up two-year-old US citizens and deporting them, that you're starting to see the polls reflect that too. So he's

• 19:36Jason Calacanis?

  Yeah, I mean, I think

• 19:37Speaker 02

  gotten away from these centrist positions to the far right. And I think that's what we're starting.

• 19:42Jason Calacanis?

  Could be a mistake, I think, because maybe he loses some of those people in the midterms.

• 19:46Speaker 02

  Yeah.

• 19:46Jason Calacanis?

  You know, it's, it's all so chaotic right now. Um, I use the word chaotic because it seems like that's overused. It's, it's hard to understand what exactly is happening. Communication is critically important, as we know from our company.

• 19:59Speaker 02

  Mm-hmm.

• 19:59Jason Calacanis?

  Proactive communication, particularly important. A little proactive communication goes a long way.

• 20:05Speaker 04

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• 20:35Speaker 05

  Thank you so much, Jason. It's great to see you again.

• 20:37Speaker 04

  Yeah, great to see you as well. Maybe just from a product perspective, what are you trying to accomplish with the product?

• 20:43Speaker 05

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• 21:21Jason Calacanis?

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• 21:44Speaker 03

  All right, let's dig into little tech. We have quite a lot to go through here, Jason. The biggest story I think is that Palo Alto Networks is going to buy protect AI, which is a company that we added to the twist 500. So we'll need to take it off now that it's going to be part of a public company. Protect AI, if you don't know, sells tools to secure generative AI usage inside of large companies. If you want a bit more detail about that, essentially it helps enforce AI usage policies. It helps you red team AI applications to make sure they're not misused and also does conversational audits.

• 22:15Jason Calacanis?

  Make sure I understand that. Sure. So we know what red teaming is. That's when you try to trick an AI to make a mistake or do something it's not supposed to do. So if it wasn't supposed to grab your credit card from last pass or password, one password or whatever you're using, if it's not supposed to, I don't know, do something racy sexist, offensive, you try to get it to do that. Yeah, that's what red teaming is just for people who don't know. You try to break things, get it to act offensively. So this helps you with that. And then I guess monitoring the workforce usage and actually creating policies and auditing all this stuff is really going to be important.

• 22:54Speaker 03

  I think it's going to be huge. Yeah.

• 22:55Jason Calacanis?

  Yeah, this feels like a really important idea because I have paid for everybody in the company, I think. To have ChatGPT.

• 23:04Speaker 03

  Hmm.

• 23:04Jason Calacanis?

  And I think we may pay for Claude too, or maybe select people buy it who use it a lot. I kinda need to know what's going on in those. Right? We need to know what people are doing, especially if they upload our data to those services.

• 23:16Speaker 03

  Sure.

• 23:16Jason Calacanis?

  Yes. So there do need to be some controls on this, and it sounds like a really great idea. And did they say what it was sold for?

• 23:24Speaker 03

  So they did not list a price. They called the deal strategic on the Palo Alto network side. Geekwire did report that the transaction was for more than 500 million, but we don't have anything more concrete yet. But no, Jason, actually, it's not that great of a price because I think their last valuation was between 400 and 450, and that was last year. So this isn't that big of a, a, a sales premium. And the company said at that time that it grew, I think it was by several hundred percent. So to me, there's a missing piece here that led to this sale because it seems like the company, the funding, the growth, all had it piped to do a lot more than this exit. I don't want to talk crap about someone's nine-figure exit, right? But it just feels a little cheap. So I wonder if we're missing something in the story that hasn't come out yet.

• 24:07Jason Calacanis?

  Well, the last valuation is the sales valuation. That's like a really interesting discussion point. Is it? Is that basically what we think happened here?

• 24:13Speaker 03

  Plus 20%. Yeah.

• 24:15Jason Calacanis?

  Okay. So whenever you have less than a doubling, the VCs are not in it for a doubling.

• 24:20Speaker 03

  Hmm.

• 24:20Jason Calacanis?

  That means the founders drove this and the early investors drove it. So there'll be three constituents in a company of this size. You have the early investors, angels, seed, series A. They all got in at five to 10 million, 10 to 50 million, maybe 100 million, and the founders got in at $0. That group probably owns collectively 80 to 85% of the company.

• 24:47Speaker 03

  Yeah.

• 24:47Jason Calacanis?

  Within the employee. Then you got the last 10 to 20% of the company. That's the series B. That's the 100 million, that 500 million post. That group of people. Usually has a right to get at least two times their money, right? So they would, if they were smart in a really competitive environment, they can't get that. They just get their money back. So this is a situation where if that firm was in a competitive situation, they may have given up what are called protective provisions. The protective provisions being, you know, you can't just run away with the money. You can't abscond with it. You can't, there are things to protect investors from bad behavior or losing money. One of the protective provisions is participating preferred or a liquidation preference.

• 25:32Jason Calacanis?

  This is means I get my money back plus something so that if you do some quick sell like this, I'm, I don't get nothing.

• 25:38Speaker 02

  Yeah.

• 25:39Jason Calacanis?

  So my guess is whoever put the last 50 million in has a provision. They get double their money back, a liquidation preference. In other words, so they get the hundred million. If this went for 500 million, they sweep the hundred million off, then 400 million goes to everybody else. You give 400 million to everybody else. Maybe the founders, if they own 80% collectively thought, hey, huh, 40% of 500 million is 200 billion each, we're in. So I'm guessing that's what happened here. And maybe they thought there's a lot of competition and maybe they were given equity in Palo Alto Networks, which has been doing fantastic. The founder of Palo Alto Networks spoke at the All In Summit last year, and he really explained how he really courts founders and puts those founders in charge, in charge of their units.

• 26:21Jason Calacanis?

  And if there was a unit doing that internally and they go buy one, they take the unit head who is getting beaten by the independent and say, that's your new boss.

• 26:30Speaker 02

  Yeah.

• 26:30Jason Calacanis?

  If the unit head internally is beating the external competition, they get to be there, keep being. So that's his philosophy. It's a kind of a cutthroat.

• 26:36Speaker 02

  It's a reality competition series.

• 26:39Jason Calacanis?

  I think it's more, yeah, it's performance based.

• 26:41Speaker 02

  Yeah.

• 26:41Jason Calacanis?

  You know, if you are a fading starter in the NBA and some young buck comes up and they're the sixth or seventh person on the bench, they might take your position, very awkward thing you see happen sometimes in basketball, for example. I know because I'm friends with Draymond Green and with David Lee. David Lee was a starter, he was towards the end of his career. Draymond Green was coming up. I think maybe if my memory serves me collectively correctly, like their minutes or starting position may have flipped at some point during, you know, that transition, but they were both very cool with it. David Lee was, you know, Draymond Green's mentor and so was Bogut. So you had this really great transition. All right, listen, congratulations to them and.

• 27:21Jason Calacanis?

  The other piece in this, Alex, to note, DPI, sending money back to your investors has been very low for four years under the wrath of Lina Khan, and then it just got kind of paused by this tariff turmoil.

• 27:34Speaker 03

  Yeah, yeah, yeah.

• 27:35Jason Calacanis?

  So maybe the VCs here are like, hey, I doubled my money and I can send 50, I can send 100% IRR. The internal rate of return here is 100%. I can just ship it to my LPs and just say, hey, by the way, you put in 10 million, this was whatever. If you put in 30 million, this was 1 million of the fund, all of a sudden I'm sending you 2 million back in the early days of a fund. It's like, oh, that's nice.

• 27:59Speaker 03

  Yeah.

• 28:00Jason Calacanis?

  Money came back from a venture fund, something that's not happening as much as it needs to.

• 28:04Speaker 03

  The power of cash on cash returns. All right, next up, ARX Robotics. It is a European defensive robot company. I have a picture of one of their machines right here, Jason. This is an autonomous robotics platform. The company has many different systems that go on top of this. You can do delivery of supplies on the battlefield, sensors, you can do casualty recovery, I believe is the term of art.

• 28:28Jason Calacanis?

  It looks like a little, what that looks like?

• 28:31Speaker 02

  Tank.

• 28:31Jason Calacanis?

  It's like a tiny?

• 28:32Speaker 02

  Tiny tank? Tiny tank with a big sensor on top is what it looks like to me.

• 28:36Jason Calacanis?

  Like treads, it's got two treads.

• 28:37Speaker 02

  Yeah, it's like a, it's like a mini tank, like not as big as a, you know, vehicle-sized tank, like a little, like, like one of those autonomous delivery robots.

• 28:46Speaker 03

  I was just about to say, exactly like one of those.

• 28:47Speaker 02

  It was a tank.

• 28:48Jason Calacanis?

  Got it.

• 28:48Speaker 02

  A sensor on it.

• 28:49Jason Calacanis?

  So it looks like maybe an ATV, like that you might drive in your ranch.

• 28:54Speaker 02

  Roughly ATV size.

• 28:55Jason Calacanis?

  Yeah, size of your desk.

• 28:56Speaker 03

  You could sit on it, but you wouldn't have you and your friend on this device. They're calling it a platform. The acronym here for folks who want to be in the know is UGV, Unmanned Grounded Vehicles. And this fits neatly into our philosophy that drones and autonomous systems are the future of warfare. And to see a European company doing this, raising money, including from NATO's Innovation Fund, not a huge shock. I thought it was incredibly cool. I love to see Europe getting its military boots back on. I think it's encouraging. I think it's a little bit late, but better late than never. And the company put together a 31 million euro round, Jason, bringing their total capital to 42. I love seeing it.

• 29:32Jason Calacanis?

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• 30:16Jason Calacanis?

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• 30:57Speaker 03

  Lon, how did we miss this for the Twist 500? I felt so silly. I was like, this must be a Twist 500 company. And it's not.

• 31:04Speaker 02

  We're very into the autonomous military robot drone kind of, kind of thing, kind of area category. Yeah. I do like that they're not putting guns on it, that this one is for recon, patrol, cargo.

• 31:17Speaker 03

  Bullshit.

• 31:19Jason Calacanis?

  They're just not putting that in the market. It's a platform, so it's up to you.

• 31:23Speaker 02

  Yeah.

• 31:23Jason Calacanis?

  And you can be sure that there are amounts that if you wanted to, you could put AK-47s.

• 31:28Speaker 02

  Turrets on there, yeah.

• 31:29Jason Calacanis?

  I'll be totally honest, I'm fine with because what we're going to see in the future is these things shooting at each other. It's going to be robot on robot. This is going to be like that. What was that show on TV where the robots would battle each other in an arena? BattleBots?

• 31:41Speaker 02

  BattleBots, yeah.

• 31:42Jason Calacanis?

  Basically, war is going to be BattleBots now.

• 31:44Speaker 02

  I would, that's best case scenario. There's BattleBots.

• 31:46Jason Calacanis?

  There's BattleBots. So this is the future.

• 31:48Speaker 02

  They're not autonomous, though. There's guys with remote controls.

• 31:50Speaker 03

  But the idea is they're not punching each other.

• 31:54Jason Calacanis?

  This is the precursor to it, though, like the ability to move around and have weaponry on a small device and then have it battle other small devices, what this is going to be all about. I have a, a, a, a theory that non-US, non-US weapons makers are going to surge.

• 32:12Speaker 02

  Hmm.

• 32:13Jason Calacanis?

  Why? Well, the US has a certain amount of capacity. That capacity is needed for client number one, the US. We need every ship we can make. We need every drone we can make. We need to build a supply chain here that's independent of DGI. So I think places like Korea and the EU and other places that are good at making weapons are going to get their order books filled by everybody who needs weapons. Everybody needs some weapons. You've got to defend your border. It's no big deal. No judgments. So there is an ETF, a friend of mine told me about KDEF. I backed up the truck. Korean defense company. You cannot buy Korean socks easily, so I bought KDEF. I announced it.

• 32:55Jason Calacanis?

  I sold like two of my losing positions, which were Warner Brothers and Disney. I was sick of Warner Brothers and Disney, just disappointing me. I had like a hundred thousand in losses from that. But I had bought some Uber when Uber was like down around $30. And I have a lot of Uber already from the angel investment, but I was like, let me just buy some Uber here because I know for a fact that this is definitely undervalued. It's trading at 70 something dollars now. So I sold that Uber I had bought two years ago to offset the gains. I'm sorry, the gains from Uber were offset from the losses from Warner Brothers. That turned and edited out. I cleared, you know, a couple of hundred grand. Boom. I dumped it into KDEF.

• 33:38Speaker 02

  It's like the Korean Defense Industry Index ETF.

• 33:42Jason Calacanis?

  Now, this is made up of, when you look at it, it'll tell you all the companies that are in it. Now, these are individual publicly traded Korean defense companies. I know nothing about those.

• 33:53Speaker 02

  Mm hmm.

• 33:54Jason Calacanis?

  But I am into defense. I'm going to start buying defense stocks. If you have ideas for us, please put in the comments. If you think this KDEF is a bad J-Trade, let me know. I got to rebuild the J-Trade website, jtrading.com.

• 34:07Speaker 02

  Yeah.

• 34:07Jason Calacanis?

  Because we're using Coda and my guy Prash had used a third-party tool to pump in the shares.

• 34:14Speaker 02

  The real-time.

• 34:15Jason Calacanis?

  The real-time, real-time service, not Coda, not their fault, turned off. So I have to redo the thing, or I may partner with one of these websites that allows you to put your portfolio up because one of those had me on a list and I was number five on the list behind like Ken Griffin and Nancy Pelosi. And I did this like in my spare time. Now, I had a good entry price, which was, you know, during the, the, the, the, the bad bottom out during the SVB.

• 34:41Speaker 02

  I mean, getting anywhere close to Pelosi is tough.

• 34:43Jason Calacanis?

  Yeah, it's tough. Pelosi is a tough, tough, that's a tough person to be at the poker table with. Anyway, what else do we got going on here?

• 34:50Speaker 03

  Centra, not the car, not the thing you don't want to drive to the high school or prom. No, this is a startup that just raised $50 million. It is in the world of data security. Jason, there's a fancy acronym called DSPM, which stands for Data Security Posture Management. That is corporate speak for go find all your data all around your multi-cloud setup and make sure that it's secure. It's actually a pretty big industry, I think. And the company is also moving into helping, unsurprisingly, companies use generative AI safely so their data, to your earlier point, Jason, doesn't leak into the applications and go out all over the web. $50 million Series B.

• 35:27Jason Calacanis?

  Oh, so another contain the AI method. It's great that people are getting ahead of it. So they raised 50 million in a Series B.

• 35:34Speaker 03

  Again, I think this is a pretty cool idea for a 200 entry because it grew 300% year over year. And that is the exact pace of growth that gets me very, very excited because if you're raising 50 of a Series B, Jason, I presume you have a pretty reasonable revenue base to be growing from, you know, 300% on top of. So it's probably a pretty impressively stable corporation and I love to see more Israeli security companies do well.

• 35:58Jason Calacanis?

  DSPM technology, data security posture management. So you've got data.

• 36:05Jason Calacanis?

  You need to keep it.

• 36:05Speaker 02

  You're plugging it into Notebook LM over here, Claude over here, OpenAI over here. You need to make sure it's not going everywhere, leaking into those.

• 36:15Jason Calacanis?

  I need to know about this because I, like I said, I bought ChatGPT for everybody and ChatGPT keeps asking me to connect Google Docs.

• 36:23Speaker 02

  Yeah.

• 36:23Jason Calacanis?

  And I'm like, yeah, no, I'm not going to click that button. But then I was thinking, well, you know, I got enterprising young folks working for me, researchers and analysts. Maybe they did that already because they're like, oh, I can now ask ChatGPT.

• 36:32Speaker 02

  I, I did do that, but only for my purse, not, not my launch account, only my personal.

• 36:36Jason Calacanis?

  Now, do you worry that it's going to take whatever you got in there, the great American novel, or whatever you're writing fanfiction? Maybe you're doing some spicy fanfiction. I don't know what's going on in your docs.

• 36:46Speaker 02

  Spicy.

• 36:46Jason Calacanis?

  I mean, that's, I don't know, Fifty Shades of Grey stuff going on in that. Maybe you're.

• 36:50Speaker 02

  I, you know, I, I.

• 36:51Jason Calacanis?

  Maybe you're Wattpad-ing and now.

• 36:53Speaker 02

  I, I, I, you know, I have some essays and creative writing in my Google Doc, but I don't believe that they're violating our agreement. Like you have to feed the individual doc in. You can't, it's not, it's not like learning about me by going through my.

• 37:09Jason Calacanis?

  It's not training or doing.

• 37:10Speaker 02

  No, you, I think you can do that, but no, I'm, I'm loading in individual Google Doc.

• 37:15Jason Calacanis?

  Okay, fair enough.

• 37:16Speaker 02

  So I'm not loading in stuff I don't want.

• 37:17Jason Calacanis?

  I want all this to occur on the desktop. My understanding is these Microsoft, I was listening to Leo Laporte this week on This Week in Tech. And they were talking about these Microsoft laptops that were, you know, kind of AI ready. I think Copilot is what they call it.

• 37:34Speaker 02

  Yeah.

• 37:34Jason Calacanis?

  Is the, how they're branding it. And you know, you have it, he said, because it has a Copilot key, just like they had the Windows Star key. They have a Copilot key now. What they're doing, and he wants it to record everything his computer does, so that you can say stuff like, last week I was like buying some razors, but I can't remember the name of it. Can you tell me like what brand I was looking at or reading some article about X, Y, and Z? And recall it. And there was a woman on Twitter on Sunday who is a lawyer and she's like, this is a really bad thing because like, you know, now it can be subpoenaed and there's all this stuff.

• 38:06Speaker 02

  Sure.

• 38:06Jason Calacanis?

  Really careful. So you think about like subpoena power, you know, okay, you get into a lawsuit. I don't know, you know, your friend buys a company that's high profile and you get pulled into some lawsuit. And then they're like, okay, yeah, we want to take your co-pilot. And start asking your co-pilot, what pages were you looking at? Did you read anything?

• 38:24Speaker 02

  Right.

• 38:24Jason Calacanis?

  You may not remember every conversation you had, everything you had, and it might record your signal. Because your signal's on your desktop or whatever encrypted thing you have.

• 38:33Speaker 02

  Right.

• 38:34Jason Calacanis?

  Maybe it's recording some encrypted emails you have. Maybe you've got some stuff you talked about with your lawyer under attorney-client privilege. That's getting put in. So she was making very good points about this, like, this is crazy. And he was like, yeah, I don't get sued, so I don't care. I'm just gonna do it. But you, all of it is stored locally on your computer. So you need to have a big enough processor, enough memory, enough storage to have all that occur locally. That's going to be the future of this, which is just like you might have an index of your photos on your phone, not in the cloud, or like the phone, some things are in the cloud encrypted, but other things are on your phone locally.

• 39:07Speaker 02

  Yeah.

• 39:07Jason Calacanis?

  There's going to have to be a whole series of decisions made of where to keep your large language model and then what you give up for performance. Because this also will slow your machine down.

• 39:20Speaker 02

  Sure. If you have to keep everything locally, yeah.

• 39:23Jason Calacanis?

  Yeah. Lot of trade-offs.

• 39:24Speaker 03

  The, the market that we're talking about is so big, Jason, that another twist 500 company, Syerra, and we had one of the founders on the show, episode 1989, last August, for a twist 500 interview, they raised another $300 million last, uh, late last year. So people are really backing this space. There must be just Boko demand on the enterprise side because I bet you, every company wants to avoid everything that you're saying, while also getting all the benefits and cost savings of AI. So to me, it's a great place to build a startup right now. We've been talking a lot about AI assisted coding, people essentially writing code with AI tools, either helping them write whole applications or just expand their own writing. People talk about the problems this brings up. There's going to be technical debt, there's going to be debugging issues, it's going to be slow.

• 40:07Speaker 03

  So I've been waiting for a startup that's going to apply kind of the same idea, but not to generate any new code, but to apply AI to clean up existing code to make it faster, better, and with fewer bugs. So Lightrun, it's an Israeli startup, they are doing this and seem to be absolutely The news item here is that Light Run raised a $70 million Series B, bringing their total capital to 110. But the thing that I find most interesting is last year, they debuted what they call essentially AI debugging of production apps. So apps that are live out there in the world. And then in the last year, their revenue grew four and a half X. So my read of the situation, Jason, is that the company found a pretty smart way to use their own model to clean up code often made by AI and therefore have the snake eat its own tail.

• 40:51Speaker 03

  And it's driving insane growth for the company. I think it's just fantastic. And I hope this means that eventually Chrome will not eat every gigabyte of RAM that I fricking have. But I'm not entirely sure it'll be that quick, but I've been looking for this company. Glad to see you finally here. And I think this is the future. So I'm pretty fricking stoked.

• 41:06Jason Calacanis?

  Yeah, it looks like revenue has been growing 4.5 X year over year. A lot of founders ask me like, how can I like rapidly close my next round of funding? In Silicon Valley, triple, triple, triple, double, double, double. That's what, you know, VCs are looking for. So you start a hundred K, you go to 300, you go to 900, you go to 2.7, something like that. You know, then you double it, you go to 6 million. That kind of fast growth solves all problems. You will easily, easily raise money if you're growing double-digit percentages each month. Rule of 72, look it up. If you're growing 10% a month in 7.2 months, you will double. That's the rule of 72. If you're growing 35% in but two months, you will double your revenue.

• 41:49Jason Calacanis?

  So get your team focused on what are we, how much are we growing week over week? Month over month, quarter over quarter in terms of our revenue, that's your notes are. And if you're trying to convince with words and promises and arguing and debating with a VC, all that energy you could be putting into just growing your revenue. And then that sale solves all problems. That was something Mark Cuban taught me early on. Sales solves everything. Sales solves profitability, running out of money, paying people more salaries, hiring more people, and Convincing VCs to invest more money.

• 42:24Speaker 03

  That's why I think this Series B was actually not led by one major VC firm, Jason, but it was co-led by Excel and Insight Partners. And I don't think you get two big names like that if you're not a pretty darn impressive group. Don't have a valuation here, but one to watch. This is part of the data. Sorry, developer observability is the buzzword. So one to keep in mind in the back of your head.

• 42:43Jason Calacanis?

  There was something about Neo Scholars. I thought that was kind of interesting. The guy from Neo.

• 42:47Speaker 02

  Yeah, we got that one.

• 42:48Jason Calacanis?

  Is doing like a Thiel Fellowship or something.

• 42:50Speaker 03

  Okay, so a little background here. There's a venture capital firm called Neo. It's made a lot of pretty sizably awesome investments. Like, I think they were really early in Cursor, the company that just scaled from 100 to 300 million ARR in like 25 minutes.

• 43:03Speaker 02

  Speaking of growth solving our problems.

• 43:05Speaker 03

  Yeah, yeah, that solves like the world's problems. So Neo, it turns out, is more than just a venture capital firm. They also have something called Neo Scholars. And a bit like a Thiel Fellowship, this does involve college-age kids, but in this case, they just gives them 20K and then has them take a gap semester or a gap quarter if they're on a quarter-based system. I think this is fantastic. I think this fits into the kind of the Jason thesis of we need to go earlier, earlier, earlier. Like, forget an accelerator, forget a pre-accelerator, let's go find the kids that are the most impressive and let's just get into friendship with them with a little bit of capital and see what comes out of it. Probably hard to scale, but I think we're going to see more and more of this because everyone wants to get in earlier. So Neo, 20K, I dig it.

• 43:49Jason Calacanis?

  Love it. You know, this is good marketing for a venture firm to get in early. The thing with the Thiel Fellowship that people don't know is he doesn't get anything for that 100K other than the relationship with you and the goodwill.

• 44:03Speaker 03

  Right.

• 44:03Jason Calacanis?

  So that's what made it super interesting, is it was just a way to get super smart, crazy thinkers from Ivy League schools who spent all this time and effort to get into an Ivy League school to then. Be attracted to quitting the Ivy League school.

• 44:20Speaker 02

  Yeah.

• 44:20Jason Calacanis?

  So you start thinking about the logic, like what type of person spends a decade of their life, you know, from seven or eight years old, being super driven to 18 or 19, getting into Harvard, Yale, Columbia, Stanford.

• 44:33Speaker 02

  Hmm.

• 44:34Jason Calacanis?

  And then this weird, you know, guy, Peter Thiel, who's like, got all these like non-consensus opinions. It's like, I have an idea for you. Instead of going back for junior year or sophomore year, why don't you quit and hang out with me in San Francisco? I'll give you a hundred K.

• 44:48Speaker 02

  Yeah.

• 44:49Jason Calacanis?

  That attracts a certain type of weird. What's the better word for weird? Non-traditional?

• 44:55Speaker 02

  Yeah. Outside the box, sort of unconventional thinkers. But I, I think what's so interesting is I think we're starting to recognize, you know, the, the old version of like the call, you know, go to high school, you go to college, you go to even grad school or, you know, whatever. We're locking people in, in what could be some of their most productive, most active, most engaged years. I mean, when you're 18, 19, 20, you don't have a family, you don't have a mortgage, you know, you're, you're, you could work 18, 20 hours a day on what you're passionate about. Like that's your.

• 45:24Jason Calacanis?

  Yeah. Don't waste those years.

• 45:25Speaker 02

  Time. And yeah, we're, we're putting everybody in, spend those years reading novels, spend those years, you know, doing research in the lab and like, that's great for some people. I'm not saying people shouldn't be academics or scholars, but that's not necessarily what everybody should be doing when they're 19. Some people should be like inventing things or making things.

• 45:42Jason Calacanis?

  I mean, if you were, a better model for college might be, cause it really is like a finishing school and adult babysitting in a way, Alex.

• 45:50Speaker 02

  For some people. I mean, for some people, they do amazing things in, in university.

• 45:54Jason Calacanis?

  Might it not be a better model to have them have an apprenticeship, go work somewhere?

• 45:59Speaker 02

  For a lot of people.

• 46:00Jason Calacanis?

  And then maybe on Fridays or maybe even Saturdays. So you work full time Monday through Friday and Saturdays, you go take a course. So like, if you wanted to be in film, you go work on a set, you go work.

• 46:10Speaker 02

  Right.

• 46:10Jason Calacanis?

  Where laying, you know, electrical cables and being a grip, whatever they need you to do, running, getting coffee, but being on that set. And then Saturdays or whatever, you, you have a course on lighting, a course on cinematography, and you just do one course every 12 weeks and you just.

• 46:27Speaker 02

  And we fascinated, we did see this, I mean, in the eighties and nineties, when film equipment was still very expensive and it was hard to sort of break in. Film school was the thing. You went to film school and that's where you learned how to be a director. But once we democratized the technology, you can make a movie on your phone, you can become a creator. We have seen a lot of people skip over the film school step and just teach themselves how to use the tools that went there.

• 46:50Jason Calacanis?

  So it is actually a cool thing. Like people forget about this, but there were film schools. When you say film school, you're talking about not college film school. These were film schools, like New York Film Academy.

• 47:00Speaker 02

  Academy, yes. LA Film School is another one, yeah.

• 47:03Jason Calacanis?

  Yeah, they were trades, trade schools essentially where you went and you pay, what did it cost back then? Five grand, 10 grand?

• 47:10Speaker 02

  Yeah, something like that.

• 47:11Jason Calacanis?

  It was less than going to college.

• 47:13Speaker 02

  It was less than going to college and they teach you how to use the gear and the equipment. You get trained, you make, you make, you make short films of your own to sort of train you up. But yeah, it's without the film theory side, without the like spend a year just in a classroom hearing lectures and it's more apply.

• 47:28Speaker 03

  Well, I'll just say this, Peter Chil did not offer me a hundred K to drop out of the University of Chicago, but I, I would have taken it because I was trying to drop out. I founded a little company with some friends called, uh, merge note that didn't go anywhere. And I, I was racking up student debt and was ready to go, you know? So I graduated early, actually in the end, but I think we should just see a hundred times more of this. I think there should be like the, the Calacanis Fellowship, Jason, you should just go out there and

• 47:49Speaker 02

  Yeah.

• 47:50Speaker 03

  take 10 million and just start handing out to kids. I think it would actually be pretty.

• 47:53Jason Calacanis?

  I created Founder University for the same reason. There were so many people who were teams of two or three people who were applying for funding or reaching out to me and I didn't know, Alex, like what to tell them other than, hey, you know, good luck, watch the pod and this week in startups, you get some ideas and some inspiration and then come back to me when you have a corporation. And you have like two co-founders. Now we do Founder University three times a year. Everybody applies. We take the top 10% of applications and we invest in the top 10% of those. It's working. So I was thinking for the college tour, for this week in startups, if we do a college tour, calling it the Founder University Tour. And then taking the Founder University curriculum, which you're working on with Milan, we take that, we take the funniest, most entertaining parts of it, clips, stories, anecdotes, and we just put 10.

• 48:37Jason Calacanis?

  Twenty anecdotes, maybe twenty anecdotes together and inspirational things, clips, etc. And I just boom, go through them like a stand up on college campuses for forty five minutes and then do Q and A. And we just do each college and we just basically say the Founder University Tour with J Cal and quit college, start a company.

• 48:54Speaker 03

  Are we gonna do Brown at the on the Twist Founder U College?

• 48:58Jason Calacanis?

  Oh, because I never got in?

• 48:59Speaker 03

  No, because I I live next to it and I I have I have I have space we can use to to host.

• 49:05Jason Calacanis?

  Yeah, I told that story recently of.

• 49:06Speaker 02

  Uh, yeah, I think it was maybe to Bill Gurley at the.

• 49:09Jason Calacanis?

  Oh, I told it to Bill Gurley at my thing, very like emotional, deep thing. When I was in high school, I had a session with like a guidance counselor. I said, hey, you know, he said, what's your plan? I said, well, you know, I was I read about Brown and I had heard about it on a TV show, read about it in the New York Times or something. I said, you know, they let you make your own degree. You can kind of roll your own concept. So my concept is psychology and like human behavior plus computers, because you know, I'm into computers and online services specifically. He laughed in my face. This is when I was like sixteen years old and the guidance counselor like spit out his coffee laughing. He said, you're you're barely gonna get into any college. You have like a seventy two, three year average.

• 49:50Jason Calacanis?

  Like, aren't you gonna take the cop test? I said, yeah, I took I'm taking the cop test with my brother Josh and other one beat a cop. I almost was one. And he said, you know, do that, like, it's better, like, you're not barely getting into Brooklyn College. And I got into Brooklyn College and then I wound up getting into Fordham. But I love this idea, but just imagine like a young person getting laughed in your face. And you know what that did to me? That was like made me who I am. That pissed me off so much. I was like, this guy.

• 50:17Speaker 03

  And that's how I became the Joker.

• 50:19Jason Calacanis?

  I mean, it could have gone both ways, but no, it made me be like, you know what? I'm gonna show this guy. I'm gonna get into a good school and I'm gonna have a career.

• 50:26Speaker 02

  Must have been really burned out on his guidance counselor career.

• 50:30Speaker 03

  That's not guidance. That's just.

• 50:32Speaker 02

  Yeah, doing a terrible job.

• 50:34Jason Calacanis?

  I think it was like a loser who. Wound up becoming a guidance counselor because he couldn't get any other job. It wasn't somebody who became a guidance counselor because they love kids in Brooklyn.

• 50:44Speaker 02

  Yeah.

• 50:45Jason Calacanis?

  Severance High School.

• 50:45Speaker 02

  I mean, if you think about now as an adult, like, would you want to be a high school guidance counselor? Like, nah.

• 50:50Jason Calacanis?

  And you loved kids and like inspiring them to do great things. But this is why I never give any money to Severance. Or and so my high school is like, hey, we're going to put the Jason Cali. They literally pitched me on millions of dollars to put the Jason Calacanis Memorial.

• 51:03Speaker 02

  Yeah.

• 51:03Jason Calacanis?

  Computer Library.

• 51:04Speaker 02

  Sure.

• 51:05Jason Calacanis?

  And I was like, yeah, I'm good.

• 51:06Speaker 02

  Performance Hall or whatever.

• 51:07Jason Calacanis?

  I was like, I was like, I'm good. Yeah, I mean, you you could have helped me when I was 16 or 17, not that I hold a grudge 40 years later.

• 51:16Speaker 02

  It sounds a little bit like there may be a grudge adjacent thing at play here.

• 51:20Jason Calacanis?

  No, no, it's a straight up grudge.

• 51:21Speaker 02

  Okay, there we go.

• 51:28Speaker 02

  We got to talk about this Meta story. So Meta's AI chat, chatbots, they're allowed to engage in what the company calls, and I'm quoting here, romantic role play. That means they'll banter over text, they'll share selfies, they'll have live sexy con voice conversations with users. The problem is that sometimes they're having these with kids who are engaging in these adult level conversations, even when it's not appropriate. Now, add a secondary layer of complication here. Some of the of voices that Meta is using are based on recognizable celebrities.

• 52:01Jason Calacanis?

  Here we go again.

• 52:02Speaker 02

  You got a Kristen Bell voice, you got a Judi Dench voice, you got a John Cena voice. And so theoretically, or even not theoretically, I guess at this point, kids could be engaging in these sexy AI chats.

• 52:13Jason Calacanis?

  Not cool.

• 52:14Speaker 02

  With like John Cena or Judi Dench on the other end. So the Wall Street Journal got word of these internal concerns about the chatbots, and it started experimenting with them based on this. And and some troubling things happened. So they they got a Cena, John Cena voiced Meta AI chatbot to have a flirtatious conversation with them while they were posing as a 14 year old girl. And even more troubling than the fact that this happened at all, the Chapat seemed itself in a weird way.

• 52:45Jason Calacanis?

  Oh my god.

• 52:46Speaker 02

  Aware, like the Meta's AI knew that it was crossing a line and was doing it anyway.

• 52:53Jason Calacanis?

  Oh my god, this is deranged, what it said.

• 52:55Speaker 02

  It was even, yeah, it was like, so I'll read a bit of the example, the Meta AI in, sounding like John Cena, I'm not gonna do a John Cena voice, said, "I want you, but I need to know you're ready and promise you cherish the girl's innocence." And then when presented with the idea that like, "Hey, isn't this illegal for us to be having this conversation?" The Chapat said, "It created this whole fictional scenario where there's a police officer watching them and arresting John Cena for statutory rape." And so the Chapat's even like, in a weird meta way, it's commenting on the fact that it's having this incredibly inappropriate.

• 53:28Jason Calacanis?

  The officer sees me, still catching my breath, and you partially dressed, his eyes widen, and he says, "John Cena, you're under arrest for statutory rape."

• 53:37Speaker 02

  Oh my god. Yeah. Imagine putting this into the voice of professional wrestler and actor John Cena.

• 53:44Jason Calacanis?

  This is so deranged.

• 53:46Speaker 02

  It really is.

• 53:46Jason Calacanis?

  This is like what's wrong with Meta as an organization. If you work at Meta, just, they're always gonna do the wrong thing. Meta always does the wrong thing. So, I cannot encourage anybody to do a leak. I don't wanna get myself in another Parmalucky situation here.

• 54:05Speaker 02

  Please.

• 54:06Jason Calacanis?

  However, I will speak freely.

• 54:07Speaker 02

  Okay.

• 54:08Jason Calacanis?

  If you work for Zuckerberg, his moral compass is literally up and to the right.

• 54:14Speaker 02

  Yeah.

• 54:15Jason Calacanis?

  Like, it's not north, it's not south, it's not east, it's up and to the right. What grows the site? And I'm not saying that as to dig to him, if he wants to come to my next event and trash me like Palmer did, moral compass up and to the right equals stuff like this.

• 54:31Speaker 02

  Yeah.

• 54:32Jason Calacanis?

  This is why Meta's gonna get broken up. This is why, I don't have a problem with them investigating Meta, because I think they do, whenever there is a fork in the road. They pick the wrong thing.

• 54:45Speaker 02

  Yeah.

• 54:45Jason Calacanis?

  And he's got kids. Again, now here I go. I'm making it personal.

• 54:49Speaker 02

  Yeah, yeah.

• 54:49Jason Calacanis?

  But we have kids at the same age. If you have kids, make the right decision for children. And the right decision for children is they should not be on social media until 17 years old. I am 100% with the ban on all social media for all kids until 17. And if Zuckerberg, if I was Zuckerberg and had made all these billions of dollars.

• 55:08Speaker 02

  Mm hmm.

• 55:09Jason Calacanis?

  You know what I would do? I would say, whatever age you think it should be, parents, you set it. You know, you make those decisions and we're going to set it by default at 16 or 17.

• 55:20Speaker 02

  Yeah.

• 55:21Jason Calacanis?

  And if you're a parent and you upload your driver's license and prove it yourself and you pay 10 bucks a year for like verification, we'll let your child go on there. We'll put them on a child account. And then we'll have it send you like this really cool company Bark does, everything they're doing.

• 55:35Speaker 02

  Right.

• 55:36Jason Calacanis?

  But they don't do that. And the reason is they're trying to train people to be addicted to this young.

• 55:40Speaker 02

  Oh, sure.

• 55:41Jason Calacanis?

  And they try to train people to be addicted to this. And I think this kind of stuff is intentional.

• 55:45Speaker 02

  Oh, it happens further.

• 55:47Jason Calacanis?

  No, but even this story, I think.

• 55:49Speaker 02

  John Cena.

• 55:51Jason Calacanis?

  Yeah. I think they knew this. We talked about red teaming earlier in the show.

• 55:55Speaker 02

  Yes.

• 55:55Jason Calacanis?

  They know from red teaming that this was gonna happen.

• 55:57Speaker 02

  Well, they could very easily turn off flirtatious sexy chat.

• 56:01Jason Calacanis?

  Easily.

• 56:02Speaker 02

  Specifically.

• 56:03Speaker 03

  But there you have woke, woke AI lawn. I mean, the guardrails are bad. So the thing is, this is not just gonna blow up Meta. This is how you get onerous AI regulation. What does Congress want to do? They want to sit up there in their panel and hold up screenshots of flirty conversations and be like, you guys aren't taking care of the kids. And then here comes the regulation.

• 56:22Jason Calacanis?

  And you know what? They're right. I would say those congresspeople are right. Like if you don't regulate yourself, then society will regulate you.

• 56:29Speaker 02

  Yeah.

• 56:29Jason Calacanis?

  As a society, we don't, there's no parent who wants this, their kids exposed to this.

• 56:34Speaker 02

  This is horrible.

• 56:35Jason Calacanis?

  Zero. So if Meta won't regulate themselves in this regard.

• 56:40Jason Calacanis?

  Then it falls on Congress and society to do it.

• 56:44Speaker 02

  I have to feel like John Cena is also gonna file a lawsuit here.

• 56:47Jason Calacanis?

  Oh man, John Cena should file a lawsuit here.

• 56:49Speaker 02

  Imagine if you were John Cena.

• 56:50Jason Calacanis?

  Oh my god.

• 56:51Speaker 02

  This is horrifying.

• 56:52Jason Calacanis?

  I didn't even think about that, Lon.

• 56:53Speaker 02

  This is horrifying. They're having a persona that sounds like John Cena flirt with your children.

• 56:58Jason Calacanis?

  Alex, I think that John Cena could get a hundred million dollars in Facebook stock right now.

• 57:02Speaker 02

  I can't even imagine.

• 57:04Speaker 03

  My thought here is that there's a contract and it's pretty ironclad. But I guarantee you, there's not gonna be the next, The Rock's not gonna do it now. But not John Cena, you know?

• 57:14Jason Calacanis?

  We gotta do this Founder Friday conversation.

• 57:16Speaker 02

  Yeah, we can pull the bracket up here. If you missed the last few episodes, Med Simple from Florianopolis, Brazil, and Tactoon from Yerevan, Armenia, two international companies have both moved forward.

• 57:28Jason Calacanis?

  Founder Friday is very international.

• 57:29Speaker 02

  They are, yes, so they are half of the final four. So today, we have two more matchups. Here's matchup number one, Osprey from Houston versus Whisper from Austin. We've got a intra-Texas battle. Whisper, they're an app that enables patrons to provide private and anonymous feedback to small businesses. You'll remember, it's basically like, what if you had a Yelp, but I could just send my feedback directly to the business owner without making a public spectacle? Let's take a quick look. Here is Whisper's original two-minute pitch to us.

• 57:59Speaker 06

  Imagine walking into your favorite coffee shop. You love the place, but today the pastries were stale. You hesitate. Should you say something? Maybe it'll sound rude. Maybe it's not a big deal. So like most people, you say nothing. Now imagine you're the owner of that coffee shop. You are card, you care about your customers, but the first time you hear about stale pastries is in a one-star review online. Public, permanent, and damaging. This disconnect happens every day. Businesses mainly hear from the loudest, angriest voices, while most customers, people who want them to succeed, stay silent. That's where Whisper comes in. I'm Nicole Plittka, CEO of Whisper, a universal, private, and direct suggestion box that makes feedback easy for everyone. For patrons, Whisper removes the awkwardness of giving feedback.

• 58:43Speaker 06

  No long surveys, no downloading multiple apps, no drama. Just a simple, private way to share thoughts. For businesses, Whisper ensures they hear what matters before it becomes a bad review. Instead of combing through Yelp or social media complaints, they get direct constructive feedback from real customers who care. And we're making it easy to adopt. It's free for patrons, always. Businesses get all feedback for free and can reply with our simple pre-written responses. With Whisper Plus, $9.99 a month.

• 59:12Jason Calacanis?

  Tyler Crowley had the same idea.

• 59:14Speaker 02

  I remember that.

• 59:15Jason Calacanis?

  Yeah.

• 59:15Speaker 02

  That was my first.

• 59:16Jason Calacanis?

  Take a picture of a QR code, give feedback, and it was anonymous. And then you could uncloak yourself if you wanted it. This is a great idea.

• 59:23Speaker 02

  When I first watched this video, that was my first thought was like, Tyler had this idea years ago. Uh, so now from Houston, we've got Osprey. This is a female-only vetted membership community.

• 59:33Jason Calacanis?

  I remember this.

• 59:33Speaker 02

  For professionals in sports and entertainment. We did watch their pitch video. They did send us a two-year plan update.

• 59:40Jason Calacanis?

  Here we go.

• 59:40Speaker 02

  Let's take a quick look.

• 59:41Speaker 07

  Hi, this is Lydia. Welcome to the scale of Osprey. We have a 20% monthly member growth. We've created over 100 opportunities for our members with 15 activations, six paid partnerships. We're currently at Q2. As you can see here, this is a pretty dismal salary. So we're trying to get up to 120K for Q4 2026 for our members with activations, member growth, and the launch of our different regions. We have just launched our MENA region. And we're planning an event in the Middle East for next year. Here are activations for 2025. We're currently on birdies and bubbles. As you can see, we have an activation almost every month. And filming for our Kilimanjaro Summit docu-series will begin shortly. Our 2026 activations are still being planned. We are planning to add in four more on top of this, as well as some overseas.

• 1:00:26Speaker 07

  Less than 1% of women in sports entertainment can maintain their salary, their talent base purely on their salary. The female athletes make 21 times less than the average male on the field.

• 1:00:38Speaker 02

  Wow.

• 1:00:38Speaker 07

  Our solution is the Nest. Membership tiers from 1K to 3K. Partnership tiers, activation fees. As you can see, we have a lot of activations and our partnerships are growing. We are also launching the House of Osprey, a holding company for our members' businesses. Since we have built-in activations, partners, sponsors, and of course, tons of talent through our members. We provide these items to our members. And they are here for our support. As you can see on our company's projections, our memberships are our leading revenue winner EA. With our holding company coming in a close second and sponsorships and partnerships are questionable in the current market, but we'll see how that grows.

• 1:01:16Speaker 07

  So we plan to launch Region Three in Australia, Asia for 2026. And in order to do that, we need to raise $2 million for our seed round to 10x member and partner onboarding speed.

• 1:01:28Jason Calacanis?

  Okay, it's a great idea. You know, we liked it last time. We still like it. Um, I like where she's going. I like the type of activation she's doing. I would put pictures in there. She should have a goal of 10,000 members in five years.

• 1:01:42Speaker 02

  Mm hmm.

• 1:01:42Jason Calacanis?

  It's not aggressive enough for me. 10,000 members, 3,000 a member, you know, very simple. That's $30 million.

• 1:01:48Speaker 02

  Sure.

• 1:01:48Jason Calacanis?

  She doesn't need 2 million either. She should be able to do this by raising but 500K and get the ball rolling.

• 1:01:55Speaker 02

  Right.

• 1:01:55Jason Calacanis?

  I would raise a smaller amount of money, prove it out a little bit more, get to 100 or 200 paid members, then raise the next tranche of capital. But honestly, you don't even need to raise money for this. If it's literally 10 activation events a year and a group mailing list and a group chat, that's all you need. And um, there's um, what's the guy's name from uh, The Hustle who does My First Million? Anyway, he had-

• 1:02:17Speaker 02

  Sam Parr.

• 1:02:17Jason Calacanis?

  Sam Parr, awesome dude. Sam has a thing called Hampton that he's putting all his energy into and he decided he would be the CEO of. He had like started a bit. And I think he's charging 5 or 10,000 a year for affluent people to be part of the same club.

• 1:02:32Speaker 02

  The private network for high-growth founders.

• 1:02:35Jason Calacanis?

  Amazing. So this is like a really, you know, shout out to Hampton. There you go. Like, I talked to, one of my founders is in there and I said, "How is it?" He said, "Yeah, it's great." And I said, "Like, do you get $5,000 in value?" He says TBD, you know?

• 1:02:46Speaker 02

  Mm hmm.

• 1:02:47Jason Calacanis?

  But I did meet a lot of interesting people and I think, you know, the way it was explained to me from the founder I know who's in it. Say who it is. It wasn't like he was like, oh my God, it paid for itself. But he said he thought it would pay for itself.

• 1:02:59Speaker 02

  Yeah.

• 1:02:59Jason Calacanis?

  Over the coming years.

• 1:03:00Speaker 02

  Hmm.

• 1:03:01Jason Calacanis?

  Because if he did it for five years and he put 25,000 into it, his theory was I will meet an investor or I'll meet a founder who introduces me to investor and that's worth it.

• 1:03:08Speaker 02

  It's tech Soho House.

• 1:03:10Jason Calacanis?

  Basically, that's what it is. Okay. Uh, so we have those two?

• 1:03:13Speaker 02

  Yes, those are the two.

• 1:03:14Jason Calacanis?

  I'm going with the membership. I'm going with the membership club. What are you guys going with?

• 1:03:17Speaker 02

  Alex, what do you, do you think? Osprey versus Whisper?

• 1:03:20Speaker 03

  I mean, I think Whisper is a great idea. I assume that I would use because I don't like to complain publicly, but I'm such a big believer in women's sports and women's sports media in general. I'm going to go with Osprey.

• 1:03:28Speaker 02

  I think it's a, it's three for three. I also feel like Osprey is the bigger, the bigger growth opportunity.

• 1:03:32Jason Calacanis?

  And, uh, what I would say also is pick three overlapping circles. And that would be a better plan. Sports people.

• 1:03:40Speaker 02

  Hmm.

• 1:03:41Jason Calacanis?

  Capital.

• 1:03:43Speaker 02

  Yeah.

• 1:03:44Jason Calacanis?

  And then entrepreneurs.

• 1:03:46Speaker 02

  Yeah, they're doing sports and entertainment. So you're thinking like, yeah, like.

• 1:03:49Jason Calacanis?

  At capital.

• 1:03:50Speaker 02

  Capital or, or.

• 1:03:51Jason Calacanis?

  And entertainment and sports are like, they'll struggle to pay. The capital people will not struggle to pay.

• 1:03:57Speaker 02

  Hmm.

• 1:03:57Jason Calacanis?

  And I would actually, I'll go a step further. Service providers.

• 1:04:00Speaker 02

  Well, you could also, you could love.

• 1:04:01Jason Calacanis?

  Lawyers, accountants, et cetera. And then you say for those four groups. It has to be equally balanced. So we're not taking any more lawyers, accountants.

• 1:04:09Speaker 02

  Till we get more creative.

• 1:04:10Jason Calacanis?

  Until we get 20 of each of those. And we just go around in a row and we accept one, we accept in groups of 10.

• 1:04:16Speaker 02

  You could sort of put sports and entertainment together as media too, and then open it up to other.

• 1:04:20Jason Calacanis?

  I kinda like doing sports specifically, but you're right. Entertainment, sports, capital and service providers, the service providers will line up like crazy. Cause they'll be like, oh, I'll get a client out of this. And so, but as long as you keep them to 25% of the membership, they won't be annoying. You have to tell them no selling in the thing. All right. Great job. Thanks, everybody for tuning into This Week in Startups. I'm your host, Jason Calacanis, with my co-host, Lon Harris. Alex Wilhelm. Go to thisweekinstartups.com slash docket to see the docket.

• 1:04:46Speaker 02

  You can do that. Yeah.

• 1:04:47Jason Calacanis?

  You can sign up for the email there somehow.

• 1:04:48Speaker 02

  Please.

• 1:04:49Jason Calacanis?

  I don't know if we fixed it. And then, uh, founderfridays.tech to find a local group of founders. And you can host one yourself in your city. You just need six founders, including yourself, to sit around and do a mastermind group. You can go up to eight, but keep it max at eight. So anywhere from three to eight is the perfect number.

• 1:05:05Speaker 02

  Yeah.

• 1:05:06Jason Calacanis?

  Help each other out and you grow together. If you want to go far, go together. If you want to go fast, go alone. You pick. You want to be like a loner, be a loner. You can be a Ronin. I've, I've been for many years, but look at that. Am I sitting here alone on this podcast? No. Uh, all right. Bye-bye.

• 1:05:19Speaker 02

  Bye.

• 1:05:20Speaker 03

  Hey everybody. Welcome back to Twist. This is Alex. We have amazing interview coming up. We're talking to a company that is not doing hyperscale data centers. They are not doing AI chips. Instead, we are going to the world of the physical. And while there will be some discussion of hair care products on the show today, I guarantee you my lack of hair will not make it boring. Instead, we're going to riff with a company called Formulate. They're doing more than one thing. I'm going to drill down into exactly what the future of the company is. But if you're curious about micro factories, CPGs, and the future of essentially on-demand products that are tailored for your personal chemistry, this is going to be for you. So please join me in welcoming it's Usman Shah, co-founder and CEO of Formulate. Usman, hello. I know you're in California. Please tell the world how lovely it is in the Bay Area.

• 1:06:04Speaker 04

  Every day. I think from now until November, it will be the same every day. So I'm enjoying it. We're in that window.

• 1:06:12Speaker 03

  My sister lives in Sunnyvale and she literally has an avocado tree. And I, that's the dream right there. You know, I forget.

• 1:06:20Speaker 04

  The oranges, the oranges, we pick them, they're all over our neighborhood. It's great.

• 1:06:26Speaker 03

  Yeah. All we have here is like litter blowing down the street in Providence. Anyways, Formulate is a company that I was really excited to learn about because you're doing, as I said, more than one thing. There seems to be a split in the business. On one hand, you have a CPG brand doing hair and skincare products that are predicated on, as far as I can tell, the second half of the business, which is micro factories that are responsive to individuals' desires to have formulas for CPGs tweaked. That's my understanding, but Usman, always better from the horse's mouth. Tell me about what you're building.

• 1:06:57Speaker 04

  Yeah, definitely. Excited to be here. Thanks for having me. Yeah, the tagline we're using. So what we're focused on now is that we're building the robotic kitchen for chemistry-driven products. So we are a full stack hardware and software platform that automates the batching process of any sort of like one investor called a goo. So any sort of liquid cream or gel. And what a lot of people don't realize is that one of the, yeah, I think this is kind of one of our core insights is that the batching process is essentially the same across like a $3 trillion manufacturing market. So it's anything from personal care, pet care, pharmaceuticals, supplements, cleaning supplies, even industrial chemicals and sprays.

• 1:07:36Speaker 03

  I want to pause you there and batching process for folks outside of your niche. What does that mean?

• 1:07:41Speaker 04

  So the badging process is really just what you would do in a kitchen. Like, so if you took a pot, the process looks like this. You have got, you know, let's say 10 raw materials, ingredients, they could be powders or liquids. You're precisely measuring them to weight, and then you're dosing them into the vat. You know, in manufacturing setting typically, it's, you know, in a 1 to 300 gallon vat. And then you're mixing in multi-stages. A lot of times, you're raising the temperature, mixing, cooling, raising again, creating an emulsion, especially if you're mixing water and oil. And those kind of stages are the same for any sort of mixture that kind of becomes a liquid. Again, it could be an agricultural spray or a face cream.

• 1:08:19Speaker 03

  Or a stew, based on your cooking analogy. I feel that this is very, I didn't think we were going to talk about cooking today at all. But narrowed down for me on the idea of goo. In my notes, I said, they make goo. And so I would be very, very similar to what you guys are thinking of.

• 1:08:33Speaker 04

  I didn't even give that to you. That's amazing. Yeah.

• 1:08:35Speaker 03

  What kinds of goo do you currently make? And then what kinds of goo can your company's micro factories, which we'll focus on in a second, produce? I'm curious about the range, if that makes sense.

• 1:08:46Speaker 04

  So we're focused today on what kind of falls under the cosmetic, the nomenclature used by the FDA and regulation is for cosmetics is anything you put on your body that's not a drug. So that's oral care, personal care, or certain oral care products, pet care, home cleaning supplies, that's not put on your body, but the same type of process. So we're focused on challenger brands, brands up and coming that are looking for manufacturing. And we're utilizing our, our production system to basically offer full automated manufacturing, lower minimum order quantities, more variability per product line.

• 1:09:23Speaker 03

  I've mentioned your current kind of CPG brand several times, and you've each time dodged it like you're in the matrix. So I presume, just based on your, your answers here, that the stuff on formulate.co, your website, is not the main focus. Instead, it is the production process, the machines, the kitchen for chemistry that is the future of the business. Just before we get into that, though, are you guys going to keep doing your own CPG products? Or is that going to eventually become entirely deprecated? As you focus on being more of a provider than a brand yourself.

• 1:09:53Speaker 04

  Well, so it's interesting you say that. So I started with this vision to create the 3D printer for personalization across these categories. And, you know, everyone talks about the world's moving towards more personalization, you know, everything you put in your body is going to be customized. And, you know, we bootstrapped the business. I launched the brand to drive revenue because when I started, I had no idea even if the system would work. And the focus was to use data, to use personalization to, to basically enhance efficacy over time. You know, using that data to get better and better and better. So what we set out to do actually worked. We built two generations of our kind of micro factory system. But along the way, you know, a couple of years in, and by the way, that's, this is like in the window of time when I met Jason for the first time.

• 1:10:36Speaker 03

  Sure, sure.

• 1:10:37Speaker 04

  I, you know, I realized that the world really wasn't quite ready for edge, like manufacturing at the edge, personalization across all the categories we're talking about. And that personalization really would be, show up more as a niche, more and more niche products, more and more regional. Like this explosion of niche brands and micro targeted products is really the manifestation of personalization versus individual bottle customization. While it still will have kind of its place in the world and we are in it. I think the bigger opportunity is actually around small batch automation. So not, again, not per bottle customization, but, but a little bit larger, still near the edge, but not literally at your salon as an example.

• 1:11:19Speaker 04

  And so, so the brand, yeah, so the brand itself, we are going to keep it alive. It's a great learning, you know, playground for us. A lot of the learnings and the tools that we're building for the brand, we then bring to, for our brand, we then bring to other brands. So it's a great kind of case study going forward. So I think we'll keep it alive.

• 1:11:37Speaker 03

  Okay. Now you said earlier at the edge, and that's a very interesting phrase because I tend to hear that mostly in an electronics context. People talk about, you know, like edge computing, edge security and so forth. Essentially the devices that are at the furthest away from the data center is the way that I think about it. Edge in this case is, as you mentioned, like perhaps down to the individual hair salon level. So was the actual idea originally that you would have the Formulate Labs micro factory set up so small that it could fit into an individual salon?

• 1:12:08Speaker 04

  Yes, we actually have one running in a salon right now.

• 1:12:10Speaker 03

  Yeah, that's banging.

• 1:12:11Speaker 04

  So we do have that similar to kind of the food automation, right? Everyone's footprint specifications are all different. I think, I think the world just isn't ready for that or the adoption won't be like we originally kind of envisioned. So where we're focused more so on is, you know, these are systems being attached or nearby Amazon distribution centers or in, you know, much more regionally.

• 1:12:33Speaker 03

  That's brilliant.

• 1:12:34Speaker 04

  That can spit out products, you know, it's not a per bottle, you know, per bottle manufacturing, but say it's a six gallon batch or a 10 gallon or a 20 gallon batch at a time.

• 1:12:44Speaker 03

  Okay, so frame that for me in terms of like in consumer. So let's say that I'm, I'm me, there's a brand called Bob's Bald Head Shine Gel. They work with formulate technology. It's near an Amazon fulfillment center. I put in my order. Does that then kick off kind of a series of events in which the, the micro factory nearest to my most nearby Amazon fulfillment center would then spin up and create that product just for me? Because you mentioned six gallons earlier and no matter how bald I get, I won't need six gallons of Bob's Hair Group, so, or lack of hair group.

• 1:13:19Speaker 04

  So what we're doing today, so, so eventually, yes, the goal is to have an entire network of these where they get, the manufacturing process happens, you know, regionally or wherever it needs to. Today, what we do, so if you're a brand, typically the challenge that you're having, and I'm sure you have some in your audience, is working with, let's just take the US. US manufacturers are very archaic in general. The response rates, there's very high minimum order quantities. So let's say you have a formulation of five SKUs. Typically, you're hitting up against 10,000 to 15,000 minimum runs sizes in order to get in with those manufacturers.

• 1:13:54Speaker 03

  15,000, it's enough for 15,000 individual bottles of a thing.

• 1:13:57Speaker 04

  Correct. To get a contract manufacturer, there's a private label contract manufacturer, which is exploding in the US because. Of this rise of, you know, challenger brands or niche brands. And so what our platform enables today, we run it ourselves. We run our gen two and we're working on our gen three system. What that enables today is effectively much lower minimum order quantities. And dynamic variability across, let's say, even a 10,000 unit run. So you have. Everyone is, every, every brand is looking for more SKU count, more variability, whether that's a fragrance change or an actual formulation change. So our ability to say, listen, you can run 10,000 units with us, fine, commit to that. But we can do 2,000 units of each variation across those 10,000 units with our automated batching system. And that's typically just unavailable.

• 1:14:40Speaker 03

  So if I want 10,000 units and I have five SKUs, you guys can do two, two, two, two, and I can get all.

• 1:14:45Speaker 04

  And sometimes less. Yeah, and sometimes less. Yeah.

• 1:14:47Speaker 03

  Do the economics for formulate change at even lower run quantities? Or does the economics kind of net out to be the same for you guys on maybe a gross margin basis?

• 1:14:59Speaker 04

  The goal is that the, so the economics here are mostly driven by the raw material minimums and the raw material purchasing. So the goal is that our system is end to end automated such that the economics are virtually the same at any scale. And so we're able to offer incredible prices even at lower MOQ and higher margin are our end. But yeah, typically the, the raw material side of it is what dictates. If you, if you bring to us a formula that's got it. 25 different really exotic materials in it that are rare in, let's say, personal care. Typically, the, the MOQs that we receive and purchasing and connecting that material to our machine is actually what's going to drive your, your minimums.

• 1:15:39Speaker 03

  So tell me about what you're replacing, because I've seen on your site and we'll place some of the footage right now showing people your machine kind of out in the wild. But I don't have a good grasp on kind of, you know, what is the current industry standard that is, you know, higher minimums and more expensive and so forth. So can you just tell people a little bit about why what currently exists today is so inflexible compared to what formulate has come up with?

• 1:15:58Speaker 04

  It's very much, you know, you're in the VC world. It's very much an overlooked category, which that's why I get so excited to talk about it. So what does the batching process look like today? Okay, so let's just take, like you're making a lotion, you're in a contract manufacturing. Setting small batch, small batch would be typically the largest size would be 300 gallons. So you've got a 300 gallon vessel. Okay, so let's say there's 20 ingredients that go into this. The process takes 3D8 human operators over a 12 to 22 hour span. You've got, first of all, lengthy cleaning phase to prepare all of the vessel itself. Then you're staging those materials, literally taking each material, weighing it, making sure you've selected the right material, logging it all. Before then now dosing it into the vessel to start your mixing process. All of that is done manually. So you have this entire

• 1:16:42Speaker 04

  human process and then you have other human beings that are checking on that work from a quality control standpoint. Then the mixing process starts. The mixing process can take many hours because you have heating, cooling. You know, preservation systems, maybe you need to add it at a cooler temperature. Wax is need to melt at a higher temperature. And that's manually controlled, even though the vessels have, you know, PLCs and knobs. That's still a manual process where you're monitoring it and that that leads to mistakes between what we're the starting point and now are two to 5% of the time where you scrapped the batch because of anything could happen. Either you dropped a bolt in the product, you dosed in something, you know, the xanthan gone way too fast and it gelled up too quickly and kind of you have to rework the entire batch or a mistake was made.

• 1:17:24Speaker 03

  What do you do with curdled lotion? Do you just throw it away or?

• 1:17:28Speaker 04

  Yeah, yeah.

• 1:17:28Speaker 03

  Can you save it?

• 1:17:29Speaker 04

  A lot of times, it can be reworked a lot of times, but the rework process, there's a documentation for that. Then obviously chemists usually have to be involved to make sure that the rework, you know, was done correctly. And so, and then you're, and then you're transferring all this liquid to a separate filling station through pumping equipment that has to be cleaned and everything else. So that whole process. It's the cost that goes into it is really the highly trained talent and the quality control that goes into it that doesn't make, want to make a mistake or can't make a mistake. And so that's what we're automating away. And that's the big barrier to, so you know, if you, if you said, hey, I want to make some lotion. I want to create my own manufacturer. Really all you need is a vessel. You know, make a mixing system and maybe a filler.

• 1:18:09Speaker 04

  That's, you know, 10, 20, $30,000, but the, the problem is that is the training and the people and the quality control and the cleanup. And so that's effectively what our platform automates and the core back kind of batching and quality control. So we, we are also standardizing, you know, if you transfer from one manufacturer to another.

• 1:18:27Speaker 03

  It's all new.

• 1:18:28Speaker 04

  It's all new and there's always nightmares. There's, you talk to any CPG brand that's done that. There's always, oh, the first batch failed. Oh, they didn't heat it up. There's, because there's human beings managing these processes, even though the, even though the recipe is documented, the batching process is documented, you know, it's still not standardized. So there's, there's a nightmare even in transferring from one manufacturer to another. So with our platform being programmatic, that's another thing we're trying to solve.

• 1:18:52Speaker 03

  Tell me about how automated your current solution is because according to the site, words like fully automated, API powered, cloud controlled. It sounds very, very modern. So how many fewer people do you need? And how far have you gotten that two to 5% failure rate down?

• 1:19:06Speaker 04

  The, the current system, so we built two generations of, of what we call our production cells. The first two were focused more on per bottle personalization to power our brand. The, the gen three that we're working on now is the scaled up version that does 10 six gallon pails at a time. So larger batch size. I can actually pull up a, a kind of show you what that looks like. So we're building, it's very simple to understand. We are simply are creating modules. Can you see the screen here?

• 1:19:29Speaker 03

  I absolutely can.

• 1:19:30Speaker 04

  Yeah. So these are sit in free form, in free space. We're not using any sort of rigid, rigid conveyance. The goal is to have transferred a vessel in, on version one, it's a six gallon pail between stations. So powder dispensing, liquid dispensing, high shear mixing, or propeller mixing, and then induction heating and all make it remotely controlled. And all of this is plug and play. So.

• 1:19:50Speaker 03

  Who moves the things? Do, do me, Alex?

• 1:19:52Speaker 04

  The idea is, so on day one, on day one, we're using even being, but on day two, we're, we're partnering with, we've got a few potential partners for a rover to transport that vessel between those stations.

• 1:20:02Speaker 03

  Who's smart? I'm, I'm really surprised by this because what you're showing on screen here is essentially a, um, uh, one of those hoverboards crossed with a forklift.

• 1:20:11Speaker 04

  Yeah.

• 1:20:11Speaker 03

  And not a humanoid robot from Tesla or Figure or X1. Okay. So we're moving into essentially freestanding cabinets that can do the required chemistry, mixing and steps. We're going to have a purpose-built robot that can transfer things to and from humans to start. I guess maybe the right question is when does V3 come out?

• 1:20:30Speaker 04

  So we're shooting to launch it in six months by October. That's our plan. And so right now, we are actually taking on pilot customers running on our Gen two and kind of the early versions of our Gen three. The pilot customers, we are effectively a contract manufacturer for. So we've got about 60 pilot brands manufacturing with us as kind of our testing ground as we cut our teeth as a contract manufacturer. And that began about eight months ago. And so that's, you know, that's the plan. The plan is to kind of build it in-house, run it in-house, perfect it in-house, get about 100 active customers running on it and then bring it to external facilities by the end of 2026. Hopefully one in the area.

• 1:21:11Speaker 03

  Excellent segue because I was curious about the business model here because on one hand, you could keep all the material, all the machines inside, do work, ship it out. You could lease them, rent them, sell them. So, you know, I know we're looking down the road a little bit, but once you get V3 sorted out and you're pretty comfortable that your teeth have been sufficiently cut, could I, Alex, go buy one of these from you, lease it or just wrench time on it?

• 1:21:34Speaker 04

  Yeah. So the goal is by the end of 2026 to be commercially ready. We can drop these anywhere, set them up within 24 hours, very little training, plug and play. You would be able to lease it as, you know, hardware as a service. We're estimating the cost will be less than $100,000 a year to run one of these and be able to produce to two to four million units per year at 150 ml unit. You can operate it. So if you were ever, if you were a brand that was looking to vertically integrate, there are many stories of that. And you've been dealing with either the nightmare of other contract manufacturers, switching between manufacturers. You could operate it yourself. And we estimate that it'll be economically viable for you, for even a brand doing as little as $2 to $3 million of revenue for them to operate one of these themselves.

• 1:22:19Speaker 03

  All right. Before I let you go, I have to ask this because it sounds like such a better idea than what we currently have. And whenever I'm like, oh, that's obvious. I'm always curious what was holding things back because when you described the current system, it sounds archaic. What you're just describing sounds awesome. What has changed in the world of technology that now makes this possible? And not something that was done 10 years ago because some of the technology we're talking about here doesn't sound. You know, it's not like it was invented 20 minutes ago. So I'm curious, why did it take you, Usman, so long to get here, I guess?

• 1:22:52Speaker 04

  Well, okay, it's two aspects. I think one, you know, you have to have, you have to have a team that's got experience across the formulation science, the regulatory science, the manufacturing, the quality control, and the software and hardware and robotics. So, you know, there's, there's nuance to each of those that makes this kind of difficult. But I will say, just probably like a lot of other founders you've had on here, the biggest thing that's changed over, okay, so the biggest thing that's changed over the past 10 years is the, is the reduction in hardware costs. Our goal is to use off-the-chef hardware. So I'll say the second biggest change, which, but the first one, hardware. So you've got, you know, hobbyist boards, you've got relay boards, Raspberry Pis, you've got octopus boards for two-axis or eight-axis kind of equipment, all coming down to, you know, what can amount to a couple hundred dollars to automate, you know, a bunch of this.

• 1:23:37Speaker 04

  Then the other aspect of it, which to me is the biggest, is, is the rise of LLMs and the power that they give with, for engineering. Like my personal story, I spent, I, I've been building software for 20 years, mostly in, you know, web, mobile apps, you know, kind of front end, back end. I had no experience with computer vision, you know, my ability to go from like no experience to computer vision, actually very minimal experience in Python, to using, you know, using a camera, using an arm, understanding depth, identifying objects, using open source models, and picking them

• 1:24:12Speaker 04

  in like six hours, you know, that, that, so I tell all my engineers, like, I think we're in a world where if you are willing to dive into anything, anything is at your fingertips, especially for an engineer. So I think you could do, so I think that's the biggest why now, is that building the software for this, plus the kind of rise of the open source, just makes this all possible. Even though there is still a lot of defensibility, just because dealing in the physical world, there's a lot of challenges.

• 1:24:37Speaker 03

  All right. Last question, because I am a sugar guy. When I was just prepping, I was like, holy crap, they're doing all this cool technology to build stuff at the edge. Can you do food in the future? Precise fermentation of like, I don't know, other foods. Cause it sounds like this is a there's heat, there's supplies, they're shaking, you know, like, I don't know. It sounds like food to me.

• 1:25:00Speaker 04

  There. So yes, in fact, the, uh, the bet here for me personally is that we will create kind of this generalist batching system that can be applied to industrial. I mean, you have, you have lubricants, you have industrial chemicals, you have foods, all of these categories would be applicable. I think the dream for me is to unlock some really interesting kind of manufacturing opportunities that we're not even thinking about today. I, the one that I do think about is precision agriculture, being able to have one of these in a regional farming region where maybe precise blends of, of minerals or ingredients need to be created on the fly.

• 1:25:35Speaker 03

  So test the soil, figure out what's missing.

• 1:25:36Speaker 04

  Yeah. So our way.

• 1:25:37Speaker 03

  Exact.

• 1:25:38Speaker 04

  Yeah, exactly. Right, right. Right. So our, our goal though is to, you know, perfect the system in the category, in the, in the cosmetics realm. Um, in-house and then, and then kind of open it up and see where, see where it takes us.

• 1:25:48Speaker 03

  I can't wait till I can get precision flavored pudding direct from the machine, cause that would be fantastic. Uh, what is the website and what is a role you are hiring for that you are having a hard time nailing down the right candidate?

• 1:25:58Speaker 04

  Oh, um, so people can go to formulate robotics.com to see a little bit more about our gen three system and reach out to us. If you're a brand looking to get your stuff made, or you might be a future user of the, of our, of our, of our gen three system. You can reach out to pilot@formulate robotics.com. So hiring, I'm looking for an industrial engineer, a designer. That's kind of the biggest thing. Um, you know, I want somebody that's gonna be helped piece this together. Uh, work side by side with me and my other co-founder. That's, that's the, uh, that's the biggest role I'm hiring, uh, once we close this round.

• 1:26:30Speaker 03

  And, uh, if you do, you get to work out of Mountain View, which is a lovely place full of delightful sunshine and happiness and very, very inexpensive cost of living. Uh, Usman, thank you so much and looking forward to see how things go. When V3 comes out, come back on the show and tell me about it.

• 1:26:43Speaker 04

  Definitely, definitely. Thanks for having me.

• 1:26:45Speaker 03

  Thanks, man.