Mother's Day Gift Guide, Rorra in WSJ, Morgan Housel, Mehul Nariyawala, Sonya Huang, Stanford Review, Will Quist, Aidan Dewar, George Maloney

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

• 0:00John Coogan?

  Hey, let's go. You're watching TV.

• 0:02Jordi Hays?

  Let's go.

• 0:03John Coogan?

  Friday, May 9, 2025. We are live from the Temple of Technology.

• 0:07Jordi Hays?

  The fortress of finance.

• 0:09John Coogan?

  The capital of capital. Let's go. It is Mother's Day in just two days. The Super Bowl of pronatalism, baby.

• 0:17Jordi Hays?

  It's the day we've all been waiting for.

• 0:19John Coogan?

  We've all been waiting for it.

• 0:20Jordi Hays?

  Especially your mother.

• 0:21John Coogan?

  It's gonna be amazing. Switch your mom to ramp.com.

• 0:24Jordi Hays?

  Time is money.

• 0:25John Coogan?

  Time is money. Save both. Switch your mom to ramp.com. Get her on ramp. Seriously, what is your, I mean, what does your family run on, if not ramp?

• 0:33Jordi Hays?

  Yeah, I mean, it's a good time to ask, what is your, you know, how are your parents thinking about enterprise security?

• 0:40John Coogan?

  Yes.

• 0:40Jordi Hays?

  Should, should they be on Vanta?

• 0:42John Coogan?

  Should they?

• 0:42Jordi Hays?

  Do they need to be thinking about SOC 2 compliance?

• 0:45John Coogan?

  Yeah, does mom pay sales tax? Get her on numeral.

• 0:47Jordi Hays?

  That's right.

• 0:48John Coogan?

  Put that on autopilot. Take that off of her plate so she can raise the kids.

• 0:51Jordi Hays?

  It's the greatest gift.

• 0:52John Coogan?

  It is.

• 0:52Jordi Hays?

  To let your mom no longer have to be spending more than five minutes.

• 0:56John Coogan?

  It is.

• 0:57Jordi Hays?

  You know, a month.

• 0:58John Coogan?

  Anyway, we're gonna be doing a deep dive on Mother's Day, giving you a gift guide, breaking down just some of the most obvious choices for what to get the mothers in your life. And, but first, we want to take you through the market, give you a little update on what's going on, what's moving the market. Obviously, the big news is the US, UK breakthrough tariff truce. Trump announced this yesterday. It's the first post tariff pact. US keeps 10% blanket duty, UK cuts average duty on US goods to 1.8%. Autos, the 27.5% levy on British cars falls to 10%. Huge for the Aston Martin owners in the community. Huge for the Bentley owners in the community. Huge for the Rolls Royce fans. I'm sure there's a lot of you listening from probably in your Cullinan's black badge.

• 1:43Jordi Hays?

  Yeah, so fortunately, Aston will be safe here. So the, it's a 10% tariff for up to 10,000 vehicles. Sorry, 100,000 vehicles. Aston Martin, for context, only expects to sell one, around 1,029. So they have a lot of that, a lot of that quota to sort of grow into, which is great.

• 2:05John Coogan?

  Something happened to my Celsius. It hit me in the face. I think I'm gonna lose the eye.

• 2:10Jordi Hays?

  John's gonna lose his eye. Hey, you don't need eyes for podcasting.

• 2:13John Coogan?

  I think there's a certain amount of caffeine level that it will, it will blind you. Yeah. Anyway. Obviously exciting, a little bit odd that this one's the first one because you were telling me that we actually have a trade surplus with the UK.

• 2:27Jordi Hays?

  That's right, we do.

• 2:27John Coogan?

  So, you know, one step forward, two steps back, potentially, but it seemed like the market liked it. It seemed like the market traded up Bitcoins at all times high, all time highs, or near all time highs, over 100K. And we are going to have Pippa Lamb from Sweet Capital come on on Monday. She is from some foreign land. I think she said it was like London.

• 2:52Jordi Hays?

  The United, is it United?

• 2:53John Coogan?

  Yeah, I think about these places like Carthage or Constantinople, like these like long lost, forgotten lands. And she actually lives in one. And so I'm excited to ask her, like, do they have movies there?

• 3:05Jordi Hays?

  Yeah.

• 3:05John Coogan?

  Do they, do they have telephones yet? Like, what type of technology is going there? Exactly, yeah. But she's going to come on and break it all down for us on Monday.

• 3:14Jordi Hays?

  Sorry for that.

• 3:15John Coogan?

  But in the meantime, we're going to move on. China, China surprised on exports, headline exports of 8.1% year-over-year growth versus 2% estimates. US shipments were down 21%.

• 3:27Jordi Hays?

  Okay, but where's this data coming from? It's a big question.

• 3:30John Coogan?

  Yeah, maybe it's a big.

• 3:31Jordi Hays?

  So, so there was a report, I think it was maybe Monday, the days blend together, but, but at some point, China used, used to report on like hundreds of different economics or metrics from across the country. That's, you know, things like land sales, local GDP, things like that. A while back, they just stopped, fully stopped reporting on, you know, most of those metrics.

• 3:54John Coogan?

  They stopped sending investor updates.

• 3:55Jordi Hays?

  Yeah, reminded me of, yeah, reminded me of a, you know, anytime you have a, you know, angel investment or something like that, that stops sending investor updates usually doesn't, usually not a good sign. So China has stopped sending.

• 4:09John Coogan?

  Sometimes they're just advancing to like, you know, just board meetings only. They don't need to update the angel investors. They don't need to update the global economy.

• 4:15Jordi Hays?

  No.

• 4:15John Coogan?

  They're responsible.

• 4:17Jordi Hays?

  Or the other one is a founder that's building in public, you know, just euphoric every single week.

• 4:21John Coogan?

  Yep, yep, yep.

• 4:22Jordi Hays?

  Look at this chart going up. They don't post for three months and you're like, you know, that's how you know.

• 4:27John Coogan?

  Aqua hire inbound. Maybe, maybe we should aquihire China. Just merge them in.

• 4:32Jordi Hays?

  Definitely something.

• 4:33John Coogan?

  Bring them on the team.

• 4:34Jordi Hays?

  Definitely should be in the conversation.

• 4:35John Coogan?

  In the conversation. Nvidia is launching a new H20. They're pushing forward. The memory bandwidth is trimmed below US export caps. The export caps keep moving down and Nvidia keeps adapting the hardware. Pinterest popped big on a huge Q1 beat. They had earnings, Q1 revenue, 855 million, MAU's at 570 million. AI ad tools push Q2 guide to 960 million to 980 million. Yeah, Pinterest is, there was an article in the, in the, in the information about how they've kind of changed the management structure. We didn't get a chance to cover it, but it is interesting. Gen Z accounts for 40% of user base. Fastest growth is in Brazil and Indonesia.

• 5:17John Coogan?

  You know, these, these, these platforms are just valuable. I've actually been using Pinterest every once in a while to try and find like really aesthetic reference photos for brand guides and style guides. It's pretty cool. It's also been overrun by AI slop in a really negative way. So I almost want to have a filter on there to say, okay, I'm looking for, you know, a newsman in a suit, but don't show me anything that was created after 2022.

• 5:42Jordi Hays?

  Or the eighties.

• 5:43John Coogan?

  Yeah, yeah, yeah. Nothing that was uploaded, but some good stuff, some bad stuff. And they're certainly pumping a lot of ads in there. And the ads are pretty related to what you're searching for because it's such a visual medium. So congrats to Pinterest for the big Q1 beat. Coinbase also bought a company for $3 billion, barely broke through. I mean, this is a huge number, size gone for sure. Would love to talk to Brian Armstrong about that. He's coming on the show soon. We will have him break it down. Would love to get the founder of Derbit on as well.

• 6:10Jordi Hays?

  700 million in cash and 11 million shares of just coin.

• 6:15John Coogan?

  Yeah.

• 6:16Jordi Hays?

  They're crypto coins.

• 6:18John Coogan?

  No. Their stock ticker is just coin.

• 6:20Jordi Hays?

  Derbit is one of the world's top BTC.

• 6:23John Coogan?

  I think it is the world's top options house.

• 6:26Jordi Hays?

  Yeah.

• 6:26John Coogan?

  Yeah.

• 6:26Jordi Hays?

  And so very strategic pickup for Coinbase. Makes a lot of sense.

• 6:31John Coogan?

  As Europe and Asia as client base and regulated futures to Coinbase's spot heavy mix, derivatives drive over 50% of global crypto volume. Very important for them to get in. So excited about that.

• 6:41Jordi Hays?

  Saying they, they have 90% of. They're clearing 90% of crypto option open interest, which is around $20 billion in volume. So very impressive.

• 6:51John Coogan?

  On the flip side of crypto.

• 6:53Jordi Hays?

  Company was started in 2016.

• 6:54John Coogan?

  Oh, yeah.

• 6:55Jordi Hays?

  Splitting time between Amsterdam and Panama.

• 6:58John Coogan?

  Oh, really?

• 6:58Jordi Hays?

  Kind of a fun, fun place to bounce between.

• 7:01John Coogan?

  Interesting. I'm sure that's for like regulatory reasons, right?

• 7:04Jordi Hays?

  Yeah.

• 7:05John Coogan?

  On the flip side of crypto, Celsius founder Alex Mashinsky was sentenced 12 years for fraud tied to the 2022 Celsius collapse. A ton of.

• 7:16Jordi Hays?

  20, 20 Bs at the peak.

• 7:17John Coogan?

  20 billion AUM. They, he made a $48 million personal gain via token manipulation. The, still deciding what the restitution figure will be, what he'll have to pay for that. Prosecutors sought 20 years. Defense pleaded for less than four years citing cooperation. But I don't know how much he was cooperating because he was selling merch that was like all about like bankruptcy and stuff. It was really, really crazy. A lot of great Coffeezilla reporting out there. If you want to go take the stroll down memory lane and hear about the Celsius debacle. But this is a rough time. I think they were doing okay while the market was up, but once the market pulled back.

• 7:53Jordi Hays?

  It was one of those things where you look at the yield.

• 7:56John Coogan?

  Who's naked.

• 7:57Jordi Hays?

  The yield that they were offering was concerningly high.

• 8:00John Coogan?

  Yeah.

• 8:01Jordi Hays?

  Given that interest rates, the risk-free yield.

• 8:03John Coogan?

  Yep.

• 8:04Jordi Hays?

  Was about zero at the time.

• 8:05John Coogan?

  Yep. And the last story is that there's a $3 billion lawsuit against Google in Italy. We won't do our Italian accents today, but I'm sure we'll be tracking it. It's part of the ongoing pressure on big tech, especially abroad.

• 8:18Jordi Hays?

  Was Google getting into suing?

• 8:21John Coogan?

  No, actually, search. But this goes back to 2010 to 2017. Google was showing a search bias against a particular group in Italy. And so they're claiming that Google Shopping, you know, hurt them to the tune of billions of dollars and they want restitution. And so the financial impact is pretty limited, given that Alphabet's 2024 revenue was 320 billion, but the legal overhang is certainly a headache for Google. But anyway, good luck to them.

• 8:48Jordi Hays?

  Interesting dynamic being internal counsel at a, at a firm like Google, where there's just like, probably, can you, I don't even, I don't even, maybe these, they, I doubt, you, you could probably figure, I'm sure you could figure out the number, but I'm at, I wonder how many inbound lawsuits, complaints, Google is getting on a daily basis, right? It has to be.

• 9:09John Coogan?

  Yeah. Hey, want to settle this with me? I mean, there was that whole story about that guy who was just sending fake invoices to big tech companies, just being like, yeah, if it's under 10 grand, they'll probably just pay it. Just doing that constantly.

• 9:20Jordi Hays?

  Wouldn't work, wouldn't work.

• 9:21John Coogan?

  Wouldn't work with ramp.com. Yep. Anyway, let's pull up the show, the run of show to kind of give you and I get guys an idea of what the rundown is today. We're taking you through the Mother's Day gift guide. Rorra was featured in the Wall Street Journal. We're going to break it down. We're going to do some timeline, tell you some other stories. Then we have two non's from Stanford, talking about the Stanford review, the bombshell report from the Stanford review. We've got Morgan Housel, Sonya Wong, Will Quist, Aidan Doer, a bunch of other folks coming on. Founders announcing rounds, announcing new products, a bunch of VCs yapping should be a good show for you. And if you're following the market update and you want to trade it, get on public.com. Investing for those who take it seriously, multi asset investing, industry leading yields. They're trusted by millions, folks. Go to public.com.

• 10:07John Coogan?

  Aston Martin sponsor.

• 10:08Jordi Hays?

  Aston Martin sponsor.

• 10:10John Coogan?

  Should we do six facts about David Steiner, the new US Postmaster General?

• 10:14Jordi Hays?

  So I mean, and this is one of the most coveted roles.

• 10:18John Coogan?

  If I were, if I were going into admin, postmaster for sure.

• 10:21Jordi Hays?

  Postmaster.

• 10:21John Coogan?

  I mean, I think of myself as a master of posting.

• 10:24Jordi Hays?

  Post.

• 10:24John Coogan?

  So it may, it would make sense.

• 10:25Jordi Hays?

  It could, you know, the extended, the full title is poster master general.

• 10:29John Coogan?

  Poster master general.

• 10:30Jordi Hays?

  Most senior poster in the country.

• 10:32John Coogan?

  Maybe they should have a post economic master general.

• 10:35Jordi Hays?

  Post economic general.

• 10:36John Coogan?

  Yeah, post economic general. He's just like, yeah, actually I can't really revitalize the DOD because I'm actually in Saint Tropez. And F1 is coming up, so I'll get to it, but I'm not really checking email right now.

• 10:51John Coogan?

  I haven't checked this inbox, so good luck getting in touch with me. And we're just like, that's exactly who we want. Anyway, he spearheaded a comeback for waste management. He's a FedEx director who led turnaround of the of Waste Management after insider trading scandal. Some of the company's top executives in the 1990s falsified financial results. That's not good.

• 11:10John Coogan?

  Really, really playing into the the meme that the trash companies are run by the mafia. Right? He joined the company as deputy counsel in 2000. In less than four years, climbed the ranks to become CEO. He streamlined operations. He calls himself the walking embodiment of better lucky than good. I like that.

• 11:27Jordi Hays?

  That's great.

• 11:28John Coogan?

  That's because he went to work for Waste Management. He turned down a job offer from Enron.

• 11:32Jordi Hays?

  Speaking of better lucky than good. I was listening to the Senator's episode on Jim Simmons. Sorry, Simons. Simons.

• 11:42Jordi Hays?

  And Jim Simons was obsessed with being lucky. He's like, I wake up every day. I just think, how lucky can I get today?

• 11:51John Coogan?

  That's amazing. So he's stepping down as as director of FedEx because FedEx, of course, competes with the US Postal Service, which he will be running. Honestly, surprising. Could have been running both.

• 12:03Jordi Hays?

  I would have liked to see.

• 12:04John Coogan?

  This whole divestiture thing, we got to get rid of.

• 12:06Jordi Hays?

  Yeah, I would have liked to see FedEx, you know, kind of merge with the USPS.

• 12:11John Coogan?

  I would like to see if somebody goes in the someone goes in the admin. Don't make them divest. Make them go 10x levered whatever they're long.

• 12:19Jordi Hays?

  Yeah.

• 12:20John Coogan?

  Just really stake it all.

• 12:21Jordi Hays?

  Risk on.

• 12:21John Coogan?

  Risk on.

• 12:22Jordi Hays?

  Hey, you're going to get a pension after this.

• 12:23John Coogan?

  Hey, but if if you make any mistakes, your bags are cooked. A 10% down draw from any of your bags, you're wiped. You're wiped, so don't mess up. It was really high stakes.

• 12:33Jordi Hays?

  Mess up.

• 12:34John Coogan?

  Yeah. So he has a big job job ahead of him. The postal service has been hemorrhaging money for years because of declining mail volumes, limits on what it can charge customers and a costly mandate to deliver around 168 million addresses six days a week. Steiner must also address persistent delays of mail and package deliveries in some parts of the country. He was hand selected by Trump and he says he wants the postal service to remain an independent agency. I don't like that. I think we should take this thing private.

• 12:59Jordi Hays?

  Yeah.

• 12:59John Coogan?

  Spack it.

• 13:00Jordi Hays?

  Spack it.

• 13:00John Coogan?

  Yep, let's see, let's let it rip.

• 13:02Jordi Hays?

  Let Chamath cook.

• 13:03John Coogan?

  Anyway, I'm sure you all are aware of Mother's Day coming up. I'm sure you've already done a lot of your prep, bought all the gifts, but if you haven't, we have a gift guide for you today to take you through some of the, just some of the basic options that you should be thinking about. If you're in the audience, we know that you're wealthy, most likely post economic, so you got to make sure that the mothers in your life.

• 13:24Jordi Hays?

  You know, you're pre, post economic, right? So you're, you know, impending, you know.

• 13:29John Coogan?

  But you could probably take a non-recourse loan against your shares, if even if you're a series B founder, and then drop that on something like the pink star. It's a 60 karat vivid pink diamond ring.

• 13:39Jordi Hays?

  Coming in at only 70 million dollars, but it's.

• 13:43John Coogan?

  I mean, at that price, you can't say no. Exactly. I mean, we talked about the graph hallucination, rainbow diamond watch, 110 carats for the wrist, and everyone's just gonna know like, wow, that mom has a great son. For sure.

• 13:58Jordi Hays?

  He or she really loves their mother.

• 14:00John Coogan?

  I mean, if you want to take it a little bit further, you could go diamond tiara.

• 14:03Jordi Hays?

  Yep.

• 14:03John Coogan?

  A crown.

• 14:04Jordi Hays?

  These have, tiaras kind of fell off.

• 14:06John Coogan?

  They did.

• 14:06Jordi Hays?

  But that just creates an opportunity for them to be so back. And I think that 2026 is feeling like it will be the year of the tiara. You know, your mom is going out on a little morning stroll. She's gonna want to throw on that tiara.

• 14:21John Coogan?

  Exactly.

• 14:21Jordi Hays?

  Put around the neighborhood.

• 14:22John Coogan?

  Yeah. A lot of people say, oh, flowers. Flowers are only for Valentine's Day. But I think if you rethink what flowers can be, you can get to a really interesting place on Mother's Day. Yeah, exactly. So Juliet roses, orchid rarities, you can push a bouquet up into the six figures.

• 14:39Jordi Hays?

  Yeah. Well, I thought you were gonna say, you know, basically drop an entirely new rose garden into her backyard.

• 14:47John Coogan?

  Or hire a team of bio, bioengineers to engineer an entirely new breed of roses never before seen. That's a reasonable thing.

• 14:55Jordi Hays?

  Not unreasonable, even to be getting ahead of it, thinking about next year, going to Monsanto, saying, hey, look, I want to develop, you know, an entirely new, you know, group of flowers, completely bioengineered.

• 15:05John Coogan?

  Yep. You can also take some of those flowers, dip them in 24 karat gold, boom, you have an eternal bouquet. They'll never wilt. That's gonna run you like 40K, but worth every penny.

• 15:17Jordi Hays?

  Totally.

• 15:18John Coogan?

  What else should we recommend? I mean, obviously renting an entire tropical island for a family week, totally doable. Around the world private jet grand tour, very good option. A ticket to space, we saw this with Jeff Bezos.

• 15:33Jordi Hays?

  Totally. Expect, I mean, you've been saying this for weeks. You think that you won't be able to get on a Blue Origin flight for the next three years after Mother's Day, because everybody is going to be sending their mother and their mother-in-law to space.

• 15:46John Coogan?

  Yeah, they made this whole thing with the Blue Origin, oh, it's all the women flight. What about all the moms? They should have just done, really focused on just moms in space.

• 15:53Jordi Hays?

  Yeah.

• 15:53John Coogan?

  That's, that's definitely the future.

• 15:55Jordi Hays?

  That's viral. Another favorite, we talked about this, just a good old wire transfer. Just a big wire transfer. You remember as a kid?

• 16:02John Coogan?

  Totally.

• 16:03Jordi Hays?

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

• 16:04John Coogan?

  Birthday money.

• 16:04Jordi Hays?

  You know, yeah, yeah.

• 16:05John Coogan?

  Oh, I got a hundred bucks. I got fifty bucks. I can buy a video game.

• 16:07Jordi Hays?

  And the logic at the time was this kid knows how to spend it better than I do.

• 16:12John Coogan?

  Exactly.

• 16:12Jordi Hays?

  Flip it on your mom.

• 16:14John Coogan?

  Flip it on your mom, yeah.

• 16:15Jordi Hays?

  And.

• 16:15John Coogan?

  Six-figure wire transfer.

• 16:16Jordi Hays?

  Six-figure wire transfer. Boom.

• 16:18John Coogan?

  Yep. It's great. If you're, if she's into purses, you know, we talk about Birkins. If you're gonna go Birkin, don't go basic Birkin. Go Hermes Himalaya Birkin with rare crocodile, diamonds. Yes, it's gonna cost you 200, maybe 500K. But it's gonna stand out in a sea of monotonous Birkins, right?

• 16:39Jordi Hays?

  And for the average platform VC, that's 20% of your annual comp, right?

• 16:45John Coogan?

  Yeah, it's nothing.

• 16:45Jordi Hays?

  Not even counting carry, right? So it's just, it's, it's the least that you could do.

• 16:50John Coogan?

  Yeah. So in fact, if you see, if you meet some GP and their mom doesn't have Himalayan Hermes Birkin with crocodile and diamonds on it, you would think like, oh, their fund's not doing well. Yeah, exactly. Immediately, exactly what I think.

• 17:04Jordi Hays?

  Or they're not raising another fund.

• 17:05John Coogan?

  They're not ready. They definitely can't lead my next round.

• 17:07Jordi Hays?

  Yeah.

• 17:07John Coogan?

  So I gotta start talking to other folks. I gotta have, run a, run a bigger bidding process for sure. Starting out working. But I mean, if you want to go, if you're more serious, you should go with the Muawadd 1001 Nights Diamond Purse.

• 17:20Jordi Hays?

  Yes.

• 17:21John Coogan?

  Guinness Book of World Records of handbags. I mean, people take such a big deal out of Birkins, but you can go a whole, whole order of magnitude higher. It's a 3.8 million dollar bag.

• 17:29Jordi Hays?

  Yeah.

• 17:30John Coogan?

  But, you know, it's really the only way to stand out. One of one. One of one.

• 17:33Jordi Hays?

  Yeah, exactly. The armored Rolls Royce.

• 17:36John Coogan?

  This is a great choice. This is a great choice.

• 17:38Jordi Hays?

  Runs, going to grab coffee, maybe dropping the grandkids, dropping off the grandkids.

• 17:42John Coogan?

  A hundred percent.

• 17:44Jordi Hays?

  Yeah, just getting, you know, ideally. Knowing my mom, 700 horsepower is kind of like the right range for a daily.

• 17:55Jordi Hays?

  My mom drives a Prius actually, but I think, I think.

• 17:59John Coogan?

  Have you considered swapping a V12 in there? Engine swap for Prius?

• 18:03Jordi Hays?

  Yeah, maybe, maybe just putting.

• 18:05John Coogan?

  Whatever car she has, just soup it up.

• 18:07Jordi Hays?

  Engine swapping a Cayenne Turbo GT. Engine into the Prius.

• 18:11John Coogan?

  Yeah.

• 18:12Jordi Hays?

  And so, you know, cause she wants to be low key.

• 18:14John Coogan?

  Yeah, exactly. She's comfortable. She knows what the buttons are.

• 18:17Jordi Hays?

  Yeah.

• 18:17John Coogan?

  But that doesn't mean that she can't have a little more.

• 18:19Jordi Hays?

  A little more power under the hood.

• 18:22Jordi Hays?

  I like that.

• 18:23John Coogan?

  I mean, Zach did this for Priscilla, right?

• 18:25Jordi Hays?

  Yeah.

• 18:25John Coogan?

  He made the, he made the custom stretched Cayenne Turbo GP minivan.

• 18:30Jordi Hays?

  Yes.

• 18:30John Coogan?

  Which is sick, but you could have gone further. You could have, you could have gone, you know, Lamborghini Urus minivan.

• 18:36Jordi Hays?

  Yeah.

• 18:36John Coogan?

  You could have gone Cullinan, Black Batch, minivan, Mansory.

• 18:40Jordi Hays?

  Yeah, there you go.

• 18:42John Coogan?

  I think that's the combo. I think it's really like the creativity of just, you know, mixing these different cultures together with key.

• 18:49Jordi Hays?

  I think under, underutilized option, something you can do last minute.

• 18:54John Coogan?

  Yep, last minute.

• 18:56Jordi Hays?

  Take your mom's phone, bring it to a jeweler, have them bedazzle. Have them bedazzle the back.

• 19:02John Coogan?

  Yeah.

• 19:03Jordi Hays?

  And what I actually like about this is because the iPhone is uneven on the back rate. It has a camera. You can just put the diamonds around this side. So it will actually sit flat, right?

• 19:13John Coogan?

  Oh, that's smart. Yeah. So it's actually like an upgrade. Practical.

• 19:16Jordi Hays?

  Yeah.

• 19:16John Coogan?

  It's practical.

• 19:17Jordi Hays?

  It's, it's, it's more practical, but it's also fun. She's taking a picture of, you know, the grandkids.

• 19:23John Coogan?

  Yeah, yeah.

• 19:23Jordi Hays?

  And so definitely something.

• 19:25John Coogan?

  I mean, we see a lot of, a lot of these like tech billionaires, their super yachts, but you never hear about the mothers of tech billionaires getting their own super yachts.

• 19:32Jordi Hays?

  Totally.

• 19:33John Coogan?

  And so I would recommend calling a feed ship, start customizing something out. I mean, two days, you're not going to be able to do much, but maybe next year, maybe the year after you start planning it out.

• 19:40Jordi Hays?

  You want to be thinking three, four years in advance.

• 19:41John Coogan?

  Thinking in decades for Mother's Day.

• 19:43Jordi Hays?

  At minimum.

• 19:43John Coogan?

  Absolutely, absolutely.

• 19:46John Coogan?

  You could also do private IMAX theater at home for the cinephiles.

• 19:50Jordi Hays?

  Totally.

• 19:51John Coogan?

  If they're into film.

• 19:51Jordi Hays?

  Totally.

• 19:52John Coogan?

  Just dig a massive hole into the house.

• 19:54Jordi Hays?

  Yeah.

• 19:55John Coogan?

  Build an underground bunker.

• 19:57Jordi Hays?

  Under.

• 19:57John Coogan?

  Great.

• 19:58Jordi Hays?

  Check out the, you know, reach out to the boring.

• 20:00John Coogan?

  Yeah. I mean, the last one that's pretty easy is just. Paying for a full domestic staff for

• 20:07Jordi Hays?

  You know why I like this?

• 20:08John Coogan?

  Yeah, why?

• 20:08Jordi Hays?

  Is because you can write a card and say you're going to do it, but you get a little bit of time to actually find the staff, right?

• 20:16John Coogan?

  Yeah.

• 20:16Jordi Hays?

  To find the individual people that are going to make up that staff.

• 20:19John Coogan?

  Yeah.

• 20:19Jordi Hays?

  And so it's one of those great last minute option.

• 20:22John Coogan?

  Yeah.

• 20:23Jordi Hays?

  That, you know, will be unforgettable.

• 20:25John Coogan?

  Yeah, I really feel like you're, if the household is running smoothly, the staff is firing on all cylinders. Ideally, you have kind of a, uh, an Alfred type of butler who really oversees the staff.

• 20:38Jordi Hays?

  Yeah.

• 20:39John Coogan?

  And I would love to see that type of, you know, house manager, estate manager using Linear.

• 20:45Jordi Hays?

  Totally.

• 20:45John Coogan?

  Totally. To, to actually, because Linear is a purpose-built tool for planning and building products. You want to be building custom software to run your smart home. Don't, don't.

• 20:53Jordi Hays?

  The ideal Alfred, the ideal Alfred was a PM in big tech.

• 20:58John Coogan?

  Exactly.

• 20:58Jordi Hays?

  Take that sort of like ethos into the home.

• 21:01John Coogan?

  Yes.

• 21:02Jordi Hays?

  And really just run it like it's a product with millions of users.

• 21:05John Coogan?

  Yes. When is the registration on the mensory calling and do? Let's make sure that the license plates are coming. Track it in Linear.

• 21:12Jordi Hays?

  Boom.

• 21:13John Coogan?

  Exactly. So this is a system for, uh, modern software development, streamline issues, projects and product roadmaps. I mean, it's the perfect Mother's Day gift, really.

• 21:22Jordi Hays?

  It really is. Shout out to Matthew. I had a good call with him this morning. Runs a lot of the marketing over at Linear.

• 21:27John Coogan?

  Anyway, uh, let's quickly take you through the run of show. Let's pull that up to show you what's happening today. We're going through the Mother's Day gift guide, but we also have some massive news. Rorra was featured in the Wall Street Journal. We're going to break it down. We'll do some timeline. Then we got the Stanford Anons coming on and then a bunch of other guests.

• 21:43Jordi Hays?

  The Anons over at Stanford.

• 21:44John Coogan?

  Yeah.

• 21:45Jordi Hays?

  They wrote a pretty inflammatory piece.

• 21:47John Coogan?

  Yeah.

• 21:48Jordi Hays?

  Uh, which I'm excited to have them break down for us, but, uh,

• 21:50John Coogan?

  Let's take you through the Wall Street Journal. Rorra was featured.

• 21:53Jordi Hays?

  Yes. Massive news. For those that are new, uh, I started a company called Rorra, uh, with, uh, my co-founders, Brian and Charlie, uh, a long time ago at this point. Spent a lot of time in R and D and launched last year and it's been, uh, just off to the races, which has been great. And, uh, anyways, uh, Rorra was in the Wall Street Journal, uh, yesterday, and I got a little bit of the backstory here. Somebody reached out apparently with a Just like a random Gmail and was like, hey, I'm doing some product testing.

• 22:27John Coogan?

  Cool.

• 22:27Jordi Hays?

  Can I get Aurora or whatever? Brian ended up sending and the article turned out really well. So we can read through it. So the water filters you actually want in your kitchen. A new wave of models making grand claims regarding their purifying prowess. But our test revealed four clear winners when it came to flavor, functionality and sheer counter appeal. For many people, the thought of water filters triggers the tiresome realization that theirs needs to be replaced or worse, that the taste of their filtered water isn't what they actively crave, the way they once craved that chilled bottle of Fiji or Evian and probably still do despite the news images of masses of plastic choking the oceans. I still have hopefully much way less now, but I still, you know, as of last year, had

• 23:12Jordi Hays?

  a bunch of friends that were just drinking tap water, which is actually completely insane in our year 2025. So anyways, going on, and let's be honest, that plastic pitcher has never again looked quite so crystalline as it did straight out of the box, has it? Drinking water out of plastic, just don't do it. So good news, it doesn't have to be that way. According to market research firm Fortune Business Insights, the global demand for water purifiers is exploding and recently water filter makers have, pardon the pun, flooded the market with models ranging from sleek and even glamorous to sporty, high tech and industrial chic. Aurora, I'm looking at you. The question then is how to choose a system that fits your drinking needs and aesthetics

• 23:55Jordi Hays?

  without sacrificing efficacy. Over the last several months, I tested everything from single bottle to multi gallon filters. Blah, blah, blah, blah, blah, blah, blah, blah. Let's just talk about Aurora for the family.

• 24:09John Coogan?

  Is Aurora numeral yet? Got to pay sales tax, right?

• 24:12Jordi Hays?

  Working on it.

• 24:13John Coogan?

  Got to get on sales tax. Put that sales tax on autopilot.

• 24:17Jordi Hays?

  Oh, ad.

• 24:18John Coogan?

  Yeah.

• 24:18Jordi Hays?

  Integrated ad. There we go. Run it, John.

• 24:21John Coogan?

  Sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. Anyway, congratulations to the whole Aurora team and you can go pick one up. What? Aurora.com?

• 24:31Jordi Hays?

  Aurora.com. R O R R A.

• 24:33John Coogan?

  Let's do a quick poly market review. There's a few markets that I'm tracking. There's a few markets that you're tracking. I'm interested in this Tesla Elon Musk CEO replacement thing right now.

• 24:44John Coogan?

  There was, there was this leaked Wall Street Journal article saying Tesla was thinking about replacing Elon Musk as CEO. Polymarket has a 13% chance. I think this is the perfect thing to be tracking on Polymarket. And now then they also have who will replace Elon Musk as CEO. Of course, 86% says no CEO announced in 2025, but JB Strabel is sitting there at 2%. I don't know if you know him. He runs Redwood Materials, one of the earliest employees at Tesla, has been there for a long time. Redwood Materials does battery recycling. It's a huge company, but you can imagine them kind of putting together. So I don't know, wild card. There's a couple of other folks in here that are, that are interesting. Gwen Shotwell is actually sitting here at 1%. Dara Khosrowshahi at Uber.

• 25:27Jordi Hays?

  Dark Horse.

• 25:28John Coogan?

  Dark Horse. Mary Barra. There's a bunch of other interesting people, but that is a market that I'll be tracking over the, through the end of the year. As the, you know, the peanut gallery yaps about Elon, where he's going. The last thing that's interesting, largest company at the end of May, Microsoft overtaking Apple.

• 25:47Jordi Hays?

  Mogged.

• 25:47John Coogan?

  Mogged.

• 25:48Jordi Hays?

  Mogged. Microsoft has a lot of momentum right now and Apple has the opposite. A lot of different forces coming into, coming into play. Obviously the trade wars, kind of botching AI, the big thing.

• 26:06Jordi Hays?

  Yeah, I'm, I'm, I'm just very interested. It's interesting that Google is not even in the conversation on this market anymore. Right? Obviously impacted over the last week from some of the comments that Apple made in the, in the

• 26:21Jordi Hays?

  trial earlier.

• 26:22John Coogan?

  Nvidia is still sitting at 4%, kind of that wild card because it, it moves much, it's much more volatile stock. Because you know, they can just blow out one quarter if someone orders 10 million H100s or something. But obviously a rough go with the, with the international sanctions and the chip bans and whatnot. What else are you tracking?

• 26:41Jordi Hays?

  Which company has the best AI model end of May? Google's sitting at 74% with 20 days to go.

• 26:47John Coogan?

  You were talking about like they've trained such incredible models. They dominate the evals. And invented the transformer, absolutely insane team. And yet really struggled to actually break through and have this crazy counter positioning where the more they do with AI search, the more it takes away from their search. It's the classic innovator's dilemma, right? Everyone said AI should be a sustaining advantage. And I think it could be in the sense that like they'll then this into GCP and cloud platform and there will be a beneficiary of AI, but they do have some serious, serious product challenges.

• 27:18Jordi Hays?

  Yeah, I was thinking they have, there's that Wario meme, which is like, I've won, but at what cost? And that's really to me.

• 27:27John Coogan?

  Avengers originally?

• 27:29Jordi Hays?

  Yeah, but it was like popularized by this like image. It'd be too hard to pull it up, but yeah.

• 27:34John Coogan?

  XAI is actually second place, which is interesting because you'd think OpenAI, based on the performance of the consumer app would be more in the conversation, but OpenAI is only sitting at 5%.

• 27:45Jordi Hays?

  Yeah, this is based on, this is based on benchmarks.

• 27:47John Coogan?

  Yeah, of course, of course. Benchmarks don't matter to ChatGPT anymore. Just user retention, I think. And stuff in ads and things, maybe, who knows?

• 27:56Jordi Hays?

  And add in it.

• 27:58John Coogan?

  Anyway, speaking of ads, we should talk to you about Vanta. Automate compliance, manage risk, improve trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program.

• 28:15Jordi Hays?

  Anyway, did you know that Vanta was one of the fastest growing vendors on ramp last month?

• 28:22John Coogan?

  I did not know that. That's great. Congratulations.

• 28:24Jordi Hays?

  Cruisin'. Congrats to Vanta.

• 28:26John Coogan?

  Well, we got to move back to Mother's Day because we forgot to take you through some of the really obvious houses that are on the market. If you're looking for a house for your mother this Mother Day, Mother's Day, there's an $8.5 million California home with a backyard railroad. And so

• 28:43Jordi Hays?

  Train heads are going to be scrambling.

• 28:45John Coogan?

  A lot of moms have kids. The kids love trains. Buy a house with a railroad in the back.

• 28:49Jordi Hays?

  Trains.

• 28:50John Coogan?

  When David and Sherry purchased their Lockin' Yada Flitridge home, not too far from me, in 2008, they found the rusted remnants of train tracks where a previous owner had built a backyard railroad. It turns out that Lockin' Yada Flitridge, home to a number of Disney employees, was once a hub for garden railways. While the family weren't train enthusiasts, they were intrigued. With the help of a one-time Disney Imagineer, they spent about a year recreating the railroad, completing it in 2011. Today, the roughly 530-foot circuit has a tunnel and a train station with a working crossing light. The train itself is faux steam, battery-powered locomotive, and caboose with two riding cars. This is incredible.

• 29:29Jordi Hays?

  This is the ultimate backyard toy for the grandkids.

• 29:33John Coogan?

  It's such a flex. Everyone has, oh, infinity pool.

• 29:36Jordi Hays?

  Oh, Koi pond.

• 29:37John Coogan?

  Oh, Jim. Yeah. Do you have a railroad in your backyard? No. The quote's so good. David, the owner, is like, there's something universal about trains. They bring out the youth in everyone. However, their railroad needed a new conductor. They put in, they put the 1.55 acre property on the market for 8.5 million. They're semi-retired and moving permanently to their second home in Park City. He's a financial executive, grew up in Chicago. They married in 1982 and later settled in Flint Ridge, a semi-rural community about 13 miles from downtown Los Angeles, where we are right now.

• 30:09Jordi Hays?

  Home of LA's auto community. If you ever want to be scared driving, just drive up, yeah, that's, that's like, I mean, effectively home. You have to drive through La Cañada to get to Angeles Crest Highway.

• 30:23John Coogan?

  Yeah.

• 30:23Jordi Hays?

  And if you ever want to feel like you're going to get run over, go on ACH and try going the speed limit. People will fly by you at four times that.

• 30:35John Coogan?

  That's awesome. Apparently Disney also had a railroad in his backyard. Walt Disney in Homby Hills in LA. The original railroad was built in the 1960s, according to The Sun, who said his train-loving father was friends with Johnston and Kimball. When the new family bought the house, the tracks had been dismantled and largely built over. At first, the railroad wasn't a priority. When David had played with toy trains growing up, he said he wouldn't describe himself as a train guy. But a friend offered to introduce David to the late Bill Tyson, a one-time Imagineer and garden railroad enthusiast who could help restore it. Then they visited the South Coast Railroad Museum near Santa Barbara, where they rode a garden railroad for $1. At the end of it, we said, okay, we have to do this.

• 31:17John Coogan?

  It's just too much fun. It was the most expensive dollar I ever spent. That's hilarious. That's great.

• 31:23Jordi Hays?

  That's great. We have another property.

• 31:27John Coogan?

  Another property. This is another good option for Mother's Day. If you're in the market to buy your mother a house.

• 31:33Jordi Hays?

  She's trying to move south, closer to the tropics.

• 31:36John Coogan?

  Yeah.

• 31:36Jordi Hays?

  Why not Fort Lauderdale?

• 31:37John Coogan?

  Better weather, Fort Lauderdale. There's a new massive waterfront home.

• 31:41Jordi Hays?

  15,000 square feet.

• 31:42John Coogan?

  $39 million and it includes eight separate bar areas. So for the entertainer.

• 31:49Jordi Hays?

  So a heavy.

• 31:51John Coogan?

  I mean, people are saying alcohol is coming back, you know?

• 31:53Jordi Hays?

  Yeah.

• 31:53John Coogan?

  There's so much alpha with alcohol being out of style.

• 31:56Jordi Hays?

  Yeah.

• 31:56John Coogan?

  Maybe go long alcohol.

• 31:57Jordi Hays?

  Yeah.

• 31:58John Coogan?

  Uh, and enjoy the eight bars, but you could also serve mocktails and beverages.

• 32:01Jordi Hays?

  That's right.

• 32:02John Coogan?

  For kids, you could do anything.

• 32:02Jordi Hays?

  Energy drinks.

• 32:03John Coogan?

  Energy drinks, yeah. Uh, for more than 20 years, Steve Savour has been hosting lavish parties at his waterfront mansion in Fort Lauderdale, Florida. Last year, he hosted a Barbie themed gala, decking out the house in hot pink and dressing up as Ken.

• 32:16Jordi Hays?

  Whoa.

• 32:17John Coogan?

  I always say, if the house burned to the ground and I didn't have any insurance, I got my money's worth out of it. The 64 year old retired bachelor, that's hilarious. So he's now listing the property known as Villa De Palma for $39 million. Says he travels frequently, especially during the summer months and wants a home that doesn't require as much attention. So, the house is beautiful.

• 32:36Jordi Hays?

  Savour, who was trained as a lawyer, made his fortune in merchant banking and is a former CEO of the Pittsburgh based communications company, Comnet Erickson. Retiring at age 39, he assembled Villa De Palma over two decades, starting with the purchase of the main house for about 1.8 million in 2002. Property records show Florida is known for massive fluctuations in their housing market. In the years since, he has spent millions adding more land to expand his footprint to roughly an acre. One of those properties included a five bedroom house, which he raised around 2009. This guy just turned making this party house into his full-time job.

• 33:13John Coogan?

  Raised, raised means demolish, by the way.

• 33:16Jordi Hays?

  Yes.

• 33:16John Coogan?

  And so, he says to celebrate the demolition, he hosted an animal house style toga party. He spent two weeks decorating the house to look like a fraternity house. Then, the night before the demolition, he and his pals tore up the house with sledgehammers.

• 33:31Jordi Hays?

  Oh.

• 33:32John Coogan?

  Can you imagine that? At the end of the night, we were throwing kegs through windows, he said. What a bro. This is so insane. After tearing down the small house, Savour, uh, has expanded the main house, completing the project around 2010. The eight bedroom Mediterranean, Mediterranean style estate has about 15,000 square feet of living space and two large, large outdoor pools. It's well equipped for entertaining with a wine cellar and eight separate bar areas, including one inspired by Hotel Du Cap d'Inroc in the south of France.

• 34:02Jordi Hays?

  Fantastic hotel.

• 34:04John Coogan?

  Uh, have you been?

• 34:05Jordi Hays?

  No.

• 34:05John Coogan?

  Oh. Uh, and Savour calls another bar on the rooftop, Tequila Tower. This guy is such a party animal. A giant table in the space can hold plenty of people to dance on after tequila has been depleted. Savage. There are two relaxation rooms, properties within walking distance of the beach and downtown Fort Lauderdale's main shopping strip. I would come down for long three day weekends and ended up staying two weeks. When I retired, I made my playground my home. What a legend. Anyway, great option.

• 34:32Jordi Hays?

  I'm interested to see where this one lands.

• 34:35John Coogan?

  Yeah. Anyway, we have two minutes till our first guest is joining. Let's do some timeline. What else is in the news? Actually, let's do an ad. Eight Sleep. What's new in Pod 4 Ultra? Pod 4 has all the signature features you love about the pod, plus new groundbreaking upgrades. Five year warranty, 30 night, 30 night risk free trial, free returns, free shipping. You gotta love it.

• 34:58Jordi Hays?

  I went hard last night.

• 35:00John Coogan?

  I did terribly. I got 85.

• 35:03Jordi Hays?

  96.

• 35:04John Coogan?

  96. It's rough.

• 35:06Jordi Hays?

  93 minutes of deep sleep.

• 35:07John Coogan?

  One last potential gift for mothers on Mother's Day, a billboard. Go to adquick.com. They make out of home advertising easy and measurable. Say goodbye to the headaches of out of home advertising and buy a massive out of home campaign.

• 35:22Jordi Hays?

  Huge opportunity to just buy.

• 35:23John Coogan?

  Just thanking your mother for all that she does.

• 35:25Jordi Hays?

  Buy the 10 billboards closest to your mother's home, wherever she lives.

• 35:29John Coogan?

  Driving around.

• 35:30Jordi Hays?

  And make it so that she can't leave her house while, without seeing how much you love her.

• 35:34John Coogan?

  Exactly.

• 35:35Jordi Hays?

  So, we got a post here from, we'll cover this and then we'll go into the guest from Bucko Capital Bloke. He posted back on March 3rd. New Mag 7, Rhymetal, which is German's arm, German arms manufacturer, Solana, VCS coin, Palantir, Salesforce for, okay.

• 35:58John Coogan?

  He's not exactly the.

• 35:59Jordi Hays?

  He's not pulling punches. Hims, D to C, I can't say anything on this show. Bloke. All new appliances and vehicles purchased before the tariffs, gold. And so he then quotes it and by saying Rhymetal is up 54%, Solana's up 15%, Palantir up 42%, Hims up 26%, Dave up 60%, used vehicles up 10%, gold 14% and the Mag 7 is down 3%.

• 36:27John Coogan?

  I wonder if this is actually just over the last two months. Maybe, yeah. I guess this is, did the tariffs hit March 3rd? Something like that? Anyway, congrats to him for calling it. Clean up the language if you want to be on the show more.

• 36:42John Coogan?

  Anyway, they said to cheat on everything, so I decided to cheat their company. I generated 84,000 believable resumes to spam their job applicants and send AI agents to waste their time.

• 36:51Jordi Hays?

  This guy, Rise.

• 36:52John Coogan?

  I'm shorting the VCs to funding them. You see this fight that's going on?

• 36:54Jordi Hays?

  Can we, Michael, are we able to pull this up on the screen?

• 36:57John Coogan?

  So Rise is trolling Roy, former guest on the show.

• 37:01Jordi Hays?

  So yeah, Roy has a company called Cluli. He is helping people cheat on everything. Right now, I think they're focused on sales calls.

• 37:08John Coogan?

  A little controversial.

• 37:09Jordi Hays?

  And he's attracted a lot of controversy. And Rise is messing with him a little bit by just using AI to spam Roy with an almost inconceivable number of applicants.

• 37:24John Coogan?

  Somehow, I don't think it's going to affect Roy. I think he's going to be just fine.

• 37:27Jordi Hays?

  Roy's built different. He's hiring a videographer in San Francisco with

• 37:31John Coogan?

  500K.

• 37:32Jordi Hays?

  300 to 500K. Absolutely massive numbers for a vlogger. So if you want to vlog and make half a mill a year.

• 37:40John Coogan?

  It's crazy.

• 37:41Jordi Hays?

  Head over to Cluli.

• 37:42John Coogan?

  Head over to Cluli. Good luck to him. Anyway, we should have our first guest joining right now, or set of guests, actually. I think we'll have two voices on the show. They're both anonymous. They've been involved in the latest report from the Stanford Review about spying on campus. You're not going to see their face. You're not going to hear their names. But you're going to hear us ask some questions about the report and try to get to the bottom of what's going on on campus and dig a little bit deeper into the viral Stanford Review article that went up most recently, just a few days ago. Anyway, welcome to the show. Can we hear you? Can you hear us? Can we hear you?

• 38:22Speaker 02

  Yes, thanks for having us.

• 38:24Speaker 03

  Thanks for having us. Great to be here.

• 38:25Jordi Hays?

  Great to have you.

• 38:26John Coogan?

  Thanks for joining. Can you start by, I don't know how you want to characterize your involvement in the story, or I know you want to remain anonymous, but can you just give us the high level on how the report came together and what the key findings were?

• 38:38Speaker 03

  Yeah, let's do it. So the Stanford Review spent over one year investigating Chinese academic espionage at Stanford. What we did is we talked to Stanford students, we talked to Stanford faculty, we talked to Stanford China experts, and we talked to congresspeople about this. And at the end of our investigation, we compiled a bunch of anonymous reports for people working in AI labs, student researchers and faculty. And the overwhelming conclusion was that there is essentially widespread intelligence gathering at the behest of the CCP at Stanford.

• 39:10John Coogan?

  What does that actually look like? I mean, no offense to Stanford folks, but like it's undergrad. It's not exactly like a proprietary AI lab or like nuclear weapons program. Like, what are they trying to steal?

• 39:23Speaker 03

  Got you, so I'm going to pass you over to my colleague.

• 39:25John Coogan?

  Sure.

• 39:25Speaker 03

  And she's going to talk a little bit about what her experience with espionage look like.

• 39:31John Coogan?

  Sure.

• 39:32Speaker 02

  Yeah, so a lot of what espionage looks like, you know, on an undergrad level is

• 39:40Speaker 02

  Chinese students and researchers trying to basically collect any and all information about Stanford that they possibly can. So, you know, Stanford is an open research institution, so a lot of the things that are being reported back to the CCP aren't exactly secrets. And, you know, obviously,

• 40:02Speaker 02

  you know, it's not as bad as stealing defense secrets.

• 40:06John Coogan?

  Yeah.

• 40:06Speaker 02

  But the issues that is happening at such a massive scale, because they, the CCP essentially has all of their students reporting back to the CCP with any and all information that they have.

• 40:22Speaker 03

  Right, so once, one Chinese international student characterized it like this. Many Chinese students have handlers. The CCP wants to know everything that's going on at Stanford. This is a very normal thing, they just relay the information they have. Now, with regards to sensitive research, we're not just talking about the undergraduate level, we're talking about the graduate level. And these are some of the best AI labs and best robotics labs in the United States of America and the world at large. What they want is not just published papers, because you can imagine, you can't replicate papers just via post papers. They want the methodology sent back. They send back communication channels. They send back people that are involved with the research and other Chinese internationals that are working on it, so that they can replicate this research at China.

• 41:02Jordi Hays?

  How would you rate the university's reaction to the piece? There's obviously been a bunch of conversation and chatter online, but I imagine you guys have been having conversations as well.

• 41:15Speaker 02

  Yeah, so we actually just published today, um Larry Diamond, Matthew Turpin. Um wanted to publish sort of a response article, um so that was also published in the Stanford Review.

• 41:28Speaker 03

  Mm hmm.

• 41:28Speaker 02

  And uh they they came out in support uh of our article. Um which, you know, was good. And then Stanford also came out with a statement saying, you know, they take this very seriously. And it is important to them. Um, you know, we are sort of under the impression that there's not much that's gonna be done about it because. Uh on some level, everyone knows that this is happening and nothing is really being done about it um uh on a university level. They really wanna kind of stay out of things.

• 42:01Speaker 03

  Right, I mean, Matt Potenje, the one of the met, one of the guys that commented is a. The former US Deputy National Security Advisor, Matthew Turpin, worked as the China Senior Advisor to the National Security Council. These guys have seen this happening for years on years. The issue is that Stanford is an open knowledge research institution. That means there's no secrets and that means it's very hard to prosecute people for sending back sensitive research information to China. So really what they get people on is just their visa. You know, they're working for the PLA, but they haven't told the authorities about it. So what needs to happen is we need to have people that are sending back this information registered to foreign agents.

• 42:39Speaker 03

  And set up new laws and new legal guidelines that prevent people from being able to se- send public information at research institutions back to foreign governments.

• 42:47Speaker 02

  Right, yeah. And and the other thing too is, you know, we we also have need to recognize that. The students are actually victims in this situation. I mean, the CCP is exploiting them. They are essentially crowdsourcing, uh you know, espionage at massive scale at, you know, universities all around the country. And they are, there's this.

• 43:11Speaker 02

  Thing called transnational repression and. Basically, you know, if they don't want to report back to the CCP, if they have any reluctantlys or if they don't comply. Their families can be threatened, um their livelihoods, their scholarships. So, you know, it's really a sad situation for them as well.

• 43:31Speaker 03

  Yeah, I mean.

• 43:32John Coogan?

  Totally.

• 43:33Speaker 03

  Matthew Turpin, who worked with the NSA, even said at Stanford. There's been Chinese international students who had their parents brought to the police station because they've refused to turn over Stanford's research information. So if you don't comply, you will face penalties from the Chinese Communist Party. And your parents and your family back at home in China may be put in harm's way, and we've seen that happen.

• 43:53John Coogan?

  Makes sense.

• 43:53Jordi Hays?

  Yeah, it's incredibly challenging, you know, you could be here, your parents could be here, and yet if you have even.

• 43:59Speaker 03

  Right.

• 43:59Jordi Hays?

  One family member at home, a grandparent, a great grandparent, you know, there's some amount of risk.

• 44:04John Coogan?

  Uh, what, uh, I don't know if you saw this, uh, post by Kim Ma Cutler, who I think is at, uh, initialized, right? Partner at initialized, uh, she said, this, uh, this report has pretty much all anonymous sourcing, unfortunately. And so it does not seem like a good platform upon to, uh, upon which to argue that many, most or all Chinese nationals or first gen Chinese. Students are spies, um, how do you interpret that kind of criticism of the piece?

• 44:32Speaker 03

  Right, let's go through this point by point.

• 44:34John Coogan?

  Please.

• 44:35Speaker 03

  First of all, when you look at how the CCP operates, they have twenty nine, twenty seventeen national security law. Under Article seven, all Chinese citizens must comply with national intelligence and provide information and keep secrets when they're asked. So straight out of the gates, all citizens must comply at the face of penalty, working with security services. So anybody who's asked at Stanford to do, do something for the CCP must do it, or they will face legal penalties in China. The second point, we have talked to Chinese international students, they have families at home. For the same reason that there's transnational oppression, they cannot go on the record and say. These things with their name out there because their families will be taken away, their families are brought to police stations, it's already happened with research. With regards to Chinese, China experts.

• 45:20Speaker 03

  We've had Matthew Turpin on the NSA, we've had Matt Pottinger on the SN NSA. And then we've had Larry Diamond all come out in support of our article. They've said this is a decade long, decades long relentless interference in Stanford to misappropriate our sensitive research technologies. All the experts have agreed with us. But at Stanford, we've seen a culture of silence and fear talking about this issue because it's characterized as racism. So one hundred and sixty six Stanford professors wrote an article to the Department of Justice saying that we need to shut down the Chinese China initiative, which was an initiative that sought out Chinese spies because it's racist.

• 45:57John Coogan?

  Hmm.

• 45:58Speaker 03

  But what that fails to recognize is if you don't shut this down, you have Chinese students who are the real victims here. So it's China who is profiling their citizens and victimizing them. It's not the USA. This is not racial profiling because we're just looking towards Chinese nationals who are being repressed by their own government.

• 46:19John Coogan?

  That makes sense. Um, putting aside the kind of like the geopolitical issue of China specifically, how are you thinking about um, like not suffering from a lack of brain drain? I feel like, you know, the majority of tech companies, like the tech industry might collapse if we didn't have, you know, a fluid transition from like, you know, there's Indian CEOs all over Silicon Valley. There are plenty of allied countries that send talented individuals, uh, you know, even going back through history. We've had Operation Paperclip, we've, we, we have, we have historically successfully uh, integrated members from even rival nations.

• 46:59John Coogan?

  And that feels like something that would be a risk of losing um, if we go too far here. Is that, is that a real risk or how do you think about confronting that?

• 47:12Speaker 02

  Yeah, I mean, I think, you know, a lot of people have sort of interpreted our article, you know, and have said, like, ban all Chinese nationals and from attending elite universities or, you know, coming to school

• 47:29Speaker 02

  in the US. And we are, we do not want that. I mean, you know, I've I grew up going to a Chinese immersion school. I, I think it's a beautiful culture. The people are amazing. And they are huge assets to Silicon Valley and Stanford. We just want to see some change in the way that these students are able to live and study abroad because right now they, it's as if they have no rights because they can't, they have such a hard time coming forward. So we need to, you know, figure out a policy system that can give these students a greater awareness of the freedoms that they have, and we need to be able to defend them.

• 48:13Speaker 03

  Right, a couple of solutions to keep Chinese students in the United States and improve security. I mean, we should remove WeChat from the United States. That's the main method of communication with the Communist Party. It's an unsecure platform that's monitored. Secondly, we should consider AI visas for bringing Chinese people's families out of China and to the United States. Because that removes a huge risk of transnational oppression. So not just getting the best Chinese researchers, but also getting their families and coming to the United States. And that's what we saw with the Soviet Union. I mean, with the Soviet Union, whole people's families came with them. And then the third thing that you have to think about is China requires a lot of these people to come back. The USA should be doing the same thing. If you want to come study and work on the most sensitive research technologies that are key to winning the AI race,

• 48:57Speaker 03

  you should be forced to stay in the United States for 10 years or more. Because what we really do want to happen is for these people to replicate these ecosystems in China.

• 49:06John Coogan?

  Yeah, yeah, Jordi.

• 49:08Jordi Hays?

  What, you know, who, who have you guys seen the most support from on campus and you can keep it high level to protect the identities if, if people don't necessarily want to be public yet, but I imagine there's quite a few people on campus that have, you know, massive concerns around, you know, the national security issues that you guys are presenting and, and are, you know, hugely in favor of reform.

• 49:33Speaker 02

  Yeah, I think um. We've definitely, you know, vast majority of the response has been off campus. I feel like there's been a surprisingly a little amount of response on campus, but I think uh the best reactions have definitely been from the Hoover Institution.

• 49:50John Coogan?

  Mm hmm.

• 49:51Speaker 02

  Um. They have been looking into this kind of thing for a long time um and are working on you know, policies to to deal with these things. Um, but you know, a lot of people that we interviewed still wanted to remain anonymous. So it's it's really tricky because if you want to work with China on some level, you can't be, you know, consistently speaking out against China. Um. So I think that's sort of the difficult balance.

• 50:19John Coogan?

  Is there is there an argument here for just kind of going completely open source of their research? I mean, famously, like the Manhattan Project had a ton of spies on it. We still kind of won the Cold War. Um, it it it feels like a sloppy and potentially crazy uh solution, but i- i- is there a world where the only thing that matters in a geopolitical technology race is just pace of play and the actual secrets don't matter that much?

• 50:46Speaker 03

  Yeah, so you definitely want to play more offense than defense when you're talking about the technology race. We're not going to win this by stifling competition in America. We were going to win this be through the way we've always won it by having an open free market system that encourages competition.

• 51:00John Coogan?

  Mm hmm.

• 51:01Speaker 03

  You don't want to ruin the risk of China using vast government intervention and vast government subsidies to essentially take the best research out of America and distribute it writ large at China by using vast state apparatus. We've seen this happen with electric vehicles. We've seen this happen with most American technologies. China misappropriates it. I mean, thirty three percent of Chinese GDP is directed towards subsidies alone. The whole Chinese economy is geared towards leveling up and distributing advanced technologies. The issue with the United States, and it's a great thing, is that the government will not subsidize these technologies to the same extent and encourage their diffusion to the same extent. So the real issue is that China may get these technologies and then use these subsidies to create a mass market in China and gain an advantage. So

• 51:46Speaker 03

  to a certain extent, there has to be sensible research policy that protects our core interests.

• 51:52Jordi Hays?

  After seeing all this, do you think that American tech companies are generally too naive when it comes to espionage? I think the major players in national security, defense tech, things like that have historically been very aware of the espionage risk. But do you believe that many, sort of more, American tech companies, specifically in the Bay, should be paying a lot more attention to security?

• 52:19Speaker 03

  100%. The Foreign Interference Task Force was disbanded, the China Initiative was disbanded, two key efforts to stop Chinese research and corporate espionage. We have very few lines of defenses right now. Companies need to be vigilant, because we've seen this happen again and again. I would say that they know it's happening, and they've known for a very long time. Even at Stanford, the people we talked to will all say, "Yeah, this is not new to me. Duh, we knew about this for so long. This is obvious." And they're surprised that we've even published this article, some people, because it's so apparent. So what really needs to happen is we need the government to come through with sensible research policies that also encourage innovation.

• 53:01Speaker 03

  And Bay Area companies, particularly startups working in this area, need to be more vigilant about this.

• 53:06John Coogan?

  That makes no sense.

• 53:07Jordi Hays?

  Great. Well, thank you guys for coming on and sharing. It's extremely insightful and a bit...

• 53:12John Coogan?

  It's scary.

• 53:13Jordi Hays?

  It's scary and unfortunate.

• 53:14John Coogan?

  I'm glad you're on the case. It seems like you're researching this, and I'm optimistic.

• 53:17Jordi Hays?

  Yeah, I mean, we need people like you guys to keep banging the drum and forever going to get changed. So come back on when you guys have more news.

• 53:25John Coogan?

  And good luck with the follow-up reporting.

• 53:27Speaker 02

  Thank you so much.

• 53:28John Coogan?

  We'll talk to you soon.

• 53:29Jordi Hays?

  Cheers.

• 53:30John Coogan?

  Thanks so much. Bye. Next up, we have Morgan Housel coming in.

• 53:33Jordi Hays?

  Switching gears.

• 53:34John Coogan?

  Well, I mean, geopolitics are in his wheelhouse. He was falsely accused of claiming that the US would fall, remember?

• 53:44Jordi Hays?

  Oh, yeah.

• 53:45John Coogan?

  So we gotta talk to him about that. Addresses allegations of being anti-America.

• 53:51Jordi Hays?

  So funny.

• 53:52John Coogan?

  But we're excited to have Morgan on the show. He was great last time, and I'm sure we'll have a fantastic...

• 53:57Jordi Hays?

  And I'm excited to ask him about his new book.

• 53:59John Coogan?

  Oh, yeah.

• 54:00Jordi Hays?

  Art of Spending Money.

• 54:01John Coogan?

  Art of Spending Money. Well, welcome to the show, Morgan. How you doing? Hey, guys. Good to see you.

• 54:06Jordi Hays?

  Great to have you on. Welcome back. It's been too long.

• 54:09John Coogan?

  Yeah, I mean, I want to start with the accusations that you claimed that America was in decline. I saw a viral post. I didn't look at any of the replies, so I don't really know. What was the story there?

• 54:23Morgan Housel?

  It's weird because everyone knows that things get exaggerated on the internet, if not just made up on the internet. When it happens to you, it's pretty strange. So I went on the Diary of a CEO podcast. It aired, I think, a week or two ago. And we talked about tariffs and I mentioned something about the fall in manufacturing jobs over the last 80 years, something to that extent. And I had so many different asterisks of like, oh, well, part is technology. Some of it is offshore, et cetera, et cetera. And that got spun into Morgan Housel is predicting the collapse of America. And it's one of those, just like, what? How does that even happen? And so I called the guy out. He deleted the post, but it's amazing to see when it happens to you personally.

• 55:05Morgan Housel?

  Because then you start questioning every, like, how many times have I read a headline that said so and so predicts the collapse of America? But they didn't, or some, you know, some version of that. So I'm not predicting the collapse of America. I'm quite optimistic.

• 55:18Jordi Hays?

  Such a challenge right now. There's so much long form content that's created. And we're also in this era of clipping, right? The internet likes long form content, but it really likes, you know, these short segments and sort of pulling out interesting moments. And we've had some issues with that already where, you know, we had the CEO of Perplexity on. And John asked him a hypothetical question about ads. And TechCrunch ran with this article saying that, you know, Perplexity planned to, you know, just jam a bunch of ads in their browser or something like that. And anyways, context is very important.

• 55:58Jordi Hays?

  Were you at, uh, were you at the Berkshire annual meeting?

• 56:03Morgan Housel?

  No, this is the first, this is the first one in four years I didn't go to. Awesome one to miss, right?

• 56:06Jordi Hays?

  Yeah, wow. Yeah. Um, how was, how was, what, what made you decide not to go this year? Just, just family stuff, busy?

• 56:14Morgan Housel?

  I've got, I've got lots of other stuff going on. What's interesting is that I think I've been seven times. And, um, the last four times I went, I didn't even go inside to the meeting. It's turned out to just be a place where there's so many like-minded people who go there. So several years ago, me and Brent Bishore and Patrick O'Shaughnessy and Shane Parrish all rented a house and hung out. And it was an awesome weekend, even though we didn't even go to the meeting. So it's just been a place where there's so many collective people who have the same, same thoughts, same priorities to go and meet.

• 56:42Jordi Hays?

  That's great. Um, well, I wanted to, I mean, I, I reached out to have you on earlier this week because, uh, obviously the news of, um,

• 56:51Jordi Hays?

  of, uh, Buffett, you know, stepping back at the end of the year to kind of get your reaction to it.

• 56:57Jordi Hays?

  Uh, I, it, it's one of those things, it's interesting dynamic where, uh, it feels like the most important sort of knowledge and wisdom in the world is sometimes becomes so widespread that people, uh, sometimes people don't even pay enough attention to it, even, even, even zero to one is one of those things. It has like, it's, it's, it's one of the most popular, uh, business books in history. Yet, um, people kind of underestimate the value of it because it's just become, um, you know, the ideas ended up become shared so broadly. So I wanted to have you on, you know, specifically to talk about kind of the ideas that, that you've, um, you know, uh,

• 57:39Jordi Hays?

  most gravitated to from, uh, Buffett yourself, some of the ones I'm sure are, are, um, very widely, you know, understood and talked about. And then I'm sure others that are a little bit more kind of under the radar. There's just so, there's so many good bits, so.

• 57:55Morgan Housel?

  Yeah, I mean, the first is that to put his retirement into context, Buffett made his first investment before Pearl Harbor. And he started professionally managing money as a professional hedge fund manager when Harry Truman was president. So just to put like the context of how long he's been doing this is absurd. And then so there's two parts of that. One is like, yes, let the guy retire. He's 94, he's been going nonstop since he was 11. Like, come on. And then the other side of that is that's why he's successful. Yes, his annual returns are good. They were very good back in the 50s, 60s and 70s. He hasn't really outperformed in any meaningful sense in a quarter century. Not a criticism because he has almost a trillion dollars in assets now. It's almost impossible, it's almost impossible to outperform when you're that big.

• 58:38Morgan Housel?

  But the point that is so easy to overlook is that, yes, he's been a good investor, but he's been a good investor for 80 years. And that is literally 99% of why he's been successful. So I made this point in my book, The Psychology of Money, that if Buffett retired at age 60, you would have never heard of the guy. He never would have been a household name. He would have retired with like 100 million bucks. Awesome. He buys a yacht and a house in Miami and lives happily ever after, but no one would have ever heard of him. The whole reason he's successful is because he's been going for so long. And I forget who mentioned this, I forget where I read this, that Apple is Steve Jobs with a thousand lives. That's what Apple is. Like Steve Jobs built the company and then, and then died, but Apple can live on because he built what it is. And I think that's what Berkshire's always been. And Buffett has talked about this, that he wanted to build a company that would way outlast him.

• 59:24Morgan Housel?

  And the irony is like, he still last, he still ran the company for half a century or more. And so he lasted a long time, but it's going to keep going so far after he's gone, which is rare and unique. And I also think of all the lessons that people like us try to learn from him. The, the wrong lessons that you can learn from Buffett is like, is, is how to pick stocks. I think that's probably the wrong lesson to learn because. A lot of what he did in his heyday in the 60s and 70s just would not work today. It's a very different world, different markets, faster information. It's just not transferable. But the lesson of like, he's successful because he stuck around for so long. Even when he was so preposterously financially independent by, you know,

• 1:00:07Morgan Housel?

  hundreds of orders of magnitude, he kept going. And like, that's something that ordinary people can stick around of like, stick around long enough that you're going to let compounding actually work in your favor. I think that's probably the most pertinent takeaway for people. There's also so many entrepreneurs too, who when they talk about, and I understand this, it's not a criticism because being a founder of a startup is so ridiculously hard and stressful. But for so many of them, the goal is we're going to build this company. We're going to scale this company and we're going to sell it. And I get that. I don't look down upon that. But the huge massive results are for are people who are like, I'm going to do this. And I'm going to do it as long as I as humanly possible that I can.

• 1:00:46John Coogan?

  Yeah, I have a bunch of follow ups there. First up, Greg Abel, is he underrated? It's interesting because he's coming in in his 60s. He looks like, you know, guy who could be retiring next year. But the culture of Buffett, you have to imagine that he's thinking, yeah, I got at least three more decades in here. I'm just getting started. So what's your take on Greg Abel? I don't know if you've actually dug into his career at all, but I'd love to know kind of how you think the culture that Buffett created kind of lives on.

• 1:01:19Morgan Housel?

  Yeah, he's 60, so he can run the company for 30 years and then run for president after that. That's how this works. That's the standard path. I think most people outside of Berkshire don't know that much about Greg Abel. He hasn't, he's not like Buffett has very intentionally, I think, been on kind of a media tour for the last 25 years. Goes on CNBC all the time. Of course, the annual meetings and the letters, like people know a lot about him. Greg Abel, people don't know that much about him, other than that he's been at Berkshire for 25 years and Buffett picked him as the obvious successor. What is known is that he's not a stock picker. And there's going to be people who who get into a lot of trouble over the next five or 10 years, who are like, looking for Greg Abel stock pick. And they're not going to find them anywhere. He's an operator. He's a damn good operator.

• 1:02:02Morgan Housel?

  And that's important because Berkshire thirty or forty years ago, its market cap was like half stocks. It like that's like its portfolio was just public stocks that owned Coca-Cola and Procter and Gamble and stuff. Today it's like less than twenty percent. So the majority of Berkshire are wholly owned to operating businesses and that's Greg's bread and butter. It's just like operating those. I think it's it's probably a very similar transition from Steve Jobs to Tim Cook. Steve Jobs was this like genius magician and Tim Cook was just a stone cold operator. And that's I think that's what we're going through with Berkshire. You're going from like the the wizard stock picker magician to the stone cold operator. And worked out great for Apple.

• 1:02:42Morgan Housel?

  It's just you have to keep your expectations in check, both because Berkshire's size and because of what Greg Greg Abel's strengths are. It it's not going to be and Berkshire hasn't been this in twenty or thirty years. The place that's going to have like massive outperformance year after year.

• 1:02:58John Coogan?

  Yeah, I wonder about how much he needs to be a stock picker because I totally understand the operator lens. But when you're looking at that three hundred billion dollar cash pile, it's like, what are you going to buy? A big oil company or something like like you can do so much with that. So I I'm sure that will be will be a challenge. I wanted to talk about the legacy Warren Buffett a little bit more. There was a retrospective in the Wall Street Journal that I kind of took issue with, but I wanted to get your take. The author is talking about Buffett's remarkable recall. He estimates that Buffett read more than a hundred thousand financial statements. He famously reads books and seven newspapers and just reads constantly.

• 1:03:40John Coogan?

  And the right and the author says, his unparalleled exposure to financial information, combined with his prodigious memory, made Buffett into a human form of artificial intelligence. He could answer almost any query out of his own internal database. That has given him an unparalleled ability to identify the kernel of significance in any new bit of information and a durable advantage over other investors. Now, and this is the controversial part in my mind, says now that AI is universally available, a person with Buffett's massive command of data won't even have an advantage in the future. And I just don't know if that's true, but I want to know, do you think AI changes the landscape in a way that the Buffett strategy just doesn't work anymore?

• 1:04:22Morgan Housel?

  I think part of the problem with Buffett in the last 20 or 30 years is that his folksy grandpa demeanor hid the fact that he is off the charts intelligent. And most of the time, when you think of like an Einstein kind of genius, like they have a certain look and they talk a certain way that and Buffett was not. That's what made him so popular is you felt you could relate to him. But anyone who spent a lot of time with him, when he's not talking for the camera or writing in his folksy way will tell you he is he is in a different universe of intelligence, particularly for money. And the reason he's successful is that since he's been 11 years old, he has spent 24 hours a day, seven days a week, thinking about stocks and nothing else. And so it's less about the data that he knows, even though people will tell you those stories,

• 1:05:04Morgan Housel?

  that he can recall specific figures from a balance sheet from an annual report he read 20 years ago. So there is like a just insane memory recall, but it's the pattern matching recognition in there. And then this other element that is way more important, which is his reputation. That's something that AI can't do. And so a lot of Buffett's biggest investments, certainly the most important ones, came from the fact that he was had such a good reputation that he could walk into a boardroom and just say, hey, I'd like to buy 10% of your company. And they were like, yes, name us your terms. Like, we'd love to partner with Warren Buffett. And so that's less about intelligence or data and more about the reputation that he had. And I think if you, I think if Buffett were a jerk or a raider and had a reputation of stripping companies,

• 1:05:49Morgan Housel?

  he would not have been 5% as successful as he was. All the big deals came from people wanting to partner with him. Particularly, like, think about 2008, the financial crisis. Every bank called him up and they were like, Warren, name your terms, like, just, just tell your terms. And he did it if Goldman Sachs and GE and Bank of America, where he got these crazy deals that nobody else could have because of his reputation. And so I think there is a

• 1:06:15Jordi Hays?

  It wasn't just that, it wasn't just that he had the liquidity, you're saying.

• 1:06:18Morgan Housel?

  Right. Yeah, there's, there's, there's a lot of liquidity in the world. There's a lot of people who can write, who can write a big check, not who can do it with that kind of, that kind of reputation. So I think there, there is a little bit of truth to that idea that the skill that he had of reading annual reports was so much more valuable in the 1970s than it is today, because everyone's reading the same reports. There's bots that can scam them just instantly. But there's like, that's not to say that anyone can be a Warren Buffett now. I think that's certainly a stretch.

• 1:06:47John Coogan?

  What do you think of the, this narrative that the past decade of Berkshire is really just the story of Apple and their, and again, like kind of the stock pick there. They're at such a huge scale. Do you think there's like a cultural shift towards more technology?

• 1:07:03Jordi Hays?

  The stock pick, of course, when Apple was already the most valuable company in the world.

• 1:07:07John Coogan?

  It was the most valuable company in the world and it still outperformed the market and drove fantastic returns. It seemed like a big shift at the time. At the same time, it panned out very well. Do you think that that represents like a significant change in the culture?

• 1:07:21Morgan Housel?

  I think what's interesting is that for having a reputation for decades of, I don't do tech, I don't do tech, I'm a grandpa dinosaur, I don't do tech, literally in dollar terms, Warren Buffett is the most successful tech investor ever. He made, he made a hundred billion dollar profit on, on Apple. No one's even come close to that. And so is that like a change or an evolution? It is an evolution, but it's easy, it's easy to assume, and it's wrong to assume, that Buffett's been the same investor for 80 years. I think part of why he's been so successful is that every five or 10 years, he completely updated his operating system to, to have a different style, a different influence, and to, to really adapt what was going on. And I think that, there's only

• 1:08:02Morgan Housel?

  a handful of investors who are like that, who have made money in different eras. There's a lot of investors who were very well suited for one era. They could make a lot of money for 10 years, but they couldn't keep it going. Because nine times out of 10, it's because they didn't update their, their thinking. They were stuck on this world that didn't exist anymore. And so there's a very long history of Buffett doing that, in every 10 years, doing things that he would not have 10 years before that.

• 1:08:27John Coogan?

  Yeah. Are you familiar with that famous napkin diagram that Walt Disney drew, showing how the parks relate to the film production, relates to the merchandise? Have you seen that chart before?

• 1:08:40Morgan Housel?

  No, but it sounds awesome.

• 1:08:42John Coogan?

  Okay. So Walt Disney drew this big chart, mapping the entire ecosystem of Disney and how everything works together. And it's cited as this example of like, oh, like, you know, build this business where everything feeds into the other piece and, you know, what is your Disney map? But I was digging into it and I realized that Disney... Made that chart 10 years before he died. Like he had already been building just in film for a decade and then 20 years to build the parks. Walt Disney, born in 1903, I believe, the park didn't open until 55 and he died like shortly after.

• 1:09:25John Coogan?

  And so it was more like a reflection on what he had built as opposed to, it was a map that was, that was drawn after he had explored the territory. And so I'm, I'm wondering your take on this idea that like, the idea of focus and the idea of empire building being something that can be charted beforehand versus has to be kind of naturally discovered and then can be potentially mapped after the fact.

• 1:09:53Morgan Housel?

  I think there, there's several historical examples of business, of like very successful business, people who had, were product geniuses and terrible at business. Walt Disney was one of them. He was the product genius of, of, of all time. He was a terrible businessman. Henry Ford was another, Henry Ford is the most successful mechanical engineer in history. And he was at best a mediocre businessman. There's so many of those like that. Even, I would even say Steve Jobs might fall into that category of technological genius, design genius, very, at, at best mediocre business person, which is why you needed a, someone like Tim Cook. And I think there's, there's been quite a bit of that, but when the product is so good, you can take it in so many different directions.

• 1:10:36Morgan Housel?

  Disney is an interesting example of, of so many of the, of the, of the film IP that they had, that was sitting on the shelf for decades. And when it was made, it was like, oh, people will watch this in the movie theater. That was the only medium that they could watch it on. And then the video cassette tape came along and they're like, oh, we could sell all of this. And the DVD came along, they're like, oh, there's another avenue to sell it. And then streaming came along and it was like, sky's the limit. So it was like, the, the IP was so good that you didn't need a genius businessman to, to, to come up with a distribution strategy. Like it was so good that it just kind of ran itself. Ford was, was similar, like the cars were so superior to anything else that even if Henry Ford was making blunder after. Blunder, the company kept going just fine.

• 1:11:19Morgan Housel?

  And so I think, I think a lot of times when you have like a very long running business, it's less because they made phenomenal business decisions and more just because the product that they made was so phenomenal that they could keep it going. If an idiot ran Apple, it would still sell zillion iPhones every single year. And there, but there's only a handful of companies that are like that.

• 1:11:39John Coogan?

  I want to talk about the book out October 7th. Do you have a log line or like what, what is the one line pitch? And then, uh, how can you unpack the different?

• 1:11:48Jordi Hays?

  I mean, the title is, the title is the pitch.

• 1:11:49John Coogan?

  I guess the title is the pitch, but, uh, can you, can you break it down in a little bit more detail?

• 1:11:54Morgan Housel?

  A little bit detail, the book is not called the science of spending money because I don't think that exists. There's no way of saying, here's how you should do it. That's going to work for me and work for you, even if we're similar people. It's just like spending is very individualistic. So I call it the art of spending money because art is different from person to person. It's, it's, it's subjective. It's often contradictory. And so rather than telling you what to do, I don't want to lecture anyone. But, um, the book is a look at, at envy and social aspiration and keeping up with the Joneses and, becoming fulfilled and getting attention and watching other people. It's kind of like the psychology of spending money, which I, I, which has always been like so much of what I write is just trying to figure out my own life.

• 1:12:36Morgan Housel?

  So I looked at instances where I was clearly, it's, it's hard to admit, but like when I was clearly envious and when I was clearly trying to get people's attention. And just when you dig a couple of layers below that, like why, like whose attention am I trying to get? Is that person even paying attention to me? Do they even care? Was giving that attention, like taking away from other parts of my life? There are so many different layers to dig through. And I think those things are universal. Even if what you're spending money on is not a science, the psychology of it tends to be pretty universal. So it's just a, a look at that. That was more than one sentence. I have, I have to hone that a little bit sharper, but that's it.

• 1:13:10John Coogan?

  Uh, I mean, is there a key anecdote or story or even just like, uh, case study that you think is the most, uh, tractable for people to grab on to? I, I think about, uh, you know, all the emotion that goes into the identity tied to the car that you drive or the house that you buy. But, uh, what, what, what, what, what, what case studies are you pulling from to kind of ground the lessons in something that anyone can understand who's reading the book?

• 1:13:35Morgan Housel?

  I don't know if this is the best case study, but it was one that I I thought was so interesting. I read the biography of Harvey Firestone from Firestone Tire. He was the tire magnet like 120 years ago, whenever he lived. And he has this part in his biography where he says, every single successful person that he knows, including himself, when they became rich, they bought a giant mansion and every single one of them to a T hated it. It was a pain in the ass to run. It was, it was, you know, when, when, when your house is 17 bedrooms, it's just more roof to leak, more radiators to break. And, and he was like, everyone hates it, but all of them do it. Every single one of them does it. And even when they hate the house, they never sell it and get a small house. And he had this line that I loved and he said, there is no going back except as a broken man.

• 1:14:19Morgan Housel?

  It's like, once you inflate your lifestyle, you cannot deflate. Even if you hate the inflated lifestyle, you cannot go backwards because it becomes so synonymous with your identity. It's like the size of your house is who you are. I thought that was pretty interesting and he was like the equivalent of a billionaire living in a mansion. It's not a very relatable example. But I think there's so much of that, that if we spend money on something and it doesn't make us happy, it's very hard to rewind. So be like, be really careful when you're inflating your lifestyle because you, it's very easy to go forward. It's extremely hard to go back.

• 1:14:49Jordi Hays?

  How much time have you spent, uh, or are you putting any attention in the book towards the way that, San Francisco and the tech industry spend money? I've, I've always been, you know, fascinated by it, given how much, uh, just this dichotomy between extreme wealth and this, uh, in many ways, desire to stay.

• 1:15:09John Coogan?

  One glass box, please.

• 1:15:11Jordi Hays?

  Yeah, yeah, or this desire to, um, you know, be, uh, and it's, it's good in many ways, right? If tech, if, if imagine that the negative attention that the technology industry would have gotten if every, you know, series C founder in San Francisco was like driving a Lamborghini, right? It would have, it would have been, it'd be fun, but it would have been, um,

• 1:15:33Morgan Housel?

  Well, I think, I think, I think there's part of that, that they can't spend a lot of money because it's not liquid. Like, they're rich on paper, but there's not a lot of liquid wealth in San Francisco. I mean, there is, but it's all, it's all relative. But I, but even that is a sense of social signaling. Like, if people know that you're rich and you are going out of your way to live an austere lifestyle, that, that might be because it'll make you happier. It might also be because that's the signal that you're trying to send. That's like, those are

• 1:15:57Jordi Hays?

  Buffett is a bit, Buffett's the best example of this. I mean, you, you have to spend some time on, on Buffett in the book of just intentionally.

• 1:16:06John Coogan?

  Yeah. But then like, I kind of twisted because Mark Zuckerberg was famously driving like a Corolla for a while, but then Sam Bankman Fried at FTX kind of used that as window dressing to be like, oh, I'm the altruistic billionaire. I, I only, I just drive a beater car. Uh, when, of course, he had like a mansion in the Bahamas and a bunch of other stuff that he like, wasn't pointing the camera at.

• 1:16:26Morgan Housel?

  And, and Mark Zuckerberg is interesting because he famously drove the Acura for whatever, for, for many years. And now he just bought a half billion dollar yacht. So it all, it all, it all comes around eventually.

• 1:16:35John Coogan?

  Yeah. He's also evolved his taste in cars a lot where he could buy a supercar, but I believe the most recent car he bought was a Cadillac CTSV Blackwing, which is like a hundred thousand dollar sports car, but it's not a half a million dollar sports car, but it's an American, you know, muscle car. It's like very fun and very different. So he's fear, he's clearly finding his own path in expressing himself in a more unique way than just like one rich guy car, please. Uh, and so I, I, I think he's probably happier and like carved out a unique niche. And I feel like that, that's often a better place to land is not just, don't just buy the most expensive thing. It's okay to buy the expensive thing if it's craft and, and it's interesting to you and it has a story and it has relevancy or performance. Um, but it needs to like speak

• 1:17:18John Coogan?

  to you in some unique way that actually, you know, improves your life. I don't know.

• 1:17:22Jordi Hays?

  What's your most irrational, uh, purchase? I know you've talked in psychology of money that you, you paid cash for your house or you don't have a mortgage, I believe. But, uh, what else is, is potentially irrational?

• 1:17:36Morgan Housel?

  I don't know if this is irrational, but it's one I think about a lot. I grew up skiing as a competitive ski racer. And when I was, you know, 10, 12, 13 years old, I always felt like all my friends had better gear than I did. They had the nicer skis, the newer jacket and whatnot. And back then it bothered me. When I was 13, I was like, I was so envious of them. And so now, and obviously I got over that. But now that my son, he's nine now, we ski a lot together. And I think because of the scars that I had from my friends having nicer stuff, I made this vow a couple of years ago. I was like, I'm gonna buy my son the best gear. Every year, he's gonna get the best skis, the best boots, the best jacket. And I'm doing that to kind of like, fill this hole that I had when I was, when I was a young kid. And the irony about it is he could care less. He does not care whatsoever what gear he has.

• 1:18:22Morgan Housel?

  And so that's interesting too. Like, I think there's always a story behind spending. For me, it's like-

• 1:18:26Jordi Hays?

  He doesn't care because he has, no, he doesn't care because he's so, all he knows is the best, right? Is that, isn't it?

• 1:18:33Morgan Housel?

  But I feel like, I feel like, like if I buy him a new pair of skis, I expect him to be like, oh wow, let me look at these, they're so cool. Cause that's what I would have done. And I get him and he's like, ah, this doesn't, doesn't matter whatsoever.

• 1:18:45Jordi Hays?

  No, I totally resonate with that though. Cause I remember growing up skiing, snowboarding. I would, I would always have a snowboard that was like, three seasons old, lightly used. And it was like the practical decision. It was $50. It got you down the mountain, just pretty much as well as anything else. But then I'd be watching the Burton, you know, videos and it's like, you know, looking at these. And I'd be just running the numbers. I'm like, I would have to ref 400 soccer games to get, you know, that board with those bindings. It's like, I'm gonna ref like 10 games this weekend, but I'm not gonna get there.

• 1:19:20John Coogan?

  Yeah, I was skiing at some point. I got too tall for regular skis. And so they needed to, they were like, you have to go to custom skis if you want to be really in this. And I was like, I'm switching to scuba diving. Like, you know, whales are big enough for the ocean. I'll be big enough for the ocean. It's fine. I do have one last question. Do you have one?

• 1:19:35Jordi Hays?

  I have one last too, but-

• 1:19:38John Coogan?

  There you go.

• 1:19:38Jordi Hays?

  Switching, I hate to switch back, but on the art of spending money, what is the, what are the-

• 1:19:46Jordi Hays?

  Berkshire enthusiasts think that or what has Berkshire signaled around how they're going to spend $300 billion or whatever their their current cash pile is because I feel like the general market sentiment is that you know Berkshire is preparing for the next you know

• 1:20:05Jordi Hays?

  next time great companies go on sale due to some crisis but I'm curious if you have any sort of insight there.

• 1:20:14Morgan Housel?

  I think you know the the list of companies that you could acquire for $100 billion is not a very long list but there is a list like it's it's not inconceivable that Berkshire can make $100 billion acquisition. I I've often thought that Bloomberg, the the media company like that would be a perfect Bloomberg fit. It's probably worth about $100 billion. Or that that'd be perfect for Berkshire and then Berkshire is so big. It's a trillion dollar market cap. They could probably repurchase $100 billion of stock. It might take three or four years, but they could do it. There's enough liquidity there. So you could spend 200 billion like that's that's pretty conceivable. The big question for me is once Buffett is gone and passed away and his his stake in Berkshire is more dispersed, then you could there's room for an activist investor to come in.

• 1:20:59Morgan Housel?

  Right now, you can't have an activist at Berkshire because Buffett owns too much. He would just tell him to go away and then it's over. Once Buffett's majority voting stake or like big voting stake is gone, then it's interesting. Will Bill Ackman or one of those guys come in and say, we want you to do a $200 billion special dividend. We want you to spin off this and that and that. I hope that doesn't happen, but you can very easily see it happen, particularly if people aren't going to give Greg the you know, a five year leash to prove his way. If if the results aren't there in two or three years, you'll probably have people knock at the door. And so having that pressure, I hope he doesn't have pressure to deploy that $300 billion of cash,

• 1:21:40Morgan Housel?

  knowing that if he doesn't, someone's going to come knock at the door and threaten his job or tell him to spin off this or that. So

• 1:21:47Jordi Hays?

  You said he's not a stock picker either. So he's not exactly just going to go out and be like, okay, I'm going to start deploying this and you know. That way, right? It feels like it has to be more significant.

• 1:21:57John Coogan?

  Yeah. Yeah. I have another question, but we'll have to do it next time. This is great joining.

• 1:22:02Jordi Hays?

  Leaving it, leaving us all hanging, John, come on.

• 1:22:05John Coogan?

  It's just gonna turn into a whole conversation and we can do a whole nother 30 minutes. So why don't we just do another 30 minutes in a couple of weeks? Let's do it. I'll see you then.

• 1:22:12Jordi Hays?

  Morgan, we love chatting with you.

• 1:22:13John Coogan?

  Thanks for coming on. This was fantastic.

• 1:22:14Jordi Hays?

  Have a great Friday.

• 1:22:14John Coogan?

  We'll talk to you soon. Bye. Here's the run of today's show. We have Sonia from Sequoia coming in the studio next. They, Sequoia just hosted the AI Ascent Conference with an absolutely stacked roster, some of the greatest programmers, some of the greatest entrepreneurs in artificial intelligence, or really just in history, all coming together. We saw a fantastic jacket swap between Alfred Lin and Jensen Huang, and I'm excited to talk to her about trends in artificial intelligence and what is happening in both the early stage and mid-stage startup market, obviously as a venture capitalist. She is investing in a lot of interesting stuff today. So, welcome to the stream, Sonia. So good to meet you.

• 1:22:55Speaker 05

  Thanks for having me. You know, Alfred was bummed his jacket was Hermes and he was sad to lose it. And I was like, don't worry. I think, I think you got the better trade here.

• 1:23:02John Coogan?

  Oh, wait. So that was a permanent swap? He gets to take it home?

• 1:23:04Speaker 05

  Permanent swap. It's hanging in the Sequoia office.

• 1:23:06John Coogan?

  Okay, that's fantastic. Yeah, it needs to be framed. I mean, it's iconic, iconic. Yeah, I mean, I want to buy a leather jacket just so if I'm ever in the same room, I have something to swap.

• 1:23:16Speaker 05

  We'll get you the deets. Don't worry.

• 1:23:17John Coogan?

  Fantastic. Yeah, give me the rundown of AI Ascent. Is this something that happens every year? Was this year special? Obviously, it's, you know, a bigger trend than ever. Who were some of the interesting speakers? Give us the overview.

• 1:23:30Speaker 05

  Well, I'll give you the origin story. I'll take us back a bit. We invested in OpenAI back in 2021. So this was back when it was very much, you know, it was a few guys using the API, definitely no ChatGPT yet. But we just felt like they had invented magic and we wanted to make sure that our portfolio companies would be kind of the first to be able to see that, play with it, and transform their own businesses. And so we set up a field trip, actually, for like 40 of our portfolio companies to go visit OpenAI back in May 2022. And so it was like pre-ChatGPT moment and everyone loved that field trip. It was like people were, you know, playing with DALL-E for the very first time. You know, this was when there was no public access yet, starting to build with GPT-3.

• 1:24:13Speaker 05

  And so our founders loved it, both for like the inspiration element of like, oh my gosh, we are in the belly of the beast of the thing that is building the, building the magic. But also like from a very tactical perspective, like here's how we should be using this stuff to transform our businesses. And so founders loved it. They asked, you know, can we bring this back next year? I honest, I'm not like a party thrower. I like hate throwing events. And so I was like, oh man, do we have to do it again? But everyone wanted to do it. So we, um, we did our first kind of non-open AI specific event, um, and more across the entire ecosystem the following year. Um, that was like right after the chat GPT moment. And so, um, this is our third year throwing that event in a row. We've had amazing speakers. Sam Altman has spoken at every event. We've had Jensen twice. We've had, I mean, even

• 1:24:58Speaker 05

  the audience is incredible. Like, um, in our opening talk, we kind of called out what we viewed as the biggest AI product innovations of the year. And, you know, we had Notebook LM, Deep Research, Jessme. Like, I think some of the biggest like innovations, those people were all just happened to be sitting in the audience. So it was just like a lot of firepower in one room.

• 1:25:14John Coogan?

  That's great. Um, what, uh, what are the top, uh, kind of discussions that people are debating right now? I mean, from talking to people on the show, uh, this idea of like the pre-training wall, needing to move into, uh, more RL focused techniques to kind of get the next level of breakthroughs. Is that a, is that the right question to even be asking? Were people debating it? And do you have a take on the idea of like this, uh, hitting a pre-training wall?

• 1:25:41Speaker 05

  Yeah, totally. Um, so we had Noam Brown speak at last year's AI Sense, and we had Dan Roberts this year. They're both on OpenAI's strawberry team. And, and we had actually gotten a preview of this from Noam, actually before he even joined OpenAI. And so, um, he had done a lot of research historically in, in AI gameplay. And if you, if you take the lesson from Go, for example, with AlphaGo, which I think was one of the seminal results in, in reinforcement learning, um, the top humans are like a 3,500 elo at Go. Uh, the best bots are like 3,000 before you give them access to inference time compute. But if you, if you actually let the model actually sit and think for a minute before it places its piece, you can get that elo up to 5,500 points. So like way better than superhuman. Um, and so the, the key insight there is like,

• 1:26:26Speaker 05

  Um, to get roughly the same order of performance, once you've like, it's diminishing marginal returns on, on multiple vectors, right? But once you've kind of like hit diminishing marginal returns on one vector pre-training, if you start scaling post-training from there, um, and I'm sorry, specifically inference time compute, you can get like a hundred thousand X scale up in performance there. So we're just starting to climb that second curve. Um, I think OpenAI deserves a ton of props for like seeing that and like investing decisively behind it. Cause I think if you talked a lot of research in the ecosystem, like one, a few years ago, it wasn't even obvious that the lessons from AlphaGo could even apply to the LLM world. And so, you know, like if you, if you went to visit research labs a few years ago, it was like, there's the RL group

• 1:27:08Speaker 05

  and there's the LLM group and they're not the same people and it's like, it's very different. And I think, I think Noam and, um, various other people like really pushed forward that vision. And I think Sam invested heavily behind a reasoning infrastructure. Cause the hard thing is like scaling up reasoning infrastructure is different from scaling up pre-training infrastructure. Um, and when I talk to my friends, a lot of them, a lot of them have joined certain labs like OpenAI, XAI that have really invested ahead in, in reasoning infrastructure, because it is such an important vector for scale.

• 1:27:36John Coogan?

  Yeah, I was always wondering about the AlphaGo, uh, pre-training kind of scaling law and wondering like, okay, we have all this major compute, what happens if we go back and train AlphaGo on a hundred thousand H100s? Like, are we going to get even better or really have we actually topped out? And it sounds like, it sounds like we basically did and we like kind of learned that lesson. But is that a refutation of scale is all you need, um, kind of the bitter lesson? Or do you see it as just continuation of that theme? That we will need to continue, continue scaling and it will just be new, new algorithmic paradigm on top of what we have and then scale that and then another one and then scale that

• 1:28:17John Coogan?

  and then another one and then scale that, because it sounds like, you know, when I hear a hundred thousand X improvement in test time compute or inference time compute, uh, that sounds like a lot of data centers.

• 1:28:29Speaker 05

  Yeah, it's a lot of data centers. I'm very much an AGI maxi, like pro bitter lesson. And I think that this is, you know, just another vector that we're going to scale on it. And it's not like pre-training is dead, right? It's like you kind of like, you know, from an economics one-on-one perspective, you go to like, where is the lowest marginal cost of the incremental unit of intelligence? And so right now, a lot of that is on reasoning, but I think it's going to break to other to other vectors as well.

• 1:28:53John Coogan?

  Are you seeing that in image and diffusion as well? It feels like the images in chat GPT is doing something different. It feels like they're layering a few different techniques together. I was playing with the text and trying to get it like the text is so good now, but I was trying to get like a snake to weave in and out of the text. And it was kind of getting confused and I was like, I feel like there's some layers going on here or something. I'm trying to like, kind of understand it. And I'm just wondering, like, you know, we might be past just like the big transformer paradigm of LLM and text responses in the reasoning era. Are we, are we evolving past the big diffusion model in image generation as well?

• 1:29:38Speaker 05

  So I'm not a researcher, but I get to talk to a lot of smart researcher friends. My understanding is that it's a, it's a combination of a transformer diffusion architecture. And I think that most people don't believe that diffusion models will fully get us there, whereas transformers have a lot more juice in them. And so even if you look at, it's not just image, it's video, it's robotics. A lot of those have transformers as their backbone.

• 1:30:02Speaker 05

  But I do think like, you know, there's so much that's happening in like the harness around it, right? What is the, you know, what's the for loop that you run the model in? What, what tools do you give it access to? We did a little Pola AI sense of like, what, what innovation is going to drive the most amount of progress in the AI ecosystem in the next 12 months? And like, biggest answer was MCP and tool use and forming an ecosystem around that. So I think like the models themselves get smarter, but they're also surrounded by a big ecosystem.

• 1:30:30John Coogan?

  On MCP, how are you viewing that as a?

• 1:30:36John Coogan?

  Position in the market, is it just a standard? Is it just an API? Is it a framework? Or will there be companies that build around it? Is there, are there going to be open source frameworks? That then we find a red hat Linux of MCP? And it winds up being a big company, even though it's mostly open source? How are you thinking about that from an investor's perspective?

• 1:30:56Speaker 05

  Yeah, I very much see it as a protocol and like something for the industry to standardize on. And so I think there are, there are obviously some benefits to the crew to Anthropic from having steered that.

• 1:31:06John Coogan?

  Yeah.

• 1:31:06Speaker 05

  But I think it being an open standard is really important. And you know, that's why a lot of the big other, a lot of the other big model labs are standardizing behind it as well. And so I think it's a net positive for the ecosystem. There's a bunch of startups spinning up, trying to make money off of it in some way.

• 1:31:23Speaker 05

  I don't know if I'm really bullish on any of them really having a shot at it. I mean, I think there's certain people that have, you know, if you have them like an infrastructure advantage and for some reason, like CloudFlare, for example, is making a big play. Then like maybe I buy that. But if you're, you know, a small startup trying to spin around, spin up a MCP shop, I just don't really see the right to win.

• 1:31:40John Coogan?

  Yeah, maybe the value accrues to like McKinsey coming in and saying like, hey, we're going to help you implement an MCP server for your existing Fortune 500 company or something.

• 1:31:48Jordi Hays?

  Was there any interesting conversations around benchmarks? And do you think they were talked about more or less than the last year?

• 1:31:57Speaker 05

  I would say like, this is an audience that like very much, you know, knows that the benchmarks exist and like, doesn't really care too much about them. We ran a poll of like, you know, if you could only use one model for the rest of your, your life, what would it be? And like OpenAI by far, number one, more than 50% share. Even though like, if you look at where they are in the model leader boards, they're like, you know, they're not there on LM Arena. And so I think there's a little bit of a, the benchmarks aren't really, you know, they're saturated. They're not really the vibes test. I think people care a lot more about the vibes test right now.

• 1:32:28Jordi Hays?

  Well, yeah, just end user value, right?

• 1:32:31Speaker 05

  Yeah.

• 1:32:32John Coogan?

  Well, speaking of benchmark, do you have a take on the Manus investment that's kind of burning up the internet right now?

• 1:32:39Speaker 05

  Oh, man.

• 1:32:39John Coogan?

  Seems like an odd choice in 2025.

• 1:32:42Jordi Hays?

  I'll give you, I'll give you a hot take, John. Apparently, the US Treasury is examining Benchmark Capital's ties to Manus. So feel free to pass on the question if you don't want to talk about it.

• 1:32:55Speaker 05

  I will say they built really cool tech, I think, like the devils in the details for like, what exactly, you know, you know, where's user data, et cetera. And I would imagine that they did their homework, but I don't know.

• 1:33:04Jordi Hays?

  Yeah. Switching gears, the, the big story this week around OpenAI, obviously, after the event was the, you know, new CEO, specifically coming in to focus on applications. I'm curious, you know, if you could highlight any of the kind of conversations around value accrual. You know, Sam, I think, has been pretty explicit in the past that if you're building products with the assumption that the models are going to continue rapidly get better, you're probably in a good spot. If you're not, you know, maybe you're going to struggle or get made redundant at some point. But I'm curious what the general kind of vibe was around, around that.

• 1:33:50Speaker 05

  Yeah, I would say like, I mean, you know, the memetic cry in the, in the venture ecosystem right now is just like, the value is in the application layer. The value is in the application layer. I actually have a great meme on this. We, we had the, the meme on like the values in the application layer. And then we had Jensen in the audience and I just had a picture of Jensen on top of Scrooge McDuck just raking in all the dollars.

• 1:34:11Speaker 05

  But like, I, I agree, like, we very much think values in the application layer and it depends how you want to play it, right? I think that like, there's, there's going to be a place, at least in the near term, for vertical agents applied to a very specific sector. And like, we've, we have a bunch of those companies in our portfolio, Sierra, Harvey, Open Evidence. I think that what the foundation models have proven, though, which was debatable a couple of years ago, is that they have every right to win the application layer. And so like, it wouldn't have been obvious that, you know, a company building foundation models could like, figure out the application magic. Um. But like ChatGPT is like a, to me, it's like a runaway freight train uh in terms of consumer adoptions and the metrics they've published, like three hundred to five hundred million

• 1:34:53Speaker 05

  weekly actives uh year to date. Uh it's just, it's phenomenal user growth. Um. One of the things that Sam shared at our conference in terms of how people are using ChatGPT was really interesting to me. Um. Uh. If you're old, you're using it as a Google replacement. Um. So I'm old. Uh. If you're in your twenties, your thirties, um, people tend to be using it as like more of a life advisor, life coach type thing. And then if you're really young, like the youths are using ChatGPT as an operating system, and I found that framework really interesting. And you know, especially in combination with like, they're clearly building things around memory, um, around tool use, around uh connecting to your, your other applications.

• 1:35:32Speaker 05

  It really does feel like, you know, if you're, if you're a young person and like really, really connecting ChatGPT and like mind melding with it. Um. That use case seems really interesting to me. And so like, if you, if you, you know, if you think of Google as front door to the internet and two trillion dollar market cap company, right? Um. It feels to me that ChatGPT is in many consumers' minds that front door to AI. Uh. And as what AI can do, uh, as the ceiling on that goes up, we, we just like each deepen our, our product usage. Um. A couple of years ago, at the first AI cent, I posted this chart of like the ratio of daily to monthly active users uh for ChatGPT and

• 1:36:12Speaker 05

  um, some of the other kind of mainstream mobile apps. And the punchline at the time was like, usage is terrible. Like people are, like it was like a fourteen percent down mal if I remember, it was like people kick the tires a little bit and then churn. Um. And we've been like tracking from externally from data science signals, just like seeing those down mal ratios increase. Um. It's pretty crazy. Like down mal is now in line with Reddit. Um. It's, it's approaching Google levels. And so like if you think about Reddit being like a super engaged, like, you know, you're in there having like multiple conversations, you see that same behavior. Both anecdotally and in the data for ChatGPT. And so to your question, where will value accrue? We think it's in the app layer.

• 1:36:50John Coogan?

  Yeah.

• 1:36:50Speaker 05

  I think a lot of the horizontal app layer opportunity will be, will be won by foundation models like, like OpenAI, like XAI.

• 1:36:58John Coogan?

  Yeah.

• 1:36:58Speaker 05

  And then a lot of the companies we're backing are going after a very specific vertical opportunity.

• 1:37:02John Coogan?

  Are you particularly bullish on enterprise application as independent? I mean, we, I'm thinking about like, Google very much won consumer search, but you know, in legal, there was Lexus Nexus. And then Palantir helps, you know, the government search through data sets. And there's, there's all these different enterprise use cases that Google wasn't able to go after. We were even talking about Armada, which is an enterprise, like, you know, service on, built on Starlink. The Starlink team has dominated in consumer, but you know, the enterprise needs of certain enterprises is just too unique. And so there's actually a business to build there. And that seems like it maps with your strategy most recently, but what do you think?

• 1:37:41Speaker 05

  Totally, totally. I think the, um, the enterprise war feels like it is like, you know, we're in the first inning still. It's not clear who's going to win yet. I think, you know, in our portfolio, like Glean, for example, has done a really amazing job as like a horizontal ChatGPT-like platform. That kind of connects to all your enterprise data. But then it's like a question of like, how deep do you need to go? Like, you know, Harvey has a ton of legal case specific data. Or Sierra has a ton of like customer support, specific data and workflows. And so I think there's, you know, the enterprise AI battlefield is very much a, a work in progress at this, at this time. I think like the shape of workflows and problems is like so diverse in the enterprise that like, my guess is a lot of these companies will be successful.

• 1:38:22John Coogan?

  Yeah. How are you thinking about humanoid robotics? I've talked to, there's a lot of high-flying companies that feel like it's mostly renders at this point. There, there are some really amazing researchers working on stuff. I'm personally waiting not to see the demo of one humanoid walk around because we've seen those with Boston Dynamics for decades. I want to see the satellite photo of the data center that's getting built out to do a massive training run for an end-to-end robotics model. And I haven't seen that yet. Is that the right signal to be looking for, for takeoff in humanoid robotics? Or should there be something else that I'm tracking as we go into this like humanoid rollout? Which it feels like it could be tomorrow or it could be two decades away.

• 1:39:05Jordi Hays?

  It doesn't feel like tomorrow to me.

• 1:39:08Speaker 05

  I was gonna say the same thing.

• 1:39:09John Coogan?

  I'm being generous. There's a lot of CEOs out there who'd say this tomorrow.

• 1:39:12Speaker 05

  But let's just say I've, I think the humanoids are a lot closer than than we may think they are.

• 1:39:16John Coogan?

  Okay.

• 1:39:17Speaker 05

  Um, and it's like, I, I thought this stuff was science fiction and I've talked to a lot of smart people who have told me and shown me things that have made me realize like, wow, this is probably on the time, like, and I would guess in like two or three years, this stuff will be in tens of thousands of households at least, maybe hundreds of thousands. Yeah.

• 1:39:33John Coogan?

  Wow.

• 1:39:34Speaker 05

  And, uh, that actually echoes kind of like the timelines from, I think Sam said on stage that, you know, um, we had Jim Pham from Nvidia on the, on the show. He like, he's like, you know, there's the, there's the digital Turing test of like, you don't know if it's a human behind the, uh, the computer or not, or not, I'm sorry, a computer, uh, a human behind a screen when you're talking to it. He's like, the, the physical Turing test is, you know, when you leave your house and it's a mess in the morning and you come back and it's like, it's all perfect and, and all cleaned up. Um, and like, he also thinks we're, we're about to get there. Um, for him, like a huge part of the breakthrough in, uh, is, is gonna be synthetic data pipelines.

• 1:40:12John Coogan?

  Sure.

• 1:40:12Speaker 05

  Um, and it's like robotics, unlike L L M, like you just don't have internet scale data to train on.

• 1:40:17John Coogan?

  Yep.

• 1:40:17Speaker 05

  Um, but like, one of the amazing things about what's happening, what's happening in AI right now is just like, with L L Ms, but also more specifically with these generative world models, you can generate, you know, tens of thousands of variations of the same environment to simulate, and these robots can get better and break through that data barrier extremely quickly. And so I, you know, I was personally like a robot bear for the longest time and, and, you know, talked to a bunch of very smart people in robotics over the last week and I flipped. I feel like the humanoids are coming.

• 1:40:45John Coogan?

  And in terms of, in terms of, uh, uh, capital intensiveness of like actually getting there in a few years, obviously it's very expensive to build a factory that produces robots, but do you think we're also gonna see raises from humanoid robotics companies that are, uh, where, you know, a ton of the raise goes into Nvidia GPUs to build a huge data center to train some massive model? Because, uh, yeah, I agree with you on the synthetic data. You could wind up with web scale, you know, trillions of tokens like we've seen with the G P T four training run.

• 1:41:17Speaker 05

  I think it's gonna be extremely capital intensive. And it reminds me of autonomous vehicles. Five plus years ago, where like, you know, at the end of the day, like, we have Waymos and we have Teslas driving around. Those companies had enormous economic engines to support the development. I think the same is happening with humanoid right now. And so my guess would be it's like, it's going to, it's not just Nvidia GPUs, it's everything, right? Because you're co-developing the hardware. You still have to collect a ton of data on actions. And so it's a time to spend everywhere.

• 1:41:50John Coogan?

  Yeah, I mean, huge trends in AI broadly. It feels like all the metrics are up and to the right. At the same time, valuations are very high. What's your overall take on the venture market? Are we in a bubble right now? Can there ever be too much venture capital? All the key questions.

• 1:42:06Jordi Hays?

  Never, John.

• 1:42:07John Coogan?

  Never.

• 1:42:08Speaker 05

  There is too much venture capital already.

• 1:42:12Speaker 05

  Look, I'll say a lot of companies are raising on like what I call vibe revenue right now. And like, it's like, it's like, it's, you know, pilots being counted as revenue. It's like really, really terrible retention stuff. And so like, once you peel past that, I think there's like a cohort of companies that are like growing high quality revenue at the highest pace that we've ever seen. And that includes, like I mentioned OpenAI before, but it's also companies like Glean and Harvey and Sierra and all these companies. And so to the extent like valuation is a function of like, how much have you de-risked? How much product perfect fit do you have? Like, what is your, what is the growth rate of your, of your business? And what is the ultimate TAM potential? I think these AI companies are demonstrating just, you know, growth rates outside of what we've ever seen before.

• 1:42:57Speaker 05

  And then TAM potential, like because it is very much you're selling into, you know, if you're able to get outcomes based pricing, you're selling into a, into a services replacement or a tools replacement. And it's a TAM in the trillions, right?

• 1:43:07Jordi Hays?

  Okay, but.

• 1:43:08Speaker 05

  Yep.

• 1:43:09Jordi Hays?

  Sorry to interrupt you on that point. Something, something I'm curious about is, is so, yes, if you have an AI tool that can replace services spend, you can capture some, you can whatever, ideally capture a lot of that market. But the thing I keep coming back to, and maybe this isn't the right way to think about it, but you're, you're not simply competing with end humans that are delivering that services. A company will also be competing with other AI tools that have, you know, a similar cost structure. So does that not, over time, just drive the? That that sort of dollar amount that you can capture just down to something that looks more like a software market.

• 1:43:53Speaker 05

  We have this debate all the time, so I'm glad you bring it up. I think it really depends. Like if if what you're doing is like, you know, really low switching costs, really low differentiation above what the models provide, like, yeah, I think that margin is going to get competed down. And so I think that's why we've we've historically debated a lot of these GPT wrapper companies. I think that, you know, if you're building something that's really hard to build, or that's integrating into a customer base, customer base that wants to like choose an AI champion and move on with life, which by the way, happens like we just did a bunch of references in the healthcare transcription market. Like you talk to these healthcare CIOs, they're like, I'm choosing one transcription vendor. I'm not wrapping that thing up for the rest of my life.

• 1:44:34Speaker 05

  And so I think there's there's nuances to the stickiness of these things. Like I work with a company called Gong. And they do, you know, they're a sales AI company. And the theory was all like, always like transcription.

• 1:44:48Speaker 05

  Love it.

• 1:44:49John Coogan?

  We love gongs on the show.

• 1:44:51Jordi Hays?

  You baited us.

• 1:44:52John Coogan?

  It's a huge part of the brand.

• 1:44:54Speaker 05

  Oh, my gosh, it's amazing. And they have such a quirky brand, too. There's so many gongs around their office.

• 1:44:59John Coogan?

  That's amazing.

• 1:44:59Speaker 05

  But like, the theory was always like transcription should commoditize. And I think that very much hasn't happened. And like, sales teams standardize on them. They standardize their processes on them. They train all their reps on it. And like, it has all your data. So like, I think the the theory of how you build modes is is different from like rubber meets the rubber meets the road in terms of like, how these companies in practice do build the modes. But like, I think you are in a run like hell business because there's so, you know, there's, you know, we backed it, we backed an AI DevOps company, like an AI troubleshooter. There's four other companies that are trying to do the same thing right now. And so like, we are kind of in like a run like hell segments of the market right now.

• 1:45:37John Coogan?

  How do you think about private equity stepping into the AI race? We've seen a few venture backed approaches where the idea is like, instead of the Harvey approach, let's buy law firms. And we've seen even in the pre about a decade ago, Justin Khan was working on Atrium, this kind of like tech powered law firm where it was a law firm. But Harvey's made the choice not to. But what is your take on private equity dipping their toe into more venture scale opportunities and venture investors starting to look more at private equity style roll up deals?

• 1:46:11Speaker 05

  Yeah, well, so I used to, I came from private equity. So this is something I think about a lot. Um, I think it makes a ton of sense and it's a continuation of the private equity play, right? A lot of the investments I did in PE only worked because you took 20% of the costs out. And so like now you have a much better tool to go and do that, but like it very much is the playbook and it's what they're best in class at. And so do I expect that they'll be great at adding, you know, AI to the arsenal for how they get those margins up? Absolutely. I think that, you know, when I think of the businesses that I'm excited to invest in, it's like, okay, at the end of the day, it's who's, who's creating gross profit, it's gross profit dollar creation. And you can choose to do that by investing in the billion dollar revenue company and taking their costs down 10%.

• 1:46:52Speaker 05

  Or you can choose to do that by backing, you know, that amazing DevTools founder that knows how to build like the AI native um, DevTools company that's going to create a hundred million dollars of gross profit off the bat. And so like, I very much personally like to invest in the founders that are kind of creating net new revenue dollars and that new gross profit dollars, but like multiple ways to play. I will say like, you know, I had to really retrain my brain when I went from private equity to venture and just, I mean, everything you like, the way you operate is just so different. And so I do think it takes a different type of culture uh, to operate a roll up um, or a cost out strategy versus investing startups. And so while I agree, like, I agree with the strategy of PE firms doing their thing and venture firms doing their thing. Um, I have a question mark on, on uh, the, the blurring of the, of the core competencies.

• 1:47:37John Coogan?

  How do you think about the different businesses that Sequoia is um, running right now from early stage, growth stage beyond? How do all these uh, things play together in the strategy? Uh, we've seen some venture firms even dip their toe into general catalysts, buying a hospital network. Some lots of people are thinking outside the box these days. There's the crossover funds. Um, what do you think Sequoia does best? And what are you excited about in the future?

• 1:48:04Speaker 05

  We're not buying any hospital chains yet.

• 1:48:06John Coogan?

  Okay.

• 1:48:07Speaker 05

  I would say like, if you think of our strategy, it's like, it's seeds IPO and beyond for like, the most ambitious entrepreneurs in the world. And so, um, sometimes we're able to catch them early at the seed, uh, like Airbnb, like Stripe. Um, and sometimes we catch them later on in their journey, but like the, the point of adding additional kind of pools of capital to our fund strategy has been, when we find a winner in our portfolio, um, for example, take like a SpaceX. We want to be able to invest a lot of money behind that company as it, as it goes, um, on its journey. Uh, and the reason for the Sequoia Capital Fund is like, even after these companies go public, we think a lot of that return is still to be had. And so we've, we've modified our structure over the years to be able to kind of support these companies as they, as they grow and become later stage and go public.

• 1:48:50Speaker 05

  But ultimately it's, you know, it's invest at the earliest point of conviction and ideally that's at the seed.

• 1:48:55John Coogan?

  Makes sense. Jordy?

• 1:48:56Jordi Hays?

  Do you expect to see more, uh, Sam had a, some interesting, sort of, uh, quotes over the last week or so. I don't know exactly when they were happening, talking about, uh, the cost.

• 1:49:08John Coogan?

  Which Sam?

• 1:49:08Jordi Hays?

  Sam Altman, the, the Sam.

• 1:49:12Jordi Hays?

  Which other, sorry, sorry to the other Sam.

• 1:49:14John Coogan?

  Yeah, sorry, Sam Lessin.

• 1:49:15Jordi Hays?

  Yeah, yes. No, he, he, the, the quote to summarize it was, or the line was, something to the effect of the cost of AI or the cost of intelligence will just, uh, converge on the cost of energy or electricity. And I'm curious, you guys had Chase from Crusoe.

• 1:49:35Speaker 05

  Yeah.

• 1:49:36Jordi Hays?

  Talk and I'm, I'm curious if you think that that is a potential area that you expect to see more net new early stage startups exploring because it probably hasn't got enough, you should have nuclear and.

• 1:49:49John Coogan?

  Were we talking with this, it was Sean McGuire, we were saying like, there is no Elon of energy yet, but it feels like the last massive, massive market that no tech founder has really gone and dominated in kind of the founder mode way. We were talking about big oil, it's still a bunch of huge companies, can't name any of their CEOs, they're not really in founder mode. They're kind of boring and maligned and it feels like there's an opportunity there, but yeah, sorry, that's a lot.

• 1:50:15Speaker 05

  I mean, it's a great question. We, uh, we had Chase from Crusoe on our, on our podcast and I, I will, I'll put in a bet that Chase might be that Elon like figure. He shared some stats that were amazing to me and it's like, I'd always kind of thought about AI from the, oh, I can generate cool Jubilee images. Perspective, but I didn't realize the extent of like, the sheer extent of the industrial build outs that is happening to support all of that. And so Chase shared, like, if you look at like typical data centers today, they're like 20, 40 megawatt data centers. Like the biggest data centers of the world are in Northern Virginia. Or sorry, in the U S or Northern Virginia. The aggregate capacity is four and a half gigawatts there. Chase at Crusoe himself has 20 gigawatts in pipeline right now, uh, more than two gigawatts built out. And so like the sheer scale of the build out right now is just like nothing that we've supported in the past.

• 1:51:00Speaker 05

  Um, and the bottlenecks are moving around. So like people, it's actually impossible to get chips now. A lot of that is, is easing. Um, and power is the new bottleneck. And so that's, this is why there's so much happening in, in West Texas right now in Abilene. Uh, where they just have this like massive overbuild of renewables, especially with wind. Uh, and so like, I think very much you'll see a lot of the AI build outs, uh, following, uh, following power and energy because that ultimately is the binding constraint right now.

• 1:51:25Jordi Hays?

  Makes a lot of sense.

• 1:51:26John Coogan?

  Well, we'll let you go. This is, uh, this has been fantastic conversation.

• 1:51:29Jordi Hays?

  Come back on again soon.

• 1:51:30John Coogan?

  All over the place, but we'd love to have you back. This is so.

• 1:51:32Speaker 05

  Amazing. Come to our AI party next year. And I heard you were asking Andrew about swag. We have these scented, we have these amazing scented candles. I actually have one on my desk. We have these scented candles. I'll send one, I'll send one your way.

• 1:51:42John Coogan?

  Thank you.

• 1:51:43Speaker 05

  It was evidence that I didn't know our audience at all, but I, I enjoyed the scented candles very much.

• 1:51:47John Coogan?

  I love scented candles. Mother's Day is coming up, so you know.

• 1:51:50Speaker 05

  I know. Your, your, um, your segments on the Himalayan Birkin. I was like, I love these guys.

• 1:51:55John Coogan?

  Yeah. They're gonna be flying off the shelves.

• 1:51:58Jordi Hays?

  Yeah, yeah.

• 1:51:58John Coogan?

  After, after we do the show, everyone's gonna go and get one. Anyway, thank you so much for stopping by.

• 1:52:03Jordi Hays?

  Thanks for coming on.

• 1:52:03John Coogan?

  We'll talk to you soon.

• 1:52:03Speaker 05

  Thank you.

• 1:52:04Jordi Hays?

  Have a great, best your Friday.

• 1:52:05John Coogan?

  Uh, next up, we got Will from Slow Ventures.

• 1:52:10John Coogan?

  The other side of, uh, of Slow Ventures, Sam Lessens, business partner, obviously. He's been on the show many times. We had to swap him out. We're, we're replacing Sam with Will from Slow Ventures. Um, very excited to have him on the show. Uh, I've been digging into a bunch of those questions. I still want to know more about the robotics timeline. I'm going to try and dig into that. I still need to know how. I need to talk to more researchers about how images in chat GPT works because I feel like there's something going on there. You know, you see it with the with the text models that there's very clearly, you know, certain filters running on top. You get these weird rejections with the images where sometimes it will like just the Studio Ghibli thing

• 1:52:53John Coogan?

  is bizarre because Studio Ghibli is real intellectual property. Studio Ghibli is a real company. And when you say that, it doesn't say, hey, this violates our our intellectual property rules. But if you ask it to generate a picture of Superman, it'll say, hey, that's copyrighted. And so I'm wondering if OpenAI did a deal with Studio Ghibli behind the scenes or something, or maybe there's some definition of how the IP shakes out. But hopefully going to have a lot more AI researchers and investors on the show to kind of answer some of the bigger questions that I have. But in the meantime, we're continuing to yap about venture capital with a venture capitalist. Welcome to the stream, Will. Good to have you here.

• 1:53:34Jordi Hays?

  Boom.

• 1:53:35Speaker 06

  Are we live? Are we doing this?

• 1:53:37John Coogan?

  Oh, we're live. Yeah, hit the soundboard every five seconds for this one. We need to raise the energy in the studio. We gotta go. Venture capitalists yaps about venture capital. Every time we have someone who's slow, we go crazy with the chyron. Expect some expect some wild, wild chyron going on. It's Friday, but we're not letting the energy go down. How's your Friday?

• 1:53:59Speaker 06

  I'm all good, man. I'm about to amp up. I got this. I got a few more things to get out. Then we got two Little League games this afternoon. So we're just starting. We're just getting going here, dude. And we're coming up on the playoffs. So it's a big Little League game.

• 1:54:10John Coogan?

  Are you a screamer? Are you? Are you yelling at a coach? Are you a coach? The ref?

• 1:54:14Speaker 06

  I'm a coach. Yeah.

• 1:54:15John Coogan?

  Okay, you are the ref. The other guys yell at you.

• 1:54:19Speaker 06

  I'm a I'm a zen out coach. I'm a zen out. I'm a zen out coach. That's my philosophy.

• 1:54:23John Coogan?

  That's good.

• 1:54:23Speaker 06

  Anyway, what's up, boys? Great to see you.

• 1:54:25Jordi Hays?

  Have you ever? Have you ever been thrown out of a game?

• 1:54:29Speaker 06

  No, no, I had a dad who was a screamer. I had a dad. No, no, I had a dad who I loved dearly. Rest in peace. We were best friends, but he was a he was a yeller at the at the refs. And so I kind of swore that off a long time ago.

• 1:54:41John Coogan?

  Adapted, learned, improvised, overran.

• 1:54:43Speaker 06

  When I coached, actually, when I coached water polo, I did get thrown off. I got thrown out of a game when I was coaching high school varsity water polo because I was being too sarcastic. I wasn't, I was, I wasn't yelling, but I was too sarcastic and the referee didn't appreciate that. Anyway, you guys look great. I almost busted my suit out, but it wasn't, uh,

• 1:55:01John Coogan?

  For the next one.

• 1:55:02Jordi Hays?

  We hope.

• 1:55:02Speaker 06

  Didn't feel like my role.

• 1:55:03John Coogan?

  Yeah. By the time we're done, all of Silicon Valley is going to be dressing in suits every single day.

• 1:55:08Jordi Hays?

  And we're going to be, we're going to be switching to business casual.

• 1:55:10John Coogan?

  Yeah.

• 1:55:11Speaker 06

  Well, if you go to our website, you'll see in classic form, slow, slow zig when everyone was zagging.

• 1:55:17John Coogan?

  That's great.

• 1:55:18Speaker 06

  And, and decided to show our LPs when things are a little tight that we are extremely, we're not just serious capitalists, we're extremely serious capitalists.

• 1:55:24John Coogan?

  Buttoned up.

• 1:55:25Jordi Hays?

  Yes.

• 1:55:26Speaker 06

  A suit, a suit, a suit is one thing, but a tuxedo really shows people that you're serious about managing money well.

• 1:55:31John Coogan?

  Yeah.

• 1:55:32Jordi Hays?

  That's right. That's right.

• 1:55:33John Coogan?

  That's a great photo.

• 1:55:33Jordi Hays?

  Uh, well, I've wanted to have you on for a while. Always enjoyed our conversations and.

• 1:55:38John Coogan?

  I want to know what you disagree with Sam on. He's got a lot of hot takes.

• 1:55:42Speaker 06

  Probably, probably, probably everything.

• 1:55:44John Coogan?

  Probably everything.

• 1:55:45Speaker 06

  Welcome to slow.

• 1:55:46John Coogan?

  What about his idea of like, uh, you know, he's pretty anti AI. He likes the AI cherry on top businesses. Are there any of these, uh, pure AI plays? We were just talking to Sonia at Sequoia. She's had a lot of luck finding enterprise AI application layer companies that are pure AI. They are kind of rappers, but they find these particular enterprise niches that can go really big.

• 1:56:10Speaker 06

  The honest answer is Sam, Sam, you and Kevin, I have a really, we really enjoy pushing each other and using Twitter as internal Slack and highlighting where we disagree. But the reality is, is we're all pretty well aligned. We say it differently. We get there differently, but no, I'm just as anti AI as Sam. And I think, listen, the important thing, we're not anti AI. You know what I mean? I think that's like the easy way to take it. Our answer is like, AI is rad. AI will definitely, what do we do with swear words on the show? Allowed?

• 1:56:38John Coogan?

  It's a family friendly show. We, we won't cut, we won't cuss, but we also don't have a bleeping mechanism. So we can't bleep it out.

• 1:56:44Speaker 06

  I can cut, I can, I coach a little league. I can cut it both ways.

• 1:56:46John Coogan?

  Okay. Um, let's keep it clean.

• 1:56:47Jordi Hays?

  Say, swear like you're five years old.

• 1:56:51John Coogan?

  Darn, drat.

• 1:56:53Speaker 06

  Like, listen, I think we all agree AI is going to break the economics as the world as they work in a massive way. Right. So that the problem to Silicon Valley, like that's step one to a compelling venture capital thesis. And a lot of people just stop at that step. They're like, okay, cool. Economics are going to break. Let's start investing against it. And I think for us, once you click, okay, but where are those economics going to flow disproportionately? Right. Against someone that has a really compelling business model, right? That that can get from here to there on very little equity. That's where our AI thesis breaks down.

• 1:57:27Speaker 06

  And I, and I don't try to argue, you know what I mean? That a lot of the game, I mean, I think the hottest take that I do agree with of Sam's is this is not nearly as disruptive as people talk about it. It's more of an enabler and the winners are going to be big companies with balance sheets and distribution and data and all those things for, for a long while. So I, I'm totally on board with that. That doesn't mean we're not doing things with AI, but I think they meet the next couple of click steps for us, right? And a lot of those do look like AI cherry on top businesses with great founders who get, who get sectors and understand what's going on. Right. And then they leverage AI in addition to much other stuff.

• 1:58:00John Coogan?

  At the early stage, there's been this pattern I've been tracking with the new generation of like Gen Z founders, essentially where they need to break into Silicon Valley. It's really noisy. There's a lot of, I mean, honestly, the millennials are dominating like the latest, you know, 100 billion dollar company is Sam Altman. And, you know, a decade ago, it was Mark Zuckerberg when he was in his twenties. We have a new big power law winner and it's, and it's.

• 1:58:28Speaker 06

  As an elder millennial, that makes me extremely, extremely excited and happy to hear.

• 1:58:32John Coogan?

  Yeah, yeah, yeah, yeah, yeah. But the, but the, the Gen Z entrepreneurs have been, they haven't had this massive power law win. Yes, there's scale AI, which is doing fantastically, but there, that there aren't, there aren't as many like, like Gen Z hasn't really found their zuck yet. And so they need to break through in a different way. And I've been seeing a number of, of young founders break through through viral stunts on X and, and in the media. And, and when we talk to them, we often come away saying like, Well, like, maybe we didn't love the fact that they have to play this game, but it just feels like a game that they have to play. And I'm wondering if you have a take on like the requirement of modernity, that you have to be such a showman now to get attention for your startup,

• 1:59:17John Coogan?

  that you often have to push it really hard and make all these crazy claims and do all these stunts. There's a kid that we have on the show who's hiring 50 interns to do social media for him. And he's, you know, getting kicked out of Columbia and it's allowed him to raise money and it's allowed him to break into Silicon Valley. But there's always that risk that it's taking you away from just going heads down, building the product, doing like the Dylan Field thing at Figma, where he was just grinding for years and then produce a great product. So are we in a new era? Or is this kind of just the natural evolution of breaking into Silicon Valley?

• 1:59:52Speaker 06

  I think a lot of that is like compensating for not actually having extremely interesting, novel hypotheses that screw with the economics of the world and a sick business model. So I, number one is like, I think it's copium for the most part. I have another take that I'm interested in, which is like, I don't think we have founders that are capitalist enough.

• 2:00:13Speaker 06

  I think like when you see Wiz print that outcome and then you find out it's like, Sequoia, Doug Leoni, a second time founder who was idea, like you start going like, oh my God, those are people that, you know what I mean? They play, they play to win and they, and they, the scoreboard for them and everybody is in dollars. And so I think that's like another thing that comes to mind when you talk about founders struggling to do that. It's like, I, I've been kind of curious on like, has there been an entire generation of founders on the back of, hey, it's product, right? That like, aren't as capitalist as necessary. And my, my take on that is like, there's actually three markets. You've got to back people or like, the big rad companies end up coming for people that can do, like are addicted to winning in three places.

• 2:00:57Speaker 06

  The market for customers, the market for talent and the market for capital. And they have like a tremendous amount of interest and respect in all three games. And they want to go maximize and manipulate all three of those. I'm not saying you illegal, like, no, don't go that. But like, they're looking at all three going constantly, how do I move chess pieces to like, win this game more? And so, um, I think a lot of the stunts are either from a product oriented mindset of like, I just need people to see my thing and try my thing, which I just think acid totes out at a certain point. So I, I'm not sure, I mean, Listen, I think if you're really good at it, it is a way to bend some of those markets. You know what I mean? But I think you need to understand, I would say, and again, I don't want to talk about Sam Lasting the other time.

• 2:01:43Speaker 06

  Our takes overlap. No, no. He had a good point about this, which is like you sell AGI to raise free money for a consumer application. You know what I mean? And you sell self-driving in order to have enough equity to get the margin structure on your cars to a place that's sustainable. I'm like, there is a role for that, but it can't be the whole thing.

• 2:02:01John Coogan?

  Yeah.

• 2:02:01Speaker 06

  And my entry working strategy, I've been trying to figure out who patient zero was that like, robbed founders of their like, capitalist nature. Um, in my working theory that I'm curious, I want to get more feedback on. I think Google was patient zero because they built a product and a business model that itself was like the most beautifully efficient capitalist thing that was like constantly operating at the efficient frontier all the time, where they could come off of like, hey, we're just vibes and product. You know what I mean? And that was like, the exception that proves the rule. You know what I mean? Because it was such an amazing, uh, I mean, I saw, I live in awe of AdWords every day.

• 2:02:39John Coogan?

  Yeah.

• 2:02:41John Coogan?

  Google is 100% right. Like they built a monopoly that just spit out cash and then they could just do whatever they wanted because like they didn't need to be ruthless at all in anything else because they built the perfect.

• 2:02:52Jordi Hays?

  Well, and, and, and, uh, Morgan earlier was saying you could potentially say the same thing about Steve Jobs around, you know, the, the original, the product goat in some ways, who wasn't, wasn't, he didn't have to be as obsessed about the business model of the iPhone.

• 2:03:10Speaker 06

  So I, so I totally disagree on that take actually. And I, and I think I, uh,

• 2:03:15Jordi Hays?

  No, no, no, go for it. We love disagreement.

• 2:03:17Speaker 06

  So, no, so this, this, I didn't pick this up till recently, or maybe I knew it and forgot it, but, um, I mean, everybody knows like they founded Apple, he got thrown out when it was time to like run a serious business because he couldn't do that. Went away, wandered in the woods for reals, started next.

• 2:03:33John Coogan?

  Yep.

• 2:03:33Speaker 06

  Um, and I didn't realize he plowed almost all of his Apple profits into Pixar. Did you guys read this article?

• 2:03:41John Coogan?

  Uh, no, no, I, I mean, I'm loosely familiar with that story.

• 2:03:44Speaker 06

  Okay. So not, not only did he do that, he ended up getting super deep in the weeds and like running the game theory on their IPO and strategic investment from, uh, from Disney. And he basically like ran the most gnarly capitalist playbook there. Yeah. Like, you know, like he ran brinksmanship using the capital markets as a lever.

• 2:04:05John Coogan?

  Yep.

• 2:04:05Speaker 06

  And that's when he went back into Apple and crushed it. So I actually think he like, is it this counterfactual? He's exactly the rule, which is you need to be on, you need to be on tilt in all three ways. Like what are customers, how do customers value? How do you win them? How do you win talent? And how do you win capital markets? And I, and I, when I read that story, I felt, uh, I felt like my cooked up theory is actually correct, which is like, then he re-enters, right? And Apple's a hundred thousand X since he re-enters.

• 2:04:31John Coogan?

  Yeah. I mean, I, I, I agree with, uh, that. And I have like kind of a similar take, just the, the difference between Apple and Google is that Apple does operate a little bit in the world of atoms. They have to actually make a thing. And so there is some sort of ruthlessness that comes from like the screws have to be screwed into the metal. And, and if you're not on time, you're not on budget, like things can really go wrong. Whereas if you just have this beautiful algorithm and this website that people just have as their default homepage.

• 2:05:00Speaker 06

  That gets better and more profitable with usage.

• 2:05:02John Coogan?

  Exactly. Like, it is, it is a little bit easier to run Google than it is to run Apple. Like Apple, like, you know, your supplier could kind of screw you. And like, what is going to happen in Google, in Google's world? I don't know. I don't know. I mean, it's a good take.

• 2:05:13Speaker 06

  Anyway, that, that was, that's all right. You, you, you mentioned millennial founders and stunts, and it got me on one of my nine talk tracks that I grabbed off the show.

• 2:05:20John Coogan?

  Yeah. But I mean, we, we, we were just talking about this, like, there has been this trend and we were tracking it from, uh, yeah, it probably started at Google, uh, but then, uh, Mark Zuckerberg drove like the Accord for a long time. And then Sam Bankman Fried kind of took that like, uh, yes, I'm a billionaire, but I'm like the, I'm like the down to earth billionaire, the benevolent billionaire. And he was like driving a Toyota Corolla and it kind of, you know, created this meme around like, You can be really successful and wealthy, but like you don't want to display it. And then the next generation kind of got caught up in this meme of like, uh, it's all about the experience. I just want experiences. I don't want any material things. And it's a big question about if you can't concretize what you want in life from a material perspective. Like you can't say, hey, I actually want a house for my kids to live in.

• 2:06:05John Coogan?

  I actually want that cool car that I've been obsessed with since I was a kid. Can you concretize building an empire, building a big company? If you're not thinking concretely in materialist, in materials, like perspective.

• 2:06:17Speaker 06

  Maybe. I just think people want to, want to win. You know what I mean? They're just like, I'm playing a game. Yeah. I mean, and he knows about Zuck is like extremely competitive, whatever he gets into. It's like, I'm going to learn Mandarin faster than anybody else. So I, I don't disagree that like, I don't, I, I joke, everyone talks about Sam Altman is this like visionary product guy. He also drives a $3 million car. He like cares about, you know what I mean? He cares. He, he knows the scoreboard's got the money.

• 2:06:43John Coogan?

  He also has a $20 million car, by the way.

• 2:06:46Speaker 06

  Oh, he does. There you go.

• 2:06:47John Coogan?

  The 3 million Koenigsegg, that's the daily, I think. And then the F1 is in the.

• 2:06:51Jordi Hays?

  Okay. Well, so on, on the young founders note, something that I think is, is happening is that so much venture capital appeared and became available to very young people that weren't necessarily exceptional in San Francisco.

• 2:07:07John Coogan?

  Yeah, let's blame this on Will.

• 2:07:07Jordi Hays?

  Right. People, people that are, people that are.

• 2:07:10Speaker 06

  Guy with the smallest fund you've interviewed all week.

• 2:07:12Jordi Hays?

  No. So, so, so founders that are, that are talented, but not, not the, the sort of necessarily top of their class. And if you give a young founder $5 million and you tell them to run their first business, they're going to act like somebody who won the lottery effectively. They're going to spend money in a way that is just.

• 2:07:35John Coogan?

  Yeah. Give me a YC take. I thought that was good.

• 2:07:37Jordi Hays?

  Yeah. And I, and, and I saw a founder, there, there was a, no, so there was a founder who recently raised a round. We've, we've had him on the show. I think he's super talented. And he was like, you know, hiring 50 interns at once. And then he put out a post, he's, he's going to hire a videographer this summer for like five, half a million dollars a year. And, and I was like, that's the one thing that YC gets right because they basically say, spend no money until your thing is really working. And then you can start pouring, you know, fuel on the fire, but until your thing is working. Spend 20 grand a month, right?

• 2:08:10John Coogan?

  Yeah, it's just been proven time. It's really, really hard to buy product market fit.

• 2:08:14Jordi Hays?

  Yeah.

• 2:08:14John Coogan?

  You can buy growth post-product market fit, but it's very hard to just say.

• 2:08:18Jordi Hays?

  Or we heard.

• 2:08:18John Coogan?

  If you can buy product market fit, big companies would be doing it all day long for new products.

• 2:08:22Jordi Hays?

  Anyway, I heard about another, I heard about another company that had, that's planning to spend 20% of basically two rounds that they've put together on a single launch day effectively. Right. And this is for a product that doesn't have any users right now.

• 2:08:39John Coogan?

  Yeah.

• 2:08:39Jordi Hays?

  And so it's like, stuff like that where it's like, you're giving talented young people an obscene amount of cash and it's the same thing that would happen to, you know, somebody that's scratching something off in, you know, uh, uh, you know, at a gas station and they get $5 million and they blow it in a year.

• 2:08:56Speaker 06

  Kind of, but it's almost worse than that, which is like, hey, here's a bunch of money that was like pretty easy to come by. And we don't actually want to hold you accountable to the money coming back because it's product and like it, it's almost. We fell down this trap of, and you know, I got, I got on my rant about value proposition, but we fell in this trap of like, backing people to do like subjectively valuable things. And that's like a really hard capitalist endeavor to scale, which is like, we, we, so we talk a lot about value proposition existing on a two by two of quantitative and qualitative causal and correlating. And you could build great businesses in all quadrants, but like, what you do to scale them out of the gate is totally different. And I think we got down this like, hey, what's the value of that product?

• 2:09:38Speaker 06

  It's like, I don't know. It's like, it's different to me than it is. It's like, handbags are clearly valuable, but like, why are they worth $10,000? So then people like, you can't, there's no math, science, logic, or anything behind that. It just is. And so I, I, I think Jordi is actually another thing where like, here's a bunch of money and go do things that like, do not have. We talk a lot about our job and our money is to figure out, does something work? Right? Like with a true or false answer. And the problem is a lot of things got started that like, don't have that true or false answer. Right. So it becomes about. Derivative signals that actually aren't like connected to building killer businesses. So I, I, a yes and to your comment.

• 2:10:14John Coogan?

  Yeah. Uh, Sam's been really big on AIs as a sustaining innovation in the mag seven in the big tech world. But at the same time, it feels like the big tech, like the stocks are performing very well. The financials are fantastic, but the products seem to be faltering. You can't find the right Gemini app for Google very easily. Apple intelligence, no one's really raving about it, at least in the tech community. What is your take on big tech? Is it a better time than ever to start a company that takes a shot at a product that normally would be, you know, owned by big tech?

• 2:10:51Speaker 06

  I, I still think that, that if I were running Google, well, I don't think 90% of the use cases in AI are actually like interestingly monetizable. I, I don't know that, I don't know that it like, and I'm starting to watch my own usage now and question that a little bit. But like the majority of the con, the, the, the content being generated from AI and the majority of my usage is like not average. So I, I don't know that I'm like that stressed if I'm, you know what I mean? Like what am I, I'm like going into chat to T K and talking to them about what I'm going to talk to you guys. I didn't do that, but like that use case is like really great, really valuable to me. What's actually the value, and back to subjective value prop, like what's the value of that? Very hard to put a number on and very hard to monetize.

• 2:11:35Speaker 06

  So I, I, I was on, I tweeted it a while ago, but like someone did, I forget who did, someone did a really good like take on this, which is AI is going to be awesome and change the world and AdWords is mostly safe. From that, so I, and I don't, I just, I don't like, I don't love the, hey, I want to take on the product because they're not good. You know what I mean? I think problem statements when it comes to building companies are not nearly as powerful. They don't lead to important companies nearly as much as like, I just believe the world works in this way. Nobody else thinks it works. And if I don't work on that, somebody else, and I've been big on like will the future? It's like, no, no, go work on things you think are like just.

• 2:12:15Speaker 06

  Truths. You know what I mean? Because you'll be pissed if somebody else works. So I don't have a good answer to you on like you take on Google right now because I think the answer has to be you have to like come out and think the world works dramatically different. In 15 years and start building against that.

• 2:12:28Jordi Hays?

  Can you give us an update on on your guys' franchising thesis? These sort of for I feel like the venture world got excited about four wall businesses because there's been there had been a bunch of M and A over the last few years and people realizing like, hey, you can kind of. Spin up a brand and you know, prove it out a little bit and get a bunch of other people to you know, scale it. And I feel like this idea of you know, this business in a box has been.

• 2:13:01Jordi Hays?

  Very prevalent for the last few years. You guys have had, you know, your own thesis around it, but I'd be curious to get an update there on where you see that kind of category and how you see that opportunity today.

• 2:13:13Speaker 06

  Yeah, I mean, top of funnel has been lighter than we wanted. I think the overlap with people who think this way and like think of slow is not so that's that's something we're constantly working on is like seeing more in that space. Listen, the way we got to that space is like, what are the raddest businesses out there? You know what I mean? Just from a. Year in, year out, efficiency, efficiency on equity, just like, what are the things you would want to own for 30 years and hand off to your family, which I think is like a really great. Framework on this stuff.

• 2:13:40Jordi Hays?

  Yeah.

• 2:13:41Speaker 06

  And you kind of quickly get to franchises. You know what I mean? Like they kick off a ton of free cash flow. Pretty durable for the most part, really efficient scale, dot, dot, dot. So like. That was just always my interesting take is somehow venture capitalists. Became software investors and not. And not folks looking for novel hypotheses that have killer business models attached to them. And so anyway, that's how we ended up there. How's it gone? It's like really fun. I think it's a very logical output for a lot of innovation.

• 2:14:12Speaker 06

  I don't think we're doing nearly as much as we would like there, but we continue to look every single day. And again, for us.

• 2:14:19Speaker 06

  For us, it exists on a like the the it's it's like one expression of you created some novel IP that has rad economics. You know what I mean? That like does something that creates a ton of value in the world. And so we talk a lot internally. We're spending a lot of time on our our GBO thesis, our growth by buyout thesis that we rolled out probably, you know, maybe first. I think we did, but with some friends in our in our company called Metropolis.

• 2:14:44Speaker 06

  And it's like, I'm not wedded to that. I just thought that that, you know what I mean? I looked at vertical SaaS and I was like, oh my God, it actually came to me if it's interesting. Uh, an industrial rail. I got pitched by these guys with a sweet industrial rail logistics company. And I was like, I love this. I want to be involved, right? And then I started digging in and realizing there were some top go to market dynamics where you might actually double the earning power of an entire industry, but be an eight millionaire company.

• 2:15:06John Coogan?

  Wow.

• 2:15:06Speaker 06

  I was, I, I mean, directionally correct, I'm making that up, but I was like, that's wild. You know what I mean? I was like, how did, like, how did, how did we get to this place that you could actually do something wildly disruptive? And everyone else but you gets paid for it. And that's where I started peeling away the layers of like, what, right? So like, it's like, oh, what if you bought a railroad and you doubled its profitability? You'd make more money than an eight millionaire SaaS company, right?

• 2:15:29John Coogan?

  More Buffett.

• 2:15:31Speaker 06

  Yeah, right. And then you go to, what are the other versions that it's like, oh, maybe some, some places it's more efficient to vertically integrate. Maybe some places, business in a box. And then a woman who works for me is much smarter than I am when I was spouting all this off quickly. It's like, what about Toast? And I'm like, yeah, Toast should definitely be a software company. So that kind of informed our framework that franchise is slotted into.

• 2:15:49John Coogan?

  How, how do you think about buyouts? Um, I mean, there, there's venture capitalists that are getting in and on the equity side. There's some funds, private equity funds that do equity investments and they have bank partners that do the debt piece. Um, I imagine that you don't have a credit fund separately that's managing that, but is that coming? Okay. Uh, and then, and then there's also like the, the, the private credit guys that come in with just the credit piece. Um, how do you think that that's going to evolve? And is it important for VCs to kind of have at least partners in the whole capital stack?

• 2:16:24Speaker 06

  You'll have the partner. I mean, like, so again, Metropolis is our kind of lighthouse case study in this. If you look at, I, I, I think the, where there's a hole is kind of the growth equity portion of this, right? So we'll fund someone to go do some breakthrough product work and go, oh my God, the economics are changed. And we'll fund them to do a small scale buy of a business and EBITDA and see if you can, like, there's basically two experiments. Is the product actually transforming economics and does it translate when you own and operate the P and L? Then there is a hole on the equity side for like, great, let's go buy 10 of EBITDA, not one. Um, but if you look at the Metropolis deal, it's Wall Street, you know what I mean? So I think had enough evidence, this all slots right into their models and Vistus Credit Fund comes in and da, da, da, da, da.

• 2:17:04Jordi Hays?

  I'm curious, we had Harley on from Shopify yesterday and it feels, you know, in many ways, it's the most significant SMB platform in the world. It's a product that at scale entrepreneurs, it's so critical to the business that yes, they're going to have issues with it, but generally, people feel great about Shopify. And I've been interested to think about in a lot of other categories, you have these sort of like Jiro dreams of sushi type opportunities where Linear was able to look at, everybody hates Jira, but like we need tools like that. And so what if you

• 2:17:45Jordi Hays?

  just built an amazing issue tracker from the ground up and really cared about the craft? And if you look at Shopify, you could look at, you know, oh, this design thing's not great, or what if this was better? Or what if we, you know, made this more intuitive? But I don't believe that you could take, you could take the most talented people in the world right now and try to get them to rebuild, you know, a commerce platform like Shopify. And just given the developer ecosystem and now Shop Pay and all these other things, I don't know, I don't think, I'm struggling to see how somebody replaces Shopify in the market right now. And I'm curious how, you know,

• 2:18:26Jordi Hays?

  if you guys have looked at any other, any other players that is anybody even daring enough to try to take on Shopify?

• 2:18:37Speaker 06

  I'm with you. I think it's a fool's errand. So back to like value prop, which my whole North Star is like, I need to buy someone that's creating a ton of value and can capture a lot of it pretty efficiently. Like that's the end of the day, what we're trying to find in the world. But value prop has to sit on two axes. And again, so this is like, everyone calls me Professor Will and you're hearing why. I go in some long tangent that's like all theoretical.

• 2:18:59Jordi Hays?

  Love it.

• 2:19:00Speaker 06

  But you gotta have an absolute value prop, but also a relative one, right? Like if you go out great, you create a dollar for people, they're stoked. If the other solution creates like 98 cents of value, right? And it solves the same, you guys are going to be in a dogfight from the sales and marketing standpoint, right? You're gonna, you're like, yes, you create value, but you're communicating that to the market is going to be super hard. And so I think the issue with taking on someone like Spotify, Shopify is Value like it's hard to create relatively more value. Can you do things nicer on the edges? Yeah, but like the core functionality of like, I have a business that generates profit for my family.

• 2:19:36John Coogan?

  Yeah.

• 2:19:36Speaker 06

  You know, it's like, that's a lot of it. And it's very hard. The switching costs are super high. There's a ton of risk and it's hard to do that dramatically better and be like, hey, just by using our platform, you know what I mean? You will get make dramatically more money. And so.

• 2:19:52Jordi Hays?

  And Shopify can sit, to be clear, they can say, look, if you have shop pay, you're going to get an incremental, you're going to get an incremental 10% of revenue just by default, because the check, you're going to have less abandoned carts.

• 2:20:07John Coogan?

  We lose you?

• 2:20:11John Coogan?

  Well, he's frozen. Let's kick it over.

• 2:20:14Jordi Hays?

  He's absolutely.

• 2:20:14John Coogan?

  To some ads. Go to get bezel.com. Your bezel concierge is available now to source you any watch on the planet. Seriously, any watch. Let's bring in some more soundboard. We can also sing the wander song. Find. Your happy place. Find your happy place. Book a wander with inspiring views, hotel-grade amenities, dreamy beds, top-tier cleaning, and 24/7 concierge service. It's a vacation home, but better, folks.

• 2:20:42Jordi Hays?

  Can you imagine if, if, if Slow is just so committed to just being lean, like their companies that they didn't pay for Zoom?

• 2:20:48John Coogan?

  The internet bill or something? No, no ISP? Anyway, we, we have three founders coming on back to back to back. Tell Will, he's happy to jump back on. We can close out, but we don't have anyone in the studio right now. But we are going to talk about nourish, Matic and Fastino, three wildly different companies, one in the healthcare space, one in the, we actually have the robot in the box over there. We should unbox it on the show with him. It's kind of a next generation Roomba talking about cleaning in your house and very excited to talk to him about that. And then, yeah, Fastino is training AI models on commodity graphics cards. So I'm sure there'll be a bunch of interesting things that we can dive into on how DeepSeek was

• 2:21:33John Coogan?

  able to train on low-grade, unoptimized cards. If they can do it on gaming quality cards, I'm sure, you know, other people can do it on all sorts of different cards. Should we do some timeline in the meantime?

• 2:21:46Jordi Hays?

  Let's do it. I messaged Will. I'm actually concerned. Hopefully, like, you know.

• 2:21:52John Coogan?

  Oh, we have someone. Okay, great. Yeah, let's bring him in. We have Aidan. Welcome to the stream. How are you doing? Welcome.

• 2:21:59Speaker 07

  What's, what's up, guys? Thanks for having me. Congrats on all the success you're having with the show.

• 2:22:04John Coogan?

  Thank you. Yeah, I mean, success, you know, technical difficulties. It's one thing after the other today on the stream, but we're doing well. Our last, our last guest just froze and bounced in two seconds, but it was a great conversation and excited to have you here. Would you mind kicking us off with a little bit of an introduction on yourself, the company and the news from this week?

• 2:22:25Speaker 07

  Sure. Yeah, so I'm Aidan Durr. I'm the co-founder and CEO of a company called Nurish. Nurish connects chronic condition patients of all different types with a registered dietitian over telehealth, and we get it covered through their health insurance. You know, we have a large network of dietitians in the country. We have over 3,000 dietitians on the platform. We serve hundreds of thousands of patients, and the vast majority of patients pay nothing at all through their, through their health insurance. We're a network with most major commercial insurance payers, Medicare, you know, some Medicaid plans at this point. And you have made a lot of exciting progress that we can speak about today. And then, yeah, in terms of the news you mentioned, we announced a Series B round recently. It's a $70 million round.

• 2:23:08John Coogan?

  70. Let's go. Fantastic.

• 2:23:12Speaker 07

  Yeah, ring the bell, ring the bell.

• 2:23:13John Coogan?

  Congratulations.

• 2:23:15Speaker 07

  Thanks. Yeah. So, you know, it was led by JP Morgan's Growth Equity Fund, and then participants from all of our existing investors, so Index Ventures, who had led the Series A, and Thrive, who had led the seed round, and then Box Group, who I know our mutual friend David, David Tisch, who's, you know, invested at the seed round, has doubled down at every round, including this one.

• 2:23:37John Coogan?

  Yeah, we got, we got mutual friends all over, all over the place. James Pierpont Morgan, doing him proud. JP Morgan and the deal. Is this, like, why was this not covered by insurance before? Is this a regulatory change? Is this technology? What's driving the growth in the business? Are you just the first to think of it? Or is there something unique that's allowed you to start covering this type of treatment with insurance? Because that seems like a major, major unlock, right?

• 2:24:06Speaker 07

  Yeah, yeah. Good question. So this actually first started getting covered in the early 2000s by Medicare. I think it was 2005 Medicare had done a study and seen ROI for this this sort of care. And really, the insight that Medicare put together, which is kind of the same one we put together, is that you look at the healthcare, healthcare crisis and trillions of dollars to spend and hundreds of millions of people with chronic conditions and millions of deaths each year. Actually, you start double clicking, most of those are downstream of nutrition. And the vast majority of spend is just downstream of a handful of conditions, obesity and heart disease and high blood pressure and cholesterol and kidney disease and a few others. And so they had seen ROI for working with a dietitian. It's a really effective intervention and started covering it. And then the Affordable Care Act 2009 carved it out as a preventative benefit.

• 2:24:52Speaker 07

  And so this coverage and then the commercial payers followed and more Medicaid plans. And then the more recent unlock, which was right around when we started the business, the business is a little over three years old, was telehealth coverage at parity with in person because of COVID. And so that was maybe the biggest recent regulatory unlock that made this a lot more accessible. Of course, you could have built this business in person, but would have been much harder than the way it's built today via telehealth.

• 2:25:17John Coogan?

  Yeah.

• 2:25:17Jordi Hays?

  On the on the subject of the raise, how is it different raising from major financial institution versus a typical Valley VC? I imagine it's both similar and different at the same time.

• 2:25:33Speaker 07

  Yeah, so I think actually, in terms of the the actual firm, the person we're working there, Paris Hayman, who we're excited to partner with, he actually was previously at Index Ventures and been part of the team that run our Series A. So actually, it wasn't so different in practice in terms of just we'd already known him. And I think the processes are similar. I think the biggest difference really was obviously at each incremental stage, there's different expectations. So Series B, very different in terms of maybe more focused on the actual metrics and getting really deep on the data than than Series A or C. And so that's definitely an adjustment. But we're fortunate that the basics of the process and the buy-in on the mission and vision and stuff like that was pretty similar to last round, given we already knew Paris.

• 2:26:16Jordi Hays?

  That makes sense.

• 2:26:17John Coogan?

  What is the tech stack like for one of these companies? Is there a plaid of insurance that you can build on top of? Or are you writing integrations? And is there a piece of like? You know, service as a software where there's a lot of humans in the loop in the short term and then in the long term it'll be AI driven like what does the actual buildup of the company look like?

• 2:26:42Speaker 07

  So there is not, not a, not a ton of what you said in terms of the insurance contracting piece. That's something we've, and kind of a big unlock in the value we provide for dietitians is actually going directly to these insurance companies and, you know, negotiating these contracts. And I think that's one of the reasons, you know, most dietitians didn't accept insurance historically is it's a pain to, you know, go directly to one of these really large enterprises and negotiate a contract. And then even if you get the contract, you know, deal with the ongoing administrative burden, licensing, credentialing, billing and whatnot. And so for the most part, we've built, you know, all that, whether it's from a tech perspective or just from a, you know, operational competency perspective in-house. We have leveraged, you know, a great vendor called Candid Health for, for billing. And it's kind of, you know, API forward billing platform that we've built on top of. And so that's been a big unlock on the billing side, but I would say most of the other stuff from a, you know, contracting

• 2:27:27Speaker 07

  and credentialing and licensing perspective has been, you know, a lot of manual work and kind of competency that we've built up in-house.

• 2:27:33John Coogan?

  Yeah. Can you talk about trends in the evolution of dietitians and how they work? We, we were talking about how there was some research that showed that artificial intelligence was particularly good at therapy. And you could imagine the future is, you know, you just have an LLM giving you diet advice.

• 2:27:50Jordi Hays?

  John, of course they're on, they're on TikTok. They're like, okay, my, my, all my clients are keto now. And the next week they're on TikTok again. They're like, okay, we're going pale.

• 2:28:00John Coogan?

  You're on carnivore now.

• 2:28:03John Coogan?

  How's it evolving?

• 2:28:04Speaker 07

  No, yeah, I mean, you're hitting on an important question, which is like, you know, we've seen AI be a big unlock for the business. And I think, you know, you're, you're kind of asking more about, you know, the patient side, which what we've started to build in into the app is, you know, essentially a lot of tools for the, for the provider to use or the patient to use without the provider in the loop to get a lot of the, you know, info you're, you're, you're talking about. And the way I think about it is like, you About eighty percent of the equation is actually behavior change, but about twenty percent and like accountability and that's where the human is is especially good, but but twenty percent is a little bit more like educational blocking and tackling and Google is not especially good at that, but you know, the L L M's are. And so that's a lot of where we're leaning in is like, how do you, you know, give the the dietitian

• 2:28:45Speaker 07

  tools to with A I to to really provide amazing care on the things that only they can do and then leverage A I for the rest of, you know, you know, if you're, you know, you've gotten to the point where maybe you're obese and have multiple chronic conditions. It's it's not that you're just kind of, you know, a couple of educational tips away from from having success. You know, you typically built up these habits over years, if not decades. And so while the L L M can, you know, provide some help in terms of educating you on on what's good for your diet and personalizing it and and whatnot. The dietitian is really important for having the the human in the loop and really the accountability to do that behavior change. And so, you know, as the L L M keep getting better, like we, you know, we want to really lean in there. You know, we think we're, you know, really well positioned to to leverage A I in this way, given, you know, we've seen hundreds of thousands

• 2:29:27Speaker 07

  of patients and have a lot of data on what works in terms of driving outcomes and and and habit change and behavior change. And so we really think kind of the, you know, the the synergy is having, you know, both the dietitian and the and the A I in the loop kind of drives better care ultimately.

• 2:29:41Jordi Hays?

  Very cool. How, what have you seen around the adoption of G L P ones? The concern that I've always had with them is that people that should just focus on their diet end up, you know, taking, you know, a magic shot that makes them lose weight. And that's good because for for a lot of reasons, but I have to imagine a lot of the, a lot of the end patients that you guys work with are both using G L P ones and, you know, thinking about the diet very intensely. But what's your reaction, Ben? And I'm sure that's a question you you got a lot even during the the fundraiser, I imagine.

• 2:30:25Speaker 07

  Yeah, yeah, for sure. And it has been really interesting to see the evolution of that over the past few years. And our dietitians had a lot of expertise working with GLP-1s even before the recent explosion. I think, as you all know, they were originally approved for diabetes. And so dietitians have been working with diabetic patients on them for a long period of time. But of course, the recent explosion that everyone has seen for weight loss has also affected us. And what we've seen is that they are a really important innovation, are really valuable for a lot of patients, and are really useful tool in the toolkit. And we've definitely seen it skyrocket in terms of our patient population and people using that. But they aren't a panacea. So there's a lot of side effects.

• 2:31:08Speaker 07

  A lot of people fall off the medication because of the side effects or either just the logistics of adherence, of getting access to the medication and injecting yourself every week. And so what we've really done is kind of pair ourselves as a complement to the drug. These drugs are FDA-approved to be paired with diet and lifestyle change. And so we see ourselves as that part of the equation. And there are a few different ways. We've kind of built out our care model across the journey of a GLP-1, which is first, we have a care program that's before you even get on a medication. So a lot of folks want to, before they try a medication, see if lifestyle change will work for them. And so we'll kind of have a step therapy-type product where you try it before you get on the medication. And then if you do choose to get on the medication, we have, of course, a commandant program that will maximize the efficacy of the drug by mitigating side effects.

• 2:31:51Speaker 07

  And we've seen a lot of cool outcomes with people losing about 33% more weight with the dietitian plus the GLP-1 than they do just with the GLP-1 alone. And then the final piece of the equation, which is maybe the most important, which is actually getting off the drug. You know, a big problem with the medications, which our payers see, but also our patients, is that when you get off, you often see rebound weight gain. And then, of course, for the patient, that's really frustrating and difficult, but also for the system and for the insurance payers. From an ROI perspective, now you've spent all these dollars to have someone lose weight and then regain it, which, of course, is worse. And so we have a program built around getting off the medication, making sure that's sustainable for the long run. And so, yeah, we've seen it be a really big tailwind for the business because it's top of mind for payers in terms of managing this cost, and lifestyle change is a part of it.

• 2:32:36Speaker 07

  And then, of course, patients are really motivated to change their behavior once they're on one of these medications.

• 2:32:42John Coogan?

  What's the use of the funding? Seventy million dollars is a lot of cash. Is that R and D spend? Are there growth channels that you're investing in? How are you thinking about growing the team and the company over the next couple of years with that new series B?

• 2:32:58Speaker 07

  Yeah. So I mean, the way we've always kind of thought about our success is scale and outcomes. So it's, you know, how many people can we help and how much do we help them? You know, the quality of the care. And so I want to use the capital on both. So, you know, scale, maybe most obviously, we want to really invest in expanding our network of dietitians. So to mention have 3,000 today, you know, the largest in the country, but I've had a long waitlist for a long period of time of dietitians who want to join, who haven't been able to. And so really want to expand our network of dietitians quickly to be able to support more patients. Of course, on the patient side of the equation, we'll, we'll invest and go to market to get in front of more patients to raise awareness that this is something that's, you know, effective and covered by their insurance. And then on the payer piece of the equation, want to keep investing in, you know, partnerships with insurance companies. As I mentioned, you know, we have, you know, pretty good national coverage, a couple hundred million lives covered

• 2:33:43Speaker 07

  at this point, but there's, you know, a lot more plans we can get a network with to expand coverage and want to continue doing so. And then, you know, maybe last, but certainly not least, maybe the part that I I'm most excited about is really accelerating development and product development, you know, you know, effectively. I think, you know, we talked about some of the AI use cases we've seen for patients and dietitians. And I think basically everything we've built there has, has, has been successful for those parties and driving outcomes and saving dietitians time and, and patients really love it. And so, you know, we're really eager to continue investing a lot, a lot of that, you know, product development. And, you know, long term, I think the, the reason we got into this, I had had my own chronic condition. I'd had really bad migraines and I'd worked with a dietitian to solve it. And, you know, of course, dietitians were really valuable for me. And that was part of the reason and my

• 2:34:26Speaker 07

  co-founders. And that's part of the reason why I wanted to expand access to it. But we know that, you know, part of healthy lifestyle change is not just nutrition, but things like mental health and, and sleep and fitness. And I think there's a lot of interesting kind of applications we can do of that in our product to drive better outcomes. And so really want to run at that pretty quickly.

• 2:34:44John Coogan?

  What else are you seeing in the overall like health tech market that's interesting or complementary? We talked a little bit about GLP-1s. There's a lot of online pharma companies that are working in that market. But where else are you seeing exciting companies or trends that could be complementary to what you do?

• 2:35:02Speaker 07

  Yeah, I think they're kind of on the on the vectors that I just mentioned. So of course, there's been a lot of movement in the in the GLP one space, and we've partnered with players there to help get access to these medications to our to our patients. You know, a lot of our patients work with a, you know, a therapist in tandem. And so, you know, there's, you know, great companies in the mental health world that we've we've referred to. I think labs are really interesting. You know, about 85% of our patients get, you know, labs done each year. It's, of course, a natural part of the career journey of both getting a baseline of, you know, discovering, you know, where you're at in your health journey and where you need to improve, but also as you're making progress over time.

• 2:35:38John Coogan?

  It feels like the lab market was just destroyed by the Theranos story and no venture capitalist will touch it now. But yeah, I mean, it does seem like there's a lot of new new entrants there, superpower and function health, kind of doing the upmarket version. But there's lots of other ways to get labs done, obviously.

• 2:35:57Speaker 07

  Yeah, and it's, I think, you know, of course, Theranos was, you know, more about the actual kind of base level of like, getting getting the lab work done. I think a lot of these, you know, players that are doing cool work that you mentioned are are more about kind of facilitating, getting the labs through the through the large lab companies. And then when AI is really great, of like interpreting the labs. And so, of course, a lot of our, you know, our patients are getting labs done consistently and think the people there are doing a lot of cool work.

• 2:36:19John Coogan?

  That's cool. Jordy?

• 2:36:20Jordi Hays?

  Amazing. This is great.

• 2:36:21John Coogan?

  This is fantastic. Thanks so much. And congratulations on the massive round.

• 2:36:25Speaker 07

  Thanks. Thanks, guys. It's great to be on. I know you all ask good questions. And, you know, I was thinking about as I was getting on, as we feedback's really big on our team, and I always get feedback about talking too fast. And so as I was going on here, I was like, oh, I got to make sure to, you know, talk slowly. But then I realized YouTube and podcast ad, that's probably where most of your views are. People just change the speed they want anyway.

• 2:36:48Jordi Hays?

  A lot of people say they just listen to the show on 2X because it's too much content.

• 2:36:52John Coogan?

  The real high performance on 3X. That's the future.

• 2:36:56Speaker 07

  People can listen to whatever whatever they want.

• 2:36:58John Coogan?

  Anyway, thanks so much for stopping by. We'll talk to you soon.

• 2:37:00Jordi Hays?

  Great to meet you.

• 2:37:01John Coogan?

  Cheers. Next up, we have Matic Robotics coming into the studio.

• 2:37:04Jordi Hays?

  I'm pumped for this one.

• 2:37:06John Coogan?

  Yeah, you've been talking to the founder. I was DMing with the founder. He sent us a robot. We're going to have it be cleaning our new studio in no time. We're very excited for that.

• 2:37:14Jordi Hays?

  Wired said, this is the best robot vacuum we've tested. It scored a rare 10 out of 10.

• 2:37:20John Coogan?

  Let's hear it. Bum bum bum. Can I get the Ashton Hall sound effect? There we go. I haven't heard this at all today. It's killing me.

• 2:37:27Jordi Hays?

  Let's go.

• 2:37:28John Coogan?

  Bring them in and play that effect again, Jordy. Welcome to the stream. Welcome to the stream. Congratulations on the Wired article. Congratulations on all the progress. Can you kick us off with a little introduction?

• 2:37:40Jordi Hays?

  Robots in homes.

• 2:37:41John Coogan?

  Robots in homes, yes.

• 2:37:42Jordi Hays?

  They said it could have been done.

• 2:37:43John Coogan?

  Yeah.

• 2:37:43Jordi Hays?

  They said it was a 2035.

• 2:37:45John Coogan?

  Most people, they ship a render, they ship a video. This guy ships a real robot. What a concept. Welcome to the stream. How are you doing?

• 2:37:52Speaker 08

  Thank you, guys, for having me. I appreciate it. I'm a president and co-founder at Matic, We Built Home Robots. And my background is in computer vision and product. And prior to this, we were at Nest. So that's a quick background.

• 2:38:04John Coogan?

  Oh, that makes a ton of sense. Yeah. Okay, so.

• 2:38:07Jordi Hays?

  How many people thought you were crazy to go make, you know, another take on a, you know, the next Roomba, you know, whatever, whatever the pitch was?

• 2:38:16Speaker 08

  I think they still do. I think it's still, why are you doing floor cleaning robots? That's the, that's the question we get quite a bit. And, and the answer really is that this is the only robot with scale.

• 2:38:27John Coogan?

  Yeah.

• 2:38:28Speaker 08

  This is the, the irony of what we are doing is that a thousand robots ship, we are already the second largest American consumer robots company.

• 2:38:37John Coogan?

  Wow.

• 2:38:38Speaker 08

  So we talk about this point of view that there is this perception that navigation and, and mapping and localization in indoor environment is a solved problem. But I tend to think of it as a Fermi's paradox, that if it is a solved problem, where are all the robots in our lives? Why aren't they at the airports, right? Why aren't they at the airports, grocery stores? Why aren't we swan with it? And, and the answer is that it's actually quite a hard problem, number one. Number two, economic viability, which is making it profitable and surviving as a business itself is a challenge. And on a flip side, making it valuable for customers.

• 2:39:16John Coogan?

  Yeah. Talk about the evolution of the relevant breakthroughs in artificial intelligence and, and which ones you are true beneficiary of. ImageNet, obviously, very groundbreaking. The transformer architecture. Haven't heard about that having an impact, at least in the Amazon's Roomba context. Are you using transformers? What about? LLMs, what about diffusion models?

• 2:39:40Jordi Hays?

  Matt uses like a vision, a vision first, vision only approach, which John has been nerding out about for months now.

• 2:39:48John Coogan?

  So I want to know, yeah, like, like, it does, is it, what is this? Does this lead into the why now? Or how do you tell the story of the underlying technologies that have led to an improved experience here?

• 2:40:00Speaker 08

  A great question. We actually left Nest and Google in 2017 to start working on it because of two trends. One is a self-supervised learning techniques that were emerging, which is what LLMs are essentially. They're learning on their own. And then second one was that my co-founder and CEO, Naveen, helps spec out Google Coral TPU from Nest's perspective. So that trend of AI chips coming out and compute skyrocketing was a trend we saw coming. And between those two things, we thought it was possible to build edge device, edge device robotics. And then the reason we thought edge device was critical was we as humans, we don't have hard minds. Latency is really critical, especially in a dynamic environment that we live in. So we always thought that robots have, we have an ability to make distance really fast.

• 2:40:43Speaker 08

  And specifically for indoor robotics, we just felt like indoor world was built by humans for humans, for our visual perception system. So vision only robotics was the only way to go, that it needed the same perception system as us. If you're trying to build, let's say, level five robots, well, level five robots for cars means that cars drive like humans. So inside home, it means that they behave like humans, clean like humans, manipulate like humans. So it should have the same perception system. And those were the trends that helped quite a bit in, in doing that. And now, if you look at a robot, what it does, it builds a Google street view like a map on its own. So the way we thought about it is we as humans, we go into new home, new environment, new indoor space. We self-explore, self-map and then remember exactly where we are so localized.

• 2:41:28Speaker 08

  Can robot do that? Well, the answer is yes, it can. Our robot does that, but it still has the same ability as cats and dogs.

• 2:41:35John Coogan?

  Yeah.

• 2:41:35Speaker 08

  We can't tell our cats and dogs to go sit by the couch or go in a living room. They don't understand that yet. And that's where V L M's and some of this open source, uh, source, uh, Dino and, and clip. Some of the models that are being released are really uh useful because now we can extract semantic embeddings and information at the image level out of it. And we can actually transfer that into our map at a voxel level. So each uh, our maps are built using voxels, which is like a three D pixel. One centimeter by one centimeter or something. So each voxel actually knows that it belongs to a chair or a, a human leg or a child or a, or a piece of furniture. And that's when you can uh start asking and doing all kinds of things like, hey, go clean by the bookcase in a living room and it knows what you're talking about.

• 2:42:18Speaker 08

  So it's really, that's the next layer, which is turning it into much more of a natural language interu- interaction between a robot and a human.

• 2:42:26John Coogan?

  Talk about the actual training runs that go into your models. Is there a concept of, of iteration on the training runs like G P T one, G P T two, three, four, four point five?

• 2:42:37Jordi Hays?

  He said they've spent less than a million dollars on Nvidia chips.

• 2:42:40John Coogan?

  Okay. Yeah. So break that down. Uh, how, how, how do you think about, uh, obviously you're, you're acquiring data constantly, but then is there this pace of let's do another bigger run and, and are you, is there capital at risk when you, when you actually uh roll out a big training run?

• 2:42:59Speaker 08

  Uh, great question. So I'll take a, a little bit of a higher view and come down, but there is this concept in self-driving car as well as robotics, that there would be one god model and that god model would do everything.

• 2:43:09John Coogan?

  Yeah.

• 2:43:10Speaker 08

  When you look at practicality of a deployment, almost always there are multiple models at a smaller level that you, uh, you do it. So we've always taken this approach that we're not trying to do research. We're trying to build product. So whatever is available to us, let's go do it. So our approach has been combination of, uh, obviously neural nets and, and some of the work that's happening. But also what we do is, uh, is referred to as a special A I. Uh, so, so that's a term that, uh, Dr. Fifi really prioritized. And we use human information bottleneck principle. So the way we do this, we take, we have image to voxel neural network and then we combine that with long-term slam using both classical and, and techniques and build this world. And then the physics of the world is permanent.

• 2:43:52Speaker 08

  Now, as a human being, I can know that there is a wall here. There is, I know how, what will gravity do? So based on that, for us, it doesn't take twenty six thousand iterations to learn how to tie shoe this is. So in the same way, once you know the physics, you can predict things of that physics that I know certain objects will topple over if I were to do that. So that's how we think about it. So we use information model like principles. So for us, computes and data has been critical, but it's less of a traditional logistic gigantic um uh uh data side and let a robot do everything on top of it. So it's less of a, uh, less of a compute intensity, but there is always iterations and, and.

• 2:44:31John Coogan?

  Is there something like a mixture of experts model that you could kind of pull from i- in i- and, and design like, yeah, to kind of scale up the model? Is that, is that relevant at all?

• 2:44:41Speaker 08

  Absolutely. So we, we have uh our own master uh student models and stuff. Exactly. And what we, and the way we use it is that it, hey, the three part of it, we use a traditional techniques of a special AI, then adding semantics and understanding and context part of it. That's our master and student model works very well. But even for the neural net, sometimes for the precision, there are master and student models that we can use for precision as well, just to see the way humans see. So occupancy network that we have, um, a lot of love, a lot of it is inspired by the approach that Tesla has taken over the years for to build their full self-driving.

• 2:45:16John Coogan?

  Talk about simulation. Are you using a lot of simulated data? I imagine that you could procedurally generate a million or trillion households with different furniture legs and stuff pretty easily. Uh, drive virtual robots around that, use that to generate data. We've heard about a lot of that in the humanoid context. Are you seeing luck with synthetic data for your product?

• 2:45:36Speaker 08

  Absolutely. I think we started with self-supervised learning. Then we realized that simulation and supervised simulation actually works very well as well along the way. Uh, so we built our own simulation environment using Unreal Engine with our own robot. Uh, so we've customized it over the years and have a large set of environment. But that usually takes it, we, what we've seen is that it takes us to about zero to eighty percent, but that the final twenty percent always comes with the real world data. So we take, we initially twenty two bit, quote unquote, the master model, but then the precision and fine tuning almost always comes from adding real world data.

• 2:46:09Jordi Hays?

  Switching gears a little bit on product strategy, I imagine you have ambitions well beyond this initial form factor. Walk us through, yeah, walk us through maybe the his, was it, was this always the the form factor that you were going to start with? And at what point do you do you look at kind of expanding from here?

• 2:46:32Speaker 08

  Great question. So we always imagine, the goal was always to go build Rosie the Robot. All of us want that, something sort of Alfred that comes in a home and just takes care of everything. But we thought that the best way to do it is the way human child grows, which is in the first five years of human child, they just learn how to navigate from a perception perspective. They are just trying to make sense of 3D rules and they pick up the object and learn that it drops. So in the same way, floor cleaning robot allows us to do that. But then we evolved and said, just like a five to 10 year old child, can it start picking up a shoes and moving it around? Can it just organize unbreakable items? So for five to 10 year old, we don't give them knives and scissors and all the risky stuff. So in the same way, can it start with this task and can we along the way productize it and start

• 2:47:14Speaker 08

  shipping? And then ultimately put it all together as a full blown robot. And we thought this approach was better because as we did consumer research and we always start with customers and work backwards, we realized that there is a lot of apprehension about robot and whether they can do things accurately. So even though, you know, robot vacuums have been around for 23 years now, they've only penetrated 13% of the US households. 87% don't even have it yet. So, and the reason is because they're just not that good. They're not accurate. They're actually kind of dumb. So for, so for 2002, they were amazing device, but they hadn't moved forward. And we thought that purpose built device that solves the problem to the nth level is way to earn customers' trust and then it to the second, third, fourth

• 2:47:59Speaker 08

  task. And the way we built it is if you see our current robot, we have a black crown, we have a black border on the top. That's where the eyes and the brain sits. And it's very much like a human being. And we always thought that we just have to build that once and then it just grows up, just like a robot. So as robot scales, it will scale. So the beautiful part of what we've built is that and then we have demos of it. Uh, in our thing where we can just raise the robot, maybe even put it at a six feet level and everything just works. Out of the box. So you can put it on our top of the humanoid and it will map the entire space. For humanoid and and it was a six degrees of freedom with the same precision at one centimeter level.

• 2:48:34John Coogan?

  So are you thinking about adding like robotic arms so it can pick up a shoe and put it back in the closet?

• 2:48:39Speaker 08

  Absolutely. As we as we're going to use this home, I've been about two hundred homes now, real homes now. And parents always talk about, can you just give me a tall cleaning robot? Uh, that's my biggest pain point. So that that comes again and again. Uh, the second thing we've heard is a lot of uh, kids talking about their parents who live on their own in Florida or Texas. Uh, and they don't have a time to go there and they're not technologically savvy as well. So they're like, we'll take this robot, we'll actually control it, clean their home. But can you also send me a ten second time lapse at the end of the day to confirm that um, that they're okay?

• 2:49:13John Coogan?

  How do you think about privacy? I imagine you have to message like, hey, we need the data, but we're gonna anonymize it. You can trust us, but then there's data leaks that happen. I'm sure this is an important part of your messaging, but what are you saying to people?

• 2:49:24Speaker 08

  Huge, huge part of. So prior to, we worked at Nest, I was a product lead for Nest Camera, so I know privacy is a big deal. So that's why we do the whole thing on their edge device. And then the way we do is just opt in. Uh, and we always knew, and this is prior, our prior startup at Flutter, we also did gesture detection where back coming in this. That if you build a trust with user, there will be a spectrum of users. On one end, there will be users who says, don't ever take even my telemetry data. I don't want to share anything. On the other hand, there will be user who says, take everything you want. I don't really care. In between, there are lots and lots of users who would say, hey, these are the long tail. At which your robot fails and I actually want you to help uh, uh, get better. So we'll share the data.

• 2:50:05Speaker 08

  So we have, we haven't even done it automatically, but there is a record button on our app and. Users have already uploaded thousands of hours of data with permission on their own.

• 2:50:15John Coogan?

  Do you have evals? Like when you train a new model, do you put the robot?

• 2:50:19Jordi Hays?

  The final eval is can the Matic robot clean up after two toddlers after they've had dinner?

• 2:50:24John Coogan?

  I was gonna say frat party.

• 2:50:26Jordi Hays?

  You know, throwing frat parties. No, no, toddlers make a bigger mess.

• 2:50:30John Coogan?

  Spaghetti and meatballs.

• 2:50:32Jordi Hays?

  A regular vacuum can't even handle it.

• 2:50:34John Coogan?

  No, no, no, instant disaster. It needs a scoop and all sorts of stuff. Anyway, Jordan, your last question.

• 2:50:40Jordi Hays?

  How do you expect the humanoid, how do you expect the humanoid market to play out over the next few years? Right? It's obviously an area that you guys wanna, you guys will be competing in that market over time, but clearly made some, some big decisions around how to get there. There's a lot of companies that have raised so much money that they, and, and you know, once you've raised a couple billion dollars, people are going to want you to be shipping or at least having, you know, robots that are, that are creating value in, in these settings. But at the same time, like iRobot, you know, and we talked about this offline.

• 2:51:21Jordi Hays?

  iRobot is the biggest robotics company in the US with 50 million units shipped. Amazon Robotics is a second at 750K. And then Boston Dynamics has only shipped 1,500 robots in its entire lifetime. And so when, and, and, but at the same time, we just had Sonia on from Sequoia Capital a little bit ago. And she's like very humanoid pilled. She was like, I think they're coming like, you know, quickly.

• 2:51:45John Coogan?

  Two years.

• 2:51:45Jordi Hays?

  And so I'm curious as somebody who's actually building and shipping robots now, kind of how you project out the next few years. And I imagine you must be kind of entertained by it all. It's, it's gonna be, you know, there's a lot of capital on the line. You know how hard it is, but I'm curious how you think.

• 2:52:03Speaker 08

  There there that's a great question. There are two pieces of the puzzle there. One, I think you guys have touched in past interviews around accuracy and how accurate can robotics get? And the the thing that we talk about internally is with AI today, we are collaborating. If it gets ninety percent of right, we're pretty happy with it. With with robotics, especially in a trivial task, we almost want always want to delegate. We want to set it and forget. We don't want to do that last percent because that's a, you know, I don't want to finish that last corner cleaning my of the cleaning or what that one last plate. And that actually puts bar much higher. There is a corollary there as well, which is we go to school.

• 2:52:44Speaker 08

  Maybe four years, eight years, learn how to do coding. So if AI gets ninety percent of right, we are mesmerized. But we don't really go to school to learn how to navigate our home or how to pick up a glass or how to vacuum floors. So the the trivial, the task, the more higher the accuracy expectations for customers. Because if you make mistakes in just picking up a glass, they think of it as a dumb robot, like, come on.

• 2:53:05Jordi Hays?

  Yeah.

• 2:53:05Speaker 08

  Again, and then the analogy is imagine someone is helping you set a dining table. Um, for your dinner party, one out of hundred times and one out of hundred times they break one glass or one set of plate.

• 2:53:16Jordi Hays?

  Yeah.

• 2:53:17Speaker 08

  There's a good chance you're gonna fire them. Uh, so so the bar of accuracy is much higher there. So that's one piece. And then second thing is the adoption. Uh, so this is where General Magic is a good example in our mind. General Magic, uh, tried to build iPhone in nineteen ninety five, didn't really work. Amazing team, all ex people, Tony Fadell was there. And instead, what we got was purpose-built device from I uh, cell phones to PDAs to iPods to um. Blackberrys and then we combine everything into an iPhone. So in a similar way, we tend to believe that purpose-built robots will see light of the day first. And then they will get combined into multi-purpose devices. And the more you have a human form, the more expectations that customers would have. So there is a home side of it and there is enterprise side of it.

• 2:54:00Speaker 08

  So we tend to think that in enterprise or factories, there is a good chance robots would be used in few years with homes. We think it's a little bit far away.

• 2:54:08Jordi Hays?

  Yeah, that makes sense. Yeah. And if if you're buying, let's say, you know, a humanoid comes in at at even comparable to something like what Unitree is selling right now. And it's forty thousand dollars. Your expectations on that are.

• 2:54:22Speaker 08

  Gigantic.

• 2:54:23Jordi Hays?

  Gigantic. So it's gonna be an uphill battle, but uh, we'll have to have you back on as there's.

• 2:54:28John Coogan?

  Uh, yeah, one last thing. What what were we about to say?

• 2:54:31Speaker 08

  I was thinking that you were touching on a really great point. We actually talk about it internally that there is no ubiquitous consumer electronics device higher than $2,000.

• 2:54:39John Coogan?

  Hmm, yeah.

• 2:54:40Speaker 08

  Cars have been, right? Cars have been around for 100 years. Utility is clear, even though, and that's usually $10,000, $20,000. And even then, it's a considered purchase. We just don't wake up and do it. So the utility and the value has to be proven. And then you have to convince customers to say, okay, it is worth spending $10,000, $20,000, and it will survive five years, 10 years. So there is a productization element to the robotics that needs to be paid a little bit more attention to.

• 2:55:06John Coogan?

  Well, thanks so much for stopping by. This is a great chat. We will talk to you soon.

• 2:55:10Jordi Hays?

  We are going to use our matics. We're going to use our matics at the new studio.

• 2:55:13John Coogan?

  Yeah, we're excited.

• 2:55:14Speaker 08

  Absolutely. Tell us how it goes.

• 2:55:16Jordi Hays?

  Yeah, we'll let you know.

• 2:55:17John Coogan?

  We'll talk to you soon. Bye. Next up, we have Fastino coming in the studio. Sounds like an Italian name, Fastino. Fastino.

• 2:55:26Jordi Hays?

  Ask him about it, John. You love to, you love to, your Italian accent is your favorite.

• 2:55:31John Coogan?

  Yeah, it's my favorite. Big news. Fastino trains AI models on cheap gaming GPUs and just raised 17.5 million dollars from COSLA. Let's bring him into the studio. We got Greg here from Fastino, or George. George, welcome.

• 2:55:46Speaker 09

  Hey, guys. How you doing? You guys hear me all right?

• 2:55:48John Coogan?

  Yeah. First off, how do you pronounce the company's name? Is it Fastino or Fastino?

• 2:55:54Speaker 09

  So funny enough, fasti-nee in Italian means a feast.

• 2:55:59John Coogan?

  Oh, okay.

• 2:56:00Speaker 09

  But Fastino, it's kind of a play on fast and tiny, like very quick and small model. It's our lame attempt at naming.

• 2:56:08John Coogan?

  You've been feasting on Nvidia graphics cars, you've been feasting on COSLA venture dollars, putting them together. Can you break down what's the news this week?

• 2:56:18Speaker 09

  All the above. Yeah, yeah. Well, great, great being on, guys. Am I your last one of the week?

• 2:56:23John Coogan?

  Last one of the week.

• 2:56:24Jordi Hays?

  You're capping it off.

• 2:56:25Speaker 09

  All right. Hoping to save the best for last. You guys are looking pretty, pretty fresh, by the way. I feel pretty underdressed.

• 2:56:31John Coogan?

  Yeah, hit the soundboard. Let them know that we still got energy. I want to hear the Ashton Hall effect. Not that one, the other one. Let's go. It's Friday, but we still got energy. We're not, we're not slacking off here.

• 2:56:44Speaker 09

  Next time I'm gonna have a suit.

• 2:56:46John Coogan?

  Please.

• 2:56:47Speaker 09

  Buy one.

• 2:56:47John Coogan?

  Please bring it on, bring it on.

• 2:56:49Jordi Hays?

  Suits are underrated. You should have one for every day of the week.

• 2:56:53John Coogan?

  Yes, yes, yes.

• 2:56:54Speaker 09

  Yeah, I gotta go to New York in a couple of weeks. I think I gotta go first.

• 2:56:57John Coogan?

  Taylor.

• 2:56:58Jordi Hays?

  We got a suit guy for you.

• 2:56:59John Coogan?

  Yeah, we'll introduce you. Anyway, break down the news and then we'll, we'll start talking about the business.

• 2:57:05Speaker 09

  Yeah. So great being on. This week we launched TLMs. So it's a family of language models called task specific language models.

• 2:57:15John Coogan?

  Yep.

• 2:57:16Speaker 09

  They're small, lightweight models that are really fast and they're built for AI developers. So being task specific really means that we're more accurate on enterprise tasks than large models like OpenAI or Gemini. And, and they cost a fraction to train. So we spent less than a hundred K on GPUs to train our models. But we're beating industry benchmarks for, for enterprise tasks.

• 2:57:40John Coogan?

  Okay. So are you fine tuning open source models? Are you ripping apart a mixture of experts model to just have a smaller set of weights? Give me the scope. I've seen the GPT 3.5 circles like this and the GPT four circles huge. How big is your circle, I guess?

• 2:57:57Speaker 09

  So we're not fine tuning or distilling any open source transformer based models. What we're doing is very different. We took a different approach from the large labs. We built a new architecture that maintains high accuracy even with very low parameter counts. So we're not fully revealing exactly how many parameters, but all of our models are far below a billion parameters.

• 2:58:20John Coogan?

  Oh, wow.

• 2:58:21Speaker 09

  Our accurate, our architecture actually gets more accurate as the task becomes well defined. So they're not generalist models. You cannot ask them to do anything, but they're extremely performant for the tasks that we built them for.

• 2:58:34John Coogan?

  Okay. Talk about the data sources. I imagine that if you're doing summarization, you need a whole bunch of examples of that to train on. Text to JSON, probably need some text and some JSON. A lot of stuff's out there on the web. Are you scraping? Are you crawling? Are you buying data? Are you using open source data sets? Where's the data coming from?

• 2:58:51Speaker 09

  Yeah, really all of the above. I think there's a big. Debate out there in academia as to whether synthetic data or real world data leads to a more accurate model. We've definitely been using a blend of all the above, but the first models that we're rolling out and you you nailed them perfectly. We have models for developers doing text JSON, text SQL. We have an agentic function calling model that we're putting out. I know you guys talk quite a lot about agents and an agent that can book a flight for me or can book a hotel for me. So we have a very lightweight model that inferences in milliseconds that can basically take what the user wants and call an API. So

• 2:59:32Speaker 09

  very much developer focused. We've got models that can parse documents, redact private identifiable information from documents, which is huge for banks, insurance companies. We have a really fun model. It's our favorite model in-house. It's a profanity censoring model.

• 2:59:49John Coogan?

  I love that. Amazing. We don't swear on the show, so.

• 2:59:52Speaker 09

  Yeah, yeah, we try to keep it light in the office, but you can imagine we've had some fun late nights building synthetic data for profanity model, which can be gaming can be used anywhere. Pretty much the funnest red teaming we can do. I try to plug my ears or turn the.

• 3:00:08John Coogan?

  That's great. I mean, if you're inferencing this in milliseconds, is there then a desire to deploy this at the edge, you know, run this in, you know, the cloud of the business that's actually deploying this.

• 3:00:22Jordi Hays?

  So I just have to ask for the profanity model. Could we run it in real time while we're doing the show? So if a guest, you know, drops a.

• 3:00:29John Coogan?

  An F word.

• 3:00:30Jordi Hays?

  An F word.

• 3:00:31John Coogan?

  Bleep.

• 3:00:32Speaker 09

  Yeah, it'll it'll it'll work in real time. It'll be much faster than an existing.

• 3:00:37John Coogan?

  Yeah, I I think the I think the real TV shows, they have a system that puts it on delay and does something like this, but the delay has got to be so much faster. If you're imagining like using Whisper and then this, there's a lot of things, but in terms of that latency, latency is really important to us. I imagine it's important to your clients and customers. Are you seeing demand for let us run your model and we'll still pay you, but we just don't want to go back and forth with your API?

• 3:01:02Speaker 09

  Yeah, so there are a lot of ways you can deploy smaller lightweight models. Obviously, we're going to be heavily reliant on our API. Yeah. Models have a small enough footprint, which actually comes from a lower parameter, parameter count. You can run them on prem, you can run them on CPUs, low-end GPUs. I think Ash and I, my co-founder Ash, he had a dev agent, somewhat a cursor in 2023. After I sold my last company, I was actually an investor in his startup. He had a problem where his LLM costs ended up being higher than his headcount cost. Uh, and it's a problem that a lot of agent companies face. So. I was actually, I spent a little bit of time as a GP after I sold my last company and all of our portfolio companies were facing the same thing.

• 3:01:46Speaker 09

  Uh, rising cost of LLM. So it's not only latency, as you mentioned. Accuracy is a big problem with large LLMs, but frankly. The key issue that we've seen is that LLMs just aren't built for the enterprise. They're built for consumers, right? So GPT Gemini, they're trained on trillions of data points. They're used by our friends, our family every day. They help you code, they help you get food recipes, they help you prep for podcast interviews. They're not built for high-scale enterprise tasks, right? But enterprises are spending millions of dollars a month on these large monolithic APIs. I want to tell you guys a story. Sure.

• 3:02:28Speaker 09

  How GPT is being used. So my, my wife's dog got really sick a few weeks ago. Um, cute little guy, thirteen years old. Uh, he has cancer. We went to the pet hospital. And the doctor basically recommended that we put him down. We had her best friend on the phone. And we're trying to make a decision based on the doctor's recommendation, symptoms, dog's age, what to do. And who is the tiebreaker? We asked GPT, hey, GPT, here's what's going on with my dog. Here's the situation. Should we put him down, right? So my wife was using GPT to, to play. Yeah.

• 3:03:08Speaker 09

  Play Maker. Um, and, and for the record, GPT told us to put him down and we didn't listen. He's doing well today, but. Wow, that's a crazy story. Why would.

• 3:03:18Jordi Hays?

  AI is Antichrist.

• 3:03:21Jordi Hays?

  Just trying to take out the dot for a pup.

• 3:03:24Speaker 09

  Yeah, why would a large bank, Bank of America, Citi, JPMC? If all they're looking to do is analyze your bank statement or look at some log for fraud, why are they using the same model that my wife used to consult on her dog's mortality? Right? So using these massive models, it's like trying to come up with a with a cool metaphor for the show. It's like, it's like the DoorDash guy riding Saturn V to come for a pizza, right? It's so, it's so unnecessary. And frankly, that's why large enterprises, large banks haven't put ChatGPT or an LLM into a chatbot.

• 3:04:02John Coogan?

  Yeah.

• 3:04:03Jordi Hays?

  Super fascinating.

• 3:04:03John Coogan?

  Analyzing your bank statement and it's just like $500 on dinner? You cannot afford to have a dog. You gotta put that dog down. It's like, Chase, what are you doing? JP Morgan, cool it with the recommendation.

• 3:04:16Speaker 09

  Reasoning is a very sexy word in this space right now. But from speaking with almost 100 Fortune 500 enterprises since we announced our preseason round in Q4, they don't want models that can reason. A bank does not want a model that can reason its way through your last 100 chatbot users' logs and figure out their personal information. So when you're building lightweight, task-specific models like this, our models are in domain. They're only trained to do the task that the enterprise is using them for. So I think we have that edge very much just in how the models are built.

• 3:04:52John Coogan?

  Okay, talk about the gaming GPUs worth less than $100,000 in total is what TechCrunch is reporting. Did you build that yourself? Do you have your own data center? Or are there clusters out there of low-end GPUs that are all rigged together from like legacy Bitcoin mining applications or something like that? Where are you getting these?

• 3:05:13Speaker 09

  Yeah, so we're, we have GPUs in-house. We have, you know, we use GPUs in the cloud, but we all told our models take about a couple hours to train.

• 3:05:25John Coogan?

  Wow.

• 3:05:25Speaker 09

  They cost, the training cost for one model is less than, you know, the cost of a Chipotle burrito. I've seen so much said about how-

• 3:05:33John Coogan?

  But a, but a 2012 Chipotle burrito or 2023?

• 3:05:37Speaker 09

  One that didn't give me food poisoning, hopefully. But, but there, there's been so much said about when Deepsea came out and they only spent ten million dollars on H100s. However questionable that number was, I think what we're trying to do as a super small team is show that you don't even need H100s to build generative models for enterprises, right? So we didn't use a single H100. We used T4s, gaming GPUs, low-end V100s, and, and you can do that. Uh, I think we've proven that, you know, banks don't need a model that takes six months to run or it's gonna drain, you know, Lake Tahoe to, for a training run, right?

• 3:06:18John Coogan?

  What's more important with that training run, uh, flops or memory? Because I imagine lower token counts, you haven't released it, but I imagine you can fit it in memory and so that unlocks it, but, um, talk to me about the dynamics of like building a cluster and thinking about the, the different parameters that go into the cards that you select.

• 3:06:40Speaker 09

  Yeah, so we have a family of, of, it's gonna be less than 10 models most likely for the next six months. I'll say that they're far below a billion parameter each, so we don't need a cluster even. We can just run these on one or two GPUs each.

• 3:06:56John Coogan?

  For inference?

• 3:06:58Speaker 09

  For inference, yeah. And for training, it's the same thing. It's a very low-end GPU for, for an hour or two. So we, we definitely believe that there's gonna be- A giant shift in how language models are used, right? So you guys have seen waves of the last couple of decades. So these massive IBM mainframes.

• 3:07:17John Coogan?

  Yep.

• 3:07:17Speaker 09

  Shifted into client server architectures and open source software. You used to have these massive monolithic.

• 3:07:24John Coogan?

  Mm hmm.

• 3:07:25Speaker 09

  Uh builds that would take, you know, that would ship a month at a time. Software applications were were shipped so much slower. And then out came microservices and you have a different release for your payment gateway and your APIs. Uh this kind of workload partitioning, as we call it. It's completely going to change the landscape in in language modeling. So there was a report from Gartner that came out about a month ago, saying that small task specific models are going to outpace. L L Ms and enterprise usage by three to one in three years. And and we wanna, we wanna lead that. Uh, we definitely think that every developer is going to become an AI developer. So every dev today will need to be able to integrate.

• 3:08:08Speaker 09

  A language model into their code, just like they're they're integrating a open source N P M package or Python library. It needs to be much simpler, uh, and that's very much how we're looking to change the game. It's going to be really hard to compete with the big labs.

• 3:08:23John Coogan?

  Yeah.

• 3:08:24Speaker 09

  If we're just focused on the models, which obviously we're a foundational model company.

• 3:08:29John Coogan?

  Yeah.

• 3:08:29Speaker 09

  But we need, we need to make much smoother developer workflow integrations. We need to make life easier for devs and right now it's.

• 3:08:37John Coogan?

  Where does this, yeah, where does this go? I mean, I, I, I know, um, some of the stories about companies like, like Ramp, for example, or Sponsor. They, uh, need to, uh, digitize receipts, so they get a lot of images. They do O C R, uh, and I think Google provides an API for that. There's a bunch of companies that do O C R. Comes through as kind of messy cluster of text, then pipe that through G P T four and boom, you have structured data. Uh, Llama comes out, okay, maybe it's getting cheaper, but this seems like something where you'd want to go to you guys and get an even cheaper model that's distilled just for that one task.

• 3:09:15John Coogan?

  But that feels like almost like you're a consulting shop or is there, is there a place where a company says, hey, we've been using G P T four or Llama and we've done, you know, ten million inferences. And so we have a lot of data about what works, what doesn't. Uh, can you train a custom model for us to drop our inference cost by a couple of orders of magnitude? Or are you trying to focus more on more versatile foundation models that can be just tools in the tool chest and aren't kind of one off specific systems for a specific task within a specific company?

• 3:09:49Speaker 09

  Yeah, I think there are a few, a few ways to answer that. The first one is probably talking about agents and how agentic systems are evolving. I'm definitely in the camp of thought that says that agentic systems will take over legacy SaaS systems within four to five years, right? So when you see how these agents are being put together, it's typically daisy chaining eight or 10 LLM calls. So in a chatbot, you want to parse a query, you want to then figure out the right document to give back to the user, summarize the right chunk of that document, give it back, all in real time with a very smooth chat interface. So we definitely see a world where you have different models for different tasks.

• 3:10:33Speaker 09

  And, and we're not saying that we're going to replace large generalized LLMs. The models that are larger, they're good at reasoning, they're good at research, they do things like orchestration, so they'll help orchestrate this entire pipeline. That's still going to be the large model. That's still going to be your GPTs, it's going to be your Geminis. But the actual agents, the workers that are calling APIs, that are doing these sort of deterministic, high scale, high throughput tasks, those are all going to be very small, intelligent, task-specific models. That's how we see it play out.

• 3:11:10Jordi Hays?

  Nvidia is down 0.6% today. Is that because of you? Is that, is it, is it, is the market, are they pricing? I mean, billions of dollars.

• 3:11:21John Coogan?

  Billions of dollars have been evaporated from the markets on the news.

• 3:11:25Jordi Hays?

  No, but how do you, you know, how do you think, you know, assuming Festino just gains, you know, massive adoption over the coming years?

• 3:11:33Speaker 09

  Yeah.

• 3:11:34Jordi Hays?

  How does, how do you think that impacts the GPU market, GPU demand broadly?

• 3:11:40Speaker 09

  Yeah, for you know, for the record, the low end GPUs that we use are still Nvidia. We're still, you know, we're still a big Nvidia.

• 3:11:47John Coogan?

  Another 10 trillion to Jensen.

• 3:11:48Jordi Hays?

  Jensen, Jensen might appreciate if you weren't so efficient and you, you know, raised, you know, $500 million and gave it to him.

• 3:11:55Speaker 09

  Yeah.

• 3:11:56Jordi Hays?

  Have you thought about doing that?

• 3:11:57Speaker 09

  If he can help us scale and go more viral, we'll, we'll need more of them for inference, for the record, but I think there's going to be a huge demand for, for consumers, for LLMs as they are. I think we, we were lucky enough to have two of the first OpenAI investors on our cap table.

• 3:12:15John Coogan?

  That's right.

• 3:12:15Speaker 09

  And they, in the very beginning, when there was a pitch deck, there wasn't a business model. They didn't think that they were going to be a consumer company, but the consumer appetite for LLMs has gone crazy. Even during the DeepSeek moment, didn't DeepSeek get to number one on the App Store? My, my wife, my friends are all downloading DeepSeek. So the need and the, the hunger for consumers to automate their lives will constantly be driving the need for these larger, generalist LLMs. We just don't believe they're needed for the enterprise. So we're taking a very different approach.

• 3:12:49John Coogan?

  Very cool.

• 3:12:50Jordi Hays?

  Makes total sense.

• 3:12:50Speaker 09

  Anything else?

• 3:12:51Jordi Hays?

  I love this conversation.

• 3:12:52John Coogan?

  Me too.

• 3:12:53Jordi Hays?

  This is super fun.

• 3:12:54John Coogan?

  He's an absolute dog.

• 3:12:55Jordi Hays?

  You're an absolute dog.

• 3:12:56John Coogan?

  You're an absolute dog.

• 3:12:57Speaker 09

  Tell me anytime you guys want to talk about LLMs and I might need to get some, get some help on buying a suit for New York.

• 3:13:02John Coogan?

  Oh, fantastic.

• 3:13:03Jordi Hays?

  We've got you. And, and seriously, well, we, uh,

• 3:13:05John Coogan?

  We got you, you got us.

• 3:13:06Jordi Hays?

  No, I want to figure out, I want to figure out this real time censoring thing. I think it'd be hilarious. We have some, we have some guests that come on and try to drop F-bombs.

• 3:13:14John Coogan?

  It's unacceptable.

• 3:13:14Jordi Hays?

  Our children listen to this.

• 3:13:16John Coogan?

  Yeah, it's unacceptable.

• 3:13:17Jordi Hays?

  And I think it'd be hilarious if it was like, you know, made like a duck sound.

• 3:13:21John Coogan?

  Yeah, yeah. That'd be great.

• 3:13:23Jordi Hays?

  So well, our people will talk to your people.

• 3:13:26Speaker 09

  Yeah, appreciate it, guys. Thanks so much for having us on.

• 3:13:28John Coogan?

  Thank you so much.

• 3:13:31Jordi Hays?

  Hey, big news. Uh, Rippling has raised 480, oh, sorry, 450 million at a $16.8 billion valuation.

• 3:13:40John Coogan?

  Huge news.

• 3:13:41Jordi Hays?

  And bigger news.

• 3:13:42John Coogan?

  Oh, I was actually supposed to be texting with them. Let me see.

• 3:13:45Jordi Hays?

  YC is a customer.

• 3:13:48John Coogan?

  Really?

• 3:13:49Jordi Hays?

  And that is big, considering YC has created all the big payroll companies.

• 3:13:53John Coogan?

  And they picked?

• 3:13:54Jordi Hays?

  Gusto, Deal, Rippling.

• 3:13:56John Coogan?

  Yeah.

• 3:13:57Jordi Hays?

  Gary must have been, uh, finding it hard to pick favorites, but.

• 3:14:01John Coogan?

  I'm, I'm texting with the team. Hopefully get Parker on soon to talk about the business. One last thing. We have a couple of posts we want to go through, but Michael, can you check the printer? Because I think we got a special printout for today. We haven't been printing posts very frequently, but we got one post that I wanted to print. Hopefully it printed. Let me see.

• 3:14:32John Coogan?

  I don't even know if it printed.

• 3:14:33Jordi Hays?

  It did not print.

• 3:14:35John Coogan?

  It did not print.

• 3:14:36Jordi Hays?

  All right, what's the post, John?

• 3:14:39Jordi Hays?

  Oh, is it working?

• 3:14:40John Coogan?

  I'm trying to print it again, and we might be out of paper.

• 3:14:43Jordi Hays?

  Okay.

• 3:14:44John Coogan?

  But we can pull up the digital version.

• 3:14:46Jordi Hays?

  We're gonna run it back.

• 3:14:47John Coogan?

  Anyway, Luke Metro said, "This show used to print out my tweets and read them. Now they have the head of the army." So, thank you to Luke Metro. I tried to print it, but we haven't printed in so long that the printer's not working. Anyway, there's some other posts. Did you see the drama in Andorl World about Matt Grimm taking notice.co to task for selling some fake equity in the company?

• 3:15:17Jordi Hays?

  Yeah, so it's hard to know. I mean, the way that Notice was displaying this information was not consistently candid, is how I would describe it. And then the funniest thing, you called this out to Matt. Apparently, the CEO of Notice messaged Matt and said, "Hey, I'm FINRA, registered, so not supposed to post publicly on social media. Happy to continue the convo privately or do a call if you want. Let me know, buddy."

• 3:15:46John Coogan?

  Buddy. It's a war crime.

• 3:15:48Jordi Hays?

  Hitting Matt Grimm with buddy is a war crime.

• 3:15:53John Coogan?

  Straight to jail. It's so bad.

• 3:15:56Jordi Hays?

  So brutal.

• 3:15:56John Coogan?

  It's so bad.

• 3:15:58Jordi Hays?

  I actually think the Notice platform is pretty cool.

• 3:16:00John Coogan?

  Oh, yeah.

• 3:16:01Jordi Hays?

  Like, they have a bunch of, you know...

• 3:16:03John Coogan?

  I mean, I imagine that there's probably some steel man here. There's a million ways that, you know, it's a big company, there's a lot of investors, someone could have come and figured out a way to put some shares on there.

• 3:16:15Jordi Hays?

  What was happening is an employee brought shares.

• 3:16:17John Coogan?

  Oh, really?

• 3:16:18Jordi Hays?

  The reason that, the way that you would have zero fees.

• 3:16:21John Coogan?

  Sure.

• 3:16:22Jordi Hays?

  Is that an employee...

• 3:16:23John Coogan?

  Is common.

• 3:16:24Jordi Hays?

  But it was, yeah, it's common, and that wasn't being...

• 3:16:26John Coogan?

  And there should be transfer restrictions. I mean, these are very standard, so there's something odd. I mean, there's been a big, big history of these odd, like, secondary sales. Like, for a while, people were doing forward contracts. Did you ever follow that story? So basically.

• 3:16:39Jordi Hays?

  I mean, I think they'll still work.

• 3:16:41John Coogan?

  I think they're definitely banned in most companies. You're not supposed to do forward contract.

• 3:16:46Jordi Hays?

  Yeah, but the whole. But the whole nature of a forward contract is that the company doesn't really. There's very good chance the company would never find out.

• 3:16:57John Coogan?

  True, but they can still ban it in your employment agreement. Like, it can still be something that you agree to when you join the company. So basically, a forward contract, if you're not familiar, it's the right to purchase the shares at a future date, much like a stock option. So you're basically writing an options contract against your shares in the third party. And the shares themselves don't actually transfer. And so the company in theory doesn't need to approve it, but it's very standard.

• 3:17:21Jordi Hays?

  They wouldn't necessarily know.

• 3:17:22John Coogan?

  And they wouldn't necessarily know, yeah. And so this is a big thing, very, very controversial. A lot of people don't like this. And so even though it doesn't, it doesn't really, it doesn't result in a whole bunch of like legal complications. Obviously, you're not transferring the information rights because you're not actually transferring the shares. They couldn't sue the company. That's the big reason why you want a clean cap table is because you have to deal with every investor. You have to give them information. They can sue you. If they just own a forward contract, they probably can't do that. But it's still a problem and creates all these distortions in the market. And so Matt Grimm taking them to task, he says, we are one of the good guys, says CEO of a company who solicits retail investors to buy shares at a significantly inflated price for what it's worth. In a privately held company, they do not own shares of, have direct access to, or have any information or information rights

• 3:18:06John Coogan?

  from which to discern financial performance or market positioning or anything whatsoever to inform the proposed investment, all while not clarifying publicly, or for that matter, to the clients they are soliciting, how exactly this exposure is structured or what precisely these clients are buying. And while privately hiding behind a claimed veil, fake, by the way, their FINRA registration means they can't comment. When keeping real goes too far, rough. So clean it up. You don't want to have Matt Grimm on your bad side.

• 3:18:37Jordi Hays?

  He could basically say this about most secondary brokers and platforms.

• 3:18:44John Coogan?

  Anyway, we got some massive breaking news.

• 3:18:48John Coogan?

  We got some personnel news.

• 3:18:50Jordi Hays?

  Jacob Efron.

• 3:18:50John Coogan?

  Jacob Efron's been promoted to managing director at Redpoint. We love to see it. Very interesting.

• 3:18:55Jordi Hays?

  The rumors, this is a maxed out contract.

• 3:18:58John Coogan?

  Rumors have been swirling for a long time. He was in free agency, considered free agency, stuck with Redpoint, got promoted. Congratulations to him.

• 3:19:05Jordi Hays?

  Couldn't be more excited for everything it had.

• 3:19:07John Coogan?

  And weird, weird terminology over at Redpoint. Not GP, not partner, managing director. Very investment bank-like, you know?

• 3:19:16Jordi Hays?

  Official business.

• 3:19:17John Coogan?

  Andrew Reid had a funny post. He's a, coming from banking, no matter how senior I get in venture, I'll always think that a managing director is more senior to me. Mogged.

• 3:19:29Jordi Hays?

  Feels, feels very senior.

• 3:19:30John Coogan?

  It does, it does. Anyway, Arvind Srinivas over at Perplexity is taking more shots at Bloomberg. Bloomberg is such a joke while Perplexity does real-time call transcriptions for free. Bloomberg has a 15-minute lag and it costs $30,000 a year.

• 3:19:45Jordi Hays?

  Hey, to be clear, that was Marcelo who said that. Somebody at TechCrunch will listen to this and say.

• 3:19:50John Coogan?

  Oh, yeah, yeah, yeah, yeah.

• 3:19:51Jordi Hays?

  Arvind said Bloomberg is a joke.

• 3:19:54John Coogan?

  Yeah.

• 3:19:55Jordi Hays?

  Anyways, what Perplexity is doing around real-time call transcription.

• 3:20:01John Coogan?

  TechCrunch reports is my quote, me quoting someone else as Arvind.

• 3:20:06Jordi Hays?

  That's what I was saying. Yeah, yeah.

• 3:20:08John Coogan?

  That's so bad.

• 3:20:09Jordi Hays?

  That's a risk.

• 3:20:10John Coogan?

  The bar's low these days, folks. The bar's low. Anyway, any other posts we want to go through? The Pope is American. Vatican City has a Buc-E's now and a Waffle House and a Costco. It's great. They've taken over. America is in control. It's fantastic.

• 3:20:23Jordi Hays?

  America is in control.

• 3:20:24John Coogan?

  And we hope you have a great weekend. We hope you have a great Mother's Day. Pick up something simple.

• 3:20:29Jordi Hays?

  Thanks for joining us this week, folks.

• 3:20:32John Coogan?

  Thanks for joining for the break.

• 3:20:33Jordi Hays?

  We had a great time doing this show.

• 3:20:35John Coogan?

  Yeah, it was fantastic. It was a good show.

• 3:20:37Jordi Hays?

  Thank you for tuning in.

• 3:20:38John Coogan?

  And we'll see you next week.

• 3:20:39Jordi Hays?

  And remember, it's Mother's Day. We talked about this three hours ago.

• 3:20:43John Coogan?

  The Super Bowl of pronatalism, folks.

• 3:20:46Jordi Hays?

  Take care, everybody.

• 3:20:48John Coogan?

  Have a great Mother's Day.

• 3:20:49Jordi Hays?

  Cheers.