OpenAI Launches Codex, Meta Delays Llama 4 Behemoth | Matt Grimm, Kevin Weil, Blake Scholl, Tim Fist, Chris Best, Sean Henry

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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?

  You're watching TVA, brother. Today is Friday, May 16th, 2025. We are live from the Temple of Technology, the Fortress of Finance, the Capital of Capital. The thing that's going in my mouth is really bad.

• 0:14Jordi Hays?

  Yeah, the amount of microplastics going into our mouths right now is.

• 0:17John Coogan?

  Anyway, we got a great show. We got Matt Grimm coming on to the show. Anduril just did the Murph Challenge. He's going to break it down for us. We got Kevin Wheel from OpenAI, Blake Scholl from Boom Super Sonic, Tim Fist from IFP, Chris Best from Substack, and Sean Henry from Stored, some legendary founders, some legendary folks, some yappers, some commentators. We got a great show. We're breaking down the news. But first, let's bring in Matt Grimm. If he's in the studio. If not, we can show you some photos. Oh, here he is. How you doing?

• 0:49Speaker 02

  Hey, guys. How are you?

• 0:50John Coogan?

  Fantastic. Looking great. Can you break it down for us? What's going on today? How did it go?

• 0:57Speaker 02

  It went. It was a great day. I'm here with Chris Wiley. Chris Wiley is the Executive Director of the Lieutenant Michael P. Murphy Navy SEAL Museum. So I wanted to give it a second to Chris to talk about what the Murph Challenge is, why we do it, kind of the story behind it, and a little bit of Lieutenant Murphy's history. So.

• 1:13John Coogan?

  Sounds fantastic.

• 1:15Speaker 03

  Thank you for having me on. So what we just accomplished today was a one-mile run, 100 pull-ups, 200 push-ups, 300 air squats, and another one-mile run, all wearing a nice weighted vest, as you can see.

• 1:27Jordi Hays?

  There we go.

• 1:28John Coogan?

  Yep.

• 1:29Speaker 03

  But the whole history behind this was that it was Michael's favorite workout when he was deployed. We don't deploy with gym equipment, so you have to kind of improvise and find what you can can use in your area so you can have a good workout. If everybody doesn't know the story of Lieutenant Murphy, the blockbuster movie, The Lone Survivor with Wahlberg and Taylor Kitsch, that was the portrayal of Operation Red Wings and how Michael stepped out into a hail of bullets to make a phone call to try to save everybody. So ultimately, receiving the Medal of Honor after he died that day, and just a great workout and a great way to remember all that have sacrificed, I'm sorry,

• 2:14Speaker 03

  and suffered our own little discomfort today during the Murph Challenge.

• 2:20John Coogan?

  It's awesome. How long has this been going on? Anduril's been a part of this for a couple of years, but can you break down some of the history of this particular event?

• 2:28Speaker 03

  So what happened was after the helicopter pilot recovered Michael and the other guys on that mountainside, when he got back home, he heard of Michael's workout and then started doing it on his own, calling it the Murph, and it spread so quickly through the local CrossFit gyms, and then it became too much for him to handle, and then he involved the family. So this has been going on as the Murph Challenge for about 12 to 13 years now, and it's just growing every single year. We're hoping to continue having this grow and have the partnership with Anduril because they're amazing, amazing partners and people here. It's been such a touching event today.

• 3:08Speaker 02

  That's amazing.

• 3:08John Coogan?

  Can you talk about Anduril's role here? Is this just a bonding event for you guys? Is this for the charity? How are you thinking about Anduril's involvement in here? How many people from Anduril came out for this?

• 3:20Speaker 02

  Well, today we had about 150 Andurillians come out, and it's, for us, it's not just about the team bonding part. That is certainly a part of it, you know, kind of team morale, team bonding, and a team that works together, sweats together, stays together. So that's certainly a part of it. But more importantly than that, like, we started Anduril to bring the best possible technology to those who serve in defense of our freedoms and our nation and our allies. And a part of that extends to supporting the veterans community. So we've been pretty active in supporting the veterans community through a couple of different ways that I can talk about in a couple of minutes. So today was less for us about the morale piece and more about a sort of a signal or a moment to celebrate our veterans, both that work at Anduril and in the community at large, and our partnership with the Murph Foundation and with Chris himself and all of that is just a symbol

• 4:05Speaker 02

  of that.

• 4:07John Coogan?

  How'd you wind up doing, Matt?

• 4:08Speaker 02

  Yeah, I gotta ask.

• 4:09John Coogan?

  I tried to do it with you over Christmas break, and I got crushed.

• 4:14Speaker 02

  Well, you guys don't even look like you broke a sweat. What's going on? I appreciate that. Should we go do another one now? We had, there were 150 of us out there, and I noticed there were two empty vests out there with technology on the front. So if you guys want to step up next year, we'd be happy to have you, and you can come out and come out with us. We'll do it live.

• 4:35John Coogan?

  Yeah, I did like three pull-ups today, so I'm getting there.

• 4:39Speaker 02

  You were wrapping it up.

• 4:40John Coogan?

  I think I did a couple sets of five, but not quite at the 100 in a row. Talk to me about-

• 4:47Speaker 02

  Thanks for your time, and thanks for the partnership and your service and everything you do for veterans. Thank you so much.

• 4:51John Coogan?

  Yeah, thank you.

• 4:54John Coogan?

  Yeah.

• 4:55Speaker 02

  All right.

• 4:55John Coogan?

  Cheers. Awesome. Matt, talk to me about the role that veterans play at Andorall. People think tech company, military, obviously there's discipline overlaps, but a lot of times there's not so many immediate skill overlaps, or do people have that wrong? Are you hiring software engineers from the military? Are you hiring hardware engineers? Are you hiring operators and finance people? What are the different types of roles that veterans are filling at Andorall today?

• 5:26Speaker 02

  Yeah, happy to talk about, talk about all of that. So we've been involved in the veterans community since day one of the organization. One of our, one of our co-founders, in fact, is a veteran himself and has helped kind of lay the foundations for those partnerships. Right now, about 12, 13% of our employee base is veterans, which is wildly over the national average and it's certainly higher than that in the Silicon Valley kind of technology community. We have a, we have a partnership with a great organization called Skillbridge that's a program run by the DOD for helping veterans transition. We have a couple of recruiting relationships with targeted to that kind of transitioning veteran kind of community. And we hire across all roles, everything from kind of field ops, field ops technicians who are installing our products and training users in the field, some of our maintenance

• 6:11Speaker 02

  and repair technicians, some of our production technicians on the factory floor building products, all the way through some design engineers, MEKs and EEs doing work. Yes, we have some coders, some CS folks who are from, from the veterans community and all the way up into the leadership ranks, you know, of our, of our leadership ranks. We've got a pretty high veteran representation, everything from flag officers to retired colonels through, through the whole ranks. So it's a big part of our, part of our culture. It's a big part of our, kind of the mission of the company and something that we're proud to support. And beyond that, I would say that we frequently raise some money for veterans charities. We've got a couple in particular that we support. I've got my, my notes here in front of me with that. So on Veterans Day last year, we had our first big public launch of the swag store

• 6:56Speaker 02

  and we had a swag drop that raised about 60,000 some odd dollars that went to a Blue Star Families Foundation.

• 7:04Speaker 02

  A good teaser for you, breaking news here on the Technology Brothers Podcast Network. We're launching our next swag drop on Memorial Day in about 10 days.

• 7:11John Coogan?

  Let's go.

• 7:13Speaker 02

  We'll be raising a whole bunch more money exactly for the foundation that Chris runs in Lieutenant Murphy's honor. So everybody be on the lookout for that. We've given some money to a great charity called Warriors Afield that is actually run by one of the AndroL executives that specializes in helping veterans kind of in distress, kind of going through some bad times by doing some mentorship and some outdoor activities and wilderness adventures and hunting and that sort of thing. So trying to build some bonds there to help veterans who are in a tough spot. So we've been, we've been very active through all the years and all this and something that we're looking forward to continuing doing and scaling as the company grows.

• 7:48John Coogan?

  Okay, give us a take about how to get a job at AndroL.

• 7:52Speaker 02

  Well, we've got a great website, you know, androL.com/careers. But more importantly than the obvious, just apply on the website line is like, we look for people with a real mission drive. We look for people who are really driven by the call to service, who are really interested in protecting American values and our allies' values and, and the escalating arms race that is happening across the world, whether that's artificial intelligence, whether that's drone technology, whether that's any sort of the kind of the next generation of what the war fighters are going to face face in the battlefield, like we look for people who are just really motivated and really driven and look, you know, want to come honestly grind and work hard on really challenging and rewarding problems to, to help defend our country.

• 8:31Speaker 02

  So the, the number one thing you could do, if you're interested in a job at AndroL, obviously apply, but more importantly is, you know, build up that skillset, build up that engineering skillset, that problem solving skillset and, and that mission drive. And that's who we look for.

• 8:45John Coogan?

  That's fantastic. Jordy, you got anything else?

• 8:46Jordi Hays?

  No, this is great. We gotta come out for the next one.

• 8:49John Coogan?

  We gotta start working. I mean, I think it's doable. I don't, I think I would have died this year, but I think I could do it next year. If I start training today.

• 8:55Speaker 02

  John's build, John's build and pull ups. The winners today finished in our, in our women's division, she finished in about 45 minutes. Our men's division, he finished in 35 minutes.

• 9:07Speaker 02

  A mile run, 100 pull-ups, 200 push-ups, 300 squats and another mile run in 35 minutes, which is totally ridiculous and very impressive. And then me, myself, I finished in about, about an hour and 11, hour and 12 minutes.

• 9:20John Coogan?

  Not bad. You look pretty gassed.

• 9:22Jordi Hays?

  You had three vests on?

• 9:23Speaker 02

  But but finished it with the full vest, full reps, all of that. Pretty, pretty, pretty happy day.

• 9:28John Coogan?

  That's amazing.

• 9:29Jordi Hays?

  Absolute dog.

• 9:30John Coogan?

  Well, congratulations. Thanks for popping by. Love to have you back and to talk more.

• 9:35Speaker 02

  And we'll see you next year.

• 9:37Jordi Hays?

  Yeah, thanks for putting this on.

• 9:39Speaker 02

  All right, thanks.

• 9:39John Coogan?

  Bye. I think it's time we take off the mustaches and get down to business.

• 9:46Jordi Hays?

  Oh, uh, yeah, little. I, I, I thought it might be fun to do a little bit of the news in a mustache.

• 9:52John Coogan?

  Okay, well, you can stay in a mustache.

• 9:54Jordi Hays?

  I'm personally going to keep mine on a little bit, John.

• 9:56John Coogan?

  Well, first up, we got Sam Altman with a big announcement. OpenAI is introducing Codex. It's a software engineering agent that runs in the cloud and does tasks for you like writing a new feature or fixing a bug. You can run many tasks in parallel, starting to roll out to chat GPT Pro, enterprise and teams users. And he sent some more info. I think this is interesting because I had this crazy experience with O3 the other day where I wanted to know how, how high a desk was actually on the Pat McAfee studio. So I was looking at, so I took a screenshot of Pat McAfee standing and I, and I said, okay, look up how tall Pat McAfee is and tell me how tall is his desk because he seems to have a good thing going where he stands.

• 10:39Jordi Hays?

  Yeah, yeah. When you were doing that?

• 10:41John Coogan?

  When? Well, when I was thinking, just thinking generally, yes, yes. He was stroking my mustache.

• 10:46Jordi Hays?

  When O3 was thinking.

• 10:47John Coogan?

  But, but this is what was crazy is that I thought, I thought it would just like look at the image and just kind of guess. It wound up writing like hundreds of lines of code, interpreting the pixels in the image and looking at different elements of the image to decide, okay, well, there's a, he has a Coca-Cola there. This is how tall a Coca-Cola is. Let me expand this. All this just to find that it's just a normal sized desk. It's just a standard desk, which is like 36 inches.

• 11:14Jordi Hays?

  Can you imagine giving that task to a human to say like, can you, can you kind of figure out how high this desk is?

• 11:20John Coogan?

  Yeah.

• 11:20Jordi Hays?

  And they go and they write hundreds of lines of code and you're like, all right, like.

• 11:25John Coogan?

  Yeah.

• 11:25Jordi Hays?

  I guess a good job for going above and beyond, but like a simple estimate would have been fine.

• 11:30John Coogan?

  Yeah. And I also, and I also had an interesting experience where today I kicked off a deep research report, asking for some, you know, top news and been put together some, some news of the day, like, what should I be thinking about? And the deep research report asked me, hey, do you want me to run this once? Or do you want me to run this just like every day or every week? I'd be happy to do that for you. And I was like, oh, wow. It just, it just volunteered to do it on a cron job, which normally you would have to write about. Anyway, any other takeaways from the OpenAI launch? We're talking to Kevin Weil in a little bit, but.

• 12:00Jordi Hays?

  No, I, I don't think this should be a huge surprise to anyone.

• 12:03John Coogan?

  Yep.

• 12:03Jordi Hays?

  Uh, we, you know, we talked with Sarah Gro, uh, probably a few weeks ago at this point. And she just said, look, uh, to understand, you know, where the labs are going, understand what they value, what they find important. Code gen has always been one of those things.

• 12:17John Coogan?

  Yep.

• 12:17Jordi Hays?

  And so, uh, this launch, uh, should not be a surprise to anyone, but I'm excited to get in deeper with, uh, Kevin.

• 12:24John Coogan?

  Yeah. Yeah. I mean, so many questions for him, but, uh, I like this idea of the front door to AI. As the foundation models commoditize, it becomes more about the, being the front door to the internet. Are you just laughing at your own mustache? Are you laughing at your own mustache? Laughing at your own jokes? Normally you think I'd be laughing at you. Every once in a while, I look over at the gong while we're talking and I just crack up. Or, uh, yeah, there's other stuff.

• 12:53Jordi Hays?

  Well, I didn't really get it. We went right into this, like, formal interview, which.

• 12:57John Coogan?

  Yeah, yeah, yeah.

• 12:59Jordi Hays?

  Normally we would have had a bit longer to laugh at ourselves. So, um, anyways, sorry.

• 13:05John Coogan?

  I think you look great. In fact, I'm not laughing because it's so convincing. It looks natural. It's growing on me. It's just normal. Anyway, um, the, the front door to AI, like, they are building a new Google where it's this front, old front door to knowledge engine stuff. But they need the front door to code gen as well. And so this new paradigm of, you know.

• 13:25Jordi Hays?

  Yeah. And the interesting thing, I don't, I highly doubt, I highly doubt Kevin can comment on this today, but the immediate question I have is how does this integrate with a potential windsurf application?

• 13:37John Coogan?

  Yep.

• 13:37Jordi Hays?

  This makes me think that windsurf might end up continuing to be a standalone.

• 13:43John Coogan?

  Yep.

• 13:43Jordi Hays?

  App.

• 13:44John Coogan?

  Yep.

• 13:45Jordi Hays?

  And so.

• 13:47John Coogan?

  Yeah, yeah. I mean, it's really blurring the lines. Like, I didn't know that I wanted, I didn't know that I needed code to decide how tall a desk is. It decided that for me. And I really like that as a product evolution where eventually you go to a, you go, you open the OpenAI app.

• 14:03Jordi Hays?

  Yeah.

• 14:04John Coogan?

  And you ask for something and it decides, do you, do we need to do code for this? Do we need to do an image model? Do we need to use 4.0? Do we need to use 3.03? Do we need to use deep research? Like, it should decide for me. That's a really cool.

• 14:18Jordi Hays?

  And this is why I've always said, I don't think OpenAI cares about naming.

• 14:21John Coogan?

  Yep.

• 14:21Jordi Hays?

  Because they're always in the.

• 14:22John Coogan?

  It's gonna get tucked under.

• 14:23Jordi Hays?

  Time horizon, they're just gonna do all the routing.

• 14:25John Coogan?

  Yeah.

• 14:25Jordi Hays?

  Based on understanding.

• 14:27John Coogan?

  Yeah.

• 14:27Jordi Hays?

  You know, what is required. So.

• 14:28John Coogan?

  Anyway, on the flip side of AI, we have another post from DD DAS. Meta will delay its biggest AI model launch, Llama 4 Behemoth. Four reasons highlighted, doesn't perform well internally, huge reorg in AI leadership. 11 out of 14 researchers on Llama have left. And we saw that funny post where someone was saying like, I was on the Llama team. I worked on Llama 1, 2, 3, but not 4. And they put that on the resume on LinkedIn. Brutal. All this after admitting that they gamed some of the benchmarks. Glad, glad Meta can afford to light billions of dollars on fire for open source. And so this is an interesting, like, discussion for me because I think that,

• 15:09John Coogan?

  I don't think open source will win. I think you need to build a product around it. But at the same time, when we talk to people like Aaron Gin, I think we, it would be amazing if America had a rock solid open source offering that was hardcoded, you know, or baked into the weights with American values. And that was an option for, for countries that are maybe deciding between America and China. I want them on my team.

• 15:32Jordi Hays?

  It's so hard to understand what Llama's real enterprise adoption looks like.

• 15:37John Coogan?

  Yeah.

• 15:38Jordi Hays?

  Right?

• 15:38John Coogan?

  Yeah.

• 15:39Jordi Hays?

  You don't hear a lot about companies, at least to date.

• 15:44John Coogan?

  There was a big boom for a long time. I think, I, I think the answer lies in that open router data.

• 15:50Jordi Hays?

  Yeah.

• 15:50John Coogan?

  And there are a lot of open source models running there. Kind of unclear. The Wall Street Journal has more deep dive here. Meta is contemplating significant management changes to its AI product group as a result. Its performance has been hobbled by training challenges. And so there is a take here that's like, they believed almost too much in scaling laws, right? Because behemoth is this massive model. I think it's a biggest context window, even bigger context window than what Google's offering. It's a huge parameter model. What is it? Two billions of active, 288 billion active parameters. Two trillion total parameters. We used to be in like Falcon 9B was like exciting. Nine billion parameters.

• 16:33John Coogan?

  We're now up in 288 billion active parameters, two trillion parameters. The circle has gotten so big from the GPT-3 circle to the GPT-4 circle. We are now with a massive circle that's covering everything. But we're not getting better results just from pure scaling. Because you have to add that RL layer on top, that post-training. And that's what OpenAI has been really, really good at with the O models. And that's what DeepSeek got right as well with their R1 model, the reasoning on top. And it seems like they-

• 17:00Jordi Hays?

  Yeah, I mean, the main thing here is despite having effectively infinity resources, they're struggling on the team side.

• 17:09John Coogan?

  Yeah, it seems like they actually did-

• 17:10Jordi Hays?

  There isn't cohesion, there's a lot of churn. There's former employees that clearly were talented that are like going out and saying, like you said, you know, I'm not, I wasn't involved in this thing.

• 17:21John Coogan?

  Yep, yep, yep.

• 17:22Jordi Hays?

  Feeling the need to sort of publicly state that they didn't play a role in that.

• 17:26John Coogan?

  Yep.

• 17:26Jordi Hays?

  And so it doesn't matter how much money they have to spend and what their capex looks like if there's not real cohesion.

• 17:35John Coogan?

  Yeah, I've been thinking about this because the whole meme with pre-training was, scale is all you need, just keep scaling the number of tokens and energy and parameters and anything that go, data that goes into the model, right? Just 10x everything, 10x that, and then 10x it again, and then 10x it again.

• 17:56Jordi Hays?

  You're only a few 10xs away-

• 17:57John Coogan?

  You're only a few 10xs from AGI. And that was, that was very clearly not the case. The scale was not all you needed in a singular context. The exponential chart was secretly a sigmoid curve, right? It would go exponential and then it would flatten out and see diminishing marginal returns. And I think that that's true in life. I think that's true in so much technology development. You need to be on the sigmoid grind set. You need to be understanding that you're going to go through bursts of explosive exponential growth, but those exponential growth periods will stop. I mean, we've seen this with the show, like when we first started quote tweeting, just printing out posts and quote tweeting, we saw exponential growth in the follower count of the show and the listenership.

• 18:41John Coogan?

  And then eventually we played that out and then we got to plateau. And then we said, let's do guests. And then we saw another one. And now we're going to come up with the third act, the fourth act, the fifth act. And you have to be constantly reinventing yourself, finding new paradigms. And if you're in artificial intelligence, you can't just say, I'm going to rely on the pre-training scaling law holding forever. You need to go into, okay, how do we scale up reinforcement learning? How do we scale up tool use? How do we scale up product use and product functionality to make this a really, really great product? You're not going to get there purely on one single curve. The arc of technology throughout history has always been a series of S-curves. There's been the semiconductor boom, the internet boom, the mobile boom, the AI boom. And if you want to make money or participate or understand

• 19:25John Coogan?

  the role of technology as it's evolved over the past 60 years or 100 years, you can't just see it as one linear exponential, like one exponential graph. It looks smooth when you zoom out. When you zoom in, it's actually a bunch of S-curves.

• 19:38Jordi Hays?

  Yep.

• 19:39John Coogan?

  There's a boom where everyone's like, mobile is going to the moon. If the trend continues, there will be 10 trillion mobile devices. And then what happens? Oh, it's like a couple billion because there's only a couple billion people, right?

• 19:51Jordi Hays?

  That's right.

• 19:52John Coogan?

  And that's just the way it goes. Anyway, staying in mobile, let's go over to Tim Sweeney. He says, Apple's app review team should-

• 19:59Jordi Hays?

  Wait, we have to flag this post.

• 20:01John Coogan?

  Oh, you want to flag this?

• 20:01Jordi Hays?

  Z, which is just wild. So Z says, did they seriously name it Behemoth? The quintessential creature only God can tame from the book of Job? And then give it the demon branding? And I got to say that the branding here-

• 20:17John Coogan?

  Is this a real photo that they used?

• 20:18Jordi Hays?

  It is.

• 20:19John Coogan?

  This is in the journal too, yeah.

• 20:20Jordi Hays?

  It is.

• 20:20John Coogan?

  What a crazy photo to use.

• 20:22Jordi Hays?

  It is a crazy asset. I mean, you got to respect the development of the delts of the demon.

• 20:27John Coogan?

  I mean-

• 20:27Jordi Hays?

  But it's still-

• 20:29John Coogan?

  We were talking about that with Orion, right? Like, like, uh, like the story of Orion, right?

• 20:37Jordi Hays?

  It's actually the most crazy brand asset that you could choose for something like this. It's like, how do we, how do we make this as scary as possible for the average meta platforms user?

• 20:48John Coogan?

  Yeah. So, so, uh, so Facebook's Meta's latest virtual reality augmented reality headset, the glasses that everyone's raving about is called Orion. And the Greek myth of Orion tells the story of a mighty hunter, sometimes portrayed as a giant, who was eventually killed and placed in the sky as a constellation. It's like the worst possible metaphor you would want for a giant tech company trying to do something new and ambitious, right? It's a very, very weird pick, but he thinks about the Roman Empire all the time. So maybe he's interpreting that myth differently and there's a different reading. But I would love to know how they wound up with that. But different versions of the myth detail his life and death, including how he was blinded, restored by his sight, his sight by the sun and possibly killed by either a scorpion

• 21:32John Coogan?

  or Artemis, the goddess of the hunt due to jealousy or a trick up by Apollo. And so like, if you read the metaphor of Orion, it's like, it's not good for meta.

• 21:41Jordi Hays?

  Behemoth in Wikipedia is a beast from the biblical book of Job and is a form of the chaos monster created by God at the beginning of creation.

• 21:49John Coogan?

  A very weird choice. You should, actually, you should just call it six, seven, B, two. That's fine. We like those names. Let's just stick with those names. Or O is a great name. O three is a great name.

• 22:01Jordi Hays?

  Orion and behemoth sound cool.

• 22:03John Coogan?

  Yeah, they sound cool. Until you peel back, like the true metaphor is like bizarre. And so, yeah, behemoth has not only been a very large model, but it has been a very large problem for, and it has been hard to tame and hard to get to produce fantastic results over there. But good luck to the team over there. Hopefully there's some new blood, some new folks come in and they produce a great fantastic product for the meta team. We're rooting for you. Anyway, let's go over to Tim Sweeney. Apple's app review team should be free to review all submitted apps promptly and accept or reject accordingly to, according to the plain language of their guidelines. App review shouldn't be weaponized by senior management as a tool to delay or obstruct competition, due process, or free speech. And so-

• 22:48Jordi Hays?

  Then Naval said, Apple continues to mock the court.

• 22:50John Coogan?

  So this is, of course, Apple should need to approve Fortnite because Fortnite has a third-party checkout where you can go and buy Fortnite V bucks without paying the 30% App Store fee. Of course, you have to go off the app and there's a pop-up warning that comes up and Apple's being very aggressive about that. But Apple is pushing the limits. They are, they're going one mile an hour under the speed limit. They're, it's certainly not, it's certainly not the spirit of the law, but they are following the letter of the law, or at least they would argue that. And who knows, maybe there'll be another court, another, another battle in court. But anyway.

• 23:24Jordi Hays?

  No, this feels like they're setting themselves up for another potentially separate lawsuit around the approval process.

• 23:31John Coogan?

  Yeah, the approval process, for sure.

• 23:32Jordi Hays?

  Because Epic can, can actually say, this is costing us, this might have cost them already nine figures, right? You can imagine when it goes back in the App Store, the amount of the flood of demand and new revenue. And so delaying that by even, you know, a few days would be, would be damaging. So.

• 23:52John Coogan?

  Yeah. So the Wall Street Journal says Epic Games Fortnite claims Apple blocks submission. Now unavailable on iOS. The claim is the latest in a long-running feud between Epic Games and Apple. The legal began it. So I agree with you. There could be another case. But do you know how long it's been for the first case? This is, we're coming up on the five-year anniversary. It started in August 13th of 2020. Epic implemented a dra, a direct payment system within Fortnite's iOS version, circumventing Apple's 30% commission fee. This action violated App, Apple's App Store guidelines, leading to Fortnite's removal from the App Store. In response, Apple, Epic filed an antitrust lawsuit against Apple in the United States District Court for the Northern District

• 24:37John Coogan?

  of California, challenging Apple's restrictions on alternative in-app payment methods. It took five years. And so, yes, they might have taken a couple pennies or millions of dollars out of Fortnite's pocketbook by delaying a few days. But if they can turn this into a five-year lawsuit. That's five years of of 30% fees, right?

• 24:59Jordi Hays?

  Yeah.

• 24:59John Coogan?

  So that could be the calculus. It's like, yeah, let's just, uh, let's just, let's just play the court game. It's fine.

• 25:05Jordi Hays?

  Crazy.

• 25:05John Coogan?

  Anyway, uh, other news.

• 25:07Jordi Hays?

  Hostile.

• 25:08John Coogan?

  Novo Nordisk has, uh, their CEO has stepped down. This is the maker of Ozempic. And the stock has been on an absolute tear. I would love for you to pull it up on public. Let me know what it's doing. But we have a, we have a post from an, I'm an anon risk addict.

• 25:24Jordi Hays?

  No, you're, you're saying a tear downward, right?

• 25:27John Coogan?

  Well, it was on a tear upwards for a long time during the GLP one boom.

• 25:31Jordi Hays?

  But it's down 50% over the last year.

• 25:33John Coogan?

  Oof.

• 25:34Jordi Hays?

  Yeah.

• 25:34John Coogan?

  Not good. So yeah, maybe, maybe it makes sense, but a non-risk addict has a take here. No idea if he has done a good job as CEO or if the change makes sense based on expectations going forward. But firing a CEO for highlighted reasons is obscene. Novo traded at 50 XPE, the market going crazy and then being a little less so is not the CEO's fault. So if you're running a company and it becomes kind of a meme stock and it runs up to an insane multiple. And then it pulls back a little bit, but you're still way above where you started as CEO. Can you really be hit with, hey, the stock's down 50%? We've seen there was Palantir. Palantir was extremely hot. And then of course it pulled back a little bit. We see this with Tesla too.

• 26:15John Coogan?

  Tesla pulled back a little bit, but it's still like a really solid company, really, really incredible market caps and, and great private, uh, great, great price to equity ratios. And so, um, the highlighted reasons here are during his eight-year tenure as CEO, Novo Nordisk's sales, profits and share price have almost tripled. Novo Nordisk has clear strategy, a strong portfolio, product portfolio and an experienced leadership team. The changes are however, made in the light of recent market challenges. Novo Nordisk has been facing and they have, they, there are, because this is an older technology, as we talked to some of those biotech folks. We've seen that, uh, there has been more competition than usual. Normally you create some breakthrough, you're able to lock it down for years. That hasn't been the case in the GLP one, uh, scenario.

• 26:58Jordi Hays?

  Hyper competitive from not only other

• 27:00John Coogan?

  Yep.

• 27:01Jordi Hays?

  Scaled pharma companies, but the, you know, the compounding and, and.

• 27:05John Coogan?

  Yep. Considering the recent market challenges, the share price decline and the wish from Novo Nordisk Foundation, the Novo Nordisk Board and Lars Fjorgensen have jointly concluded that initiating a CEO succession is in the best interest of the company and its shareholders. Yeah, very rare that you see a CEO go out while the stock is still trading at 50xpe, doing really well overall, even if it is down 50% recently. I mean, that's not good. But anyway, you know what Novo should do? They should get a ramp, obviously. That should be the first thing that they do with the new CEO. They should bring in ramp, ramp, ramp, ramp, ramp. Time is money. Save both easy use corporate cards, bill payment, accounting and a whole

• 27:47John Coogan?

  lot more all in one place. They should also be using Figma. We should talk about Figma. Think faster, build faster. Figma helps design and development teams build great products together. You can get started for free.

• 27:58Jordi Hays?

  The best. Figma is Figma for Figma. You can do a lot with it. You can generate marketing assets. You can generate apps. You can create websites and a whole lot more. Thank you to Figma for supporting the show.

• 28:10John Coogan?

  They should also get on Vanta. Automate compliance, manage risk, improve trust continuously. Vanta's trust management. It takes the manual work out of your security compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program. Anyway, the other news is Semi Analysis is talking about the AI deals that have been happening in the Middle East. Dylan Patel coming on the show in a couple of weeks. US strikes a deal with the United Arab Emirates and the Kingdom of Saudi Arabia, a 5 gigawatt data center, the humane G42 diversion and American AI wins. Dylan Patel breaks it down. He says, "The US Saudi slash UAE AI deals are complete wins. Everything is there to

• 28:52John Coogan?

  win over the Middle East and accelerate infrastructure spend." So, American companies, AI companies are going to be making more money from this because we have a new customer. The main subtext here is that China is locked out of Middle East AI infrastructure investments. There's a different world. There's a different path where, yes, there were some controversial moments in Trump's tour of the Middle East, but there is a different world where we are watching Xi Jinping do that tour and we're watching from the sidelines. That's not what happened. What happened is, is our president went there and struck a bunch of deals.

• 29:23Jordi Hays?

  For the first time. On the show.

• 29:25John Coogan?

  Instead of Sam Altman and Elon Musk and Alex Wang, it could have been the founders of Huawei and DeepSeek and HighFlyer.

• 29:34Jordi Hays?

  Yeah, you can imagine there's an alternative timeline where, you know, the QIA is investing,

• 29:41John Coogan?

  Yep.

• 29:41Jordi Hays?

  You know, $100 billion.

• 29:43John Coogan?

  Yep.

• 29:43Jordi Hays?

  Not actually 100, but massive amount of money into Manus, right? Or DeepSeek or some of these other players, so.

• 29:50John Coogan?

  Are you talking about Manus?

• 29:52Jordi Hays?

  Manus?

• 29:52John Coogan?

  Talking about Manus?

• 29:53Jordi Hays?

  Oh, we're talking about. We can talk about Manus.

• 29:55John Coogan?

  Open Source AI agents with Manus?

• 29:58Jordi Hays?

  With Manus, you're gonna make me put my mustache back on, John?

• 30:00John Coogan?

  No, no, no, we have a, we have a very important person coming on the show, Jordy. Put that mustache down.

• 30:05Jordi Hays?

  Put that mustache down.

• 30:06John Coogan?

  Put that mustache down. We have the chief operating officer of, or chief product officer of OpenAI coming into the studio.

• 30:14John Coogan?

  And so the UAE ruling family used headline grabbing investment numbers, deals with Trump's family businesses and ties with tech executives to score an Nvidia deal. And it's all looking good. Let's see if we have Kevin in the studio. Let's bring him in. He's here. Fantastic. How you doing?

• 30:31Speaker 04

  This is wild. I just like joined a Zoom and I'm live with you guys.

• 30:34Jordi Hays?

  We're live.

• 30:35John Coogan?

  Yeah.

• 30:35Jordi Hays?

  Great to have you.

• 30:36John Coogan?

  Welcome.

• 30:37Speaker 04

  I was watching you on X and thinking how weird it was that in 30 seconds I was gonna be on the screen. This is awesome.

• 30:44John Coogan?

  Yeah, we're leveraging this thing. It's called the internet and technology. But we'd love to get you up to speed on it since.

• 30:51Jordi Hays?

  It's funny, a funny story. So Tyler Cowen called into the show before one of your guys' earlier releases and he was like, AGI is here. Like he was basically saying like, it's a couple of days out, but he couldn't get his camera working. And it was this like funny, funny dichotomy of like, AGI is here, but like the internet is still actually.

• 31:10John Coogan?

  There was actually another day when we had to basically take the whole show down because Zoom and both, both Zoom and Google Hangouts just went completely down, like nationwide. And so we were like, well, we can't do our show now, I guess.

• 31:23Speaker 04

  The running joke is that audio video is like ASI complete.

• 31:27John Coogan?

  Yeah.

• 31:29Speaker 04

  Well, everything else in the world is solved.

• 31:31John Coogan?

  Yeah, wait, so I mean, I think long-term for the show, we need to go proprietary. We need to build our own video streaming stack. Can you, can you help with that?

• 31:39Jordi Hays?

  Codex.

• 31:40John Coogan?

  Can Codex help?

• 31:41Speaker 04

  Well, you know what? You know what can help with that?

• 31:42John Coogan?

  Yeah.

• 31:43Speaker 04

  Code can help with that.

• 31:44John Coogan?

  Break it down. How would I use Codex?

• 31:48Speaker 04

  And by the way, you get to talk about AI and then you're gonna have Blake from Boom here. So you get to talk about supersonic flight afterwards. You guys have the coolest lives ever.

• 31:56Jordi Hays?

  It's full stack, full stack technology.

• 31:59John Coogan?

  But yeah, can you, can you take us through the announcement? Break down exactly what launch, when it's available, to who, what you're excited about? And then we'll go into some of the trade offs in the product design and development.

• 32:11Speaker 04

  Yeah, let's do it. So we just launched this morning Codex, which is a cloud based software engineering agent that can work on many tasks in parallel. So a lot of folks are used to the kind of cursor windsurf style, you know, GitHub Copilot style of AI development, which is really more about augmenting a single engineer, right? You're, you're writing code in your IDE and you can press tab, tab, tab, and it'll autocomplete and you're, you know, 10, 20, 40% faster. With Codex, you actually have a software agent that runs in the cloud that can do entire tasks for you. So you give it a task, it goes off and does it. And suddenly you have a PR and you didn't work on it at all.

• 32:53Speaker 04

  And it's powered by a version of O3 that we fine tuned specifically to be really good at these kind of hard software tasks. We're super excited about it. It launched today inside ChatGPT. So you can use it if you're, it's rolling out now to pro, to enterprise, to teams. Well, it'll make its way to plus in the coming weeks. But the cool thing is it's a, it's an agent, it's a software agent in the cloud. So, you know, you're using it today from ChatGPT. You can imagine using it in the future from, you know, your terminal, your IDE, all kinds of other places. And even, you know, hooking it up via API to your bug queues and just having this software agent churn through every single bug that you have, you know, for each one, look at

• 33:37Speaker 04

  the context of the bug, understand your code base, and then suggest proactively how you would fix that bug and give you a PR that you can review. So the world of software is changing. We're super excited about it. It's a research preview. It's not perfect yet, but I think this is the future.

• 33:55John Coogan?

  Yeah. So I mean, I've already noticed that ChatGPT has been writing code for me for a while. It seems to be writing more and more code. I was telling Jordy about how I wanted to know the height of a desk in an image. And I knew how tall a person next to it was. And I thought that it would just use images in ChatGPT to kind of one-shot this or guess. But it wound up spinning up and looking at the individual pixels with a bunch of Python code. I think it wound up writing like 5,000 lines of code or 500 lines of code and it got it really right. Unsatisfactory because it was just an average sized table. It was like literally the standard size, but it really knew it.

• 34:34John Coogan?

  But, but so I'm wondering like, like, is this something that will, will feel like a deep research project where our deep research functionality, where I click a button to say, hey, let's use Codex for this. I'm giving you the hint. Or is this something that can be automatically triggered just from a text interaction like images in ChatGPT?

• 34:52Speaker 04

  Yeah. So it's a, I mean, by the way, you know, you never know if that desk was actually like 38.2 inches. So. Yeah, it's worth it. It's worth it. Write the 500 lines of code.

• 35:02John Coogan?

  Why not? It's too cheap to meter.

• 35:05Speaker 04

  Actually, that's been one of the big, the coolest thing about O3, O3 personally for me has been a kind of feel the AGI sort of moment using that model. The things that it can do and it's, a lot of it comes from the fact that it can use tools while it reasons. So it's thinking and in the process of thinking, it can do some web searches and then it can take what it learned from a web search and write some code. And then after that code, it can do image analysis and then it can write some more code and do another web search. And then finally, with all of that context, it will output the answer. It's like, it's really been an unlock for a huge number of use cases. And that's the kind of thing that enables Codex here because you're right. ChatGPT has been able to write code for a while, right?

• 35:47Speaker 04

  You can, you can just go to ChatGPT and type in like, here's a, you know, write me code to sort this array of integers that I have. And it can give you the code and it's going to be great at it. The difference here is Codex is built to work on big, complex code bases. So you're not just saying like, do this little task for me, write this function. You're saying, I have a bug and I don't know where it is. There's a, you know, a hundred thousand line code base. Can you please go understand my code base and and try and fix this bug? Or I'm a new engineer at a new job. I'm trying to understand what the heck is going on in this code base. Can you explain to me where the code does X or Y or Z? And very quickly, it'll look through the code and give you an explanation of how something works.

• 36:33Speaker 04

  Um, you know, it's funny, I've even seen examples where people go. Hey, Codex, find a bug in this code base and fix it.

• 36:43John Coogan?

  I just find one randomly. Just go. That's amazing.

• 36:48Speaker 04

  Complex stuff and do do do hard work on a huge amount of existing context.

• 36:54John Coogan?

  Yeah.

• 36:54Speaker 04

  That differs from what you've been able to do in chat GPT for a long time.

• 36:57John Coogan?

  Yeah. Um.

• 36:58Speaker 04

  Wild.

• 36:59John Coogan?

  From a personal perspective, I I used to write Python pretty regularly. I haven't written much code, so I haven't really gotten into the cursor or windsurf world. Uh, obviously I've been writing code via chat GPT now. Uh, I noticed recently I kicked off a deep research report and it's and it prompted me to put it on an effectively a cron job. It was like, do you want me to just run this for you every week? And I said, yeah, that sounds awesome. Uh, that's great. Uh, but i- if I'm like a, I don't have a repo, but I could set one up. Is there a world where me as kind of like a prosumer, non-technical user? Should set up a repo to house the custom code that Codex writes for me?

• 37:41John Coogan?

  To make it a better experience for all the little custom software and tools and random stuff I use? Or should I just live in the O three world where the code is pretty much ephemeral?

• 37:54Speaker 04

  I think it depends what you're looking to do, you know? For simple things where you just wanna like quickly put together a script or something.

• 38:00John Coogan?

  Yeah.

• 38:00Speaker 04

  Writing it inside chat GPT and not using version control and all of that is fine. But if you're if you're gonna do something, you know, that you expect to be longer lived, like it's the basis for something you actually wanna build for yourself and maintain. Then I think setting up a quick GitHub repo and using Codex on it makes a ton of sense. By the way, I I so I used to be an engineer. I haven't, you know, I still dabble and screw around on the side and write code, but nothing major. And I hadn't written any code at OpenAI. I've been there about a year and haven't checked in a thing. Like Tuesday, Tuesday night, I think, um, I was, I was doing, you know, the rest of my work. And I was like, I I want to fix a couple of bugs.

• 38:43Speaker 04

  And so I went and found a couple of really basic bugs, uh, because I didn't want to screw anything up. And sent Codex off to work on both of them in parallel, check back in a few minutes, and I had two PRs. They looked right, so I submitted them, got them code reviewed by somebody, you know, who's actually a good engineer. And they were submitted and now I've got a couple of commits in the code base. So it's just, it's like.

• 39:07John Coogan?

  This is stolen valor, though. This is stolen valor. You didn't write that code.

• 39:13Speaker 04

  But it's cool. Like, I I actually just kept, you know, other than just like getting to play around with the product and and offering a little bit of feedback on on a a couple of things. I was off doing the rest of my work and I had this software agent working for me in the cloud writing code.

• 39:30John Coogan?

  Yeah.

• 39:30Jordi Hays?

  Talk about, I I'm I'm so curious to hear about the kind of internal testing process and when when you guys decided the right time to actually roll this out as a research preview, because I imagine you've been using Codex in one form of another internally for like a very long time. Maybe you didn't have a name or anything like that, but um, I'm sure that ChatGPT has been, you know, contributing to the effectively the ChatGPT codebase, um, you know, almost since the beginning in some form or another.

• 40:04Speaker 04

  Yeah, for sure. I mean, we're we're big users of our own tools. There was a, there was a version for a while that um, that was mostly about the kind of how do you come up to speed quickly in a big codebase? That was good at at understanding our codebase and answering questions about it. That was really popular with new engineers on the team. And then once you kind of, you know, get to understand it, you might not use that tool as often unless you're exploring a new area of the codebase. So that was like a proto version of this.

• 40:34John Coogan?

  Yeah.

• 40:34Speaker 04

  But we've been working a lot over the last six months at improving the ability of our models to code. Like you've got GPT four point one, which we released a little while ago, which is kind of, which is very quickly become a really popular model. It's now, I think, default in WinSurf, it's increasingly a large percentage of of cursor users coding. And, you know, that's that came from focusing on the things that matter in creating a really good coding model that you can rely on. Means really good instruction following, longer context. You know, the ability to like, not just make the changes, but to make the changes a way a developer would. So don't add a bunch of extraneous stuff, don't add weird comments.

• 41:16Speaker 04

  You know, make surgical, precise changes that accomplish the job. Um, so there's a style element to writing good code, not just a correctness element. And we've been focusing on all of this. And then you you kind of bring that together with O three and all of the the things that we were, you know, that O three's ability to tool call and to reason and um, and and and suddenly you can put together a really good coding model. So we've been thinking about this for a long time. This is the first time when we're like, okay, this is now good enough that we think it it deserves being a product for the rest of the world and we're excited to see how people use it.

• 41:56John Coogan?

  Can you talk a little bit about product design, product, like inspiration, product design? I I noticed that the very first iOS app had these incredible haptics when the tokens were streaming through that I hadn't really seen anyone do. I just opened the app last night and saw that when you're using voice mode to dictate to it, it has a different modal now. It feels like there's a very strong design language evolving. At the same time, there was, you know, people complaining, oh, I can't even, I'm using ChatGPT, I can't even stay logged in. That that bug obviously got crushed pretty quickly. Um, but but what what is the actual product design inspiration? Are there people that are pulling from certain uh schools of thought or anything?

• 42:40John Coogan?

  Or like, is there someone driving that internally or is it just like baked into the culture?

• 42:45Speaker 04

  Yeah, for sure. Ian Silver leads our design. I was fortunate to work with him at Instagram. He's an incredible designer. It's building for ChatGPT is a really interesting thing because we have, you know, well over 500 million weekly active users at this point. So it's a it's a big scaled product.

• 43:03Jordi Hays?

  Yeah.

• 43:04Speaker 04

  And so for products of that size, you, one of the most important things is to simplify, right? You're not just serving power users at that point. And so, and so you're you're serving people that are just trying to get something done in their day. They don't want, they don't care about the complexity. They don't care what the models are called. They just have a task and they want to complete it and you want to help them. But then on the other hand, we have folks who are super deep AI enthusiasts and want to, you know, digest and every single new model that we use and try it out in all these different ways. And so we want to both, and we want them to, we don't want to sort of soften the edges of their experience. We want them to to be able to do everything they possibly can to experience all of, you know, the power of AI.

• 43:50Speaker 04

  And so we both want to like simplify the experience for for a lot of our users. And we want to provide the people that want it, all of the bells and whistles. And so we try and we try and balance that. You know, so you try and make it so that you don't need to worry about things like the model picker as much. You don't need to like have a bunch of AI knowledge in the background to do what you want to do in OpenAI or in ChatGPT. But if you have that, you should be able to expose the sharp edges and like test the different new features and stuff. And so we we really actually try and get both of those things right, and it's a delicate balance.

• 44:26Jordi Hays?

  Is that why, is that why you guys don't seem to put too much emphasis into perfectly naming products? Just because in the, on a long enough time horizon, it doesn't really matter. I just come to, you know, ChatGPT and I work with it to get the outputs and the results that I want. And I'm not, regardless of my experience level, I don't necessarily care the underlying sort of models doing the actual work.

• 44:52Speaker 04

  Wait, are you saying, are you, or naming isn't great?

• 44:58Jordi Hays?

  I was, I was alluding to.

• 44:59John Coogan?

  No, to be clear, we think that you have the second worst naming after behemoth, which is a very, very untamable, you know, demon.

• 45:09Jordi Hays?

  Demon monster.

• 45:10John Coogan?

  Potentially a disaster. So we are now long four oh and oh three and we just decided that these names are great.

• 45:16Jordi Hays?

  I just, you know, if you look, only six, only six months ago, a new model would get announced and people are like, oh, it's so confusing, blah, blah, blah.

• 45:24John Coogan?

  Yeah.

• 45:25Jordi Hays?

  But it just, it seemed to me, you know, as an observer that you guys, like, it wasn't like, oh, this is a problem and we need to fix it. It was just more so like, let's just keep making really great models and make them easier to access in really intuitive ways.

• 45:40Speaker 04

  Yeah. I mean, in all, in all seriousness, it comes from our focus. We, we have this principle of iterative deployment that we really believe in, which is that these are new, these models are new systems, right? They're, each one, each model has capabilities that we understand somewhat. And, and also we discover new things about it. And we believe that no matter how many smart people we have inside of our walls, there are way more smart people outside our walls. And the best thing we can do in a world of AI evolving so quickly is to kind of co-evolve with society, to ship stuff early and ship often and, you know, learn together. And so one of the reasons that we have this explosion of models is we're trying to build new capabilities rapidly.

• 46:26Speaker 04

  And sometimes the easiest way to do that is to kind of build it into a new model that's really good at one specific thing or a handful of specific things, but can't do everything. And so you end up with this like profusion of models that do different things while like 4.1 is really good at coding and instruction following, but it's like not as chatty. And so if you're asking about other things, you might prefer four over some things and 4.1 for others. Seems totally natural. You'd go like, well, why don't you just build one that's, you know, good at coding when you're coding and good at chatting when you're chatting. And we will do that. That's what we're trying to get to with GPT-5, where we're trying to bring more of these things together. But if we tried to do that from the beginning, we wouldn't have been able to launch as fast.

• 47:09Speaker 04

  And so we've we've opted for like launching fast, having a little bit of, you know, confusion that comes with it. But we learn faster and then over time you sort of integrate and simplify.

• 47:19John Coogan?

  I guess like the the meta question, though, is like, is the future just, you're already using mixture of experts within the models. Is the future like a mixture of mixture of experts, models? And so I I go to one, there's one command line, text is the universal interface, not dropdown model pickers. And and and it routes me, it says, hey, this person doesn't want to chat, they want to write code. Okay, we're using 401. That seems kind of logical. And already this is kind of happening with the model picker becoming like, just the UI is getting less and less in your face. And it's a little bit easier to just have a natural uh uh in interaction. But how do you see it evolving?

• 47:55Speaker 04

  Yeah, I think over time, the the capabilities that that have existed for a little while, you sort of learn how to bring them into a general model.

• 48:03John Coogan?

  Yeah.

• 48:03Speaker 04

  And and but you're always going to have these new frontier capabilities.

• 48:07John Coogan?

  Yeah.

• 48:08Speaker 04

  That you're going to want to be able to iterate on really quickly. And you might want to do specialized things to to make the model really great at some new frontier capability. And so I think, yes, ideally, you have a, you have a sort of model, you know, a layer above the models that's doing the choosing for you.

• 48:25John Coogan?

  Yeah.

• 48:26Speaker 04

  But that is, you know, it's a hard problem, especially it goes back to the the building for simplicity versus building to enable power users.

• 48:33John Coogan?

  Sure.

• 48:34Speaker 04

  As a power user, you might be the only one that knows for a particular question you're asking. Whether you want a 80% good answer immediately, or you'll wait a minute for a 95% good answer. Or whether you want to do deep research and wait 20 minutes and get an amazing answer.

• 48:51John Coogan?

  Yeah, I mean, you could theoretically like train the user on that a little bit like like.

• 48:55Jordi Hays?

  Well, it's it's also like how you work with the comp that I or like my personal framework is like when you're working with people on your team or teammates. There are certain people you'd work with that you would have to explain effectively like the exact tool set that they should use to accomplish the task. You should get the CRM and you should go in the CRM and do this and that. And then there's people that are maybe have greater intelligence or experience or context. And you just sort of like discuss the task with them and you're not even thinking about the underlying sort of like. Toolkit to accomplish the task is just sort of this higher level.

• 49:30John Coogan?

  Yeah.

• 49:30Jordi Hays?

  You know, conversation.

• 49:31John Coogan?

  I want to talk about A B testing versus personalization. When you choose like a default model or the default prompts when you open up chat G P T, it says, create an image, write a Python script, make up a story, what's in the news. There's a couple of options there. There's a lot of personalization going on, but you could also imagine doing A B testing to understand what will drive churn down or retention up. How are you thinking about the balancing act between those two techniques of product development?

• 50:01Speaker 04

  I don't think they're really in at odds in any way. We do both. So we definitely A B test a lot of things because we're trying to learn what works and, and you know, how, how we can help people understand this new kind of strange world of A I. It's a funny, it's a funny product, right? You're, we're used to products where you, you have a U I like computers before A I needed very specific inputs. Like this button does this specific thing and that button does this other thing. And if you wanted to do a third thing and there wasn't a button for it, you probably just couldn't do that thing. Right? But then every time you hit the button, you got the same output. It was very consistent.

• 50:42John Coogan?

  Yep.

• 50:43Speaker 04

  L L M's are basically the opposite, right? You can give them input that is the, that has the full complexity and nuance of the human language. And you have no limits on what you ask. And then also what you get out is not the same from one thing to the next. It might be substantially the same, but the words are not identical. Right? And so it's just a, it's a totally different way of building product. And when someone comes to chat G P T for the first time, if they just hear from their friends, hey, this I, this A I thing is super cool. It can do all this stuff for me. And they show up at the front door of chat G P T. They're a new user. Like, what's the mental model? Because it flies in the face of almost everything that you've learned using computers over the last however long.

• 51:25Speaker 04

  So, we, we really think a lot about how we get people going. Uh, and how we teach them all of the different capabilities. Which, you know, by the way, the capabilities are changing every month or two, too. So, it's a, it's a really challenging problem. Um, but something that we care a lot about because that's, you know, if you go from uh, i- i- being a novice chat GPT user to being a power user. It can really change your life. It can save you a ton of time. It can accomplish a lot of tasks for you, and that's only increasing. So the, the upside of us being able to teach people well is also increasing.

• 52:01Jordi Hays?

  Yeah, I feel like a decade from now, people are gonna look back at this moment and realize that the people that fully understood the capability, like the full capability set of the models, just had this ridiculous sort of extreme advantage.

• 52:17John Coogan?

  It was the same thing with social media, like the people that really understood and took social media seriously early on are like famous now, like actually famous. Uh, interesting. Uh, what, what is your postmortem on the sycophancy thing? I feel like that, like that made news because it was kind of blanketly a uh, uh, like, it was kind of like everyone was experiencing, or at least all the power users were experiencing it. Um, but I could imagine a situation where some people really liked that type of interaction and it was beneficial and it actually may improve their lives. And so, uh, if you go to the YouTube algorithm right now and you only search and click on positive content that reassures you, you can have a sycophantic

• 53:00John Coogan?

  experience and that can be good for everyone involved. Uh, so how do you, uh, what is your postmortem on it and how do you think that, uh, the personalization, uh, will play out in the future?

• 53:12Speaker 04

  Yeah, it's a, this was a really important issue. I mean, we, so we, the, the story for people who don't know, we, we rolled out a new version of GPT four O, which is something we do pretty regularly. There's, we're always, you know, to your point about A B testing. We're testing new versions of GPT four O that are incremental improvements over previous versions. So we rolled out a new one and, you know, we'd A B tested in the past, so we, um, you know, the, the metrics looked good. It looked like a really solid model. Had some new stuff around personalization. And then as it got out there, we saw that a, a number of, of use cases, not like super widespread, but enough use cases where we saw the model sort of

• 53:55Speaker 04

  overly like, like just being

• 54:00Speaker 04

  some of it was like glazing, what people called

• 54:04John Coogan?

  Yeah, we call it that. I think we use that term.

• 54:08Speaker 04

  Yeah, but then, but then there were other cases that were more, uh, more serious.

• 54:13John Coogan?

  Totally.

• 54:13Speaker 04

  Where someone had real problems. And, you know, maybe they, they were having mental issues and the model was sort of validating them in ways that didn't really comport with reality. And that's like a, that's a real thing. And we took that super seriously. So we rolled the model back. And then, um, basically have spent the last few weeks diving into, uh, where this is coming from and what we need to do to, um, to, to make sure it doesn't happen again. And we've tried to be super transparent about it. So, you know, we tweeted as soon as we were rolling it back. And then immediately put out a, a postmortem, like, you know, within a day or so, and then put out a second

• 54:53Speaker 04

  after we had done a bunch of deep dives. And so we've gone through, we've like, the, the team, uh, did some great work. We've got evals now that measure this. Um, we understand a bunch of the root causes from where this came from, you know, as always with these things, they're not. It's never just one thing. It's like a little bit of this combined with a little bit of that. And then this unexpected thing happened and together they created something that that, you know, wasn't up to the standards that we set for ourselves. So.

• 55:23John Coogan?

  Uh, I, yeah, sorry. Uh, I, I, I just have a interesting uh realization with the product. So, uh, we've been hearing this, this like this request for feature on social media for a while of like, I wish I could just reset my algorithm, start fresh, because I feel like it's funneled me in some sort of echo chamber and I don't like that echo chamber and I want to start fresh. Uh, and I don't know if social media feeds actually have that feature, it might just be buried, but I've noticed that with the chat GPT memories, uh, early on, I was really aggressive about prompt engineering and, and basically like prompt hacking. And so to get the best responses, if I was trying to learn about trains, I would say like, I am a world

• 56:03John Coogan?

  expert in trains. I own multiple train lines and railroads. Give me a breakdown of the market map of trains. Uh, basically lying to it. Uh, and then it remembered that. And so now it's like, well, as a train conductor, you'll probably want to eat this for dinner. And I'm like, oh, okay. I, I have to back up. I wasn't being completely honest with you, chat GPT, but the good news is that the saved memories are there and I can delete them all. And so I can kind of reset my experience. Was, but was that a, was that a, was that a learning from the demand that people are seeing in the, and the, uh, in the, not the stated preference on social media for resetting? Or do you think that that's important? Or what other lessons are you learning from, from how social media has played out? Because you obviously have a lot of experience there

• 56:48John Coogan?

  and a lot of people at the team have experience in social media.

• 56:52Speaker 04

  Yeah, it's, personalization is a, is a really powerful thing that I think we're just at the very beginning of. Like you want, I mean, in the same way that we, we know each other a little bit.

• 57:02John Coogan?

  Yeah.

• 57:02Speaker 04

  You have, you have best friends that you know super well, who you're really comfortable with. And then you have strangers and you're, you know, the, your level of comfort in interacting with them is very different.

• 57:12John Coogan?

  Yeah.

• 57:13Speaker 04

  You want your, if you have a super assistant in your life in chat GPT, you want it to know you really well. You want it to know your habits and how you like to do certain things. And, you know, even down to like, do you want, uh, you know, more flowery supportive language? Or do you want crisp analytical terse language, things like that?

• 57:31John Coogan?

  Um.

• 57:33Speaker 04

  I've I was messing around last night with chat GPT trying to do um trying to give my son some math homework. And uh he I just said, hey, can you design ten math problems for Matthew? And the model knew Matthew was my son, knew he was ten years old. And developed a bunch of like grade level appropriate escalating, you know, and it it was like that was super cool. And it even it was like, oh, he likes Legos. And Kevin, you're a runner. And so a bunch of these program or a bunch of the questions were like Lego themed and you're going on a run with your dad and this and so. Like, okay, this is really cool.

• 58:11Jordi Hays?

  It's truly making me emotional. It's it's like the coolest thing. As like a parent to be able to as a parent to be able to give your to give your children like a truly bespoke magical experience is like almost priceless.

• 58:25Speaker 04

  Yeah.

• 58:25Jordi Hays?

  Even in the context of homework, like something like homework, right? And so to that and and even. Knowing that like kids today, like both of our all of our, you know, we've we've got five kids be between the two of us. And um knowing that they'll grow up only knowing this sort of world in which this kind of technology exists where. A parent can just like generate magic for them in like seconds is.

• 58:51Speaker 04

  Yeah.

• 58:52Jordi Hays?

  Just unbelievable.

• 58:53Speaker 04

  I mean, and and think of the world, this thing designed ten math problems. So I used O three, it designed ten math problems for my ten year old. That were escalating in difficulty across a range of different things. It could easily, if he was entering in the answers, could easily. Realize over time where, you know, what what concepts he understood and what concepts he didn't. And just yeah become a personalized tutor for every single kid. And remember, I mean, this is free, right? We don't charge for chat GPT. You can you can get a subscription, but you can also use it for free. Basically. You know, you don't you don't even need an account.

• 59:31Speaker 04

  You need an Android phone anywhere in the world for free and you can, you know, get this thing that's starting to be more and more of a personalized tutor. I just like, I think it's incredibly powerful.

• 59:41Jordi Hays?

  Totally.

• 59:42Speaker 04

  Every, every study I've ever seen says that when you pair, you know, traditional learning with personalized tutoring, the, it's like a standard deviations of improvement. So I, I, I'm with you. I think the future is going to be very different and there's a lot of reasons to be optimistic about what the next generation is going to be able to do with AI. I need to be more honest with.

• 1:00:04Jordi Hays?

  Love it. Uh, how do you, how do you explain the rate of AI progress to, let's say, like a family member of yours that's not in tech?

• 1:00:16Speaker 04

  That's a good question. Um, I think the only way, honestly, because you can talk about it, but it's like, you can't, you can't get fit by reading about going to the gym. Like, you can't refuse it. Uh, so I've been trying to get any of my family members who aren't using it, just, just try it. Start asking, you know, for everything that you're doing, ask, why couldn't I use chat GPT for this? And you start to realize that there are more things that you can say yes to there and you can start using chat GPT. And then, you know, the more you use it, the more you realize the value and, and off you go. It's really hard to explain in the abstract, right? People go, ah, agents, I'm hearing so much about agents. What is it?

• 1:00:58Speaker 04

  And then you use deep research or you use codex and you're like, oh, wow, that just saved me a ton of time or did something I couldn't have even done. Yeah.

• 1:01:06Jordi Hays?

  Yeah.

• 1:01:07Speaker 04

  You know, that's the promise of the future. I think we're all going to be much more productive. We get to not focus as much on the doing of particular things. We get to focus on the outcomes and, you know, what we do once the, once some of the labor itself is, is taken care of. And that's, that's a super exciting future for me.

• 1:01:26Jordi Hays?

  Couple more. Uh, help, talk to us about Health Bench.

• 1:01:30Speaker 04

  Yeah, so a huge amount, I mean, people are increasingly using ChatGPT for health. I've done it any number of times. My son had a had a small surgery that was supposed to be, you know, ninety nine point nine percent innocuous, zero point one percent bad. And we got the results back from the doctor before I could talk to the doctor, and they look scary. Uh, and, uh, it's full of a bunch of medical jargon that even as a, you know, former scientist, I didn't understand. And I put it in ChatGPT and said, this looks weird. What is this? Is this, should I be worried? And it said, oh, no, no, no, don't, don't worry, it's fine. And I was like, okay, explain it like I'm five.

• 1:02:12Speaker 04

  And it did. And, you know, I couldn't get a hold of the doctor for another seventy two hours. That would have been a bad seventy two hours for me if I was sitting there like stressed out about my son and ChatGPT gave me the peace of mind. So we always try and say with anybody, anybody asks about anything medical, you know, this isn't a substitute for actually seeing a doctor. ChatGPT is not a doctor, but here it is. Here's, here's, here's the understanding of what's going on there. And it's really valuable, you know, for all of us, you know, for me, it saved me seventy two hours of of anxiousness. For somebody else who doesn't have access to a doctor, it might be a totally different thing. So, um, anyways, we care a lot about this.

• 1:02:53Speaker 04

  We wanna make, if people are using ChatGPT for this, we wanna make sure that the answers that it gives are really good answers. And so we're putting a lot of effort into improving, uh, ChatGPT's ability to act as or to to answer medical questions. And the only way that you really know if you're doing it right is if you have a benchmark. Right? You've got to have something to test against to show that you're getting better. And we figured if we'd done a lot of work to put this benchmark together, then, you know, others could benefit from it outside of us. And so we, we, we open sourced it.

• 1:03:26Jordi Hays?

  Last question, can you give us the 30 seconds on why you're excited to join Cisco's Board of Directors?

• 1:03:33Speaker 04

  Oh yeah, totally. So I mean Cisco is an incredible company, like iconic Silicon Valley software and hardware company. We all use it every day in 100 different ways. And they're at this really interesting point because I think AI can transform their business. And they can either be transformed, like it can either happen to them, or they can get ahead of it and build some really amazing software and tools and become, you know, a sort of even even more powerful leader for the next in the next generation. And I think that's not unique to Cisco. I think a lot of companies are at that turning point,

• 1:04:14Speaker 04

  but Cisco really realizes it. By the way, they're actually a launch partner today for us with Codex. So they're one of our early partners. They're looking a lot at how AI can can help them get more done, you know, faster, more cheaply, etc. So it's just AI is going to really impact their business over the next, you know, three to five years. And I'm excited to be a part of that and hopefully help them navigate this transition gracefully.

• 1:04:40Jordi Hays?

  Amazing.

• 1:04:40John Coogan?

  Well, I have like five more hours of questions, but we will let you go.

• 1:04:44Jordi Hays?

  Let you go. We'll come up to SF soon.

• 1:04:47John Coogan?

  Most questions can be answered by ChatGPT, but there's certain questions you gotta go to the source.

• 1:04:52Jordi Hays?

  Organic, farm to table.

• 1:04:54John Coogan?

  Yeah.

• 1:04:54Speaker 04

  Yeah. Well, thanks so much for having me on. It was good to see you guys.

• 1:04:57Jordi Hays?

  Yeah, great to see you, Kevin.

• 1:04:59Speaker 04

  Supersonic jets. I wish I could stay for that one.

• 1:05:02John Coogan?

  Yeah, we'll talk to you soon.

• 1:05:03Jordi Hays?

  Great to see you. Cheers.

• 1:05:04John Coogan?

  See you. Bye.

• 1:05:07Jordi Hays?

  Kevin is the man.

• 1:05:09John Coogan?

  But you know what else is the man? Linear is the man. Linear is a purpose-built tool for planning and building products. Meet the system for modern software development, streamline issues, projects and product roadmaps. Linear. And also numeral is the man, sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. Put your sales tax on autopilot.

• 1:05:31Jordi Hays?

  There was, numeral was getting picked up by an annual account yesterday.

• 1:05:36John Coogan?

  There may be out there in the market.

• 1:05:38Jordi Hays?

  But Sam said, too low.

• 1:05:40John Coogan?

  Too low?

• 1:05:41Jordi Hays?

  You're not bullish enough on sales tax.

• 1:05:43John Coogan?

  Did you tell him it's on record or not? Well, it's live.

• 1:05:46Jordi Hays?

  He posted. No, he posted this. He said, too low.

• 1:05:49John Coogan?

  Okay. So we're not, we're not scooping anyone here.

• 1:05:51Jordi Hays?

  We're not scooping anybody.

• 1:05:52John Coogan?

  Uh, we have Blake from Boom Supersonic in the studio. Welcome to the show, Blake. It's been too long.

• 1:06:00Jordi Hays?

  We've been wanting to do this for a while.

• 1:06:02John Coogan?

  Yeah. Ideally from a supersonic plane. We're, we're aviation aficionados. We like traveling. But the hard thing with the show is that it takes us six hours to get across the country. We podcast for three hours a day. The math just doesn't make sense. So we're happy that you're working on a solution for us.

• 1:06:22Blake Scholl?

  Indeed. Well, thank you for, thank you for having me. Yeah. It will be fun to do the first ever supersonic webcast. Maybe we should just agree to do that.

• 1:06:29John Coogan?

  I'm 100% on board.

• 1:06:30Jordi Hays?

  Let's do it.

• 1:06:31John Coogan?

  Count me in. Uh, can you give us just the general update? Obviously explain like what you're building, but what's, uh, what's the latest news in the world of Boom Supersonic?

• 1:06:41Blake Scholl?

  Yeah. Well, if anybody's not been following this story, the goal is to really pick up where Concorde left off, foment a supersonic renaissance, ultimately deliver faster travel for our, everybody from the president on down to every family. And so it's a, it's a decades long, uh, mission, you know, ultimately to replace subsonic with supersonic for every passenger on every route. Uh, but, uh, but building, building companies like Boom is, it's like building an iceberg from the bottom up. And I feel like this year is the year that the iceberg is like really emerged from the, the surface of the water. Uh, in January, we broke the sound barrier, uh, with our test airplane, the XB1.

• 1:07:21John Coogan?

  Breaking the sound barrier. We love to see it.

• 1:07:23Blake Scholl?

  Right? And then in February, we did it again, and arguably we broke it permanently.

• 1:07:29John Coogan?

  Fantastic. That's great news.

• 1:07:33John Coogan?

  Oh, you guys picked me up.

• 1:07:34Blake Scholl?

  You said you broke it permanently? Is that what you said? Yes, because we proved we could do it reliably with no audible sonic boom.

• 1:07:39John Coogan?

  Oh, there you go. Okay.

• 1:07:41Jordi Hays?

  They said it couldn't be done. They said it couldn't be done.

• 1:07:45Blake Scholl?

  Yeah, people, people felt... By the way, it turns out that like, people have been telling me this for decades.

• 1:07:49John Coogan?

  Yeah.

• 1:07:50Blake Scholl?

  And mostly the claims are it's like really hard. You have to like change the aerodynamics of the airplane and da, da, da, da. It, no, it's a software fix.

• 1:07:58John Coogan?

  Really? How? Explain that.

• 1:08:00Jordi Hays?

  Everything is computer, John. That's it.

• 1:08:04Blake Scholl?

  If you fly the airplane at the right altitude, at the right speed for the current atmosphere, the boom makes a U-turn in the sky and never touches the ground.

• 1:08:14John Coogan?

  No way.

• 1:08:15Blake Scholl?

  That's so amazing.

• 1:08:16John Coogan?

  But you need to be able to calculate that.

• 1:08:17Blake Scholl?

  That's right.

• 1:08:17Jordi Hays?

  In real time.

• 1:08:18Blake Scholl?

  You need like decently good weather data.

• 1:08:20John Coogan?

  Yes.

• 1:08:21Blake Scholl?

  And ironically, algorithms that were developed for computer gaming.

• 1:08:24John Coogan?

  Wow. Oh, that makes sense. Yeah. So it's a physics simulation.

• 1:08:28Blake Scholl?

  It's, it's rate, it's ray tracing.

• 1:08:30John Coogan?

  You're running Unreal Engine.

• 1:08:33John Coogan?

  I'm sure you have a proprietary system. Um, what, uh, does that need to go through FAA approval to use that? Or is that separate from the rest of the aircraft authentic? Wait, what's it called? Qualification or like?

• 1:08:46Blake Scholl?

  Yeah. So you need to certify an airplane.

• 1:08:48John Coogan?

  Certified.

• 1:08:49Blake Scholl?

  To carry passengers.

• 1:08:50John Coogan?

  Yeah.

• 1:08:50Blake Scholl?

  Basically, you've got to prove you meet all the safety standards.

• 1:08:53John Coogan?

  Yeah, yeah.

• 1:08:53Blake Scholl?

  Uh, and this is, this is separate because we, we have, um, one of the dumbest regulations ever created. In 1973, we banned supersonic flight in the US. Like literally, there's a regulation that says thou shalt not exceed Mach 1.

• 1:09:07John Coogan?

  Yeah. And it's speed limit, not sound limit, right?

• 1:09:10Blake Scholl?

  Right. It's really stupid. It's really stupid. And, um, uh, and so no, you know, we could like make it play Mozart when it flies over.

• 1:09:18John Coogan?

  Yeah.

• 1:09:18Blake Scholl?

  And you're still not allowed to do it. And that's why, that's why those coast to coast flights are still stuck at six hours. That's why no one's done this already. And so we're working really hard to get that changed.

• 1:09:30John Coogan?

  This feels like something that like the EO would just drop and it would be like, oh my God, he just tweeted it out or put it on Truth Social and it happened like love him or hate him, but like the guy definitely like likes to rip a crazy idea on short notice for everyone. Are you optimistic that there will be change? Does this need to go through the House and Senate? Or is this something that could just happen in EO?

• 1:09:51Blake Scholl?

  So we've had good conversations at FAA. This week, a bipartisan bill dropped in the House and the Senate that does it. And Elon endorsed it. Jared Isaacman endorsed it. We've got bipartisan support.

• 1:10:07John Coogan?

  Great.

• 1:10:08Blake Scholl?

  Some people think this could get through the Senate unanimously. I think that's probably a little ambitious, but even the idea that that's possible, I think is pretty cool.

• 1:10:17John Coogan?

  Some lawmakers like traveling slower because it inspires them to grind harder. More time on the plane, more time to prep their filibusters. They don't want to go fast.

• 1:10:28Jordi Hays?

  I guess the bear case for supersonic flight is that I get so much email done.

• 1:10:34John Coogan?

  I do get a lot of email done on a six hour flight.

• 1:10:36Jordi Hays?

  If I got there faster, I'd do less email.

• 1:10:38John Coogan?

  I was texting Jordy when we were flying to DC. I was like, this is incredible. I've never been more productive.

• 1:10:43Blake Scholl?

  But yeah. Faster flights were just, forced us all to be more efficient with our time, right?

• 1:10:47Jordi Hays?

  That's right.

• 1:10:48John Coogan?

  Yeah. But, but I mean, break down the actual scope of the problem here. How much is engineering? How much is regulatory? How are you staffing against that? Do you have a massive government affairs team and lobbyists? Or I imagine there's still a ton of engineers on the, you're not just taking some like white labeled plane and then doing a bunch of lobbying and that's the end game, right?

• 1:11:13Blake Scholl?

  Yeah. I mean, the most surprising thing is that we don't have to invent anything fundamentally new. This is not a science project. It's not a technology project. It's really just an engineering project. In fact, we're taking 20 year old 787 technology, basically reshaping the airplane, making it long and skinny, putting twice as many engines. And so there's a lot of engineering and testing that goes into that, but there's no science and there's no new technology and there's only one regulation that needs to change. So we have small numbers of great engineers. I'm a big believer in like tiny teams.

• 1:11:47John Coogan?

  Yeah.

• 1:11:48Blake Scholl?

  That are very focused like we did, we, we built XB1, our test supersonic jet with just 50 people.

• 1:11:52John Coogan?

  50 people, wow. And the overall company is not that much bigger, right?

• 1:11:56Blake Scholl?

  Right, like 115 now and like we're growing very slowly. Like if, if a team does not complain about being understaffed, I know they're overstaffed.

• 1:12:03John Coogan?

  Yeah. Yeah, I mean, we, we were joking about like white labeling a plane. Obviously you are standing on the shoulders of giants using some off the shelf technology, using some technology licensed from other firms. Can you take me through the journey of engine development, the decisions that you made? Have you changed course on any of those decisions? What would you recommend to the next generation of aircraft builders?

• 1:12:27Blake Scholl?

  Yeah, well, I'll go broader than that. Like if you're, if you're thinking about doing hardware at all, my, my, my advice, frankly, any startup, any startup, all startups are hard. I don't think any are easy. I think the difficulty level is set by founders because we tend to run at our own red line. And if somehow it gets easier, well, does it make the job harder again? Like, like, like Brian, you know, Brian just decided to like, you know, double, double what Airbnb is. You know, because I guess the old thing got too easy.

• 1:12:52John Coogan?

  Yeah.

• 1:12:53Blake Scholl?

  And, and so, and so what I, what I've found along the way is I'm far more successful if I pick a mission that deeply inspires me and makes it worth being at my red line. So I never get up in the morning, I think, is it worth it? Okay, great. So now, now probably building supersonic jets is like, you know, the ultimate hard mode. And but what I have found along the way is people around the company from the legacy industry will have all these stories about all these things that are impossible to do. You know, you can't build your own jet engine, like only a big company could do that. There's tons of proprietary technology, blah, blah, blah, blah, blah, blah. It's all bullshit. It's all bullshit. Like, I'll tell you one story, like we were trying to get high temperature super alloys for our engine.

• 1:13:36Blake Scholl?

  And, you know, we thought we needed to go license it from one of the big three. We get in this licensing conversation and they're like, oh, we can't give you this thing because there's a trade secret. I'm like, don't tell me the trade secret. I'll give you the part, just make me the part and hand me the parts back and don't tell me the secret. And they said, no, no, no, no, you'll find the secret. So we can't do that. And for, for like two weeks, we're like, oh shit, like, how do we ever get this engine built? But eventually we just went into the supply chain and we found the trade secret.

• 1:14:05Jordi Hays?

  We found it.

• 1:14:06Blake Scholl?

  And I'll tell you the trade secret.

• 1:14:07John Coogan?

  Okay.

• 1:14:08Blake Scholl?

  There is no trade secret.

• 1:14:10John Coogan?

  Oh, interesting.

• 1:14:11Blake Scholl?

  The thing that was theoretically proprietary is an open source material developed by NASA where all the specs are public.

• 1:14:17John Coogan?

  Well, the trade secret is that they're using open source.

• 1:14:20Jordi Hays?

  That was the trade secret.

• 1:14:21John Coogan?

  That's the trade secret.

• 1:14:22Blake Scholl?

  The trade secret was there is no trade secret.

• 1:14:24John Coogan?

  Yes.

• 1:14:25Blake Scholl?

  And because there's all this fake proprietary.

• 1:14:27John Coogan?

  Yeah.

• 1:14:27Blake Scholl?

  And everybody's telling you why you have to work with them, why you have to use their stuff, why you couldn't create it yourself. And, you know, and it just nine times out of 10, it's just not true. And so we, we, we found, you know, we've probably heard Elon talk about the idiot index, which is like how much a finished part costs is divided by the raw materials cost. We found a thing that's more important. It's called the slacker index. Slacker index is how long it takes to get something divided by how long it takes to actually make it. And, and so we've got these turbine blades, we're 3D printing turbine blades for our engine. And we go quoted out of the traditional aerospace supply chain. It's going to cost a million dollars for one engine's worth of parts. And it takes six months. I was like, well, how long does it take to print a blade? Well, it's like actually about 24 hours.

• 1:15:12Blake Scholl?

  So why does it take six months to get one? Well, they were like printing them like one at a time and then you gotta wait for your turn on the machine, all this not. Okay, what's the machine cost? $2 million. How long does it take to get a machine? Oh, actually they've got them in inventory. You get them in a couple of weeks.

• 1:15:28Blake Scholl?

  So for the price of two engines worth of blades, we've got the 3D printers and the blades. And we could, and, and it would beat the lead time of just outsourcing it. Wow. And that, and that pattern exists everywhere in this business.

• 1:15:40John Coogan?

  Uh, can you talk about the current fundraising market for hard tech companies? There's a bunch of companies raising a ton of money. There's other, it's feast and famine out there.

• 1:15:49Blake Scholl?

  Yeah.

• 1:15:49John Coogan?

  The F-35 costs a trillion dollars. Somehow I feel like trillion dollar raise is. On the table soon, based on the current market.

• 1:15:59Jordi Hays?

  Yeah, we'd like, we'd personally like to see you do one T on five T.

• 1:16:03John Coogan?

  I'd love to see that. I'd love to see that.

• 1:16:04Blake Scholl?

  One T on five T.

• 1:16:05Jordi Hays?

  That should be the new, the new goal.

• 1:16:06John Coogan?

  But, but I mean, there is, there is a world where a plane company comes out and raises just massive money and just dumps it all into subcontractors and takes a very different approach. Why wouldn't that work? And, and, and what advice would you give to the next generation of hard tech founders in aviation or otherwise?

• 1:16:25Blake Scholl?

  Yeah. So the, the key difference, so there's this mythology that hardware companies are more capital intensive. And if you go look at like, how much money did Uber raise? How much did Lyft raise? How much did Stripe raise? How much did Airbnb raise? Like these like theoretically capital light businesses consumed billions in venture capital.

• 1:16:42John Coogan?

  Yep.

• 1:16:42Blake Scholl?

  Before IPO. So wait, wait, what? And if you go look at like SpaceX or Andro, like the, you know, the theoretically hard tech companies, like oftentimes they raise less money. So you have WTF. And I, I think that the difference is if you are building, say Uber or Airbnb, you have an idea that sounds really counterintuitive, like invite strangers from the internet to sleep on your couch. Right? It doesn't sound like a good idea, but it's actually really cheap to test.

• 1:17:10John Coogan?

  Yeah.

• 1:17:10Blake Scholl?

  And, um, and, and so what happens in most internet businesses is very small amounts of capital allow you to test whether you have product market fit. And, and you, and you test it by means of building and shipping the product.

• 1:17:24Blake Scholl?

  We can't build a supersonic airliner as a means to testing whether anybody wants a supersonic airliner. Right? Uh, so, so what you have to do in a hardware business is, is find a capital light way to demonstrate that you're at product market fit. And the answer can't be shipping the product. So, so, so, you know, our strategy was pre-orders.

• 1:17:44John Coogan?

  Yep.

• 1:17:45Blake Scholl?

  So we, you know, we got United American to make like deposits, like non-refundable deposits on airplanes against a specific design. So it's not just like, okay, here's, you know, here's a dollar that says, you know, supersonic is cool. It's like, nope. Here's a significant multimillion dollar deposit, a whole further deposit schedule against a very specific airplane with very specific specs. And, and then so we can go to investors and say, um, if we build this, there's obviously a gigantic market. And this is going to be like a thousand extra money.

• 1:18:17Jordi Hays?

  You guys are already getting paid for it.

• 1:18:19Blake Scholl?

  That's right. Yeah. So all you, all you have to, all you have to believe is we'll actually ship the product.

• 1:18:25Jordi Hays?

  What was the, I want to ask you, what was the worst week building Boom? And what was the best week? I'm guessing the best week was this year.

• 1:18:34Blake Scholl?

  Yeah, I think the, I'll give you the best moment. The best moment was the day that we broke the sound barrier for the first time. But it wasn't actually the moment of breaking the sound barrier. Because we'd done so much testing at that point. I knew if we flew that day, we were going to break the sound barrier. What I didn't know is whether we'd have the weather to do it. And like I'd gotten up that morning and it was extra cloudy and like we can't, you know, we can't do it on a cloudy day. And, and so the team was kind of debriefing, checking the weather, da, da, da, da. And, and one of our safety culture rules is like no top management are in the safety briefs. It's the team making an independent go no-go decision with nobody seeing you're putting

• 1:19:18Blake Scholl?

  their thumb in the scale and telling them they need to go and pressurizing it. But so the team, so I'm like in the hangar waiting and the team, the team walks out and I could just tell from the energy, like it was go time. Like nobody had to say anything. It's just like I see him walking over the airplane. They're like hooking it up, hooking it up to the, hooking the tow bars up like we're going to go. And at that moment, I really teared up because I knew, I knew it was going to happen. And then, then like when it actually happened and everybody was jumping up and down and screaming, I was sort of like, yeah, of course. So that was, I think that was the best moment. The worst moment, we have near death experiences like basically every year. And at this point, I just expected, I'm like, okay.

• 1:20:01Blake Scholl?

  You know, every year we're going to get the equivalent, the startup equivalent of a cancer diagnosis. And, you know, if I'm lucky, it's stage two, not stage four. But, you know, we've had like some, like we like survive stage four startup cancer. We had an extremely difficult fundraise. I think we got down to a week of cash.

• 1:20:18Jordi Hays?

  Wow.

• 1:20:19Blake Scholl?

  Like the lawyers had a plan to shut the company down. I remember calling one of our investors when we were sort of three weeks away. And he's like, usually when people tell me you're three weeks away, you're telling me you're going to shut the company down. And I was like, of course, we're not shutting the company down. We're talking about how we're get through this little nut hole here. And

• 1:20:37John Coogan?

  There are people who are like, who have like 12 months of cash and they're like, I'm out of this. I've been doing this for a year. I'm going to go be a PM in big tech.

• 1:20:45Blake Scholl?

  I've done the PM at Big Tech. I don't ever want to do that again.

• 1:20:47Jordi Hays?

  No, I think.

• 1:20:48John Coogan?

  I'll never go back. You could never make me go back. I can't go back.

• 1:20:52Jordi Hays?

  The thing, the thing with your, with, for you and your team, and I'm sure the entire cap table, it's like, if we don't do this, we have to be, if we're not successful here, we're going to be reminded multiple times a year.

• 1:21:06John Coogan?

  Every time they take out our shoes.

• 1:21:08Jordi Hays?

  Yeah, like, yeah, every time you get on a plane, every time, you know, it like is, is one of the very few companies on earth that can bend reality into, into, you know, bend time, right? And I, and I just think, uh, I feel like humanity is fortunate that you are running this company because so many people would have gotten the stage four diagnosis and just said, all right, like we, we took a good shot. We did our best and that's it.

• 1:21:36John Coogan?

  Yeah.

• 1:21:37Blake Scholl?

  I mean, it's my biggest wish for other founders is pick the startup where if you got the stage four diagnosis, you say, screw it, we're beating this. And that, and that's, that, you know, for me, that's supersonic flight, but every, for every founder, it's something different. But it's like, there's this founder market thing and if, or founder mission thing, and if you get that really in alignment, then, uh, like, like then, then you can run through brick walls.

• 1:22:02John Coogan?

  Yeah.

• 1:22:04John Coogan?

  In many ways.

• 1:22:04Jordi Hays?

  I would run through brick walls for a note taking app.

• 1:22:10John Coogan?

  I would too. The, in, in many ways, you could think of boom as being a very logical, obvious next step in commercial aviation, long haul travel, that type of thing.

• 1:22:25Blake Scholl?

  Yeah.

• 1:22:26John Coogan?

  What about the flying car market? I've often said, we have flying cars, they're just helicopters, but the problem with helicopters is that they're not evenly distributed. Not everyone has a helicopter, but if everyone had a helicopter on their house, they could fly to work and yeah, you need air traffic control and stuff. We all need to be good pilots, but. If a company could drop the cost of helicopter by 100x and make it 100x safer, yeah, we'd probably basically say, yeah, we solved flying cars. And yet that hasn't happened. So what is your take on the boom of helicopters, whether or the boom of flying cars or anything else in aviation?

• 1:23:06Blake Scholl?

  There are great people working on that, actually. And it's actually way harder than supersonic flight, way harder.

• 1:23:11John Coogan?

  Why?

• 1:23:13Blake Scholl?

  Because, oh, silly and reasons. Like, one is you need a whole new set of regulations, right? Because the electric vertical takeoff and landing, so Joby and Archer, who are really the two leaders in this,

• 1:23:26Blake Scholl?

  it's not technically or regulatorily a helicopter. So there's a whole new set of rules. Then you need a whole new set of infrastructure.

• 1:23:33John Coogan?

  But is that a mistake? What I'm saying is like, is like, what if, what if I started a flying car company that was perfectly regulated as a helicopter? Just like, there are these companies now that are regulated as sea gliders, Billy Fowler.

• 1:23:47Blake Scholl?

  Oh, yeah. Billy and Regent are doing great work.

• 1:23:49John Coogan?

  Yeah, it's like legally a boat, right? Yeah, I'm sure you love it, right? It's like legally a boat, but it's like a plane, but he has, but he's designated in one way. So it's a lot easier. And I feel like there's almost like this regulatory arbitrage, regulatory hack that the hard tech founders might need to think through.

• 1:24:04Blake Scholl?

  So it's, this is, if the regulations were done well, your idea would be exactly on point. The problem is we have, we have too many regulations that are prescriptive about exactly how something has to be done.

• 1:24:15John Coogan?

  Sure.

• 1:24:16Blake Scholl?

  Rather than setting a safety bar or a noise bar, right? And so, and so like, if you look at the regulations for helicopters, they tell you how you must build your helicopter.

• 1:24:26John Coogan?

  Okay.

• 1:24:26Blake Scholl?

  So if you want to build an electric helicopter with distributed rotors, well, it doesn't have the parts that the regulations tell you how to design.

• 1:24:37Blake Scholl?

  You know, or like, how do you, you know, you're allowed to have like a wing on the thing, too. So that like, the better helicopter is that doesn't fit the regulations for helicopters.

• 1:24:46John Coogan?

  Yep, yep. So, yeah, it'd almost be better to just...

• 1:24:49Blake Scholl?

  You'd bug in the regulations.

• 1:24:50John Coogan?

  Yeah, almost just to regulate against like, like, if, if flying things are crashing at a rate above more than like one in a billion, it's no go. Doesn't matter how you build it. Instead of saying, you have to have this, this screw in this place.

• 1:25:04Blake Scholl?

  That's, that's, that's right. And for actually for large transport aircraft, it's actually a bit better. Yeah. One in a billion is actually the regulatory safety bar. And there are, and yet there are also still some things that are like prescribed, but there's a, there's a mechanism to get around the prescription. Uh, called equivalent level of safety. So we can go to FAA and say, um, uh, and say like, you know, you, you say that our throttle has to be built in such and such and such a way. Uh, but the real thing is a reliable throttle. Let me show you my reliable throttle that's done differently. And you can get an equivalent level of safety fine and you can go forwards. Uh, but the, if you look at like going from a helicopter, an electric vertical takeoff and landing, you know, a flying car. Uh, like, like the whole thing is different.

• 1:25:49Jordi Hays?

  What's your, what's your timeline to EV tolls being in American skies?

• 1:25:57John Coogan?

  Who wins? Who goes first? Uh, will I be on a boom supersonic or a, or a EV tall?

• 1:26:02Jordi Hays?

  Yeah. I mean, just a, just kind of a wild guess. Is it like before 2030 seems unlikely to me. Is it?

• 1:26:11Jordi Hays?

  Is it 2040? Is it?

• 1:26:13Blake Scholl?

  I, I, I, I don't, I feel uncomfortable speaking for other people's timelines.

• 1:26:17John Coogan?

  Yeah.

• 1:26:17Blake Scholl?

  I think, I think the technology is going to be ready, uh, but before the infrastructure and the regulatory environment are, are laid flat.

• 1:26:25Jordi Hays?

  Yeah.

• 1:26:25Blake Scholl?

  Um, and, uh, the, it, the, the stated timelines for EV toll are like super near term.

• 1:26:31John Coogan?

  Yeah.

• 1:26:32Blake Scholl?

  And, but I, I suspect it's optimistic. I don't know. And, uh, I don't know. Maybe we've been, made the mistake of being more realistic and, and now it just sounds worse, you know? So our, our timeline is 2029 for being ready for the first passenger.

• 1:26:44John Coogan?

  I mean, there's also like incredible things happening in EV toll that are unmanned. You look at what zip line's doing. We talked to the founder of zip line and we were blown away by the progress there. And that was one of the things where they had to go to another country to get favorable regulatory treatment and kind of figure things out. Um, but then have really been able to accelerate.

• 1:27:02Blake Scholl?

  Yeah. I mean, Keller's crushing it. Like, like I love zip line. Uh, great, amazing founder, amazing company, great success story for how you do these things. The, the, they're, they're brilliant. Keller is brilliant at like finding the first market.

• 1:27:14John Coogan?

  Yep.

• 1:27:15Blake Scholl?

  Uh, that was like the, the soft target.

• 1:27:17John Coogan?

  Yep.

• 1:27:17Blake Scholl?

  Um, the, the, the small and uncrude are radically easier than large and crude. And the, um, and the, the re, the, the reason for both is safety. If you go big. Even if it's uncrewed, you have a problem because if the thing crashes, it can hurt somebody on the ground.

• 1:27:36John Coogan?

  Yep.

• 1:27:36Blake Scholl?

  Right? And so there's a threshold, you know, somewhere around, I think 55 pounds. Like above which like it's radically harder.

• 1:27:44John Coogan?

  Yep.

• 1:27:44Blake Scholl?

  And then if you put a human on board, like obviously, you know, you don't want to hurt anybody. And so, and so in building XB1, like the, the, the most surprising things were about, um, this was the second order effect of our, our, our choice. Uh, to put a human on board from day one and, and not to have an ejection seat. Like we, like, we basically put everything on hard mode. Uh, but we learned a lot more from that.

• 1:28:08John Coogan?

  Yeah. Is there, is there an easy mode version of the boom story where you go to some country with lax regulations? You say, we're going uncrewed, we're going smaller. Maybe it's like a ISR reconnaissance application. You're only flying over the water, counting on a fish or whales or something. And, and it's just much easier to actually get flying on a routine start the flywheel like Zipline did.

• 1:28:33Blake Scholl?

  I mean, you could go, you know, like there are people doing kind of what you're describing that I think are smart, like Hermes. Hermes is smart.

• 1:28:39John Coogan?

  Yeah, totally.

• 1:28:39Blake Scholl?

  And, you know, but what is, what, what is Hermes doing? They're, they're basically building a hypersonic bomber.

• 1:28:45John Coogan?

  Yeah.

• 1:28:45Blake Scholl?

  Uh, and, uh, you know, and it's kind of okay if the trips were one way.

• 1:28:49John Coogan?

  Sure.

• 1:28:50Blake Scholl?

  Um, you know, and, and yeah, and this, I think they'll have a great business and they're great people working on that. And I, you know, I'm, I'm cheering for them. They'll probably get to Mach 5 long before I get to Mach 5.

• 1:28:59John Coogan?

  Yeah.

• 1:28:59Blake Scholl?

  Um, but the, uh, but doing that and then, and then later putting a human on board is extremely difficult. Like if you look at the history of development of aircraft platforms, you find that defense technology makes it into commercial technology. But there are basically zero cases of a defense product becoming a commercial product. But there, but the reverse is not true. There are many cases of commercial products becoming defense products. So the Boeing 707 became the KC-135, the 767, uh, became the KC-46. Uh, the, the, uh, the 737 is turned into a whole bunch of command and control airplanes and anti-submarine airplanes.

• 1:29:39Blake Scholl?

  Uh, so, uh, the, I, and I think the reason is if when you're commercial, you have to worry about safety and you have to worry about noise. And neither of those things is retrofittable. They're actually foundational to product architecture. And so, technology can go in either direction, but products go in one direction because safety and noise are fundamental to product architecture.

• 1:30:04John Coogan?

  You mentioned AJ at Hermias. When are we going to see the foot race? I want the two founders of the supersonic companies to race each other to see who's faster in the real world on the ground, and then we'll race the planes in the sky.

• 1:30:15Blake Scholl?

  I think AJ, AJ and I have been telling each other the other one's going to win the race. So, I don't know. I think it'd be like the most, at least for me, it would be the most pathetic race ever. I am like not a runner at all.

• 1:30:27Jordi Hays?

  Well, we'll do it as a pay-per-view. We'll raise some non-dilutive capital. You guys can maybe split it based on.

• 1:30:33John Coogan?

  Let's actually make it a little bit less about the running. Let's just do the Murph. Yeah. We'll just do the Andorl Murph together.

• 1:30:40Jordi Hays?

  Well, we're going to hold you two being the first people to podcast supersonic.

• 1:30:45John Coogan?

  Yep.

• 1:30:46Jordi Hays?

  And I would love to have you back on the show many times between now and then because this conversation has been extremely insightful and we are just grateful for the work that you and the team do.

• 1:30:58John Coogan?

  It's great. Thank you so much, Blake.

• 1:30:59Blake Scholl?

  That was so much fun. Thank you.

• 1:31:00John Coogan?

  We'll talk to you soon.

• 1:31:01Jordi Hays?

  Cheers.

• 1:31:02John Coogan?

  And in the meantime, we will tell you about public investing for those who take it seriously, multi-asset investing, industry-leading yields, trusted by millions.

• 1:31:09Jordi Hays?

  Trusted by millions.

• 1:31:10John Coogan?

  We'll also tell you about eight-sleep, five-year warranty, 30-night risk-free trial, free returns, free shipping. How'd you sleep last night, Jordy? I got an 89. Did you smoke me again? 100 clinically-backed sleep fitness. He's got a 100 sleep score.

• 1:31:26Jordi Hays?

  They got the new Pod 4 Ultra.

• 1:31:28John Coogan?

  Pod 5 Ultra.

• 1:31:29Jordi Hays?

  Pod 5 Ultra.

• 1:31:30John Coogan?

  With a blanket, with the same heating and cooling technology. You gotta pick it up.

• 1:31:35Jordi Hays?

  Can't wait.

• 1:31:35John Coogan?

  You gotta check it out. Anyway, we got Tim Fist from IFP in the studio. We remember he was here when we were under attack and all of Zoom was down.

• 1:31:45Jordi Hays?

  That was devastating.

• 1:31:46John Coogan?

  That was devastating.

• 1:31:47Jordi Hays?

  It was such an interesting conversation.

• 1:31:48John Coogan?

  It was.

• 1:31:50Jordi Hays?

  Technically.

• 1:31:51John Coogan?

  Yeah, it was awful. So, he's at the Institute for Progress. We'll bring him into the studio and talk to him. How are you doing, Tim?

• 1:31:57Jordi Hays?

  Welcome back.

• 1:31:58Speaker 06

  Good. Thanks for having me, guys. We made it.

• 1:32:00John Coogan?

  We made it. Thank you so much for bearing with us.

• 1:32:04Jordi Hays?

  That was such a weird, you know.

• 1:32:06John Coogan?

  It was weird.

• 1:32:06Jordi Hays?

  It's not the first time a nation-state has tried to take down TVPN.

• 1:32:09John Coogan?

  Maybe we start talking and we get spicy and all of a sudden the connection gets fuzzy. It might happen again. We don't know.

• 1:32:16Speaker 06

  Yeah, we had Tencent was pretty upset at the H20 allegations. So crime suspect number one.

• 1:32:22John Coogan?

  Take us through the allegations again, break down what you guys published and then we'll go through some of the the reaction and the fallout from the piece.

• 1:32:32Speaker 06

  Yeah, so God, so much has happened since this was the news. It feels like there's five different things in export controls that have gone on since. But yeah, basically, this was the H20 inference chip from Nvidia, which some might remember was designed to be compliant with the export controls. So it's the chip they sold about reportedly 1 million of them into China in 2024. And yeah, there was a lot of outcry at the time for the Bureau of Industry and Security, who's, you know, the part of government that administers and enforces export controls to do something about this because, you know, 2024 was the period where everyone realized that inference compute was perhaps, you know, the most important strategic input to frontier AI development because of, you know, test time compute scaling, reinforcement learning and synthetic data generation is the key things.

• 1:33:18Speaker 06

  And yeah, you know, earlier this year, there was reporting that, you know, Nvidia had a huge number of additional sales plans to like big Chinese companies and a bunch of people, including us, sort of said, hey, is this really what we want to be doing? Do we want to sort of allow, you know, China to get access to millions more of these chips? And yeah, the government ended up taking action on this and issued some guidance, basically saying, hey, no, you can't make these sales. Nvidia reportedly was left holding the bag to the tune of about 5.5 billion. And now, you know, since then, we've seen. It's a bag for ants for Nvidia.

• 1:33:54Speaker 06

  It's barely a flesh wound.

• 1:33:55John Coogan?

  Well, they made up for it with deals in Saudi Arabia, right?

• 1:33:58Speaker 06

  Yeah, indeed. Yeah. So that's the new thing, right? As the administration walking back on the diffusion rule, the speaking framework and then the series of deals that have been announced over in the Gulf.

• 1:34:07John Coogan?

  Yeah. And what's your reaction to the diffusion rule and the deals in Saudi Arabia? Is this a step forward? Are you excited about this? Is this positive news?

• 1:34:15Speaker 06

  Yeah, so it really depends on the details of all this. So I think on the deals, I guess fundamentally, you know, what do we want? We need the US AI tech stack to win the global competition against China. And I think a big part of that is locking in these early adopters and big spenders, especially like the United Arab Emirates. But I think we need to be thinking about how to structure deals like this to sort of get the US the outcomes at once, which is, you know, US tech diffusion, the kind of like Chinese tech stack locked out in a way that, you know, we couldn't handle with 5G, like China won sort of like the 5G battle globally. And then appropriate national security guard rails in place. And it's pretty unclear, like what the trade offs that have been made for this

• 1:34:56Speaker 06

  deal are. So I think like the high level specs that we've gotten is a five gigawatt AI data center campus to be deployed over some time period in Abu Dhabi, and then reports of 500,000 chips per year to be exported with maybe four fifths of those for US firms who are building data centers over there and one fifth for G42, this big tech conglomerate in UAE. And kind of depending on how quickly that all happens and whether they're referring to, you know, 100,000 of today's chips or 100,000 of like chips in, you know, five years' time, this could be the difference between, you know, 1X to 100X in terms of like different differential in compute. So, yeah, I think that really makes the difference. And I think the key question here is, you know, do we want an AI lab in, you know, an

• 1:35:40Speaker 06

  authoritarian country to have the biggest clusters or close to the biggest clusters in the world? And, you know, this is a country that does collaborate with China in areas like drones and 5G and military technologies. And so you need to sort of be careful with giving them access to sort of frontier scale compute here.

• 1:35:54John Coogan?

  Yeah. Yeah. So there's kind of like

• 1:35:55Jordi Hays?

  Can you talk about, I'm curious if you have insight on capital flows from UAE and Saudi into Chinese AI is how much investment activity is there? Do you have any insight?

• 1:36:10Speaker 06

  I don't have stats on this. I suppose the interesting to say on this, you guys might remember there was this $1.5 billion deal between Microsoft and G42 a couple of years ago that sparked one of this stuff. So this was essentially, you know, Microsoft making an investment in G42 and saying to build data centers in collaboration with them. And Department of Commerce got really involved in this and part of one of their requirements was to divest from Chinese companies in the kind of AI stack for G42, which is, you know, this huge tech conglomerate that is funded through the nation's sovereign wealth fund, which is the second largest in the world. So pretty serious money. We're talking trillions of dollars. And yeah, reportedly what they did is they had a bunch of passive investments in Chinese companies, including, you know,

• 1:36:55Speaker 06

  hyperscalers and AI companies. And reportedly, G42 did divest from those companies, but then basically moved the investments over to another fund called Lunay that was sort of also owned by this, you know, big sprawling tech conglomerate that's ultimately funded by, you know, the sovereign wealth fund. So the big question marks about how much are they actually decoupling from China? And like, how costly is this to them? Like, are they actually burning bridges that are hard to reverse?

• 1:37:16John Coogan?

  Yeah, there's some element of like, we have a smooth gradient of friendship with different countries. Obviously, there's the Five Eyes, like the closest allies. We sell nuclear submarines to some countries. But then there's countries that are more jump balls and could go either way. As the diffusion rule goes away, do we need firmer rules around, hey, we're willing to sell to you, but don't immediately set up a reseller and start selling, just passing these on to China? Because you could imagine if the natural economic forces take hold, and I was in some country that was just about to get 500,000 chips, it's pretty easy to just immediately start reselling these if I, and just print money, basically.

• 1:38:00Speaker 06

  Yeah, and there's the kind of two ways to do that, right? One is you can just unsell the chips. So kind of smuggle them into China. And the other way that's pretty straightforward is set up your own data center and rent it out as cloud computer. Exactly. So yeah, I think that's what you're referring to. And yeah, currently, there's not great guardrails around either of those things. And I think the administration wants to set up better versions of this. But yeah, I think this needs to be part where there's sort of like countries that are really willing to, you know, buy hundreds of thousands, two millions of chips. You kind of want these structured deals that have these guardrails in place. And I think the Trump administration is really, really well positioned to strike these kind of smart bespoke deals that get us the right possible outcome across each of these dimensions. And hopefully that's what they're pursuing. Yeah.

• 1:38:37Jordi Hays?

  Uh, can we talk about the news today? Or maybe it came out late yesterday that Nvidia to set up research center in Shanghai, maintaining foothold in China. Basically, they're, they're opening this R and D center, uh, in a, as almost like an olive branch to China is kind of how I would describe it. They, they say they're gonna use it to understand Chinese customer demands and design US compliant products. Uh, and they're basically doing this to just kind of navigate, uh, domestic, uh, sorry, navigate export controls and compete with companies like Huawei. This, uh, to me, I mean, there's so much to unpack here. I, I love your kind of initial take and then I want to kind of maybe move more high level.

• 1:39:22Jordi Hays?

  And to me, this signals that, that, um, maybe Jensen doesn't take national, the national security concerns about like an AI war as seriously as even some of the US foundation, uh, model labs, uh, talk about it.

• 1:39:41Speaker 06

  Yeah, I'd say that's an accurate assessment and, you know, I think it's really hard to design, you know, sanctions, export controls, like these kinds of things in a way that it's not. That sort of can't easily be escaped from, but it's kind of like the spirit of the rule in that like, hey, we're worried about China beating the US in like the most strategically important technology of this century. And we don't want you selling to them. But then, you know, you can do all these, you can do all these things to sort of like actually be cooperating around the scenes like design, compliance chips or whatever. And to be fair to Nvidia, you know, like I think they say, look, if the, if the speed limit is 60 and we're going 55, like we're not breaking the law, like we should be allowed, allowed to do this. And if you think like the strategic perspective for them is also a lot of their customers are like these big US hyperscalers, right?

• 1:40:25Speaker 06

  And all of these hyperscalers are developing their own custom silicon. So, you know, we know Google has their TPU, you know, that they use for both trading and inference. We know Amazon has like trainium and inferentia that they're also using for trading and inference. Microsoft is developing their own stack. And so, you know, huge source of revenue for Nvidia is potentially at risk. So it kind of makes sense for them to want to be, you know, diversifying to other parts of the world and not just be selling to US hyperscalers. So they're certainly in like a difficult position overall. And yeah, what you think is right here depends really on how much you buy this kind of argument that, hey, over the next five years, AI as a technology that will like reshape the global balance of economic and military power is a thing and will be a really big deal.

• 1:41:06John Coogan?

  Yeah, um, it seems like the speed limit is getting lower and lower, though. We went from the H100 to the H20. Now Nvidia is preparing to release a modified version of the H20 chip for the Chinese market. After your piece and the changes to the H20 restrictions. Is there a point where the restrictions are so, are so onerous that no one wants to buy a car that goes nine miles an hour, you know? And at a certain point Nvidia will just lose the market share because Huawei Ascend chips will just be outperforming. Are you tracking any of that?

• 1:41:46Speaker 06

  Yeah, so here it becomes an interesting conversation. I think the kind of crux of the matter is, if Huawei has better chips than Nvidia in the Chinese market, and is able to sort of capture that market, how bad is that? Like, should we sort of set export controls such that Nvidia is always slightly ahead of Huawei, for example, and sort of like raise those limits over time? And here, I think there's two sort of dimensions to it. One is that, you know, in AI, the quality of the chips matter, so how sort of individually performant each chip is. But also, the quantity really matters. So, you know, you can have a million chips each that are, you know, like half as good and sort of like substitute for like 500,000 chips, for example. And so, you know, this is a crude approximation, but you both want the sort of best chips and as many of them as possible.

• 1:42:29Speaker 06

  And where we're trying to squeeze China, like we being like the US government, is across this whole supply chain. So, not just on, you know, being able to procure our chips directly, but also being able to manufacture their own, so having like the semiconductor manufacturing equipment and the fabs and everything there. And so I think the goal of the US government has to be really to restrict the quantity of AI chips that China, so like SMIC and Huawei is like the key firms here, are able to produce. And so by this logic, you know, even if, you know, Nvidia has a chip that's only slightly better or slightly worse than Huawei's, you still might want to restrict it because you would prefer them not to have access to 10 times as many chips than they otherwise would have. Like, you don't want them to have access to essentially like, you know, TSMC's production capacity

• 1:43:13Speaker 06

  of like being able to do many, many millions more chips than you could otherwise produce. So I think, yeah, these are like hard trade-offs to make. I think where it really matters is in foreign availability. I think, you know, where Huawei is accessing foreign markets and outperforming US chips, that's really bad. And we should sort of make sure that that is not the case. And it is US chips that are being used globally in countries that aren't China.

• 1:43:35Jordi Hays?

  Do you think Huawei will ever go public? Or do they not want people to know? They want people to know as little about their business as possible?

• 1:43:43Speaker 06

  Yeah, I'm clear. It depends what the CCP wants. It's a fiercely opaque organization. Yeah.

• 1:43:50John Coogan?

  Interesting. What is your take on open source AI? We were talking to Aaron Gin about this idea that if America does not provide a state of the art open source stack to countries that want to build their own AI products off on top of fine tuned or post-trained Llama that meet their definition of free speech or ideals or morals. The stack by default will be Huawei Ascend, DeepSeek, Manus.

• 1:44:25Speaker 06

  Yeah, I totally buy this. I think that being able to sort of have the best open source models in the world be American is really important for similar reasons like the chip stack and the data centers and the cloud services. I think there's a question about how sticky is this ecosystem actually? So you talk to people who are like, yeah, we really need to like lock in the tech stack globally. Like American open source models need to be sort of like the rails that the world runs on. But then if you look at sort of how AI developers work, they are very happy to switch between different base models for their application, depending on which happens to be the best. You know, you look at like the revenue of Frontier Labs and you know, when they have the best model, it's up here or when they don't, it's down here. Like everyone is switching every day depending on like you have, who has the best model.

• 1:45:07Speaker 06

  So it's, yeah, like you want to diffuse American open source as widely as possible, but like what about it makes it sticky? And my hypothesis would be that it's probably the security and reliability side of things. So, you know, everyone's worried about, you know, the fact that you can insert like backdoors to create sleeper agents into open source models. And there's no way to actually detect these. I think, you know, the US wins if it can prove that it has the most trustworthy and reliable models over China. Similar to how I think US cloud computing companies compete over, you know, Huawei and Alibaba cloud. Like often Huawei and Alibaba are coming to the market with a cheaper option, but the US is just more trustworthy in terms of, you know, data privacy, security, et cetera. So I think. Trying to figure out those technical problems around security, reliability, interpretability,

• 1:45:49Speaker 06

  and sort of proving that US models win across those dimensions is probably the way to make the kind of open source models from the US more sticky, or just sort of be way better. And you know, this is where sort of most of the effort is currently going and definitely support those efforts as well, like, you know, building out more domestic compute, for example, and like finding more training datasets.

• 1:46:08John Coogan?

  Yeah. How do you think about the dynamic between the importance of the application layer versus the foundation model layer? We've seen efforts on the foundation model layer at the national level all over the place, but let's just use Mistral as an example. Mistral has a consumer app called Le Chat. It is a direct competitor to ChatGPT. And I think that's great for the French and they could potentially have a fine tuned model that meets their standards and guidelines. But if at the end of the day, the French consumers, 90% of them are using Google and 90% of them use OpenAI, well then, all

• 1:46:50John Coogan?

  of that is kind of worthless. And sure, maybe Mistral will be cheaper in the enterprise and be implemented in French businesses or European businesses, but in terms of like control of the population, that feels like the diffusion of American ideals in Europe, which doesn't seem extremely controversial because America and European ideals are pretty similar, but you can see how this would play out in other countries.

• 1:47:15Speaker 06

  Yeah, totally. And the economics are pretty brutal here, right? Like, we're in a regime where the amount of compute being used to train a model goes up 5X every single year. We're moving from, you know, $100 million to train a model, you know, last year to rapidly approaching the billions. If you are a company committing to this and you're only sort of just slightly better or worse than, you know, one of these huge tech companies, you can't keep sustaining this over time. You have to, you have to, you have to check out eventually.

• 1:47:41John Coogan?

  Yeah, we've seen that with a lot of the early stage foundation model companies that have raised, trained something, but never been on the frontier. And now they're, you know, falling out of favor, more or less.

• 1:47:51Speaker 06

  Yeah, totally.

• 1:47:52John Coogan?

  Interesting.

• 1:47:53Jordi Hays?

  Has there been any conversation on the on the ground in DC or have you heard any chatter around the Manus investment that that definitely kicked the that Benchmark made, kicked the Hornets nest a little bit in the Hornets nest of American dynamists?

• 1:48:10John Coogan?

  Delian Asparuha, the fund.

• 1:48:12Jordi Hays?

  But but to to give Benchmark a little bit of credit, you you if you're going to be mad at Benchmark for making investment in Manus, you also, in some ways, I think, have to be mad at Jensen for going up and setting up a research and design, you know, R and D center in Shanghai

• 1:48:32John Coogan?

  Right now.

• 1:48:32Jordi Hays?

  explicitly to work on developing products for the Chinese AI ecosystem and in some way direct the CCP directly.

• 1:48:42John Coogan?

  Yeah.

• 1:48:43Speaker 06

  Yeah, I it's a bit hard to evaluate. I think, you know, one, you know, the one of the US's advantages is like very deep capital markets, right? And so being able to exert financial control over setups overseas by sort of like acquiring stakes is potentially a way to, you know, have you sort of a better sort of fairer sort of more aligned like global system overall. I think this is high when it comes to Chinese companies.

• 1:49:06Jordi Hays?

  But does America benefit from having American capital allocators and ByteDance? I don't think we have much

• 1:49:14Speaker 06

  Yeah.

• 1:49:14Jordi Hays?

  influence or control over what ByteDance does.

• 1:49:18Speaker 06

  Yeah, exactly. So I think for big companies, especially those that are part of this, you know, Chinese sort of state industrial military complex, this is a pretty poor prospect. This is why, you know, the Treasury Department has outbound investment restrictions in a bunch of different industries, which have been expanded to AI over time relatively slowly, though. So, yeah, one, one thing that they've been sort of working on is trying to figure out whether to apply these outbound investment restrictions more solidly to commercial AI developers and commercial AI cluster operators. Like, so like investments coming from VC is actually restricting investments of those kinds into China. And yeah, this is complicated by the fact that just like due diligence is really hard.

• 1:50:00Speaker 06

  Like, let's say you're investing into an application developer who's doing something pretty innocuous, like, you know, automated code agents or, you know, search or something along these lines. You don't have any control over, you know, are they going to work with the Chinese military in the future? Are they going to be sort of like an instrument of state-backed surveillance over the local population? They're not going to tell you that, and they might not have plans to do that, but they can certainly be compelled to do that in the future. So the due diligence question is super hard.

• 1:50:28John Coogan?

  Do you think regulators or the American government needs to be thinking about the pre-training scaling law potentially not holding or reaching some sort of diminishing marginal return? We've seen the data from GPT four point five. It feels like GPT five might not just be a hundred x bigger than GPT four point five. It might actually be some sort of mixture of experts, different models, and more of almost like a product challenge than just a scaling and just get the more chips challenge. At the same time, OpenAI is also investing in in Stargate, and there's still a drumbeat of ever larger data centers in the United States.

• 1:51:11John Coogan?

  But the the overall tone of of AI research labs in America seems to have shifted away from just the ever bigger transformer. And there seems to be a somewhat of a somewhat of a resignation to this idea that there might be more challenges on the path to ASI than merely scaling up the architecture that we have right now.

• 1:51:37Speaker 06

  Yeah, I think there's a few things here. One is that, you know, obviously, these companies are still making huge investments in clusters and energy to get to the next order of magnitude of scale. So there's some level of just. You know, uh, financial buy-in to the idea that, you know, pre-training scaling will continue. But also a recognition that, uh, you know, we've got this other scaling law, this sort of test time compute scaling law. And now like reinforcement learning as a paradigm, it seems to really be working for language models. Where a lot of companies are starting to put more of their compute resources overall. So I think the rough balance now seems to be around sort of eighty, twenty pre-training compute and then post-training.

• 1:52:15Speaker 06

  And I expect what we might see as we see sort of, um, you know, companies who are building out these clusters and these energy sources to support them. Where are they going to sort of like balance the compute allocation across those? The calculus seems to be that, um, yeah, pre-training compute is relatively less promising than before. And putting more of your resources in a relative sense into RL, which is sort of very much a kind of like the early stages of scaling up is the better strategy at the moment.

• 1:52:40John Coogan?

  Yeah, I mean, the, the other side of this is like, as even, even beyond post-training and RL. As reasoning tokens and just more test time compute, more inference cost increases. Maybe the real way to get a GDP boost or competitive advantage out of AI is just to make sure that there is an H one hundred or equivalent for every member of your society or every, every citizen. Because everyone will need to be inferencing at a very high level, very large model, basically constantly. And so even if you've trained the greatest model, if you can't have every single one of your citizens constantly inferencing it all day long. You're not going to see the benefits of.

• 1:53:22Jordi Hays?

  I need my AI companion constantly on.

• 1:53:25John Coogan?

  I mean, we do need, we do need, you know, code gen and we need research and we need answers. And if we're, if we're timing out, it's not just.

• 1:53:34Jordi Hays?

  Well, yeah, code, code gen and deep research are going to be competing with the AI companions for inference.

• 1:53:40John Coogan?

  Yeah, probably.

• 1:53:42Speaker 06

  Uh, but yeah. Just to, I guess, maybe push back on, maybe I thought to the side of lying that, um, I am very, um. Confused about where most of the compute is going to be spent and how that is going to be distributed across people. So I can easily imagine a world like in two years where most people in the world still aren't really using simple tools like ChatGPT, like, you know, my grandma is still like never heard of it. And uh but at the same time, you have some companies at the frontier who are deploying millions to billions of agents internally. So you had this really like unequally distributed use of compute overall.

• 1:54:18Speaker 06

  Uh so yeah, I I kind of buy the idea that there'll be just like massively uneven sort of like usage of these kinds of resources and like really like located in particular countries and within particular companies.

• 1:54:28John Coogan?

  Yes, agree in the sum total of the importance of inference and compute allocated and available for inference, but potentially disagree on the distribution of that. And I I think now that you now that you hash that out, I think that makes a lot of sense. You already see that just in the prosumer versus consumer market. Uh I'm probably kicking off like three to five deep research reports using a lot of tokens. I'm getting my $200 worth. And there's a lot of people that are, you know, just land on it every once in a while to toy around with it. That makes a ton of sense. Uh what what's next, Jordy? What should we talk about?

• 1:55:00Jordi Hays?

  How have you guys had success explaining uh the potential for AI, you know, AI's potential progress in the next few years in in Washington broadly? Do you feel like lawmakers have fully kind of uh fully understand the potential, right? Nobody has a crystal ball. Uh, we can't predict the future, but if you sort of extrapolate trends and even just use the products today. Uh, do you feel like, do you feel like Washington is is pricing it in? Or is it still? Uh, you know, or are people going to be, you know, extremely surprised in the next few years?

• 1:55:43Speaker 06

  Yeah, I bet is one hundred percent extremely surprised. I am, I think consistently disappointed with how the lack of kind of level of AGI pilled. People in D C are even with sort of like current capabilities and like where the sort of trend is obviously going. I think like there's a lot that just isn't being priced in about kind of how weird the world is. You know, in five years' time. There's also, I think, a sense of which, you know, there's a real loss here in that. If you look at technologies like the internet, which, you know, as you probably know, like came from up and at like this with this like D A P A funded project. As well as, you know, early sort of genomics with the human genome project. These were technologies where the government sort of.

• 1:56:23Speaker 06

  Saw what was coming and took sort of a really active role in shaping the development of the technology through basic R and D. So with up and at, for example, the focus was really on. Creating, you know, a resilient network system that could survive a nuclear bomb. But also they sort of like they were able to take that sort of secure network infrastructure and apply the notion of kind of like openness and freedom of information. To create like a scaled global network that really represented American values and was like very secure. We don't see like an equivalent kind of level of basic R and D investment in the United States around A I. And that would be really cool to see because there's basically a bunch of problems where, you know, right now industry is focused on where the money is, which is, you know, B two B S A S apps and chatbots. But there's like a huge space of just like, if you accept that over the next few years, we'll have these incredible new A I capabilities.

• 1:57:07Speaker 06

  There's all these massive important societal and scientific problems in areas like, you know, materials discovery, drug discovery, et cetera. Where the government could be placing essentially huge bets that could pay off, you know, within a few years. And we're kind of not doing that because we're sort of. In D C at least failing to see sort of where the future is going and therefore what the role for this kind of basic R and D is. So, yeah, I'm there's a congressional coalition that's just started called the American Science Acceleration Project, which we're really excited about and try to build hype around. But they, I think I have the right, the right idea around this, but you know, there's a deficit of this kind of thinking in D C at the moment.

• 1:57:38John Coogan?

  Last question for me. How is Meta's reputation changed in DC over the last few years? Famously, Zuck goes to Capitol Hill. They don't even understand how his business model works. He says, Senator, we sell ads. He was castigated for being too left than too right and a lot of political hot button issues around the Facebook app and the type of content it's servicing. Obviously, a big vibe shift there. But now, it seems like Meta is increasingly a very important tool in the American foreign diplomacy AI tool chest with Llama. Llama is, of course, in their open source model that's, you know, there's

• 1:58:19John Coogan?

  Defense Llama now. The DOD is partnered with Meta on this. And yet, today, we learn that their behemoth model is struggling to improve capabilities. They're facing setbacks. Has the tune changed in DC to say, hey, Zuck, like, sell more ads, please, like, do more stuff. We gotta, we gotta get you pumping because, like, you're a national champion now?

• 1:58:41Speaker 06

  Yeah, I'd say, like, by and large, you know, there's different factions in DC who care about different things. Obviously, sort of Meta is going through this big, like, antitrust case at the moment as well, like, has been going through it. Yeah, on the AI side, I guess it's interesting as well. Like, Meta is very much seen as kind of like the darling of, you know, open source supremacy for the US. I think it's kind of awkward for a lot of Meta fans to see the latest batch of models and them really not be that impressive and also potentially a bit of gaming with leaderboards and sort of what models they're releasing there. Obviously, they've executed the strategic pivot to appeal to the current administration with, you know, getting rid of fact checking and bringing in like the community notes type approach. And that seems to have been pretty effective. But yeah,

• 1:59:21Speaker 06

  I think they've certainly got a lot of backers here. Yeah, and the open source approach, it's like really good to have like a really well capitalized company, like, really like pursuing the strategy overall. But yeah, I think they're copying a bit of heat for Not actually delivering on the promise to some extent. And also people, there's sort of like another faction that's pretty worried about uh, open source models with capabilities that could be significantly misused, especially in the cyber domain, being like freely available to the whole world. But that's less of a concern while they're behind.

• 1:59:50John Coogan?

  Yeah, it was very interesting in the, in the, in the press release around this, in the, in the, the management of the, the news that they were delaying the rollout. They didn't say, oh, it's, it's too dangerous to release. They could have easily said that. That's always an easy out for the AI labs to say, it's just too good. Trust us, we, we, we can't trust you with it. We're, we're doing more safety research. Instead, it seems like there's a little bit of an admission that it's just not at the level we want it to be. Jordy?

• 2:00:16Jordi Hays?

  This might be out of scope for you, but do you think that AI is art, is at a much, uh, is being used in nefarious ways in the context of social engineering attacks at a greater scale than people sort of realize today? This was top of mind, just due to the, the Coinbase news this week, the leak that they had. And I think people broadly anecdotally reported that they just felt like they had a huge uptick in like sort of inbound calls or, and, and social engineering attacks. My, my question is, is AI is already, when you're using tools like Sesame and, and some of these lower, you know, Sesame is obviously state of the art, but even some of these lower latency video models,

• 2:00:58Jordi Hays?

  should already be capable and more better at social engineering attacks than like, you know, a PhD level person globally that, that even, even if English wasn't their first language and, and, and, you know, uh, so anyways, I'm curious if you have

• 2:01:19John Coogan?

  Cybersecurity, social engineering.

• 2:01:22Jordi Hays?

  Any sort of like insights there?

• 2:01:23John Coogan?

  Potential regulation around it.

• 2:01:25Speaker 06

  Yeah, no insights into the true extent. I will note that it is surprising to me that we don't seem to see more of this. My impression is that from sort of GPT 3.5 onwards, we've had Llama that can produce. Better text, more convincing text than the kind of median phishing email, which, as you know, is often like pretty poorly written. Um, maybe that's deliberate, but yeah, like it's kind of weird to me that we haven't seen mass sort of spear phishing campaigns of the kind that have been possible for like several years now yet, or at least they haven't been widely reported. Maybe it's that, yeah, existing sort of filters and defensive approaches work. Maybe like, we shouldn't expect actually that there'd be that many people who are trying to pick this low hanging fruit and they're not technically sophisticated enough. Or maybe it's like, it's like happening and not being reported on, but yeah, I find.

• 2:02:07Jordi Hays?

  I think it's, I think there's potential that it's happening, but it's happening to a demographic that doesn't even know it's happening, right? Like, I don't pick up random calls, right? I just don't, I'm not going to answer.

• 2:02:19John Coogan?

  That you know of. Maybe the last time I called you, it was actually a bot.

• 2:02:23Jordi Hays?

  Yeah, that's true. That's true, John.

• 2:02:24John Coogan?

  You do pick up non-random calls, but that's the point of them.

• 2:02:28Jordi Hays?

  Yeah.

• 2:02:28John Coogan?

  I mean, the same thing happened with the crypto stuff, like there were a lot of the victims of cryptocurrency scams, like weren't profiled in the New York, the New York Times. And so we just didn't really hear about them because like the people that with the loudest microphones didn't fall for the scams.

• 2:02:41Jordi Hays?

  Yeah.

• 2:02:42John Coogan?

  Tricky. Anyway, thank you so much for joining, Tim. This was fantastic. I'm glad we survived the attacks from the nation state actors that don't want us to yap.

• 2:02:51Jordi Hays?

  We kept the stream up.

• 2:02:52John Coogan?

  A stream together. We really appreciate it. We'd love to have you back and this was fantastic.

• 2:02:55Jordi Hays?

  Yeah.

• 2:02:56Speaker 06

  Thanks for coming on.

• 2:02:57John Coogan?

  We'll talk to you soon.

• 2:02:58Jordi Hays?

  Have a great weekend.

• 2:02:59John Coogan?

  Uh, next up, we're bringing Chris Best from Substack, but first let me tell you about AdQuick, adquick.com, out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising.

• 2:03:07Jordi Hays?

  Say goodbye.

• 2:03:07John Coogan?

  Only AdQuick combines technology, out of home expertise and data to enable efficiency buying seamless ad buying across the globe. And we should also talk about Wander. Find your happy place. Find your happy place. Book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning and 24 seven concierge service is a vacation home, but better. Anyway, let's bring in Chris.

• 2:03:30Jordi Hays?

  Airbnb is getting distracted. Wander's doubling down.

• 2:03:32John Coogan?

  Wander's doubling down. It's a knockout, drag out fight. In the rental home market and we recommend Wander. Anyway, let's bring in Chris Best from Substack. How you doing?

• 2:03:41Jordi Hays?

  Boom.

• 2:03:42John Coogan?

  Good to see you.

• 2:03:42Speaker 07

  Doing good. That jingle is unstoppable.

• 2:03:44Jordi Hays?

  Unstoppable. We gotta get a jingle for Substack. What's the Substack jingle?

• 2:03:49John Coogan?

  What? Do you have a tagline? What's your landing page hero, hero text?

• 2:03:54Jordi Hays?

  The app for independent voices.

• 2:03:57John Coogan?

  There we go. Same, same melody. I go with take, take back your minds. Take back your minds.

• 2:04:03Jordi Hays?

  Take back your minds.

• 2:04:04Speaker 07

  That of a jingle.

• 2:04:05John Coogan?

  How is the process of taking back minds going?

• 2:04:08Speaker 07

  It's going pretty well.

• 2:04:09John Coogan?

  Okay.

• 2:04:10Speaker 07

  Can't complain. We crossed 5 million paid subscriptions.

• 2:04:13John Coogan?

  Wow, that's a lot. Awesome.

• 2:04:15Speaker 07

  Blown ahead of, I think all of the legacy media apps combined.

• 2:04:19John Coogan?

  Amazing. Chris and I were in the same YC batch, winter 18.

• 2:04:23Jordi Hays?

  Another one. I always, so, so my biggest thing with John is, is actually probably good. If John had just invested in, in, in his batch, he would have been too post-economic to start a podcast and we wouldn't be here.

• 2:04:36John Coogan?

  Coinbase, Instacart, Zapier, Substack. Even, what was the other one? The crypto exchange that absolutely ripped the NFT marketplace? OpenSea was in our batch?

• 2:04:48Speaker 07

  Yeah. Atlanta, Replid.

• 2:04:50John Coogan?

  Yeah, yeah, yeah. Remarkable companies. It was good times. So yeah, I mean, take me through the, the, the history and evolution of Substack and where you're going next.

• 2:05:00Speaker 07

  Yeah, I mean, we started, we were in winter, winter 2018 together. The basic theory is we're building a new economic engine for culture. You know, we want to harness the power of technology, the power of world's, you know, internet scale networks combined with a business model that actually powers independence. The version of that, the simple version of that that we started with is basically make it dead simple to do a paid email newsletter. But as the years have gone by, we've grown that into multi-format. You can do, you can write, you can do a podcast, you can do live video. We've got this network and this app. You can get the Substack app from the App Store and discover this whole universe of the smartest, best independent media and culture on the internet. And that's who we're

• 2:05:45Speaker 07

  building next. Basically, I mean, I we're building a bunch of video tools. We've got this live, you know, live tool that lets you do something that feels like a FaceTime call and then AI magically turns it into like a produced podcast and series of clips. So if not, everybody is the brilliant, YouTube sensations that you guys are, if you're just someone that has something to say, we make it that easy. That's totally super powerful.

• 2:06:08John Coogan?

  Was Ben Thompson really an inspiration? He kind of tells that story. I don't know if that's true that Sir Tekkery and he kind of pioneered this like independent newsletter creator really scaled the business. But I mean, had you been reading him at the time? Had you taken lessons away from Sir Tekkery when you built Substack?

• 2:06:24Speaker 07

  Yeah, I do. There was a few people doing it, right? There was like, you know, because we had this this cockamamie scheme where like, hey, I bet you people would subscribe to, you know, things they deeply value if if you had something great. And there was a handful of people that were doing it. You know, Andrew Sullivan did this with kind of like the Daily Dish back in the day. Ben Thompson had Stratechery. And here's this guy, you know, writing an email newsletter from his bedroom in Taiwan, making, by our calculations, millions of dollars a year. We're like, you know, that's that sounds pretty sweet. Like, why does? Why do more people not do that? Basically, and you know, the answer to that turned out to be it's way too hard. So what if we made it way easier?

• 2:07:03John Coogan?

  Yeah, I mean, he's he's invested immensely in technology to build up Passport and what he's done. And now there's a few other companies that run on it. But yeah, where does this all go? I mean, I guess the big question is like, ads product, you know, is tied to the written media. Wall Street Journal has subscriptions and ads. New York Times has subscriptions. And even after you subscribe, you still get ads. We are an ad powered show. Ads feel very, they get a lot of negative attention, a lot of negative stated preferences, but the revealed preference is almost always people don't mind ads and scroll right past them on Instagram and sometimes even

• 2:07:43John Coogan?

  get value from them. We've been very pro ads. But what has your take been on ads generally in in the Substack world?

• 2:07:53Speaker 07

  The thing that's actually different about Substack is kind of creator ownership and a model that rewards quality and value. So the fact on Substack that you, you know, people don't subscribe to Substack, they subscribe to you. You know, you can make, if you make something truly great and a bunch of people value it, they come. All those things are what actually set Substack apart. You know, the formats are similar to what you see elsewhere. You get, you can, you can write a long form article, you can write, make a podcast, you can do a video. Like those are, those are not novel things. The thing that's novel is this business model that powers independence. The fact that you own the, you know, it's your business, you're getting the upside, you want to invest in the quality.

• 2:08:36Speaker 07

  And I think there are methods of doing sponsorships and advertising that are, that, that, that work with that, right? The fact that people, you know, people are paying premium for you guys to advertise on this program, not because you're getting like the most clicks ever that gets sold at a market, like at some market rate for the demographic, but because you're making something special and you have tremendous, you know, jingle skills, but the audience is like, is magical. Anyway, there are a bunch of people, today we're doing all subscription, we're powering that thing. That actually works really well, shockingly well, much better than people thought it was going to work. People are consistently surprised by how well that business model can work for them. But there are also people on Substack who are doing sponsorships and doing tremendously well.

• 2:09:21Speaker 07

  And so I do think that model can and should coexist with high quality media endeavors.

• 2:09:27John Coogan?

  Do you believe the medium is the message? We, we've kind of felt this where we decided to go live for somewhat of like a technical reason, just with the way YouTube's organized, it kind of made things easier. But then, once we were live, we realized, well, we're faster, we're not, there's no delay between us recording and uploading. And so we can react to the news, we could, we could open up X right now and, and read a headline that just dropped with you and get your reaction. And it's kind of changed the nature of the show. What's even your processing of like the McLuhan ideology?

• 2:10:01Speaker 07

  I'm a huge believer in live for that exact reason. You know, we're building this video product that you that is live within Substack. And I think it's almost like a hack that sets the social expectation. The fact that you're going to be able to sit down, make this thing, ship it off. It's not necessarily the case that the majority of the audience is going to watch live.

• 2:10:19John Coogan?

  Totally.

• 2:10:19Speaker 07

  It's great that those of you are here, but it's, you know, it's going to be, there's going to be a VOD. There's going to be clips. Those might be the places that actually get the distribution. But as a hack to make the thing, the fact that the, you know, the social expectation between us right now is we're sitting down, having a live conversation. Makes it easier, makes it faster. It does feel different. Like, I don't know if you have this, but I feel, you know, the feeling of being live is a little bit more energizing than than otherwise.

• 2:10:43John Coogan?

  Definitely. And then also it just builds, I mean, we, we like it because it builds trust with you. Like, yes, there will be clips, but we're not going to edit, we can't edit out what you're saying. So if you want to make your case in some way, we can't be like, ah, we didn't want to put that in.

• 2:10:56Speaker 07

  Yeah, I could, I could go back to the tape and say, well, here's, here's the full context, guys.

• 2:11:00John Coogan?

  Exactly, exactly. It's always there.

• 2:11:02Jordi Hays?

  Can you talk about this? So, so Juan, I want your help kind of framing something because there's, in my mind, there's this stages of, of Substack, right? Like, our audience, at least the initial core audience is this sort of like terminally online ex, you know, tech enthusiasts, right?

• 2:11:19John Coogan?

  Genius, wealthy, that, that's a core audience.

• 2:11:22Jordi Hays?

  Yeah, yeah, yeah.

• 2:11:22John Coogan?

  But yeah, I mean, you could say terminally online too.

• 2:11:24Jordi Hays?

  You know, yeah, 20 to, you know.

• 2:11:27John Coogan?

  Goaded, definitely, or like in the conversation.

• 2:11:29Jordi Hays?

  Definitely in the conversation. No, but, but to me, there's been these stages of Substack where like, I don't know if it was like a year ago at this point, that I noticed that Substack had not become a household name, but it had been, becomes.

• 2:11:42John Coogan?

  Outside of tech.

• 2:11:43Jordi Hays?

  Outside of tech.

• 2:11:44John Coogan?

  Emily Oster, for example.

• 2:11:45Jordi Hays?

  But it had just become something that, that kids I went to college with that aren't in tech were.

• 2:11:50John Coogan?

  Yep.

• 2:11:51Jordi Hays?

  Subscribe to probably three Substacks. And it was like part of that.

• 2:11:55John Coogan?

  It wasn't just all like packing McCormick fans.

• 2:11:56Jordi Hays?

  It became like clearly part of popular culture online.

• 2:12:01John Coogan?

  Yeah, yeah.

• 2:12:01Jordi Hays?

  And was there a note, was there a moment? Is that like the wrong analysis? And I just wasn't paying attention outside of our bubble? Or did you feel something like that too?

• 2:12:12Speaker 07

  I get this question a lot, and I think people, because it kind of grows in pockets, right? Like, it'll be, there'll be, you know, this bunch of crypto people that all join at the same time, or a bunch of politics people, or a bunch of finance, like, there's sort of like these, you know, next adjacent market pockets as it grows. And so, all along, there's, I've sort of had people ask me this, feel like, it feels like Substack is suddenly blowing up, like, what does that feel like? Has your life changed? And internally, like, it's just been growing really consistently, really steadily. Like, the curve just looks like a steady exponential curve. And so, it is kind of always true, like, this is, this is the most exciting time. I have had, you know, I do feel it, too. Like, I get less blank looks when I tell people I'm working on Substack than I used to. But yeah, it's been, it's been a steady march.

• 2:12:55Jordi Hays?

  How has, kind of, the war with, with X, maybe the war is not the right word for it, but obviously, removing links was-

• 2:13:04Speaker 07

  Platform changes.

• 2:13:05Jordi Hays?

  Yeah, platform changes, obviously frustrated a lot of the core creators who had been building an audience in both places. But from my view, it seems like they maybe, you know, created a monster, like, in the sense that, like, it maybe made you guys react and be like, and, and it, maybe it was like a short-term win, but will maybe be a mistake long-term, and that maybe it's kind of pushed you guys to think even bigger about what Substack is.

• 2:13:33Speaker 07

  The, I mean, the funny thing here is that Ben Thompson credits his early growth with LinkedIn, and sharing links on LinkedIn, and then LinkedIn had an algorithm change, and he had said that he, it wouldn't be possible to build Stratechery the way he did in the modern LinkedIn era. So, there was kind of like a LinkedIn vibe, too. But yeah, I'm interested to hear how you've been processing just all the platform changes, really. So, I mean, this has always been my theory, is if you want to build one of these businesses, you need a model that supports independence, you need people to be able to subscribe to you, and then you also need, like, internet-scale networks to grow on. And in the old days of Substack, it would be, you know, the very start, like Stratechery, you'd have this newsletter, this website, but then you'd have to go on Twitter to promote it, or go on LinkedIn, or go on Instagram, or wherever. We always want you to be able to do that, we want you

• 2:14:18Speaker 07

  to be able to publish, it's not a walled garden, like, put it everywhere, put it on the RSS feeds, put it on YouTube, whatever, but you're totally at the mercy, then, of these other platforms that don't necessarily, you know, sometimes they go to war with you, like Elon got pissed off at us, but a lot of the time, they just, they don't care, right? Zuck can turn around and say- We're not doing politics for a little while because people got mad at us. And if you're somebody that writes about politics, that's really bad for you. And so we always knew that we need to, we needed to make our own network, our own place. Fucking Zoom reactions.

• 2:14:51Jordi Hays?

  It's at the OS level.

• 2:14:54Speaker 07

  I feel like I've turned this off a thousand times and it sometimes still comes back. If we could just shoot whoever built that feature, that's perfect. Anyway, we had to build the network. We knew we had to build a network. You know, it doesn't make sense. It's not like, you know, Facebook or LinkedIn or X or anybody's TikToks job to help you like, you know, take your audience and own it and make something independent. It's never like been their main thing. So we knew we had to do that. That's why we built, you know, the Substack app in the first place, which is why Elon got so mad at us. He felt like we were, you know, competing, but ultimately we just knew these independent places need their own network that actually wants them to grow and thrive. It was a big painful thing for people that were on the platform. It sucked that you're like, links didn't work. Super annoying.

• 2:15:39Speaker 07

  But it was a, it was a very small fraction of traffic. Like it didn't slow down the business or the numbers at all. There was a lot of stir and drag. It was very like, you know, for people that are like, had a big Twitter presence and were trying to make a Substack, it was very painful and stressful, but it didn't slow down the growth at all.

• 2:15:54Jordi Hays?

  That's cool. What's you, your, yours and the, and the team's sort of decision-making process? It feels like at a bunch of different points with Substack, you could make a product decision that might drive a media, basically make the number go up, but maybe wasn't aligned with the kind of platform that you want it to be and, and maybe not even aligned with humanity. And on that note, there's sort of this like interesting thing where every platform, maybe other than Substack is sort of like converging on being the same app, the sort of like short form slopification of, of social media where it's like, you know,

• 2:16:33Jordi Hays?

  Doing a slot machine with information and it feels like Substack is orienting around long form content. We had Jason Fried on yesterday. So that's sort of rambling, but

• 2:16:45John Coogan?

  No, no, I completely agree. I was gonna ask the same question. I feel like if I land on a Substack link, it's gonna be written by a human. It's not gonna be particularly sloppy. I might not like the particular topic or something, but I feel that it's gonna have like this premium vibe to it, I guess. And I'm wondering if there's, is there, are we just early and there's a coming wave of slop or that you're gonna have to fight? Terrible.

• 2:17:09Speaker 07

  I mean, here's my take on this is, you know, I think if you put yourself in the position you described where it's like, hey, we've got this business, we're trying to make the number go up, and we either need to make the number go up, or we need to make something that's good that we believe in, and we kind of have to like make that choice. I think as soon as you have to make that choice, that already sucks. Because both of those choices suck, right? It sucks if you kind of give up your principles and make the number go up. But it also sucks if you stick with your principles and the business, like it hurts the business and the business doesn't thrive. Ultimately, the business of Substack needs to grow and support the thing we're making. And so the thing that we've tried to do is yoke the success of the business. Set up the business model

• 2:17:50Speaker 07

  and the fundamental way that it works. So that in order to make the number go up, we have to do the thing that's actually good. So an example of this is, you know, the way that we make money is it's completely free to publish on Substack to any size audience. You guys should cross publish on Substack, by the way, that'd be sick.

• 2:18:07Jordi Hays?

  I know.

• 2:18:08Speaker 07

  And then we only make money when you make money, right? So we're trying to help you grow. We make money when you make money. And so, you know, we have an algorithm the same way that Twitter or TikTok has an algorithm. We even support short form video. You can see clips. You can read long form stuff. You can watch a long form podcast. But it turns out that when you're tuning the algorithm to introduce people to things that they deeply value and might pay for. The emergent effect of that is very different than if you take the same technology and point it at the goal of get people to spend as much time here as possible.

• 2:18:39John Coogan?

  Hmm. Yeah, that makes sense because I, I, I might pay and then be satisfied, close the app, but that's a win for the algorithm.

• 2:18:46Speaker 07

  Yeah, our, our algorithm says great, right? Whereas, you know, Elon's been public about the links thing. It, it used to be just Substack. Now it's everyone. He's like, yeah, if you're scrolling your feed, you click into a long form post, you go and read that thing and get deep value from it, you just tank the metrics.

• 2:19:01John Coogan?

  Yeah.

• 2:19:01Speaker 07

  You're not seeing any ads. Like, what are we doing?

• 2:19:03John Coogan?

  Yeah, yeah, yeah. It makes sense. Uh, how is the health of the overall creator economy? There was a big boom where venture capitalists were investing in the creator economy. Uh, that's kind of died down, but, uh, how healthy is the creator economy broadly?

• 2:19:16Jordi Hays?

  We were joking yesterday that, uh, Arwan in many ways in LA is a product of the creator economy. There has to be double digit percentage of Arwan's revenue. It's just creator revenue, you know, that, that flows in in different ways and then just goes into.

• 2:19:30John Coogan?

  In there for sure. A lot of G wagons in the parking lot.

• 2:19:33Speaker 07

  It's the LA equivalent of like the dot com bubble.

• 2:19:36John Coogan?

  Yep. Arwan bubble.

• 2:19:38Speaker 07

  I've, you know, I've never liked, I've never liked the term creator economy. Even the term content creator kind of gives me hives. Uh, here's the thing that I think is not going away is, you know, the, the media landscape is shifting. The legacy models have been eaten up by internet things that don't necessarily support, you know, the old businesses. And there's this shift to, a shift in power to independent creators. People like you that can just set up, start a thing, make something that matters.

• 2:20:09John Coogan?

  Yeah.

• 2:20:09Speaker 07

  Earn the trust of people by building, going direct, building an audience. I think that trend is extremely robust. I think that thing is gonna, is sort of inevitably gonna happen at this point, but I do think it's sort of undecided which version of that future we get. And so we see our, you know, the thing we're working on at Substack is could try to bring about kind of like the best and most valuable version of that future. But I think that, I think that shift is not going away.

• 2:20:36John Coogan?

  Yeah, I mean, you talking about the the content creator as a bad term. Do you prefer journalist, writer, like more specific scalpel like terms? Is that what you're getting at? Or what specifically don't you like about the idea of the word content? Or the word content creator, the phrase?

• 2:20:59Speaker 07

  It's pre rational, man. It just kind of feels it. It feels like a slop version, right? Yeah, you're a journalist, you're a writer, you're a podcaster.

• 2:21:06John Coogan?

  An analyst.

• 2:21:07Speaker 07

  Analyst, broadcaster.

• 2:21:09John Coogan?

  Yeah.

• 2:21:09Speaker 07

  Filmmaker, you know, comic. There's a million things you can be. And I listen, I'm I've made my peace with creator. Like it's it's a good generic term. But I think there was, I think there was a moment where we kind of like cargo culted the creator economy and everybody got really sort of hyped up about it in a fluffy way and missed the the the deeper thing that is actually still happening.

• 2:21:30Jordi Hays?

  What actually happened is that there was like a specific data point, which is that VCs realize that creator, content creators were the fastest growing SMB category. And they were just like, OK, we should deploy like a billion dollars.

• 2:21:45John Coogan?

  We gotta make money off this.

• 2:21:46Jordi Hays?

  We gotta make, we gotta find a way to make money on this. And the thing that the thing that people missed is that that had been a sort of they were sort of like a decade into that trend. And so people funded a lot of businesses that were like banks for creators. But a creator is like, you know, what? Why would a creator not just use, you know, we use ramp, right? Like, why would a creator not just go to Bank of America and just get a bank account? Right? And so I think the the sort of interesting investable opportunities were the Substacks, which is like a new economic, you know, not to use your tagline, but like an economic, creating a new economic engine for media.

• 2:22:27John Coogan?

  They should have invested in. Arowan, because that's like the grocery store for creators.

• 2:22:32Speaker 07

  Yeah, yeah, yeah, it's all down.

• 2:22:33John Coogan?

  They should have just bought stock in Mercedes because they make the, the, the small SUV for the, for the, for the creator economy. I want to talk about the value of curation versus instantiation of ideas. I'm not sure if you've been following Ben Thompson's erosion of like the evolution of like the printing press to the internet, making distribution, zero marginal cost to the instantiation of ideas with GPT and deep research and language models. It's become easier and easier to create a deep research report. The writing is good. It still feels like you can tell when it's AI written, but.

• 2:23:12Speaker 07

  It's at least fine.

• 2:23:13John Coogan?

  Yeah, it's at least fine. But I guess the question is, are there any, are there any Substackers out there that are openly using AI tools to write, but the value that they bring, the human element is just curation? Because sometimes I feel like I should just share all the deep research reports that I put together because they're cool and they're, I'm asking interesting questions and the, and the humanness comes from the question that I'm asking. And very few people would think to ask that question to deep research and the, the answer is less important than the question versus just the general trend in, in language models. If you have any takes there.

• 2:23:54Speaker 07

  Yeah, I mean, the way I think of it is, you know, we, even before AI, we already lived in a world of infinite content. You can't get bored, you can't run into stuff to see or watch.

• 2:24:03John Coogan?

  Yeah.

• 2:24:04Speaker 07

  And so the limiting factor is like your attention in your life. Like what, what should you pay attention to? Who are you going to trust? What matters? Sort of, it's, it's the human alignment problem. Like this is what culture is. It's not just getting what you want. It's figuring out what to want in the first place. And that's the thing that's actually valuable. Even before AI, nobody's subscribing to Substack because it's like, oh, I don't have enough emails to read and I want to pay money for that. You're subscribing for a perspective. You're subscribing for some connection, some piece of trust, some piece of curiosity. And so I think all of these, these technology tools that just give people superpowers kind of supercharge both sides of that. There's now there's a, you know, a thousand times infinity content. There's more than you could, even more, but also the people who, who have those relationships

• 2:24:49Speaker 07

  can have so much creative leverage. And I, I, I think like literally writing for me is the, is one that's not that exciting yet, although it's not impossible. But like, yeah, help me do the research. Help me figure this thing out. Help me, you know, put the pieces of this together. I think there's, you know, there's even people that have, you know, Lenny Rochitsky has his Lenny Bot that people, subscribers can talk to. Um, I think all that stuff is awesome.

• 2:25:11John Coogan?

  Uh, talk about growth hacks. If, uh, someone out there is starting a Substack today from zero, they have no audience. Uh, what can they do to turbocharge their business in the short term?

• 2:25:24Speaker 07

  The biggest growth hack I often have to give people is just start the, to start the thing. A lot of people I talk to are thinking about, oh, I should do this. Should I write 10 things? Should I come up with this plan? Should I do this? Everybody that succeeds that I see just goes, just gets going, just starts writing, starts publishing, you know, try to make something good, try to share with people. Um, and really just have a very strong bias towards action, towards thinking and moving in public and then kind of like correct based on feedback rather than trying to come up with some genius scheme. Um, all that said, you know, make great stuff, share with people.

• 2:26:03John Coogan?

  Have you been able to dig into any of the quantif- quantitative metrics around the most successful Substacks? Like, is there a correlation between posting weekly and, and revenue or length of post? Can a deep dive ever be too long on Substack or too short? Or is, are there any patterns that you've seen amongst the, the top performers?

• 2:26:27Speaker 07

  You know, there is a, there is a trend that says, look, all else being equal, being consistent and publishing pretty frequently really does help.

• 2:26:36John Coogan?

  Yeah.

• 2:26:36Speaker 07

  Um, it's, it's a lot easier. You know, if you're publishing multiple times a week consistently for a long period.

• 2:26:42John Coogan?

  Yep.

• 2:26:42Speaker 07

  Your chances of success really do skyrocket. Other than that though, We sort of have the problem, you see this in marketing too, where sometimes the

• 2:26:52Speaker 07

  the opposite of a good idea is a good idea.

• 2:26:55John Coogan?

  Yep.

• 2:26:55Speaker 07

  Where it's like, one thing works, but also like the opposite of that thing also works. You just got to find something that's sort of good and differentiated. So yeah, make something that's interesting, authentic that you actually like, and then make a lot of it is.

• 2:27:07John Coogan?

  Yeah, I mean, we found that 100%. I mean, 15 hours a week, three hours a day. And not only that, but I mean, I think we posted on X 20 times yesterday and like 10 clips and like, some of them don't do very well, but you just set the quality bar where you set it. And then you just try and get those, you know, let the winners ride, basically.

• 2:27:27Speaker 07

  Well, I'll tell you what, you cross-stream to Substack.

• 2:27:30John Coogan?

  We'll do it.

• 2:27:30Speaker 07

  Easy peasy, you're already doing it. We got AI auto clips. You can make your own, but also people will just find them.

• 2:27:36John Coogan?

  I love it. Let's hear it for that.

• 2:27:38Jordi Hays?

  Let's hear it for that. I like the sound of that. No, I'm excited to get over there. To be honest, we've been so, you know, the core challenge for TVPN is that we're a startup, but we're, you know, John and I are the founders, but we happen to be live for three hours a day. And then we have to spend like a couple of hours prepping the show. And so there's just like, and we've built out.

• 2:27:59John Coogan?

  We're individual contributors.

• 2:28:00Jordi Hays?

  An amazing team now, but it's just about adding these other channels. But I see a ton of opportunity on Substack and I just love how thoughtful you guys have been about, you know, building the platform and staying true to your values. It's awesome to see.

• 2:28:14John Coogan?

  I have one last question and then we'll let you go. Lessons from Lulu, going direct. What'd you learn from working with her? What have you learned from the most recent Lulu ideology? And what it means to communicate as a CEO to an audience of investors, employees, customers, et cetera?

• 2:28:35Speaker 07

  I'm a huge Lulu stan. I've learned a lot from her. Maybe one thing that is non-obvious that I got from working with her that I wouldn't have necessarily picked up on just from the output is kind of like the. In many cases, the principles and the morals and the facts come first. The most important part of the go direct comms thing is not just how do I spin this? Or how do I posture it? Or how do I say it's like, are you doing the right thing? Are you, you know, are you, are you willing to stand behind the message that you're coming with?

• 2:29:09Speaker 07

  I think that thing matters a lot.

• 2:29:11John Coogan?

  Yeah, that's great. Well, thank you so much for joining.

• 2:29:14Jordi Hays?

  This was awesome. Come back on again soon.

• 2:29:16John Coogan?

  We'll talk to you soon.

• 2:29:17Jordi Hays?

  Great to catch up.

• 2:29:18John Coogan?

  We'll see you on Substack.

• 2:29:19Jordi Hays?

  We'll see you over there.

• 2:29:20John Coogan?

  Bye. Let's tell you about Bezel. Getbezel.com. Your Bezel concierge is available now to source you any watch on the planet. Seriously, any watch. Also, potentially creator economy startup. A lot of creators getting watches.

• 2:29:34Jordi Hays?

  Yeah.

• 2:29:34John Coogan?

  Lots of folks in tech getting watches.

• 2:29:36Jordi Hays?

  Their cap table is absolutely stacked.

• 2:29:38John Coogan?

  It is. Lots of creators.

• 2:29:40Jordi Hays?

  We talked about numerals, benchmark, series A.

• 2:29:42John Coogan?

  Yeah.

• 2:29:43Jordi Hays?

  Talk about a stacked cap table.

• 2:29:45John Coogan?

  Uh, anyway, our next guest is here. We have Sean from Stored announcing a, a major size gong moment. Welcome to the stream, Sean. How you doing?

• 2:29:56Sean Henry?

  Good to be here. Thank you guys for having me.

• 2:29:59John Coogan?

  Kick it off with the funding announcement. What's going on? What's new with you?

• 2:30:04Sean Henry?

  Yeah, we're excited today to announce that we've raised $200 million across our series E.

• 2:30:10John Coogan?

  Congratulations. Series E.

• 2:30:12Sean Henry?

  Series E. Been waiting for that gong moment.

• 2:30:15John Coogan?

  That's amazing.

• 2:30:16Jordi Hays?

  Let's go. We're gonna hit more. We're gonna hit.

• 2:30:18John Coogan?

  More sound effects, please. Give me the Ashton Hall. Overnight success. Overnight success. Yeah. How long have you been doing this?

• 2:30:25Sean Henry?

  I'm a few months away from my 10 year anniversary with Stored.

• 2:30:28John Coogan?

  Wow.

• 2:30:29Sean Henry?

  Exactly. Overnight success.

• 2:30:31Jordi Hays?

  Overnight success. Classic overnight success.

• 2:30:34John Coogan?

  That's great. Uh, but introduce the company. Break it down for us. What do you do?

• 2:30:37Sean Henry?

  For sure. So we're building a commerce enablement platform that's entirely designed to level the shipping experience for brands of all sizes with Prime. Over the last two decades, retail has changed where you don't walk in a store and swipe your credit card and walk out with the product. You swipe your credit card online and you walk out with trust. Trust that you're going to get the right product when the brand said you're going to have easy returns. And these massive giants like Amazon have realized that is what's driving today's buying behavior. And so they've invested tens of.

• 2:31:09Sean Henry?

  Billions of dollars into building out this competitive advantage. Meanwhile, every other brand is kind of in this stone age where if it's take cloud computing, they're still building their own data centers, managing their own racks in their office. And so we give them a scalable platform that combines an end to end physical fulfillment network that ships over 30 million packages a year. Last year, we hit about 15% of US households. We powered over 1% of Black Friday, Cyber Monday. But then all of the technology, not only that runs that network, but that also speaks to the consumer. So there's a high probability to either yourselves or people listening have actually delivered you a package before, powered that tracking link you may never even have known.

• 2:31:47John Coogan?

  Wow. So talk about how asset heavy or asset light the businesses. What do you own? Do you own warehouses, trucks, planes, boats? What are you sitting on top of? Who are your key partners to make this happen?

• 2:32:02Sean Henry?

  Yeah, great question. Our three pillars are really a network, software and scale. We give economies of scale across a network of assets. Some of those we run ourselves. So we do now operate 13 fulfillment centers, employ about 2,000 individuals across those fulfillment scenes.

• 2:32:19John Coogan?

  There we go. Congratulations. That's huge.

• 2:32:22Sean Henry?

  It's crazy. Keeps me on planes all the time, constantly going to a different city. But then about 70% of our business is an entirely asset light network, existing warehouses, existing trucks, particularly existing last mile carriers where we manage a network of about three dozen of them. But then all of that overlaid with our technology. So the customer has one consistent experience, no matter where we deploy their inventory.

• 2:32:47John Coogan?

  We talked to Harley at Shopify. How important are small businesses to your business versus going after the scaled e-commerce players, obviously not Amazon, but maybe Walmart or, you know, Macy's and like the really big players?

• 2:33:05Sean Henry?

  Great question. I'd say we're kind of squarely in the middle where we serve a lot of mid-market brands, about 500 of today's market leaders. So we power all of the deliveries for brands like Athletic Greens, Seed Health, True Classic Teas, Proactive, the skincare, Quip, the toothbrushes, Billy, the razors. It's a lot of today's kind of multi-hundred-million revenue leading brands, the types of companies you'd see walking the aisles of a Target, for example.

• 2:33:30John Coogan?

  Yeah, is that, is that mostly founder-led? I imagine that a lot of the founders of those companies kind of in your boat, been in business maybe a decade, raised a bunch of money and kind of at the same conferences. Is that how you're doing biz dev? Do you have a massive sales force? Are you outbound what's working, what's not?

• 2:33:48Sean Henry?

  Yeah, we are one of the flattest founder-led sales cultures you'll find. We actually sell, I mean, last year we were nine figures of new sales. This year we'll be multi-nine figures of new sales in terms of how we're growing. We have a seven rep sales team. And so we are on the plane all the time, meeting with our different brands, meeting with these customers. And I think that's actually one thing that blew away investors in this round. If you look at our last four quarters of sales beats, I mean, we were three X our Q1 goal this Q1 alone, most of the year. We have a fraction of a kind of percent of revenue on sales and marketing and R and D to a lot of peer companies, yet a lot of ROI.

• 2:34:31John Coogan?

  This is such a funny interview because not only is it live, which is obviously a little higher stakes, but there's also a very chaotic soundboard potentially throwing you off.

• 2:34:38Jordi Hays?

  Well, I mean, there's so many, every single, I don't want to throw you off. That's my personal reaction.

• 2:34:43John Coogan?

  But if you can make it through a TVP interview, like Bloomberg or CNBC is going to be a walk in the park. It's two minutes, no soundboard, really easy. You got a question?

• 2:34:51Jordi Hays?

  What was the, what was the dynamic? I mean, I imagine the last, you know, five, six weeks have been intensely stressful just because of what your underlying customers have been going through. Did the round get kind of done before that? Or were you simultaneously navigating trade? I imagine you were navigating a trade war and a new financing. Just sounds, sounds intense, but, but what did the timeline look like?

• 2:35:20Sean Henry?

  Yeah, we kind of come to the principle that everything crazy happens at once at STORE. So it's a it's never a time time off. Uh, I'd say that we were laying the groundwork for some of this before the trade war really started. Uh, and it kind of threw a big wrench into the fundraise in terms of some people realized how good it was for us. And some people got really scared. Uh, thankfully, and I'm fortunate to say, STORE grew massively at other issues. Take COVID, take war breaking out, take um, UPS or Canada post strikes. All those are a reason for a brand to say, you know what? I'm not going to face this on my own. I don't have the economies of scale to stay flexible. I don't want all the risk on my business. Let me go to a network like STORE.

• 2:36:03Sean Henry?

  And so thankfully, very similar here where there's really two tariff issues going on. One is anything that comes into the ports from other countries in large quantities. And that's kind of the standard tariff people are talking about. The other one is the de minimis IMAX section three, two, one. All these e-commerce brands sending small packages into the U.S. Not via a container on the water, just a small package where if it's under $800, they haven't paid taxes or tariffs on the import. That was really made for people like us, individuals traveling internationally, sending products back to families. And it got exploited into this massive program where about half of Shopify's top 100 e-commerce businesses were shipping from outside the U.S.

• 2:36:46Sean Henry?

  And so when that changed, all of a sudden, all these brands had to have this influx of volume into the U.S. And these traditional providers, again, back to kind of the data center analogy, are telling them, oh, we can get you live and set up a new fulfillment center for you in six to eight months. We had a case study with that true classic T-shirt brand, multi-hundred million revenue retailer. Took them live from meeting us and signing to fully outbound shipping in 18 days. And that's only possible on a tech-driven network.

• 2:37:14John Coogan?

  How much of the business is international versus domestic?

• 2:37:18Sean Henry?

  About 9% of our revenue would be either packages leaving the US or actually holding inventory internationally.

• 2:37:26John Coogan?

  Okay, I have another question.

• 2:37:28Jordi Hays?

  Go for it.

• 2:37:29John Coogan?

  I noticed that the raise was a mix of debt and equity. What are you using debt for? And how do you think about, is this the first time you've really included debt in a big fundraiser? And then I have more questions that we can riff on after that.

• 2:37:47Sean Henry?

  Yeah, I think for a start, we're at a late stage where part of what we announced in this round is profitability, which I think is a lot rarer in a category like ours. We've spent multiple quarters in a row now consistently profitable. And that's compared to venture times when you're in a rapid delivery business and people are wondering, are we using venture dollars to subsidize fast deliveries? Well, I think the proof is in our unit economics and in that profit. But at the same time, we still had a strong balance sheet from the 300 plus million dollars we had raised prior. And so when we looked at this round, we kind of said, let's raise the right amount of equity, but let's also use the scale, the profitability to complement the balance sheet with the right cost of capital and the right flexibility. And part of it comes down to, we actually have been acquisitive in the past as well.

• 2:38:31Sean Henry?

  We've acquired three businesses over the last few years, all existing fulfillment centers. Cause we've just seen if we onboard existing infrastructure to our technology, we can multiply the success of those customers, the profits of the acquired business and more. And so, uh, plan to be on the lookout for more opportunities like that as we keep growing, which I think funny enough, we started that, our first one in 2020, very not in vogue for venture backed businesses to be making acquisitions. Now with this kind of AI wave and more, there's actually some specific funds that are just being built to roll up traditional businesses and apply technology to them.

• 2:39:09Jordi Hays?

  What are you seeing that's exciting around actual fulfillment, automation and robotics? This has been obviously a tough challenge that again, the major players have invested billions of dollars at this point into, uh, and yet oftentimes fulfillment is still a very manual sort of process.

• 2:39:30John Coogan?

  It feels like if you're building a 3PL from the ground up, it's maybe easier to think robotics first, especially if you're a tech company, young, you're obviously aware of everything that's happening in AI, but at the same time, hard to replace a human. They're pretty versatile.

• 2:39:45Sean Henry?

  Yeah, we're very excited about both AI and robotics because labor and humans are one of the biggest costs in a business like store. And going all the way back to day one, starting even back then, we were seeing peer startups in different cohorts and accelerators more that were building drones for inventory scanning and all this robotics. And it oftentimes shocks someone when you step back and you say, hey, you realize over 60% of US warehouses aren't even using a digital WMS. They're doing pen and paper based picking. It sounds like it's made up. It doesn't sound possible, but it's true. And so then you kind of look at this gap of where the industry is. And if they can't even get to that kind of threshold, one, getting to humanoid robots

• 2:40:27Sean Henry?

  or AI deployed on how to slot in a warehouse is essentially impossible. And so there's such a fundamental advantage when we've built an entirely vertically integrated tech stack of we're really the only ones like Amazon when we're making you that promise in the cart, hey, order now, you'll get it by 5:00 PM tomorrow or the next day. We're actually going through not only the front end consumer tech, the order management layer, the transportation management layer, we're looking at, we actually have this unit in Las Vegas right now, we can get it to California by tomorrow if we ship it right now. And so we're connecting that vertically integrated system, which just gives us so much more opportunity to deploy robotics, AI and more. And so a lot of it's on the AI wave right now.

• 2:41:09Sean Henry?

  How do we use it to optimize demand planning, inventory placement, parcel selection, promise to the consumer and more. And the next phase is we've been using some robotics, particularly around the conveyance, slotting and picking in the facilities. But when you can go from static with a moving arms to both moving arms and moving legs with a humanoid, it's really interesting.

• 2:41:33John Coogan?

  On other big tech trends, what are you most optimistic about across kind of the eVTOL package delivery that we're seeing from zipline to something like automated trucking, self-driving trucks to maybe even something just like really, really robust language model driven AI agents, just doing some of that paperwork, for example, but 100% reliably. Like what technologies are you the most optimistic about? And if you have any timelines, I'd be interested to hear them.

• 2:42:08Sean Henry?

  Ooh timelines is always the question mark because even some of the ones you just mentioned, there's been a heavily debated and now disproven timelines over the last decade already. So I I struggle to make promises, but

• 2:42:20John Coogan?

  But which one would have the biggest impact on the customer experience? Which one should we really rooting for in terms of just speeding up the the time to delivery and reducing the cost?

• 2:42:33Sean Henry?

  I think any form of autonomous delivery, whether the amazing teams over at ZipLine and that kind of localized rapid last mile, some things that failed even at Amazon like the driverless kind of sidewalk robots, anything that helps connect that last mile autonomously bends the cost and speed curve so dramatically that that's probably where we remain the most hopeful and excited. But with a model like STORE being the network, essentially what we're doing is aggregating the demand and putting it on one form of tech. But a lot of these businesses you're mentioning are actually key partners of ours where somewhere in our network, we're able to kind of test this net new technology. So same thing with one of the major grocery and kind of food delivery platforms, we have a pilot in a

• 2:43:18Sean Henry?

  few cities for same day delivery for some of our brands, two hour or less type delivery. But you wouldn't assume if you looked at STORE that we're working with that type of company because it's buried in the network. So anything autonomous last mile, anything humanoid in a facility, and really anything around demand planning with AI, I think that is the most critical because if you talk to brands, demand planning is the thing that really only enterprises will say they do well. And I think most of them are a little self fatuated when they say they're doing it well. Demand planning is the biggest struggle in anything physical supply chain and speaks to the problem our friends at Peloton had during COVID. It's really hard.

• 2:44:01John Coogan?

  I'm looking at the bottom of our ticker. It's Polly Market has the US recession in 2025, dropping like a stone. Let's hear it for the US economy. But my question for you is, are you seeing data on the health of the US consumer? How how is demand in the US economy?

• 2:44:23Sean Henry?

  Yeah, we have a really interesting kind of frontline to the consumer across a lot of industries. We've purposely positioned to very macro resilient industries, things like health and beauty. You still keep the same makeup and skincare in bad times, things like nutrition and supplements, very similar, a lot of subscription orders that we fulfill, almost 50% of the volume we ship. And so thankfully, our brands have been pretty well insulated, but we actually saw an interesting trend in April, which was uptick for many of them. And we were questioning it, saying, is this consumers buying because they think prices are about to go up or what is this signal? And so, so far, we haven't seen a kind of bullet from that negatively in May. And so, year to date, our, our metrics and kind of markers to the consumer have actually

• 2:45:06Sean Henry?

  remained pretty strong, even though there's a lot of kind of fear and uncertainty when you, when you watch the news and look at the macro.

• 2:45:12John Coogan?

  Let's go, let's hear it for the American consumer. Endlessly relentless.

• 2:45:15Jordi Hays?

  Undefeated. Uh, this has been, this has been fascinating. Thank you for coming on. I remember the first time I heard about you and Stord was from John at Strike, I think in 2021, and he was just so incredibly bullish on you, and I can see why. So, thank you for coming on and congrats to the whole team on the milestone.

• 2:45:36Sean Henry?

  Means a ton. We're very proud to have Strike lead, and I think something like 50% of the store investor base has, has joined TBPM so far. I saw the Kleiner chat at SUSA.

• 2:45:47John Coogan?

  Oh, yeah.

• 2:45:48Sean Henry?

  We're thankful for not only their support.

• 2:45:52Jordi Hays?

  Yeah, come back on when you have, when you have interesting data too. Doesn't, you don't need to come on just for fundraising news if you're seeing stuff that

• 2:45:58John Coogan?

  Yeah, that'd be great.

• 2:45:59Jordi Hays?

  you think would be interesting to us and in the audience. Love to have you back on.

• 2:46:03John Coogan?

  Thanks so much.

• 2:46:04Sean Henry?

  We keep the news flowing, so we'll reach back out soon. Thanks.

• 2:46:07John Coogan?

  We'll talk to you soon.

• 2:46:07Jordi Hays?

  Cheers, Sean.

• 2:46:08John Coogan?

  See ya. A little soundboard, spice it up. Elevate the energy at the end of a long week. It's Friday, but that doesn't mean we can't listen to the Ashton Hall sound effect, which I haven't got enough of.

• 2:46:19Jordi Hays?

  We're going into the timeline, John.

• 2:46:21John Coogan?

  The timeline, okay. Welcome to the TBPM timeline. We review the best posts.

• 2:46:25Jordi Hays?

  Many people said, oh, it's almost five on the East Coast.

• 2:46:29John Coogan?

  They're gonna stop, they're gonna stop streaming.

• 2:46:30Jordi Hays?

  They're gonna stop podcasting.

• 2:46:32John Coogan?

  They can't podcast for more than 17 hours a week. We did it. I think we had multiple four hour streams this week. Yeah, big.

• 2:46:39Jordi Hays?

  Big.

• 2:46:40John Coogan?

  Big week.

• 2:46:41Jordi Hays?

  Never podcast weekly, always podcast strongly.

• 2:46:44John Coogan?

  Always podcast strongly and daily. Scientists use CRISPR to rewrite DNA inside a living baby fixing CPS1, a rare lethal liver disorder. No transplant, no viruses, just three tiny LNP CRISPR doses, gene designed dose to dose in less than six months. Personalized gene therapy is finally a reality today, says DeeDee. The world's first personalized CRISPR therapy given to baby with genetic disease. What a, what a white pill.

• 2:47:14Jordi Hays?

  What a white pill.

• 2:47:14John Coogan?

  Fantastic story.

• 2:47:15Jordi Hays?

  The footage from this is really, really sweet.

• 2:47:17John Coogan?

  So there's a whole video about this. You should go and watch it this weekend. But DeeDee goes on to say, right now, this is applicable to single cell, single gene well mapped mutations in organs that can safely be reached, which affect thousands of babies every year. It costs under $5 million now, so that's obviously expensive. It'll need to come down further and it was covered in, you know, all the mainstream media. But what a, what a fantastic piece of news. A baby's life was saved by CRISPR. I remember learning about CRISPR.

• 2:47:49John Coogan?

  Back when my co-founders were at Caltech and it was kind of this hot technology. There'd been actually a few previous technologies to edit DNA. Zinc finger nucleases was one of them and, and all the hot PhD research being done in bio and biophysics. Back in, this was like 2012, 2013 at Caltech and their bio division was all about CRISPR. There were a couple of people that spun out companies around this technology. Jennifer Doudna won the Nobel Prize and has a fantastic biography written by Walter Isaacson all about that journey. It's a, it's a very interesting technology. It took so long to get here, but it's finally having an impact.

• 2:48:33John Coogan?

  I mean, it already has in many ways, but very, very exciting to follow. Good story. Also out of the scientific community.

• 2:48:39Jordi Hays?

  Wonder if we could get gene therapy to make us closer, even closer, even closer to golden retrievers.

• 2:48:46John Coogan?

  I knew you were going to go there. Absolutely. Just permanently change my DNA so I can only be friendly.

• 2:48:51Jordi Hays?

  Yeah.

• 2:48:52John Coogan?

  Just turn off the unfriendly gene entirely.

• 2:48:54Jordi Hays?

  Yes.

• 2:48:55John Coogan?

  And also make me hotter and dumber because that's key. You can't just be friendly. You also have to be hot and dumb if you're going to go full golden retriever mode. Anyway, I love this. I love this headline from the Wall Street Journal. Forget humanoids at MIT. Worms and turtles are inspiring a new generation of robots.

• 2:49:13Jordi Hays?

  Pull up this image.

• 2:49:14John Coogan?

  This is such a great image. Yeah.

• 2:49:16Jordi Hays?

  Look at this turtle robot.

• 2:49:17John Coogan?

  He's so proud of his turtle robot. It's great. So CSAIL, which is their artificial intelligence laboratory, envisions robots beyond humanoids, including soft, flexible, and even edible designs.

• 2:49:29Jordi Hays?

  Edible robots.

• 2:49:30John Coogan?

  Eat your robot.

• 2:49:30Jordi Hays?

  You're gonna be able to eat your robot.

• 2:49:32John Coogan?

  Live in the pod, eat the robot.

• 2:49:33Jordi Hays?

  This is what Joshua was talking about, right? Like, let's explore every potential magical form factor of robot.

• 2:49:42John Coogan?

  Soft robots like a sea turtle.

• 2:49:44Jordi Hays?

  Somebody acquired, somebody acquired robot.com this week, too. Oh, yeah, I saw that. They came out with it.

• 2:49:49John Coogan?

  Edible robots for non-invasive surgeries. So you eat the robot, it crawls around inside you and cleans you up and fixes you up, sews you up. I mean, yeah, I mean, if you have internal bleeding or something, yeah, eat a robot. It'll sew you up, I guess. Russ's lab is also using new types of AI models inspired by the neural networks of worms to power robot brains. What a fun story. Anyway. And this is something that's actually gone on before. I found a different video from a different group. It says, "We have created a robot based on the leatherback sea turtle, which is alive today, leisurely swimming in motion. Next, we plan to modify it to an ancestor of the leatherback sea turtle that remains as a mesozoic fossil to make it swim."

• 2:50:32John Coogan?

  And I think this is just like, I don't know, robos, robo, robosucky? I don't know. Very interesting. It's just swimming around. Just made a, made a robot turtle. Fun. People like turtles, I guess.

• 2:50:44John Coogan?

  We talked about a few of this. What are the other funny posts? I mean, more fallout from Google, the design lead.

• 2:50:52Jordi Hays?

  Android Auto. This guy, this is somebody's LinkedIn profile if you're on audio. This person says, "Spent 40% of my time arguing with the worst PM I ever worked with, 20% managing and coaching amazing designers, and 40% on the inefficient overhead of simply working at Google. It's wild to see ideas we talked about in 2015 finally coming out in 2020, but they happened."

• 2:51:14John Coogan?

  Yeah. And this is, of course, a quote post from Daniel. Says, "It's amazing how good Gemini is and how bad every product manager at Google is." Is it, I feel like the PMs aren't that bad. It's more just like the organizational, you ship your org chart and they just, they just can't. Move fast enough to like position the products correctly. Like the products are good. They're just not, they're just not positioned correctly or talked about properly. I don't know. Sundar Pichai did an interview with the All In Podcast. He sat down with Dave Friedberg. I'm excited to listen to that this weekend and dig into how he's thinking about product design and AI generally. I'm sure there's a lot of good insights in that interview.

• 2:51:54John Coogan?

  So go check it out. We have a new landing page for Greptile?

• 2:52:00Jordi Hays?

  Greptile? This is not going to come up. I just thought this was a fantastic website.

• 2:52:04John Coogan?

  Okay, okay.

• 2:52:05Jordi Hays?

  And it's hard to

• 2:52:06John Coogan?

  Catch 3X more bugs, merge 4X faster, 100% codebase content.

• 2:52:12Jordi Hays?

  We gotta pull up the, I'm gonna share, I'm gonna share it.

• 2:52:15John Coogan?

  It's a fun name. These AI companies, these SaaS companies, sometimes they get wild.

• 2:52:19Jordi Hays?

  All right, team, it's in the chat. Let's pull this up.

• 2:52:21John Coogan?

  Data Dog, great, great SaaS name.

• 2:52:23Jordi Hays?

  You gotta see the animation though, because the static image.

• 2:52:26John Coogan?

  So the, so the Greptile, the lizard is eating bugs?

• 2:52:31Jordi Hays?

  Catching bugs.

• 2:52:32John Coogan?

  Oh, that's good. A little on the nose, the metaphor.

• 2:52:35Jordi Hays?

  Do we got it?

• 2:52:35John Coogan?

  But we respect it.

• 2:52:37Jordi Hays?

  Look at this.

• 2:52:38John Coogan?

  Cute. Very cute.

• 2:52:40Jordi Hays?

  That is a fantastic website.

• 2:52:41John Coogan?

  I like it. That's fun.

• 2:52:42Jordi Hays?

  I love to see it.

• 2:52:43John Coogan?

  That's great. Dan Romero giving us a shout out.

• 2:52:46Jordi Hays?

  Little shout out. I'm excited to have Dan on the show.

• 2:52:49John Coogan?

  Yeah.

• 2:52:50Jordi Hays?

  Getting him locked in.

• 2:52:50John Coogan?

  TPN format works because it generates daily content flowing out of the 48-hour timeline zeitgeist that can be cross-posted in video favoring algos on every major social network. Weekly podcast is too slow and stale in comparison. The only live competition is CNBC, and they are too slow, boomer downstream compared to Twitter. Interesting. 48-hour timeline, we were, it was the Daily Show. We do, we're on a 24-hour timeline.

• 2:53:14Jordi Hays?

  No, we sometimes catch stuff a little late.

• 2:53:16John Coogan?

  It's true.

• 2:53:16Jordi Hays?

  Right?

• 2:53:16John Coogan?

  Yeah. We gotta be more on top of it. We gotta spend more time.

• 2:53:18Jordi Hays?

  But we're news maxing. We're news maxing, folks. Again, thank you for a wonderful week.

• 2:53:23John Coogan?

  Yeah.

• 2:53:24Jordi Hays?

  I hope everybody has a fantastic weekend.

• 2:53:26John Coogan?

  Do you want to talk about the, the public.com vibe investing?

• 2:53:31Jordi Hays?

  Yeah, we should actually cover this.

• 2:53:33John Coogan?

  This is very cool. So, public.com, obviously sponsored by the stream, has launched the ability to create synthetic portfolios around basically any investment idea you have.

• 2:53:42Jordi Hays?

  And then backtest them against the broader market, which is where it gets really interesting.

• 2:53:47John Coogan?

  So we have a couple of these pulled up that we can share with you. The first one is founders fund funded companies that have graduated and gone public. How did they do in the public markets? And you can see Companies that were backed by Founders Fund have done 659% return over this test versus 150% in the S and P. Sequoia's done similarly, a little up and down here for Sequoia, 123% versus 147 in the S and P 500.

• 2:54:20Jordi Hays?

  Yeah, a little bit rockier, but you have to imagine.

• 2:54:22John Coogan?

  Very well, 589% versus 150 in the S and P. A16Z is also done well with 406% total return versus 150% in the S and P.

• 2:54:35Jordi Hays?

  And this is where it gets really interesting, John, the F1 index.

• 2:54:38John Coogan?

  Very fun.

• 2:54:38Jordi Hays?

  These are companies that sponsor F1 teams.

• 2:54:41John Coogan?

  Yes.

• 2:54:42Jordi Hays?

  And they have dramatically outperformed.

• 2:54:45John Coogan?

  Yes.

• 2:54:45Jordi Hays?

  Uh, the S and P, 317% total returns versus 147%.

• 2:54:52John Coogan?

  Yes.

• 2:54:52Jordi Hays?

  For the S and P over the same time period.

• 2:54:55John Coogan?

  Perhaps the best, the best portfolio that they tested is the size, compensation size lords. These are highly paid CEOs, often controversial, 2,000% return based on investing in CEOs that get paid a lot versus 176% in the S and P over the back test period.

• 2:55:15Jordi Hays?

  That's actually insane. All right. It turns out when CEOs get paid well.

• 2:55:21John Coogan?

  Yeah.

• 2:55:21Jordi Hays?

  Shareholders benefit.

• 2:55:23John Coogan?

  And also who else outperforms? Bald CEOs. Bald CEOs.

• 2:55:27Jordi Hays?

  Let's give it up for the bald CEOs.

• 2:55:29John Coogan?

  433% versus 150 in the S and P. Fascinating. Bezos probably doing a lot of heavy lifting now.

• 2:55:37Jordi Hays?

  Lot of heavy lifting, yeah. But you got the Brian Armstrongs.

• 2:55:40John Coogan?

  Yeah.

• 2:55:40Jordi Hays?

  Right? Strong, strong.

• 2:55:42John Coogan?

  He's kind of good.

• 2:55:44Jordi Hays?

  I mean, this is insane. I'm, I'm interested to just continue tracking this over time because it really tells an interesting story.

• 2:55:51John Coogan?

  Yeah. Not adventure some advice, obviously, but.

• 2:55:54Jordi Hays?

  Never investment advice, always entertainment advice.

• 2:55:57John Coogan?

  Steve Ballmer, another bald CEO. There's a ton of them.

• 2:56:00Jordi Hays?

  Yep.

• 2:56:00John Coogan?

  Lot of good, lot of good bald CEOs out there. So shout out to your bald friends. Anyway, thank you for watching. Leave us five stars on Apple Podcasts and Spotify and we will see you on Monday. Thanks for watching.

• 2:56:12Jordi Hays?

  I cannot wait.

• 2:56:13John Coogan?

  We'll see you soon.

• 2:56:13Jordi Hays?

  Cheers.

• 2:56:14John Coogan?

  Have a good weekend.