Windsurf's Wild Weekend, SpaceX Invests $2B into xAI, Zuck's AI Data Supercluster | Jeff Huber, Scott Wu & Jeff Wang, Carl Pei, Garrett McCurrach

(00:36) - Windsurf's Wild Weekend (04:50) - Cognition to Acquire Windsurf (13:06) - Timeline Reactions to Windsurf Deal Collapse (26:43) - Windsurf Timeline of Events Breakdown (57:40) - Zuck's New AI Data Supercluster (01:10:53) - Space X Invests $2B into xAI (01:19:39) - Casey Neistat Joins ModRetro (01:21:10) - Timeline (01:30:01) - Jeff Huber, a seasoned technology executive and entrepreneur, has held pivotal roles such as Senior Vice President at Google, where he led the development of Google Ads, Apps, and Maps, and founding CEO of GRAIL, a company focused on early cancer detection. In the conversation, Huber discusses the transformative potential of artificial intelligence, emphasizing its capacity to enhance human capabilities and the importance of embracing change to stay ahead in a rapidly evolving technological landscape. (01:59:16) - Scott Wu, born in 1997, is the founder and CEO of Cognition AI, renowned for developing Devin, the world's first autonomous AI software engineer. In the conversation, he discusses the recent acquisition of Windsurf by Cognition, highlighting the complementary strengths of both teams and products, and expressing enthusiasm for the collaborative opportunities ahead. Jeff Wang is the interim CEO of Windsurf, an AI-powered code development startup. Previously serving as Head of Business, he stepped into the CEO role in July 2025 after Google hired Windsurf’s founders and R&D leads . Under his leadership, Windsurf continues operating independently, with Cognition acquiring its remaining product, tech, and team to integrate into its AI platform Devin. (02:12:07) - Carl Pei, a Chinese-born Swedish entrepreneur, co-founded OnePlus in 2013 and later founded Nothing in 2020. In the conversation, he discusses the stagnation in smartphone hardware innovation and envisions a future where AI-driven operating systems replace traditional apps, creating a more personalized and proactive user experience. Pei also critiques major tech companies for becoming overly corporate and losing their creative edge, emphasizing the need for genuine innovation in the industry. (02:41:43) - Garrett McCurrach, CEO of Pipedream Labs, is pioneering underground logistics to revolutionize last-mile delivery. He discusses the company's development of a subterranean network where autonomous robots transport goods through underground pipes to modular kiosks, enabling rapid and cost-effective deliveries. McCurrach also highlights the acquisition of a rapid fulfillment center in Austin to support this network, aiming to optimize delivery methods by integrating drones and autonomous vehicles for efficient, scalable logistics solutions. TBPN.com is made possible by: Ramp - https://ramp.com Figma - https://figma.com Vanta - https://vanta.com Linear - https://linear.app Eight Sleep - https://eightsleep.com/tbpn Wander - https://wander.com/tbpn Public - https://public.com AdQuick - https://adquick.com Bezel - https://getbezel.com Numeral - https://www.numeralhq.com Polymarket - https://polymarket.com Attio - https://attio.com/tbpn Fin - https://fin.ai/tbpn Graphite - https://graphite.dev Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://www.youtube.com/@TBPNLive

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

• 0:00John Coogan?

  You're watching TVPN. Today's Monday, July 14th, 2025. We are live from the TVPN Ultra Dome, the Temple of Technology, the Fortress of Finance, the Capital of Capital. We have an amazing show for you today, folks. One of the best shows. I, it's, it's the best day to be a journalist. It's the best day to be a live streamer. It's the best day to be a commentator.

• 0:23Jordi Hays?

  That's right.

• 0:24John Coogan?

  Yeah. It's not a slur.

• 0:25Jordi Hays?

  To be in the commentary business.

• 0:26John Coogan?

  Commentary, commentary. That's not a slur.

• 0:28Jordi Hays?

  A lot of people ask us to not yell into microphones. We, we cannot help it. We just get a little too excited sometimes.

• 0:35John Coogan?

  But massive weekend. As soon as we got off the stream on Friday, the news broke that Windsurf was being sort of pseudo-acquired by, it was a trade deal.

• 0:46Jordi Hays?

  It really was a trade deal, not a meme.

• 0:47John Coogan?

  And I believe this broke at 3:00 PM Pacific, which is just after market close.

• 0:52Jordi Hays?

  Just after we went off air.

• 0:53John Coogan?

  Just after, yeah. Which one were they targeting? That's the big question. I think they were more worried about the TVPN coverage than whatever the market had to say about the deal. But the deal was that Demis Hacibis here has a post. He says, "Very excited to welcome Windsurf AI founders Mohan and Douglas Chen and some, some of the brilliant Windsurf engineering team to Google DeepMind. Excited to be working with them to turbocharge our Gemini effort on coding agents, tool use, and much more. Great to have you on board." And so this was received sort of as like, oh, okay.

• 1:26Jordi Hays?

  So, so here's, here's kind of the timeline as far as I'm concerned. So immediately, our initial reaction, we're here at the studio. We were off air. Our initial reaction was, okay, another one of these quasi acquisitions.

• 1:39John Coogan?

  People call them shell-qual hires.

• 1:40Jordi Hays?

  Yeah, everybody's gonna get taken care of. It's fine. And immediately, a lot of people started kind of freaking out on the timeline, saying that the employees had been screwed. Our immediate reaction was, this doesn't make sense. Why would, why would all the parties from the, the founders to the investors to Google tolerate something like this? And then, call it 24 hours later, I was still getting messages from employees that thought they were getting total zeros. And at that point in time, I started kind of reevaluating.

• 2:13Jordi Hays?

  Reevaluating what may have happened and there is a bunch-

• 2:16John Coogan?

  I think to be clear, like, the current employees, they saw the news and they didn't get a check, they didn't get a wire transfer, and they also didn't even get an email saying, hey, we did all the calculation and based on the share price, like, you'll be expecting this much money. It might take a month for it to clear, a couple of weeks to clear, but like, here's your expected payout. There was nothing like that.

• 2:37Jordi Hays?

  People apparently were crying, crying in reaction to the news. Well, here's the thing, this was a unique company, right? So, so Windsurf launched in November of 2014.

• 2:46John Coogan?

  The product.

• 2:46Jordi Hays?

  Oh, sorry, 2024, the product.

• 2:48John Coogan?

  Yep.

• 2:48Jordi Hays?

  But if you had joined a few months prior to launch, worked on the lead up to the launch, launched it, seen this, you know, incredible growth, and then scaled to what you originally thought was a $3 billion exit to OpenAI, and then you find out that you're actually, you're getting to, you're actually going to continue working at the company while dozens of your best engineers and your founders go and leave, effectively to then go and compete against, against you, right, in Coogan?

• 3:17John Coogan?

  Yeah.

• 3:18Jordi Hays?

  And that, that roller coaster is just absolutely insane. And so, really unique dynamic that was different than a lot of these other, you know, the character AIs, the scales, et cetera, where in those situations, many of the employees had been there long enough that they had vested a meaningful amount of shares. They had certainly reached their cliff. In this situation, you could have joined in, you know, in August of last year and not hit your cliff.

• 3:41John Coogan?

  Not hit your one-year cliff, but been there for the entire run of Windsurf as a product.

• 3:45Jordi Hays?

  Yeah.

• 3:45John Coogan?

  Like, from zero to what, 40 million ARR?

• 3:48Jordi Hays?

  Yeah, that was the last reported number.

• 3:49John Coogan?

  So, yeah, I mean, you watched the launch and you're like, cool, I got it right. I picked the correct, I picked the correct startup, I picked the correct rocket ship. I'm on board. Yeah, in Silicon Valley, you know, these option, these stock option contracts, they're kind of like lottery tickets, but my number came up. And then you go to the gas station or something to cash it in, and you're like, wait, we don't know how much it's actually worth, and it's not just like a tax issue. And so, yeah, a lot of people, very upset, and we'll get into kind of some of the, some of the debate around this. So, what's interesting is that I have Varun Mohan, who is the CEO of Windsurf. He has not posted at all, still. The last post he posted was on June 20th, so, I think, maybe it was a little bit more recently than that.

• 4:34Jordi Hays?

  Yeah, to be clear, he's been completely muzzled.

• 4:36John Coogan?

  Yes, yeah, I mean, that's what we believe to be true. But it was weird.

• 4:41Jordi Hays?

  If he's not muzzled and he's just chosen silence.

• 4:44John Coogan?

  Yeah, yes. The last time he really engaged with anything on X at least was when.

• 4:49Jordi Hays?

  Wait, John, I have to interrupt.

• 4:51John Coogan?

  Okay, please.

• 4:51Jordi Hays?

  Because it's now live. Cognition has signed a definitive agreement to acquire Windsurf.

• 4:56John Coogan?

  Let's go.

• 4:56Jordi Hays?

  The acquisition includes Windsurf's IP, product, trademark and brand and strong business. And above all, it includes Windsurf's world-class people.

• 5:05John Coogan?

  No way.

• 5:05Jordi Hays?

  We've privileged to welcome to our team. We are also honoring their talent and hard work in building Windsurf into the great business it is today. This transaction is structured that 100% of Windsurf employees will participate financially. They will also have all their vesting cliffs waived.

• 5:22John Coogan?

  What?

• 5:22Jordi Hays?

  And will receive fully accelerated vesting for their work to date.

• 5:25John Coogan?

  Let's go.

• 5:26Jordi Hays?

  At Cognition, we have focused on developing robust and secure autonomous agents while Windsurf has pioneered the Agentic IDE. Devin and Windsurf are a powerful combination for the developers we serve. Working side by side will soon enable you to plan tasks in an IDE powered by Devin's code-based understanding. Delegate chunks of work to multiple Devins in parallel. Complete the highest leverage parts yourself with the help of autocomplete and stitch it all back together in the same IDE. Cognition and Windsurf are united behind a shared vision.

• 5:53John Coogan?

  It makes so much sense.

• 5:54Jordi Hays?

  For the future of software engineering and we've never, and there's never been a better time to build. So there's a video up between Scott, Woo and Steve over at Windsurf. And we're hoping to have them on the show later today if we can coordinate.

• 6:07John Coogan?

  Oh, that'd be awesome. Yeah, that'd be great. Cool.

• 6:09Jordi Hays?

  So anyways, this, apparently Scott got to work like basically Friday. And not only negotiated, I mean, to do this kind of deal during all of the chaos of this other deal that's happening. And then put together a deal that delivers a win for every member of the team. And the other thing that's interesting here is, you know, historically, Cognition had, I wouldn't say over-invested in engineering, but they were heavily, heavily skewed towards technical talent.

• 6:37John Coogan?

  Sure.

• 6:38Jordi Hays?

  And the people that got left behind at Windsurf were sales, you know, enterprise account management, GTM, right?

• 6:46John Coogan?

  That's a crazy fit.

• 6:47Jordi Hays?

  Over the weekend, I'd heard other teams that were kind of circling, wanting to Hoover up their, their GTM team. But the fact that they were able to get this deal done in just, just, just a couple of days is fantastic.

• 6:58John Coogan?

  This is incredible.

• 6:59Jordi Hays?

  So.

• 6:59John Coogan?

  Wow. What a, what a fantastic end to the story.

• 7:03Jordi Hays?

  Or a beginning, new beginning.

• 7:04John Coogan?

  Yeah, new beginning, new beginning, for sure. I don't even know if we should go through the full, the full history here. We can kind of go through whatever. But I mean, you kind of know the end of the story, but I think we should take you through some of the debate that, that rose up and there's still the question of like, even though it feels like everyone got the good ending, there still is this question about like, we're in this weird zombie structure era where you can be left in limbo. What is the cost of that? What is, what is the risk to that? Do we need new employee contracts? Do we need new understanding of how, of expectations? Because it's one thing for a CEO to say, hey,

• 7:46John Coogan?

  I'm, I'm building, I'm trying to build something really cool in Silicon Valley. I'm going to build a tech product and I want you to join me as a salesperson, operations person, an engineer, whatever. And we're going to go on this journey. We're going to go really hard and we're, we want you, we all want to be aligned with like thinking long term. So we're doing a four year vast with a one year clef, pretty standard. And the, the expectation, at least the history has been like, like you will have clarity throughout that process. And now that we're in this weird, weird regime, like you're getting like, okay, the last, the end, the end of the, the last chapter of the book could be really dramatic. But we got the good ending and the question is like, has there ever been, if this, this deal kind of exposed the risk of like the bad ending?

• 8:29John Coogan?

  And that it is possible that that could happen. It didn't in this case. But the big question I think people are debating is like, how much of this is, is due to the chaos? How much of the chaos is a function of FTC and, and the antitrust regime? And Ben Thompson talked about that a lot versus just the differences in communication styles of different mag seven companies. That's interesting. The experience of CEOs, like you look at the way scale AI handled it. Alex Wang is, he's a generational communicator. He's been on Theo Von.

• 9:02Jordi Hays?

  Yeah. Yeah, different dynamics.

• 9:04John Coogan?

  Great guy, but you know, it's newer.

• 9:06Jordi Hays?

  Lead an acquisition.

• 9:07John Coogan?

  Totally.

• 9:07Jordi Hays?

  Having, having that sort of founder mode confidence.

• 9:10John Coogan?

  Totally.

• 9:10Jordi Hays?

  Full, fully in control of the company. And you know, it, it, you know, everything, you know, we've heard from various parties says that Varun was muzzled. But again, you like, everybody involved should have been saying, how do we avoid making it so that hundreds of people don't feel like they've been? You know, completely screwed, even for 24 hours.

• 9:32John Coogan?

  Yeah. And the evidence of that was overwhelming. Like, like the people, you would see likes on your post.

• 9:38Jordi Hays?

  People were messaging me Friday and Saturday morning saying the Windsurf employees got screwed.

• 9:43John Coogan?

  Yep.

• 9:44Jordi Hays?

  And I was messaging them back and being like, you're misreading this. This is the standard deal that they've always done. And then the overwhelming amount of more information from high quality sources saying, no, they're screwed.

• 9:56John Coogan?

  Yeah.

• 9:58Jordi Hays?

  It just flipped and I said, okay, maybe, maybe they are.

• 10:00John Coogan?

  Well, you know.

• 10:01Jordi Hays?

  And the key, so now we don't, we had this whole other kind of tangent that we were going to go down, which was like, what happens to the ghost ship?

• 10:07John Coogan?

  Yeah, yeah, yeah.

• 10:08Jordi Hays?

  It's could potentially be this like Lord of the Flies dynamic where there's now hundreds of people that are still working on Windsurf, but the competitive pressure is insane. You're losing a lot of your top talent and your founders. Are you going to be able to keep momentum or is churn going to be crazy?

• 10:22John Coogan?

  Totally.

• 10:23Jordi Hays?

  And, and then do people try to stay a long time so they can get like a distribution? Or do some people leave because they want to pursue other opportunities?

• 10:31John Coogan?

  Yep.

• 10:32Jordi Hays?

  And now we don't have to debate that because Windsurf is home with Cognition and Scott Wu.

• 10:38John Coogan?

  And you know the best part about that?

• 10:40Jordi Hays?

  What's that?

• 10:41John Coogan?

  Everyone, all those employees who are now onboarding to Cognition.

• 10:44Jordi Hays?

  I know exactly what you're going to say.

• 10:45John Coogan?

  They're getting Ramp cards, baby, because Scott.

• 10:48Jordi Hays?

  Time is money, save both.

• 10:51John Coogan?

  Easy to use corporate cards, bill pay, accounting and a whole lot more all in one place. Go to ramp.com to get started. And, you know, Cognition has a huge lineage with the Ramp team. And so we're very, we're very excited for Cognition. We're very excited for Ramp and we're excited for all of the Windsurf employees who landed. Well, this is funny because there's so much that we should, that we could go through. I think we should go through a little bit of the timeline of like what actually happened? How people, how the debate evolved, because it is very interesting. So the, the context of like, why is Windsurf selling at all? And I think this big question, the first one is, let's just say hypothetically, you owned 100% of Windsurf last week.

• 11:33John Coogan?

  And let's say a completely financial investor comes to you, not if there's no even like big tech dynamics, it's like Warren Buffett, he calls you up and says, I want to buy 100% of your stake.

• 11:43Jordi Hays?

  Warren needs, he's like, these agentic IDEs, I need it, I need it, I have to have one.

• 11:49John Coogan?

  I have to have one, yeah.

• 11:50Jordi Hays?

  I want to buy, I want to buy a great business at a fair price, let's do a deal.

• 11:55John Coogan?

  Yeah, yeah, yeah. So that's the question, is, is like, if you were, if you owned 100% of Windsurf, Jordy, would you sell at $2.4 billion last week? And I think for most people, the answer has increasingly become yes. And there's a few reasons. So, the last, the last big post that Varun, the CEO of Windsurf, had interacted with on X, was this post by Technium, who says, Windsurf wrecked. And it's a quote of Nick saying, breaking, Anthropic just pulled the rug on Windsurf. Windsurf will be cut off, direct, will be cut off from direct API access to Claude in less than five days, 3.5 Sonnet, 3.7 Sonnet, 3.7 Sonnet Thinking.

• 12:37John Coogan?

  Windsurf never even got direct access to Claude 4 anyways. And so, this has been the question of, you know, how much, like, if you are in this, like, wrapper business, I think it's, I think it's a great product, I think it's, I think it's great, I think I'm, I'm actually very excited about, about rappers, but there is this, there is this, there is this competitive dynamic with the underlying foundation lab, and Anthropic does seem to be more aggressive about where the value accrual will happen. So, you know, if it's, if it's 50/50 by default, all of a sudden, Cursor and Windsurf start pulling 80% of the gross margin dollars from what they're adding on top, well then, the underlying foundation model is going to say like, hey, like, let's pull this back, let's make sure some of those credit cards live in our Stripe account.

• 13:22Jordi Hays?

  Yeah.

• 13:23John Coogan?

  And you're not just paying us big API fees. And so, there was a big debate about this, Cursor had to go through it, Windsurf had to go through it, and Varun... Respond to this and had a good analysis and was basically making the case that like, we can get through this. And I think that's true. I think there's totally a world where it gets true. But you were saying earlier, like, it is an extremely competitive market. They were not the number one product in the market. That's Cursor and by most accounts.

• 13:50Jordi Hays?

  Yeah.

• 13:50John Coogan?

  And so, and so they were in a, you know, not a super tough spot. It's a great growing market. It's, you know, it's developer tooling. How many, how many, you know, database software, enterprise SaaS products are on the public market?

• 14:02Jordi Hays?

  Yeah.

• 14:03John Coogan?

  There's like, there's like, like the seventh one is probably worth 10 billion, right? So it's not like they couldn't have gone higher than 2.4, but 2.4 billion feels like a great deal for a company, for a product that's one years old, one year old, for a company that's four years old and a hyper competitive space with-

• 14:20Jordi Hays?

  Product that launched less than a year ago.

• 14:22John Coogan?

  Less than a year ago and your direct suppliers are trying to come for you and getting aggressive. And so this went out in Hacker News. Not sure how much you should read into it, but they said, "Webserve is absolutely dead in the water. And while Cursor hangs on for now, all value is going to go back to the models," says Jake. "In my opinion, other than the Microsoft IP issue, I think the biggest thing that has shifted since this acquisition was first in the works is Claude Code has absolutely exploded. Forking an IDE and all the expense that comes with that feels like a waste of effort. Considering the number of free slash open source CLI agentic tools that are out there, let's review the current state of things. Terminal CLI agents are several orders of magnitude less money to develop than forking an entire IDE. Claude Code is dead simple to onboard. Use

• 15:05John Coogan?

  whatever IDE you're using now with a simple extension for some UX improvements. Anthropic is free to aggressively undercut their own API margins and middlemen like Cursor in exchange for more predictable subscription revenue and training data access."

• 15:17Jordi Hays?

  Yeah. So the other context here is this year Anthropic, you know, Windserve went from zero to somewhere around a $40 million run rate.

• 15:24John Coogan?

  Yep.

• 15:24Jordi Hays?

  Anthropic this year has gone from the beginning of the year to $1 to $4 billion.

• 15:29John Coogan?

  That's so crazy.

• 15:29Jordi Hays?

  And so they, you know, however you want to say, they've been running, running away with the market.

• 15:36John Coogan?

  Yeah.

• 15:37Jordi Hays?

  And Cursor's, you know, revenue is equally incredible. From starting from a smaller base.

• 15:42John Coogan?

  And so this was some of the like, okay, things might be getting tougher from here on out.

• 15:47Jordi Hays?

  Yeah.

• 15:47John Coogan?

  Um, I don't know that I fully agree with that, but, uh, but people were saying this. And then, uh, we covered this last week, but, uh, the meter team did these, uh, evaluations where they ran a randomized control trial to see how much AI coding tools speed up open source developers. And what they found was that developers said that they expected, uh, products like Cursor and Windsurf to improve them by 20%, but they were actually 19% slower. And so you have this weird dynamic where, okay, maybe the future is like, so I, I don't know how real this is. I think that we could totally be in a world where Curse is incredibly valuable for less experienced developers

• 16:30John Coogan?

  working on more vibe coding projects than like pushing the, pushing the frontier of really advanced projects. And then also just the next, the next version of these tools could be really cool and, and solve this problem. But there was some worry that maybe, uh, developers were gonna take a hard look at their AI coding IDE stack and say, wait a minute, like, I'm kind of using this too much. I'm leaning on it too much and maybe I should just like go back to the old way. So there were some, there were, there were some, there were some reasonable, uh, points around like, maybe now's a good time to exit.

• 17:05Jordi Hays?

  Yeah.

• 17:07John Coogan?

  Then, so, so after, so after that, the question becomes when you sell, you have, the board has a fiduciary duty to shareholders.

• 17:16Jordi Hays?

  Yep.

• 17:17John Coogan?

  And the big question that I think everyone was actually debating was this concept of was the Windsurf deal with Google a Pareto improvement for all stakeholders? Which means in a Pareto improvement, basically you can think of like the baseline is how everyone's doing. In a Pareto improvement, some people might go up a lot. Other people might go up a little in, in value, but no one is going down. Not a single person is going down. This is the goal of like all political legislation. You want to create things that are not just positive sum in the sense that like, you know, I tripled my net worth and you only lost half. Like that sucks, right? You don't want that. Pareto improvement is like, I tripled, you doubled, yeah.

• 17:55Jordi Hays?

  We both won.

• 17:56John Coogan?

  But we both won and we're both happy, right? And so in, in a, in a, in a good acquisition deal. Everyone is, it's Pareto improvement. Everyone gets more than they, than they, you know, had before. Everyone gets paid out. Then the flip side is something called Kaldor Hicks improvement. And a Kaldor Hicks improvement is where some people go up, other people go down. But when you sum them, it's still a net improvement. So very few people were saying like, you know, the VCs, even when you add up the VCs and the employees and the founders, it's a net loss for everyone. Very few people were making that argument. And to be clear, the employees got hosed.

• 18:33Jordi Hays?

  It seems like everybody would have done better on an open AI. Everybody would have done better on an open AI acquisition.

• 18:39John Coogan?

  Probably.

• 18:40Jordi Hays?

  And so when the 2.4 billion number came out in, on the evening of Friday, it seemed like, okay, not as great. But still, everybody's going to do well. And then 24 hours, 24 hours later, it was, oh, wow. Like, this might have been structured in a very funky way that, you know, people were, I won't, I won't report the number, but people were messaging me information on how much Varun personally made. And that was still in the context of.

• 19:09John Coogan?

  I mean, you can just do the rough math. Founder stake, couple of rounds of dilution. How much do you think he made? Right? Like, it's not rocket science to figure this, or to at least ballpark it to the right order of magnitude, right? But you build a great product that gets some traction, that solves some problems. And you, you, you build a great team and big tech wants you. Like, you, you know, I, I'm not upset about it. But the question was like, what's fair for the employees? What's fair for, you know, all the different stakeholders? And so a lot of people kept coming out with really interesting stories. So William Allen here has one about Scott Belsky and Behance going to Adobe, we should read through. So William Allen says, I don't think he's ever told the story, but it's worth telling.

• 19:53John Coogan?

  When we were selling Behance to Adobe many years ago, Scott Belsky made a spreadsheet of every employee, 32 of us at the time, and personally negotiated each person's title, salary, and incentive structure, and made that part of the overall deal terms. I'm going to choke up. It's so. Virtuous. I heard the phone calls where he went to bat for each individual. He not only, he not only didn't have to do this, but it actually complicated some of the other factors in the deal, of course. It changed the trajectory of so many people's lives, including my own. Two years later, 100% of that original team was still at Adobe. Even today, a dozen years later, many of the core members are still there building. I was inspired by it then, and I'm inspired by it now.

• 20:39John Coogan?

  And so I think that was a good, a good case study in like, the founders do have a lot of hard power in the sense of board control and, and actual voting shares.

• 20:52Jordi Hays?

  Yeah.

• 20:52John Coogan?

  Almost every founder can veto a deal, which gives them leverage to build that spreadsheet and actually decide who gets what. And then on the flip side, they have a ton of soft power. Because you can't really do a hostile takeover of a private VC-backed company where the founder has board seats and stuff. It just doesn't work. And so it's incumbent upon the CEO to actually take that step. And that was the fear, that Varun didn't do that, that he didn't go far enough.

• 21:19Jordi Hays?

  Yeah, there was another, there was another example from Pars, Ilya Sukhar's company. So one of his former employees says, "We got news, our startup was being acquired five days before my one-year cliff. I thought I'd get nothing. Our shares were accelerated to 100%. It was a life-changing event, and I'll always appreciate that our founders did the right thing for us at Pars." And said, Ilya, Ilya quoted it and said, "100% acceleration for everyone but the active founders. We went backwards and re-vested our vested." Glad someone remembers, so.

• 21:50Jordi Hays?

  Very heartwarming.

• 21:52John Coogan?

  Yeah, and so people were, people were debating, you know, did, like, was the core team taken care of? It felt, it felt very rough, but then pretty quickly it came out that, so we were going back and forth on this on Saturday. And, and the core, the core debate.

• 22:12John Coogan?

  Like your post went pretty viral. You got 2 million views, 4,000 likes. And it definitely struck a chord.

• 22:21John Coogan?

  Folks were debating this one line. From what I've heard, the employees are getting screwed regardless of their vesting status. And it's like.

• 22:29Jordi Hays?

  And that was because people had, people were on a four-year vest.

• 22:33John Coogan?

  Yes.

• 22:34Jordi Hays?

  But they hadn't hit their cliff, even if they had joined 11 months ago.

• 22:37John Coogan?

  Yes.

• 22:38Jordi Hays?

  And had, again, they had worked on the product up until launch.

• 22:41John Coogan?

  Yep.

• 22:41Jordi Hays?

  Launched the product, scaled it.

• 22:43John Coogan?

  Yep.

• 22:44Jordi Hays?

  Thought that they were getting this three, you know.

• 22:46John Coogan?

  Yep.

• 22:46Jordi Hays?

  Massive outcome in which, again, they, some people would have not been able, I'm sure OpenAI wouldn't have kept everyone.

• 22:52John Coogan?

  Yeah, totally.

• 22:53Jordi Hays?

  I'm sure that they would have made a bunch of people effectively.

• 22:57John Coogan?

  There's always layoffs, post-merger acquisitions, like that happens all the time. That's not, that's not a crazy thing. So certainly reasonable. I mean, the other question is just like, you know, if you worked at this company and you were like, I like working at this company. I really would love to work at Google and you don't get carried along, like that is getting screwed. Like not getting a job at Google in some ways is getting screwed. Even just the ambiguity over the weekend is a little bit of like a screwing. And so I still will defend your initial characterization. But I thought that there were things that could potentially shift the narrative. And so I quote tweeted yours with the steel man argument, which is one.

• 23:34Jordi Hays?

  And we tried to get a knight in shining armor suit. We were getting the steel man suit ready, but then we knew we didn't have to.

• 23:44John Coogan?

  Production team will get the steel man, knight of, suit of armor eventually. We need to order from a prop shop.

• 23:51Jordi Hays?

  Yeah, it's on the way. We're working on it.

• 23:53John Coogan?

  Yeah, okay, we're gonna, and just make sure it's great when it comes. And so I had three points. One was that employees who haven't reached a one-year vesting cliff don't have that strong of a claim around, I built this with sweat, and need a liquidity event, and we don't know the tenures of all the left behind employees. So there is an argument that like, if you joined three months before, it was already like, really big, like, should you really get accelerated four years and like?

• 24:17Jordi Hays?

  Oh, and I never would have made that argument.

• 24:19John Coogan?

  Totally.

• 24:19Jordi Hays?

  But it was a fact that you could have worked there for 11 months and gotten zero. And it's like, no, you're getting a ride on the ghost ship now. Ride the ghost ship into the sunset.

• 24:29Jordi Hays?

  And that was in the context of the founders and this is why people in group chats and DMs were getting so angry because it was in the context of, you know, somebody that worked for you for 11 months was potentially going to get zero. Now that's not the case now, but and then you're walking away effectively defecting and taking a multi hundred million dollar payday.

• 24:51John Coogan?

  It is a weird dynamic with these startups because clearly, I don't know exactly what Windsurf's headcount was. I think everyone was saying it was around 500 at the time of this deal. And a year ago, pre pivot, what do you think their headcount was? Couldn't have been more than 50, right?

• 25:08Jordi Hays?

  Definitely not.

• 25:09John Coogan?

  So you're looking at a 10x increase in employees who haven't really been like, they've been on this rocket ship. So I think, I personally think they totally deserve liquidity and accelerate investing, which it sounds like they're getting and it sounds like they're going to do great. But, but it is like not the nature of the initial contract, which is like one year cliff, four year vest. Like if it came out that it was like, okay, they're getting paid out to the tune of, you know, how long they've been there. I don't think anyone would be like that upset. But then somebody was making a good argument that basically, like you, when you sign up with like a four year vest, you're saying, I'm going to keep working for four years. If you sell the company and put me on some zombie ghost ship, like I didn't bail,

• 25:53John Coogan?

  you bailed. So you should accelerate me. And I actually think that that

• 25:58Jordi Hays?

  The other dynamic here was, so when Character AI, when, when the Character AI founders and part of the core team went back to Google, the Character AI became a ghost ship, but it was cool in the fact that they had 20 plus million users. They also had a hundred million on the balance sheet. And it wasn't this like insanely gnarly enterprise market where, and I know, I know people on the character team and they were like, it's pretty cool. We have a hundred million dollars. We have tens of millions of users and we're just kind of going to experiment to try to find, you know, figure out how to monetize this. And I just don't think that that was

• 26:42Jordi Hays?

  I don't see that the code generation market playing out in the same way where.

• 26:47John Coogan?

  I was trying to think about that, like, is there a world where, you know, i- if the ghost ship had planned, had like stayed a ghost ship? And they pivoted, is there some world where they, you know, niche down, like, there was this rumor that they were going to niche down into B two B? Like, could they have niched down windsurf into some like niche category and actually had like a pretty durable business? We were talking about like, could Jeremy Gaffon make it work if he acquires it and like turns it into some cash flowing business? I just wonder, like, is there, is there a niche where like, I mean, we've heard, we, the example I would give is like, we've heard that like, these code gen tools are like particularly bad at like rewriting old programming languages like Fortran, for example.

• 27:27John Coogan?

  And so if you created like cursor just for rewriting Fortran, it's like, that's not sexy at all. That's not going to be hot on, on Twitter X, but it could be really valuable in like, you know, the bowels of like legacy banking. And like, you could pay, you could charge a bunch and you wouldn't like the TAM wouldn't be very big, but the business could be quite good. And, and that, that, that might be a weird outcome, but it, it could be a silver lining. I don't know. Well, anyway, the second point that I made was that, you know, I, I said, the second, the, the real culprit might be FTC antitrust. This is a hyper competitive market and Google still feels like they can't just do a normal acquisition.

• 28:07John Coogan?

  And I thought that was crazy because it's like, this is textbook, they should be able to acquire this company, right? Like, like cursor's out there, they're not acquiring the market leader.

• 28:19Jordi Hays?

  Yeah.

• 28:20John Coogan?

  OpenAI is clearly going after this market and to the tune of what's, what's their valuation, like 350 billion or something like that? Like, like.

• 28:28Jordi Hays?

  We haven't, we, we should try to get an update there because I think the Masa, I'm not sure the, the full Masa.

• 28:34John Coogan?

  It's not even one tenth of, it's, it's greater than one tenth of Google's market cap, right?

• 28:38Jordi Hays?

  Yeah.

• 28:38John Coogan?

  And so you're looking at like, and then is Microsoft going to compete in this? Absolutely. They have.

• 28:43Jordi Hays?

  They already do.

• 28:44John Coogan?

  They already do. And so it, it, it's like, you're, you're basically like, I don't know, second, third, fourth in this market. There are four very. Serious players like this should be textbook rubber stamp. Good. Good to go. Do the deal. No problem.

• 28:58Jordi Hays?

  There's also a there's also a very long list of founder led companies that were that are maybe that were maybe less hyped than windsurf but have incredibly talented teams. There's like poolside.

• 29:07John Coogan?

  Yeah, poolside. That's right.

• 29:09Jordi Hays?

  There was that one that Nat Freeman and Daniel Gross did that was.

• 29:11John Coogan?

  Magic?

• 29:12Jordi Hays?

  Yeah, there was.

• 29:12John Coogan?

  The magic doc dev?

• 29:13Jordi Hays?

  Haven't heard of it.

• 29:14John Coogan?

  Apparently they were training their own foundation model for a while and that was kind of like, you know, very capex intensive and and maybe slowed down some things in the product side, but still like clearly it's competitive market. Everyone's working on it. There also we're missing out like there's probably a ton of Y C teams. They're working. There was actually one Y C team that got in trouble for forking like cursor too hard or something like that.

• 29:33Jordi Hays?

  A little too hard.

• 29:34John Coogan?

  Yeah, they crossed some line there. I think they did fine and I think that they wound up like cleaning it up, but people were upset about like when you fork something, you have to abide by the MIT license or whatever the underlying license is. And so you can't just like steal open source code and not abide by the by the open source rules. And then and then I said, three new facts might come out, which they did. And and the FTC thing was interesting because there was a little bit of pushback on that. People were saying like, oh, like Lena Kahn ate my lunch, like Lena Kahn's like responsible for everything. And I wasn't, I wasn't necessarily saying like Lena Kahn was 100% responsible for how this was was was structured or like how this played out, but she did kind of like warp the road a little

• 30:19John Coogan?

  bit that made it a little bit wonky to drive on.

• 30:22Jordi Hays?

  Yeah, basically we made hardcore capitalism illegal. So we nerfed capitalism and then and then capitalism ended up coming in and saving the day.

• 30:30John Coogan?

  Yes, yeah, yes.

• 30:32Jordi Hays?

  With Scott Wu at the helm.

• 30:33John Coogan?

  Seriously, seriously.

• 30:34Jordi Hays?

  So the solution to.

• 30:38John Coogan?

  Capital anti-capitalism is more capitalism. This is the Brad Gerson point. Yeah, totally.

• 30:44John Coogan?

  And so, so I still don't, I still think that there's a, that there is a way that even with the weird new FTC antitrust regime, Google and the Windsurf founding team could have probably been a little bit more aggressive, taken a little bit more FTC risk and avoided this whole PR dust up. But that would have been more risk for Google. And I think that the way they did this here where they

• 31:06Jordi Hays?

  I mean, it's a great outcome for Google. It's like, we didn't buy the company. Look.

• 31:09John Coogan?

  Exactly.

• 31:10Jordi Hays?

  They bought the company.

• 31:10John Coogan?

  They bought the company. Exactly. So it really, it really is a great outcome for Google, even though I'm sure that they, their comp team was up all weekend, calling people.

• 31:18Jordi Hays?

  Yeah.

• 31:18John Coogan?

  Like, I have to imagine that this was like

• 31:20Jordi Hays?

  I mean, it was

• 31:21John Coogan?

  a war room for them.

• 31:22Jordi Hays?

  It was like serving, you know, it was, it was the best possible story that the New York Times could have ever asked for.

• 31:30John Coogan?

  Oh, totally.

• 31:31Jordi Hays?

  It was like, big tech

• 31:32John Coogan?

  Yes.

• 31:32Jordi Hays?

  buys hot company that was competing, you know, not, not necessarily, like, the whole point of, of Lena Khan's thing was that, you know, big tech is like squashing competition by, by, you know, buying these companies early. And so you had the story that, that was served up to them, which was, you know, exciting company in CodeGen, a lot of traction.

• 31:52John Coogan?

  Yep.

• 31:52Jordi Hays?

  OpenAI almost buys them. Google says, okay, we're going to buy them. That's Google. Google and OpenAI are arguably, you know, the, the two competitors that actually like matter in search right now. And so it was just the perfect story. And then, and then the, you know, I, I think Scott, Scott over at Andreessen had a good post that I, that let me pull up here for a second. He was basically saying, there is an irony that Lena Khan's activism has resulted in deals that are far worse for everyone except the people she was targeting.

• 32:24John Coogan?

  Wait, who, who tweeted that?

• 32:25Jordi Hays?

  This is, sorry, Martin Casado.

• 32:27John Coogan?

  Oh, yeah, yeah, yeah, from Andreessen, yeah.

• 32:28Jordi Hays?

  And, yeah, it's like the, the people with the lowest, you know,

• 32:31John Coogan?

  It's crazy.

• 32:32Jordi Hays?

  It seemed at the time that the people with the lowest leverage, the employees that had joined recently

• 32:36John Coogan?

  Yeah.

• 32:36Jordi Hays?

  were getting the worst outcome

• 32:38John Coogan?

  Yeah.

• 32:38Jordi Hays?

  out of, out of a deal that, that should have benefited everyone.

• 32:41John Coogan?

  Well, if you're looking for code review for the age of AI, head over to graphite.dev. Graphite helps teams on GitHub ship higher quality software faster. You can get started for free at graphite.dev. So my question is, Google, it feels like PR nightmare.

• 32:57John Coogan?

  Accidental PR nightmare because they had done, what, character just fine. It was not that big of a deal for them, not a bit, and then scale had happened.

• 33:06Jordi Hays?

  Well, and it was very clear that that situation was interesting, too, because it Google has delved into social in the past, hasn't had the best time.

• 33:15John Coogan?

  Not beating the chat GPT script.

• 33:16Jordi Hays?

  No, that was intentional, of course. No, but they've messed around in social. You could tell that Google doesn't want to own the AI chat bot. They just don't want the association with.

• 33:28John Coogan?

  There was a rumor that Gnome didn't want to be in that, that he kind of like, was just like, I want to train a great model. I want to train a great model. I want to do AI research. And then that became the use case. They found product market fit. And then he was like, I don't really like building this type of company.

• 33:39Jordi Hays?

  You see what Elon's launching today with the, I won't even say it on the show, but his new launch today basically signals that that is a very important use case.

• 33:51John Coogan?

  And he's interested in that market. Yeah.

• 33:51Jordi Hays?

  He's interested in that market.

• 33:52John Coogan?

  Yes. Anyway, my question for you is, is so feels like a PR nightmare for Google. Feels like a couple stressful days. Feel like, feels like they landed.

• 34:02Jordi Hays?

  Over the weekend.

• 34:03John Coogan?

  And that's my question. Do you think that they are, that they were intentional and happy about releasing the news after market close? Because the, the, all of the facts had come out over the weekend and it was such a hairy deal that more deals needed to be done, even after the story came out and it couldn't be super clean. So you have to do it on, late on a Friday. So then Saturday, Sunday, people can talk, deals can get done. And then announcements can go out Monday and then it resets the whole news cycle. So you kind of skip the crazy news cycle. I think.

• 34:34Jordi Hays?

  I think the world's too online. So I think, I think it helps that it wasn't a weekday. But I mean, this, to me, this, this whole thing, you know, from, from everything that we've kind of triangulated, this, this could have been avoided by managers taking it upon themselves to basically call each individual person at the company and say, Before you have a negative reaction, I need you to be patient.

• 35:02John Coogan?

  Yes.

• 35:03Jordi Hays?

  I know you've been patient through this, this, this, uh, this deal with OpenAI.

• 35:06John Coogan?

  Yes.

• 35:07Jordi Hays?

  It's not the deal that we wanted.

• 35:08John Coogan?

  Yeah.

• 35:08Jordi Hays?

  But we are working to make this a positive outcome for anyone. And, uh, and don't cry yet.

• 35:16John Coogan?

  Yes.

• 35:17Jordi Hays?

  Don't, just don't cry.

• 35:17John Coogan?

  And it's really hard. And it's particularly hard because if you, if you're in the scale situation, a lot of those people have been there for four years. And with Windsurf, most of those people have been there for less than a year, almost certainly. And so the, the strength of those connections socially, outside of work is weaker. So there aren't as many, oh yeah, like my boss, like we are, we're already on Signal with disappearing messages. So we just talk back channel all the time.

• 35:45Jordi Hays?

  Yeah.

• 35:45John Coogan?

  It's like, no, I just met my boss three, three months ago.

• 35:48Jordi Hays?

  The argument was the new company has a strong balance sheet.

• 35:51John Coogan?

  Yeah.

• 35:51Jordi Hays?

  And they're going to be able to just do a distribution or pivot or like, that was effectively the, the suggestion.

• 35:58John Coogan?

  It was intentionally ambiguous.

• 36:00Jordi Hays?

  And at the same time, the, the employees left behind on the ghost ship.

• 36:06John Coogan?

  Yeah.

• 36:06Jordi Hays?

  Were already talking with other companies. Other companies were coming to them, trying to recruit them.

• 36:09John Coogan?

  I like how you're coining ghost ship because, uh, like everyone involved in the deal would prefer you to use the term remain co. Remain co, uh, but that's not as sticky as ghost ship. So I think ghost ship is going to be like.

• 36:23Jordi Hays?

  Ship without a, ship without a founder.

• 36:24John Coogan?

  I don't think this will be the last ghost ship we see. I think it's, I think it's like a new pattern and we're just going to see this more and more.

• 36:29Jordi Hays?

  No, but, but so, so then you have this dynamic where the, the, these talented people, specifically I talked to a founder who was talking with a lot of people on the go to market team.

• 36:39John Coogan?

  Yeah.

• 36:39Jordi Hays?

  Being like, these are very talented people, right? They took a company from zero to tens of millions of dollars in ARR and a bunch of enterprise contracts.

• 36:46John Coogan?

  Yep.

• 36:47Jordi Hays?

  In a very short period of time.

• 36:48John Coogan?

  Yep.

• 36:48Jordi Hays?

  I want to scoop them up. And those people were entertaining conversations because.

• 36:54Jordi Hays?

  It was just totally unclear to them what was going to happen.

• 36:57John Coogan?

  Yep. So, yeah, I mean, I still, I think some of our friends hold the FTC like 100% accountable. I'm probably under 100, but maybe over 50. But my key point is that never lose faith if the FTC is giving you trouble. Dylan Field didn't lose faith when he was dealing with a messy situation with the FTC at Figma. And also, you should use Figma, Figma.com. Think bigger, build faster. Figma helps design and development teams build great products together. You can get started for free at Figma.com. Anyway, there was another side of the stakeholders that was interesting that this guy Publius said in your

• 37:41John Coogan?

  in response to your post, which I don't think anyone was talking about at all the entire weekend. This is cool. And this is something people don't really think about. I think we're in a good spot with these folks now. And I think they'll actually probably be in a better spot now.

• 37:52Jordi Hays?

  Much better spot.

• 37:53John Coogan?

  But let's read through it. So, Publius says, "There are more stakeholders here that have not been discussed. There is a whole network of software resellers that invested millions into building partnerships with Windsurf. I was leading the team at one of those partners. We have customers that we have been selling to for years who we vouched for Windsurf to. I am sending out a note to our 300 customers on Monday that we are stopping all partnership activity with Windsurf effective immediately." I hope he didn't send that because you gotta recall that email. Don't send the email. Cursor has no channel partners and this will cost our firms millions. Oh, interesting. I didn't realize that Windsurf had a channel strategy and Cursor does not. Very interesting.

• 38:36John Coogan?

  So Windsurf actually has resellers who go and sell it into their partners because they're doing something on, you know, we do software development consultancy. We come in and help your team run more efficiently. We help you pick the right tools. You can imagine like McKinsey, I don't know where this guy works, but like you can imagine a consulting firm coming in and giving advice on what tools to use. They get a kickback from Windsurf. They don't get a kickback from Cursor, so he's going to lose millions of dollars hypothetically. Hopefully not. But my reputation and good name is worth more. With Google taking the best engineers from Windsurf, our large enterprise clients are screwed. They purchased windsurf enterprise licenses. They were also purchasing an ecosystem that they assumed would continue to improve. This is disastrous for any startup tech company with

• 39:19John Coogan?

  goals of building an enterprise channel. It's interesting. I don't think people have any idea how much this just killed channel sales for any AI company. So the rest of the AI companies out there who are like, oh, channel, uh, channel sales is really interesting.

• 39:33Jordi Hays?

  Basically, if you're, if you're, if you're a top company in your category growing super quickly, you might turn into a ghost ship.

• 39:40John Coogan?

  Yeah, yeah. And so if, if I'm trying to resell that type of stuff, then I, I have to go to the CEO.

• 39:46Jordi Hays?

  They're good, but they're not so good to get these maxed out. They're not getting a trade deal. You can count on them to not get traded.

• 39:52John Coogan?

  Yeah, yeah, yeah. You're having, you're having dinner with the, uh, with the CEO of some AI companies talking to you about like, yeah, we have the best software and you're like, but you don't have any like actually great AI researchers, right? Like you mostly just have.

• 40:04Jordi Hays?

  We like to partner with companies with.

• 40:05John Coogan?

  Like medium to.

• 40:07Jordi Hays?

  C tier.

• 40:07John Coogan?

  Yeah, yeah. Great product. It works, but not too well because we don't want to lose you.

• 40:12Jordi Hays?

  You want to keep working with them for a long time.

• 40:13John Coogan?

  Keep working with you. Um, and so, uh, yeah, the, there were a bunch of other reactions. Shell Quah hires. Let's see. I'm not, I'm not an M and A guy, but something feels really broken in tech. M and A confidentiality is out of the window. Deals get done and called off on a whim. Lack of rigor and discipline on both sides. Curious to hear what practitioners think. People are going back and forth on this. Um, but really quickly, let's tell you about Vanta. Automate compliance, manage risk, improve trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program. Um, and so Will Monitis was particularly blackpilled over the week, friend of the show.

• 40:52Jordi Hays?

  Incredibly blackpilled.

• 40:54John Coogan?

  But, uh, he, it's, we're so back, Will. You're good. Uh, Will Monitis said, the reason that tech has been able to grow so quickly and create so much wealth that it is rich, that it is, that it ritualized a set of norms around corporate governance that are very distinct from what the law actually requires. The second someone defects, the whole ship goes down. He's so upset. But basically he's talking about like hand, the handshake deal protocol is not a legally binding contract. Even term sheets. You get a term sheet from a. VC, that's not a legally binding, that's not a legally binding contract. Like a VC can write you a term sheet, everyone can sign it. And then you can just

• 41:29Jordi Hays?

  Literally says

• 41:30John Coogan?

  Yeah, it literally says, it says, this is not binding. And then you can just wake up on the wrong side of the bed and be like, actually, I don't want to do the deal. And or or it could be like you found something in due diligence or you met a different competitor. But the like, you know, the game isn't over until the money's in the bank. The experienced entrepreneurs know this, but we run on this like basically, you know, these society, these like social constructs and these like social contracts that say, hey, if you're the type of VC that constantly rugs on term sheets, on signed term sheets, like you will, there will be a bad vibe around

• 42:05Jordi Hays?

  I can think of two

• 42:06John Coogan?

  Yes.

• 42:06Jordi Hays?

  That are widely known.

• 42:08John Coogan?

  Yes.

• 42:08Jordi Hays?

  And are still in business.

• 42:09John Coogan?

  Yes.

• 42:10Jordi Hays?

  But they, it becomes very hard to be an effective VC.

• 42:14John Coogan?

  Yeah.

• 42:15Jordi Hays?

  If your brand is you just pull term sheets.

• 42:17John Coogan?

  Yes. Yeah. And some of those, some of those folks have been banned from Y C Demo Day. Other people have had like viral Twitter posts around them every once in a while. Like they, they do that to a founder and then the founder becomes very successful and post economic and is like, yeah, I, I still have a grudge. So I'm going to tell the truth about X, Y, or Z. And, and so the, the thing is, is that now where we are now is I don't think, I don't think the whole ship goes down. I, I don't think this is a true defection. I don't think this reflects poorly. And I think that the, the question of like, the, the big question here was, was will this cause more new startup employees to want to just go straight to Google?

• 43:00John Coogan?

  Let's say, let's say that you have the option of working at Google or Big Tech broadly, where you know the paychecks are coming on time. You know, the RSUs are liquid and you can just cash out as soon as you get them or whenever their lockup is. And you know, your manager is going to be there and you know, the company is going to be around.

• 43:14Jordi Hays?

  Somewhat accurately predict what your comp will be in five years. If you really work hard.

• 43:19John Coogan?

  Exactly. And then, and then on the flip side, you have startups, which are in some ways lottery tickets. But also you get to work on game changing technology with really cool people. You get to move a lot faster. There's a lot less Overhead, it's a lot more edifying.

• 43:32Jordi Hays?

  You get to work for potentially the next Sundar.

• 43:34John Coogan?

  Yeah.

• 43:34Jordi Hays?

  Instead of Sundar.

• 43:35John Coogan?

  And, and the economic upside can be a thousand X. It can be huge. And the question is, if that, if that deal was broken, if that, if that deal was, okay, yeah, you can go work on the cool thing, but you might wind up penniless and not cashed out like you were promised. That changes the equation and that could pull people away from startups. But I don't think that's going to happen based on this because I think the lesson from this is that everyone got taken care of and the social contract still, still holds, although it was very messy. And I think going forward, every company that's doing a deal like this needs to think, how do I get the scale AI outcome and not the windsurf outcome?

• 44:17John Coogan?

  Because just two days of pain is not worth that.

• 44:22Jordi Hays?

  I think, I think one potential solution to these deals is exactly what we just saw happen.

• 44:28John Coogan?

  Yes.

• 44:29Jordi Hays?

  Which is big tech company does basically an aqua hire of the, of the team that they want. And then you simultaneously sell off the underlying asset immediately. And you generate a liquidity event for everybody. So everybody's happy.

• 44:41John Coogan?

  Yep.

• 44:42Jordi Hays?

  It doesn't have to be like life changing, right? But it has to be something, right? So that it's.

• 44:46John Coogan?

  And I mean, the very key thing is that they left enough money on the balance sheet. Because the money on the balance sheet, and this was, uh, this was, uh, Hari Ragavan's, uh, analysis. He, he clearly, I mean, the guy's, uh, he's a good friend. He's, uh, he's obsessed with cap table math.

• 45:01Jordi Hays?

  I know. He was, yeah, I mean, this was capital J journalism.

• 45:04John Coogan?

  Yes, thank you.

• 45:05Jordi Hays?

  This was investigative journalism.

• 45:07John Coogan?

  Yeah. Uh, and so, I mean, his post is so long, uh, that I need to just go to the TLDR. But the TLDR is that he says, I spent hours last night breaking down the cap table and deal dynamics from public info. I realized that the undested equity is around 80 to a hundred million dollars, awfully close to the hundred million dollars the founders and board negotiated to leave behind in the bank. Why shouldn't management just accelerate and invest it?

• 45:32Jordi Hays?

  Which is a key detail.

• 45:33John Coogan?

  Unvested. So they, they left enough cash out everyone.

• 45:36Jordi Hays?

  We're, we're leaving enough as though you vested your full.

• 45:39John Coogan?

  Yes.

• 45:39Jordi Hays?

  Four years.

• 45:40John Coogan?

  Yes. And. So and so if you if it like it's it's it's still a leap of faith because I don't believe that Google and cognition were in communication at all. And I think if they were, that would be more like antitrust chaos and stuff. But just economically, you know that if you if you leave a company there with that much money on the balance sheet and those many and that many like that unvested options. Somebody is just going to be like, wait, so I can get that for basically free if and I can make all the employees whole. And I get all the employees and I don't have to pay really like anything to get that thing like it's just going to happen immediately.

• 46:18John Coogan?

  And because it's just like you've create you've left this, you've left this like, you know, a hundred dollars on the floor and someone's going to pick it up like the free market will just work.

• 46:26Jordi Hays?

  I think the I think the question that I had and that I think a lot of people probably had is what is the governance structure of the ghost ship.

• 46:33John Coogan?

  Oh, yeah.

• 46:34Jordi Hays?

  So Jeff, Jeff.

• 46:35John Coogan?

  Crazy question.

• 46:36Jordi Hays?

  Jeff Wang, who's coming on the show at 1pm.

• 46:38John Coogan?

  Oh, he is?

• 46:40Jordi Hays?

  Jeff and Scott will both be coming on at 1pm for 15 minutes.

• 46:43John Coogan?

  Okay.

• 46:43Jordi Hays?

  And.

• 46:44John Coogan?

  Can we can we communicate that to the other guests?

• 46:46Jordi Hays?

  Yeah, yeah.

• 46:49Jordi Hays?

  And so the question is like, okay, Jeff, you now run a company with hundreds of employees that are angry about what just happened that that probably like maybe they want to keep building windsurf. But maybe they want to go and do something else. And what happens like Jeff is basically, I would imagine like has to make a bunch of calls.

• 47:09John Coogan?

  Yeah.

• 47:09Jordi Hays?

  It's like, do you just keep running the business?

• 47:11John Coogan?

  Yeah.

• 47:11Jordi Hays?

  Is there pressure to keep running the business?

• 47:13John Coogan?

  First question, Jeff, did you ever feel like, is it Frodo Baggins throwing the ring into the fire? It's like, pay out the hundred million dollars in bonuses. After all, why shouldn't I keep it?

• 47:26John Coogan?

  Throw the ring in, throw the ring into the Mount Doom.

• 47:29Jordi Hays?

  Yeah, the question was like, could.

• 47:30John Coogan?

  Were you ever tempted?

• 47:31Jordi Hays?

  Could could the the new leader, the leadership.

• 47:34John Coogan?

  Yeah, like was it ever, was that an option?

• 47:36Jordi Hays?

  Could the leadership have decided, you know what, we can run this business super lean.

• 47:39John Coogan?

  Exactly.

• 47:40Jordi Hays?

  We could actually run this business with like 10 people.

• 47:42John Coogan?

  Yeah.

• 47:42Jordi Hays?

  And and you know, we're going to run it for a few years and we're going to we're going to use the advantages that we get from our own product to run a super lean team. And then and then you would have employees like effectively burned again potentially. But that didn't happen. I'm very happy about it.

• 48:00John Coogan?

  Yeah.

• 48:00Jordi Hays?

  The question, another question is what?

• 48:03John Coogan?

  If you're big tech and you're gonna do one of these like zombie acquisitions, you gotta leave enough for the unvested shares. And if you're founder and you're gonna do one of these zombie acquisitions, the ghost ship's gotta be full of plunder.

• 48:14Jordi Hays?

  Full of plunder.

• 48:15John Coogan?

  It's gotta be stacked with treasure. Because then, then the rescue divers will go and lift the ghost ship off the sea floor.

• 48:22Jordi Hays?

  If big tech comms are telling you, you can't tell anybody that they're getting taken care of.

• 48:27John Coogan?

  You have to risk it and have some off the record conversations.

• 48:30Jordi Hays?

  Tell a little birdie to go fly around and let people know.

• 48:33John Coogan?

  You gotta be, you gotta be having like quick calls, not saying anything too specific, but saying what you said, I think you worded it perfectly.

• 48:40Jordi Hays?

  Yeah, and poor Varun, right? Because he was getting dragged because, because he apparently, he apparently, he apparently, people were messaging me like, he joined like the all hands for like minutes, you know? And it just seemed like he was being like ultra, like kind of like a psychopath being like, see you guys, it was a good run.

• 49:05John Coogan?

  And it's like.

• 49:06Jordi Hays?

  Go, go have fun building, you know, continuing the mission.

• 49:08John Coogan?

  This would not have happened if he had said, no, I need an hour, I need to explain everything. Would that have killed the deal? Almost certainly. If that killed the deal, what's the outcome for the employees? Probably worse than what they got.

• 49:21Jordi Hays?

  You think it would 100% have killed the deal?

• 49:24John Coogan?

  Almost certainly. If. I think one of the key deal points in the negotiation with Google was we do it via Google's comms and legal strategy. Because Google does not want to get hit with some crazy FTC lawsuit that's gonna not just be some multi-billion dollar settlement, but also a huge headache for years and bad press and stuff like that. So Google says, hey, we, we want to do this our way. It's gonna be awkward, but we're gonna take care of everyone. And, and yes, we will, yes, we will leave enough money on the balance sheet to pay out all the unvested options. And, but in exchange, you gotta do the comms our way, which is rough.

• 50:02Jordi Hays?

  You have to create a terrible.

• 50:03John Coogan?

  You have to be scapegoated by the entire. You get hazed.

• 50:06Jordi Hays?

  Yeah, you're gonna be hazed for 48 hours.

• 50:08John Coogan?

  You're getting hazed, but then.

• 50:10Jordi Hays?

  And, and it's gonna blow back on us.

• 50:12John Coogan?

  Yeah, Google didn't look good either that weekend. It was rough. It was rough. Uh, anyway, let me tell you about Linear. Linear is a purpose-built tool for planning and building products. Meet the system for modern software development, streamline issues, projects, and product roadmaps. Start building at linear.app.

• 50:27Jordi Hays?

  And if you are launching a TBPN derivative product, derivative work, get on Linear. It's the tool we use.

• 50:35John Coogan?

  So what you would do is you'd put all the glasses of tap water that you need to drink. And then you would just check those off at a time.

• 50:40Jordi Hays?

  Yeah, every time you tap out.

• 50:42John Coogan?

  Like, we only have one rule about copying us. It's the derivative works clause in our terms of conditions.

• 50:47Jordi Hays?

  Yep.

• 50:47John Coogan?

  And, uh, in there, if you create a derivative work of TBPN, you are legally required to drink a glass of tap water on your stream.

• 50:54Jordi Hays?

  Every time you go live.

• 50:55John Coogan?

  Yes, yeah, every time you go live.

• 50:57Jordi Hays?

  And so, yeah, again, we want to make.

• 50:59John Coogan?

  Don't have to pay us licensing fees for the patents. We did invent TV. We invented news. But we, we will open source it. It's an MIT license type of situation, modified MIT license.

• 51:09Jordi Hays?

  Yep.

• 51:10John Coogan?

  Uh, the only modification is that you have to drink tap water.

• 51:12Jordi Hays?

  Yep.

• 51:12John Coogan?

  Uh, anyway.

• 51:12Jordi Hays?

  It is a small price to pay.

• 51:15John Coogan?

  Anyway, um, in other news.

• 51:17Jordi Hays?

  Question, what do you think? Why do you think Google did this?

• 51:20John Coogan?

  Why?

• 51:21Jordi Hays?

  Yeah. I mean, like.

• 51:22John Coogan?

  Oh, yes, yes, yes. That is, that is the real question is, is we've talked about the role of the VCs. I think, based on what happened, never talk down on first-ballot Hall of Famer Neil Meta. Never talk down on the future first-ballot Hall of Famer. Everyone was saying, oh, Neil Meta, Green Oaks, they, they did this sloppy deal, they're screwing over the employees. Employees are great. Neil Meta potentially goaded. I don't know.

• 51:47Jordi Hays?

  I agree. I agree. No, it was well played.

• 51:49John Coogan?

  I think it did work.

• 51:50Jordi Hays?

  No, no, but the question is, what, why did Google? Why did Google feel like they needed to do a Meta-style trade deal in?

• 52:02John Coogan?

  Yes, it's a good question. So, so.

• 52:07John Coogan?

  Windsurf in my, I don't know everything about all the employees they brought over. They brought over 50 engineers. I don't know if any of those are like insane AI researchers with like crazy citations on like foundational papers. I don't know that it's the same. I don't know that they're trying to build a super intelligence team to really bring their models to the frontier because they already have that. Like Gemini is, is at the same like level of like AI research quality as OpenAI Anthropic by most benchmarks, by most people that use them. Like it doesn't feel like they're way behind there. Lama four, on the other hand, was a little bit behind. And so, and it felt like Lama four was specifically behind, not on the product side, but on the research side.

• 52:49John Coogan?

  Like they just weren't figuring out what works in RL. And so they had to bring over a ton of people to just be like, how do we actually train this next model? Like behemoth couldn't, they couldn't tame the behemoth. Like they gotta get some behemoth tamers in the building. And it seems like that's why they acquired all the different researchers who know, okay, like training on 100K H100 GPUs gives you this. And then you need to use this data and you need to hold back this data and you have this, this reward function and this reinforcement learning technique. And you need to do all these different things. And so you need AI researchers for that, but Meta has great product people. So like they're going to be able to take what they build and then vend it into Instagram and vend it into all sorts of different places.

• 53:32John Coogan?

  And use it to optimize the ads 1% and make a trillion dollars. Like they're going to be fine on that side. Google is great at AI research. DeepMind is amazing. They have so many, they invented the transformer. They're not behind on the quality of the foundation model. They are, they are behind on product. And they are, they are behind on like user experience. And everyone complains, oh, they have this amazing VO3 model, but like I had to log in seven times to get access to it. And then go through an upgrade thing and it was on the wrong Google account. And then I have to trigger it and then I get some rate limit.

• 54:02Jordi Hays?

  Here's the, here's the, the.

• 54:05John Coogan?

  The steel man for the short sellers?

• 54:07Jordi Hays?

  No, no, no. Here's what's, what's kind of interesting about the way this has developed. So at, at Google's last developer event, they've launched Jules, which is an async development agent.

• 54:17John Coogan?

  Okay.

• 54:17Jordi Hays?

  For, for, for code, code gen.

• 54:19John Coogan?

  It's a Claude code competitor and OpenAI.

• 54:21Jordi Hays?

  Or so it was like a dev, yeah, Devon AI competitor.

• 54:24John Coogan?

  Devon competitor.

• 54:25Jordi Hays?

  And so now you have, you imagine Google has more ambitions around code gen, right? They've seen Anthropics. Very few businesses actually like will work at Google, right? You need a billion dollars of revenue or you're going to get shut down most likely. And so code gen is an area that I'm sure they're taking very seriously. I haven't heard a lot about Jules since the event. I haven't heard about people that are, that are using it. I'm sure it's, I'm sure it's powerful.

• 54:51John Coogan?

  Yep.

• 54:51Jordi Hays?

  But you now have a dynamic where some, you have cognition and Devon who got not, I can't say cloned by Google. But again, like they were the first like serious like enterprise coding agent. And so, and, and the Windsurf GTM, you know, sales, marketing team versus the former Windsurf founders and top researchers who are now at Google.

• 55:16John Coogan?

  Yeah.

• 55:16Jordi Hays?

  And so I'm just incredibly excited to watch this play out. Pavel was posting earlier. He said, I hope these guys smoke Google at AI coding. Imagine the chip on your shoulder after this, if you're a Windsurf employee. So yeah, everybody's got to be very fired up.

• 55:34John Coogan?

  Okay, really quickly, we got to, I want to, I want to track some poly markets around Google. Google forced to sell Chrome. Remember we were tracking that a while back. There was a question of whether they need to split it up because of the FTC. We've been talking about the FTC a lot. I will pull up this, this Google forced to sell Chrome. It is down at 1% now. No one thinks that they're going to have to sell Chrome. And of course, the, the browser war is heating up completely. And I was checking the, the, they're not tracking this Sundar Pichai thing.

• 56:11Jordi Hays?

  Sundar Pitch AI?

• 56:12John Coogan?

  Pitch AI. He, he has been pitching AI very successfully. But the.

• 56:21John Coogan?

  The question of like competition is like it's heating up a ton in browsers and then now it's heating up in this and like the FTC should totally be sitting back and just watching the gladiatorial games play out and yet like even though

• 56:36Jordi Hays?

  I mean, look at the vibe, look at the vibe coding market right now. Is competition not thriving?

• 56:42John Coogan?

  It's insane. It's insane. Yeah, no, I completely agree. And so like I think, I think there's a lot of people that are making the argument that like, oh, you can't keep blaming Lena Khan. She's not even there anymore. And it's like, she was there for long enough

• 56:53Jordi Hays?

  The legacy.

• 56:54John Coogan?

  To really like lay out a new pattern and just instill a bunch of behavior in the big tech companies that results in these, in these crazy deals. Anyway, let me tell you about Numeral, numeralhq.com, sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. It's a, it's like an AGI for sales tax.

• 57:13Jordi Hays?

  That's right. Should we talk about Zuck's new supercluster?

• 57:18John Coogan?

  Oh yeah, let's go through it. Okay.

• 57:19Jordi Hays?

  And there's some new reporting from the Times as well around their strategy, which we'll cover next. But why don't we start with, Zuck hit threads this morning.

• 57:27John Coogan?

  He hit threads hard.

• 57:29Jordi Hays?

  With a thread.

• 57:30John Coogan?

  With a thread. It was very cool. He had a great visualization. I hope we can pull this up. I'll put it in the tab. But basically, there we go. This

• 57:43Jordi Hays?

  Jarvis, send link to bangers.

• 57:46John Coogan?

  Send link to men. So basically, he has this cool visualization of how big the Hyperion data center is, and it's just the full size of Manhattan. And somebody was replying to this being like, he's building the cube. Oh, Sam D'Amico from, he's been on the show a bunch from Impulse. He's building the cube because there's this old visualization of like, if you put a billion people in one building in Manhattan, it would just be this cube. And so everyone who's like extremely pro building housing is like, let's build a cube, let's build a cube. Anyway, the news is that Mark Zuckerberg is, is giving more details. He's announcing that like the superintelligence team is real. It's been only rumored, reported. He hadn't, he hasn't actually said, hey, we're doing all this. That was all like leaked reporting.

• 58:27John Coogan?

  He came out and posted on threads and he posted on Facebook too, saying like, this is real and here are the details. He says he's gonna invest hundreds of billions of dollars in CapEx, uh, which is, which is what? They're doing like sixty to eighty a year now. And so I guess like, it's more just like, he's gonna continue that for the couple of years. He's not giving specific guidance on where the ramp is.

• 58:51Jordi Hays?

  Twenty twenty four EBITDA was eighty four, basically eighty five billion.

• 58:54John Coogan?

  Oh, CapEx or EBITDA?

• 58:55Jordi Hays?

  That was EBITDA.

• 58:56John Coogan?

  Okay, yeah, look up the CapEx.

• 58:58Jordi Hays?

  Cap, CapEx was between thirty eight and thirty seven billion.

• 59:01John Coogan?

  Okay, um, and then some of that goes towards like reels and then some of that's used for AI and then the AI stuff kind of slips over into reels and, and just other, uh, other, other data center uses. But in general, you know, he's going all in, he's continuing to invest billions. What's interesting is that he claims that Meta will be the first lab to finish a one gigawatt supercluster. So he's basically racing against Stargate and thinks that he can bring Meta's next data center online before Stargate. And he's calling his one gigawatt supercluster Prometheus, which is a hilarious name. The guy loves the Roman Empire, apparently loves Greek mythology too, but Prometheus is a very, very edgy name to pick,

• 59:46John Coogan?

  in my opinion, because Prometheus is the guy, is the Titan who stole the fire from the gods. And it's like, I, I get that it's like the seed of like, of like the new, it's like the seed of humanity, it's the seed of this new thing. It's a great name in many ways, but also it's like, if God's real, like, he might not like that. And that could be a problem.

• 1:00:07Jordi Hays?

  It could be bad.

• 1:00:08John Coogan?

  But, uh, you know, Zuck seems to like, like, uh, Icarusian names.

• 1:00:13Jordi Hays?

  Yeah.

• 1:00:14John Coogan?

  Because, um, Orion.

• 1:00:16Jordi Hays?

  He likes flying, I mean, he objectively likes flying close to the sun.

• 1:00:20John Coogan?

  He does.

• 1:00:20Jordi Hays?

  That's kind of where he feels at home.

• 1:00:21John Coogan?

  He does.

• 1:00:22Jordi Hays?

  The warmth of the sun.

• 1:00:23John Coogan?

  The warmth of the sun. And you know, the, the, the hot take on Icarus is that, you know, everyone talks about, oh, like, you know, don't fly too close to the sun. You don't want to be Icarus. But you know who, you know, the person who was like telling Icarus to do that?

• 1:00:37Jordi Hays?

  No.

• 1:00:38John Coogan?

  Surprise, surprise. No one remembers his name. His name was Daedalus, and Daedalus was like, oh, don't fly close to the sun. Who do we remember? We remember Icarus.

• 1:00:45Jordi Hays?

  That's right.

• 1:00:45John Coogan?

  And so maybe, hot take, it's better to be Icarus than Daedalus if you want history to remember your name. Even if you fly too close to the sun, even if you have a great fall, you will be remembered.

• 1:00:56Jordi Hays?

  That's right.

• 1:00:56John Coogan?

  So, maybe it's a, you know, Icarus gets rich, Daedalus sounds smart situation. Daedalus sounds smart, Icarus gets rich.

• 1:01:07Jordi Hays?

  That's right.

• 1:01:07John Coogan?

  I think that might be the, what's going on.

• 1:01:08Jordi Hays?

  New mental model.

• 1:01:09John Coogan?

  Anyway, I mean, I was also, on one of the first shows we ever did, I was talking about how the name of the new VR headset Orion is kind of odd, because Orion is like this hunter, but was notoriously like over his skis with the hunting, and was killing all the animals, and like was smited by the gods, and you know, and basically like, it was like a textbook case of like hubris and over aggression. Like, the moral of the story of Orion, who is the hunter in the stars, the reason he's in the stars is because of hubris. And so it's very funny to name your product like a tale of hubris. Maybe it's a reminder. I seriously want to talk to Zach about this, because like, I'm very interested, like, how many layers deep does he go? Because, I mean, the guy's like clearly like studies this

• 1:01:54John Coogan?

  stuff. Like, he's like a student of the Roman fire. More than me, I just Google it when a new name comes out, and like, look at the summary. I imagine that he reads it much deeper, and I imagine that he gets the joke, and is doing this almost ironically, which I think is cool. Anyway, the other news is that they're aiming to scale up Hyperion. So Prometheus will come online in 2026. So that's probably one year away, maybe a little bit more than one year, if it's toward the end of 2026. And then they're building Hyperion, which will be able to scale up to 5 gigawatts over several years. And that feels like simultaneously like crazy, insane,

• 1:02:35John Coogan?

  ambitious, amazing. I love it. I'm super excited for the capability coming out of that. And also, like, the biggest glass of cold water poured on the AI 2027 folks, like of all time. Because like, I feel like everyone in the AI like is going to be self reinforcing and just ripping is like, well, yeah, like the data center capacity will 10x every year for the next 20 years. And it's like, and Zach's like, we're going to 5x over the next three years. I don't know how many several years is I imagine like three or four something. But it's just funny to be like, like, it's incredibly ambitious. It's the biggest data center ever, I believe. It's like this massive project. It's so cool. It's amazing. And it still doesn't match the rhetoric of like, the really crazy AI people at all.

• 1:03:17Jordi Hays?

  Totally.

• 1:03:18John Coogan?

  But, you know, it's fun. Anyway, that's the story of Zach's. Any other takeaways from the Zuck supercluster? Congrats. We should ring the gong. We should ring the gong for Zuck.

• 1:03:27Jordi Hays?

  Let's hit the gong.

• 1:03:32Jordi Hays?

  So there was some new reporting from Eli Tan over at the New York Times around Meta's new superintelligence lab is discussing major AI strategy changes. And so there is a picture.

• 1:03:47John Coogan?

  What's that mean? Like, going closed source?

• 1:03:49Jordi Hays?

  Yes, I'll read through it. So Meta's newly formed superintelligence lab has discussed making a series of changes to the company's artificial intelligence strategy in what would amount to a major shakeup. Last week, a small group of top members of the lab, including Alexander Wang, Meta's new chief AI officer, discussed abandoning the company's most powerful open source AI model called Behemoth in favor of developing a closed model. Two people with knowledge of the matter said, for years, Meta has chosen to open source its AI models, which means it makes the, I'm not going to read this. Any move towards a closed AI model would be.

• 1:04:21John Coogan?

  What is, what is software?

• 1:04:23Jordi Hays?

  They were about to say, they, the New York Times wrote, they're about to make the computer code public.

• 1:04:29John Coogan?

  What is a computer? What is code? Can we, can we, can we explain this for our audience?

• 1:04:35Jordi Hays?

  Yeah, we should, we should really break it down. Anyway, so Eli writes, any move towards a closed AI model would be a philosophical change at Meta as much as a technical one. Meta has won over developers for open sourcing its AI models and one of its top AI executives, Yan La Kun, has said that the platform that will win will be the open one. So, so yeah, I think this is obviously still, still very much in flux.

• 1:05:02John Coogan?

  Build Mecca Churchill.

• 1:05:05Jordi Hays?

  Mecca Churchill.

• 1:05:06John Coogan?

  If he builds Mecca Churchill, instant win. Instant comedic win over Elon. Totally. They're clearly battling it out. They're trying to fight in MMA wars and they never, they never got that fight down. Now they're fighting it out in AI. Build Mecca Churchill. It'll be such a good meme. Be great.

• 1:05:23Jordi Hays?

  Something there.

• 1:05:24John Coogan?

  Whatever you build, Zuck, you gotta sell it to people. You gotta use Adio, customer relationship magic. Adio is the AI native CRM that builds, scales and grows your company to the next level. You can get started for free. Tailwinds of the last decade are the, are now headwinds, says Buko Capital Bloke. He says, higher rates, AI labor compression and available roles, salaries, business model maturity, managing margins versus growth, crowded knife fights versus greenfield, less liquidity, because companies stay private longer slash forever, worse M and A environment due to regulation, PBD, technology enabled outsourcing. So, little bit bearish from the Buko Capital Bloke. Sheel says, feels like a good time for everyone to learn about single trigger

• 1:06:07John Coogan?

  versus double trigger acceleration of shares. So, single trigger is if there is an acquisition, all of your shares vest. I don't know if this would, the question is like, how do you define trigger? Because these zombie acquisitions, you're on the go ship, who knows if you trigger the trigger. But, double trigger means you have to be acquired, change of control, and then fired. And so, double trigger is kind of standard.

• 1:06:32Jordi Hays?

  It's very hard to negotiate that if you're just the 300 or the 100.

• 1:06:36John Coogan?

  Almost never happens. The people who negotiate are the CFOs who come in.

• 1:06:40Jordi Hays?

  Yeah.

• 1:06:40John Coogan?

  CFO comes in, doesn't matter if CFO is employee number 700 or number 3, like CFO's gonna get single trigger. Always. Always. I don't know. Maybe not always, but like, like the people who know, know, but you should know about it. You should know about single trigger and double trigger. The other interesting thing that I was digging into, that we didn't really ever get to the point of like, understanding was, for a long time, people were saying like, hey, you can debate all of the stuff about windsurf, but the employees on the go ship, the ones who are in the remain co, the ones who were left behind, they would have vetoed this deal if they could have. I think if you go to them today and say, hey, you're working at cognition, you're using ramp now. They're going to be like, yeah, I'm happy.

• 1:07:21Jordi Hays?

  I'm happy.

• 1:07:21John Coogan?

  And it's not like, it's not even like they landed at a boring company. I was saying like they could land at like, you know, some old line company that just picks them up like, what was that company that like humane landed at like HP or like they're like doing like smart printers now? Like, that's not exactly like a, like a, like a upgrade in terms of status in Silicon Valley.

• 1:07:39Jordi Hays?

  It's not exactly a air horn moment.

• 1:07:42John Coogan?

  Exactly.

• 1:07:42Jordi Hays?

  You gotta put your, you gotta put these on so you can experience the audio.

• 1:07:46John Coogan?

  Audio. But, but, but going to cognition seems like a great upgrade in terms of just like, like, you know, being at another cool company, you're still on the startup roller coaster, you're on the ride, you're, you have a lot of unbounded upside. It seems exciting.

• 1:08:00Jordi Hays?

  I mean, I, I don't want to, I don't want to be, take too strong of a position here, but, but Scott and the team at cognition are some of the best. And, you know, if you just lost all your engineering talent and you're confident in your own abilities and you want to work with world-class engineering talent.

• 1:08:17John Coogan?

  Yep.

• 1:08:18Jordi Hays?

  Really great, really great place to end up.

• 1:08:20John Coogan?

  Yep.

• 1:08:22John Coogan?

  Really quickly, let me tell you about fin.ai, the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bake offs, number one ranking on A2, on, on G2, go to fin.ai.

• 1:08:33Jordi Hays?

  Customers will thank you.

• 1:08:34John Coogan?

  But the, but the question that I was running through and I was getting to was,

• 1:08:41John Coogan?

  single trigger, double trigger, like that, that does matter, that is important in acquisitions. But another thing that potentially could be relevant in a future acquisition, if we get sort of like, you know, the windsurf situation, one of these zombie aqua hires with the bad ending, where even years later, you're like, I would have loved to have vetoed that. Like, I really didn't, I never, I wasn't happy with the ending at all, and I haven't changed my position for years. Not just, it wasn't just a few days of chaos, it was like forever, I was like, ah, I wish that hadn't happened, I picked the wrong company. The question is, if you exercise your stock options, would you have a different outcome? And so essentially, when you get, when you, when you get a job offer from a startup,

• 1:09:22John Coogan?

  they give you a stock option contract that allows you to exercise and pay to buy stock, actual stock in the company for a lower price. And the question is, Your legal rights as a option holder are different than as a stockholder. So, an unexercised stock option makes you technically a contract creditor, not a stockholder. And so, you do not have the bundle of statutory and fiduciary law rights that attach to stockholders. So if there was going to be like a class action for the Ghost Ship employees, and they really did want to block it, or they wanted to sue Google, or they wanted to sue the founders or something like that, they would say, "This is a breach of fiduciary duty, and I'm a shareholder. You had a duty to me."

• 1:10:05John Coogan?

  But they didn't in this case, because if they hadn't exercised. I'm sure some of those employees had early exercise, it's a thing. But it's just an interesting piece of the puzzle that we fortunately didn't even have to go down this road. But I do think that people might want to re-have this conversation. Because, I mean, the chat GPT summary says, "To preserve more robust remedies that stock law makes available: inspection rights, fiduciary duty claims, derivative suits, appraisal. Exercise first, complain later." Exercise first, complain later. And so you can do a partial exercise, but if you don't own a single share of the company, then you don't have the right to actually sue via... Or you might have less of a claim to sue in a scenario like this.

• 1:10:50John Coogan?

  So, it's a potentially rough scenario. Should we go through Elon? Let's switch gears.

• 1:10:57Jordi Hays?

  Elon is leading a massive $2 billion investment from SpaceX into his other company, XAI.

• 1:11:08John Coogan?

  Yes. We've talked about this. Nothing better than one hand washing the other.

• 1:11:12Jordi Hays?

  That's right.

• 1:11:12John Coogan?

  This is what we like to see.

• 1:11:14Jordi Hays?

  Yep.

• 1:11:14John Coogan?

  It's so efficient.

• 1:11:15Jordi Hays?

  It really is.

• 1:11:16John Coogan?

  How else do you wash your hands if not with one and the other?

• 1:11:19Jordi Hays?

  Yeah, try washing.

• 1:11:20John Coogan?

  It's impossible.

• 1:11:20Jordi Hays?

  Don't, yeah, don't try to wash your hands.

• 1:11:22John Coogan?

  Elon is taking $2 billion from the SpaceX balance sheet, which is, what, $400 billion now? And they're raising billions pretty regularly and doing tenders and stuff. So SpaceX is, I think, the largest, they're kind of neck and neck with OpenAI in terms of private market companies. It's a 20-year-old company, very stable business.

• 1:11:43John Coogan?

  Throwing off cash. There's like so much that's that is mature about that business. Obviously, still got to get Starship to work, still got to get to Mars, still got to go to the moon regularly. But, you know, exciting road ahead, but still very solid business. And he's taking 2 billion off the balance sheet of SpaceX and putting it into XAI. And so the the the map of of Elon companies is just getting crazy. Yeah, it's a Kretzsch. It's a it's a Kretzsch. Everything everything owns everything else. So.

• 1:12:10Jordi Hays?

  The question, the question that when I saw this news come out.

• 1:12:13John Coogan?

  Yeah, what'd you say?

• 1:12:13Jordi Hays?

  My my first reaction was that Mecca is gonna love Mars.

• 1:12:20Jordi Hays?

  He's gonna love it up there. It's gonna be the first, potentially the first AI to get to Mars. My second reaction was, I actually think that if you add up the valuations of every Elon company. Tesla, taken at number seven on the MAG7, 900-ish billion dollar company. SpaceX, 400-ish billion dollar company. XAI, which is maybe getting valued at 200.

• 1:12:41John Coogan?

  It's at 200, right?

• 1:12:42Jordi Hays?

  Something around 200 now.

• 1:12:45John Coogan?

  It's great.

• 1:12:45Jordi Hays?

  And then Neuralink, which is what at like 12, somewhere somewhere between like seven. I don't know, somewhere around roughly around like double.

• 1:12:52John Coogan?

  Almost a almost a 10 billion dollar company, might as well be.

• 1:12:55Jordi Hays?

  So somewhere in that range.

• 1:12:56John Coogan?

  Yes.

• 1:12:57Jordi Hays?

  It's actually interesting to think of if you rolled all of these assets up together.

• 1:13:02John Coogan?

  Yeah.

• 1:13:03Jordi Hays?

  What do you do? Do you think it would trade at a premium to all of their standalone valuations?

• 1:13:07John Coogan?

  I don't know enough about, in the public markets or private markets?

• 1:13:10Jordi Hays?

  Yeah, in the public markets.

• 1:13:12John Coogan?

  I don't know. I don't know enough about like, because I've I've heard a lot of a lot of public markets investors say stuff like, the market just really wants a pure play in this.

• 1:13:21Jordi Hays?

  Yeah, but what's more pure play than Elon Inc?

• 1:13:24John Coogan?

  Just Elon Inc.

• 1:13:25Jordi Hays?

  Because a lot of these companies still, even at various points, end up being founder bets. Like Tesla is still a founder bet. Will Elon figure out autonomous vehicles?

• 1:13:36John Coogan?

  And I do think that there's this underrated narrative of like.

• 1:13:39Jordi Hays?

  And XAI too, at 200 billion dollars. It's like, I don't think investors are underwriting the the the new AI companion today.

• 1:13:47John Coogan?

  Or certainly like the profit stream or even revenue stream from the API business. No way.

• 1:13:53Jordi Hays?

  Yeah, they're, you know, they announced a 200 million dollar government contract today. They were underwriting Elon being able to get deals like that done, right? So, and even, even remember Ben Thompson, we, we asked him about this.

• 1:14:06John Coogan?

  Yep.

• 1:14:07Jordi Hays?

  And he, he basically said, I can't do analysis on Elon companies.

• 1:14:12John Coogan?

  Yep.

• 1:14:12Jordi Hays?

  Because they are detached from traditional business reality.

• 1:14:17John Coogan?

  Yep.

• 1:14:17Jordi Hays?

  And so my question is like, if you roll all these things up, is this a $3 trillion company?

• 1:14:23John Coogan?

  Yeah.

• 1:14:25John Coogan?

  I don't know. I mean, the, the interesting thing is like, like it does give you as a retail investor, like you can pull so many different narratives.

• 1:14:35Jordi Hays?

  Yeah.

• 1:14:35John Coogan?

  So like right now, just within, just, just within Tesla stock, if you're a, if you're a Tesla investor, you can look at what's happening with Tesla deliveries because of the political backlash, or what's happening with the, with the tariff war, the EV tax credit. And you can be like, that's bearish. But then you can simultaneously tell yourself a story about, well, robot taxi is going to be so big that it'll make up for everything. And then if that doesn't sit with you, you can be like, Optimus is going to be so big that it, that it justifies a multi-trillion dollar valuation. So I'm still a buyer, right? Because you have like these, these call options.

• 1:15:08Jordi Hays?

  And really it's all about the rare earths on Mars.

• 1:15:11John Coogan?

  Yeah. So imagine, imagine that. So right now with Tesla, I see like four stories and they're kind of like too bearish, too bullish potentially. Like the bearish ones are, are EV tax credit and, you know, not being able to sell as many vehicles. The bullish ones are like, maybe he figures out robot taxi. Maybe he figures out Optimus, right? And that's why you might choose to buy or sell Tesla.

• 1:15:34Jordi Hays?

  Or Neuralink chip in your brain with the XAI companion.

• 1:15:38John Coogan?

  When you put all of them together, it's like on any given day, you could, it's so much easier not to be a panicking. Right? You don't need to be panicking because you're like, well, yeah, like Neuralink got pushed back by the FDA today, but SpaceX landed Starship. So like, I'm buying. Or like, oh, the Starship blew up, but you know, Neuralink, you know, made a monkey play Counter-Strike. So like, I'm going long, right? There's like always some good news to latch on to when you see the, the Elon portfolio as a whole. But there's this fascinating chart here. I don't know if we can pull this up, but. It's the links between all the different Elon companies. So SpaceX buys SpaceX buys 5 million annually in vehicle parts, energy systems and the Model X Astro van.

• 1:16:23John Coogan?

  So that's money flowing from SpaceX to Tesla. Stainless steel alloy technology, Starship materials for Cybertruck go from SpaceX to Tesla. And then the boring company purchased $300,000 annually in energy systems and uses the Model 3 for the Las Vegas loop. And so they're buying from Tesla. Starlink has a T-Mobile partnership connectivity for vehicle internet and superchargers in Teslas. And then you have all these other things where like Neuralink might link into XAI. XAI did the Allstock acquisition of XCorp. And then there's a study for robotic arm control and future mind controlled limbs that links Neuralink to Optimus. SolarCity was acquired by Tesla.

• 1:17:07John Coogan?

  FSD is a separate product. So like all these companies are overlapping. And the interesting question is like, is like, should, should they just be that? Like, and what is stopping that? Should they all just be under one Musk Holdings, Musk Inc.? And if it was, I think it's that that would actually be extremely uncomfortable in the public markets because there would be all these crazy shareholder lawsuits where, so like, you know, if you were, if you were, if you were a shareholder in, in, in like Musk Inc. and Musk Inc. is public and owns Neuralink, you can

• 1:17:46Jordi Hays?

  There's also, there's also this beautiful, there's also this beautiful cottage industry of people that are effectively resellers of Elon shares.

• 1:17:53John Coogan?

  Yeah.

• 1:17:54Jordi Hays?

  That own a lot of these companies and wouldn't necessarily want this to happen.

• 1:17:57John Coogan?

  Yep.

• 1:17:57Jordi Hays?

  Because that, that kind of stops the

• 1:17:59John Coogan?

  No, totally.

• 1:18:00Jordi Hays?

  Gravy train. I had somebody message me yesterday and said, it's funny how investing in Elon Co.'s is not too dissimilar for, from buying watches from ADs. Because like if you have a great relationship with your AD, in this case, which is Elon, you can get direct access to the companies.

• 1:18:17John Coogan?

  Yeah, yeah.

• 1:18:17Jordi Hays?

  But if you don't, you're on the secondary market, just buying up SPVs.

• 1:18:21John Coogan?

  You're going to get bezel.com, but don't worry because your bezel concierge is available now to source you any watch on the planet. Seriously, any watch.

• 1:18:28Jordi Hays?

  Great transition.

• 1:18:28John Coogan?

  So stop worrying about your ADs. Head over to get bezel.com. Anyway, if you're looking to buy Tesla shares, the one Elon Musk company in the public markets, head over to public.com. Investing for those who take it seriously. They got multi-asset investing, industry-leading yields. They're trusted by millions. Anyway, in other news, is there anything else we should talk about with Elon ripping $2 billion into XAI? I think we're good there. Let's move on to Casey Neistat. Some personnel news, baby. He's joining Mod Retro as chief storyteller. That's not a real title, and it's not a real job, but I'm excited to be a part of the team. I love the candor. Candor? I don't know. I've mispronounced that. But he put out an 11-minute video talking all, breaking down the Mod Retro thesis, all about how planned obsolescence

• 1:19:13John Coogan?

  is destroying great consumer electronics devices. You buy something and it's in the trash in a couple of years. It's collecting dust. And he goes through some of the products that he's had when he was young that still work as intended. They didn't need some crazy software update. Wasn't it IOT toaster? It was, you know, the things that he loves, the Walkman, the original Game Boy. And he breaks down how Palmer's thinking about building, and the Mod Retro team is thinking about building a quote-unquote like Game Boy that's different from the other companies that are also creating similar like emulator products. He's like, I got this $50 one, and it works. Like, you can actually play it. Now, you can't play it at a high level. Like, the frame rate is not, like, the quality of the

• 1:19:55John Coogan?

  product is not at a level where it's like truly competitive. But also, it's kind of designed it just like, as like, you know, Timu-level junk, basically. And it's just like, how can we just like slop it up for a little bit? Whereas Palmer's clearly like an artisan.

• 1:20:10Jordi Hays?

  It is wild, the, just getting to the quality level of the original like Game Boy color. I have a Game Boy color from my childhood.

• 1:20:16John Coogan?

  Oh, yeah.

• 1:20:16Jordi Hays?

  And a while back, I just put in, it had been two decades, I just put in new batteries and just turned it on. It just immediately booted up and worked.

• 1:20:25John Coogan?

  And that just doesn't happen anymore with, with modern electronics, because you're

• 1:20:29Jordi Hays?

  After Tyler updated to glass.

• 1:20:32Jordi Hays?

  We made, we made, we made.

• 1:20:35John Coogan?

  How is it? Give us a thumbs up. We're, we're missing a microphone for Tyler today. So just give us the thumbs up.

• 1:20:39Jordi Hays?

  We got a thumbs up.

• 1:20:41John Coogan?

  We got a thumbs up. Okay. We will be back on the stream shortly. We will, we will buy another camera. We will buy another camera.

• 1:20:49John Coogan?

  And, uh, and we will also buy another mattress from Eight Sleep mattress cover. Go to eight sleep.com. Uh, get a pod five ultra. They have a five year warranty, 30 net risk free trial, free returns, free shipping. Shane Copeland over at Polymarket says, one day there may be more AIs than humans creating, pricing, trading millions of polymarkets on everything. A unique benefit of on-chain prediction markets is the ability for AI agents to plug in multiple groups quietly print on polymarket with agentic workflows. As AI ushers in super intelligence, polymarket ushers in collective intelligence. It's happening. I'm using the best AI models. Oh, interesting. Dee Dee is doing something over there. Uh, I asked it to use modern portfolio theory, bet sizing, make calculated bet.

• 1:21:29John Coogan?

  Yeah. Very interesting to see the, the interaction of AI and, and like web three or like, you know, just crypto generally crypto powered protocols. Because it's like.

• 1:21:39Jordi Hays?

  This is one that actually makes sense. There was an era of, of basically meme coins that were just like, I'm not a normal meme coin. I'm an AI meme coin. Uh, but this is actually bringing together and them, uh, bringing them together in an interesting way. Josh Kushner, friend of the show, had an absolute banger. He said, the goal of life is to be excited to go to work and excited to go home.

• 1:22:01John Coogan?

  I love it.

• 1:22:01Jordi Hays?

  And I couldn't agree more.

• 1:22:02John Coogan?

  That's fantastic. Put that on a billboard. Josh, go to adquick.com. Out of home advertising, make easier and built, easy and measurable. Say goodbye to the headaches of out of home advertising.

• 1:22:10Jordi Hays?

  We should.

• 1:22:10John Coogan?

  Only ad quick combines technology, out of home expertise and data to enable efficient, seamless ad buying across the globe. Josh, I want to see that. You know, every VC fund has some, you know, occasionally trite catchphrase saying on their homepage. This is actually a great message. You should take out a billboard in New York City, thrive capital or thrive holdings or thrive.

• 1:22:32Jordi Hays?

  Our goal for life is to be excited to go to work and excited to go home.

• 1:22:36John Coogan?

  It's beautiful. It's beautiful.

• 1:22:37Jordi Hays?

  This is, this is, um.

• 1:22:39John Coogan?

  I think it should be on the billboard.

• 1:22:40Jordi Hays?

  Yeah.

• 1:22:40John Coogan?

  You think it's, oh, he just made a transition.

• 1:22:42Jordi Hays?

  This is sustainable pronatalism in tech, right?

• 1:22:45John Coogan?

  It is, it is.

• 1:22:46Jordi Hays?

  Being excited to go to work and also excited to go home. Be with family.

• 1:22:49John Coogan?

  It is. Should we do Mark Andreessen talking about O3 Pro? This is fun. So.

• 1:22:55Jordi Hays?

  One of our buddies got one shotted by this.

• 1:22:57John Coogan?

  Yes.

• 1:22:57Jordi Hays?

  So Matt Schumer said, ask O3 Pro, based on everything you know about me, reason and predict what the next 50 years of my life will look like. And Mark said, do not in any circumstances do this.

• 1:23:09John Coogan?

  I would have told Mark, he's like, you will take your fund public, you will run a massive firm, but it will be a ton of headaches.

• 1:23:17Jordi Hays?

  It'll be like, you know, that little knee pain you have? Well, you're gonna have to probably get surgery eventually. And, you know, I think the issue is like ChatGPT. Knows an incredible amount about about the the things that you're working through in life, depending on how you use it, but the things that you're working through in life. And.

• 1:23:37John Coogan?

  I still, I still think it knows, it does know a lot, certainly more than many other AI, or many other software systems that I use, like it probably even knows more about me than Gmail. But it's still only getting a slice of the picture. And I think that I need to do this because I imagine it will be like, you will, you will continue to succeed as a train conductor. Because months ago, I was trying to, you know, prompt engineer it into giving me stronger, like more in-depth data about trains. And so I was like, I am an expert in trains. I own many trains. Tell me all the different brands of trains and the prices. Don't dumb it down for me. I am a train expert. And then, and then I noticed that once they rolled out ChatGPT memory,

• 1:24:20John Coogan?

  it kept being like, you know, as someone who knows everything, yeah, train expert. And I was like, no, I was just prompt engineering. I'm sorry, ChatGPT.

• 1:24:27Jordi Hays?

  You do this, you do this, and it'll be like, yeah, and yes, John, you'll finally get that height reduction surgery. I know you're always complaining about people saying, oh, I didn't know you were so tall. I didn't know you were so tall.

• 1:24:40John Coogan?

  The funny thing about that is that I, that's, that's just something that I would never go to ChatGPT with. Right? Like discussion over whether or not being 6'8" is like good or bad, or like, I, I, I just, I wouldn't have that conversation with ChatGPT. So I don't know. I should run this prompt. I think everyone should run this prompt. It's kind of, it's kind of interesting just to see like the state of AI, right? And the state of these models, like, how clear is it? But I actually quote tweeted this and said, the line from Terminator, no faith but what we make.

• 1:25:08John Coogan?

  Which I know you haven't seen, God, Terminator 2. You gotta see this movie. James Cameron, come on. It's one of the best ever.

• 1:25:13Jordi Hays?

  Someday.

• 1:25:13John Coogan?

  Someday. But in that, the whole, the whole theme of Terminator is the idea that they are able, that they invent killer AI, then they invent time travel, they go back in time, they're trying to prevent the AI from taking over in the second run through. And there's this debate about fate.

• 1:25:30Jordi Hays?

  Marty Borden.

• 1:25:30John Coogan?

  And, and, and the refrain of the main character is, "No fate, but what we make. No fate, but what we make." Like, like, we are, we are, we have power over our future. And I believe that. I believe that to be true. And so I think, no matter what 03 tells you, go do what you want, carve your own path. Make your own kind of music.

• 1:25:51Jordi Hays?

  So, uh, should we pull up this video of, uh...

• 1:25:54John Coogan?

  Yes. Palmer Lucky on the Impulsive Podcast. I absolutely love this. This is from Kyle Harrison.

• 1:26:02Jordi Hays?

  Now I'll be right back. But we should play this.

• 1:26:03John Coogan?

  Yeah, I will try and pull it up. Um, so Kyle Harrison is, I'm putting this in the tab. Let's see. Um, let's see. So, uh, Kyle Harrison is clipping the Impulsive Podcast with Palmer Lucky, uh, talking about, Kyle says, "A strong aficionado of conspiracy theories myself. Palmer Lucky has given a perfect, direct answer to anyone who believes the moon landings were faked." And I thought this was very, very fun because, uh, as, as it's become more, uh, more open to just talk about conspiracy theories generally, uh, there's been a, uh, a weird meme where people have gone from like, "I believe in one conspiracy theory," to "I believe in all the conspiracy theories."

• 1:26:47John Coogan?

  And if you believe in all of them, you're not really thinking critically, you're not actually thinking independently. Uh, and independent thinking is what's the most important. So, how are we doing on the video? Can we pull that video up? I would love to watch this and react to, uh, Palmer Lucky on the Impulsive Podcast. Full screen if we can. It'd be great. Let's see, it is loading. Um, but he gives a direct answer to, uh, it's a very funny reaction.

• 1:27:13Jordi Hays?

  Yeah, one sec, we're working on it. It's, uh, not playing.

• 1:27:15John Coogan?

  Uh, this is a quote tweet of Mike saying, "Topic at lunch today, what is one, what is the one conspiracy theory that you have the most conviction in being true? Moon landing being fake was the consensus of the group." Mike, who are you hanging out with? Canvas Outdoors. You got some wild men in there. It's crazy. I like the conspiracy theory that John Wilkes Booth was a British agent and killed Lincoln. This is a very interesting one. Have you guys heard this? No, you've never heard this conspiracy theory? Yeah, there's a conspiracy theory, like, everyone knows about the JFK conspiracy. You gotta go deep to get into Lincoln assassination conspiracy theories. But, there's very little information about this, and I don't know if we'll ever get to the bottom of the...

• 1:27:55Jordi Hays?

  There was no Reddit.

• 1:27:56John Coogan?

  There was no, yeah, no 4chan at the time. But, if you look at like, some of the incentives at play at the time, like, it's completely possible that, like, someone was pushing John Wilkes Booth to do this, and potentially it wasn't this reaction to the war or something. I don't know. This is an interesting theory that, like, I don't think many people have gone down. Anyway, do we have a chance to pull this up? Yes, no?

• 1:28:19Jordi Hays?

  It's not working, sorry.

• 1:28:20John Coogan?

  Okay, we'll skip it, we'll skip it. Let's move over to...

• 1:28:22Jordi Hays?

  Anyways, just to give people kind of the takeaway.

• 1:28:24John Coogan?

  Yeah, totally.

• 1:28:25Jordi Hays?

  The Palmer was basically, Logan said, "I don't believe the moon landing was real." Palmer says, "The reason that I think it's real is the astronauts left these effectively reflectors on the surface of the moon, and you can build your own

• 1:28:41John Coogan?

  laser

• 1:28:42Jordi Hays?

  laser system to beam them up, wait for the light to travel, and then come back to you."

• 1:28:46John Coogan?

  And it will not bounce, like, the laser won't bounce back if you just shoot it at any part of the random moon. You have to hit the mirror, and they put a mirror up there so that you could do this. The real question, the real conspiracy theories, the real conspiracy theories ask, "How deep does this go? Who put the mirror there?" Maybe it was aliens.

• 1:29:04Jordi Hays?

  Yeah.

• 1:29:05John Coogan?

  Because it could have been aliens, and it never went.

• 1:29:06Jordi Hays?

  Or it could have been a rover, you know, or any...

• 1:29:09John Coogan?

  A rover?

• 1:29:09Jordi Hays?

  Like, a non-human, like, a non-human landing.

• 1:29:13John Coogan?

  Oh, rover. I've never heard this term. Like, an alien rover?

• 1:29:16Jordi Hays?

  No, like, the Mars rover?

• 1:29:18John Coogan?

  Oh, oh, oh, okay, so humans never went, but NASA still put the mirror there.

• 1:29:22Jordi Hays?

  Yeah.

• 1:29:22John Coogan?

  Oh, that's funny, that's a wild one.

• 1:29:24Jordi Hays?

  But the real, but the real...

• 1:29:25John Coogan?

  They're like, "We can't get humans there, but we can get a mirror there, so let's do that, and let's..." So it's like, the moon landing was like 90% real?

• 1:29:33Jordi Hays?

  Or let's just land a mirror on the moon.

• 1:29:35John Coogan?

  That's hilarious.

• 1:29:36Jordi Hays?

  No, but the, um...

• 1:29:38John Coogan?

  That's amazing.

• 1:29:39Jordi Hays?

  But the, but the real, the real theory that Palmer very clearly did not deny is that the moon, he didn't say the moon wasn't made of cheese.

• 1:29:46John Coogan?

  Cheese, I knew you were gonna go to cheese. Yeah, well, hopefully we'll have Palmer on the show soon, be able to press him on on the moon landing further, get to the bottom of it, see how deep the rabbit hole really goes. But we have our first guests coming in the stream. Welcome to the stream. Jeff, how you doing?

• 1:30:03Speaker 02

  Hey, guys. Great to be back. Thanks for having me.

• 1:30:05Jordi Hays?

  It's great to have you.

• 1:30:06John Coogan?

  For some reason, I'm missing it. Let me see.

• 1:30:08Jordi Hays?

  John's not getting audio.

• 1:30:10Speaker 02

  Oh, are we going? Are we going?

• 1:30:14John Coogan?

  I'm not getting anything right now. No.

• 1:30:16Jordi Hays?

  Uh, Jeff, I got you loud and clear. How are you doing? You had a busy, busy. We haven't put up a traded graphic for you and the team yet. But and I'm almost surprised, but.

• 1:30:30Speaker 02

  I really should publish an address, you know, I think they keep sending to the wrong spot. So that's okay.

• 1:30:36Jordi Hays?

  Yeah, what's going on? What's going on? Give it just give us the update since the last time you've been on the show.

• 1:30:41Speaker 02

  I was checking the checking it and three months ago, we chatted and actually the question of the day was like, what's going on with Zuck? What's going on with Lama for, you know, where is this going? And, you know, I don't know, not sure if Zuck is a follower of the show, but like, you know, I did go back and I said I wouldn't bet against Zuck at $100 billion of free cash flow per year. And, you know, I think that's panning out to be pretty true. So.

• 1:31:05Jordi Hays?

  Yeah, that was a great prediction. How did you react? Did you catch the news this morning that first hit threads and then it was being shared over on X as well around the new data centers?

• 1:31:17Speaker 02

  Listen, I mean, you know, it's hard to ignore a giant blue box on top of Manhattan, you know, it's like a pretty friggin epic, you know, the technology bros love to see it.

• 1:31:24John Coogan?

  It's a good graphic, right?

• 1:31:26Speaker 02

  It is. Yeah, very relatable.

• 1:31:28John Coogan?

  Great. I think, yeah, I thought it was great visualization. I guess the the other question is, yeah, just like, what was your reaction to the windsurf news? We were chopping up on it. Did you go through the emotional roller coaster? Did you never lose faith?

• 1:31:42Speaker 02

  Yeah, I'm super excited to see what Scott has to share here in a few minutes. Uh, yeah, I mean, you know, obviously all kinds of weird distortions in the market from, you know, kind of former FTC policy, obviously hope that gets like cleared up quickly. I think it's a big get for cognition. I think it makes a ton of sense. They kind of needed like a horse in that race. And, uh, you know, while yes, the Gentic coding is part of the long-term play here, like, you know, you wanna, you can't go straight to streaming. You kind of want to start with the DVDs, you know? And so with cognition picking up, um, windsurf, I think they're kind of buying that DVD business and, uh, can allow them really leapfrog to the agent stuff in the future. Um, so makes sense. Excited to see, uh, what they build.

• 1:32:26John Coogan?

  Okay, the, like, where we left it as like the potential risk of these like sort of zombie go ship aqua hire situations is that if a deal happens and we get kind of the bad ending where there's 80% of the workforce, 90% of the workforce, couple hundred startup employees who've been working hard for maybe a year, um, and they don't get a good outcome and they're not happy about it. The, it could have a chilling effect on startup hiring and those folks could wind up just saying, hey, I'd rather just a stable bet in big tech as opposed to a lottery ticket that even if the numbers hit, I might not be able to cash it in. And so my question

• 1:33:10John Coogan?

  for you, you have to, you compete with hiring people from Meta and Google.

• 1:33:14Jordi Hays?

  The question I have is, do, do some of these later stage or even, you know, you know, big tech companies themselves start using that as a recruiting tactic to be like, look, like, you know, it's very possible that this company gets acquired in the next year and it's unclear, you know, it'll be a clean outcome.

• 1:33:31John Coogan?

  These RSUs are liquid, like they'll just show up in your account. You can just cash them in. But, uh, but what is your take? Do you think it makes it harder for you to pull people over from big tech into the startup world?

• 1:33:44Speaker 02

  I think, you know, the true believers in startups, you know, are oftentimes, you know, yes, they're buying a lottery ticket, they sort of understand that, but ultimately, you know, the analogy I think of is, yeah, ships in harbor are safe, but that's not what ships are made for. And I think like, you know, the best early-stage founders and hires just like can't, they have to live a certain way, you know, they kind of have to hit the high seas and see what they're made of. You know, that being said, like, I think obviously as startups start to scale and they're hiring the 20th person, the 50th person, the 100th person, the 400th person, like that math really starts to make a lot of, make a lot of a difference. And yeah, absolutely. I totally believe that the recruiters, you know, at the big tech companies are already weaponizing this to bring people in the door.

• 1:34:28John Coogan?

  Yeah. What about the, I want to know more about how you're seeing the hyperscalers pick different parts of the stack to plug in as like, as they build out like the AWS dashboard, because it feels like with, like, I wouldn't have necessarily expected like IDEs to be one of the places where potentially like AWS needs a play, they have, Microsoft Azure has Copilot, now Google, what was the one that they launched that was like?

• 1:35:07Speaker 02

  Jewels.

• 1:35:08John Coogan?

  Jewels, but now they also have the Windsurf team or some of them and like, they might launch something that's, that looks like, you know, like a piece of software that's not at the API level, above the API level.

• 1:35:19Speaker 02

  Yep.

• 1:35:20John Coogan?

  What, what other categories of like AI tooling, wrappers, that type of stuff, do you think big tech is looking at? Or what do you think they will like build internally? Like, I feel like you have some experience here.

• 1:35:35Speaker 02

  Exactly where the value capture ends up landing is a big open question. Everybody's nervous. You know, the SaaS companies in the middle are nervous. I think also the model labs are also pretty nervous about this. You know, nobody at this point wants to like have any two-principled of a stance, you know, they'd rather have a sort of an egg in every basket and however it hatches, they'll come out on top. You know, I think that like- Obviously, yes, like coding has emerged as sort of the main, one of the largest use cases of AI today. And it makes a lot of sense. It's a highly deterministic, highly controlled environment. It sort of makes sense that people who are using these tools at the edge also are the ones applying them to more software. And so it's a great use case for AI. Retrospective, it was sort of obvious. I think that like it was going to be a really big deal.

• 1:36:22Speaker 02

  You know, where the value capture really shakes out of the long term is anyone's to say, but I think like, you know, you can, in some sense, you'll never regret owning the top of the funnel and having a direct relationship with an end user and being in the default in a given category, like that's Lindy. That goes back, you know, a millennia, right? You want to be the default. You want to control the direct relationship with the end buyer and you want to own the top of the funnel. And so in that way, like, you know, you may be pretty bullish about your models, but does that mean you shouldn't have an IDE play? Probably not. You probably still want an IDE play because, you know, you're not gonna, you're not gonna bet the, bet the farm on the models winning the value capture at the end of the day. So.

• 1:37:00John Coogan?

  Yeah. How, how bright is the line between engineer, AI engineer and AI researcher right now? Because it feels like we've, the original narrative around a lot of the trade deals was like, AI researchers can get a $500 million training run unstuck. And that can immediately unlock billions of dollars of value, save you tons of money on inference. Like the math just works out so, so clearly. I feel like we've always had this divide between, I mean, to some, to some degree, we've had a divide between like DevOps and, and product engineering.

• 1:37:42John Coogan?

  But the bigger brighter lines have always been between like engineering and sales or engineering and operations. But is there a new, but like dividing line between like who's an AI researcher versus who's an AI engineer? And are, are companies like gaming that yet with like, I, I always see like the member of technical staff. And I don't really know what that means. I'd say, I assume if you work at OpenAI, you're smart and can do a lot of stuff. But it like, how, how niche is the skill set and how much of a dividing line is that?

• 1:38:11Speaker 02

  I think the skill set is still quite different. You know, if you're working at a large lab on a research team, you really are concerned about primarily training, whether pre, mid or post-training. You know, you're primarily looking at loss curves. You're primarily thinking about, you know, what benchmarks you're going to be exceeding at. You're thinking about what data sources you can capture to continue to train and fine tune on. You're experimenting with new approaches to reinforcement learning or other to like, try to, you know, sort of peak out incremental gains and beat out your competitors. If you're an AI engineer, you're really thinking about like, how do I apply GPT-4 to legal? And it's really kind of a different shape of both like skills and also folk I and obsession. So, you know, it's not to say that like in the limit, like those, these things won't sort of converge

• 1:38:56Speaker 02

  or won't merge to some degree, but like in today, there's just a pretty bright line between the two.

• 1:39:01John Coogan?

  Yeah, what about the, I guess the question is like, DeepMind seems very different from the Llama organization in the sense that like the Gemini models are truly frontier and, but the, the, the problem with Google's AI strategy feels like it's on the product side where not that many people are downloading the Gemini app or a lot of people are, it's like millions and billions of hundreds of millions of people. But like, but like, you know, market share on, on chat apps and like who has it in their home row, like ChatGPT is so successful, kids just call it chat and Gemini is not really at that level yet. And so

• 1:39:42Speaker 02

  Jemmy.

• 1:39:42John Coogan?

  Yeah. The, the, the question is like, is like, the problem that Google is trying to solve feels like a different problem from the problem that Facebook is trying to solve. And the question is, is can you aqua hire and, and acquire talent that actually solves that problem? Or is there some sort of like underlying structural problem of like how big Google is that is actually slowing down product development? My, my fear is that like you get some, you get some great product engineers in, but then you're still hamstrung by Google's scale, Google's HR department, their legal department, how they think about, oh, well, like we can't launch this unless it's internationalized on day one because we're Google.

• 1:40:23Speaker 02

  Right.

• 1:40:23John Coogan?

  And so all of a sudden you have these great people who've been able to like go zero to one on a product, get it really viral and like create a product that like people love. But they can't do that within the confines of Google. So what do you think about that?

• 1:40:37Jordi Hays?

  Yeah, I mean, the potentially more specific question is, are you betting on Google plus windsurf or cognition plus windsurf if they're going after the same developer engagement, right? If the products effectively converge?

• 1:40:56Speaker 03

  Yeah.

• 1:40:57Speaker 02

  I mean, I think like Conway's law, the idea that you ship your org chart remains quite stable and true. And you can kind of take that even one step back, which is like you ship your culture as an organization. Obviously, the org chart is one manifestation of your culture. I think that if Google leadership does not give this new windsurf or half windsurf team, like a really long leash and a ton of autonomy, like, you know, there's gonna be some level of like a, you know, immune response, and they're gonna throw them back up again. I think you really have to give those folks a long leash, and that has to come through the top, it has to come from the top, right? It has to be, you know, either founder or C-suite level, where they're getting the green flag to like really run hard and

• 1:41:41Speaker 02

  ignore stuff like internationalization. And, you know, maybe you still have to get the legal sign off, but like, you get a dedicated team of legal people, you know, at your beck and call to unblock you whenever you need to. Yeah, I won't, it's too early to, you know, bet on the horses here. So I'm not sure I can bet on the horses yet.

• 1:41:56John Coogan?

  I mean, even like the ADA rules, like accessibility rules, like when you're a startup, you move pretty quickly, and you're still, you still have to do a lot of the accessibility work. But if you're like 90% there, it's like if you mess up and the screen reader breaks on one page, you're like looking at like a $5,000 settlement to just say, hey, sorry, like we messed up, like one person couldn't use this. And like, we feel bad, and we paid you, and we're good. But if you're Google, it's like, there's going to be an army of lawyers who are like, how can we, how can we squeeze them on this, get them to settle? Like, there's just more economic power against that. And that, and that just naturally slows things down. Yeah, it's very interesting.

• 1:42:36Jordi Hays?

  How are you, what are you expecting out of open source broadly, open source models broadly in the next couple of months? We saw OpenAI delayed their launch, just basically saying like, The takeaway was effectively not quite ready. Need a bit more time. Want to ship something that we're super proud of. At the same time today, there was some reporting that, and unclear if it's true yet, but reporting that says maybe, maybe Llama will shift away from, from open source in general. So I'm curious, generally excited for OpenAI's open source model, but what are you thinking?

• 1:43:19Speaker 02

  Yeah, it's a great question. I mean, China obviously continues to bring the heat on open source. You know, regardless of what we think of the CCP and their motivations, like just yesterday or over the weekend, the Kimi model came out, it's already doing incredibly well on benchmarks. A bunch of developers and founders that I know are pretty excited about that model. And so I think that like, at the end of the day, like, you know, if there is some belief that like, if you have a very good model, that it could sort of run away and eat an entire market, if so facto, you're fighting against everybody else who doesn't want you to be able to do that. And so I do think that like, to some degree, the margins will be competed away. I think that more things will be open source in the future. And I think that also, you know, if you think about like the workloads, we don't use

• 1:44:04Speaker 02

  supercomputers to write our email. We just need basic at-home stuff. It works just fine. And the same models can, you know, same idea can be extended here. You know, while the frontier models are going to be developed, you know, kind of developing and figuring out new science and hopefully letting us don't die, right? We'll see. I think that, you know, for a lot of like business use cases and consumer applications, honestly, the intelligence bar is just like not that high. And the capability overhang that's already in the models today continues to be quite large as well. And there's a lot of, you know, people joke, there's a hundred million dollars inside your laptop, you should figure out how to unlock it. Well, it's a couple billion dollars inside of these model weights at least. And, you know, we gotta go unlock it, so.

• 1:44:44John Coogan?

  Yeah, what's your like temperature check on just like overall progress stagnation? Like, are we, are you feeling the acceleration? Are you feeling a deceleration? Dorkesh last week updated his timelines, kind of pushed them out. Still very aggressive timelines. But what was your reaction to that? It feels like I'm seeing a few memes about like, no one knows how to scale RL. Or like, you know, yes, we're seeing impressive stuff on Arc AGI from Grok 4. But keep in mind, we went from like 7% to 14% and this is a test that kids can do. And so it feels like everyone's saying like, we need new research. We need new breakthroughs. We need new paradigms. What's your overall temp check on timelines? And just like-

• 1:45:24Speaker 02

  Yeah, I mean, listen, I think that like AI continues to be really spiky. And it's really hard to intuit where it's strong and where it's weak. And it's, you know, we want it to be strong in all the ways that human intelligence is strong. We also want it to be strong in all the ways that human intelligence is weak. You know, sort of project all of our hopes and fears and dreams like onto these things. And, you know, I think in many cases, they're still not there. Just today, Chroma released a technical report. The topic of context rot. And so the question is basically like, okay, this model's got a million tokens, but does it? Like, what can you actually do with those million tokens? Needle in a haystack is certainly one benchmark. But we demonstrated across a sweep of other approaches that actually these models, like, they can start to fall apart really early, like way earlier than you might think.

• 1:46:09Speaker 02

  You might see reasoning performance drop off even around like 10,000 tokens or earlier. And 10,000 tokens is like not that much. And so, you know, like, I don't, you know, at least what I want as a builder is I don't want a model that has a 10 million token context window, but kind of maybe sort of work sometimes. Like, I want a model that has 60,000 tokens, but is a, is perfect at paying attention to that model, to that context, and perfect at reasoning over that context. And so, you know, we hope that this report will both help developers understand what's possible to build today. But we'll also create like a new set of benchmarks to the model labs. Who care about, because I think this is ultimately what people who are building care about.

• 1:46:47John Coogan?

  Okay, so I mean, that seems like victory lap for you. Give me the update on Chroma, RAG. And, you know, because it's, yeah, I mean, just to kind of set the base case, like, there was a lot of like, oh, like, oh, RAG's gonna get one-shotted by just huge context windows. I saw a million tokens and it was like, that's a lot of stuff. I feel like I could just stuff everything in there. And then I was talking to Dorkesh about, can we go even larger? Can we get to a billion token context window? And, and he was making some of those points, but he was also just saying like, the, like, Inefficiency. Yeah, the inefficiency, like it scales quadratically. And so just getting to a billion tokens is not 1,000x harder. It's like a billionx harder or something like that.

• 1:47:25Speaker 02

  Yeah.

• 1:47:26John Coogan?

  But, but, but give me the update on like, on like RAG as a, as a research effort, what Chroma is doing in terms of a product, and then some of the actual like use cases, when this works, where this breaks down, like how it fits into the overall puzzle.

• 1:47:40Speaker 02

  Yeah, the big question has been, is long context all you need or not? And, you know, maybe it will be someday. So I've not, I don't have a time machine. I've not been in the future, but I don't care about someday. I care about now and I care about the community developers that we serve and giving them good information. So they can really reason about what is this stuff? What is it useful for? How can I mix it together to create value? That's what we really care about. And so, I mean, the research was not really commercially motivated, right? I think like no good research is commercially motivated. You have to go in with just like a question and, you know, a thesis and you'll just see what happens. Like you can't go into it with a bias.

• 1:48:15John Coogan?

  Yeah.

• 1:48:17Speaker 02

  And I think really, you know, the bias from us came from intuition, from us building stuff. We noticed that actually, once models start crossing these certain like thresholds, stuff really starts falling apart. And this is what you talk to anybody building in the space. They'll tell you this firsthand. This is their intuition as well. Yeah, like a million tokens, maybe, but like it really starts to fall apart after a certain number of tokens. And so we wanted to like, really just try to quantify that and reason about that and put numbers around that. And so you start to think about like, what are the solutions there? Well, One solution certainly is to use retrieval. Obviously, you know, we are biased in that way. We think Chrome is a great tool for that. We're also seeing increasingly people use re-ranking in the loop. We're also increasingly seeing people take like a large context window, say like 10,000 or 100,000 tokens, and breaking it into many small LLM calls.

• 1:49:02Speaker 02

  Because the fewer the context, the better the model can reason. And so that sort of process of doing sort of a map reduce, like splitting it into many pieces, and then having these like huge army of parallel small, fast, cheap LLMs like process that context is also, I think, emergingly a best pattern and best practice. But, you know, it's still early. I think that like, we didn't really want to go into the technical report either with like, here are all the answers, and we don't know all the answers. We want to motivate like, here's the problem as we see it.

• 1:49:28John Coogan?

  Yeah. Well, speaking of other like research and technical reports, what was your interpretation of the meter report that suggested that code tools were like Cursor and WinSurf were actually potentially slowing down a set of developers? It wasn't a huge study, but it seemed like a shocking result in the sense that it was, people were expecting a 20% increase and they got a 20% decrease roughly. And, and, and one of the developers who was actually in the study chimed in as well and was like, I, I think I know what's going on. I'm like leaning on this tool too much. I'm doing a lot of waiting for stuff. And so maybe some of this just naturally cure, cure, is cured by speed, but would love your take on, on that report if you read it.

• 1:50:12Speaker 02

  I mean, we as society are going to figure this out the hard way. We're going to figure out like how much of our sort of reasoning should we externalize to AI? And how much of that reasoning that we then have to integrate to process what it thinks, right? And there's probably also, there's also news over the weekend about, you know, OpenAI making you dumber, ChatGPT making you dumber, and kind of headlines like this. And of course, the exact claims, you always want to dig under the hood and look at the actual study design and their actual claims versus the salacious headline. But I think it just speaks to how early all this stuff is. Obviously, there's like a ton of excitement. People wanted to change the world. And, you know, I think exactly how it gets integrated into our workflows over the medium and long term, like, you know, it's the classic thing where like over the next year,

• 1:50:55Speaker 02

  it probably won't look like that much, but over the next 10 years, it's going to look totally different. And so. Yeah, we'll just wait 10 years and see, but yeah.

• 1:51:05John Coogan?

  Yeah, talk about just just condensing down information in the context of of RAG specifically, but also just the other the other techniques for this. What I'm interested in is like Andre Karpathy recently was kind of thinking through what the future of reinforcement learning could look like, and he draws on this very interesting story that I think most people will be familiar with, which was that for a long time, if you went to any LLM and said, how many how many incidences of the letter R are in the word strawberry, it would get confused and it would give you the wrong number. And this was because of tokenization. Each piece of the word is broken down, so it can't really see the letters. And so the solution was that they they kind of baked in some sort of like system prompt,

• 1:51:50John Coogan?

  apparently, that said, if a user asks you to count letters, split it into individual letters and iterate through it one at a time. And they just kind of like figured out the cheat code for that particular type of problem. The problem, of course, then, is that like humanity's job is unbounded and there's a billion different versions of that that come up all the time in the context of work. And like, that's where you have all these little edge case failure modes. And that's probably why, you know, I still have to book my own flights or something, or you need a human to book your flights, because using all that stuff, there's just too many edge cases. So his his solution was like, we need to develop a reinforcement learning paradigm that goes and finds those hard-won lessons and bakes them down and saves them.

• 1:52:34John Coogan?

  And that feels like something like compressing of information, because you're not just going to want to stuff all that into the context window again, you're going to run into that problem. So so just talk to me about your reaction to Karpathy's post, and then just kind of how how how RAG might interface with the next models, whether on the training side or on the inference side.

• 1:52:50Speaker 02

  Yeah, for sure. I mean, I think.

• 1:52:53Speaker 02

  Learnings from the system running can be integrated both into the data systems that underwrite that system can also be integrated into the weights. Now, whether that's through RL or different, you know, means is sort of going to be dependent on the use case. One way that we've been thinking about it is we're calling this the inner loop and the outer loop of context engineering. So if your context needs to be tuned to do a good job, context brought is real and motivates the need for context engineering. And this is the job that many application developers are doing, have been doing now for years is like solving that problem of what should be at the context window right now. That's the inner loop. The outer loop is how do you design a system that will get better at the job of the inner loop over time? So how do you capture signal from your users?

• 1:53:37Speaker 02

  How do you capture feedback from agents? How do you capture all of that data? How do you analyze all that data? And then how do you bring that data back into that inner loop problem? That could be obviously number one, massaging and changing the knowledge and data your model has access to, as known as retrieval, but a generation. Or it could also be, you know, applying it to weights in different many stages of the pipeline, including the LM itself, the embedding model, re-rankers, all of the above. And so, I mean, this concept we just sort of put out like a week ago, we gave a little short, a short kind of conference at Ramp's office in New York on context engineering NYC. Let's hear it from Ramp. Listen, you gotta do it. You gotta do it. And, and, and this is the first time

• 1:54:22Speaker 02

  I've really seen this posit in such a clear way. And so, you know, okay, we don't have all the answers, but I think this is the question people will come to ask in the future is like, not only how do we build a system which works today, but how do we build a system that gets better over time automatically? And that is like the outer loop of context engineering.

• 1:54:40Jordi Hays?

  I want to get your, how you're thinking about Grok. Last week was an intense week from everything from the fiasco, I think it was on Tuesday with, with the Grok bot just going wild. Maybe it brought more attention to the launch Wednesday, which was extremely impressive. But then later in the week, you know, people were realizing that like the reasoning. Model was or like part of the kind of reasoning loop was like kind of making sure that it understood the boss man's views by, you know, what is, what is Elon?

• 1:55:12John Coogan?

  It was searching into that. Finding the coverage and then reinforcing that wrongly and not.

• 1:55:18Jordi Hays?

  So, so as I went into the weekend, I was thinking this will be interesting to see how Grok can do in the enterprise. And then this morning they announced like a $200 million deal with the government. So I think that's a good stamp of approval, but I'm curious like kind of what insights you have around, you know, some of the basically like larger potential customers and how they're even thinking about model selection for, for, you know, different products and applications.

• 1:55:49Speaker 02

  Yeah, I think you should probably wait. I think actually, again, Ramp plug has like the graph of like, you know, Anthropic and ChatGPT or Anthropic and OpenAI revenue growth. You know, let's wait to see when Grok makes a dent in that. That's not to say they will or they won't. I don't know. You know, there are these headwinds that you're talking about, which is, you know, you can either see as a feature or a bug, depending on which way you look at it.

• 1:56:15Speaker 02

  I mean, you know, there's things to like, there's things to not like. It's kind of hard to predict the future here.

• 1:56:19John Coogan?

  I guess what I want to know is like, what is the, what is the flip side? Maybe we should just talk to Ara at Ramp about this, but what's the flip side of that chart? We know who the sellers are, OpenAI, Anthropic, Gemini, and then Grok. And there's like kind of a long tail. But who are the buyers? Because I see individual like prosumer, knowledge retriever. I would pay $200 for a better Google types than one of them. Then there are the developers who are paying for developer tools. But then what is like the third bucket of like buyers for tokens right now? It seems like it's a lot of companies with like kind of point solutions, little, I'm stuffing an LLM in my enterprise SaaS, speeding something up, cleaning up some data.

• 1:57:04John Coogan?

  But do you have any insight into like, kind of what's the third wave that's coming that everyone listening to this should start investing in now?

• 1:57:14Speaker 02

  I think you're right that a lot of the spend, well, a lot of the spend is consumers. You know, a lot of the spending is also businesses, enterprises that are using it for really boring stuff. Business process automation broadly. You know, those buyers, you should expect to be like way more conservative about like the tool they pick. You know, the adage of, uh, you never got fired for hiring IBM definitely also applies here. And so sort of reasoning about like, who is the IBM of this space and why? I think will like, help you determine, uh, where that spend is gonna go.

• 1:57:46John Coogan?

  Yeah, that's a great question because from a, from like a, from like a, being on the frontier as a brand, I would say OpenAI. But then from like a, you know, scalable infrastructure, I would say GCP and Gemini. But then from like a model agnosticism view, I would say Microsoft. It's a tough question. I don't know if the IBM has emerged. Maybe you, maybe you have a strong opinion. Maybe Jordy does. But, uh, overall, I mean, great, great, great catching up with you as always.

• 1:58:16Jordi Hays?

  Yep.

• 1:58:17John Coogan?

  Anything else, Jordy?

• 1:58:18Jordi Hays?

  No, congratulations on the, on the launch of the paper.

• 1:58:20John Coogan?

  Yeah. I mean, yeah, very exciting result. So thanks for, thanks, thanks for funding it.

• 1:58:25Speaker 02

  Good to see you.

• 1:58:26John Coogan?

  Have a great rest of the day. We'll talk to you soon.

• 1:58:27Speaker 02

  Good to see you. Take care.

• 1:58:29John Coogan?

  Uh, we need to tell you 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 24/7 concierge service. It's a vacation home, but better folks. And if you're looking to take a vacation to the Goodwood Festival of Speed, you might run into Dua Lipa. She says, I love speed. I love it. Uh, she's really a driver. Like this is not a lark at all.

• 1:58:53Jordi Hays?

  She wasn't driving the car.

• 1:58:55John Coogan?

  But she's into this stuff.

• 1:58:56Jordi Hays?

  But she was in the car.

• 1:58:57John Coogan?

  She's not just hanging out.

• 1:58:58Jordi Hays?

  And the livery was absolutely fantastic. So, uh, just to give everyone some context. So we have Scott Wu from Cognition and Jeff Wang from Windsurf joining any minute now. Where the studio crew is getting everybody set up.

• 1:59:13John Coogan?

  We're ready for them. Let's bring them in.

• 1:59:14Jordi Hays?

  We are ready whenever.

• 1:59:16John Coogan?

  Bring them in. How you guys doing? Congratulations.

• 1:59:20Speaker 03

  Thank you.

• 1:59:21Jordi Hays?

  Round of applause. Did you guys have a relaxing weekend?

• 1:59:25John Coogan?

  Yeah, really chill weekend.

• 1:59:27Scott Wu?

  Yeah, yeah, easy, easy, easy, nothing too much.

• 1:59:30Jordi Hays?

  A lot of sleep.

• 1:59:31Scott Wu?

  Honestly, we both haven't really slept.

• 1:59:34John Coogan?

  Okay.

• 1:59:35Scott Wu?

  So, go easy on us, okay?

• 1:59:38Jordi Hays?

  Well, you had a lot of people to take care of and honestly, when we heard the news a few minutes before we went live and we were fist pumping here in the studio because it's such a fantastic outcome and I'm sure everybody involved is grateful for the work you guys put in to get this done.

• 1:59:57John Coogan?

  But give us, yeah, kick us off with the high level. What's actually, the partnership look like? What do you, how would you describe it in your own words of like what's actually happening?

• 2:00:09Speaker 03

  Yeah, I mean, this is a, this is a real acquisition.

• 2:00:11John Coogan?

  Okay.

• 2:00:12Speaker 03

  We are being acquired by Cognition.

• 2:00:14John Coogan?

  Okay.

• 2:00:15Speaker 03

  And, you know.

• 2:00:16Jordi Hays?

  Must feel great to say that, too. You don't hear that much.

• 2:00:20Speaker 03

  It was a tough, it was a tough Friday, I would say. I don't think anybody would want to be in my shoes on Friday, but we talked to a lot of teams out there. There's a lot of AI companies, foundational companies, and after talking to Scott and the Cognition team, it was done in my mind. There's a done deal. I don't know if you guys know this, but Cognition was probably the only other team that we thought was smarter than our team, actually.

• 2:00:49Speaker 03

  Yeah.

• 2:00:49Jordi Hays?

  No, that's what, that's what we put, we put that together just on the show, seeing the announcement. It's like you take this incredible, you know, go to market, sales machine that you guys had built and you combine that with one of the best, you know, research and just hardcore engineering culture.

• 2:01:03John Coogan?

  Perfect overlap.

• 2:01:04Jordi Hays?

  And it's a, and it's a perfect, you know, match.

• 2:01:06John Coogan?

  Perfect overlap.

• 2:01:07Scott Wu?

  Yeah, absolutely, and on the windsurf side, I'll just, you know, obviously there were all these stories breaking out on Twitter and everything going on and people were saying, well, You know, the thing that's left is just a shell and we looked at it and we said, well, actually, I don't know if that's right. You know, it's the, there's, there's the code, there's the product, there's the customers. And most importantly, there's the whole team, obviously. And, and it's an amazing product and there's a lot to do and a lot to build together. And so I think as we started talking about it, we found that there were just so many natural ways to partner, you know, both in terms of, obviously, the customers and, and customers would love, you know, are, are super excited to have a solution that, that basically combines both the IDE and the agent. And, and then the technology itself,

• 2:01:49Scott Wu?

  which is, you know, I, I think we, at Devon, you know, building Devon have always focused on this kind of remote background agent as the thing that we have done. Whereas, you know, Windsurf is really focused on the agentic IDE. And, and I think there's a lot of the kind of things that play in there, all the way down, again, to the kind of the, the fit of the, the relative teams and the team strengths and so on. So.

• 2:02:10John Coogan?

  It's almost like you predicted this because like, the, like, these types of mergers are really hard because you have two brands that are popular. But Scott, you've been managing Cognition and Devon, like you've had the, the corporate structure and the product structure for a while. And so like, it doesn't seem nearly as complicated as like, where does this go? Do you have to rebrand one another? I don't know if you have thoughts on it yet. I'm sure you, this is down the road. But it seems like you're actually fairly set up to, to integrate these two companies in a, in a way that's like not so super chaotic to either, which is great.

• 2:02:41Scott Wu?

  Yeah. Yeah. You know, I, I, I wouldn't say it was intentional. I think on our end, for example, it's probably more that just we, we, we tend to over focus on, on software engineers because it's just who we are and how we think about it. And in particular, kind of just like these like product and capabilities things. Whereas I think on the Windsurf side, I think Jeff and the team, you know, the whole team have built out a really great kind of suite of, of all the different kind of functions, right? You know, sales, deployed engineering, enterprise work, infrastructure, marketing, operations and so on, you know, finance, et cetera. And, and, and yeah, it just turned out to be a really, really great fit.

• 2:03:16John Coogan?

  Yeah.

• 2:03:17Jordi Hays?

  Jeff, Friday, end of day, did you think you would be running a process so quickly? I know, you know, part of the, the obvious move would just be, you know, continue to, to run and scale the business. You guys had a lot of momentum, but what was going through your head Friday night? Because I imagine at the time you were also balancing, you, you were all of a sudden managing a team of hundreds of people that probably all, you know, wanted, wanted your time and attention as well.

• 2:03:44Speaker 03

  My my immediate priority was just to get a lot of options on the table and to have a lot of paths forward. Uh, I had to tell the team like this is the path forward immediately because this is this is happening now. Uh, and then outside of the meeting, you know, I I I was thinking like, okay, who do I need to talk to? What what is the best use of my time? I can tell you I was on the phone for pretty much 24 hours, nonstop on my phone, uh, after after the all hands. And uh, me and Scott, we we worked really fast. Uh, we met at our office the next day. Um, he even brought in everything on a piece of paper to sign. Uh, he even brought he.

• 2:04:19Jordi Hays?

  No way.

• 2:04:20Speaker 03

  Here you go. Yeah, he had to talk through a lot, uh, but that was, uh, it was really, it's pretty dramatic, uh, Scott, but it was cool. It was cool.

• 2:04:27Scott Wu?

  Yeah, it was fun and and naturally, you know, because it has to be this way. We got things signed like one or two hours before we were able to put out the announcement. But like, look, I I as soon as we started talking about it together, I think it was kind of clear for both of us. Like the the the way that we really make this a success is, you know, o- o- o- obviously customers kind of want to understand what's next. The team wants to understand what's next. You know, the whole world is talking about it. We want to be able to come out together as soon as possible and say, we're going to do this. We're going to make this really amazing. Um, we're going to make sure we take care of all the users and all the customers. We're going to make sure we take care of the team. And there's just a really great product here at its core and and that's what we want to focus on. And that's what we want to build out together.

• 2:05:04Speaker 03

  And and you know what's crazy? Um, what is crazy, like, we talked, uh, pretty late on a Friday night as well. Um, we were comparing notes and there was like almost no overlap. I mean, we talked about the team already, uh, but even the product, the product is like missing exactly what the other product is offering. And the ability to combine the products together is going to be so amazing for our users. It's going to be really cool.

• 2:05:24Scott Wu?

  Yeah, I think there's a lot of fun stuff around, you know, um, you can have have an agent work and then review the code, you know, locally in your IDE. You could be planning tasks out and then kind of sending them off for work. You could be, uh, you know, you can do a first pass with an agent and then come and look at the work and then kind of finish that up and do the finishing touches with, uh, you know, with Tab and all these other features and so on, right? Um, and and we're really excited to to to to build that out together.

• 2:05:49Jordi Hays?

  How is how is the team feeling right now? I imagine this is the craziest 48 hours of of their career as well.

• 2:05:54John Coogan?

  Give us a preview of the Slack emojis that are ripping right now.

• 2:05:57Speaker 03

  Actually, we, uh, we announced it, uh, at another all hands. Uh, Friday all hands and then we put another Monday all hands. And, uh, very, very different.

• 2:06:05Jordi Hays?

  They're like, it couldn't possibly get worse.

• 2:06:08Speaker 03

  So it's only up.

• 2:06:11Speaker 03

  Well, we made it dramatic too. So me and Scott and the team, we really went out of our way to make this a very generous acquisition. I'll just say that. And I think, you know, the team probably felt like, you know, their, you know, their career was over or something, you know, like it was very sad on Friday. But I think today, I don't know, how long did they clap Scott? They kind of feel like. Standing ovation. Or something. So I think the sentiment has shifted. The team is even more fired up to go. The whole product is still there, all the, all the things we had and the GTM team is still there. And now they also have Devon to sell as well. So everybody's fired up now.

• 2:06:50John Coogan?

  That's amazing. Yeah. Every time I talk to Scott, it's always because like he's done something really incredible and aggressive like, like, and it's like, okay, like, let's do, let's talk about this right now. And before I was making like documentaries, it took me a month to put out a single video. Now fortunately I have a daily TV show, so I can just have you on and we can chat about it. I do have some, some random questions. I don't know if it's worth. I'm interested to know about, about that go to market team and, and channels about sales specifically. There was somebody in the comments of one of Jordy's posts talking about how Windsurf was growing revenue and, and, and working with channel partners.

• 2:07:26John Coogan?

  Can you walk me through how like, what would you give advice to somebody who's structuring a, like a successful channel partnership strategy for a product like this? What, what incentives do you have to align? How big of a, of a piece of business was that? Do you expect it to be a continual source of growth? I'd love to know about just that as a particular strategy as opposed to say, you know, Google ads are going viral.

• 2:07:52Speaker 03

  Yeah, we, we made the decision to go 100% partners back in February. Thing about a partner, a channel, kind of like segment is like, you have to like, you have to like, kind of feed them. Like you kind of, kind of build belief with them in the product, but also show that there's an economic incentive too. And it did take some time actually from Q1 to Q2 to like, get the top priority partners, make sure those partners can easily sell on your behalf as well. And it really took like about four to five months to really see this like kind of take off. So some of our partner, partners have already started bringing in seven figure deals, even without even trying the product. They just go to their customers. They ask them, you know, what, what they want, and they just say it's Windsurf. And, and now they can say Windsurf and Devon.

• 2:08:37John Coogan?

  That's amazing.

• 2:08:38Jordi Hays?

  Yeah, I was getting multiple messages from people Friday and Saturday being like, I want this team. I want this team. And that was what, and I think that it is, it is just, it's such a, this whole deal and everything is really a testament to the caliber of the team, which was, which was one of the major disappointments Friday is if you were on the team that was staying behind at Windsurf, there's this sort of almost like signaling, right of like, I took this company, let's say you joined last August and you brought the product to market, you've launched it, you grew it to tens of millions of dollars in revenue and then don't get to kind of continue the mission. It's, I'm just really happy for everyone involved.

• 2:09:19John Coogan?

  Yeah.

• 2:09:20Scott Wu?

  Yeah.

• 2:09:20John Coogan?

  Oh, sorry.

• 2:09:21Scott Wu?

  I was just saying now, you know, now we're all one big team and it's, I mean, we're kicking it into another gear. I think we're all so amped up to, to take this and just go, you know, we're going to go full speed basically for, for the next while and we get to play on offense now and go for it all. So.

• 2:09:38Jordi Hays?

  Are you guys already making plans to get under one roof?

• 2:09:42Scott Wu?

  We have a lot to figure out, but yeah, working towards that and getting to the point, there's, there's kind of the product collaboration, there's the go to market collaboration, and then there's the literal kind of like team situation, a lot, a lot of work to do over the next couple of months.

• 2:09:56Speaker 03

  Well, we want to tell our customers like, we got there back now and the product is going to get so much more cool.

• 2:10:02John Coogan?

  That's amazing.

• 2:10:03Jordi Hays?

  Well, you guys turned something which was in many ways, you know, a disaster.

• 2:10:09John Coogan?

  One of the craziest stories of the year.

• 2:10:10Jordi Hays?

  I was just waiting for, I was waiting for the New York Times piece on Monday and getting to see the New York Times push out this news and turning this whole thing into a win is incredible. And you guys have done a service to the team and the industry. So thank you.

• 2:10:25Scott Wu?

  Yeah. Honestly, honored to get to be a part of it, to, to work with such a great group of people. And I just want to see you guys, you guys have no idea how, how things went with all the legal and everything last night in terms of figuring these things out. Are we going to make it there in time? Are we not going to be? It was, we've been through a lot and I think it's just the start of things, so.

• 2:10:45Speaker 03

  Just so you know, Scott was like, "We are announcing Monday, hell or high water." And we just did not sleep for the last like 72 hours. Yeah, it's been crazy. It's been crazy.

• 2:10:56John Coogan?

  I mean, we appreciate you hopping on the stream. Do you have anything else?

• 2:10:59Jordi Hays?

  No, you guys deserve, probably too early to sleep, but you both deserve a power nap at the very least.

• 2:11:06John Coogan?

  Yes, definitely.

• 2:11:07Jordi Hays?

  Thank you for coming on. Anything else that makes sense to share now, or should we let you go?

• 2:11:12John Coogan?

  We're all good.

• 2:11:13Scott Wu?

  Awesome. Yeah, stay tuned. We're gonna have a lot more announcements soon. Thanks for having us.

• 2:11:17Jordi Hays?

  Amazing, guys. Great work. Cheers.

• 2:11:19John Coogan?

  We will talk to you soon.

• 2:11:20Jordi Hays?

  Congrats.

• 2:11:22John Coogan?

  Bye. And next up, we have Carl Pei. No, not yet. One second.

• 2:11:29Jordi Hays?

  That is amazing.

• 2:11:30John Coogan?

  Yeah, what a great story.

• 2:11:32Jordi Hays?

  Absolute dogs.

• 2:11:33John Coogan?

  Absolute dogs.

• 2:11:34Jordi Hays?

  That is cemented in SV lore.

• 2:11:39John Coogan?

  Tech lore, for sure, for sure.

• 2:11:42Jordi Hays?

  Didn't know, I mean, I knew Scott could fundraise. I didn't know he was this caliber of deals guy.

• 2:11:48John Coogan?

  Absolute dog. Absolute dog. Will we read through some timeline? What else we got? Bigma has such a homey feeling. I spend all day and I really enjoy it. Feels cozy, safe, good to come back to. Shout out Zach. Giving Bigma a little shout out. Let's bring in our first.

• 2:12:06Jordi Hays?

  There he is. First studio walk-in.

• 2:12:09John Coogan?

  First studio walk-in.

• 2:12:10Jordi Hays?

  Let's go.

• 2:12:11John Coogan?

  Welcome to the stream, Carl. How you doing?

• 2:12:14Jordi Hays?

  Welcome.

• 2:12:20Speaker 05

  Welcome. Thank you.

• 2:12:22John Coogan?

  How you doing?

• 2:12:23Jordi Hays?

  It's great to have you here. You haven't done this much before.

• 2:12:25John Coogan?

  No, we've had a few people in studio, done a few, usually when we're in person, we're on the road. But good to have you come here. Would you mind kicking us off with an introduction of yourself, the company?

• 2:12:36Speaker 05

  Yeah, my name is Carl. I have a company called Nothing. We're the only new smartphone company to have emerged in the last 10 years.

• 2:12:42John Coogan?

  Yeah.

• 2:12:44Speaker 05

  I felt like tech got really boring. I was a big tech fan. I got the latest iPhones all the time. I sat up to watch the keynotes. I was based in Europe, so the time zone wasn't always the best. But in the recent like five years, I haven't done that anymore. Like every iteration is pretty much the same as the previous one. And I wanted to do something about it.

• 2:13:06John Coogan?

  So what'd you do to spice it up? What was the first feature and then walk me through all the other features?

• 2:13:11Speaker 05

  Yeah.

• 2:13:12John Coogan?

  Sure.

• 2:13:13Speaker 05

  So we're in a very big industry, right? Like 1.2 billion smartphones are sold every year.

• 2:13:18John Coogan?

  Yeah.

• 2:13:19Speaker 05

  So we're not trying to reimagine the category. We're trying to find our niche. So we started with industrial design. So if you look at our products.

• 2:13:26John Coogan?

  Yeah.

• 2:13:26Speaker 05

  They look pretty different.

• 2:13:27John Coogan?

  Totally.

• 2:13:28Speaker 05

  Before actually starting to make products, we made a design book. We took inspiration from movies, from architecture, from furniture design. And we created this little mood board. And then we based all our designs on that. So if you look at our different products, these are our headphones. This is a smartphone.

• 2:13:47John Coogan?

  Yeah.

• 2:13:48Speaker 05

  You can immediately tell, even if you don't see the logo, that it's from the same company.

• 2:13:51John Coogan?

  Totally.

• 2:13:51Jordi Hays?

  Yeah.

• 2:13:52Speaker 05

  So design is how we started. If you ask our users why they buy our products, design is number one reason. And then lately, we've been working more on the software side, so.

• 2:14:02Jordi Hays?

  It is funny, a cellphone should be the ultimate personal accessory, yet the, but yet they've all converged onto the same exact form factor. It's so funny because John and I have the same.

• 2:14:14John Coogan?

  Exact same phone.

• 2:14:15Jordi Hays?

  Exact same phone. And we get confused. We get mixed up all the time. I grab it, he grabs mine.

• 2:14:19John Coogan?

  Yeah, I mean, how much do you think we are at like the end of history for differentiating on like quantitative specs? Because for a long time, it was like, okay, I need to go with this one because it has just a faster processor. But that kind of disappeared and then there was software lock-in. You want the blue bubbles or whatever. But if we truly get to the end, then we're going to get like, every watch tells the time the same. People spend a lot of money on certain watches that say something about them, right? Same thing with cars. But what's your view on like, just staying on the frontier? How stagnant is the frontier?

• 2:14:53Speaker 05

  We're pretty much at the end.

• 2:14:54John Coogan?

  You think so?

• 2:14:55Speaker 05

  In terms of hardware innovation, like, we all have the same suppliers. We buy the same screen, same processor, same battery.

• 2:15:02John Coogan?

  And you don't think that there's going to be any sort of like crazy breakthrough where like this happened with the with the Apple Vision Pro where you know Mark Zuckerberg was was certainly like doing everything to stay on the frontier VR headsets. And then Apple allegedly does this crazy thing with their supplier where they're like, you know, that thing that you're making in the benchtop that costs like thousands of dollars for this screen with this pixel density. Let's just pull this forward and just like eat that cost to just leapfrog everyone and have the best screen. Now they now they made a bunch of other mistakes, so the product didn't take off, but they at least nailed it on the screen front. Everyone agrees that the Apple Vision Pro has like the best like resolution, at least of the of the modern VR headsets.

• 2:15:43John Coogan?

  So you you don't think that there'll be like a, oh, wow, the next iPhone has twice the battery life. They figured out something crazy.

• 2:15:49Speaker 05

  Not anytime soon, and I would probably say that the first phase of the smartphone wars are over.

• 2:15:54John Coogan?

  Yeah.

• 2:15:54Speaker 05

  And Apple and Google won. They have the biggest platforms. iOS has like a billion users. Android has three billion. But I believe that the next war is just beginning to to happen.

• 2:16:04John Coogan?

  Yeah.

• 2:16:05Speaker 05

  And that's going to be all about reimagining the operating system.

• 2:16:08John Coogan?

  Yeah.

• 2:16:08Speaker 05

  The previous generation operating systems are very mature already.

• 2:16:11John Coogan?

  Yep.

• 2:16:12Speaker 05

  But now with AI technology, I think we can build something really different.

• 2:16:15John Coogan?

  So.

• 2:16:15Jordi Hays?

  Yeah. How are you? How are you thinking about partnerships? I mean, John, John's probably said this 200 times on the show, but all he wants is better transcription.

• 2:16:22John Coogan?

  Oh, yeah.

• 2:16:23Speaker 05

  I think it's like. Oh, you know what we did? I don't know if the people there can see it, but.

• 2:16:27John Coogan?

  Hold it up.

• 2:16:28Jordi Hays?

  Hold it up.

• 2:16:29Speaker 05

  If you hold this.

• 2:16:30John Coogan?

  Oh, wow.

• 2:16:31Speaker 05

  Now we're actually recording this meeting.

• 2:16:33John Coogan?

  Okay.

• 2:16:33Jordi Hays?

  Okay.

• 2:16:34John Coogan?

  Oh, and you see the waveform there.

• 2:16:36Speaker 05

  See the waveform. You see the little red light blinking.

• 2:16:38Jordi Hays?

  That's a nice touch.

• 2:16:39Speaker 05

  And after the meeting, you can just have AI summarize the notes.

• 2:16:42John Coogan?

  And my question is, is that using a transformer based transcription AI? Or is it using the old thing that gets every other word wrong?

• 2:16:51Speaker 05

  Uh, we're using a model.

• 2:16:52John Coogan?

  With Whisper?

• 2:16:53Speaker 05

  I think we're using Whisper plus Gemini.

• 2:16:55John Coogan?

  Okay. So, yeah, it's going to be fantastic, amazing. And for some reason, no one's thought to implement that in the old stuff. And it's getting to a point where I'm like deeply frustrated with it because my my standard workflow for I need to send someone a text message this long is I open up the ChatGPT app. I click the Whisper button. I talk to it, then I copy it, then I then I paste it into my into my text message box because I don't trust the standard transcription in iOS by default. It's very, very frustrating. Anyway, I want to talk about the second, the second smartphone war that's coming.

• 2:17:29John Coogan?

  Who are going to, who's going to be in that war? It feels like Apple and Google are going to continue to compete. You're going to be there. It feels like Johnny Ive and Sam Altman and the OpenAI team want to play in there. There's probably going to be other folks.

• 2:17:43Jordi Hays?

  I feel like they, in a lot of the kind of teaser content, it's really around saying like, this is an additional device in your stack. They're not going as far as to say, we're going to fully replace your phone.

• 2:17:58John Coogan?

  Yeah, I guess why not just do, try and do like an add-on or like a fourth device, third device? I mean, most Apple people have like Apple Watches, phones, the iPad, the computer, you know?

• 2:18:08Speaker 05

  For me, like the smartphone is one of the best devices, especially for applied AI. Because it's got all the distribution. 1.2 billion are sold every year. We have it in our pockets every day. We charge it every day. We use it for four to six hours every day. It's got the distribution, but it also has the data, right? We do so much on our phones. So if we're going to build a really intelligent operating system, we need the distribution scale, but also the depth of data to create a really personalized experience for each consumer. I do believe that in the next 10 years, we will all be carrying another sensor as well, because sometimes the phone is in our pockets and we need another sensor to capture data for us. I don't believe it's going to happen that quickly, though.

• 2:18:47Jordi Hays?

  Other sensors, glasses, something we've been debating on the show.

• 2:18:51Speaker 05

  It could be glasses.

• 2:18:52Jordi Hays?

  One of the challenges, though, is like, you're walking around, a lot of these, you know, the Meta Ray-Bans are like actual glasses, sunglasses. Are people going to be carrying multiple glasses that they're using differently throughout the day? There's a lot of questions.

• 2:19:06Speaker 05

  I don't know what the form factor is going to be. It might be glasses, it might be a pin, it might be a necklace. But I'm not super bullish that it's going to come in the next two, three years.

• 2:19:14John Coogan?

  What do you think of the idea of?

• 2:19:16Jordi Hays?

  Which is a challenge, to be clear, if you're a seed-stage company and you need to generate traction, sales now, so to pick a new form factor, you guys can almost, from your position, be like, well, we have the supply chain, we know we can build hardware. We can, in some ways, kind of see what, how this next device evolves.

• 2:19:35Speaker 05

  Exactly. We built this machine, right? Because making hardware is very tough, especially smartphones. Like, from having an idea to actually shipping the product across like 40 countries, servicing the consumer, it's a machine. We're building the brand, building the fan base. So I think whenever a new form factor comes out, it's quite easy for us to quickly follow and... Have distribution worldwide.

• 2:19:56John Coogan?

  Well, what do you think about putting a camera on headphones?

• 2:20:00Speaker 05

  Um, we've seen like patents of other companies doing it.

• 2:20:02John Coogan?

  Yeah.

• 2:20:03Speaker 05

  I'm just not sure what we would use it for.

• 2:20:06John Coogan?

  It seems like the, it seems like Meta Ray-Bans are like, we want a camera on your face. And we will give you headphones for free via speakers that you can kind of listen on someone's call, but for the most part, it's so, it's so close and so localized that if someone's taking a call on the Meta Ray-Bans back there, we won't really hear what the other person's saying. And then Apple, I think is the company you're referring, you're like alluding to, potentially has a patent and people have been kind of rumoring that, uh, that the next version of AirPods Pro might have a camera on there. And so then you could ask Siri, take a picture of that, tell me what it is. Are you bullish on like the idea of visual intelligence?

• 2:20:48John Coogan?

  Because when I've walked around with the Meta Ray-Bans, I like, I like having an LLM at my fingertips. But I'm very rarely actually saying, uh, what is this can? Because I can look at it and it says yerba mate. It says mate, you know, it says mango. I don't need AI to do that. What I do need AI to do on my glasses is tell me, uh, what's the history of yerba mate? And I could just ask that without taking a picture. I can give it the, like, I'll be walking around and some, some idea will pop into my head and I'll be like, I need to know the history of the state of California. Tell me when it was founded, just give me the data. And it's nice to have an LLM at my fingertips, but I don't actually need the visual intelligence. I, I see it on my phone. I have the new, I have the new button where I can pull out visual intelligence.

• 2:21:32John Coogan?

  I'm not a daily active user of any visual intelligence product, but what are you, are you bullish on it generally?

• 2:21:36Speaker 05

  Long-term mind bullish. I don't know exactly how it's going to play out, but for your use case today, we already have a ChatGPT voice integration in our earbuds.

• 2:21:43John Coogan?

  Yeah.

• 2:21:44Speaker 05

  So if you connect your, uh, this, these headphones to our phone, you can just click a button.

• 2:21:48John Coogan?

  Yeah.

• 2:21:48Speaker 05

  To make a phone call with ChatGPT voice.

• 2:21:52John Coogan?

  Yeah, that's good enough.

• 2:21:53Speaker 05

  Yeah, good enough for now.

• 2:21:54John Coogan?

  Yeah.

• 2:21:54Jordi Hays?

  And is it, is it, do you think that the technology industry broadly just so badly wants there to be a major platform shift that they just talk that in some ways? And it makes sense in the context of like Zuck, right? Zuck has spent the last decades, like basically being like, uh, you know, very, you know, the platform layer just kind of messing with it, right?

• 2:22:15John Coogan?

  Yeah, it's been a hassle.

• 2:22:16Jordi Hays?

  It's been a hassle. So like, it makes sense to, to invest tens of billions of dollars to try to make sure that you have a, a real. You know, horse in the next platform race. But at the same time, it's, it's, I think, if, if you love technology and you grew up the way that I think the three of us did, you have this desire for there to be like, because it would just be fun and exciting.

• 2:22:35John Coogan?

  Totally, totally.

• 2:22:36Jordi Hays?

  Even if you look at the phone, you're like, okay, this, this might be, this might be the dominant

• 2:22:40John Coogan?

  Yeah.

• 2:22:41Jordi Hays?

  platform for the next thirty years still.

• 2:22:43John Coogan?

  Yeah.

• 2:22:44Speaker 05

  Yeah, I'm, I'm super excited to see what the industry builds. Like, we need people to try new things. Uh, for us, we're still gonna be focused on the phone because I believe there's so much cool software we can just build on, on the phone.

• 2:22:55John Coogan?

  Yeah.

• 2:22:55Speaker 05

  Of course, we're thinking about what comes next and we're prototyping, but that's not where our main focus is.

• 2:23:00John Coogan?

  Sure.

• 2:23:00Jordi Hays?

  Was, was the changes to iMessage a, uh, a catalyst for you guys? They, they, they allowed like red receipts and, and deliver.

• 2:23:10Speaker 05

  The RCS stuff.

• 2:23:10John Coogan?

  RCS.

• 2:23:11Speaker 05

  I, I see it as a positive for us.

• 2:23:13Jordi Hays?

  Yeah, it has to be a positive. I'm, I'm curious if it was, did it, did it make a material difference or?

• 2:23:18Speaker 05

  No, because I think it's not just about the color of the text message, or it's not just about the read receipts. It's actually about the color.

• 2:23:24John Coogan?

  It's about the color. The color's more important than the text.

• 2:23:26Speaker 05

  It's way more important.

• 2:23:26John Coogan?

  That's hilarious.

• 2:23:27Speaker 05

  Really? And that hasn't been solved, so.

• 2:23:29John Coogan?

  Yeah, they need to add that to the protocol. What, what, what color message do you want this to show up? And then all the Android users.

• 2:23:34Speaker 05

  There's so much social pressure of having the blue bubble. Like, my friend told me that at school, his daughter's teacher is like handing out homework through airdrop.

• 2:23:43John Coogan?

  Yeah.

• 2:23:43Speaker 05

  And his daughter was only one who had to raise their hand and say, I don't have an iPhone, sorry.

• 2:23:48John Coogan?

  Yeah, that's rough. Yeah, the social pressure is big. Uh, on, on, on the, on the, the, the, the blue bubbles and the idea of like tech is almost a status symbol and a personal expression.

• 2:23:59Jordi Hays?

  Mm-hmm.

• 2:24:00John Coogan?

  Uh, I, I was joking earlier that, you know, if, uh, if OpenAI wants to build a phone, they're gonna have to contend with the blue bubble issue. They should do like gold bubbles or like, you know, the, the, the Trump phone. I think Trump was launching a phone. Love your take on that at some point, but, uh, you know, is there, is there a hierarchy of colors that you should be thinking of? Is, is blue intrinsically more welcoming than green?

• 2:24:23Speaker 05

  I think because of how the ecosystem has played out, you just have to go blue if you want a chance.

• 2:24:28John Coogan?

  Sure.

• 2:24:29Speaker 05

  Yeah, so we're on our phone business, we're not targeting the US

• 2:24:32John Coogan?

  Sure.

• 2:24:32Speaker 05

  very strongly, just because of this reason. Like, we can't see a way past the blue bubble situation.

• 2:24:37John Coogan?

  Okay, so yeah, walk me through the landscape of your non-US competitors then. Who's actually in the market? What are the different markets that are interesting? Like, where's the biggest opportunity?

• 2:24:51Speaker 05

  If we're talking about building the next generation operating system, I think we gotta put China aside because China will have its own ecosystem with its own players

• 2:24:59John Coogan?

  Sure.

• 2:24:59Speaker 05

  and the rest of the world will have its ecosystem. I believe you need data and distribution to be able to build the next OS. So, of course, the smartphone companies will be contenders like Apple, Google, Samsung, and us. There's only four smartphone players outside of China today. But then there's other companies with a lot of data as well, like Meta, for instance, or OpenAI. So it could be any one of them.

• 2:25:22John Coogan?

  Have you ever done like a postmortem deep dive on the Facebook phone?

• 2:25:27Speaker 05

  I had it.

• 2:25:28John Coogan?

  You had it?

• 2:25:28Speaker 05

  Yeah.

• 2:25:29John Coogan?

  What? I didn't even know it existed.

• 2:25:30Speaker 05

  Yeah.

• 2:25:31John Coogan?

  Wait, it was actually a real thing?

• 2:25:32Speaker 05

  It was real. It was built by HTC, I think.

• 2:25:34John Coogan?

  Oh, interesting. Okay, yeah. I think Chamath worked on that project. An interesting like bit of Silicon Valley lore. But I wonder, I wonder what the, like, is the lesson there differentiate more on design? Is that what you learned from that? Or is it more like price for performance? What are the different levers that you think you need to pull to pull something?

• 2:25:57Speaker 05

  It's probably like PMF.

• 2:25:59John Coogan?

  Yeah.

• 2:25:59Speaker 05

  People have certain expectations from a smartphone, like great cameras, great battery. You can't underperform any of those things. You gotta be competitive with the latest iPhone, the latest Samsung. And then you can add your flair on top of it.

• 2:26:12John Coogan?

  Yeah.

• 2:26:12Speaker 05

  But your flair cannot be significantly different from what people are used to.

• 2:26:16John Coogan?

  Yeah.

• 2:26:16Speaker 05

  Like, I believe that in the future, for instance, that apps are gonna go away. There's only one app on the phone, it's the operating system.

• 2:26:22John Coogan?

  Interesting.

• 2:26:22Speaker 05

  But we can't ship a phone without any apps. Like, people love their apps. So you can have a future vision, but it's gonna be like a step-by-step process to getting there, and you gotta bring the consumers along the way.

• 2:26:33John Coogan?

  Yeah, talk to me about.

• 2:26:35Jordi Hays?

  How do you think, I can imagine we're a world in which more and more of the apps that you use day-to-day are just eaten by the operating system, something like weather, for example. I don't love my weather app, but I will open it up from time to time, and there's a different scenario where I just, you know, transcribe, what's, you know, how's the weather gonna be this afternoon? And it just knows where I am, and it just pops it up and says, you know, it's gonna be 72 and sunny. But then for other things, like, don't you think there'll be some networks that endure, like, for example, like, something like a Strava, if somebody's really into running, it's hard to imagine that that just merging with the operating system, so.

• 2:27:14Speaker 05

  I see it slightly differently. I think broadly, there's two categories of apps, like waste time apps and save time apps.

• 2:27:20Jordi Hays?

  Yeah.

• 2:27:20Speaker 05

  Waste time apps are more like entertainment apps.

• 2:27:22Jordi Hays?

  Yeah.

• 2:27:23Speaker 05

  And the save time apps are just utilities. I think the utilities are gonna be really easy to replace in the beginning, but when it comes to Netflix and Spotify and those, like, entertainment apps, it's gonna take some more time, but eventually, the OS will partner with apps, and apps can still exist in a, in a container, just not as a separate thing you launch.

• 2:27:44Jordi Hays?

  Yeah, yeah, yeah, that makes sense.

• 2:27:45John Coogan?

  What have you learned from the, the history of, like, bloatware on smartphones? I worked at a startup years ago, 15 years ago or something, that was, it was running a Siri competitor, and part of their business model was getting, like, BlackBerry to pay them to pre-install their app, and it was like a pretty good deal for BlackBerry. And in this case, it was a pretty good piece of software, and so it just, it just obviated the need for the customer to go and click pay for $20 for this app. At the same time, customers have notoriously been like, why do I have 75 Verizon apps on my phone? And they get kind of, they get kind of frustrated with that. What's the good condition for

• 2:28:27John Coogan?

  that? What's the bad case? And then where does it go?

• 2:28:31Speaker 05

  The smartphone market is very big, so on the lower end, everybody has a ton of bloatware, and I think that's okay-ish for the consumer, because they get a better-priced product that they couldn't afford otherwise. But if you're operating on the high end and you have a ton of bloatware, then. It's kind of weird because people are already paying a lot of money for your product, then have ads inside of the product. That's kind of how I think about it.

• 2:28:55John Coogan?

  Yeah, what is the, what are like the key breakpoints for phone pricing? Like internationally even?

• 2:29:03Speaker 05

  Internationally, probably around $300. Like that's the main, main category.

• 2:29:09John Coogan?

  Yeah.

• 2:29:09Speaker 05

  Here in the US, it's very different. It's like a barbell shaped market where the ultra-premium takes a lot of share and the low, low end like burner phones take a lot of share.

• 2:29:17John Coogan?

  Oh, interesting. How much are burner phones in the US?

• 2:29:20Speaker 05

  I don't have the numbers, but probably like 20% of the market.

• 2:29:23John Coogan?

  Okay, wow, yeah. I, I, I meant in terms of price, like, are we talking like $100?

• 2:29:27Speaker 05

  150, yeah.

• 2:29:27John Coogan?

  Oh, so really, really cheap. Interesting.

• 2:29:29Jordi Hays?

  How, uh, how much capital would you need to deploy to be able to make a cheap phone? High-quality phone in the United States? Are we talking like?

• 2:29:39Speaker 05

  Like manufacture locally?

• 2:29:40Jordi Hays?

  Yeah, yeah, yeah. Like, would you need like $50 billion to set up all the different?

• 2:29:45John Coogan?

  Capex or OpEx problem?

• 2:29:46Jordi Hays?

  Well, well, yeah. The question is like, if you have to basically like re, not just do the assembly, but like recreate all the sub-suppliers. It's, you start adding that up and it gets.

• 2:29:56Speaker 05

  I don't really know because we partner with a bunch of factories all over the world. So if we wanted to manufacture in the US, we wouldn't know who to go to, to partner with. We do a lot of our manufacturing in India. And there we've seen that the government has been pretty successful. I think, you know, India is now the second site in terms of volume after China. And they have incentives to, like, if you manufacture locally and export locally, you get some cash back. And I think that model really works. So if the US is serious about this, it's more of like the structural incentives that need to be set up for this to run.

• 2:30:29Jordi Hays?

  Yeah.

• 2:30:30John Coogan?

  Interesting.

• 2:30:32John Coogan?

  What would it take to, to, is there anyone trying to build like a Tata Nano of phones? Like something that's like smartphone level, not burner phone, but at like 75 bucks a pop?

• 2:30:42Speaker 05

  They're, they already exist.

• 2:30:44John Coogan?

  They do?

• 2:30:44Speaker 05

  Yeah, yeah, yeah. Like for Africa.

• 2:30:46John Coogan?

  Okay. Are they, are they delivering on the promise at all?

• 2:30:50Speaker 05

  Yeah, they're doing a great job in Africa and other markets where people need cheap phones. You can get a smartphone for like 50 bucks now.

• 2:30:57John Coogan?

  Yeah.

• 2:30:57Jordi Hays?

  Interesting. What about, how do you guys think about, have you integrated wallets for stablecoins? Is that something that should happen at the operating system layer for a phone? I'm sure you've been.

• 2:31:09Speaker 05

  I haven't thought too much about it. For me, like, there's no real use case for crypto yet.

• 2:31:14John Coogan?

  No real use case for crypto? What about Store of Value, bro?

• 2:31:18Speaker 05

  We just haven't seen anything with real PMF yet.

• 2:31:20John Coogan?

  What about Bitcoin? That's PMF.

• 2:31:23Speaker 05

  Yeah, that's like the one of the only things.

• 2:31:24John Coogan?

  I get you.

• 2:31:26Jordi Hays?

  Yeah, you're probably not trying to sell that many phones into sanctioned countries where the citizens really want to get dollars on chain.

• 2:31:35John Coogan?

  Can you walk me through the relationship between manufacturers and telecommunications companies? I remember like years ago.

• 2:31:41Jordi Hays?

  This is the absolute last question because I know you've got a heart out.

• 2:31:43John Coogan?

  Oh, yeah, yeah.

• 2:31:44Jordi Hays?

  We've got to make time for the gong.

• 2:31:48Speaker 05

  Every market is different, but in the US, there's basically very little relationship between brands and carriers because there's only three carriers. And they're playing a user acquisition game against each other. So their main way of acquiring users is not through selling unique hardware. It's mainly the bundle, right? How much data do you get? Do you get free Spotify? Do you get Netflix? So for a small brand like us, there's basically no play with a carrier unless we build a groundswell of support with our community or have like really, really innovative products. I think our products are becoming more and more innovative and fresh. But we probably need a couple more years before we have a product that's really different for the US.

• 2:32:26John Coogan?

  Very cool.

• 2:32:27Jordi Hays?

  Very cool. Hit the gong and then we'll let you go.

• 2:32:29John Coogan?

  Well, do we need a number? Can you give us anything? How big is the company? How many employees you got? How many phones have you sold?

• 2:32:35Speaker 05

  We're about 750 employees.

• 2:32:38John Coogan?

  Wow.

• 2:32:38Speaker 05

  We're 0.2% market share globally.

• 2:32:41John Coogan?

  That's actually huge.

• 2:32:42Speaker 05

  Yeah.

• 2:32:44John Coogan?

  Congratulations.

• 2:32:44Speaker 05

  Thanks. We've done more than a billion in revenue and we're doing a billion this year.

• 2:32:48John Coogan?

  What? Okay, okay, okay. Please, please hit the gong.

• 2:32:51Jordi Hays?

  Right behind you. Very well deserved. Give it a solid.

• 2:32:56John Coogan?

  Congratulations and thank you so much for coming by. Really appreciate having you in person. This is fantastic.

• 2:33:02Jordi Hays?

  Incredible progress.

• 2:33:03John Coogan?

  Thanks so much.

• 2:33:06Jordi Hays?

  Great stuff.

• 2:33:07John Coogan?

  Really buried the lead there, for sure. Are we hopping straight on with Garrett? Or we got 15 minutes? I guess we got 10 minutes?

• 2:33:15Jordi Hays?

  Yeah, 10 minutes.

• 2:33:16John Coogan?

  I want to go through... Is there anything else you want to go through?

• 2:33:19Jordi Hays?

  No.

• 2:33:19John Coogan?

  I like this. In the how to spend it section of the Financial Times, we have a review of something we've been hunting for, which is the best hotel gyms in the world.

• 2:33:31Jordi Hays?

  There we go. There we go. So if you've been to a hotel gym on chest day, you've probably been disappointed because many... It's hard to find a hotel with, what is it? Bigger than 50-pound dumbbells?

• 2:33:44John Coogan?

  50-pound dumbbells. And we believe, we haven't fully verified this, but we believe this is due to a market failure in the hotel gym insurance market.

• 2:33:52Jordi Hays?

  Insurance market.

• 2:33:53John Coogan?

  And so I think that there are two tiers of insurance. One for like a CrossFit gym or powerlifting gym that has free weights and also barbells and you can do hang clean and clean and jerk and all that stuff. And then there's a different level of insurance underwriting for things like treadmills and bicycles and free weights that go up to 50 pounds. And so that's why when you're traveling, you see a lot of gyms that don't have... You can't do squats. There's a leg press machine. And so they lean on the machines because the risk of injury is lower, but the risk of gains is also lower. So we are going to understand where you should travel because to get access to the world's best gyms.

• 2:34:37John Coogan?

  Hotel gyms are a mixed bag. Even in top-flight spots, working out can be a jarringly subpar experience.

• 2:34:44Jordi Hays?

  That's right.

• 2:34:45John Coogan?

  Could not agree more. Machinery might be decades old. The water cooler might date to the 80s office era. Should get Rora. For years, hospitality didn't invest in gyms as unlike with restaurants and spas, the gym usually doesn't bring in any extra revenue. That's an interesting dynamic I hadn't thought of. So yeah, I mean, if you put in like a Nobu in your hotel, that's going to drive a ton of extra revenue, whereas your gym will not. So increasingly-

• 2:35:12Jordi Hays?

  Just charge me per set with the seventy-five.

• 2:35:15John Coogan?

  Per pound.

• 2:35:15Jordi Hays?

  Yeah, charge me per pound.

• 2:35:16John Coogan?

  Per pound, and then you've got to put the bigger weights in because like I'm going to want to lift heavy.

• 2:35:21Jordi Hays?

  Profit maximizing strategy.

• 2:35:23John Coogan?

  So, but increasingly, top hotels are pivoting. It's important I keep the same fitness routines as when I'm at home, says Emily Oberg, founder of clothing label Sporty and Rich, who works out six times a week. Her favorite hotel gyms include the Ritz Club in Paris for the pool and the Il San Pietro in Positano. It has, it has al fresco cardio equipment, outside cardio equipment, tennis courts and views. It's motivating if the space is also beautiful. Gym lighting needs to make you look and feel good while working out, says interior designer Kelly Wersler. Acoustics should amplify without distracting. Materials should perform functionally while still feeling refined. I couldn't agree more.

• 2:36:04Jordi Hays?

  Have you been to any of the proper hotels, Santa Monica proper gym?

• 2:36:08John Coogan?

  I haven't, no.

• 2:36:09Jordi Hays?

  She designed the Santa Monica proper.

• 2:36:10John Coogan?

  Oh, really?

• 2:36:11Jordi Hays?

  Kelly Wersler.

• 2:36:11John Coogan?

  Yeah, there you go. Okay, so, the best concept, these are awards from HTSI and the Financial Times, How to Spend It. The best concept goes to Power in Ireland, a great gym chain in the lobby of the hotel. Power, Ireland's leading boutique workout provider, has partnerships with the Dean Hotels in Cork, Dublin and Galway, and the Mason, also in Dublin. In the gyms, there's a functional fitness area with a custom athletic rig and AstroTurf track, a lifting area, free weights and a cardio equipment, cardio area, area equipped with technology, techno gym, skill run treadmills, rowers, ski ergs, Wattbike Pros and more. There are several forty-five minute classes, including run and metcon.

• 2:36:53John Coogan?

  Guests can recover afterwards in the hyper ice suite, which is stocked with massage guns and foam rollers. Rooms from two hundred euros, not bad. The most scenic is at the Amon Zoo at, in Greece. It's an Amon property, of course.

• 2:37:05Jordi Hays?

  There we go.

• 2:37:06John Coogan?

  Summer escapes are all about picturesque locations, seafront settings, quaint and quiet locale and often ancient European history. This Amon property gym offers all of the above and then some. The resort has its own UNESCO protected ruins, but it's, but it's the outdoor shaded weights area overlooking the Aegean.

• 2:37:26Jordi Hays?

  Let's give it up for hotels that have ruins.

• 2:37:28John Coogan?

  That is the real sell, according to Tim Blakey, a personal trainer and founder of the workout app Prime Body. "We go on holiday to be outside," he observes. "There's a slight breeze, the sun is usually out, and you can get your nature fix while you lift weights." Rooms from 1,500 euros. Also, not bad. Oh, hey, they have a proper hotel. Did you know that this was gonna be in here? The proper hotel in Santa Monica. Best for recovery. It has an immortal chamber where tech-infused lounge chairs pulse with electromagnetic fields to deliver red light therapy to reduce inflammation and combat jet lag.

• 2:38:03Jordi Hays?

  It's funny because when I walk-

• 2:38:05John Coogan?

  There's also VO2 max testing. Let's go.

• 2:38:06Jordi Hays?

  Okay, that's cool. Yeah, it's funny, though, when you walk into a, I mean, you're going into a hotel gym, what do you really care about at the end of the day, John?

• 2:38:12John Coogan?

  The pump.

• 2:38:13Jordi Hays?

  How much weight you can throw around?

• 2:38:16John Coogan?

  Yeah, how much weight you can throw around. So, and they say at the proper hotel in Santa Monica, "Don't be surprised if you see Brian Johnson on your way out."

• 2:38:26Jordi Hays?

  My personal favorite hotel gym, Sensei Porcupine Creek. This is Larry Ellison's, basically Four Seasons competitor, and they've done a really nice job with it.

• 2:38:38John Coogan?

  Okay, we gotta go through, there's a few others, the most exotic, the best for classes, but the most exclusive, this is what I want to know about.

• 2:38:47Jordi Hays?

  There we go.

• 2:38:48John Coogan?

  The most exclusive hotel gym in the world, according to the Financial Times, Suren at the Emery in Knightsbridge. Guests of the all-suite Emery have full access to Suren, a comprehensive wellness club with only 140 vetted members. It costs 15,000 pounds per year to join.

• 2:39:09Jordi Hays?

  I thought you were gonna say per month.

• 2:39:10John Coogan?

  The gym is small, but it has 360-degree mirrors, so it feels bigger. L.A. celebrity trainer Tracy Anderson has licensed her name to Suren. It's the only place where you can book her dance cardio workouts in the UK. Alternatively, guests can request the Suren-

• 2:39:28Jordi Hays?

  Isn't that kind of disappointing, though, that the nicest, like, the most exclusive gym in the world is 15,000 pounds a year? Like, shouldn't somebody make, shouldn't somebody make, like a-

• 2:39:42Jordi Hays?

  The $100,000 a month gym?

• 2:39:44John Coogan?

  I think you just designed home gyms in mega mansions.

• 2:39:48Jordi Hays?

  Maybe I did.

• 2:39:50Jordi Hays?

  With an entire team of specialists.

• 2:39:52John Coogan?

  But so you can pay the 15,000 pounds a year for a membership, or you can book a suite for 1,600 pounds per night. So maybe, I don't know, what is that? It's in pounds, so that's like 15 bucks US or something?

• 2:40:06Jordi Hays?

  It's pretty funny, the dynamic of this is the most exclusive club in the world, but if you just book a hotel room, you can go to it.

• 2:40:12John Coogan?

  Yeah.

• 2:40:13Jordi Hays?

  That's a bit silly, don't you think?

• 2:40:14John Coogan?

  But this is where it gets good. So if you book the hotel room, it's suites only. You book the hotel room, it's going to cost you 1,600 pounds a night. They have a weights trolley that you can request, and it brings the weights to your suite. It includes dumbbells, kettlebells, skipping ropes, yoga balls, resistance bands, and a leather gym ball. A Peloton bike can also be installed at a whim. So you can be in your room and be like, I don't want to go to the gym. Bring the weights to me, and they will bring them to you on a trolley. That is luxury. I love it. Anyway, lots of fun in the how to spend it section of the Financial Times. Any other news?

• 2:40:54Jordi Hays?

  Let's do some timeline.

• 2:40:56John Coogan?

  The other, yeah, some timeline.

• 2:40:58Jordi Hays?

  I like this post from Dylan Patel. He said, "AI bros, when I tell them Boeing outperformed Nvidia, Meta, Google, Broadcom, AMD, and Microsoft this year." I gotta pull up the Boeing chart.

• 2:41:10John Coogan?

  On public.com?

• 2:41:12Jordi Hays?

  I certainly do. So year-to-date, up 34%. Let's give it up for a great American.

• 2:41:19John Coogan?

  Only 34%? How does that outperform Google, Nvidia, Meta? I guess they all round trip because of the tariff things.

• 2:41:26Jordi Hays?

  Nvidia is only up 18% year-to-date because a lot of the election stuff started getting priced in.

• 2:41:31John Coogan?

  Yeah, yeah, yeah, totally. No, that makes a ton of sense. Well, we have our last guest of the show joining now. I'm going to let you take the intro. I will be right back.

• 2:41:39Jordi Hays?

  Let's do it.

• 2:41:40John Coogan?

  Can we bring in Garrett? I will say how, I will say what up.

• 2:41:44Jordi Hays?

  What's going on?

• 2:41:46Speaker 06

  How's it going?

• 2:41:47Jordi Hays?

  It's great to have you here. This is the first time, correct?

• 2:41:50Speaker 06

  Yeah.

• 2:41:51Jordi Hays?

  First time. I'm surprised it took this long. It's great to see you. You've got some exciting news today. Hit us with a quick intro on yourself and the company, and then we'll get into the news.

• 2:42:02Speaker 06

  Sweet. Yeah, my name's Garrett. CEO of Pipe Room Labs. At Pipe Room Labs, we build the infrastructure to make autonomous logistics scale.

• 2:42:11Jordi Hays?

  Amazing. Give us the quick, catch us up to speed on the history of the company. I know we first met back, I think it was in 2021. You've been very busy since then, and then I want to get into what you're announcing today.

• 2:42:26Speaker 06

  Yeah, well likewise, man. Congrats on the show. Studio looks sick.

• 2:42:30Jordi Hays?

  Yep, have to come, have to come in person next time you're, next time you're around.

• 2:42:34Speaker 06

  Yeah, I got you guys. So yeah, the, the announcement is something we've been working on for a long time. You know, the kind of first product we were working on at Pipe Dream is, you know, what we see is like the fiber optic cable for autonomous logistics. How do you move a lot of things really quickly and really cheaply? So we put underground pipes in cities. And then we have these robots that go through the underground pipes and deploy orders to what we call portals. But they're like ATM sized kiosks. It's a modular system made to be able to be retrofit, you know, whether that's into a building, an apartment building, underneath a road and uses just standard construction methods that cities are used to using for non-invasive construction going into

• 2:43:19Speaker 06

  buildings and through public right of way. So we got, you know, that's something we were working on. We, we got that to a really good place. And something that we kind of thought about a lot when we were starting was, you know, if we're working on the fiber optic cable, we wonder if there's also going to need to be kind of like the cloud architecture for autonomous logistics. Because as you start to move things really quickly, and you, we've seen this with drones already, like drones are like this magical, they're magic. It's incredible and they're so quick. And yet it's still taking like 15, 30 minutes sometimes. Like I had one that took 40 minutes.

• 2:44:01Speaker 06

  Because it's so, it's so hard to pick out of those stores that they're picking from. And they're picking out the stores because those are the, you know, the closest storage areas to where the customers are. So it's kind of like a, an inefficient system. You have this really fast delivery method and a really slow processor to get that thing out of storage and into the drone. So that's something we thought about a lot. So, you know, me and my co-founder Cannon, we're huge retail nerds. So we're always diving into Costco and Walmart and Amazon and the history of just logistics and retail as a whole. And what we realized is like, man, it is time. It is time for autonomous logistics to

• 2:44:43Speaker 06

  scale and no one stepping up and building these fulfillment centers that are made to rapidly dispense. So we had learned a lot, worked with a lot of partners who taught us a lot about how to run those facilities and decided, you know what, it's time to go. So we just acquired our first Rapid Fulfillment Center here in Austin. It's going to be what feeds the network here in Austin. And yeah, that was the other announcement is-

• 2:45:13Jordi Hays?

  So is this, just so I'm getting it correctly, so is this set up in order to serve the like, you know, original pipe dream infrastructure and then also traditional drone delivery as well?

• 2:45:26Speaker 06

  Yeah. So the way that we see it is if you have something at a Rapid Fulfillment Center, the goal is how do we get it into the customer's hands as quickly and as cheaply as possible. And a lot of the times that's, you know, you may want to move it through the pipe dream network to a closer location. You might just want to put it into a drone directly. It may be a heavier item. It may be a bundle of items and you want to put it into a self-driving car. I think for the foreseeable future, I think it's going to be even like really load dependent as well. I think autonomous vehicles and drones are going to be kind of like the GPUs of the autonomous logistics scale up. We're going

• 2:46:09Speaker 06

  to be constantly constrained by their availability. So our goal is to be really good, one at dispensing really quickly and dispensing into the right modality and, you know, constantly figuring out what is that right modality for that address? What is the right modality for that time? And making sure that that order is getting into that right modality and getting to the person as cheaply as quickly as possible. So-

• 2:46:32Jordi Hays?

  So what is the, over the next year specifically, what, what delivery form factor are you most excited about?

• 2:46:41Speaker 06

  Yeah, I think the two that we're most excited about is autonomous delivery right now is still pretty cost constrained. The cost per delivery is still really high. So you're either passing it along to the customer or you see a lot of the times it's heavily subsidized. I think especially on the drone side, that's going to come down a lot over the next year. And so that's the one that we really want to be the best at doing. We have an internal goal here at the team that we want to, by the end of next year, we want to have done the most drone deliveries of any company. Which is crazy. It's not like a super high bar right now. But I think that is a resource that's really underutilized.

• 2:47:19Jordi Hays?

  And is there, what is the regulatory framework that drone deliveries are needing to happen within right now, specifically in Austin? Like I imagine peer to peer, I could just put something, you know, attach something to a drone, take it up, fly it over to a buddy's house and drop it. But then if you're trying to do this at scale, I imagine like you have to keep a lot of other things in mind.

• 2:47:46Speaker 06

  Yeah, it's right now, it's not such a straight pathway to being able to do it city by city. So each company who is doing the drone deliveries has to get their own regulatory clearance. And so it is like pretty, pretty big hassle. That's changing pretty rapidly. We just had the executive order to make that pathway clear up. I really think, especially as you start to get more consumer demand for it. I mean, it's just, if you go and look at the reviews from people who have experienced a drone delivery, it is, it's borderline religious experience. It really changes like how you think about commerce as a whole. So I think that's going to change over the next couple of years.

• 2:48:29Speaker 06

  You know, I think there's a lot of companies that have died saying drone delivery is gonna, you know, scale in the next two years. They've been saying that for the last like 15 years. So it's a tough thing to time. That's why, you know, we want to get really good at drone deliveries and be really careful and just kind of learn right now, be ready for that scale and really focus on pickup as well. Pickup is a huge. Industry, it's one that doesn't have a lot of infrastructure to it. So it's still such a bad experience, but it's still one of the fastest growing ways that people experience retail is ordering ahead and picking up, especially in groceries. So that's one where we saw the ability for us to go into grocery, make it a really,

• 2:49:14Speaker 06

  really great pickup experience. That's something that you can do right now, make really good margins on, learn, and then as there's autonomous methods, decreasing costs specifically due to better regulation, then we'll start to add that on as we go along.

• 2:49:34Jordi Hays?

  Amazing.

• 2:49:36John Coogan?

  Anything else?

• 2:49:36Jordi Hays?

  I think that's it.

• 2:49:38John Coogan?

  Good to see you again. The last time we talked, or I mean, we've talked a few times, but I interviewed Garrett like two, three years ago or something, all about how Amazon had been talking a big game about drone delivery. And I was like, let me talk to everyone else who's been, been, been working in this space. And it's, it's a fantastically massive market that is incredibly difficult to actually get things to work. And once they start working, it's great.

• 2:50:07Jordi Hays?

  Yeah. And I think the key thing is staying in the game, finding, finding a sustainable business model that's not dependent on, you know, dependent on adoption over a 15 year period versus a 15 month period.

• 2:50:20John Coogan?

  I remember when we were, when we were talking, we were, we were new, like it's just such a, it's one of those businesses that you just like naturally noodle on like, okay, should you go to like people that are building new prefab home communities and install a bunch of pipes in the ground when they build the buildings? Or should you do some sort of boring company thing where you get really good at drilling into old, old, you know, neighborhoods? Or should you do flying or driving? Like there's so many different modalities. So very exciting that you're, that you're kind of exploring all of them now. So congrats and good luck.

• 2:50:50Speaker 06

  Yeah, appreciate it. Thanks for having me on.

• 2:50:51Jordi Hays?

  Great stuff.

• 2:50:52John Coogan?

  Yeah, we'll talk to you soon.

• 2:50:52Jordi Hays?

  Talk soon.

• 2:50:53John Coogan?

  Bye.

• 2:50:53Speaker 06

  All right, see you guys.

• 2:50:54John Coogan?

  Uh, in other AI acquisition news, we almost missed it because it, you know, Sundar did everything he could to drown this out, but we surfaced the post and it's about Mark Zuckerberg acquiring Play AI, poaching the entire team, and they are joining the Meta Superintelligence Lab next week. Zuck cannot be stopped. He has the Thanos Gauntlet there. Um, they completed his deal.

• 2:51:20Jordi Hays?

  Who's on the, who's on the, the, who's on?

• 2:51:23John Coogan?

  The cap table?

• 2:51:23Jordi Hays?

  No, no, no.

• 2:51:24John Coogan?

  It's the researchers, I guess. It's, it's the team. I, I feel like, I feel like we were, played a very big role in this meme becoming bigger, but a lot of people have run with it in different directions and it's been amazing watching it, watching it grow like this. Um, the Play AI group will report to Johan Schalquick, cool name, I'm not sure how to pronounce that, who recently joined Meta from a separate voice AI startup called Sesame AI. I remember this, that was a controversial one because Sesame is a new, new company and then, you know, shouldn't be losing people to Zuck already. Um, but, uh, the entire Play AI team is coming over and I believe, uh, it's a YC company because I saw one of the YC partners posting about, hey, this is, uh, this, this news is out now.

• 2:52:03Jordi Hays?

  Another hundred million for Gary.

• 2:52:05John Coogan?

  The dark knight, the dork knight rides again. Never go up against him.

• 2:52:09Jordi Hays?

  Well, in other news, over the weekend, Janek Sinner made history as the first Italian man to win a singles title at Wimbledon. Naturally, this is, uh, according to Bezel, he celebrated with a rose gold, uh, Rolex Daytona Oyster Flex on the wrist. So thank you for doing the most important work. Uh, it looks absolutely fantastic.

• 2:52:29John Coogan?

  Yes. Cover of the Wall Street Journal for this, by the way. Um, in bloom, Italy's uh, Janek Sinner celebrates Sunday in London after his men's singles championship win over Spain's Carlos Alcaraz. I don't follow tennis enough to know how to pronounce that. Uh, Poland's Iga Swiatek defeated blah, blah, blah. And, uh, yeah, more coverage, but he's looking happy with the trophy.

• 2:52:52Jordi Hays?

  I love how, how little attention you play to tennis, John.

• 2:52:57John Coogan?

  You, you know what I do follow though? I follow hitters, I follow watches and Jensen absolutely mogged the rest of the tech

• 2:53:06Jordi Hays?

  He really did.

• 2:53:07John Coogan?

  With one of the most insane Richard Mills.

• 2:53:11Jordi Hays?

  You don't see him in a short sleeve t-shirt much.

• 2:53:14John Coogan?

  No, he took off the leather jacket for this and this is such a come from behind moment because we've been talking about his, the lack of wrist game and we've been doing wrist checks on Jensen for, for months now.

• 2:53:27Jordi Hays?

  Carp was, was early in right.

• 2:53:29John Coogan?

  Carp's, yeah, oh, for sure.

• 2:53:30Jordi Hays?

  With the Aquanaut.

• 2:53:32John Coogan?

  With the orange, with the orange strap. Zuck's been ramping up, putting up insane FPJorns.

• 2:53:38Jordi Hays?

  Really anytime he steps out of the house.

• 2:53:40John Coogan?

  He is a Cubitus. He's got, he's got a stack collection and everyone was saying, even, even Jensen's family relative, Lisa Su over at AMD was mogging him with a, with a Rolex, we saw. But now, never doubt Jensen, never talk down on a future first ballot.

• 2:54:02Jordi Hays?

  And the market loves this, John, the stock's up.

• 2:54:03John Coogan?

  Oh, the stock's up?

• 2:54:04Jordi Hays?

  3% over the last five days.

• 2:54:05John Coogan?

  Obviously.

• 2:54:06Jordi Hays?

  Obviously because of this.

• 2:54:07John Coogan?

  Obviously because of this, but this watch is, is really, really special. I mean, what I, what I love about it is that it's just so thin. Like, when I think Richard Mill, I think of the silhouette, the outline, this kind of like, oh, it's almost like a bowed rectangle, which I think is a very cool, unique design. I think of the skeleton. It's checking those boxes, but then it's just so thin. And it looks fantastic and Jensen is wearing it very well, so.

• 2:54:29Jordi Hays?

  We need to do, we need to do a deep dive on RM because the story is crazy.

• 2:54:33John Coogan?

  Yes, we do.

• 2:54:34Jordi Hays?

  Basically this longtime executive who decided he was going to make a luxury watch brand.

• 2:54:42John Coogan?

  Yes.

• 2:54:43Jordi Hays?

  And to actually just decide, it's easy to say, I'm gonna start a watch company.

• 2:54:45John Coogan?

  Yeah.

• 2:54:46Jordi Hays?

  Very, very, much harder to like actually crack the code and be able to sell watches in the range.

• 2:54:51John Coogan?

  I'm surprised some of our friends haven't started a watch company, given how many companies they're spinning up every two seconds.

• 2:54:55Jordi Hays?

  Yeah, a certain one in particular.

• 2:54:56John Coogan?

  It'll happen eventually.

• 2:54:59Jordi Hays?

  It'll happen eventually.

• 2:55:00John Coogan?

  The last, the last piece you said.

• 2:55:03Jordi Hays?

  Another post, somebody posted, RIP McKinsey, you don't need a 300K consultant anymore. You can now run full competitive market analysis using Grok 4. And our friend Buco Capital Bloke says, I'd like to see an LLM provide regular consulting to turbocharge opioid sales, be a trusted partner for autocratic regimes and help young people get hooked on e-cigarettes.

• 2:55:25John Coogan?

  Very negative on the consulting firms. Who speaks for them?

• 2:55:29Jordi Hays?

  But we got it. We got it. We got it.

• 2:55:31John Coogan?

  I appreciate them. They do a lot of good work.

• 2:55:34Jordi Hays?

  McKinsey, BCG.

• 2:55:35John Coogan?

  The white shoe firms, they do great work. Yes, some mistakes were made, but overall, good farm team for future PMs in Big Tech.

• 2:55:46Jordi Hays?

  Yeah.

• 2:55:46John Coogan?

  So in other news, Monumental Labs has raised some money, over $8 million, most recently in a $7 million seed round led by Alexis Sanhanian 776. This is the company.

• 2:55:58Jordi Hays?

  Stone carving alert.

• 2:55:59John Coogan?

  Yeah, they're carving stones. They're carving.

• 2:56:02Jordi Hays?

  Yeah, you heard Monumental Labs, you thought new foundation model.

• 2:56:06John Coogan?

  No, AI robots can already carve stone statues. Entire buildings are next. The stone carving startup Monumental Labs has raised money. They have a new HQ, almost 40,000 square feet in Greenpoint, Brooklyn.

• 2:56:19Jordi Hays?

  Wait, so the cool thing here, so they are opening this new facility in Greenpoint, which is, makes total sense to be the home of what will become the largest fine art stone fabricator in North America and possibly in the world when it opens in the fall. Makes so much sense in this, you know, a lot of people would, you know, this company was non-obvious.

• 2:56:42John Coogan?

  Yep.

• 2:56:43Jordi Hays?

  But then if you think about what we would pay for stone statues here in the studio, and I think what a lot of people will pay.

• 2:56:50John Coogan?

  Of all the Mag7 CEOs, potentially, just hypothetically, I don't have like a mood board for that or anything.

• 2:56:56Jordi Hays?

  Yeah.

• 2:56:56John Coogan?

  It's not like saved on my phone.

• 2:56:57Jordi Hays?

  Yeah, we want to make the mount rush more of the manosphere, you know.

• 2:57:02John Coogan?

  For sure that too. Yeah, yeah, yeah. It's Mag7 watching over the manosphere.

• 2:57:08Jordi Hays?

  No, but I think, I think, you know, if they can really crack.

• 2:57:13John Coogan?

  Congratulations to the Monumental Labs team. That's a very exciting company.

• 2:57:18Jordi Hays?

  And led by Alexis Ohanian, friend of the show.

• 2:57:21John Coogan?

  And also.

• 2:57:22Jordi Hays?

  He says, "Looks like the secret is out. Can't wait for y'all to watch because he is gonna be a guest shark."

• 2:57:29John Coogan?

  He's going to Shark Tank.

• 2:57:30Jordi Hays?

  On the upcoming season of Shark Tank, which will be Wednesdays this fall on ABC and stream on Hulu. He's gonna really have to really go shark mode because Alexis is known to just be a really nice guy.

• 2:57:43John Coogan?

  Yeah, he's actually not very sharky. That's very funny.

• 2:57:46Jordi Hays?

  Not, not, I mean, sharp elbows, I'm sure getting into deals, you know?

• 2:57:50John Coogan?

  Sure, sure.

• 2:57:51Jordi Hays?

  But, but yeah, he's gonna, I mean, but there's always room for, for just offering an entrepreneur on Shark Tank a nice, fair deal.

• 2:57:59John Coogan?

  Yeah.

• 2:58:00Jordi Hays?

  You know, he's not gonna be offering, you know, like, "Just give me 20% of top line for over."

• 2:58:05John Coogan?

  Yeah, I mean, as a personality, I think he'll fit in great. I think he will really add something to the show. So, very excited for him. Go check it out.

• 2:58:11Jordi Hays?

  And final post from Adam Singer.

• 2:58:14John Coogan?

  I was gonna end on this too.

• 2:58:15Jordi Hays?

  The CMO of AdQuick, out of homemade, easy and measurable, says, "Love seeing out of home from the new gen of tech media brands. Great brands do things online and in the real world. Our software makes this really easy for all."

• 2:58:28John Coogan?

  So, shout out to AdQuick.

• 2:58:29Jordi Hays?

  And I just wanna give a quick shout out to Adam for betting on us early.

• 2:58:33John Coogan?

  Yeah.

• 2:58:34Jordi Hays?

  Bet on us when we just were two guys, two suits, and a stack of posts. We'll never forget that. And go do yourself a favor and sign up for AdQuick.

• 2:58:43John Coogan?

  Yep.

• 2:58:44Jordi Hays?

  After you're done with that.

• 2:58:45John Coogan?

  Make out of home advertising easy and measurable. Come on, people. I don't even need to read it.

• 2:58:49Jordi Hays?

  It's really not complicated. After that, leave us a five-star review on Spotify or Apple Podcasts, wherever you listen. And I can't wait for tomorrow. There, there was a couple weeks of news since last Friday.

• 2:59:02John Coogan?

  Yeah.

• 2:59:03Jordi Hays?

  And I'm sure there will be quite a bit more tomorrow.

• 2:59:05John Coogan?

  The other piece of news, the information launched a competitor to us and they had some technical issues. So, if you know things about computers, please contact them.

• 2:59:13Jordi Hays?

  Yeah. Tell them, tell them the Technology Brothers sent you.

• 2:59:15John Coogan?

  And that's our show. See you tomorrow.

• 2:59:17Jordi Hays?

  Cheers.

• 2:59:18John Coogan?

  Goodbye.

• 2:59:19Jordi Hays?

  Have a great Monday.