Starlink Cellphones, Open AI Critique, Ross Ulbricht Founder Story, The Best of X

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

• 0:00John Coogan?

  Welcome to Technology Brothers, the most profitable podcast in the world. Today, we are breaking down Ross Ulbricht. He was released from prison because he was pardoned by Donald Trump. We will give you the full deep dive on his life and career and the drug market place he built called the Silk Road.

• 0:17Jordi Hays?

  Sharing economy startup.

• 0:19John Coogan?

  Yeah.

• 0:19Jordi Hays?

  Another, you could put it that way.

• 0:21John Coogan?

  Yeah, exactly. Tons to learn from him, tons to, you know, avoid mainly, mainly all the crimes.

• 0:28Jordi Hays?

  Mistakes were made.

• 0:29John Coogan?

  Mistakes were made, but that should be a fun one. We're going to take you through Ross Ulbricht, get you up to speed on that because he's, he's out in the wild now.

• 0:36Jordi Hays?

  Yeah.

• 0:36John Coogan?

  He could, he could do anything.

• 0:38Jordi Hays?

  Yeah.

• 0:38John Coogan?

  I think the pardon means.

• 0:39Jordi Hays?

  There was, we weren't involved with the rumor.

• 0:42John Coogan?

  Yeah.

• 0:43Jordi Hays?

  But there.

• 0:43John Coogan?

  Had no, nothing to do with it.

• 0:44Jordi Hays?

  There may have been, there may have been a rumor or some misinformation shared about him, you know, potentially out raising, but it's just a rumor.

• 0:52John Coogan?

  Yeah.

• 0:52Jordi Hays?

  You know, always just a rumor.

• 0:53John Coogan?

  Also, in, in economy news or Fed world, the Fed.

• 0:59Jordi Hays?

  We love the economy here.

• 1:00John Coogan?

  We love the economy, love business. The Fed had a meeting today. People were hoping for.

• 1:06Jordi Hays?

  A rate cut.

• 1:07John Coogan?

  Rate cut, ideally to zero.

• 1:09Jordi Hays?

  So we had the DOM ready.

• 1:10John Coogan?

  We had the DOM ready.

• 1:12Jordi Hays?

  We picked it up this morning in preparation for a celebratory moment.

• 1:15John Coogan?

  Yep.

• 1:15Jordi Hays?

  And I feel a little bit rugged by Powell, to be honest.

• 1:19John Coogan?

  Uh, yeah. I mean, I don't think the market was pricing in a, a cut.

• 1:23Jordi Hays?

  I know.

• 1:23John Coogan?

  But it didn't happen. But there were also rumors. There were rumors that Trump was saying it should go.

• 1:28Jordi Hays?

  Optimists, you know, get paid.

• 1:30John Coogan?

  Yeah. Well, maybe next time, but I'm sure there will be a reason to break out the DOM hearing on soon. So enjoy.

• 1:36Jordi Hays?

  Leave it on the table. It might be this episode. You know, you never know.

• 1:39John Coogan?

  Yeah. Surprise.

• 1:40Jordi Hays?

  Trump, Trump might, Trump might send, override it, send out a post, hey, talk to Powell, we fixed the issue. Uh, we're going down to 2%.

• 1:49John Coogan?

  I love that.

• 1:50Jordi Hays?

  That would, uh, that would help us recover from Monday's, you know.

• 1:53John Coogan?

  Monday's bloodbath.

• 1:54Jordi Hays?

  Bloodbath.

• 1:55John Coogan?

  It's terrible. Well, let's go to SpaceX news. Starlink is coming to iPhones. They're teaming up with Apple and T-Mobile. There's an article in Bloomberg from Mark Gurman, guy who covers Apple better than anybody in the game. And he says, "Apple has been secretly working with SpaceX and T-Mobile to add support for the Starlink network and its latest iPhone software, providing an alternative to the company's in-house satellite communication service," which, I don't know if you've used it, it's simultaneously amazing and absolutely terrible.

• 2:25Jordi Hays?

  T-Mobile?

• 2:25John Coogan?

  No, the satellite internet on your phone.

• 2:29Jordi Hays?

  Oh, yeah.

• 2:29John Coogan?

  Like, if you get caught with no

• 2:31Jordi Hays?

  Yeah, it uses it during the fires.

• 2:32John Coogan?

  During the fires, yeah.

• 2:33Jordi Hays?

  So you have to go outside.

• 2:34John Coogan?

  And you're like, it's amazing, it still works, but it's so slow and you can only send a few texts.

• 2:40Jordi Hays?

  Basically like text-based messages.

• 2:42John Coogan?

  It's like being back in like

• 2:43Jordi Hays?

  Being on a plane.

• 2:43John Coogan?

  I don't know, like 1997.

• 2:44Jordi Hays?

  It's like being on the phone, the phone, like planes now, they offer the free messaging product and then they have, I think, the paid version.

• 2:52John Coogan?

  And they all kind of suck.

• 2:54Jordi Hays?

  And it's like, okay, well, you can't receive images, but you can send texts back and forth.

• 2:58John Coogan?

  And so they've been testing iPhones with Starlink service. In an under the radar move, the smartphone's latest software update released Monday now supports the technology. The tie-up comes as a surprise. T-Mobile had

• 3:10Jordi Hays?

  See, that's interesting. I didn't realize they fully had the tech. It was just they're pushing a software.

• 3:15John Coogan?

  The hardware's there. Yeah, just the software.

• 3:16Jordi Hays?

  Yeah.

• 3:17John Coogan?

  T-Mobile has previously only specified Starlink as an option for Samsung phones, such as the Z Fold and S24 models. Don't want to get caught using those.

• 3:26Jordi Hays?

  Do we have, do we have any listener?

• 3:28John Coogan?

  Yes, we do. We have one.

• 3:29Jordi Hays?

  Wait, one?

• 3:30John Coogan?

  Lone Ranger.

• 3:30Jordi Hays?

  The Lone Ranger?

• 3:31John Coogan?

  I'm pretty sure. I'm pretty sure. He said that.

• 3:34Jordi Hays?

  Shout out to Lone Ranger.

• 3:35John Coogan?

  In a post on X, responding to the news, Musk said, "Images, music, and podcasts should be supported by current Starlink technology, and future upgrades will add video support as well." So it does seem like

• 3:46Jordi Hays?

  Full market for daily podcasts.

• 3:48John Coogan?

  Yes, fantastic. You'll be able to listen to this anywhere. I mean, there are some like restrictions because you have to be able to see the sky. You can't really use the satellite, you know, receiver inside. And then also, if you just look at the size of the Starlink dish that I have, I have the Mini, and that gets pretty good speeds, but they make a bigger one. As you scale that down, it does seem like you're scaling down the bandwidth and there's some sort of, you know, like, kind of, like, power law function there. An Apple, an Apple spokesperson declined to comment while T-Mobile said the test-

• 4:19Jordi Hays?

  Yeah, Mark is really just throwing this news out there without, uh-

• 4:23John Coogan?

  He has so many moles and, and sources inside Apple.

• 4:26Jordi Hays?

  Clearly, clearly they weren't exactly ready to announce all of this, but Elon's no stranger to it. He just reacts.

• 4:32John Coogan?

  Yeah. Yeah. Yes. Text messages are already going out from T-Mobile saying, you're in the T-Mobile Starlink beta. You can now stay connected with texting via satellite from virtually anywhere. So I think, um, uh-

• 4:44Jordi Hays?

  It's interesting too, because, because I never followed this closely, but I always imagined that Starlink would eventually come out with their own phone plan and actually threaten the telecom providers.

• 4:54John Coogan?

  Yep.

• 4:55Jordi Hays?

  But maybe telecom companies just find a way, you know, to really-

• 5:00John Coogan?

  I mean, I think, I think it really comes down to-

• 5:02Jordi Hays?

  Cell phone is tied to service still.

• 5:03John Coogan?

  Yeah. And I think it comes down to like-

• 5:05Jordi Hays?

  Reliability.

• 5:06John Coogan?

  Yeah. Yeah. And using it in buildings. Like you'd be saying, like, why would you pay for that plan if it doesn't work in a building? That'd be weird. And then I guess they could team up and kind of like white label, like, uh, you know, like Mint Mobile, that, uh, Ryan Reynolds company?

• 5:20Jordi Hays?

  Yeah, yeah, yeah.

• 5:21John Coogan?

  Like that is, they don't have their own towers. They piggyback on the, they roam on the other towers. And so I'm sure there's some way to build something, but, uh, Apple was originally working with Global Star to offer satellite features in 2022. There's been speculation over whether it might support competing networks. The day after Apple's 2022 announcement, Musk posted on X that his company had some promising conversations with Apple about Starlink connectivity. It's so funny how he just like rips like these private conversations on X. He's just like, oh yeah, I just walked out of Apple. Like we're definitely getting a deal done. Like, yeah, it's in the bag.

• 5:55Jordi Hays?

  Do not do that if you're not Elon Musk.

• 5:57John Coogan?

  Yeah, exactly. Uh, so when a, uh, when a T-Mobile phone is in an area without cellular connectivity, devices that are part of the Starlink program will first try to pair with Starlink satellites. Users will also be able to activate texting via the satellite menu for the Global Star service or ca- or contact emergency services through Apple. Uh, the initial version of Starlink is exclusively for testing, but Starlink and, uh, but SpaceX and T-Mobile have said that they plan to expand into data connections and voice calls in the future. The program is also only available in the U.S. for now, and that contrasts with Apple's Global Star service, which works in several countries.

• 6:33Jordi Hays?

  So when I am getting the opportunity to use satellite on my iPhone, it's still Globalstar.

• 6:37John Coogan?

  Yes, exactly.

• 6:38Jordi Hays?

  And so Globalstar shares fell because people are thinking, okay,

• 6:41John Coogan?

  Yep.

• 6:42Jordi Hays?

  they clearly aren't on the level of Starlink and Elon's gonna make a bunch of deals happen that directly threaten their business.

• 6:48John Coogan?

  Yeah, and so the like, the the history of like satellite communications for cellphone and internet, that's been going on for, I mean, 30, 40 years.

• 7:01Jordi Hays?

  It's also crazy. Think of the cost structure for Starlink because they own the rockets versus Globalstar, who presumably has to use SpaceX to get their satellites up. That's not a great competitive dynamic for Globalstar.

• 7:17John Coogan?

  Yeah, a lot of this started with, you know, the guy who built the, he owns Madison Square Garden. He built the Sphere in Las Vegas, James Dolan. So James Dolan, at one point, was working with Madison Square Garden on like all their sports and entertainment thing. And he had a satellite TV startup that didn't, that he was like obsessed with. He was beefing with his dad about it. It was this crazy story. They wind up selling it, I think, to Dish Networks.

• 7:48John Coogan?

  And Dish is the traditional like satellite TV provider. So you put the satellite dish on your, on your roof and then you're getting a constant stream of TV. So it's not two-way communication. It's not bespoke. So that satellite, all it has to do is just say, okay, there's 100 channels of data. I just got to send those out to everyone all the time.

• 8:07Jordi Hays?

  Yeah.

• 8:08John Coogan?

  Whereas Starlink's much more complicated because it has to send you your, you know, Instagram, your specific Instagram images.

• 8:14Jordi Hays?

  When I'm using DeepSeek.

• 8:15John Coogan?

  Yeah, yeah. It has to send like your specific data, right? Internet's more complicated. And so then there were sat phones, satellite phones. And then ViaSat was a company that was like really promising for a while, putting up big. Like huge satellites.

• 8:31Jordi Hays?

  ISS that still does a lot of stuff with the airlines, right?

• 8:35John Coogan?

  Yep, yep.

• 8:36Jordi Hays?

  Yeah.

• 8:36John Coogan?

  Exactly. And so, and then Astronis is also doing geostationary satellite internet. So they will put one up over Alaska and then that will just control just Alaska, but it's just one. Starlink has this mesh strategy. So they put up like thousands and thousands of them.

• 8:51Jordi Hays?

  Yeah.

• 8:51John Coogan?

  And that's of course like driven by the fact that they have, you know, all these rockets that are going up all the time. So they can afford to just put up tons and then, and then they're also in low earth orbit as opposed to geostationary orbit. So they're, I think like it's like 3,000 miles instead of 30,000 miles or something like that.

• 9:07Jordi Hays?

  Yeah.

• 9:08John Coogan?

  Uh, much closer to the earth and that enables lower latency. So instead of like, you could, you could sometimes with satellite internet or satellite TV, you could download like a big file, but there would be latency. So you could never do like a zoom call or play a live game. And that's the advantage of, yeah, of Starlink. And so currently, if you're using an iPhone with Global Star, you, uh, you have to point your phone at the sky to find the satellite. Whereas with Starlink, it's designed to work automatically, even when the phone is in a customer's pocket, which, so maybe it'll work inside to some degree. I'm not exactly sure. But both the Starlink and Apple satellites featured are, features are designed to work in off the grid areas.

• 9:51John Coogan?

  So just hiking trails that don't have cellular service, the capabilities can't be used in places where mobile phone, where a mobile phone network is within reach. So it will just say, okay, we're not even bothering with the satellites if you're connecting to a cell phone tower. And the, uh, and the support for the Apple feature is available on most current iPhone models. And the company plans to bring it to its ultra smart watch later this year. That's cool. So like, if you go hiking, you just bring your watch. You don't even need the phone. If something happens, you see a bear, you can still send a text message saying, come rescue me.

• 10:21Jordi Hays?

  Lock's coming out.

• 10:24John Coogan?

  Yeah, maybe you don't need the Starlink connected Apple Watch, you just need the Glock. T-Mobile updated its website this week. SpaceX requested authority to begin beta testing the service starting Monday. The FCC commissioned granted SpaceX conditional approval for its satellites to supplement T-Mobile cellular network in November. So, very exciting to see more Starlink news, more Starlink rolling out.

• 10:47Jordi Hays?

  Turns out owning the heavens as SpaceX does is quite valuable.

• 10:53John Coogan?

  It's free real estate.

• 10:54Jordi Hays?

  Can do a lot of stuff with it.

• 10:55John Coogan?

  Yeah, there's a lot of alpha in that. I mean, that's the whole, that's the whole like mega bull thesis on the boring company is just like, there's only so much land under the earth and like if you can justify a way to like own it, like that's extremely valuable.

• 11:09Jordi Hays?

  Yeah.

• 11:10John Coogan?

  I love that.

• 11:11Jordi Hays?

  Yeah, and we've talked before about land yachts and bean airs, you know, bean airs looking to develop large drills attached to vehicles that allow them to burrow deep beneath the earth and pop up in Saint-Tropez, Porchavel, Aspen, Art Basel, you know, like being able to just pop up.

• 11:31John Coogan?

  Pop up, yeah.

• 11:32Jordi Hays?

  Is a great feature and something that is in high demand.

• 11:36John Coogan?

  Fantastic.

• 11:38Jordi Hays?

  Should we talk a little bit about?

• 11:41Jordi Hays?

  Yeah, we love talking about organic intelligence and artificial intelligence. Today, we have an article here. I wanted to cover some news on OpenAI. For those that don't know, this is an American company that competes with a Chinese company called DeepSeek. Do you want to?

• 11:57John Coogan?

  Yeah, people call it like the American DeepSeek.

• 11:58Jordi Hays?

  Yeah, it's the American DeepSeek. Very similar to ChatGPT, except it struggles to talk about Tiananmen Square.

• 12:06John Coogan?

  Yeah. But of course, if you've been listening to the show, you've seen, you know, you've heard many deep dives. We've probably spent three hours talking about DeepSeek at this point. But Ben Thompson dropped a new update on Strategory and we're going to go through it.

• 12:21John Coogan?

  So to review his conclusion on OpenAI, he has, he has, he has some criticism of the company. Specifically around speed of innovation.

• 12:31Jordi Hays?

  Yeah.

• 12:31John Coogan?

  Which is, which is interesting. And his thesis is basically like all the crazy nonprofit effective altruism, all the fear mongering around AI doomerism, that really held us back. And this is what we get for that.

• 12:47Jordi Hays?

  Yeah.

• 12:48John Coogan?

  Meanwhile, like, no one is causing an AI panic over DeepSeek. People are like, oh, cool. They use floating point eight instead of FP32. Like, it's like, oh, it's so much more efficient. Like, it's gonna be able to, you know,

• 12:59Jordi Hays?

  Yeah.

• 13:00John Coogan?

  like, review my, you know, homework faster.

• 13:03Jordi Hays?

  Yeah.

• 13:03John Coogan?

  And that's it. It's not, like, everyone's saying it's an incredible jump. No one's saying it's more dangerous now.

• 13:09Jordi Hays?

  Yeah.

• 13:10John Coogan?

  And that's just a complete vibe shift from two years ago when everything was, I was reading my son, The Boy Who Cried Wolf. And

• 13:17Jordi Hays?

  Yeah.

• 13:17John Coogan?

  Nothing, like, the AI doomers really need to read that story. Because they've been like, GPT-1, this is gonna kill us all.

• 13:26Jordi Hays?

  Paperclip mode.

• 13:26John Coogan?

  GPT-2, we're done for. GPT-3, it's completely over. It's never been more over. And now we're getting a new AI model every couple of months. It's like, yeah. It could kill me, but I'm not gonna listen to you.

• 13:39Jordi Hays?

  Now people widely agree that we have AGI.

• 13:41John Coogan?

  Yeah.

• 13:42Jordi Hays?

  And it's ASI that we need.

• 13:44John Coogan?

  Yeah.

• 13:44Jordi Hays?

  Artificial superintelligence.

• 13:45John Coogan?

  Yeah.

• 13:46Jordi Hays?

  Uh, which, so the goalposts keep moving.

• 13:48John Coogan?

  And so let's read from Ben's, uh, let's read from Ben's, uh, previous day conclusion. He says, that leaves America and a choice we have to make. We could, for very logical reasons, double down on defensive measures, like massively expanding the chip band and imposing a permission-based regulatory regime on chips and semiconductor equipment that mirrors the EU's approach to tech. Alternatively, we could realize that we have real competition and actually give ourselves permission to compete. Stop wringing our hands, stop campaigning for regulations, indeed, go the other way and cut out all the cruft in our companies that has nothing to do with winning. If we choose to compete, we can still win. And if we do, we will have a Chinese company to thank.

• 14:30John Coogan?

  I like that because he's just so focused on just like go, go, go, like competition and just, just actually win there. So some folks read this as being simply about government regulations. And I did specifically mention the President Biden executive order on AI, which Trump has already repealed, but that misses the deeper point I was diving at. One of these intense frustrations of the last few years of the AI debate has been the Mott and Bailey aspect of the safety question. And this is funny because I, there's, there's this AI doomer guy on X who always uses the Mott and Bailey like meme whenever someone's arguing with him. He's like, no, that's the Mott and Bailey. And now Ben Thompson's kind of like flipping it around. And so we'll break down like what that is because it's

• 15:09John Coogan?

  actually kind of odd. But I understand and grant the very real concerns about AI safety, which I think everyone does. There is some safety concerns, but, but that's the Mott in the safety argument. But the way that AI safety has too often manifested has been through the imposition of various cultural mores that roughly align with San Francisco politics. That's the Bailey. Indeed, if you look again at the excerpt from OpenAI's GPT-2 announcement that I linked to yesterday, it's right there in the first sentence. Due to concerns about large language models being used to generate deceptive, biased or abusive

• 15:50John Coogan?

  language at scale, we are only releasing a much smaller version of GPT-2 along with sampling code. We are not releasing the data set training code or GPT-2 model weights. So this is, this is the moment that OpenAI decided to stop open sourcing everything. And the reason was, we, we believe that our release strategy limits the initial set of organizations who may choose to do this and gives the AI community more time to have a discussion about the implications. So they're, they were worried about generating deceptive, biased or abusive language. So, and then, and then Ben says, first off deceptive, biased or abusive language is not a human extinction level danger. So you've said, hey, we got to lock this down because it's going to paperclip us.

• 16:30Jordi Hays?

  And historically, we've, we've dealt with bots trying to influence public opinion at scale.

• 16:36John Coogan?

  Yeah.

• 16:36Jordi Hays?

  Yeah, they're not, are we good, Ben?

• 16:40John Coogan?

  Cool.

• 16:40Jordi Hays?

  Cut for a second. Historically, it hasn't been this intelligent bot who's having a conversation. It's more these bots that are spamming comments being like, I think America is bad.

• 16:50John Coogan?

  Yeah, yeah, yeah. It's literally just copy pasting.

• 16:52Jordi Hays?

  That's deceptive and biased.

• 16:54John Coogan?

  Totally.

• 16:54Jordi Hays?

  You know, doing the same things. I think one thing that OpenAI has always balanced is clearly they want to win.

• 17:01John Coogan?

  Yeah.

• 17:01Jordi Hays?

  Sam enjoys the competition, but loves winning. He said, he even said on television, I think about a year ago at this point, nobody could ever compete with us. Like, he's on record being, you know, saying, nobody is. I saw it was, it was shown on like Entertainment Tonight, like some random television, but it was from, from some event he was at. So he said, nobody can compete with us. That's obviously not true. They also have used this pending looming doom. We're creating this all-power intelligence as a marketing and capital raising strategy to basically create this aura around the company of,

• 17:39Jordi Hays?

  we are creating super intelligence. We're creating this powerful being that's more powerful than humanity and, and you have to trust us to control it. So historically, I think some of this stuff due to concerns about, you know, large language models playing into that,

• 17:55John Coogan?

  Yep.

• 17:56Jordi Hays?

  that, that narrative, but then also saying, well, we have the power.

• 18:00John Coogan?

  Yep. I do, I do wonder, like, there are so many different people around the table. Like, a lot of this language was clearly driven by the previous OpenAI administration, essentially, like the nonprofit board. Like, some of those people were really, really crazy. And, and, and it, it, for a while, it felt like, even though Eliezer Yudkowsky wasn't tied to OpenAI, it felt like he was almost like an informal.

• 18:28Jordi Hays?

  Puppet master.

• 18:28John Coogan?

  It felt like he was like an informal spokesperson for a while. And now it's like, he's completely out of the picture. But it was like, oh, if Eliezer says something like, OpenAI is going to have to respond because like, it's, it's really critical that we like, take him seriously. And now it's been kind of, you know, we've moved past that. And so, second, who decides what is deceptive, biased, or abusive? Third, whatever your position on these questions, I think we can all agree that a tremendous amount of time and effort has been devoted to arguing about these cultural war issues and implementing one side or the other of them. By the, and by definition, the time has, that time has an opportunity cost. More broadly, I think it is completely valid to argue that a lot of time and energy in tech has been devoted to many things other than actual tech.

• 19:11Jordi Hays?

  Yeah.

• 19:12John Coogan?

  That's the justification for that lack of focus.

• 19:15Jordi Hays?

  I would actually be interested how many tens of millions or potentially hundreds of millions of dollars are spent on their safety team. Annually, like it could easily be somewhere in the range of fifty to a hundred million dollars. That's just being spent on people that are a part of the safety apparatus, which Ben is basically putting in the

• 19:36John Coogan?

  Yeah.

• 19:36Jordi Hays?

  culture war bucket.

• 19:38John Coogan?

  Yeah.

• 19:38Jordi Hays?

  Like almost classifying them as deep, like making them like a D E I org.

• 19:43John Coogan?

  Yeah. What's interesting is like, so he goes on to talk about the O one chain of thought and how they, when they launched O one in, in comparison to R one, R one tells you everything it's thinking and just dumps it out. And it's open source. So even if it didn't, you could still see every single token that it's thinking about. And that's turned out to be a great UI pattern. We've talked about this. It's like,

• 20:03Jordi Hays?

  Yeah.

• 20:03John Coogan?

  It's just really reassuring to the user. But when OpenAI launched O one, they said they believe that a hidden chain of thought presents a unique opportunity for monitoring models. Assuming it's faithful and legible, the hidden chain of thought allows us to read the mind of the model and understand its thought process for it. And this was the thing where I went to O one, asked it to summarize the book, and one of the hidden chain of thoughts sections was copyright infringement. So it, it thought internally about like, is it okay for me to share the contents of this book? And it decided, yes. And, and so there's

• 20:36Jordi Hays?

  A little bit of a bad boy like, uh,

• 20:37John Coogan?

  There's that.

• 20:38Jordi Hays?

  Ross.

• 20:39John Coogan?

  Yeah. And then there's also the fact that, uh, so they, they were also thinking about, um, uh,

• 20:47John Coogan?

  Uh hiding the chain of thought so that people couldn't steal it and use it to train their model, basically. And, and if they have some interesting thing in there, they can kind of tuck that behind the scenes and just give you a better answer. But this exposed chain of thought from R1 is, has clearly won out on the day. And I think we'll see other models shift. Yeah, users like it.

• 21:08Jordi Hays?

  That was the, the, the only UI change that people cared about or talked about with the DeepSeek launch was that exposed chain of thought.

• 21:18John Coogan?

  Everything was either a copy, like even, even just the fact that you have like the chats on the side, like where the buttons are laid out is a verbatim copy of ChatGPT.

• 21:26Jordi Hays?

  Yeah, down to the API, the way the API works.

• 21:29John Coogan?

  Many of them are actually degraded features. Like you can't, you can't click a button just to talk to it. There's no voice mode at all. It doesn't have a lot of features yet. But exposed chain of thought is like the fundamental UI pattern breakthrough. And so exposed chain of thought teaches users how to do better prompting because they can see exactly where the AI gets confused. It increases trust in the model because you gain an understanding of how it's arriving at the answer. And it's just cool and endearing. One, one thing that was interesting with the normie discovery of R1 is how delightful they found the, the experience. And so Ben understands OpenAI's competitive concerns, but the existence of R1 has shown that locking down chain of thought perhaps didn't matter so much. More generally, the consideration of competitive concerns gets back to my overall critique that the US approach to competition is too rooted in

• 22:14John Coogan?

  stopping and blocking would be competitors instead of out innovating them.

• 22:17Jordi Hays?

  Yeah.

• 22:18John Coogan?

  Uh, and this was the thing where like, remember when we went back to that Ilya working on A-Star? And the framing around that was absolute panic. I remember there were fake news articles about uh OpenAI. This was almost two years ago, we said, right? It was a year, year and a half ago, or maybe a year and three months ago. And they said, A-Star is so good. It, it solved every foundational like math problem and it also broke encryption.

• 22:45Jordi Hays?

  Yeah.

• 22:45John Coogan?

  And so they were like, they have an AI model that can break encryption. So they're just gonna like, you know, Bitcoin should go to zero because they've broken encryption. And it was like, obviously not true, but people were just so insane about it. And internally, it seemed like a lot of people were maybe just using it for internal politics and like, you know, oh, is this dangerous? Like, why are we moving so fast? The nonprofit folks having a big problem with it. And then O1 just throws, or R1 just comes out and throws it out there. And it's like, yeah, it's basically fine.

• 23:11Jordi Hays?

  Yeah.

• 23:12John Coogan?

  Very funny.

• 23:12Jordi Hays?

  Yeah, it's kind of, it's kind of the, uh, the most savage founders that I know will, when they're fundraising, they'll take a PDF export of their deck and they'll share it with anybody that's like remotely, like interested in what they're doing or relevant in some way. And then the, the founders that are sort of afraid of competition, you know, kind of lock their decks down. They put emails, you know, uh, authentication and passwords on their deck. And then they usually end up just like not being the actual like winner in the category. And so it's the same thing here where we should just be really focused on

• 23:48John Coogan?

  Innovation.

• 23:48Jordi Hays?

  Winning innovation, being at the edge.

• 23:51John Coogan?

  Yep.

• 23:51Jordi Hays?

  Understanding that people are going to reverse engineer

• 23:53John Coogan?

  Yeah.

• 23:53Jordi Hays?

  everything good that gets done in the world.

• 23:56John Coogan?

  Yeah.

• 23:56Jordi Hays?

  Been the case for every technology.

• 23:58John Coogan?

  Yeah.

• 23:58Jordi Hays?

  And things will get copied, uh, one way or another.

• 24:01John Coogan?

  And this was kind of the, the weird critique that I saw. Once the Sam Altman like haters got really emboldened, they would make the claim that Sam Altman is like non-technical and has never done anything good and is not responsible for any innovation in AI. Like the transformer was invented at Google. He didn't invent the transformer. He just like popularized it. But then simultaneously, they'll argue that him, uh, they'll, they'll quote the OpenAI board that criticized Sam for launching ChatGPT too quickly without informing the board. Do you remember this whole thing? It was like, it was like, as evidence of Sam like moving recklessly with regard to AI safety, he just put out, he just tweeted out ChatGPT one day. And it's like,

• 24:44John Coogan?

  Well, which is it? Like, he can't be both. He can't both have no impact and also create the most dominant product and drive it forward and actually get it out in the world.

• 24:52Jordi Hays?

  If you're thinking about OpenAI as a business,

• 24:54John Coogan?

  Yeah.

• 24:55Jordi Hays?

  him tweeting it out and getting to 100 million users in however, within weeks.

• 24:59John Coogan?

  Fantastic.

• 25:00Jordi Hays?

  It's, you know, clearly was the right decision to just go.

• 25:03John Coogan?

  Yeah.

• 25:04Jordi Hays?

  If you're thinking about it from a nonprofit safety org lens, you should have waited a year. You should have tested more.

• 25:10John Coogan?

  Yeah.

• 25:10Jordi Hays?

  Should have put more guardrails up. You should have rolled it out slowly. Uh, there's a number of things that.

• 25:15John Coogan?

  Yeah. And so I kind of see it as, as like, there is a world where Sam was fighting like an internal, like the, the nonprofit structure, culture war, uh, like a longhouse type environment that was saying like, no, don't release products. Don't move fast. Don't innovate. Don't do anything that's could be risky because they're so terrified of what they're building.

• 25:36Jordi Hays?

  Yeah.

• 25:36John Coogan?

  And, and he's looking at it and he's like, actually, this is fine. It's a chatbot. Let's just get it out there and see what, what happens. And, and that was the right decision. But there's still like, there's still that, that, that impulse internally to say, hey, maybe we should lock this down a little bit more. And so, uh, there's an interesting, uh, discussion right now. Is this a Sputnik moment or a Google moment? And so, uh, Yishan Wong, uh, who is, I think the CEO of Reddit, um, says, Sputnik showed that the Soviets could do something the US couldn't, a new fearsome power. They didn't subsequently publish all the technical details and half the blueprints. You know, they only showed that it could be done. With DeepSeek, if I recall correctly, a lab in Berkeley read their paper and duplicated the claimed results on a small scale within a day.

• 26:21John Coogan?

  That's why I say this is like the Google moment in 2004. Google filed its S1 in 2004 and revealed to the world that they had built the largest supercomputer cluster by using distributed algorithms to network together commodity computers at the best performance per dollar on the cost curve. And famously, Google's,

• 26:40John Coogan?

  Was massively profitable when they went when they went public and every VC is like, why can't we have more Googles because the financials were so fantastic. This was in contrast to every other tech company of the day during the dot com boom, who at that point just bought what were essentially larger and larger mainframes, always at the most expensive leading edge of the cost curve. And so Ben says it's hard to overstate what a favor DeepSeek did to basically everyone by outsourcing, by open sourcing their model and explaining exactly how they accomplished what they did. They could have, and from a geopolitical perspective, arguably should have kept all their progress a secret, even as China built drastically more efficient AI infrastructure.

• 27:18Jordi Hays?

  You know, the narrative that they are a hedge fund. This was a side project and so they just released it short, opened a massive short against the video and then made, you know, they could have made how many tens of billions of dollars off of that short, right?

• 27:33John Coogan?

  There are so many theories here.

• 27:35Jordi Hays?

  Like it is a fun theory.

• 27:37John Coogan?

  Yeah.

• 27:37Jordi Hays?

  And there is a world where that was exactly the strategy is like they were doing, they were building models internally to run their investing. And then they realized, hey, we can train a model and we can throw up a clone of chat GPT. And if we pay to get it number one in the app store, we can tank the markets on Monday and like get, you know, make like an entire career's worth of.

• 27:58John Coogan?

  It's definitely a tinfoil hat theory, but I'm interested. I'm listening.

• 28:04Jordi Hays?

  Yeah, yeah, I'm not saying, I'm not saying it.

• 28:06John Coogan?

  I mean Palmer, Palmer just cited that in a post that we'll go through later and, and it's not as crazy as it sounds. There were some people pushing back and he had some very good responses to those things. So then he moves to a tweet from Rune who says, this is not the right lesson. There is an opportunity cost to researcher time and there, and if they're spending it micro optimizing PTX to make best, the best of limited comms, like the memory communication bandwidth, that's something else they weren't doing. Nerfing some aspect of the hardware is never a benefit. The most dangerous, and then Ben says, the most dangerous lure about thinking in terms of comparative advantages, how time and learning curves lead you to consequences that you never considered when you made the decision.

• 28:47John Coogan?

  I wrote about this exactly last year in A Chance to Build. I started the post by describing how US semiconductor companies kicked off outsourcing to Asia and tied that to the fact that Apple can't make an iPhone in the US. And so Steve Jobs famously said, you know, it's not, it's not even a matter of price. It's just there are not 30,000 manufacturing engineers in the United States. There are not 30,000 manufacturing engineering jobs to be filled. This is because the structure of the world economy, choices made, starting with Bretton Woods in particular, and cemented by the removal of tariffs over time, made them non-viable. And so, connect this to Google. What if Google had taken Rune's advice and not wasted time, what not wasted the time of valuable researchers in transforming

• 29:30John Coogan?

  how data centers are built? Perhaps they could have waited until Alibaba did it a decade later and rented capacity. And in the meantime, they would have been a far smaller and less significant company specifically, and the entire US tech industry would have been similarly stunted generally. To be fair to Rune, he does seem to be talking narrowly about the specific optimizations that DeepSeek made to overcome the H800's nerfed memory bandwidth, but I think the critique holds more generally. US tech companies, including OpenAI, have clearly, in retrospect, been Nvidia's willing suckers, happy to pay for more capacity instead of wringing out their own. How many years would it have taken them to discover?

• 30:07Jordi Hays?

  Yeah, and this is, this is a classic. If you're trying to scale anything really quickly, do anything really fast, you just end up paying more for it. So you hire somebody and you just say, yeah, we'll pay you, you know, $20,000 a year more than we budgeted for the role because we need the role. Or you're trying to buy billboards quickly and you and you say, yeah, we're going to pay 30% premium, but we want to launch this now because there's this competitive pressure. So what these US firms have been doing is not exactly out of the ordinary. It's just the nature of trying to do things fast as you focused on, you just focus on speed versus efficiency and cost.

• 30:43John Coogan?

  Yep, yep. And so he closes talking about aggregation theory, says,

• 30:51John Coogan?

  On the flip side, non-reasoning LLMs are still great at producing content and they also get smaller by distilling the output of reasoning models. One of the big R1 takeaways is that you can infuse reasoning into normal LLMs. More than that, though, you can also use them to generate massive amounts of synthetic data that simply teach the normal LLMs the answer to an effectively infinite number of questions. And of course, reasoning could end up simply being effectively free. One announcement that I should have added to yesterday's post was Google's announcement of Gemini 2.0 flash thinking. It appears to be competitive with R1. The China is crushing US rhetoric today, forgets about Gemini 2.0 flash thinking, likely cheaper, longer context and better on reasoning. We're still early in the AI race. So this is like completely missed.

• 31:36Jordi Hays?

  Yeah.

• 31:36John Coogan?

  But we don't know the prices yet.

• 31:39Jordi Hays?

  Can you believe that Google owns search and YouTube and they basically have every mainstream media company by the balls?

• 31:47John Coogan?

  Yeah.

• 31:47Jordi Hays?

  And they can't even get news out?

• 31:48John Coogan?

  No, it is crazy. Their product sense is just so bad. And they have this whole problem.

• 31:53Jordi Hays?

  And their marketing sense now.

• 31:55John Coogan?

  It's like, is it Gemini or is it Bard? Or they've been renaming models left and right? And it's clearly they're shipping their org chart because they had they had Google Brain and then DeepMind and they finally merged them. But they're still just like, like, I know what Google is. Google is a search engine. I don't know what I know what ChatGPT is. ChatGPT is a text is a chatbot. Like, Google Gemini 2.0 flash thinking? Like, what? How do I even access that? I tried to get Gemini set up. I finally figured it out.

• 32:22Jordi Hays?

  It sounds like an internal project.

• 32:24John Coogan?

  I went to Gemini and then I had to upgrade to Gemini Advanced and then I got access to the 1.5 model. But I was even asking the model, like, what are your capabilities? And it didn't know. Like, it was like not telling me like how to do it.

• 32:37Jordi Hays?

  That should be one of the new benchmark for models. You should be able to.

• 32:40John Coogan?

  What's your context window? What version am I on? How do I upgrade?

• 32:44Jordi Hays?

  You're interviewing for a role and somebody asks, so what are you good at? What do you do? And you don't have a good answer for it? That's kind of a tough sell.

• 32:51John Coogan?

  Yeah. And so Google is a company that actually cares about and has invested in infrastructure and perhaps doesn't need this, doesn't see the need for software type of margins. OpenAI and Anthropic have allegedly been earning on their API. So I wouldn't be surprised if they are very competitive. Of course, they're not open source, but again, R1 is, I can get all the thinking I want locally for free. This isn't necessarily dispositive in terms of the long-term prospects for aggregation theory, but given that the entire history of technology has been defined by processing speed simultaneously increasing, even as it decreases in price, the burden of proof is probably on those who say that zero marginal costs are an aberration. And so he's saying

• 33:33John Coogan?

  that like, in the long term, all of these models will be optimized to the point where there's zero marginal cost.

• 33:38Jordi Hays?

  Yeah.

• 33:39John Coogan?

  And at that point, being the entry point and being able to tax that is

• 33:43Jordi Hays?

  Yeah.

• 33:44John Coogan?

  really valuable. And so there's a couple of posts that we'll go into during the timeline that say, oh, this is massively bullish for Apple.

• 33:50Jordi Hays?

  Yeah.

• 33:50John Coogan?

  Because, you know, all of a sudden, the inference gets super cheap, gets much better, can be done on the edge, baked down. They don't need to mess around with any of the, uh, the, the, the actual training or inference themselves. They can just throw it on the phone and it's there and it's great.

• 34:02Jordi Hays?

  Yeah.

• 34:03John Coogan?

  Um, and, uh, and, and same with Google and, and Facebook. They were saying it's really good for Facebook because they can just chuck this in and they don't need to worry about, uh, you know, playing the model race.

• 34:13Jordi Hays?

  Yeah.

• 34:14John Coogan?

  But fascinating story, continues to evolve.

• 34:17Jordi Hays?

  Ben Thompson, staying competitive.

• 34:19John Coogan?

  Goaded.

• 34:20Jordi Hays?

  Goaded.

• 34:21John Coogan?

  Goaded. Let's move on to Ross Ulbricht and the story of the Silk Road.

• 34:28Jordi Hays?

  We, we've had a lot of laughs.

• 34:31John Coogan?

  Oh, yeah.

• 34:32Jordi Hays?

  Obviously, it's a dark story in many ways.

• 34:34John Coogan?

  Yep.

• 34:34Jordi Hays?

  There's sort of this bright spot now with him being pardoned. We're not, we'll, we'll wait till the end to, to talk about whether or not we agree with that decision. Not that it's on our, uh, you know, not that we like to comment on politics.

• 34:48John Coogan?

  Yeah.

• 34:49Jordi Hays?

  But, um, but yeah, there's, there's so many just insane aspects of, of this story.

• 34:54John Coogan?

  Yeah.

• 34:55Jordi Hays?

  And I think that as we looked into it, we realized that so many people had talked about the history and the sort of crime story around Silk Road because it's so fascinating. It's this internet narco trafficker meets hacker meets anon.

• 35:12John Coogan?

  Yep.

• 35:13Jordi Hays?

  You know, was an Eagle Scout, right?

• 35:14John Coogan?

  Yep.

• 35:15Jordi Hays?

  It's just like wild story.

• 35:16John Coogan?

  Yeah, we should.

• 35:17Jordi Hays?

  And an amazing marketer.

• 35:18John Coogan?

  Oh, yeah.

• 35:19Jordi Hays?

  Even after getting caught.

• 35:20John Coogan?

  Even after, he still has a ton of fans. I don't know if Ben, you can pull this, this photo up, but he was an Eagle Scout. I was an Eagle Scout.

• 35:28Jordi Hays?

  Really?

• 35:28John Coogan?

  Yeah.

• 35:28Jordi Hays?

  I didn't know that. My dad was an Eagle Scout.

• 35:30John Coogan?

  And I remember when I was in the Boy Scouts, they would tell everyone, no Eagle Scout has ever been convicted of a felony. Or something like that. And it was like clearly wrong, but it was just to like put you in the mindset of like, well, I don't want to be the first one, so I can't be a criminal.

• 35:45Jordi Hays?

  Yeah.

• 35:46John Coogan?

  Uh, and it was very effective.

• 35:48Jordi Hays?

  The Boy Scouts and the Girl Scouts fell off massively.

• 35:51John Coogan?

  There are tons of like culture war issues.

• 35:52Jordi Hays?

  Yeah, yeah. And, and real, you know, issues around.

• 35:56John Coogan?

  Criminal stuff.

• 35:57Jordi Hays?

  Sex crimes and stuff like that. Um, but, uh, anyway, so.

• 36:01John Coogan?

  But he has a lot of fans and dripped out Technology Brothers like really, really likes him and has posted him multiple times. There's another photo of him. Uh, yeah, we'll put that up on the screen of him and.

• 36:11Jordi Hays?

  Without a doubt, he's, he's benefited massively from his, you know.

• 36:15John Coogan?

  Aesthetics.

• 36:15Jordi Hays?

  Aesthetics.

• 36:16John Coogan?

  Yeah. The physiognomy is strong.

• 36:18Jordi Hays?

  Which is why it's underpriced to get diced.

• 36:21John Coogan?

  I don't know that he's diced. I don't know that he's actually lifting.

• 36:23Jordi Hays?

  But a lot of people say he looks healthier than Brian Johnson after 11 years in prison, eating prison slop.

• 36:30John Coogan?

  Yeah. What's the secret?

• 36:32Jordi Hays?

  What's the secret?

• 36:32John Coogan?

  Yeah.

• 36:33Jordi Hays?

  We'll have to ask him.

• 36:34John Coogan?

  He does look young and he's certainly played into that. And we'll go into kind of the timeline here because a lot of people think, oh yeah, he was 17 when he did this.

• 36:40Jordi Hays?

  He, so he, yeah, the other aspect that we'll talk about throughout the story is, is how good of a marketer he was. And he and his family post incarceration on his carceral journey.

• 36:52John Coogan?

  Yeah.

• 36:53Jordi Hays?

  They were able to spin this story like he was like some 18 year old kid, you know, a high schooler almost. What you'll find out is that he was, you know, 11 years ago, he was, when he was, uh, put into prison, he was 29 years old.

• 37:09John Coogan?

  Yeah.

• 37:09Jordi Hays?

  So he wasn't, you know, he wasn't a kid, right?

• 37:11John Coogan?

  Not at all. He was born in 1984.

• 37:14Jordi Hays?

  And he was very aware of his actions. So just to get into kind of like the high level. Founder mode elements of the story and then we'll get into the timeline. He's a self-taught developer, first time CEO, completely bootstrapped the company, went from zero to 1.2 billion in sales in less than three years, personally netted over 80 million in fees off the marketplace with a very low take rate, which we'll also get into. Operating a fully remote, global and basically anonymous team where he was the only one that knew the real identity of his employees, he would require them to show ID. Leveraged novel payment rails using Bitcoin and maintained this sort of missionary sort

• 37:55Jordi Hays?

  of mode to building the company that was basically almost like a religious pursuit for him because of his libertarian beliefs, which we'll also get into.

• 38:04John Coogan?

  And so the backbone of our research was mostly Nick Bilton's American Kingpin, which is a great book. I highly recommend it. It reads like, you know, it's a page turner. It's like a total thriller. And so Bilton kicks it off by taking you back to the beginning of Ross Ulbricht's story. Born in Austin, Texas, March 27th, 1984, supportive, middle-class household, nothing crazy going on, Eagle Scout, as we mentioned, friends and family described him as polite, gentile and unassuming.

• 38:36John Coogan?

  Ulbricht developed an interest in science, tinkering with computers. He goes to University of Texas at Dallas on scholarship, initially studying physics, then he pursues a master's degree in material science at Penn State and he basically gets obsessed with libertarian economic theory, especially Ludwig von Mises, Murray Rothbard and Milton Friedman.

• 38:56Jordi Hays?

  Yeah. And so while he's there, so, so one thing to note, he's not studying computer science. He's not a programmer at all at this point. He's interested in technology, but he's spending his time going and debating libertarian beliefs, arguing for things like the legalization of drugs, his big, Point, you know, the, the high level, sort of, his high level view is that government should not have any decision-making power over individuals and individuals should be able to do whatever they want. And he goes on to do whatever he wants.

• 39:26John Coogan?

  Yeah.

• 39:26Jordi Hays?

  For the, you know, basically.

• 39:28John Coogan?

  Have you seen that post that you go on Banger Archive, but it's like, women will say they want a man who reads, but every man who reads ascribes to some ho-scaring.

• 39:39Jordi Hays?

  Extremist.

• 39:39John Coogan?

  Extremist political belief. And it's like, yeah, he got into reading and started reading like Mises and Rothbard and like these like, kind of crazy philosophers. And he really.

• 39:50Jordi Hays?

  Speaking of Ludwig von Mises, there's this, this UFC fighter, Money Moicano.

• 39:55John Coogan?

  Yeah. Oh, yeah.

• 39:56Jordi Hays?

  Done this post-fight speech where he just is like hammering against the government, like.

• 40:02John Coogan?

  And I mean, obviously, like, there's a lot of good, good ideas in libertarianism, but it clearly, like, Ross took it to such an extreme that he was using it to justify anything. Uh, and, and clearly bending his, like, libertarians love to, they, you know, they have a hammer and everything looks like a nail. And so they wind up not seeing any externality, is just viewing every little minor interaction as like, oh, well, this fits with my libertarian ideology, so therefore it's justified.

• 40:29Jordi Hays?

  Yeah.

• 40:29John Coogan?

  And, and he really, really twisted the ideology and, uh, in like a much more negative way than many libertarians who are just arguing for like slightly smaller government or like, you know, slightly, uh, you know, lower taxes or something, or more efficiency in the government. Like you could look at Doge as like a libertarian project in some ways, but it's much different than, yeah, we should legalize guns and drugs and all this crazy stuff, which is like where he wound up. And so.

• 40:53Jordi Hays?

  Yeah. Not just legalizing it, but brokering transactions at scale for a number of illicit goods.

• 41:00John Coogan?

  Uh, he dabbled in entrepreneurial ventures and after graduate school, one of these involved day trading, another was ebook enterprise, none proved lucrative or fulfilling.

• 41:09Jordi Hays?

  So, so, so to be clear, he was trying to do day trading, realized it wasn't very profitable. He also, uh, he, he was a part of this, someone else's sort of nonprofit called Goodwagon Books, which. They would go around to houses, collect sort of old books if people didn't want, they would sell the ones online that they could, and then they would donate to prisons, the ones that they couldn't sell.

• 41:30John Coogan?

  Wow.

• 41:30Jordi Hays?

  And so he was probably.

• 41:32John Coogan?

  Foreshadowing.

• 41:33Jordi Hays?

  Foreshadowing, donating books to himself in his later years.

• 41:36John Coogan?

  Setting himself up.

• 41:37Jordi Hays?

  And, uh, yeah, one, one other thing about this time that I thought was interesting, while at Penn State. Little like odd jobs he was working, he saved up enough to buy a rental house. Uh, and he later, uh, shared that, that he found it so frustrating having college students as, as, you know, degenerate college students as tenants that he, that he sold it.

• 41:57John Coogan?

  Yeah.

• 41:57Jordi Hays?

  And he actually used that money to kind of get so far off the ground because he didn't have an income for some amount of time.

• 42:04John Coogan?

  Yeah. So he becomes fascinated with Tor, the onion router, which is the, the portal to the dark web.

• 42:10Jordi Hays?

  The timing here is so key, right?

• 42:12John Coogan?

  Yeah.

• 42:12Jordi Hays?

  Cause like if he had had all these ideas five years before.

• 42:15John Coogan?

  Impossible.

• 42:16Jordi Hays?

  Then wouldn't have had Bitcoin.

• 42:17John Coogan?

  Yep.

• 42:17Jordi Hays?

  I don't know where Tor was in the development, but it wasn't, all this stuff was like this perfect convergence.

• 42:23John Coogan?

  Totally. And Bitcoin obviously coming up at this time. Uh, few people outside of cryptography circles were paying attention to Bitcoin, but Ross saw it as a tool for circumventing government oversight. He once famously stated, "I want to use economic theory as a, as a means to abolish the use of coercion." Uh, this quote illustrates Ross's self-styled mission of empowering voluntary exchanges. And, uh, he, uh, yeah, i- i- it's also very funny throughout this because he's not like super technical. There's a lot of times when clearly you can tell that he's, he's bought, you know, like, oh, nothing can go wrong. It's decentralized. Like, oh, Bitcoin, it's anonymous. And it's like, it's not, it's actually not anonymous, like in many ways. And there's always ways around this stuff.

• 43:04Jordi Hays?

  You don't have to, um.

• 43:06John Coogan?

  But the meme is always.

• 43:07Jordi Hays?

  You don't have to KYC.

• 43:08John Coogan?

  Yeah.

• 43:09Jordi Hays?

  But, but it's, it's a public ledger.

• 43:10John Coogan?

  Exactly. Exactly. So it's very, very traceable and, uh, and we'll go into this later, but, uh, they're like, tracking the Bitcoin movements actually got a lot more people caught because it was all trackable. And so.

• 43:22Jordi Hays?

  And there's still companies today like Chainalysis that leverage public blockchains to track down criminals at scale.

• 43:30John Coogan?

  Yeah. And so, uh, combining Tor with Bitcoin and his ideological calling, he sets up the first version of the Silk Road. By early 2011, Silk Road was online, though still small, and his site allowed buyers and sellers to communicate, post-product listing and leave reviews. It was basically an eBay account.

• 43:48Jordi Hays?

  And so, and so just going back a little bit, uh, taking one quick break. So he, to, to, anytime you're starting a marketplace. So the fact that he took this marketplace from zero to 1.2 billion in volume in three years, bootstrapped is insane.

• 44:02John Coogan?

  Yep.

• 44:02Jordi Hays?

  Very, very, very few companies do that.

• 44:04John Coogan?

  Yep.

• 44:05Jordi Hays?

  He, in order to get this started, marketplaces have this chicken and egg problem where what, what comes first, the supply? You know, you need supply in order to have demand on the marketplace. And so he actually starts growing mushrooms in order to create the supply to have supply on on the marketplace. So he's growing mushrooms, he's building the site. And then, once he's at a point where he's ready, and he has a girlfriend at this time, who's like, sounds like a very sweet girl, and they're very like, in love at the time.

• 44:35John Coogan?

  Yep.

• 44:36Jordi Hays?

  And he, at one point, like, takes his girlfriend, like, blindfolded out to, like, see the mushrooms and, like, is, like, all proud of it, like, takes her out to this, like, damp, kind of field or whatever, and there's just, and so he's, he's, uh, he's, this is like, the very beginning of him actually, so he had the intention to commit crimes.

• 44:54John Coogan?

  Yeah.

• 44:56Jordi Hays?

  And he's very aware that it's, what he's doing is illegal, and he specifically chose psilocybin mushrooms because he felt like the penalty for that would be less severe than, than starting by selling harder drugs. Or even something like marijuana at the time.

• 45:11John Coogan?

  Yeah, but I thought the amount that he was growing was, it was, it wasn't like he was growing, like, oh, he's got, like, one little plant. It was like, a whole roomful, and the punishment for that, if he had gotten caught, would have been years and years in prison, just for that.

• 45:22Jordi Hays?

  Yeah, yeah, yeah.

• 45:22John Coogan?

  Which is like, still kind of crazy.

• 45:23Jordi Hays?

  Yeah, and one thing is, in order to kind of kickstart the first initial sales, he, uh, he went on a site that would talk, a for, a public forum.

• 45:34John Coogan?

  Yep.

• 45:35Jordi Hays?

  That would talk about mushrooms, and he made a post, and he was very, sort of, this was smart at the time, if you weren't committing crimes, but he, he, he posted something under this username, I forget what the username was called.

• 45:47John Coogan?

  Was it Altoid?

• 45:48Jordi Hays?

  It was Altoid, and it was like, hey, has anybody tried this site?

• 45:52John Coogan?

  Yeah, looks pretty cool.

• 45:53Jordi Hays?

  Looks cool.

• 45:54John Coogan?

  Yep.

• 45:54Jordi Hays?

  And he used that to sort of catalyze some traction, because he knew he was holding supply, that he was ready to sell.

• 45:59John Coogan?

  Yep, and, yeah.

• 46:00Jordi Hays?

  And so, and we'll get to this later, but that was, ended up being part of his downfall, because he had used his real email to create the Altoid account.

• 46:07John Coogan?

  Yep.

• 46:08Jordi Hays?

  And, uh, he had gone back at one point and changed the email, but there was a record in the database that it had [email protected].

• 46:16John Coogan?

  Yeah.

• 46:17Jordi Hays?

  Tied to that username. So that was one of the ways that they sort of.

• 46:20John Coogan?

  Yeah.

• 46:20Jordi Hays?

  Ended up, um.

• 46:21John Coogan?

  Yeah, he's one of those things where he's, oh, everything's anonymized and decentralized. It's like, you left paper trail all over the place, bro.

• 46:27Jordi Hays?

  Yeah.

• 46:27John Coogan?

  You were not that good at your OPSEC. And so it's fascinating how fast this took off. So he's thinking about it in late 2010. In January of 2011, he launches the Silk Road, codenamed Underground Brokers in Austin, Texas, aiming to create a free market website where users can buy anything anonymously. And by June, just six months later, Senator Chuck Schumer denounces Silk Road in Washington DC, prompting heightened media coverage that forces Ross to bolter.

• 46:57Jordi Hays?

  They also got a big Gawker article, which I think was right around this time.

• 47:00John Coogan?

  Yeah, this all happened right around the same time.

• 47:01Jordi Hays?

  Schumer, so a reporter who was at Gawker, and Gawker's no longer with us due to the actions of some powerful people in tech. But this Gawker article hears about Silk Road, gets on it, is browsing around, ends up writing this whole piece. Ross talks to them and says, please don't write this piece. That usually doesn't work with journalists. They know they're on to something. They end up publishing this and there was even a while that that journalist was suspected of starting Silk Road because it was such a big marketing moment that people were like, did he just like,

• 47:37John Coogan?

  start this?

• 47:38Jordi Hays?

  Did he like use this? And he'd written about some other topics. And that was like, Ross really felt like it was too early for it to go that public. Like, they were starting to do sales in a meaningful way, but at the same time, he was a self-taught developer and so he struggled with hacks and stuff like that all the time. And so he would notice every now and then he'd be like, oh, what the heck? Like, my wallet's getting drained. And so he'd be freaking out. The Bitcoin at the time, to be clear, we should look up on public what the actual price was, but it would be like, I'm sure it was like a few dollars.

• 48:15John Coogan?

  It was a few dollars, yeah.

• 48:16Jordi Hays?

  And so he'd be noticing like, oh, my wallet's getting drained. It wasn't that damaging. But he kept having these sort of small errors because he was not a super sophisticated, he was like a hacker-type builder, but not a security engineer. And so he kept constantly getting kind of lightly scammed. And so this launch, like you can imagine, he's just in Austin, building this thing by himself. He had a couple engineers that would help him that knew they were committing crimes too, but they were on board with it. And then going zero to 60 in six months, zero to 100, zero to 1,000, right? Like, he's getting a senator in Washington DC that's denouncing you.

• 48:55Jordi Hays?

  Is the pressure was on right away.

• 48:57John Coogan?

  Yeah, usually these, these like, you know, government federal level pressures take like years until like the first like, oh, is Facebook, you know, leading to misinformation that took like, you know, years and years or even like the jewel.

• 49:09Jordi Hays?

  Probably almost 10 years.

• 49:10John Coogan?

  Yeah, the jewel hearings were probably, I mean, that company was started like 10 years before.

• 49:14Jordi Hays?

  And there was being publicly marketed the whole time.

• 49:16John Coogan?

  Yeah, totally.

• 49:17Jordi Hays?

  Silk Road was, was, had the Gawker article and some other coverage, but it wasn't.

• 49:20John Coogan?

  Yeah, I mean, Chuck Schumer had the Zin, the Zin press conference in 2024, Zin launched in America 2014. And so the, the, the dark web, Amazon, the Silk Road really like just took off so fast, six months.

• 49:36Jordi Hays?

  And to be clear, the reasons why it was in many ways, a much better, looking purely at the user experience.

• 49:43John Coogan?

  Yeah.

• 49:44Jordi Hays?

  Somebody that's buying drugs in, in 2011, while this starts, they can go and find a dealer on the street or hit up some random sketchy person on Facebook.

• 49:53John Coogan?

  Yep.

• 49:54Jordi Hays?

  And there's all these ways to have a transaction that don't have a bunch of reviews, right? So you're kind of trusting the dealer, which is like people sell, that sell drugs. I can imagine you wouldn't want to like, trust them with your life. And so the experience at the time was from a purely like a product experience, to be able to go on a site to see vetted sellers that have a selling history and activity on the forum and reviews. He really made the experience of buying these narcotics much better.

• 50:26John Coogan?

  Yeah.

• 50:26Jordi Hays?

  And, and people were allowed to buy very small amounts. And this ended up being what, what slowly helped get the marketplace taken down is it usually authorities, so like Homeland Security, DEA, FBI, when they're tracking drugs, they're looking for these big shipments.

• 50:44John Coogan?

  Yeah.

• 50:44Jordi Hays?

  And as Silk Road started taking off. They started getting these envelopes that would be, you know, one little pill. So like one person who's just like goes on there, they just order one.

• 50:54John Coogan?

  Yeah.

• 50:55Jordi Hays?

  It's kind of cute.

• 50:57Jordi Hays?

  It's kind of cute. But, uh, but yeah, it was, it was, it, it, it can't be understated, like going back to the, the founder story bit. He made the experience, like he really innovated on the experience.

• 51:09John Coogan?

  Yeah, there's a couple of other things that were pretty innovative here. They had an escrow system which used Bitcoin, kind of smart contracts, but really just it would transfer the Bitcoin out of the buyer's, out of the buyer's account into a holding account. And then, once the transaction cleared, it would get paid to the seller.

• 51:26Jordi Hays?

  Yeah.

• 51:26John Coogan?

  And so, like, if you got scammed, you could actually have like a dispute resolution process.

• 51:31Jordi Hays?

  It was like a PayPal.

• 51:32John Coogan?

  Exactly.

• 51:33Jordi Hays?

  Type experience.

• 51:33John Coogan?

  Yeah, and PayPal really unlocked eBay.

• 51:35Jordi Hays?

  So that it wasn't fully trustless, right?

• 51:37John Coogan?

  No, no, no.

• 51:38Jordi Hays?

  Like, somebody could have received it centralized.

• 51:41John Coogan?

  And we saw that because everyone was stealing Bitcoin from the site constantly.

• 51:44Jordi Hays?

  Well, yeah, and Ross would also have to get involved with these disputes. And there were even situations where he'd be negotiating with cartels saying, you know, somebody would, would steal.

• 51:53John Coogan?

  Yeah.

• 51:53Jordi Hays?

  And, and he'd be, the cartels would get mad at him and be threatening him. So, so one thing, to be clear, at every step of the way, he was doing things that didn't scale.

• 52:04John Coogan?

  Yeah.

• 52:05Jordi Hays?

  And that involved, and that was, that involved committing crimes.

• 52:09John Coogan?

  Yeah, yeah, yeah.

• 52:10Jordi Hays?

  And so, looking at, and just to compare this, so another company like Airbnb, that got launched out of this era. Airbnb innovated on the vacation rental, because there were some marketplaces, but

• 52:21John Coogan?

  Couch surfing.

• 52:22Jordi Hays?

  People would book a vacation rental without seeing any reviews. And then you show up there and it's like, well, the toilets don't work and the sheets are all dirty.

• 52:29John Coogan?

  Yep.

• 52:29Jordi Hays?

  It's a very, very similar experience where just opening it up and creating more trust really catalyzed some, some velocity.

• 52:37John Coogan?

  Yeah, and so as he's growing the site, he starts going by his pseudonym, The Dread Pirate Roberts, which is a

• 52:44Jordi Hays?

  Reference to the

• 52:45John Coogan?

  Reference to the Princess Bride.

• 52:46Jordi Hays?

  Yeah, yeah, yeah.

• 52:47John Coogan?

  Which is like kind of an odd reference. I don't think of that as like particularly libertarian. It's just kind of like a funny, weird thing to pick. Because he likes that movie. Really shows you how old he is though, because that movie came out in like the eighties, right?

• 52:57Jordi Hays?

  Yeah, yeah, it's a classic though, classic.

• 52:59John Coogan?

  And, and so

• 53:00Jordi Hays?

  And he never went by Ross, to be clear. He went by Admin.

• 53:04John Coogan?

  Oh, okay.

• 53:05Jordi Hays?

  And so going by Dread Pirate Roberts was A way to build this brand world around the site, right? It was this pirates themed kind of.

• 53:14John Coogan?

  It's funny because there's another pirate themed like decentralized, like the Pirate Bay. Are you familiar with this? The it's it's like a.

• 53:22Jordi Hays?

  Yeah.

• 53:22John Coogan?

  Bit torrent, right? So like for downloading illegal.

• 53:24Jordi Hays?

  Movies.

• 53:25John Coogan?

  Movies and stuff.

• 53:26Jordi Hays?

  Yeah, yeah, yeah.

• 53:26John Coogan?

  Much less harmful, but still.

• 53:28Jordi Hays?

  Yeah.

• 53:28John Coogan?

  Kind of similar piracy.

• 53:29Jordi Hays?

  Pirates of the internet.

• 53:31John Coogan?

  And so people start obsessing over this guy. They revere DPR as a benevolent philosopher king who is giving the world a safer alternative to street drugs. And people really believe the narrative of like harm reduction, that.

• 53:43Jordi Hays?

  Yeah.

• 53:43John Coogan?

  That he, you know, reduced the amount of violent crime because anytime that there's a drug transaction on the street, there's a chance that it goes south and someone gets shot or stabbed or murdered or something like that. And that's not going to happen on the Silk Road. Now, the problem is is that, well, if you're if you're increasing the amount of drug dealing by a thousand acts, even if they're 50% safer, well, there's still a net negative impact of that.

• 54:06Jordi Hays?

  Yeah.

• 54:06John Coogan?

  And you need to measure that. And so sure.

• 54:08Jordi Hays?

  Yeah.

• 54:08John Coogan?

  It's like.

• 54:08Jordi Hays?

  And and there was.

• 54:09John Coogan?

  I'm sure a lot of cartels were like, cool, I'll just go on, I'll just go on Silk Road, buy a bunch of stuff and then deal it on the street. And so you just wind up with more street deals.

• 54:19Jordi Hays?

  Yeah. And at this time, so he, so the whole this brand world building that he's doing, this is why if you view him purely as a founder and ignore the heinous crimes that he committed over a long period of time, he would do things like they would have a 420 sale, right? Where it was like whoever, if you bought.

• 54:37John Coogan?

  That's great.

• 54:38Jordi Hays?

  If you bought on the site, you got like a ticket that entered you into a, you know, something where you could win like an all expenses paid trip and stuff like that. So he was following sort of like traditional e-commerce, like marketing.

• 54:50John Coogan?

  Black Friday, Cyber Monday is like huge for him.

• 54:52Jordi Hays?

  Yeah.

• 54:52John Coogan?

  He's like, let's, let's pump it.

• 54:54Jordi Hays?

  And he'd be like, no fees today on the platform. Buy as many drugs as you want. But meanwhile, the dark side of that is that people would be buying heroin.

• 55:00John Coogan?

  Yeah.

• 55:01Jordi Hays?

  And overdosing and killing like.

• 55:02John Coogan?

  Yeah, yeah, yeah, it's bad.

• 55:04Jordi Hays?

  Like it was very.

• 55:05John Coogan?

  Yeah.

• 55:05Jordi Hays?

  To him, he, he had these libertarian ideals. Meanwhile, you're enabling addicts to, if you make it almost as easy to you to buy drugs as going on Amazon.

• 55:17John Coogan?

  Yeah.

• 55:17Jordi Hays?

  You're enabling a lot of behavior that that isn't so great.

• 55:20John Coogan?

  Yeah. And.

• 55:23John Coogan?

  Yeah, I mean, another, another factor of the growth was that Silk Road really drove early adoption of Bitcoin and it created this crazy flywheel where you would buy a little bit of Bitcoin to go on Silk Road, buy some psilocybin mushrooms or something. And then because there was so much buying pressure, the price of Bitcoin would go up, you'd still have some leftover in your wallet and be like, whoa, I made money, like I could buy more now. And then that would drive more people into it. And so it became this like virtuous cycle.

• 55:47Jordi Hays?

  Yeah.

• 55:47John Coogan?

  And I remember reading about some journalists who had tested the site and bought like one, you know, drug pill or something when they were reporting on it.

• 55:58Jordi Hays?

  Yeah.

• 55:58John Coogan?

  And then forgotten about what they left in their wallet. So they bought like, you know, oh, I needed to buy a hundred dollars of Bitcoin and I spent 50 of it on the Silk Road back in 2010.

• 56:07Jordi Hays?

  Yeah.

• 56:08John Coogan?

  And now it's like 500 K or something. And then they have to find their keys and some of them, some of them did, some of them lost it.

• 56:13Jordi Hays?

  Yeah. And so, so the crazy thing about this is so Ross, in the very, very early days in 2011, had a girlfriend.

• 56:19John Coogan?

  Oh, yeah.

• 56:20Jordi Hays?

  She didn't agree with the plot, with what he was doing.

• 56:23John Coogan?

  Yeah.

• 56:23Jordi Hays?

  Uh, and she basically gave him an ultimatum at one point, like me or Silk Road.

• 56:30John Coogan?

  Yep.

• 56:30Jordi Hays?

  He chose Silk Road, founder mode, absolute dog. Uh, so he goes with that. And then, and then at one point, like later, he tells her, they're like, they, they get together again at some point in San Francisco and he tells her that, you know, yeah, I gave the site away, all this stuff. His, her roommate also during this time found out about it. Uh, because like they got in an argument and she posted on his Facebook wall, like, I hope the authorities don't find out about Ross Ulbricht's drug website. And then like deleted it. Like, he got her to delete it.

• 57:00John Coogan?

  Yeah.

• 57:00Jordi Hays?

  And so he had a couple loose ends here.

• 57:03John Coogan?

  Yeah.

• 57:04Jordi Hays?

  The other thing that's crazy about the, his experience doing this is he, so anybody who's built a company before, you know that it's the kind of thing that you're, you're thinking about around the clock, right? You wake up at 3am, you're thinking about it.

• 57:17John Coogan?

  Yep.

• 57:17Jordi Hays?

  Right as you're going to bed, you're telling your significant other about it, whatever. It's not something you can get off your mind and it's a very uncomfortable thing to not be able to talk about it. Cause you have all these ideas like, right, like we're in the gym. I'm like, I need to talk to you about this.

• 57:30John Coogan?

  Yeah.

• 57:31Jordi Hays?

  Challenge, whatever. So Ross doesn't have any of that. He has his girlfriend at first and then she's like, wow, like my, my, my boyfriend is like a narco trafficker. Digital pirate, like this is crazy. So that, that ends. And then he starts to develop these friendships online. People that he's talking to, people that are users of the platform, people that are sellers. And so he starts developing these friendships. He's got a buddy that's in Vietnam.

• 57:55John Coogan?

  Yeah.

• 57:56Jordi Hays?

  Uh, I forget.

• 57:57John Coogan?

  He's really developing like two worlds, almost like a split personality thing. Like he actually.

• 58:01Jordi Hays?

  Well, he doesn't have that much of a IRL life.

• 58:04John Coogan?

  Yeah, doesn't have much of an IRL life. And then he actually splits his computer hard drive in two and kind of has two wings of the, of the computer. One for his personal life, one for the Dread Pirate Roberts. And it's almost like, there's like, he can switch to just being a completely different person. Completely different moral framework, because even during the trial, a lot of the, uh, like, you know, witness testimony, character witnesses were like, yeah, even during this period, like he was just total, totally normal guy. And it's like, he was able to put on one face and then go online and then be chatting with people about like, oh yeah, let's kill this person. Let's bring in a million pounds of math.

• 58:38Jordi Hays?

  Send me the photo when you finish the job, you know?

• 58:40John Coogan?

  Yeah.

• 58:40Jordi Hays?

  So, so in this whole time, so law enforcement already by this point has started to develop, like use anonymous accounts to develop relationships with him. He already has law enforcement that are buying drugs on the platform to like build cases and they're trying to, he has this guy, uh, DiYegi, what's his name?

• 58:59John Coogan?

  I don't remember. No.

• 59:00Jordi Hays?

  So this is a random guy in Chicago who's with Homeland Security, who's painstakingly collecting thousands of Silk Road orders, which he had figured out, uh, historically, apparently people would send drugs in the mail and they'd have like these handwritten letters.

• 59:15John Coogan?

  Yep.

• 59:15Jordi Hays?

  So that was like one way you could. Potentially identify.

• 59:18John Coogan?

  Sure.

• 59:19Jordi Hays?

  But then people on Silk Road wanted to look like they're more professional.

• 59:22John Coogan?

  So they type it out.

• 59:23Jordi Hays?

  So they would print out these sort of like

• 59:25John Coogan?

  mailing levels.

• 59:26Jordi Hays?

  Mailing, return labels. And so there was this, this guy, De Yegi, I forget his name. And what's crazy is many of these law enforcement people themselves end up committing crimes.

• 59:37John Coogan?

  Oh, yeah, totally.

• 59:38Jordi Hays?

  As part of the process and then they get taken.

• 59:39John Coogan?

  It's so chaotic.

• 59:40Jordi Hays?

  It's like the most chaotic story.

• 59:41John Coogan?

  And I mean, there's just so many different organizations involved in this. The DEA, the FBI, the IRS, Homeland Security, the Secret Service. And then they all have varying levels of jurisdiction and abilities.

• 59:54Jordi Hays?

  And they all want to win.

• 59:55John Coogan?

  They all want to win.

• 59:56Jordi Hays?

  And they all want credit for it.

• 59:57John Coogan?

  They all want credit for it. And so it's just chaotic. Let's go through some of the, some of the posts, just to kind of break it up. I have this one from Rune here who says, okay, but where are the crypto conferences for people building illegal stuff? I'm talking next generation impenetrable Silk Road, evading Chinese capital controls, war bonds, hit me up.

• 1:00:20John Coogan?

  And this was back in 2022, when crypto was obsessed with like NFTs and, and just kind of like.

• 1:00:25Jordi Hays?

  Was that pre FTX crash?

• 1:00:27John Coogan?

  Yeah, yeah, this is pre FTX. And, and so, yeah, I mean, I think that, I think that we can obviously intellectually understand that like, everything that happened here was terrible. It's a tragedy. It's like bad in so many ways. But it's deep down, I think, if you don't recognize that like, you know, crime stories are a little bit cool and like edgy, like, like that's just a very natural impulse. And I think that's what drew a lot of people to this story. And then the whole reason that we're talking about this is this clip from Autism Capital that says, breaking Trump confirms that if he becomes president, he will commute the sentence of Silk Road founder Ross Ulbricht. So this was in May of last year before. So the whole reason that we wound up in this situation is because there was a, like,

• 1:01:11John Coogan?

  there was this massive campaign that we'll get into, Free Ross, that was. Driven by his mother and she'd been campaigning for him a long time.

• 1:01:18Jordi Hays?

  And he got married.

• 1:01:19John Coogan?

  Yeah.

• 1:01:20Jordi Hays?

  At one point.

• 1:01:21John Coogan?

  And she was working on the project and then there were a lot of libertarians and a lot of Bitcoin people that were like, get him out. And so it became this like bargaining chip with Trump was like, oh, we will back you super hard if you give us our boy back. And so this is when, on January 21st, Ross Ulbricht has been fully pardoned. And Donald Trump says, I just called the mother of Ross William Ulbricht, he misspells his name, to let her know that in honor of her and the libertarian movement.

• 1:01:49Jordi Hays?

  Writing the, he's signing the papers. He's like, what did this guy do again? Murder for hire?

• 1:01:54John Coogan?

  Which supported me and they will tell you, he didn't get convicted of that.

• 1:01:58Jordi Hays?

  Yeah.

• 1:01:58John Coogan?

  He didn't get convicted of that.

• 1:01:59Jordi Hays?

  To be clear.

• 1:01:59John Coogan?

  Allegedly.

• 1:02:00Jordi Hays?

  Yeah, yeah, yeah.

• 1:02:02John Coogan?

  It was, it was my pleasure to have signed a full and unconditional, full and unconditional pardon of her son Ross. The scum that worked to convict him were some of the same lunatics that were involved in the modern day weaponization of government against me. He was given two life sentences plus 40 years. Ridiculous. And Sager says, I'm no fan of the Silk Road, but the way the FBI set up Ross Ulbricht for life is still one of the most insane cases I've ever read about. And so Sager is like hugely anti-drug, even anti-weed, marijuana.

• 1:02:30Jordi Hays?

  Yep.

• 1:02:31John Coogan?

  Cannabis, but still this is a nuanced topic.

• 1:02:35Jordi Hays?

  Yeah.

• 1:02:35John Coogan?

  And it is possible that someone could be doing something really bad and then the government can come in and throw the book at them even harder than they should.

• 1:02:40Jordi Hays?

  Yeah. And so, so getting kind of into that, you had one of, one of the, one of the, I forget if they were, I don't think they were FBI, but maybe Homeland Security. At one point, one of the guys had turned, like was selling secrets to Ross about all the investigations.

• 1:02:59John Coogan?

  Yep.

• 1:03:00Jordi Hays?

  And had made some, somewhere over half a million dollars selling information to Ross about the case, even though he kind of still wanted to get him.

• 1:03:07John Coogan?

  Yep.

• 1:03:08Jordi Hays?

  But, but it became this whole game that you could tell that.

• 1:03:11John Coogan?

  Double agent.

• 1:03:11Jordi Hays?

  All the, all the agents involved with it were so consumed in the cat and mouse game.

• 1:03:17John Coogan?

  Yep.

• 1:03:18Jordi Hays?

  Of chasing this guy. Really, he, he, he, at one point got citizenship in the Dominican Republic, but it wasn't really a big factor in the story. And so the, the other thing is like, you would imagine that this guy would take off. And be in Eastern Europe or Asia somewhere. He went to Australia at one point, but he was just really visiting his sister.

• 1:03:39John Coogan?

  I think he did go to the Dominican Republic briefly.

• 1:03:41Jordi Hays?

  But yeah.

• 1:03:42John Coogan?

  Maybe some accounts.

• 1:03:43Jordi Hays?

  I think he needed to invest like 100K or

• 1:03:45John Coogan?

  Yeah.

• 1:03:45Jordi Hays?

  Under six figures to actually get that.

• 1:03:47John Coogan?

  And so let's do a little bit of a tour of the of the agencies involved in this. The DEA would send agents to infiltrate the marketplace by posing as large scale narcotics traffickers. The FBI was focused on tracing the Silk Road server, which they eventually got. I think there was one in Iceland or something.

• 1:04:04Jordi Hays?

  Yeah.

• 1:04:05John Coogan?

  That they were able to get and decrypt. The IRS wanted to follow the money trail. Homeland Security specialized in customs and import control that recognized that packages from overseas were flooding the US postal system. One key figure was Gary Alfred, an IRS investigator who approached the Silk Road puzzle by following internet breadcrumbs. He started analyzing older forum posts discussing Silk Road's launch, focusing on handles like Altoid that might have been inadvertently that might have inadvertently revealed a personal connection.

• 1:04:35Jordi Hays?

  And so this guy, this IRS agent, ended up getting taken down because he was he was profiting in different ways from the like from the investigation and very, very corrupt. But he was one of the guys that traced those old forum posts.

• 1:04:50John Coogan?

  Yeah.

• 1:04:51Jordi Hays?

  Found posts that an account that was called Altoid created by Ross Ulbricht at Gmail. That then he changed to a fake email called Frosty at Frosty.

• 1:05:01John Coogan?

  Yep.

• 1:05:02Jordi Hays?

  But then he had used

• 1:05:03John Coogan?

  Frosty somewhere else.

• 1:05:04Jordi Hays?

  He called the Iceland server Frosty.

• 1:05:07John Coogan?

  Yeah.

• 1:05:07Jordi Hays?

  So they tied that together.

• 1:05:09John Coogan?

  Not enough imagination on the username generation, bro. You gotta get a password generator.

• 1:05:13Jordi Hays?

  Yeah.

• 1:05:14John Coogan?

  Just go full random. Yeah, it's the Gary Alfred guy. I read a thread about him as well about how what was interesting was that he didn't have access to like really crazy proprietary databases and oh, the fingerprint database and the DNA database. It was really just like Google. It was just really good at just like Googling around, finding usernames here, piecing things together. And so all of these investigations were hampered by a lack of interagency coordination. Rather than pooling intelligence, each unit often withheld leads, hoping they could be the ones to crack the case. This fragmented approach would simultaneously prolong the manhunt and create openings for suspicious behavior. Indeed, two law enforcement agents, Carl Force, DEA, what a great name.

• 1:05:56John Coogan?

  And Sean Bridges, Secret Service, would later be indicted for misusing the case to enrich themselves.

• 1:06:02Jordi Hays?

  Wait, wasn't the IRS guy then?

• 1:06:03John Coogan?

  I don't think so. I'm not sure, but.

• 1:06:05Jordi Hays?

  I thought he got taken down as well.

• 1:06:07John Coogan?

  No, I think Gary Alfred was fine. But I mean, it was, it was like, the whole thing was just a massive chaotic. This is all just happening on the dark web and there's money flowing around Bitcoin and everyone thinks it's anonymous. It's not, but everyone thinks it is.

• 1:06:18Jordi Hays?

  And they would, they would have these meetings called de-confliction meetings.

• 1:06:21John Coogan?

  Yep, yep.

• 1:06:22Jordi Hays?

  Where they'd bring everybody together and like, some people would share information and other people would be like, I'm not going to share that. Like, this is my edge in the case. And so it's very toxic dynamic where within those types of organizations, you rank up and get more titles and comp and paid leave and vacation.

• 1:06:39John Coogan?

  Yep.

• 1:06:40Jordi Hays?

  By cracking cases. And so everybody wanted, everybody was self-interested in wanting to crack the case themselves and get credit for it.

• 1:06:48John Coogan?

  Yeah. It's always crazy to hit the numbers. It's like, he stole like $50,000. And then like, you look at the price of Bitcoin now and it's like, oh, that would have been like hundreds of billions, hundreds of millions if they had like, been able to hold on to it.

• 1:07:01Jordi Hays?

  Yeah. The other thing about, so, so law enforcement is like, starting to have this like, very like, multi-pronged, chaotic.

• 1:07:08John Coogan?

  Yeah.

• 1:07:09Jordi Hays?

  And it didn't take them that long to really start to get some real leads into him and start to put the pressure on, right? So at this time, they're creating fake identities. They're taking over, they're finding sellers. They're, they're going to sellers and they're saying, we are going to put you in prison for life for selling drugs.

• 1:07:27John Coogan?

  Yep.

• 1:07:27Jordi Hays?

  Or we'll give you a better sentence if you give us your seller account.

• 1:07:30John Coogan?

  Yeah.

• 1:07:31Jordi Hays?

  So then, then they would flip sellers.

• 1:07:33John Coogan?

  Yep.

• 1:07:34Jordi Hays?

  And then they would just be in there and they also started flipping like different moderators.

• 1:07:39John Coogan?

  Yep.

• 1:07:39Jordi Hays?

  And they also just started creating entirely new accounts where, where they would come in and be like, yeah, I'm a narco trafficker.

• 1:07:45John Coogan?

  Yeah.

• 1:07:46Jordi Hays?

  And then they would slowly develop a friendship. And there was this weird situation where to develop trust, they would have to, they would have to give him advice that.

• 1:07:57John Coogan?

  Real advice.

• 1:07:57Jordi Hays?

  Real advice. Like, you should get three passports.

• 1:07:59John Coogan?

  Yeah.

• 1:08:00Jordi Hays?

  You should get fake passports. You should be able to get to Asia. You should have a contingency plan to get here. You should split up your Bitcoin holdings so that, you know, if you get taken down here, like, you know, you'll still. And then, and then on the platform level, they had created this sort of PayPal style system, right?

• 1:08:17John Coogan?

  Yep.

• 1:08:18Jordi Hays?

  It was very effective. Every now and then a seller would build up so much selling history that they would, it's very easy for them to be like, anybody that sends Bitcoin to this address and sends me their address. So, so people would circumnavigate the platform, right? This happens with all marketplaces, right? Even on Airbnb, somebody will book an Airbnb for like two weeks and then they'll talk to the owner and they'll be like, hey, like, can I just book it through you and like save on the Airbnb fees?

• 1:08:45John Coogan?

  Yep.

• 1:08:46Jordi Hays?

  And so every now and then these sellers would, you know, there was one that happened on 420 where this certain seller was like, hey, like, you know, if you just pay me directly, like, and they had a big selling history. So everybody trusted them and they did like 250K in sales in a day and then just like gone, right?

• 1:09:04John Coogan?

  Yeah.

• 1:09:05Jordi Hays?

  So that would happen. And then Ross would be in this position where he would have, he would have all these people that were mad at him. His users are pissed at him. But he would be like, well, you circumnavigated the platform to try to save what are not crazy. The other crazy thing, so Silk Road's take rate for selling drugs during the most illegal activity is 40% lower than Substack, which sells information, you know.

• 1:09:30John Coogan?

  Is that true? Substack's not 50%?

• 1:09:33Jordi Hays?

  No, 40% lower. They, Substack's 10%.

• 1:09:35John Coogan?

  Oh, okay, 6%.

• 1:09:36Jordi Hays?

  Yeah, so Silk Road was 6.25%.

• 1:09:39John Coogan?

  And it is way lower than OnlyFans too. I think OnlyFans is like 20%.

• 1:09:42Jordi Hays?

  Yeah, it's like way, way, way. So Ross was, was so mission oriented that, that he, he really believed, you know, the part of the crypto ideals is, you know, there's these financial institutions. They have these crazy take rates. And so he's only getting double the take rate basically of Stripe.

• 1:09:57John Coogan?

  Stripe, yeah.

• 1:09:58Jordi Hays?

  And Stripe is like the most regulated, just like vanilla, like we sell SaaS, right? He's selling drugs at scale online and.

• 1:10:05John Coogan?

  Yeah, he could be taking like 30%, but he's not.

• 1:10:07Jordi Hays?

  Yeah, yeah. And he's not. And when, and, and he still had issues because the kind of people he was dealing with, you know, people that are buying small quantities of drugs online are, are probably not the most affluent crowd for the most part. So they would have issues with it. And so he keeps dealing with this stuff and he also has. I don't know, he has issues where, you know, something would happen to a seller and then the cartels would be coming to him saying like, hey, like you owe us a million dollars and he'd and then he'd be like trying to do deals with them. And so every, every marketplace founder understands that at a certain point, you have this programmatic system that you're running, right?

• 1:10:49Jordi Hays?

  Where like, you know, let's say you have Airbnb, but early days, I'm sure that the Airbnb founders would have to be talking to like one of their like listing people and being like, hey, like we gotta work this out. But in Ross's situation, he was dealing with cartels, narco traffickers, drug dealers and people buying drugs. And so it's not like they painted a picture like he's just sitting there and like he created the software.

• 1:11:14John Coogan?

  He's just writing code.

• 1:11:15Jordi Hays?

  But he would be, he at one point, he was wanting to test into product. He was encouraged by someone in law enforcement who had built up this fake identity that he was friends with. Hey, you should create the masters of the Silk Road, which was a version of Silk Road specifically for global drug cartels. And so, and, and, and so Ross worked with his team. He's like, hey, we gotta move a kilo right now. And so he was just selling drugs.

• 1:11:43John Coogan?

  Just drug dealing fully.

• 1:11:44Jordi Hays?

  He was just fully drug dealing. And, and then mass, I don't think masters of the Silk Road really took off. He also around this time, I don't know where we get to it. So he, he, he, somebody started, people would start listing weapons.

• 1:11:58John Coogan?

  Well, yeah, so I have some extra, so he, he, he kind of finds like a almost pseudo co-founder, this ally variety Jones, who offers him marketing tips, security advice, and even recommended that Ross consider violent tactics against potential threats. He, he starts thinking about all this violence and alleged murder for hire plots, which would become pivotal to the federal charges against him. And there's still some debate over whether these plots were real or entrapment. But it's really insane how fast the site grows. We, we said it started in 2011, by late 2012 and into 2013, Silk Road was grossing hundreds of millions of dollars. Dollars in transactions, its user base extended across continents and shipments were moving through postal

• 1:12:41John Coogan?

  systems at astonishing rates. Within this environment, Ross grappled with immense stress, anxious that each day could be his last as a free man. Still, he persisted motivated by profits ideology and perhaps the thrill of running a digital empire unrestrained by traditional laws.

• 1:12:55Jordi Hays?

  At this point, at this point, he's in San Francisco.

• 1:12:57John Coogan?

  Yep.

• 1:12:57Jordi Hays?

  He's living in a random apart, like he's not living, he's not living the lifestyle of Pablo Escobar.

• 1:13:05John Coogan?

  No.

• 1:13:05Jordi Hays?

  Nice houses and, you know, cars. He's living in San Francisco paying cash.

• 1:13:09John Coogan?

  Yep.

• 1:13:10Jordi Hays?

  Under a fake identity, something Terry, Terry Jones or something like that. He needs, he orders fake IDs off of the dark web.

• 1:13:19John Coogan?

  Yep.

• 1:13:19Jordi Hays?

  Off of his own website.

• 1:13:20John Coogan?

  Website.

• 1:13:21Jordi Hays?

  So he gets a handful of fake IDs. They get caught in the mail by Homeland Security. And at one point Homeland Security comes and knocks on his door and he's like, oh, it's over. Like he thought he was getting taken down and they, and they were just like, hey, like, we got these fake IDs addressed to you.

• 1:13:37John Coogan?

  Yeah. It's too small of an issue to be big for us. We just want to know more about the dark web.

• 1:13:42Jordi Hays?

  Yeah. So he's like, no, they were like, can you tell us like, we're not going to like, do anything right. We're not going to arrest you right now, but where did you get these? And he goes on record and says, there's a site called Silk Road. He can't help himself.

• 1:13:53John Coogan?

  He goes and pitching though.

• 1:13:54Jordi Hays?

  He goes and pitching on Founder Mode. He's like, well, actually there's this site you can go on called the Silk Road.

• 1:13:59John Coogan?

  It's amazing. Only 6% take rate.

• 1:14:01Jordi Hays?

  6% take rate.

• 1:14:02John Coogan?

  And use this coupon code to sign up.

• 1:14:03Jordi Hays?

  And you can add some other stuff to your cart, you know?

• 1:14:05John Coogan?

  Guns, drugs.

• 1:14:06Jordi Hays?

  Do whatever. Yeah.

• 1:14:08John Coogan?

  So he's like pitching.

• 1:14:09Jordi Hays?

  And so, and so he gets on the record at that moment, he gets, that was the first time he was in the system for committing a crime and they added basically, I don't know how it works, but they added notes to like his profile that he had talked about the Silk Road.

• 1:14:22John Coogan?

  Sure.

• 1:14:22Jordi Hays?

  Which ended up coming back to bite him later.

• 1:14:24John Coogan?

  Yeah. And so the DEA at this point is, is posing as major buyers. The FBI is focusing on these high tech methods. They find a server in, in, it is in Iceland and the, and there's a bunch of friction between the different agencies because no one really knows who's dealing with cybercrime. So Jared Dur- Der Yegian.

• 1:14:47Jordi Hays?

  That's Der Yegian.

• 1:14:48John Coogan?

  Der Yegian, who was the.

• 1:14:50Jordi Hays?

  This is the guy who's just obsessed.

• 1:14:51John Coogan?

  Yeah.

• 1:14:52Jordi Hays?

  Der Yegian had collected thousands of orders that he had personally caught.

• 1:14:56John Coogan?

  Yeah.

• 1:14:57Jordi Hays?

  And he had just been categorizing them and tracing them to different seller profiles.

• 1:15:01John Coogan?

  He was flipping the dealers to become important, uh, to get, become informants. He gleaned details about Silk Road's internal workings, including how vendors ship products. Other groups tried to ta- trace the site's IP addresses using advanced hacking techniques. At one point, the FBI exploited what have, what might have been a misconfiguration in a Silk Road CAPTCHA or login screen, gleaning a real IP address that led them to a data center in Iceland. So the whole, the whole goal of Tor is to mask the IP address and route through a bunch of different.

• 1:15:30Jordi Hays?

  Yeah.

• 1:15:30John Coogan?

  Anyone who's running a Tor server all over. So you could, if you just have spectrum or, you know, AT&T internet, you can spin up a Tor server and then you're routing random traffic constantly. And so that anonymizes things because the traffic's just going all over the place. You can't trace it all. And so anytime it goes through some random server, it comes out the other, other side randomized or disguised and it's very, very hard to track down. But they found the actual IP address because it seems like the CAPTCHA that was being rendered wasn't going through Tor. It was going through like, you know, it wasn't being anonymized properly.

• 1:16:03Jordi Hays?

  Yeah.

• 1:16:03John Coogan?

  So they figured it out. They, they, they issued the warrant.

• 1:16:06Jordi Hays?

  This is, this is, this is something that happens throughout the whole Silk Road journey is because he's a first time developer, first time founder.

• 1:16:12John Coogan?

  Rookie.

• 1:16:13Jordi Hays?

  He's just making all these.

• 1:16:14John Coogan?

  Yeah.

• 1:16:15Jordi Hays?

  Mistakes and oftentimes suffering financial losses, but the site's doing so well.

• 1:16:20John Coogan?

  Yep.

• 1:16:21Jordi Hays?

  And growing so quickly, it doesn't, the losses are offset, but the one thing that's kind of hard to make up for is getting caught.

• 1:16:27John Coogan?

  Yeah, getting caught. And so they grabbed the server from Iceland, decrypted, and it's like the database. It has all the information and then they're combing through it for clues that.

• 1:16:34Jordi Hays?

  Yeah.

• 1:16:35John Coogan?

  Could lead them to who this guy is or like how the operation works.

• 1:16:38Jordi Hays?

  Hard to flip the, whatever company in Iceland had the server.

• 1:16:42John Coogan?

  Oh, no, no.

• 1:16:43Jordi Hays?

  You get approached by US law enforcement. They're like, we believe people are committing crimes on your server.

• 1:16:47John Coogan?

  And they're just like, you just want us to copy it? Sure. No problem. Whatever.

• 1:16:50Jordi Hays?

  And that goes in, and, and to be clear, as they uncovered, they got data on all the buyers and sellers and.

• 1:17:00Jordi Hays?

  Like presumably all the transactions that had happened in Silk Road history, right?

• 1:17:04John Coogan?

  Oh, yeah.

• 1:17:04Jordi Hays?

  It's like, yeah, it was encrypted, but they were able to basically crack it.

• 1:17:09John Coogan?

  Yeah, and every escrow transaction is logged in a database because it has to, even though the, even though the blockchain might be somewhat anonymized, like it's not anonymized when it sits on the database record of the Silk Road, which they got access to.

• 1:17:24Jordi Hays?

  And so it's not like every person who had ever bought drugs or sold drugs on the Silk Road was suffered from that.

• 1:17:30John Coogan?

  Yeah.

• 1:17:31Jordi Hays?

  But if the government had wanted to, they could have gone and knocked down all the addresses.

• 1:17:35John Coogan?

  Exactly.

• 1:17:36Jordi Hays?

  Obviously, people would use fake addresses and fake names and, you know, things like that, but.

• 1:17:40John Coogan?

  Yep.

• 1:17:42John Coogan?

  And so by 2013, enough agencies had processed, enough agencies has processed enough scraps of evidence that Ross Ulbricht's identity was starting to come into focus, though they had yet to conclusively tie him to Dread Pirate Roberts. Ross, for his part, was often oblivious to the scale of the manhunt, trusting and touring Bitcoin's layers of security while continuing to manage Silk Road from cafes and libraries around San Francisco. And so the corruption scandal continues. Karl Mark Force, the fourth, and Sean Bridges of the Secret Service. What a great name.

• 1:18:12Jordi Hays?

  Mark Force.

• 1:18:13John Coogan?

  The DEA and the Secret Service is one of the most dramatic subplots here. Both men were tasked with bringing down the Silk Road, yet they exploited their positions for personal gain. Force, who operated undercover personas like Nob on Silk Road, directly interacted with DPR.

• 1:18:29Jordi Hays?

  And so Nob, Nob was basically boys with.

• 1:18:32John Coogan?

  Oh, yeah.

• 1:18:32Jordi Hays?

  He was absolute boys. Talking all day long.

• 1:18:35John Coogan?

  Yeah.

• 1:18:35Jordi Hays?

  You know, Nob would give him, this is not, Nob is the guy who'd give him advice. You should get more passports.

• 1:18:40John Coogan?

  Yeah, yeah, yeah.

• 1:18:40Jordi Hays?

  Things like that. And people were like, dude, stop giving him such good advice.

• 1:18:43John Coogan?

  And he messed up because at one point, he was, he was, he had a fake account and was chatting with Dread Pirate Roberts and was like, and it was like. It's Carl or something like that. And he was like, wait, what? And he was like, oh, Carl, Carla, like, I go by a bunch of different names.

• 1:18:59Jordi Hays?

  But that was all on, that was all on record.

• 1:19:01John Coogan?

  Yeah.

• 1:19:01Jordi Hays?

  And then was it Sean Bridges at one point that later, once Sean knew he was getting caught, he Sean was like, I will get you killed in prison.

• 1:19:10John Coogan?

  Yeah.

• 1:19:11Jordi Hays?

  He was like threatening, like, you're gonna get caught.

• 1:19:13John Coogan?

  It's all so messy.

• 1:19:14Jordi Hays?

  And so, yeah, it was basically slop on both sides.

• 1:19:18John Coogan?

  Yeah, very sloppy. And so, from Ross's perspective, these agents' manipulative activities made the Silk Road environment feel ever more treacherous. Logs released in court showed Ross confiding to trusted confidants that he suspected infiltration at every turn. He also struggled with evaluating demands for hush money or hits on suspected blackmailers. Whether Ross seriously believed in orchestrating murder for hire, or if he was cornered into entertaining the idea, is still debated. Nevertheless, chat logs indicate that Ross agreed to pay for violent solutions if it meant protecting Silk Road's anonymity and his own.

• 1:19:52Jordi Hays?

  Yeah, so this is, when I, I posted this and a lot of people are like, oh, you left out murder for hire. Obviously, on this post, I was purely talking about the business, not endorsing his actions in any way. But yeah, he, he, over the course of this 2013 era, got very comfortable with the idea of paying to get people killed. So these were people that he thought were informants, people that he thought were just generally bad actors. There's records of him ordering hits and actually negotiating the price of hits, saying, you know, being kind of frustrated with, with how expensive would something would be? And the, and the, and the person would be like, well, it's like last minute and, you

• 1:20:33Jordi Hays?

  know, it's kind of a complicated situation. And he'd be like, okay. He would be provided photo evidence of success, what he thought were successful hits. At one point, law enforcement baked one of the hits using like Campbell's soup. And they were taking and, and using like crappy phone images to like, take a picture of somebody's face, like. With like Campbell's Soup, like as if their face had been like

• 1:20:57John Coogan?

  Blown off.

• 1:20:58Jordi Hays?

  Blown off or whatever.

• 1:20:59John Coogan?

  Yeah.

• 1:21:00Jordi Hays?

  So very, very dark. Like he, he clearly at this point had, was like, living this dual life of like, he's Ross and then he's Dread Pirate Roberts.

• 1:21:09John Coogan?

  Yeah.

• 1:21:09Jordi Hays?

  And he's willing to do anything to protect the pirate ship.

• 1:21:12John Coogan?

  Yeah, exactly.

• 1:21:13Jordi Hays?

  Silk Road.

• 1:21:14John Coogan?

  Yeah. And I think we have a post here. It's probably a few deep, Ben, but this is a screenshot from Reddit. It says, are there any merits to the claims that he hired a hitman to kill friendly chemist? Someone on Silk Road who said they would leak personal info on thousands of Silk Road users unless paid 500K. I've never seen this discussed in our weekly Ross posts.

• 1:21:35Jordi Hays?

  Yeah. So this was, there was a user who hacked the server in some way. They were able to uncover quite a lot of data on like the sellers.

• 1:21:43John Coogan?

  Yep.

• 1:21:43Jordi Hays?

  And so Ross was worried that, I mean, if people realize that if you bought something on the platform and that your personal information could be exposed, then obviously it was going to really slow down sales. He's also facing competition at this time. Other sites are popping up that are doing the same thing. So he really didn't want this information to get leaked.

• 1:22:03John Coogan?

  Yep.

• 1:22:03Jordi Hays?

  And he, you know, so you

• 1:22:05John Coogan?

  And so, and so someone replies to this and says, Ross ordered hits on four to five people total. The evidence of this, the evidence that he did this is clear. No one here likes talking about this because it ruins the narrative. Now, the sentence for ordering a hit in California, if I recall correctly, is 10 years per contract. So he definitely got a harsher sentence than this, but there were other crimes he was guilty of. Not that it will save me from downvotes, but El Chapo is significantly worse than Ross. And any system that gives Chapo less time than Ross is busted. But to ignore that Ross didn't try to have people executed for doing, is doing no favors to anyone who wants to have an honest discussion about justice.

• 1:22:47John Coogan?

  And I think that's just a very interesting thing where there, there was this like big narrative. And if we go back to this debate between Matt Palmer and Joe Posting, Matt says Ross Ulbricht's work was one of the largest contributions to

• 1:23:04John Coogan?

  Harm reduction in narcotics distribution ever the systems he created removed violence from the drug trade by anonymizing and physically dislocating transactions. He almost certainly saved thousands of lives. But Joe says skeptical of this claim, the vast majority of drug trade violence is caused by production, namely, South American cartels and opium warlords in the Golden Triangle. Silk Road made retail purchases safer, but that's small potatoes next to the back end. And it's funny because, you know, it's like, yeah, he might have removed some violence, but then he added it all back by trying to commit hits. It's like, come on. It's just a ridiculous situation. But moving on, we're in mid 2013, and there are enough threads of investigation

• 1:23:46John Coogan?

  that had converged that a direct confrontation with Ross Ulbricht was inevitable. Each agency.

• 1:23:52Jordi Hays?

  So at this time, they had figured out, they had figured out a number of people. So they started with profiles. We think he's a smart guy. We think he's in America. We think he's.

• 1:24:01John Coogan?

  One of the, one of the, one of the ways they figured out was hilarious was that he, he had, he had posted something about how buying drugs on the street is dangerous. And he says something about like, those people. And so they, so they use that to justify this idea that he came from like, a white, middle-class upbringing and was not like a street guy. Because he wouldn't, he would have said like, when we buy stuff on the street, we get shot and killed. Instead, he was like, they get shot and killed. And so that, that made it clear that he wasn't like, from the, from the rough and tumble streets.

• 1:24:36Jordi Hays?

  And so at one point, he was even, he was a suspect, just based on his profile of being, you know, interested in technology and libertarianism and all this stuff. But they still were like, they actually, people didn't believe that he could have done it because he didn't fit the hacker, like, internet hacker developer archetype. Because they were like, well, he didn't study computer science. And so they had this other suspect who had run like a Bitcoin forum that was like, more of the prime suspect at the time. So, so he had some nonbelievers in law enforcement that were like, yeah, we, it could be Ross, but like, we don't think he's got that dog in him.

• 1:25:12John Coogan?

  Yeah. And so the, the main breakthrough came from Gary Alfred, the IRS agent. And he was convinced that Ross Ulbricht made a slip up early on. And so he scoured internet forums such as Bitcoin Talk.org and Shroomery.org. Going back to the earliest-

• 1:25:28Jordi Hays?

  Shroomery was where he was trying to-

• 1:25:29John Coogan?

  He posted, "Hey, anybody want to get some shrooms? Check out this website."

• 1:25:32Jordi Hays?

  No, he was like, "Has anybody bought shrooms from Silk Road?"

• 1:25:35John Coogan?

  Yeah.

• 1:25:35Jordi Hays?

  And it was him selling the shrooms.

• 1:25:37John Coogan?

  And so he reasoned that whoever created the site might have posted about it during its infancy, before it was famous enough to attract major scrutiny. And this is very funny. This actually happened in my high school. There was someone who put up a, like a cyberbullying type website. And the easiest way to figure out who was behind it, it's still like myth in my high school. But I'm convinced I know who it was because I basically traced it back to patient zero. And the first person to say anything about it was likely the person that did it. Because like, how else would it go viral? Like, it has to have somebody that introduces it. Because if a website's just up there on the internet, like, no one's going to find that. But the first person to say, "Hey, have you seen this?" That person is, you know-

• 1:26:16Jordi Hays?

  Guilty.

• 1:26:17John Coogan?

  Guilty. And I'm very convinced of this. So Alfred, this is Gary Alfred. He discovered a user named Altoid posting in January of 2011, right at the start of Silk Road, mentioning Silk Road and suggesting people check it out. Further digging reveals that the same user had made a subsequent post, looking to hire a tech specialist, leaving the email address [email protected]. This was the smoking gun Alfred had been searching for, as it linked a real-life individual to Silk Road's initial marketing efforts. While other investigators were pursuing the server's physical location, Alfred's simpler forensic analysis of publicly available posts provided a direct link to Ross.

• 1:26:53Jordi Hays?

  And so Ross had gone back to that forum. He knew he had kind of messed up. And so he changed the email-

• 1:27:00John Coogan?

  Yeah.

• 1:27:00Jordi Hays?

  -on that account to a fake email.

• 1:27:02John Coogan?

  Yeah, but you can see the change.

• 1:27:03Jordi Hays?

  But then the, you can see the change. And then the name he used for the fake email ended up being the same name he used to name the server. So he had some, he liked the name Frosty.

• 1:27:12John Coogan?

  Yeah. And so at this point, they, they were definitely suspicious of Ross, but they needed to catch him red-handed, logged in as the Dread Pirate Roberts on his laptop, if they hoped to secure a watertight prosecution. And detective work in the digital age can hinge on human error. The Altoid handle and the Gmail address turned out to be one of Ross's biggest mistakes. An unintentional breadcrumb left behind before the Silk Road's success.

• 1:27:39Jordi Hays?

  One thing I'll note here, this is just speculation, but he, his girlfriend at one point said that he was a big marijuana fan. I think he admitted to it at different points as Dread Pirate Roberts. And marijuana is a performance decreasing drug. Makes people forgetful, it makes people anxious and all these things. And so imagining him as a first time developer, high all the time, trying to, you know, committing crimes at scale. And again, I respect the libertarian view that says, well, nothing he's doing was wrong. But he was committing crimes by way of our legal system.

• 1:28:19Jordi Hays?

  And so imagining him just like hanging around San Francisco, smoking pot, like being a narco trafficker. It's like not a, you know, it's inevitable. There's other people that would have made it like seven years, eight years, nine years, 10 years. There's, there's narco, like real narcos that make it 30 years.

• 1:28:38John Coogan?

  Yeah, they buy soccer teams.

• 1:28:39Jordi Hays?

  Yeah, yeah.

• 1:28:40John Coogan?

  Mansions.

• 1:28:41Jordi Hays?

  They get presidents elected.

• 1:28:42John Coogan?

  Yeah, it's crazy.

• 1:28:43Jordi Hays?

  So it's actually wild to think about if he had maybe not as intensive marijuana habit or gone and went to Russia or something like that.

• 1:28:52John Coogan?

  Totally.

• 1:28:52Jordi Hays?

  There's a world where he would have become like a Bitcoin, you know, 100 billionaire. Like one of the wealthiest, most like, you know, influential people in the world and could have been out of reach in many ways.

• 1:29:03John Coogan?

  Totally, yeah. It is so funny that he, you know, his whole philosophy was, was based on this idea of like, drugs aren't this gateway. Nothing bad can happen if you start doing a lot of drugs. And then he is the best case study for drugs ruining your life. Drugs completely ruined his life. Started doing drugs, then started selling drugs, then started trying to get people killed, then got massively arrested and thrown in jail for a decade. It's like, yeah, drugs were not good for you, Dip Bro. Like calm down. And so as the law enforcement officials homed in on Ross Ulbricht, they began careful physical surveillance. His whole laptop was heavily encrypted and he had a single button

• 1:29:46John Coogan?

  that if he pushed it, it would lock and encrypt the hard drive. So even if you got access to it, you couldn't access it without a password. They had no way to guess the password. It would take a computer millions of years to decrypt that or hundreds of years to force the decryption. Although maybe it's faster now, who knows? But at the time, they were very worried and they were like, we have to get him while his hands are on the keyboard or hands off the keyboard, but he's still logged in. And so they were excited about the idea that he kept working in public spaces because they could stage an unexpected confrontation.

• 1:30:17Jordi Hays?

  It's just the irony here of him in another reality, he would have been in Y Combinator just absolutely crushing it on some like normal business. And so he would have been in these coffee shops in San Francisco at the explosion of the sharing economy and mobile. And he would be sitting next to people that, you know, it's not unlikely that some like very well-known founders today like were in the same coffee shop, right?

• 1:30:44John Coogan?

  Totally, totally.

• 1:30:45Jordi Hays?

  The craziness of doing this all like from the epicenter of tech.

• 1:30:49John Coogan?

  I mean, I lived in San Francisco when this happened. And I would go to this library. I would go to the San Francisco Public Library. I actually worked out of there a few times. And so on October 1st, 2013, Ross Ulbricht walked into the Glen Park branch of the San Francisco Public Library, sat down and opened his laptop. Unbeknownst to him, undercover agents sat nearby. Agents orchestrated a ruse where one undercover officer posed as a feuding couple, creating a minor commotion to divert Ross's attention. As Ross turned his head, other agents sprang from behind, grabbing his laptop before he could even move to close the lid. The narrative of the takedown is cinematic. Ross is stunned, half standing, and as FBI pushes him back into his seat and secures arms.

• 1:31:33Jordi Hays?

  To visualize this, a male and a female agent start yelling and like pushing each other. He looks over.

• 1:31:42John Coogan?

  And then, and then

• 1:31:42Jordi Hays?

  And then they just take his laptop.

• 1:31:44John Coogan?

  Yeah, yeah, yeah. It's literally a woman who's an agent, just sits right across the table and just is like, pull this away, don't touch anything.

• 1:31:50Jordi Hays?

  And so it has it open.

• 1:31:51John Coogan?

  Has it open.

• 1:31:51Jordi Hays?

  And so they immediately, what they do is they take it, they take it and they rush it to a van outside. But like, imagine like you're like trying to keep your computer from going to sleep.

• 1:31:59John Coogan?

  Oh, yeah, yeah. That's what they're doing.

• 1:32:00Jordi Hays?

  And so they're making sure they're moving the mouse.

• 1:32:02John Coogan?

  Move the mouse, move the mouse.

• 1:32:02Jordi Hays?

  And so for the next like 10 hours, they just sit there like moving the mouse and like downloading all of the data off the computer. And like backing it, I think they backed it up like nine times in nine different ways.

• 1:32:12John Coogan?

  Yeah.

• 1:32:12Jordi Hays?

  And you could imagine, because, because when they, when after, we'll, we'll talk about this in a bit, as they go to prosecute him, the, the, um, defense's main defense is that it wasn't Ross.

• 1:32:25John Coogan?

  Yeah, yeah, yeah.

• 1:32:25Jordi Hays?

  That's their main thing. They were like, some, the real Dread Pirate Roberts framed him. They put all this evidence on his laptop. But they obviously caught him.

• 1:32:34John Coogan?

  Yeah, literally red handed, yeah.

• 1:32:36Jordi Hays?

  With the, with, uh,

• 1:32:37John Coogan?

  And it's like, if there was like some sort of like screen sharing software where, yeah, okay, maybe, maybe he was just using his computer and then the real Dread Pirate Roberts was like, you know, putting evidence on there, there would be evidence of that software.

• 1:32:51Jordi Hays?

  But, but they tracked him so many times where they would be physically viewing him. He's typing.

• 1:32:55John Coogan?

  And it'd be like, he logs on.

• 1:32:56Jordi Hays?

  Cause they had, they had moles on the Silk Road team. So they had like, law enforcement was being paid to work for the Silk Road. And so they would see when he logged on, he'd be typing and they would be recording all of this where they'd be watching him typing.

• 1:33:10John Coogan?

  Yeah.

• 1:33:11Jordi Hays?

  And Dread Pirate Roberts is typing. And so it was kind of a tough, uh, argument to make, even though law, you know, various members of law enforcement were committing their own heinous, uh, crimes. Uh, it's sort of difficult to defend.

• 1:33:25John Coogan?

  And related to that, uh, we have a post from Sam Parr. He did a podcast on Ross Ulbricht, the founder of Silk Road, and he says, He admitted to creating the Silk Road, but said he sold it to a new owner and they're the ones who did the murder for hire. What do you think? Was Ross the owner the entire time or an order to murder for hire or no? Why? And Anthony J. Descenzo says, of course, he owned and operated it the entire time. He admitted to creating the Silk Road at the beginning and was caught red handed working on the administration page at the ending. Follow his Bitcoins from start to finish.

• 1:33:58Jordi Hays?

  And he had tried to, he told his girlfriend once that he was no longer running it. Then she walked in on him after like they were hanging out.

• 1:34:05John Coogan?

  There's just so much evidence. It's so clear.

• 1:34:07Jordi Hays?

  And then, and then later, he even had this crisis on the platform where he, he made a post where he's like, I'm going to change the way I talk so that it's less obvious who I am. And then everybody was like, got really mad at him. They were like, wait, like, is this safe to use now? Like, did they flip him or something like that?

• 1:34:25John Coogan?

  Yeah. So in the days following his arrest, the global community of Silk Road users found themselves in disarray. Vendors, buyers and administrators scrambled to figure out whether their personal identities had been compromised because as part of the onboarding process to work for the Silk Road, you would have to send him a photo of your real driver's license. And it was kind of this like getting sworn in into the secret society. There was panic over Bitcoin funds held in escrow, which now seemed out of reach. People posted frantic messages on the dark web, some lamenting the loss of their livelihood. Oh, it's terrible. You know, you build a drug, a drug business and it just goes up in smoke one day. Others questioning whether the Dread Pirate Roberts persona might somehow live on. Law enforcement officials. Also, it's like, if there was a real Dread Pirate Roberts, who his fall guy

• 1:35:09John Coogan?

  gets busted, why wouldn't he just keep operating the site?

• 1:35:11Jordi Hays?

  Make a new fall guy.

• 1:35:12John Coogan?

  Or like make a new thing. Yeah, just, just.

• 1:35:14Jordi Hays?

  But yeah, you can think about it. So at this point.

• 1:35:16John Coogan?

  Or even just move the Bitcoins to something else.

• 1:35:18Jordi Hays?

  At this point, they're doing hundreds of millions of volume a year.

• 1:35:20John Coogan?

  Yeah.

• 1:35:21Jordi Hays?

  And you could imagine at any one point, there's, I don't know, an S, a very rough estimate would be a hundred million dollars of like drugs, like changing hands. And so that, that was quite a lot of money that was just locked up in escrow at this time that was clearly, the Silk Road team had to be the team that would approve when, you know, the, the recipient would say, yes, got it.

• 1:35:44John Coogan?

  Yep.

• 1:35:44Jordi Hays?

  Then they would approve, you know, the payout.

• 1:35:47John Coogan?

  Yeah, and so afterwards, after the arrest, law enforcement officials lauded the arrest as a significant victory in the war on cybercrime. Politicians who had long criticized Silk Road took credit for pushing agencies to shut it down. Mainstream media coverage exploded with headlines labeling Ross as everything from a brilliant hacker to a modern day outlaw. The sensationalism surrounding the kingpin moniker overshadowed the complexities of Ross's motivation. He was painted as a cold-blooded trafficker who profited off of addiction and despair. I think that's probably correct. His friends and family were stunned.

• 1:36:21Jordi Hays?

  He definitely was cold-blooded. He was able to separate the nice guy, Ross, who had a loving family, from, he embodied, fully embodied the Dread Pirate Roberts.

• 1:36:34John Coogan?

  Yeah, I wonder if there's anyone that gets to this level that isn't cold-blooded, though. It's like, it's kind of a prerequisite.

• 1:36:38Jordi Hays?

  Every C, every C, every billion dollar, every unicorn CEO that I know, even the ones that are nice, you can tell.

• 1:36:45John Coogan?

  Ice in their veins.

• 1:36:46Jordi Hays?

  Ice in their veins, yeah.

• 1:36:49John Coogan?

  Meanwhile, the government's forensic teams sifted through the trove of data from Ross's computer. They discovered personal diaries, chat logs between Dread Pirate Roberts and administrators, and spreadsheets detailing profits. The data portrayed a person intimately involved in day-to-day operations, from vendor disputes to strategies for dating law enforcement.

• 1:37:09Jordi Hays?

  You could just call that drug arguments.

• 1:37:10John Coogan?

  It's just like, how to evade the government, federal, the IRS.txt. How to beat the secret service.

• 1:37:17Jordi Hays?

  Yeah, that was a big part of this. He was not living this high life because he had all this Bitcoin, but he couldn't really figure out a way to get it off-chain.

• 1:37:25John Coogan?

  Yeah. It was clear that Ross faced a battery of charges: money laundering, computer hacking, drug trafficking, conspiracy to commit murder. The last charge stemmed from his suspected willingness to eliminate threats to Silk Road's anonymity, whether or not actual violence occurred. Federal prosecutors used the chat transcripts to argue that Ross was willing to orchestrate killings. As the immediate chaos settled, the case moved toward a long legal process that would captivate the public and set legal precedents about dark web marketplaces. And so, the-

• 1:37:58John Coogan?

  The defense strategy, the legal defense strategy for Ross focused in on a few key ideas wrongful identification. They argued that Ross wasn't the true Dread Pirate Roberts and that the real DPR had set him up. Reliability of evidence. They questioned whether the laptop data could have been tampered with, especially considering corruption charges.

• 1:38:20Jordi Hays?

  That's a, because of how corrupt many members, not many, but at least two.

• 1:38:25John Coogan?

  Carl Force and Sean Bridges.

• 1:38:26Jordi Hays?

  Carl Force.

• 1:38:27John Coogan?

  It's like, yeah, maybe there was something weird going on.

• 1:38:29Jordi Hays?

  Yeah, and they were encouraging him to do things that were, like, that was a whole, like, I think it was Nob who would be like, yeah, you should take this guy out.

• 1:38:39John Coogan?

  Oh, yeah, they definitely pushed him on that.

• 1:38:41Jordi Hays?

  And law enforcement helped, they helped him.

• 1:38:44John Coogan?

  Yeah.

• 1:38:45Jordi Hays?

  They were involved with helping fake these sort of murders as well.

• 1:38:50John Coogan?

  Yeah, and so they wound up not convicting him of that, but it definitely like set the tone of the trial and kind of get people out of this mindset of like, he just built a website. It's like, he built a website and maybe he did this other stuff. We're not even going to push him on that, but it like threw everything else.

• 1:39:05Jordi Hays?

  Maybe he did a few things that didn't scale, but it also is interesting. It would have been sort of, I imagine untenable if he was convicted on the murder for higher stuff to actually get pardoned. So that small detail, I think it doesn't seem like Trump knows his actual name, but I imagine there would have been much more pushback if he had been actually convicted of murder.

• 1:39:28John Coogan?

  So look at this digital diary. There's an excerpt in here that says, "I'm doing about $2 million a week in sales now." They also had logs with references to specific violent acts that Ross had allegedly considered, or at least verbally agreed to pay for.

• 1:39:42Jordi Hays?

  Yeah, and so he had sent $750,000 of money to fund hits. So he was paying for the hits. They weren't happening.

• 1:39:56John Coogan?

  So he pleads not guilty and there's a public trial. His mother becomes a tireless advocate for his cause. They argued that the government was making Taking an example out of him, which I think is probably true, since this was like the first major cybercrime, uh, deep web case.

• 1:40:13Jordi Hays?

  Yeah.

• 1:40:14John Coogan?

  And, and, and if they didn't throw the book at him, there would just be a million more.

• 1:40:17Jordi Hays?

  And there was super, like, there was Gawker articles.

• 1:40:20John Coogan?

  Yeah, exactly.

• 1:40:21Jordi Hays?

  It became mainstream, for sure. And so it's very embarrassing to law enforcement to have

• 1:40:25John Coogan?

  Yeah.

• 1:40:26Jordi Hays?

  A website that anybody can

• 1:40:27John Coogan?

  Yeah.

• 1:40:27Jordi Hays?

  Go to, to buy.

• 1:40:28John Coogan?

  Yep.

• 1:40:29Jordi Hays?

  That's, if law enforcement can log in and view it, and regular, like, a high school kid can do it, and some, you know, grandma can do it.

• 1:40:36John Coogan?

  Yeah, it's just such a violation of, like, the, the social contract.

• 1:40:40Jordi Hays?

  Yeah.

• 1:40:41John Coogan?

  Uh, in the, in the, in the end, the case would be resolved in the public eye with Ross heading to trial, January of 2015, a date that would not only decide his fate, but set a precedent for the future of dark web marketplaces. The trial took place in New York, in Manhattan Federal Court, presided over by Judge Catherine Forrest. It was a high profile, profile case, and the courtroom was often packed with journalists, curious onlookers, and Ross supporters.

• 1:41:04John Coogan?

  The atmosphere was tense. The prosecution maintained a mountain of files, uh, presented a mountain of files taken from Ross's laptops.

• 1:41:11Jordi Hays?

  This was part of the challenge for the defense, is there was like six terabytes of data that they were, like, using against him, and so they're like, they're like, yeah, like, we're gonna use all of this against you, like, good luck. One other thing he benefited from is he had tried to set up a Silk Road armory.

• 1:41:28John Coogan?

  Oh, yeah.

• 1:41:29Jordi Hays?

  But it totally flopped.

• 1:41:30John Coogan?

  Yeah, yeah, yeah.

• 1:41:30Jordi Hays?

  You know, like, you know, sometimes you hit PMF with one thing.

• 1:41:33John Coogan?

  Side project.

• 1:41:34Jordi Hays?

  Uh, he, he realized that it was, like, much harder to, like, send guns in the mail.

• 1:41:38John Coogan?

  Oh, yeah, totally.

• 1:41:38Jordi Hays?

  But he was trying to sell, I think you could buy explosives on the Silk Road.

• 1:41:42John Coogan?

  Grenades, and you can buy fully automatic weapons.

• 1:41:44Jordi Hays?

  Which is just like, even, even I think that gave Ross some pause around, you know, that, the.

• 1:41:49John Coogan?

  Yeah, thi- this was the libertarian thing that always got, got to me. It's like, he, he would argue that, you know, I am willing, uh, I'm, I'm willing to consent to sell drugs, you're willing to buy drugs, therefore, the government has no say in that. But the, there's always this question of, like, negative externalities, and what, what got to me was like, well, at, at a certain point, you were selling, like, cyanide, and

• 1:42:13Jordi Hays?

  Yeah.

• 1:42:13John Coogan?

  And, and also, it's like, okay. Even if that's not bad between the two parties, what about the UPS guy that has to carry that?

• 1:42:21Jordi Hays?

  Yeah.

• 1:42:21John Coogan?

  Did they opt into that?

• 1:42:22Jordi Hays?

  So if explosives are going into the mail.

• 1:42:24John Coogan?

  Yeah, it's like, oh, I'm just a FedEx driver and now I have to carry grenades? Like, I didn't opt into that. Like, in your libertarian philosophy, I don't consent to that.

• 1:42:33Jordi Hays?

  Libertarianism seems to work if you had a private island.

• 1:42:36John Coogan?

  Yes.

• 1:42:37Jordi Hays?

  And everybody there is there by their own.

• 1:42:39John Coogan?

  Epstein joke.

• 1:42:40Jordi Hays?

  I mean, like, I mean, basically going there.

• 1:42:43John Coogan?

  Yeah, no, no, it's totally.

• 1:42:44Jordi Hays?

  When your actions are affecting other people that are participating in a society that has agreed to have certain laws.

• 1:42:50John Coogan?

  Yeah, you never think about the negative externality of, okay, you brought these drugs in and then the drug dealers on the street and commits violence because of this. Or you're funding a, like, it's always just, let's look at just the one, the one's micro interaction and not consider the knock-on effects. And that's why we have like an actual society and societal contract. And so the government witnesses included law enforcement agents who had participated in Silk Road investigations. Ross's defense contended that he was set up. Friends testified to his peaceful nature, pointing out how out of character it was for him to order violence or run a massive drug site. Over the course of three weeks, jurors were presented with a dizzying array of digital exhibits, as you mentioned, six terabytes or something like that, IP addresses, chat

• 1:43:35John Coogan?

  logs and email addresses. And on February 4th, 2015, after only a few hours of deliberation, the jury returned a guilty verdict on all seven counts, including narcotics trafficking, computer hacking, money laundering, and maintaining an ongoing criminal enterprise.

• 1:43:50Jordi Hays?

  Yeah, and so, to be clear here, this was like three weeks. It was not the kind of trial that stretches on for months and months or years. It was like very quick and the deck was certainly stacked against him, right? He had all these different agencies that were, and there was so much evidence.

• 1:44:08John Coogan?

  Yeah. And when you think about other, other trials, it's like, well, Yeah, like maybe they got some photos or something, or maybe they kicked down a door and they found someone with something, but it's all, there's always this question of like, oh, was it planted? But when you, when you show someone six terabytes of like, okay, we got his computer, he's, his hands are on the keyboard.

• 1:44:27Jordi Hays?

  He was logged into this profile.

• 1:44:28John Coogan?

  He was logged in. It's a lot harder to, to paint the, you know, the

• 1:44:32Jordi Hays?

  Yeah, and even, even this is why they, it ends up being really hard for law enforcement to pin down traditional narcos. They get them on money laundering and things like that.

• 1:44:42John Coogan?

  Yep.

• 1:44:42Jordi Hays?

  Or wire fraud, you know, this stuff that's like unrelated to

• 1:44:46John Coogan?

  Was Al Capone went down for tax evasion, not drug trafficking?

• 1:44:49Jordi Hays?

  And it's because it's really hard, especially the, Ross was able to build a massive enterprise quickly because of the internet.

• 1:44:57John Coogan?

  Yep.

• 1:44:57Jordi Hays?

  But he also generated a massive amount of data related to that activity. And a narco, you know, you have like, you know, them on like a radio, you know, talking or whatever. There, you know, there's less of, a lot of narcos, at least in Mexico, have like regular businesses too, that they're talking about, right?

• 1:45:15John Coogan?

  Yeah, yeah.

• 1:45:16Jordi Hays?

  And so, not the same amount of evidence.

• 1:45:18John Coogan?

  So sentencing happens a couple of months later, May 29th, 2015, Judge Catherine Forrest sentences him to two life sentences plus 40 years. And because it's a federal case, there's no possibility of parole. So he is truly screwed. And this was one of the, it was significantly harsher than typical sentences for nonviolent drug offenses, especially given his age, 31 at the time.

• 1:45:40Jordi Hays?

  Which is like

• 1:45:41John Coogan?

  It's not that young, but

• 1:45:43Jordi Hays?

  The whole 30, you know.

• 1:45:46John Coogan?

  He was young. He did this in his twenties, but he wasn't a teenager who was like

• 1:45:50Jordi Hays?

  His prefrontal cortex was developed.

• 1:45:53John Coogan?

  Fully developed, yeah.

• 1:45:53Jordi Hays?

  Developed, and he had a good five-year run with a full cortex.

• 1:45:57John Coogan?

  Full cortex.

• 1:46:00Jordi Hays?

  Full cortex mode.

• 1:46:01John Coogan?

  Yeah. And so

• 1:46:02Jordi Hays?

  But he was, he was smoking pot. They should have included that.

• 1:46:05John Coogan?

  Yeah. Ross appealed the decision, and this outcome underscored the US justice system's stance on dark web marketplaces, an uncompromising approach that signaled to future clandestine operators that they too could face the rest of their lives in prison. And we didn't really see a replacement pop up very quickly. It was, it was pretty, it was pretty, I think it was effective.

• 1:46:27Jordi Hays?

  I don't know. I Well, the dark, I mean, many of these transactions like still occur on the dark like I think.

• 1:46:34John Coogan?

  I can't tell you.

• 1:46:35Jordi Hays?

  But there's not a brand name. Two, two point oh, oh, just go right here. Any, I think historically, anytime a drug has become a brand name.

• 1:46:43John Coogan?

  Yeah.

• 1:46:43Jordi Hays?

  They get taken down, right?

• 1:46:44John Coogan?

  Sure.

• 1:46:45Jordi Hays?

  And so like, that's why when you think about, okay, billions of dollars a year of cocaine gets consumed in the US.

• 1:46:51John Coogan?

  Yep.

• 1:46:51Jordi Hays?

  There's no brand that you can think of, right?

• 1:46:53John Coogan?

  Sure.

• 1:46:53Jordi Hays?

  And as soon as you tie a brand to it, then there's like, well, now we can start tracing this and it, so it's just like.

• 1:46:58John Coogan?

  Colombian cocaine.

• 1:47:00Jordi Hays?

  Yeah, like that's sort of, yeah, yeah, it's sort of, that, that one's more obvious.

• 1:47:04John Coogan?

  Yeah.

• 1:47:04Jordi Hays?

  But yeah, I imagine that this way more volume happens now. It's just not these sort of brand name marketplaces, right?

• 1:47:11John Coogan?

  Yeah.

• 1:47:11Jordi Hays?

  Silk Road was the DoorDash.

• 1:47:13John Coogan?

  It really was.

• 1:47:14Jordi Hays?

  Or the Uber of hits.

• 1:47:16John Coogan?

  It was crazy.

• 1:47:16Jordi Hays?

  You know, whatever you wanted.

• 1:47:17John Coogan?

  And so Carl Force and Sean Bridges, um, after the, after the Ross conviction, the scandal emerges and they get sentenced to six and a half and six years. And then more when further misconduct was discovered. And so, uh, they go to jail for, uh, stealing a bunch of money and basically they're not, not doing their job at all. Meanwhile.

• 1:47:40Jordi Hays?

  Well, it's a weird thing. They were trying to catch him, but they were also trying to make, you know, a buck in the process.

• 1:47:47John Coogan?

  Yeah.

• 1:47:47Jordi Hays?

  Weird thing.

• 1:47:49John Coogan?

  And so, uh, it goes on, but let's move. So that was, let's see, 2015. In 2016 to 2017, he, uh, Ross Ulbricht appeals his conviction to the US Court of Appeals, asserting evidence was tainted by law enforcement corruption. But the court upheld the guilty verdict. In May of 2017, the Second Circuit of New York reaffirms Ross's life sentence, reasoning that the massive scope of Silk Road justifies an exceptionally harsh penalty. In 2018, June 28th, the US Supreme Court declines to hear Ross's final appeal, effectively exhausting his direct legal avenues for overturning the conviction.

• 1:48:29John Coogan?

  Lynn Ulbricht during this time, 2015 onward, uh, spearheads the Free Ross Movement nationwide, championing her son's cause.

• 1:48:36Jordi Hays?

  And Lynn is a cracked marketer.

• 1:48:38John Coogan?

  Cracked, absolutely.

• 1:48:39Jordi Hays?

  She went to town.

• 1:48:40John Coogan?

  Yep.

• 1:48:41Jordi Hays?

  For her son.

• 1:48:42John Coogan?

  And so in December of 2021, the Ulbricht family auctions Ross's writings and artwork as NFTs online, raising millions through the decentralized organization Free Ross DAO to support continued legal efforts. In 2021 to 2022, a stash of over 50,000 stolen Bitcoin from the Silk Road is seized by the US government and Ross relinquishes any claim to help satisfy his $183 million restitution order. And in 2024, Pirate Wires reported on April 2nd that the US government has moved roughly $2 billion in Bitcoin confiscated from Silk Road to what's reported to be a Coinbase wallet per CoinDesk.

• 1:49:24Jordi Hays?

  Yeah, and everybody's like, are they gonna market sell this?

• 1:49:27John Coogan?

  Are they gonna sell this? Everyone's worried. And so in May of 2022, Congressman Thomas Massey calls publicly in the House of Representatives for Ross's commutation, viewing the life sentence as a grave injustice beyond appropriate punishment.

• 1:49:42Jordi Hays?

  Yeah, and to be clear, to be clear, it is a bad precedent that law enforcement agencies can commit a bunch of their own crimes in the effort to take somebody down. And then still, if they get, like, it is a terrible precedent, right? We want to live in a society, ideally where nobody, a vibey libertarian utopia where nobody's like hurting each other. But then if one person commits a crime, it doesn't justify another person to commit crimes in order to take that person down. And so many, while we both believe that many of the things that he did were net negative and bad, it is, you know, the people on the other side of that that don't believe he did anything

• 1:50:27Jordi Hays?

  wrong, they also have a, you know, I don't necessarily think they have a good point there. They do have a point that it's a bad precedent that. You know, law enforcement should be able to commit crimes and then still, you know, deliver this like, you know, very intense sentencing.

• 1:50:42John Coogan?

  Yeah. And so let's go through some of the more recent facts about the, how we got to the pardon. In May of 2024, Donald Trump promises that he will pardon Ross on day one, swaying libertarian-minded voters and crypto enthusiasts. In June of 2024, RFK Jr., running for president, similarly vows in a public statement to grant Ross a pardon. In November, Chase Oliver, the Libertarian Party's presidential nominee-

• 1:51:10Jordi Hays?

  RFK spotlight, wanted to spotlight Silk's, Silk Road's role in pioneering cryptocurrency, which is kind of like, everybody's like, really just trying to lean into the market.

• 1:51:20John Coogan?

  For sure. Libertarian Party's presidential nominee reaffirms in Reason Magazine that a full pardon aligns with fundamental libertarian principles, kind of debate that. And then on January 21st, 2025, President Donald Trump signs a full and unconditional pardon from the Oval Office, fulfilling his campaign pledge.

• 1:51:40Jordi Hays?

  And so, the crazy thing about this is like, imagine you're Ross, you're in jail for a decade.

• 1:51:46John Coogan?

  Yeah.

• 1:51:47Jordi Hays?

  Trump gets elected, signs a doc, 48 hours later, you just walk out of prison.

• 1:51:52John Coogan?

  Yeah, you're free.

• 1:51:53Jordi Hays?

  And that's why I felt like this was a, I wouldn't have wanted to cover this story at all.

• 1:51:59John Coogan?

  Yeah.

• 1:52:00Jordi Hays?

  A month ago.

• 1:52:01John Coogan?

  Yeah.

• 1:52:01Jordi Hays?

  Cause it was just purely dark. It's like, okay, he committed a bunch of crimes, now he's life in jail. Yes, he was-

• 1:52:07John Coogan?

  Now he's off to Sand Hill Road.

• 1:52:08Jordi Hays?

  From a business standpoint, yeah, now he's, now he's, he's taking it on the road. No, and there's rumors that, that he's still worth, you know, presumably-

• 1:52:18John Coogan?

  Yeah. It seems like he might've had a second or third Bitcoin wallet that was not seized. And so he might, he might've come out with a lot of wealth.

• 1:52:24Jordi Hays?

  Yeah.

• 1:52:25John Coogan?

  Which would be fascinating. And I think

• 1:52:27Jordi Hays?

  He was forced to hold it.

• 1:52:28John Coogan?

  Yeah, yeah, yeah. Ultimate hodler. Ultimate hodler. And so Ross, now free, speaks across the US about prison reform, cybersecurity and the lessons of Silk Road, aiming to reshape his legacy in the libertarian movement. And he's pardoned and living under close public scrutiny, continues to champion libertarian advocacy and prison rehabilitation efforts. So it'll be interesting to see, once he actually does like the Joe Rogan style interview or the Lex Friedman, like the full story. I am interested to hear his side of this. I wonder-

• 1:53:00Jordi Hays?

  I would be surprised if he doubles down and says I wasn't the PR.

• 1:53:04John Coogan?

  That would be interesting. Does he need to do that if he's being pardoned? He doesn't need to-

• 1:53:07Jordi Hays?

  No, he doesn't need to do that. So if he does do that, that would be, and then he's able to prove like through some crazy thing, which I, which I don't believe.

• 1:53:14John Coogan?

  Yep.

• 1:53:15Jordi Hays?

  The main thing, my main takeaway is this guy is a goaded operator.

• 1:53:21John Coogan?

  That's true.

• 1:53:21Jordi Hays?

  Like clearly, like he benefited from some luck and timing and was like this missionary founder, but, but self-taught developer, first time CEO, bootstrapped, zero to a billion in sales, very, very profitable the entire way, operating a remote team.

• 1:53:38John Coogan?

  Yep.

• 1:53:38Jordi Hays?

  He has clearly is very powerful.

• 1:53:40John Coogan?

  In some ways he's-

• 1:53:41Jordi Hays?

  He's got insane aura.

• 1:53:42John Coogan?

  Yeah.

• 1:53:43Jordi Hays?

  And if he uses that for good.

• 1:53:44John Coogan?

  It could be very good.

• 1:53:45Jordi Hays?

  It could be very good.

• 1:53:46John Coogan?

  In some ways, he's, uh, he's playing the game on hard mode in the sense that, as you mentioned, he can't talk about people, you know, he can't talk to anyone about his business. He can't, you know, get, you know, public investors or advisors or anything. But on the other side, he is selling the most addictive and product that just has immense pull from the market because it's illegal. And so-

• 1:54:10Jordi Hays?

  Yeah.

• 1:54:11John Coogan?

  I don't know how much credit you actually want to give him. Let's go through some more posts. We got Captain Nemo says Silk Road's historical importance is still underrated. Uh, I thought that was, I thought that was interesting from 2022. This is well before the pardon. And there's another post from Captain Nemo in here, uh, 2022 says, "The ultimate tech anon moment was when Forbes did an interview with the Dread Pirate Roberts, the anonymous founder of Silk Road, at the height of Silk Road's- When multiple federal agencies were trying and failing to track him down. It's so funny that he did an anonymous interview successfully with Forbes because it's like now, you know, Bef Jezos can't stay undoxed.

• 1:54:48Jordi Hays?

  Yeah.

• 1:54:49John Coogan?

  And like, you know, can't do an interview.

• 1:54:50Jordi Hays?

  Yeah.

• 1:54:50John Coogan?

  Without getting doxed and this guy was able to to stay anonymous while appearing in Forbes.

• 1:54:56Jordi Hays?

  Yeah, one of our, one of, one note, a friend of the show,

• 1:55:02Jordi Hays?

  Lone Ranger says Donald Trump paved the way to be to the White House as a quote unquote convicted felon, giving Ross a clear path to a presidential run in the future. Ross, who turned 40 in prison, is now old enough to run for president and could be the first libertarian president if elected. So that's a stretch to me.

• 1:55:19John Coogan?

  It's a joke, but it's one of those things where it's like, maybe.

• 1:55:22Jordi Hays?

  But, but the oftentimes the most entertaining.

• 1:55:25John Coogan?

  Outcome is the most likely. I agree.

• 1:55:26Jordi Hays?

  And I.

• 1:55:28John Coogan?

  Yeah.

• 1:55:28Jordi Hays?

  It does feel like not totally out of like if, if Ross's goal is to create a libertarian utopia. United States is awesome. It would be a great place to be a true utopia. And if that's what he believes, now he's got a few hundred million bucks, he can finance a campaign, you know?

• 1:55:45John Coogan?

  I will be campaigning against him. That's all I can say.

• 1:55:47Jordi Hays?

  Yeah.

• 1:55:49John Coogan?

  We need law and order.

• 1:55:50Jordi Hays?

  Law and order.

• 1:55:52John Coogan?

  Captain Nemo continues and says, more recently, he posted this January 21st when Ross was pardoned. Hard to overstate how impactful it was to be a young, earnestly curious student when Ross Ulbricht was running Silk Road as the Dread Pirate Roberts, operating a completely illegal digital bazaar openly for years, despite every effort to stop it by the most powerful nation state ever. Massive Hensonian view quake viscerally opened my eyes to technology's power to reshape existing power dynamics and sow the flow of history for better or worse.

• 1:56:24Jordi Hays?

  Yeah.

• 1:56:24John Coogan?

  And I think that's super interesting to think about how powerful the internet and this new technology was that even though it was only two years and he did get shut down. He went on a generational run and was able to actually do this thing that no one else was able to do purely because of technology.

• 1:56:40Jordi Hays?

  Crypto for a long time was looking for use cases outside of Bitcoin being digital gold.

• 1:56:46John Coogan?

  Yep.

• 1:56:46Jordi Hays?

  Meme coins being speculation and other activities. And the most obvious use case outside of digital gold that had the craziest product market fit was the Silk Road, right?

• 1:57:02John Coogan?

  Yep.

• 1:57:02Jordi Hays?

  But no crypto VC could be like, oh, look, look what's possible. Like, this is the potential of crypto because there was just like a thousands of crimes being committed a day, you know, at scale.

• 1:57:15Jordi Hays?

  But and it's funny because everybody that was, if all the people that had just been, you know, committing crimes with BTC, early days of Silk Road, if they had just bought and held, they'd all be millionaires because they'd be using like 20 Bitcoin to buy like one pill.

• 1:57:32John Coogan?

  Yeah.

• 1:57:32Jordi Hays?

  So that was like an expensive night on the town, you know?

• 1:57:36John Coogan?

  Yeah, the stories around Bitcoin have evolved so much, like version one was this, we've used math to solve the general's problem. And it's going to be decentralized and not controlled by the government and perfectly anonymous. And then a lot of those stories kind of eroded and it became just this crime money, basically. And then it somehow made it through that and just became digital gold. And now, and then there were new narratives around, oh, there'll be all these like games and metaverse built on top of it. And then that kind of melted away. And now it's prediction markets and meme coins and digital gold and just kind of a store of value.

• 1:58:17John Coogan?

  But it's interesting that at every point in time, there's been so many negative narratives about this is the worst thing ever. But there's been this one enduring narrative that's stuck with it and driven value. And now it's at 100K. It's like, it's crazy.

• 1:58:30Jordi Hays?

  Well, yeah, and it's still, even though what?

• 1:58:34Jordi Hays?

  Like the, I don't like, honest analysis of crypto technology, you could never say this isn't cool.

• 1:58:42John Coogan?

  Exactly.

• 1:58:43Jordi Hays?

  Like this isn't like this crazy, truly novel transformative technology.

• 1:58:47John Coogan?

  Yeah.

• 1:58:47Jordi Hays?

  It's just that the primary case study was a nefarious use case.

• 1:58:51John Coogan?

  Yeah.

• 1:58:51Jordi Hays?

  Right?

• 1:58:52John Coogan?

  Yeah.

• 1:58:52Jordi Hays?

  But it's still incredible that you could operate an open air

• 1:58:55John Coogan?

  Yeah.

• 1:58:56Jordi Hays?

  drug bazaar online that anybody could go to and see and law enforcement could see and not do anything about.

• 1:59:02John Coogan?

  Yeah.

• 1:59:02Jordi Hays?

  That is a wild

• 1:59:03John Coogan?

  It was insane.

• 1:59:04Jordi Hays?

  Wild.

• 1:59:04John Coogan?

  Yeah. And so let's go to Catherine Hahn, former GP at Andreessen Crypto, now with Hahn Ventures. And she is quoting the, I think the founder of Chainalysis, which is a company that does research into how crypto is used nefariously. Joanie Levin says, "Today is my proudest day at Chainalysis. We enabled US, UK, Germany, and South Korea to take down one of the largest child abuse material sites. Law enforcement in 38 countries made 330 arrests of alleged pedophiles and rescued 23 children from abuse." And Catherine Hahn says, "Great work by Chainalysis and the authorities in such an important case.

• 1:59:46John Coogan?

  As I found when working on the Silk Road corrupt agent and other cases, having the digital breadcrumbs of crypto was a useful tool for law enforcement." And so she's actually saying that, like, the reason that she was able, I didn't know this, but I guess she worked on the

• 2:00:03Jordi Hays?

  Corrupt agent.

• 2:00:03John Coogan?

  On those corrupt agents in the Silk Road case. And the reason

• 2:00:06Jordi Hays?

  The agents were obviously taking payment in Bitcoin.

• 2:00:08John Coogan?

  Exactly. And so they were able to trace the Bitcoin, where it moved out of the Silk Road account into their account, and then was eventually taken off-chain. And I think they were buying like sports cars and stuff. And so they were able to figure that out and track it down. And she was saying like, if this was fiat, that would not have been possible. And so that's actually the exact opposite narrative that people were telling in crypto, but it still worked out.

• 2:00:29Jordi Hays?

  I don't know if she's saying it wasn't possible, but normally

• 2:00:32John Coogan?

  Much harder.

• 2:00:32Jordi Hays?

  So if a corrupt agent takes a cash payment.

• 2:00:35John Coogan?

  Exactly.

• 2:00:35Jordi Hays?

  There's not a record of that.

• 2:00:37John Coogan?

  Yeah. The classic, like, you kick down the door.

• 2:00:38Jordi Hays?

  Public ledger.

• 2:00:39John Coogan?

  You've gotten the drug kingpin, and there's a huge stack of cash, a huge stack of cocaine, and then a bunch of luxury watches. And you're just like, yeah, throw the watches in the back.

• 2:00:47Jordi Hays?

  One node.

• 2:00:48John Coogan?

  Yeah. Yeah. Oh, yeah, we got a lot of cash and a lot of cocaine. I didn't see any gold bars there.

• 2:00:53Jordi Hays?

  Yeah.

• 2:00:54John Coogan?

  Throw it in the backpack and like you see this in like Training Day and like those like kind of cop movies and there probably some element of truth and you know, a lot of

• 2:01:01Jordi Hays?

  And it's wild, it shows.

• 2:01:02John Coogan?

  Don't do that.

• 2:01:03Jordi Hays?

  It shows the, you know, the fact that Catherine was working on this crazy, high-profile case.

• 2:01:09John Coogan?

  Yeah.

• 2:01:10Jordi Hays?

  Still recognize the potential of crypto.

• 2:01:12John Coogan?

  Yeah.

• 2:01:13Jordi Hays?

  And goes on to have a $2 billion fund now.

• 2:01:15John Coogan?

  Yeah.

• 2:01:16Jordi Hays?

  She was a GP.

• 2:01:17John Coogan?

  At Andreessen doing a historic run.

• 2:01:18Jordi Hays?

  Historic run.

• 2:01:19John Coogan?

  Yeah.

• 2:01:20Jordi Hays?

  2021.

• 2:01:20John Coogan?

  Coinbase and stuff. Yeah, fascinating.

• 2:01:22Jordi Hays?

  So wild, wild story.

• 2:01:25John Coogan?

  Uh, so let's go to a promoted post where we're, we're, we're done with the Ross Ulbricht story. I hope you enjoyed it. We're moving on. Uh, we're going to go to the timeline, but first we got a promoted post from Josh Steinman promoting my product.

• 2:01:36Jordi Hays?

  There we go.

• 2:01:36John Coogan?

  The one I worked on with, uh, with Jordy says, "Co-founder just texted me confirming that XL performs as promised." And, uh, XL, if you don't know, is a project, a little marketing stunt that Jordy and I worked on, uh, to, uh, deliver shareholder value. So it's a nicotine product that says right on the.

• 2:01:53Jordi Hays?

  And this was in many ways the genesis of TV because we would.

• 2:01:56John Coogan?

  This was the first loud opulence podcast.

• 2:01:58Jordi Hays?

  Yeah, we would riff on what nicotine meant in the context of value creation and that, that many of those early conversations sort of transformed into the show. So it's a cool, physical.

• 2:02:09John Coogan?

  Yeah. I mean, I think, I think basically the first time we did anything that felt like this format was the, the, the launch video type of thing. We did a vibriol and then we did an hour sit down and we both came into it being like, oh yeah, like let's just like riff on this and talk about what we did and clip it.

• 2:02:26Jordi Hays?

  Embodied characters.

• 2:02:27John Coogan?

  And we just were fully in character the whole time. And Ben, our vice president was like, "Is Jordy an actor?" Like, like, what, what was that?

• 2:02:36Jordi Hays?

  Yeah.

• 2:02:36John Coogan?

  And we were, there's some amazing quotes in there. It's fantastic.

• 2:02:39Jordi Hays?

  Yeah.

• 2:02:40John Coogan?

  We still have, that's, that's a lost episode. We've never uploaded the full thing. So it's like over an hour. We've only released like three clips.

• 2:02:46Jordi Hays?

  I can't believe we recorded for an hour.

• 2:02:48John Coogan?

  Oh yeah. We were just on fire. We were just locked in.

• 2:02:50Jordi Hays?

  Podcasters high.

• 2:02:51John Coogan?

  For sure. For sure. Um, let's move to, uh, a very important story. Valentine's Day is coming up. I'm sure there's someone in your life that you need to get something nice. Uh, I was asking Jordy.

• 2:03:03Jordi Hays?

  If there's not.

• 2:03:05John Coogan?

  This is a good opportunity.

• 2:03:06Jordi Hays?

  Kind of an aggressive move right now to reach out to somebody maybe you've been thinking about.

• 2:03:09John Coogan?

  Cuffing season is here. Cuffing season. And so I was asking Jordy, you know, what is the Patek Philippe of Valentine's Day gifts? He said the Birkin bag, which I think is a good answer. I did hear that Birkins are maybe not a Valentine's Day gift, more of a Christmas or birthday gift. And Valentine's Day is more jewelry and chocolates. So we need to find some good jewelry and chocolate options.

• 2:03:31Jordi Hays?

  Some controversy.

• 2:03:32John Coogan?

  We're going to do a whole deep dive on Valentine's Day gift guide for sure. But there's an interesting story going on right now because Walmart has cloned the Birkin bag.

• 2:03:43Jordi Hays?

  Oh, I know.

• 2:03:43John Coogan?

  Have you heard about this? So Bethenny Frankel says, we are witnessing a luxury goods rebellion and we are rewriting the rules of fashion. Last night I talked with NBC News about the viral Walmart Birkin bag has taken over social media. And they call it the working bag and it's 80 bucks and it's a clear knockoff. The Birkin bag, if you're not familiar, is from LVMH, right? Or Hermès, right?

• 2:04:06Jordi Hays?

  Hermès, a separate, separate company. It's been family owned. It's public now, but it's been.

• 2:04:11John Coogan?

  What does it cost to get in the game? It's like 20K, 30K, something like that.

• 2:04:15Jordi Hays?

  Yeah, I mean, it's the same thing as Patek and then they're trading these crazy ranges.

• 2:04:19John Coogan?

  Alligator stuff.

• 2:04:20Jordi Hays?

  Yeah, you can't really just walk in off the street and buy one.

• 2:04:23John Coogan?

  Exactly, yeah, yeah, you have to be invited.

• 2:04:24Jordi Hays?

  Relationship with.

• 2:04:25John Coogan?

  Relationship. And so it is, it is in that, you know, Audemars Piguet, you know, Patek realm.

• 2:04:32Jordi Hays?

  Holy Trinity.

• 2:04:33John Coogan?

  Yeah, where, where.

• 2:04:34Jordi Hays?

  And they started with saddles.

• 2:04:36John Coogan?

  Oh, yeah, they did.

• 2:04:37Jordi Hays?

  Yeah. Yeah, so there's an amazing acquired episode on the history of Hermès and there's this family drama and that, you know, this whole dynamic. It's kind of, it's a wild, wild story. So we should do the TB reaction to the acquired.

• 2:04:51John Coogan?

  Yeah.

• 2:04:51Jordi Hays?

  Episode on Hermès.

• 2:04:53John Coogan?

  Okay, I like that.

• 2:04:54Jordi Hays?

  We just press play for five seconds.

• 2:04:57John Coogan?

  Pause. Yeah, it was funny because I, I was looking up like Walmart stuff and I got a ton of posts from Bernie Sanders being like, they make too much money. And I was like, well, I hate them too, but for a different reason.

• 2:05:11Jordi Hays?

  Me and Bernie can agree on something.

• 2:05:13John Coogan?

  We agree on one thing. They're ripping off luxury goods. They should be charging more.

• 2:05:18Jordi Hays?

  Yeah, I mean, but but tying this back to yesterday, we were talking about the what's happening in the automotive industry with the premium brands being knocked off. The thing here is that the way I can guarantee you the the woman or the the households that are buying Birkin bags.

• 2:05:33John Coogan?

  Yep.

• 2:05:34Jordi Hays?

  Are not seeing this Walmart product and saying, I'm gonna get that instead.

• 2:05:39John Coogan?

  Yeah.

• 2:05:39Jordi Hays?

  It's people that aren't buyers of Hermes.

• 2:05:42John Coogan?

  Yeah.

• 2:05:43Jordi Hays?

  That are saying, I just like the way this purse looks. Maybe they like the way the fact that it looks like it at Birkin.

• 2:05:49John Coogan?

  I mean, you could always buy a knockoff Birkin bag at like Canal Street, right? On the street, the street vendors, very low quality knockoffs.

• 2:05:55Jordi Hays?

  Same thing with watches or anything.

• 2:05:57John Coogan?

  And stuff.

• 2:05:57Jordi Hays?

  The only things that are hard to buy knockoffs of are cars.

• 2:06:00John Coogan?

  Cars. They do. They do make perfect replicas of cars.

• 2:06:03Jordi Hays?

  Yeah, yeah. But I mean, they still end up being like $200,000 because it's like a super bespoke.

• 2:06:08John Coogan?

  There's only so much you can do.

• 2:06:09Jordi Hays?

  Yeah.

• 2:06:10John Coogan?

  But, uh, yeah, it's just funny that Walmart would do this. I feel like there'd be a legal battle on the design patent or something, but who knows?

• 2:06:17Jordi Hays?

  I'm sure they'll. But it's also like the Birkin's been in market for so long. Do you? Can you actually defend that IP? You can have design patents.

• 2:06:27John Coogan?

  Yeah, maybe not. And, uh,

• 2:06:29Jordi Hays?

  But that's why they can't. They can't copy the brand.

• 2:06:32John Coogan?

  Yeah, Walmart is not a move fast and break thing like small. Oh, like maybe we'll get a letter for Hermes. Like they clearly considered the the legal impact of this before they launched.

• 2:06:40Jordi Hays?

  The main thing here too is is if you hold an actual Hermes product up to this.

• 2:06:46John Coogan?

  Oh, yeah, it's not close.

• 2:06:47Jordi Hays?

  It's not anywhere close. And so the the some people will argue, oh, it's like it's the same exact thing. Why is Hermes charging this much? And it's like, charging that because of the brand, but also the quality.

• 2:06:57John Coogan?

  Yeah.

• 2:06:58Jordi Hays?

  Like they've mastered the art of making these bags and they they have incredible margins, but it's still a fantastic product.

• 2:07:04John Coogan?

  Yeah, like, you know, $80, like the cogs on a on a true real Hermes Birkin bag are.

• 2:07:11Jordi Hays?

  Probably a thousand.

• 2:07:11John Coogan?

  Probably a thousand. So 10 times as much just in quality. And then you get the actual brand and all the extra lift on top of that. Thought that was an interesting story, but stay tuned for our full Valentine's Day gift guide. And our reaction to the story of Hermes. I'm sure we'll cover it at some point. This was, this was interesting. I saw this going around some friends. There's a scam going on. You know, we love to highlight scams on this show. There's a new scam I've just recently heard about, says David, the QR code scam. People are either sending you a package or they put it in your mailbox. Inside might be a small item, not of much value or no item at all. With that, there's a coupon or a piece of paper with a QR code on it for you to scan. Might say free or discounted or even a giveaway item.

• 2:07:55John Coogan?

  Once you scan the QR code, the hackers now have access to all or some of your data, including financial information. So they're basically trying to trick you to go into like a phishing flow. So it'll be like, scan this QR code and it takes you to like amazonlogin.com. And then it looks, and then you type in your username and password and they've basically phished you. And they've, they've used like the analog real world to get you into a phishing flow, which where that would normally be caught by a spam filter. But it's not going to be filtered by the USPS.

• 2:08:22Jordi Hays?

  Real world, real world action.

• 2:08:24John Coogan?

  Yeah, yeah, very interesting.

• 2:08:25Jordi Hays?

  I had a buddy recently that got his Instagram account taken over. And it was like a bunch of Instagram stories of him hyping up this person named Coach Maria. It was like helping him invest. And he's like, you know, I don't normally, like it was written in a way. It was like, I don't normally talk about this kind of stuff.

• 2:08:40John Coogan?

  Oh, it was just like text over.

• 2:08:41Jordi Hays?

  It was like Instagram story. Yeah. So it was like text over an image. And it was like, I don't normally talk about this stuff, but I started working with this woman named Coach Maria. She helped me turn two grand into 50, like reach out to her. And, and of course, like all me and all my other friends are like, awesome. Like I gotta hit up Coach. All the comments.

• 2:09:00John Coogan?

  No, no, no.

• 2:09:02Jordi Hays?

  Finally got back in. I honestly don't think, I don't think, I don't think it fooled anybody, but they're doing that at such an extreme scale that, that they're bound to get.

• 2:09:10John Coogan?

  So this is a promoted post for two factor authentication. Turn it on, lock your accounts down. The hackers are desperate these days. Anything for a buck. But have you heard of lumpy mail generally?

• 2:09:23Jordi Hays?

  No, what's that?

• 2:09:24John Coogan?

  So lumpy mail is. A, uh, so basically like if you send someone like junk mail, they'll usually just filter it out and, and, uh, and they'll just throw it out like at the mailbox. When you get your mail, you'll just throw out like, oh, this is clearly like a flyer for something. I'm just gonna throw this out. Uh, then the like physical mail retail marketers figured out that if they got a machine to handwrite your name and your address and make it look like it was script and like it was written by an actual person with a real stamp on it. It would be like, oh, maybe this is a Christmas card. I'll open it up. They open it, then, then they see the ad and they engage a little bit more. Lumpy mail is, is, uh, is a letter that has something in it, like a little chocolate. And so the, the envelope looks like it's lumpy. And so it's more expensive to send through the mail,

• 2:10:09John Coogan?

  but it has a higher open rate. And so you can send people lumpy mail.

• 2:10:13Jordi Hays?

  Conversion optimization.

• 2:10:14John Coogan?

  And it's all about conversion optimization to just getting someone to open the physical mail, see the ad, and then potentially buy the product. And, uh, this is just the next generation of that.

• 2:10:23Jordi Hays?

  Yeah. The, the classic is, I mean, I would pay an almost ungodly amount of money to never receive physical mail from, I would even be willing to give up letters from loved ones and Christmas cards and fully switch to digital just to not get physical mail because it's just such a...

• 2:10:42John Coogan?

  Have you ever done like earth class mail or any of those services? Like P O Box forwarding? And then it scans it all. You see those emails?

• 2:10:48Jordi Hays?

  I know, but like enough people have my...

• 2:10:49John Coogan?

  Figure it out. Yeah.

• 2:10:50Jordi Hays?

  You have, they just can send it to your address, right?

• 2:10:53John Coogan?

  Yeah, yeah, yeah. It's rough.

• 2:10:55Jordi Hays?

  But, um, but the classic now is like the, like, they'll just write, "Do not throw away."

• 2:10:59John Coogan?

  Yeah, exactly.

• 2:11:00Jordi Hays?

  And then you're like, you open it and it's like, okay, this is an ad for some insurance thing that I don't need.

• 2:11:04John Coogan?

  I feel like in here, there is a non-scam version of a very viral marketing strategy. Like if you, like if we were to do some sort of drop where we got a bunch of people's addresses and we sent them something that looked like a package, they open it up, there's a QR code, and it goes to a vibe reel announcing season two of Technology Brothers. Like, like that, or it just goes to...

• 2:11:25Jordi Hays?

  That's more like a public service.

• 2:11:25John Coogan?

  Exactly. It just goes to like our X account and just says like, you want to follow it?

• 2:11:29Jordi Hays?

  Speaking of mail.

• 2:11:31John Coogan?

  Lumpy mail, something huge.

• 2:11:32Jordi Hays?

  We were out of town for a couple of weeks, but I came home to this, uh, a package from Fiorentino label. Uh, and so I can open it up here quickly. I'll read this. So if you don't know, Fiorentino label... Is by a entrepreneur and friend of the show, John Fiorentino. He says, gentlemen, it is with the deepest admiration that I present to you this handcrafted tie from Fiorentino label conceived by hand and brought to life by Fabio Caldarella, a true maestro of Italian bespoke tailoring with over a quarter of century of mastery. This piece is a testament to the timeless elegance and unparalleled craftsmanship we hold sacred. He's got this wonderful letter from John himself and then I saved it to actually open it on the show.

• 2:12:17Jordi Hays?

  John had given us a little bit of, you know, a subtle critique that we don't wear ties enough. And so now we don't have an excuse. This thing is fantastic. So expect to see us.

• 2:12:32John Coogan?

  Yeah, rocking that. I like that he just sent us one tie.

• 2:12:35Jordi Hays?

  Well, I think you got, I think you got one.

• 2:12:38John Coogan?

  Where's the second tie? Is there two?

• 2:12:40Jordi Hays?

  No, no, I think he sent one to you too.

• 2:12:41John Coogan?

  Okay, okay.

• 2:12:42Jordi Hays?

  It's just like buried in your mail.

• 2:12:43John Coogan?

  No, no, no, it's our communal tie. We'll trade off.

• 2:12:46Jordi Hays?

  Yeah, yeah, yeah.

• 2:12:47John Coogan?

  We'll share it.

• 2:12:48Jordi Hays?

  Or you, I can just hold one side and you hold the other and it's like the fidget type thing.

• 2:12:51John Coogan?

  Exactly. No, no, no, it's great. I need to get, I need, that's the next evolution. I got a bunch of new suits. I'm sporting the white suit today. Got a couple more, I'll, I'll be strutting on the show.

• 2:13:02Jordi Hays?

  You look like Colonel Sanders had a liquidity event.

• 2:13:05John Coogan?

  That's what I'm going for. That's the look. But definitely the tie game is next. I like the open, the open collar look, but you know.

• 2:13:12Jordi Hays?

  It's a little too casual for the work we do.

• 2:13:14John Coogan?

  It's a little too casual for a podcast, for a technology podcast.

• 2:13:16Jordi Hays?

  Yeah.

• 2:13:17John Coogan?

  Oh, that's great. Well, thank you to John Fiore. And if you do wind up purchasing a suit from Fiorentino, Fiorentino label, tell him the Technology Brothers sent you.

• 2:13:26Jordi Hays?

  We've already had a few people go through.

• 2:13:28John Coogan?

  We've had a couple conversions. What was that? In your texts, there's some Q and A from the chat. Okay. In the group? Yeah, you want to read some Q and A stuff? Jordy, what you got?

• 2:13:36Jordi Hays?

  Q and A.

• 2:13:39John Coogan?

  Let's see.

• 2:13:40Jordi Hays?

  Can we get an affiliate link in the description of those suits? Incredible suits today from Sky. Honestly.

• 2:13:47John Coogan?

  Thank you. We really appreciate it.

• 2:13:49Jordi Hays?

  AJ Sharp says, honestly, a groundbreaking banana bone cream. And John says, white suits for a black market. Tyler says, VP, let's get a ticker tape on the bottom where the fits are from with codes. New ad skew.

• 2:14:09Jordi Hays?

  Yep, this is great. So this is great. This is great stuff.

• 2:14:12John Coogan?

  This is fantastic. Good to see you in the chat, guys.

• 2:14:15Jordi Hays?

  Ashley says, my question is, what's their plan to monetize with this podcast? Brother, we are already monetizing on a scale.

• 2:14:23John Coogan?

  Never before seen. You don't become the most profitable podcast in the world with running a lot of ads. I do think that we are very much on the side of integrated brand partnerships, advertisements. And there's a very good reason for this. I mean, first off, we don't believe in audience capture. And if so, if we were charging the viewers, pretty soon, we'd be like, what do the viewers want to see? And then we'd have to deliver exactly what they want. And so we are 100% corporate supported here. So if you want to help support the company, call a company and have them sponsor the podcast. This is the key. But seriously, like, there's a long, long history of this debate about should you just charge like $5 or $10 a month?

• 2:15:06John Coogan?

  The stratechery model versus an ad model? We decided early on that the ad model was much better because it allows us more flexibility. It gets the content out everywhere. We like supporting our cool companies. And also, it allows you to price discriminate in a way that captures more value. So there are stratechery readers that are literally billionaires who work at big tech companies. They pay the same price as the college student who's paying $10 a month.

• 2:15:32Jordi Hays?

  Which is cool, to be clear.

• 2:15:33John Coogan?

  It's cool. It's great, but it doesn't allow them, it doesn't allow them to capture the maximum value.

• 2:15:38Jordi Hays?

  We would rather anybody in the entire world to be able to come and get the 12 hours of content that we put out a week, totally for free. And then if you want to use Ramp or work with other partners, if you want to go on Bezel and buy, you know, a fantastic watch, you can do that.

• 2:15:54John Coogan?

  So expect more and more ads.

• 2:15:55Jordi Hays?

  Got a couple other questions. Ashley says, asking about S and P 500 and just like public market investing in the future. Is it going to be? You know, will companies require the same amount of capital as they get more and more efficient with AI? My answer there is that I think we're still in the early stages of just the hyper financialization of the world. Crypto is the hyper financialization of memes, right? And companies, I don't think the capital markets are going anywhere. In many ways, people predict that labor will be less valuable and capital will be potentially have be able to be more impactful because you can now, you know, we talked about this yesterday with all these rollups.

• 2:16:38Jordi Hays?

  These companies are being bought because they have a thousand employees and people think they can bring that down to 50 employees by replacing people with AI. So capital actually becomes more valuable.

• 2:16:49John Coogan?

  Also, when you just talk about the S and P 500, the S and P 500 is an index on American business. And we've, and obviously, like, America has this narrative, like, we're in turmoil, we're more divided than ever before, things are crazy, there's stagnation, and there's so many bad things happening. But when you go around to other countries, we just did a deep dive yesterday on Germany's economy, and they are in a much worse position than us. And China's economy has been stagnating because of COVID lockdowns and deflation and currency fluctuations.

• 2:17:19Jordi Hays?

  Soon tariffs.

• 2:17:20John Coogan?

  Yeah, tariffs, and there's so many other things. So the question of like, S and P 500 or not, to me, feels like America or not, and I'm still very long on America, relative to everything else.

• 2:17:29Jordi Hays?

  The markets are a reflection of the general value, the earnings potential of those businesses, as well as their future potential and the memes that get, and the narratives that get built around these companies. And so thankfully, we're still going to be able to deploy capital with our absolute boys.

• 2:17:47John Coogan?

  Exactly.

• 2:17:48Jordi Hays?

  We got another, another just comment from CX Productions. They say, "Thank God the studio's back. It's been a rough few days, it's been a rough few weeks, actually."

• 2:17:56John Coogan?

  They tried to stop us with those fires, but they couldn't.

• 2:18:00Jordi Hays?

  And then we have another one, question, "We thought we needed energy infrastructure to support new AI data centers. We actually needed data centers to justify the energy infrastructure." It's more of a statement potentially than a question, but...

• 2:18:14John Coogan?

  Clearly not Jevon's paradox build.

• 2:18:17Jordi Hays?

  Yeah.

• 2:18:18John Coogan?

  Get up to speed.

• 2:18:21Jordi Hays?

  Yeah, I don't know. I think even with all the DeepSeek stuff, every hyperscaler is still saying, we still need to build data centers. We still need to,

• 2:18:32Jordi Hays?

  have all this CapEx and the energy requirements of

• 2:18:38Jordi Hays?

  the way that, you know, on BG squared, Brad Gersner, I was listening to their episode from last week, and they were talking about how, one, the way that OpenAI is projecting their chip demand just from Nvidia, it would be like a third of all the chips that are sold this year by Nvidia. And Abilene, Texas, where this new data center is going to be, definitely doesn't have the energy infrastructure today to support that kind of, you know, just energy demand. So,

• 2:19:10Jordi Hays?

  yeah, we'll see. It's going to be exciting. But it does seem.

• 2:19:13John Coogan?

  Yeah, I think DeepSeek, just based on, you know, letting a few days breathe, it's like, it changes the economics of the B2B market. It might change the economics of the consumer market to some degree. But everyone is marching forward towards gigawatt training runs and then 10 gigawatt training runs.

• 2:19:31Jordi Hays?

  Yeah.

• 2:19:32John Coogan?

  Nothing's changed on that front. People want the best possible foundation model to build the other stuff on top of. And sure, if you can get those optimizations, let's see what happens if you run the super optimized model on the thousand times much more hardware. And that just might speed things up. Cool. Let's go on to more timeline. Speaking of.

• 2:19:52Jordi Hays?

  Thank you, everybody. Before that, thank you, everybody, for submitting questions in the chat. If you're listening to this on the RSS feed, we're now live streaming daily. So you can add questions live or just DM us post and we will get to your questions ASAP.

• 2:20:07John Coogan?

  Yeah, so simp4satoshi says, "DeepSeek went viral outside of Twitter because of the Elon like and Zero Hedge retweet of my Regera meme. This broke containment, and I had a lot of normie friends in LA tell me they saw this post on a bunch of TikToks. Check the App Store before this tweet and after. DeepSeek went from 31 to first." And the post is, "Sam spent more on this than DeepSeek did to train the model that killed OpenAI." And he posted it January 24th.

• 2:20:35Jordi Hays?

  Okay, I don't even want to respond to this post with a video, so Ben, don't, don't respond to this because I generally, I've met some first Satoshi, I think he's a sharp dude, but he is the biggest hater of OpenAI and there's a lot of, there's a lot of assumptions in here. One, I think everybody sort of understands that they probably spent quite a bit more than, than what they're saying. Two, you can't claim credit that your one post, when everybody had viral posts this week about DeepSeek. I don't think you catalyzed it to go number one in the charts. It was very clear that it went number one, like in a very inorganic way. And that they were just buying, you know, downloads because this started happening Sunday and it didn't really hit the mainstream until this week. So

• 2:21:17John Coogan?

  This is either humorous or humor. He could be joking. I don't know.

• 2:21:21Jordi Hays?

  But we're putting it in the truth zone and

• 2:21:24John Coogan?

  But I do love just posting all the time. And then if something goes viral or something happens, just be like, look, I'm responsible. I'm responsible. Yeah, I'm the one that posted. Yeah.

• 2:21:36Jordi Hays?

  He, I mean, he very, so simp very clearly wants to be credited for taking down OpenAI.

• 2:21:44John Coogan?

  You know, you, you, I think on the Monday show, when Nvidia was down 15%, you said on the show that you bought.

• 2:21:51Jordi Hays?

  I did.

• 2:21:52John Coogan?

  And then what happened the next day?

• 2:21:53Jordi Hays?

  It ripped.

• 2:21:54John Coogan?

  7% pop.

• 2:21:55Jordi Hays?

  Yeah.

• 2:21:56John Coogan?

  You need to take, you need to take full responsibility for that.

• 2:21:58Jordi Hays?

  I, when I, when I, when I did that market buy on Monday.

• 2:22:02John Coogan?

  Exactly.

• 2:22:03Jordi Hays?

  People said, whoa, there's some whales, there's some whales that are buying. We gotta go.

• 2:22:08John Coogan?

  This is not financial advice. We're joking around here.

• 2:22:09Jordi Hays?

  And I, not, yeah, we never give financial advice. I did, I did post, um, it was so funny because like Sunday night, Satya came out and he's like, Jevon's, Jevon's, you know, Jevon's paradox. All this stuff. And, and I posted in a sort of joking way. Just imagine being unfamiliar with Jevon's paradox on a day like today. Cause it does seem like, like part of it's, part of it's like Wall Street is not always betting on their beliefs. They're betting on about the future. They're betting on what they think the market's going to do the next day.

• 2:22:38John Coogan?

  Yep, yep, yep.

• 2:22:38Jordi Hays?

  And so even if you have these very intelligent analysts in Wall Street that understand Jevon's paradox, it's like energy as energy gets cheaper, we use more of it.

• 2:22:46John Coogan?

  Yep.

• 2:22:46Jordi Hays?

  Things like that. Um, they can understand that and still short the market because they, they, they expect it to go down and they're just trying to make money that, that day, right? They're not thinking about five years from now, or they're not really, they don't really care about long-term capex implications.

• 2:23:01John Coogan?

  Do you remember what I said about Mark Zuckerberg in October of 22? I think I said he was he was goaded and he was gonna go on a generational run and then look, Joe Weisenthal says Meta is up 659% since November of 2022. Look, I must be responsible for all that.

• 2:23:17Jordi Hays?

  Wow.

• 2:23:18John Coogan?

  Yeah, it's amazing.

• 2:23:19Jordi Hays?

  Yeah.

• 2:23:19John Coogan?

  But I do.

• 2:23:20Jordi Hays?

  Yeah, so so make a make post something and then wait for things to happen and then claim credit for it.

• 2:23:27John Coogan?

  Take credit, for sure. And then if anyone comes for you, just say I was joking around. I'm not, I would never take credit for something as big as that.

• 2:23:33Jordi Hays?

  Hubers, bro.

• 2:23:34John Coogan?

  Built different. But but I do think this is a crazy stat, almost 1,000% in two years. Like, I mean, this was the bottom. Like, everyone was super bearish on Meta at this point.

• 2:23:44Jordi Hays?

  And that was because TikTok TikTok was was doing well.

• 2:23:48John Coogan?

  Everyone thought they over invested in the Metaverse.

• 2:23:50Jordi Hays?

  The Metaverse was a big thing.

• 2:23:50John Coogan?

  It's like 10 billion and the AI thing hadn't happened yet. So this was pre ChatGPT. ChatGPT dropped in like in like December of 22, something like that. And so.

• 2:23:59Jordi Hays?

  And the other the other thing that can't really be understated, though, is that Gen Z was spending more time on TikTok.

• 2:24:06John Coogan?

  Totally. Yeah. And there was no real like, oh, ban TikTok, anything.

• 2:24:10Jordi Hays?

  So the risk was like, hey, you. Yeah, you.

• 2:24:13John Coogan?

  Yep.

• 2:24:13Jordi Hays?

  Your next generation of users prefer another app.

• 2:24:16John Coogan?

  Yep, yep. So there were a bunch of bear theses. Ben Thompson, he gets to claim credit for this because he was writing about how it's oversold and how Meta was due for a huge comeback because the core business was just so solid and was just throwing off

• 2:24:32Jordi Hays?

  The greatest ad platform of all time, outside of Google, and ads are the best business model.

• 2:24:37John Coogan?

  The other thing people were really worried about was app tracking transparency, the iOS update. And everyone was saying that's going to screw Meta's ads and their ability to track users with cookies and stuff.

• 2:24:45Jordi Hays?

  That was that was Tim Cook trying to take down small businesses.

• 2:24:48John Coogan?

  Yes, yeah. And who did it wind up hurting? It wound up hurting small businesses and every other ad platform except for Meta, because Meta has so much data that they can actually run AI across their entire data.

• 2:24:59Jordi Hays?

  They were impacted, but not to the same degree.

• 2:25:01John Coogan?

  And so they don't need to know that you literally clicked on this ad, clicked on this link, came back a day later and then converted. They can just look at all your all your traffic across all their networks.

• 2:25:11Jordi Hays?

  And they're listening to everything that you say.

• 2:25:14John Coogan?

  Obviously, obviously. And so and so, yeah, Ben Thompson.

• 2:25:18Jordi Hays?

  Yeah, to help prep for our Valentine's gift guide, I just want to say, hey, John, I'm really looking to buy some new gifts for for my wife for Valentine's Day.

• 2:25:27John Coogan?

  Send me some stuff.

• 2:25:28Jordi Hays?

  After the show, after the show, I'll scroll and I'll get some good.

• 2:25:31John Coogan?

  I told you that my wife actually uses Instagram that way where if she's shopping for a product, she'll visit a couple of the websites, not just scroll a little bit, not really actually shop. And then just be like, like a king, like come to me on Instagram. And then all the retargeting ads will come and be like, I'm ready to hear your pitch, but you have to pay.

• 2:25:50Jordi Hays?

  It didn't, it didn't feel like it always was that way. Now.

• 2:25:53John Coogan?

  How they really follow you around.

• 2:25:54Jordi Hays?

  They, well, they, they follow you around, but the other thing is it's so, this is why it is such a bloodbath of competition in e-commerce right now, because if you go, you know, Rora, right? Like we sell water filters. If you go to rora.com right now, R O R R A dot com.

• 2:26:10John Coogan?

  Yeah.

• 2:26:11Jordi Hays?

  Uh, and browse around for a second and then you go back to Instagram, you will be start being served a bunch of ads from our competitors. Granted, we have a much better product, much better tested. It's more effective. So we're confident that you'll come back to us.

• 2:26:23John Coogan?

  Yeah.

• 2:26:23Jordi Hays?

  But still it's wild that Meta, the company we spend more with than anyone, except basically our own suppliers is like, like working against us in many ways. It's like you knew about Rora. Now we're going to show you all these other alternatives to it.

• 2:26:38John Coogan?

  It's a free market. Welcome to libertarianism, Jordy.

• 2:26:40Jordi Hays?

  Yeah, yeah. Ross would be proud.

• 2:26:43John Coogan?

  Cope harder. Let's go to David.

• 2:26:45Jordi Hays?

  I'm not coping. We're confident.

• 2:26:47John Coogan?

  He says, I worry an unsustainable need to raise billions of dollars has broken the discourse around AGI, ASI timelines. There's too many incentives to say you're on the brink of a breakthrough and too many incentives for everyone else to say they're not far behind.

• 2:27:04John Coogan?

  Interesting. We do see a lot of this where there's a lot of the AI foundation model leaders who are saying AGI is so close, ASI is so close. Just one more training one, bro. Just one more. It's almost like, you know, the, uh, you know, the, the scientists, how they always want to build the, the, the large hadron collider. And there's that meme of like the scientists being like, just one more collider, bro. Just one more, just one more collider.

• 2:27:28Jordi Hays?

  Please, you can trust me.

• 2:27:29John Coogan?

  Please, you can trust me. And then it's like, I guess we do get cool foundational science out of it, but it's very hard to say like, what has the large hadron collider done for me lately? Like, you know, it's like, I guess it discovered like quarks and stuff, but like, how is that really? Really changed my life. I don't really have like, you know, teleportation or like supersonic travel or like, you know, space exploration because of the the colliders. And so we're seeing the same thing with the with the training runs. I mean, I am very, I want them to do it just because, yeah. You know, light some money on fire, Masa, and let's see. How good is GPT five? What can GPT six do for me?

• 2:28:02Jordi Hays?

  Yep.

• 2:28:02John Coogan?

  If it's the same old and it's still messing up, okay, cut it then, but half a trillion, let's let it rip.

• 2:28:09Jordi Hays?

  Truly.

• 2:28:10John Coogan?

  Let's let it rip. Let's go to Alex Wang. He is doubling down on the DeepSeek hate. He says, what does DeepSeek R1 slash V3 mean for LLM data? Contrary to some lazy takes I've seen, DeepSeek R1 was trained on a ton of human generated data. In fact, the DeepSeek models are setting records for the disclosed amount of post-training data for open source models. 600,000 reasoning data, 200,000 non-reasoning SFT data, human preference RLHF dataset of undisclosed size, human process synthetic data for cold start data. According to Chinese AI engineers, DeepSeek actually values data annotation even more than other Chinese labs, with the CEO personally labeling data for the model. That's kind of crazy.

• 2:28:51John Coogan?

  This reminds me of Karpathy, who used to spend a quarter of his time labeling at Tesla. The DeepSeek V3 paper has even even has a dedicated acknowledgement section for data annotation. Very interesting.

• 2:29:03Jordi Hays?

  Well, we don't know exactly what's going on there, but this is why I put out a call to action in Chinese characters. I said, if anyone on the DeepSeek team wants to spill any highly confidential information to us, we'd be happy to discuss it on our podcast.

• 2:29:17John Coogan?

  So if you work for DeepSeek, feel free to call in.

• 2:29:20Jordi Hays?

  DMs are open.

• 2:29:20John Coogan?

  DMs are open.

• 2:29:21Jordi Hays?

  Call in.

• 2:29:22John Coogan?

  Let us know.

• 2:29:22Jordi Hays?

  We'll get on WeChat for you.

• 2:29:24John Coogan?

  Yeah.

• 2:29:24Jordi Hays?

  We'll talk it over.

• 2:29:25John Coogan?

  We'll talk it over. I mean, DeepSeek really is having an impact even as an open source model. You can see Arvind Srinivas from Perplexity has integrated DeepSeek R1 and FactSet to do financial research on steroids. And so they've they've connected Crunchbase data and FactSet data with R1 so you can ask it to reason through things. And this is really cool because a lot of times I go to ChatGPT and I'm like, okay, we're going to talk about. Coinbase today, give me their entire funding history and it just doesn't have access to that data. It's not reasoning through it properly. So then I have to go to Coinbase, I have to go to, I have to go to Crunchbase, export all the data, copy and paste that into ChatGPT, pull that. It's very cool to see perplexity,

• 2:30:08John Coogan?

  integrating those extra data sources so that you can get better results. And I think that's maybe, maybe an increasing trend. Like you saw this with the operator launch where they had, they had dedicated agreements and integrations with a bunch of different companies to get access to Instacart to make it work even better. Instead of just trying to brute force everything with a model that might not quite be there, might kind of mess up more. It's like, hey, yeah, just give us.

• 2:30:31Jordi Hays?

  Yeah. Cause a lot of these, a lot of these apps and platforms that you'd want to interact with have anti-bought.

• 2:30:36John Coogan?

  Totally.

• 2:30:36Jordi Hays?

  Products.

• 2:30:37John Coogan?

  Yeah.

• 2:30:37Jordi Hays?

  That are kind of trying to prevent that activity.

• 2:30:40John Coogan?

  And so, yeah, I mean, using deep seek has been a little bit like controversial from the geopolitical angle. Obviously, Mark Andreessen is firmly on the side of like, open source is great. Everyone should be using R1. It's a gift to humanity. I actually, we discussed this briefly on the show, but I asked on X, how sci-fi or tinfoil hat is it to consider the idea that there might be a Manchurian candidate buried within the weights of an LLM? So basically you get this open source LLM out there and it gives you normal answers to everything. But then at some point it switches on you and starts changing the way it responds or doing something. And, and is this like five years out or 10 years out or is this doable now?

• 2:31:25John Coogan?

  And Trevor Blackwell, I believe it was him, he was one of the founders of YC was like, it's possible and it's happening today.

• 2:31:33Jordi Hays?

  Crazy.

• 2:31:34John Coogan?

  I got like one response. It was like, it was like this is the smallest post for my account, but I was like, this guy's very high signal. Like this is, this is crazy. So I don't, I don't think there's any evidence that they did that. I don't think it's actually what happened here, but it is something to consider in the future.

• 2:31:49Jordi Hays?

  We got the hat ready.

• 2:31:50John Coogan?

  Yeah, it is, it is something to consider.

• 2:31:51Jordi Hays?

  Out of the shot.

• 2:31:51John Coogan?

  And I think we should do the same thing. Next version of Lama Zuck, let's embed a Manchurian candidate that, you know, send that out into the world and convinces everyone to get into luxury watches.

• 2:32:02Jordi Hays?

  Brought to you by Bezel.

• 2:32:03John Coogan?

  Yes. Let's go to Nir. Nir says, why did DeepSeek go viral? TLDR, class resentment, anger, and especially schadenfreude. Very little actual app usage in comparison to the above. And so Nir says, my memetic model has really failed with DeepSeek. And my analysis of why I failed is so failing, is also failing. Does anyone who studies this topic have any novel takes? And so Nir has categorized the first week of the DeepSeek launch showing the increase in queries for DeepSeek on X. The posts go from 35,000 to 66,000 to 114,000, 191,000, and then explodes to almost a million on quote unquote, Black Monday, the 27th.

• 2:32:49Jordi Hays?

  50,000 of those were us.

• 2:32:52John Coogan?

  And then the iOS rank, it went from 400 all the way to 1. And then there's mainstream viral videos, CNBC, Forbes, CBS, CNN, etc. And so Nir really did a crazy deep dive here in a spreadsheet of kind of tracking how this model went so viral and what happened. And it really is a very emotional issue for a lot of people. And it spans the gamut. Like clearly Taylor Lorenz was saying like, yes, like go China. Because she's just has this like funny bit that she's doing right now where she's like a full blown communist and like loves everything China does and hates America.

• 2:33:29Jordi Hays?

  Let's send her over there.

• 2:33:30John Coogan?

  And then, but then there are other people that just love open source. And they don't care about the geopolitics at all. And so they're just like, I don't like that OpenAI doesn't open source things anymore. I'm an open source purist and there's a lot of those people. So they'll amplify it for that reason. Then there's other people who just really are Sam Altman haters. And they're like, anything that hurts Sam, I will amplify and I'm stoked about. Then there's other people who are just like, like, you know what? I just want to use a cheap AI model to create my grocery lists and my recipes. And this is the best app. And I was on the free plan of ChatGPT. It wasn't reasoning at all. I didn't have access to O1 whatsoever. This one gives me reasoning. I'm in for that. I love this. Thanks. It's a cool free app. And so there's all these different like.

• 2:34:11Jordi Hays?

  Other people, bat enthusiasts, if you ask OpenAI, can you make me a recipe for a really delicious?

• 2:34:19John Coogan?

  Terrible. And then also, I mean, there's even people who are like anti Nvidia and anti hyperscaler. And they're like, I've been sick of Nvidia making all this money. I've been sick of this story about Microsoft, you know, and these big tech companies. I just don't like the big tech companies. And so if this hurts them and I see their stocks down, this is awesome. And so there's all these different effects going on that were very unexpected, not priced into nears model, which I think was interesting.

• 2:34:46Jordi Hays?

  Lorenz was not priced in.

• 2:34:47John Coogan?

  Not priced in. Let's go to Joe Weisenthal. He says, I think one thing that's fun about AI is that it's brought back tinkering. For years, it's been impossible to play with the computer, especially smartphones. Everything felt so sealed off for most users. Maybe this helps revive a new era of tech literacy. And I completely agree with this. I think this is so cool. It's not just the cursors and the and the cognitions and the devins. It's just this ability to have a new tool. I mean, I remember when I got to Silicon Valley, it was the slow mo or whatever. It was like social, mobile and local was the trend. So like Foursquare was at the intersection of that. But there were really, really strong APIs for Google Maps,

• 2:35:28John Coogan?

  for delivering software on the iPhone via an app store. Nothing was locked down at that point. And there were also social graphs. So very quickly you could say, okay, for my app, I want to combine Google Maps with your social graph and I'll plug into the Google Maps API and the Facebook API. And boom, I have something today. And instead of needing to build these big services, now everything's locked down, walled garden. You can't really like integrate these in the same way. And so it's been, there was like that narrow window of opportunity for like.

• 2:35:57Jordi Hays?

  Yeah, LLMs are so magical across all these different app experiences and model, foundation models, that there's this broader excitement. X has always been willing to try a new social app, right? Something pops off and they'll be like, oh, everybody will download it and play around with it. Usually it dies fairly quickly. But right now you have a more, the general, so many, hundreds of millions of people have tried chat GPT and been relatively impressed with it, even if some of them are using it in relatively simple ways, like, you know, asking it questions like they would Google. That there's this broader willingness to just try new products and experiment and.

• 2:36:37John Coogan?

  And this is why I think the whole like anti chat GPT wrapper meme is so harmful to the next generation of entrepreneurs. Because I imagine that in a few years, like building a somewhat viral chat GPT wrapper, even if you get killed by OpenAI, even if you don't make a lot of money, is going to be a massive bull signal for entrepreneurs. Because you're going to have someone who, you know, yeah, they took a couple of computer science courses. They learned a little bit of Python, they installed Cursor or Devon and they started spinning something up. And they just made a small little niche app using R1 and these free open source LLMs. They got it up, it delighted a few users and it was an end to end product.

• 2:37:14Jordi Hays?

  Good project.

• 2:37:15John Coogan?

  Project. And then, and then when they find that business opportunity that's maybe boring, like rolling up HOAs or whatever, it's going to be like, well, I know that this, I know that this founder can build. And so I'm totally ready to.

• 2:37:28Jordi Hays?

  It's the new sneaker. It's the new like trading sneaker.

• 2:37:32John Coogan?

  Exactly, exactly, exactly. And so I am, I'm, I'm very excited about the era of, of AI and what it means for the tinkerer and just having more tools. I mean, even just in 2012, Heroku was a huge deal because it allowed you to write basically just Python and then click, you know, you would, you would push your Git repo to GitHub and it would automatically deploy it on the cloud. So you didn't need to install any Linux servers, even AWS, which was huge because you didn't need to rack the servers yourself. AWS was a huge increase in just developer productivity and like hacker productivity. Heroku was another step because you didn't even need to say, okay, I want to provision a server. It would just do that automatically.

• 2:38:13Jordi Hays?

  How big is that business today?

• 2:38:14John Coogan?

  Heroku?

• 2:38:15Jordi Hays?

  Yeah.

• 2:38:15John Coogan?

  I don't know if it's been like fully, so it was bought by Amazon for I think almost a billion dollars. It was a YC company. It was one of the first major liquidity events for a YC founding team. And so they were, when I got to YC in 2012, people were like, oh man, like Heroku, like that's like a sick outcome. Like that's a great business, like they did so well. And then I'm sure it got folded into like a million different projects because.

• 2:38:38Jordi Hays?

  Inspired, it got to a point where half of the YC batch would be dev tools. In many ways, because that one event really inspired.

• 2:38:46John Coogan?

  You could start on Heroku, you could even, now they have even simpler products called like serverless architectures. Are you familiar with any of this? Where like you don't even need to write the server. It's, it's not, Heroku would like. Spin up a server and keep it on all the time and it would kind of go dormant every once in a while if you're on like the free tier, but generally the server was on and if you visited the web app, it was there. Serverless is just sitting there and only when the query comes in, it spins up the server, immediately runs the query that you want or the code that you want and then gives you the answer. So that was like super, super cheap because you could throw something up. If you had no users, it was zero cost. You only got charged for the queries, whereas Heroka would give you like one free one. So you could keep something small up, but if it scaled at all, it would still be expensive because you'd be running

• 2:39:29John Coogan?

  it when you didn't have demand. There were some like automatic load balancing stuff. And then as you scale up your business, you go to, okay, now I'm using all of AWS's like bespoke tools that I'm provisioning, like dedicated servers, and then maybe I'm building a $500 billion data center in Texas, you know? Let's go to Palmer Lucky. We talked about this a little bit, but he is also beating the drum on DeepSeek and the controversy around DeepSeek. He says, "DeepSeek is legitimately impressive, but the level of hysteria is an indictment of so many. The $5 million number is bogus. It is pushed by a Chinese hedge fund to slow investment in American AI startups, service their own shorts against American titans like Nvidia, and hide sanction evasion. America is a fertile bed for psyops

• 2:40:14John Coogan?

  like this because our media apparatus hates our technology companies and wants to see President Trump fail. We have so many useful idiots uncritically reporting Chinese propaganda as fact because on some level, they want it to be true. They love seeing hundreds of billions of dollars wiped off the market cap of our largest companies." And so there was a little bit of back and forth in the replies to this. Palmer kind of clarified, a lot of people were saying, "Oh, well, you know, what are you talking about?" Like, they didn't drive down the stock price with a short, it's a multi-trillion dollar company, like they wouldn't have been able to do that. But what he was saying was that they might've just had like, you know, a billion dollar short position and boom, they just make $150 million and that's a great trade, right? He wasn't saying that

• 2:40:57John Coogan?

  like all of the downturn was caused by short pressure.

• 2:41:01Jordi Hays?

  No, the whole, I mean, look at Hindenburg Research. They're taking a position, releasing a report and hoping that it goes down. They're not capturing the entire loss associated with that sell off, right?

• 2:41:13John Coogan?

  Exactly.

• 2:41:13Jordi Hays?

  And I think the things that make that sort of conspiracy theory or broader theory somewhat believable is it was clear that the app on a random Sunday when nobody outside of X was talking about it.

• 2:41:29John Coogan?

  Yeah.

• 2:41:30Jordi Hays?

  Just happened to go to the number one app in the entire iPhone App Store.

• 2:41:35John Coogan?

  Yeah.

• 2:41:35Jordi Hays?

  With a Chinese character developer name that just screams.

• 2:41:40John Coogan?

  Yeah.

• 2:41:40Jordi Hays?

  Like even TikTok doesn't use Chinese characters in there.

• 2:41:43John Coogan?

  Yeah, I mean, to be fair, a lot of the app chart is very gamable and it's and I believe that that screenshot was in the productivity category, which is also very slow moving because there aren't that many viral apps that are gaining and the and the chart is based on momentum. And so if you're if you're getting, you know, double the amount of downloads every day, you will be number one, even if

• 2:42:06Jordi Hays?

  Yeah.

• 2:42:06John Coogan?

  A thousand times more people downloaded ChatGPT that day. The momentum is what matters more than anything else. And so no one really knows the algorithm. But it is very interesting. And honestly, it's been weird because in the paper, they say we don't count R and D dollars in that $5 million number. We don't count the servers that we had from a previous training run in this number.

• 2:42:28Jordi Hays?

  We don't count.

• 2:42:29John Coogan?

  We don't count the data.

• 2:42:30Jordi Hays?

  Singapore, Singapore G P S.

• 2:42:32John Coogan?

  So there's a lot of things that they that they didn't count and they admit to this, but it's been kind of uncritically reported in the US as just, oh, it's 5 million.

• 2:42:39Jordi Hays?

  Well, because there's so many, like going back to his Palmer's original point, there's so many people that want to see.

• 2:42:44John Coogan?

  Totally.

• 2:42:44Jordi Hays?

  Tech fail, like the traditional media hates tech still.

• 2:42:48John Coogan?

  Yep.

• 2:42:49Jordi Hays?

  The there's a lot of people that want to see Trump fail. He just announced Stargate.

• 2:42:52John Coogan?

  Totally.

• 2:42:53Jordi Hays?

  They, you know, want to people want to position him as silly or dumb or whatever, just. Give him an L.

• 2:42:59John Coogan?

  Yeah.

• 2:42:59Jordi Hays?

  And so there's a lot of people that just take everything at face value.

• 2:43:03John Coogan?

  There is something very like memetically or like inherently viral about the fact that the number five is both in the DeepSeek announcement and in the Stargate announcement. So it's literally five million versus 500 billion. It's exactly 100,000. And I think if it was like 4 million and 6 million, 600 billion, it like wouldn't have clicked as much in people's heads. But just the fact that it was exactly 100,000 dollars, exactly 100,000 times cheaper to do something like impressive. And it's like, what's going on? This is such a big.

• 2:43:38Jordi Hays?

  It's also disingenuous though, because presumably the Stargate level training runs will provide even the theory, the whole reason to do it is it will provide models that are much better than O1 and much better than DeepSeek.

• 2:43:50John Coogan?

  And yeah, I mean, the original GPT-4 training run was 500 million, so 100x. So they were able to, it seems like they were able to get 100x improvement in efficiency. If the number is even close to being right, definitely a 10x. If even if they're, even if their number is off by 10x, they're still, they're still 10x cheaper. But we don't have numbers on what O1 cost to train because that is not the same as the R1 model. It's a reasoning model. It's a different thing. It's, it's, it's more about the algorithm than, than, than the training data.

• 2:44:20Jordi Hays?

  It's a smart marketing strategy to let everybody compete on advertising how much they're spending on training runs and then take the exact opposite approach.

• 2:44:28John Coogan?

  Yep, totally.

• 2:44:29Jordi Hays?

  It's like a, a fitness trainer online being like, everybody's telling you to work out six days a week.

• 2:44:34John Coogan?

  Yep.

• 2:44:34Jordi Hays?

  I've got a product that lets you work out one day a week.

• 2:44:37John Coogan?

  Yep, exactly.

• 2:44:38Jordi Hays?

  And get the same results.

• 2:44:38John Coogan?

  It's similar to.

• 2:44:39Jordi Hays?

  And it's just like so contrasted.

• 2:44:40John Coogan?

  Yeah, it's similar to like the friend.com. We spent our whole seed round on a domain. We spent $2 million on this domain. That gets a story. And then also I built a massive viral success with a $10 domain. Anyone can do it. That's also interesting and clickable.

• 2:44:55Jordi Hays?

  Yeah.

• 2:44:55John Coogan?

  But, but just going with something in the, in the, like that meets expectations. Like you have to break expectations if you're going to go viral. Well, let's go to some good news. Did you see the Boom Arrow news?

• 2:45:07Jordi Hays?

  Yes.

• 2:45:07John Coogan?

  The supersonic plane broke the supersonic barrier, broke the speed of sound. Mach 1.1, very good news. And Nicole Wiskoff says, my husband from the other room, babe, can you believe the founder of Boom Arrow used to be a product manager at Groupon? Unbelievable. I gotta frame his LinkedIn and put it on my wall. Serious congratulations.

• 2:45:27John Coogan?

  Big fans over here and I love his, did you read his LinkedIn? It says at Groupon, he was there for two years, two months. And he says, there's nothing like working on internet coupons to make you yearn to build something you truly love. It is such a fascinating story for him. He's been over a decade at Boom. Really rough go, hard down round, lots of regulation, tons of red tape. When I see the announcement, everyone in the YC world was going crazy because I think they just did the new round as well. And there were a lot of people that doubled down. I think Joe Gebbia was in and a few other people. And, and, and on the face of it, I was like, this isn't that impressive. It's just a plane going Mach 1.1.

• 2:46:09John Coogan?

  Like we did this in the seventies and like they had to caveat the record and saying it's like the first domestic, it's the first civil plane that's domestically produced that's broken the speed of sound because the Concorde was a French project. And so I was like, this doesn't feel as innovative as it could. It's not like, it's not like it's like Mach 10, like we'd never done that before. But at the same time, it is impressive when you think about just all the red tape that exists these days in these hard tech companies. And it just shows that they actually broke through that. So it's almost more impressive as a business and regulatory story than an engineering story to me.

• 2:46:44Jordi Hays?

  Totally. Yeah, yeah, I buy that. I mean, they had 50 people on the team. It was crazy. A group of 50 people came together and said, let's build a plane that can go, let's build the fastest possible plane we can build.

• 2:46:56John Coogan?

  It's crazy.

• 2:46:56Jordi Hays?

  It's amazing story. And it, I mean, if you look back, it's like we, as humanity, we gain the ability to build things. And then if you don't keep the pressure on, you lose the ability.

• 2:47:09John Coogan?

  Totally.

• 2:47:09Jordi Hays?

  If we ever get to a point where we hit hour three on a podcast and we, and we decide, oh, I'm tired, I need to go to the bathroom.

• 2:47:15John Coogan?

  Just remember.

• 2:47:16Jordi Hays?

  Just remember, you gotta keep the pressure on. But, but, but this is like Elon, when starting SpaceX, he wanted to buy Russian ICBMs because he was like, well, they, this is like this technology that they had that's still like is viable and we can use it or learn a lot from it. So I think it's great and it's such an amazing story to me that many, many investors would have left this company for dead at the down round and I'm sure many did.

• 2:47:44John Coogan?

  Yep.

• 2:47:44Jordi Hays?

  And are now kicking themselves because they didn't believe in the company when it was at its roughest point.

• 2:47:50John Coogan?

  Yep.

• 2:47:50Jordi Hays?

  They turn around. So it's just a fantastic story. They're going to make documentaries on this. It's gonna be awesome.

• 2:47:55John Coogan?

  Jason Carmen already has, I'm pretty sure.

• 2:47:57Jordi Hays?

  Well, we need a new one. We need the full hero's journey, the bottoming out, the recap.

• 2:48:01John Coogan?

  Yeah, the really dramatic documentary that they're gonna make is the Hermes versus Boom story. They're in different markets because one's military and one's commercial, but there are these two founders, they're clearly racing against each other to build hypersonics and supersonic planes and there's like a lot of similar engineering that goes into it. And I think if you, if you start telling that story as a horse race, it gets a lot more exciting.

• 2:48:24Jordi Hays?

  Yeah.

• 2:48:24John Coogan?

  As opposed to just the story of one company. So.

• 2:48:26Jordi Hays?

  Yeah, we're going to the Middle, we're going to the Middle East later this month, or sorry, and later in February. And I wish we could be going Mach, Mach 1.

• 2:48:34John Coogan?

  That'd be amazing.

• 2:48:35Jordi Hays?

  Be nice.

• 2:48:37John Coogan?

  Jack Rain says the Skrely versus meme coins has been a great Twitter side plot in Q1. And Martin Skrely says, ha, ha, ha, ha, fart coin and dog with hat tokens for our words. What happened? It went down, it's only down like 30%. That doesn't seem that bad.

• 2:48:53Jordi Hays?

  Still, still.

• 2:48:54John Coogan?

  I expect this stuff to go down 99%.

• 2:48:57Jordi Hays?

  Yeah. That's the thing. Memes have some intrinsic value.

• 2:49:01John Coogan?

  The F D V is $793 million, which is far too high for something so stupid, but people do like.

• 2:49:09Jordi Hays?

  Hey, it could be the future of finance. Don't, don't judge it.

• 2:49:13John Coogan?

  Don't jinx it. I mean, that's what happened with Dogecoin. It's, it's too bad. But it is funny that Skrely's been, been out there giving out lots of financial advice. Let's move on to, so.

• 2:49:26Jordi Hays?

  It actually is, it is, it is a really good bit for him to go heavy against just calling out things that he identifies as stupid or scammy or he's going after, he goes after these like bio, he's, he's had a couple bets where he'll post something Sunday night. Short this company and then, and then maybe it's a butterfly effect or maybe they just like, people figure it out and he's drawing, he has, he has a huge, huge audience.

• 2:49:52John Coogan?

  Yeah.

• 2:49:52Jordi Hays?

  So.

• 2:49:53John Coogan?

  So after Satya Nadella said, "Jevon's paradox strikes again," and posted the Wikipedia Jevon's paradox on a Sunday night or something because he was worried about the stock going down. Ara Karazian over at Ramp, their economist that they just hired, says, "We can see this in the tri-ramp data. Here's data from a small market, a small sample of our base. Some thoughts, though, about whether the market reaction is justified or not. Companies purchased more tokens as the average price per token collapsed." And so you can see even just over, I guess it's just two months or one month. The token, the average price per million tokens of LLMs dropped by, I guess, a factor of three.

• 2:50:36John Coogan?

  And the number of tokens purchased increased on ramp cards because companies are buying more. And it makes sense. There's so many places where you want to stuff an LLM.

• 2:50:44Jordi Hays?

  Yep.

• 2:50:44John Coogan?

  And if it's super cheap, it makes sense on a per transaction basis. It's like, yeah, my LTV of a customer, a hundred bucks, I can't afford to spend $10 on LLM inference per customer.

• 2:50:54Jordi Hays?

  Yeah.

• 2:50:55John Coogan?

  But if it's a dollar, sure.

• 2:50:56Jordi Hays?

  Yeah.

• 2:50:56John Coogan?

  Why not?

• 2:50:58Jordi Hays?

  I got a, I got a promoted post that's in the form of a review.

• 2:51:02John Coogan?

  Okay.

• 2:51:03Jordi Hays?

  Like if a podcast called All In was good and interesting, unnecessary, unnecessary jab. We like, we like, it's our favorite political podcast over there. And Jeremy Sun says, "If you want to understand what startups are actually like and immediately tap into the unhinged schizo gundo core vibe, this is the show for you. Who do you trust? A couple dudes in the dream, in the arena building? Or a guy who invested in Uber once and won't shut, shut up about it? This review brought to you by Symbiant AI. Symbiant helps keeps your grandma from getting scammed through a free AI security app that reads, email, text, and more to identify scams in progress, stops them before they happen, and costs scammers money by wasting their time."

• 2:51:46John Coogan?

  That seems super valuable.

• 2:51:47Jordi Hays?

  Super cool. Jeremy, this is awesome.

• 2:51:50John Coogan?

  We, we covered a couple scams, the QR code scam.

• 2:51:53Jordi Hays?

  Yeah, so it's S I M B I A N T dot AI, Symbiant. And I need to get this for my family members.

• 2:52:03John Coogan?

  For sure.

• 2:52:04Jordi Hays?

  I would love to get a little printout at the end of the month, maybe actually a physical piece of paper.

• 2:52:10John Coogan?

  Great.

• 2:52:10Jordi Hays?

  If you can make a printer integration, Jeremy, that'd be awesome.

• 2:52:13John Coogan?

  Do you want me to read the next one?

• 2:52:14Jordi Hays?

  Yeah.

• 2:52:15John Coogan?

  And we'll go back and forth. Lifelong bureaucrat. Great podcast, although it has nothing to do with my line of work doing TPS reports and publish and pushing paper in the federal bureaucracy. It gives me a sense of how the other half lives and better yet, the 1%. Love to listen and then drop the lingo on my GS14 supervisors. Don't know what that means. Get a great way to seem value add and tech native. Since no one in my government workplace understands any of these words, banger, Patek Philippe, misspelled. It's two Ps and then E. Size gong. They think I must be working in the IT. The net result is they leave me alone and then I have more time to listen to the Technology Brothers podcast.

• 2:52:55Jordi Hays?

  Let's go.

• 2:52:57John Coogan?

  Let's go.

• 2:52:58Jordi Hays?

  Should leave an ad for your agency. Well, we love the, we love the government.

• 2:53:02John Coogan?

  Well, it's an ad for the government.

• 2:53:04Jordi Hays?

  It's an ad.

• 2:53:04John Coogan?

  Pay your taxes on time.

• 2:53:05Jordi Hays?

  Yep.

• 2:53:06John Coogan?

  And don't break the laws.

• 2:53:07Jordi Hays?

  Yep. Technology Brothers, this is from Nick Stewart. Technology Brothers gave me the strength to quit wearing Lululemon and the courage to start using nicotine again. Thank you. This review sponsored by Angelus. Attention beloved capital allocators. Are you still working at a large tier one venture firm and letting an investment committee stop you from backing the next Lucy? Are you sick of getting Carhartt merch? Wow, savage. Do you wish you could avoid the internal politics and get more personal upside from your investing? Well, you already know that some of your smartest colleagues have left to launch their own solo fund. What you might not know is that the smartest ones did so using Angelus' full service fund offering. Angelus takes the operational complexity out of running a venture fund, helping you focus on doing what you do best.

• 2:53:50Jordi Hays?

  Making great investments and running various parts of the federal government. Start your solo GP journey with Angelus today and we'll help you hit the size gong at first close. Make sure to tell them John and Jordy sent you. So anyways, I use Angelus all the time. A bunch, I've invested in, in funds on Angelus. I, one of my very close friends. Jack recently set up a new, I think it's like a $40 million fund on AngelList. And yeah, I'm an LP in it. It's an awesome experience.

• 2:54:18John Coogan?

  It's great.

• 2:54:19Jordi Hays?

  And yeah, AngelList is the best. I used to have to compete with them. I did not enjoy that. Now I'm just happy to be a user.

• 2:54:26John Coogan?

  Fantastic.

• 2:54:27Jordi Hays?

  Thank you to Nick for the five star review.

• 2:54:28John Coogan?

  Let's move on to Calmed805 says, "The missing piece into my Chad diet. Last year I committed to overhauling my diet and becoming a true Chad. Existing nutrition apps weren't cutting it, so I took matters into my own hands. I built YourBody AI, now available in the Apple App Store or at YourBodyAI.com. The fastest and easiest way to track your calories and macros. But there was a missing piece, my information diet. Fortunately, I discovered Technology Brothers. They consistently deliver the essential tech insights and entrepreneurial inspiration for my mind, that my mind craves. With both body and mind now fueled by optimal nutrients, I'm a new man. I'm down 12 pounds. I'm pushing up two plates on the bench. My wife and kids respect me.

• 2:55:11Jordi Hays?

  Let's go.

• 2:55:12John Coogan?

  I couldn't be more excited for what 2025 will bring.

• 2:55:16Jordi Hays?

  All right, we gotta check out YourBody AI. Very cool. And I just love how everybody that leaves a review, like it crushes the ad. They crush the review. They're doing best when it's all integrated.

• 2:55:30John Coogan?

  Oh yeah, it's fantastic.

• 2:55:31Jordi Hays?

  It makes me, we already love ads.

• 2:55:34John Coogan?

  This is how you market.

• 2:55:35Jordi Hays?

  But you guys are brilliant. So keep it up.

• 2:55:38John Coogan?

  If you haven't done it already, go leave a five star review. And I mean, this is untapped alpha. You can do it twice. There's Spotify and Apple.

• 2:55:46Jordi Hays?

  You can create new accounts.

• 2:55:50Jordi Hays?

  We might have to set a limit on our per company basis.

• 2:55:52John Coogan?

  I think if people do that like crazy, we will get flagged as like spam owners. Basically, they'll be like, this is the next deep sea.

• 2:55:57Jordi Hays?

  I just, I just wanna, yeah, yeah. If you, it's really funny to think about an Apple like podcast, like moderator, who just like stumbles upon this and, and is like, starts removing these. Cause like, it's probably against the terms.

• 2:56:12John Coogan?

  It's probably spam.

• 2:56:13Jordi Hays?

  But we support it 100%.

• 2:56:15John Coogan?

  Yeah.

• 2:56:15Jordi Hays?

  So thank you.

• 2:56:16John Coogan?

  So we're capping it at two right now. One on Apple Podcasts, one on Spotify. Mix it up.

• 2:56:23Jordi Hays?

  You can also, you can leave an unlimited amount of ads in the YouTube comments.

• 2:56:27John Coogan?

  True, true. Yeah.

• 2:56:28Jordi Hays?

  And we post like, we're now posting five videos a day.

• 2:56:33John Coogan?

  Yeah, like, subscribe, ring the bell.

• 2:56:36Jordi Hays?

  Go on OpenAI, make an operator bot that just spams the comment section.

• 2:56:41John Coogan?

  No, no, just generate the text, the cheap LLM, and then copy paste.

• 2:56:45Jordi Hays?

  Yep.

• 2:56:45John Coogan?

  That's the artisanal way of spamming. Orin John says he's about, he's about to cross a thousand short form videos. This is all it took to achieve financial freedom mid-career and never have to work for someone else ever again. Kind of ridiculous when you think about it. So congrats to Orin on hitting a thousand.

• 2:57:03Jordi Hays?

  Yeah, I just thought this was cool. So he started, like, I think really leaned into reels. I followed him on Instagram. I think he's also on TikTok and some of these other platforms. And he's just been dialing in, not only building his business in public, but like helping people understand these like short form platforms and really, you know, built a pretty, pretty awesome community around it. So I think that that's the amazing thing. Five years ago, it was super hard to get attention on Instagram. You could get attention, but it was super slow. It was like very hard to grow on Instagram.

• 2:57:35John Coogan?

  You had to go around and leave comments everywhere. I had a bot.

• 2:57:38Jordi Hays?

  Yeah, yeah. Yeah. So it was just like really tough. Yeah, it was spammy, tough time. And then the short form platforms now make, or it's much more democratic system where they don't like some, if you're an account and you have 100,000 followers on Instagram, and then you stop really posting or leaning into short form, you're pissed because you're like, I post and a thousand people see it.

• 2:57:58John Coogan?

  Yep.

• 2:57:59Jordi Hays?

  But it makes it so it levels the playing field and you can have 100 followers and you post a good video. I still will be on reels sometimes and I'll get a video that has like no views from like a new account. I'm like, sometimes it's super relevant.

• 2:58:12John Coogan?

  Yeah.

• 2:58:12Jordi Hays?

  Other times it's total slop.

• 2:58:14John Coogan?

  Testing it out on you.

• 2:58:15Jordi Hays?

  Um, it's a free way to, to change your life.

• 2:58:17John Coogan?

  Well, we started with Elon and Starlink and SpaceX, uh, bringing internet to your phone from the stars. And we will close on Elon Musk and SpaceX. Uh, the president has asked SpaceX to bring home the two astronauts stranded on the space station as soon as possible. We will do so. So, very good.

• 2:58:38Jordi Hays?

  Yeah, I mean, it's absolutely wild that they've been up there for a very long time. And seemingly Elon was very willing, excited and able to assist in the effort. And the Biden admin had snubbed him at the like EV car event that they hosted and just like ignored Tesla, ignored that he had the most dominant, you know, private space company or space, you know, force in the, in the history of mankind.

• 2:59:04John Coogan?

  Yeah, it was crazy. And, and the debate over whether or not they were technically stranded was like a big thing. Oh, well, it's just a safety thing. They could go back or.

• 2:59:14Jordi Hays?

  They could go back anytime.

• 2:59:15John Coogan?

  They could go, and then it was like, no, they actually can't go back on that Boeing pod. They gotta go back on the SpaceX thing, but when will they go back?

• 2:59:21Jordi Hays?

  Do they, do, do the astronauts have a decent internet connection when they're up there? Can they, so can they use like reels and X?

• 2:59:29John Coogan?

  I don't know. I don't know how fast the internet is.

• 2:59:30Jordi Hays?

  Can they do like, can they watch like brain rot slop or do they have to like?

• 2:59:34John Coogan?

  They might be able to use Starlink up there.

• 2:59:35Jordi Hays?

  Old office reruns?

• 2:59:36John Coogan?

  They're right up there with the, they can just beam down.

• 2:59:39Jordi Hays?

  They got black market.

• 2:59:40John Coogan?

  I think they have, I think they have pretty good internet. I don't know. But, uh, I mean, the steel man here is that like, they were supposed to go up for like two days. They got to stay up there for like nine months. Like, I think going to space for nine months.

• 2:59:50Jordi Hays?

  Maybe it's like a mutiny thing and they're like, we don't want to come down. We like it up here. We like our little.

• 2:59:54John Coogan?

  We own the stars now.

• 2:59:55Jordi Hays?

  Yeah, yeah. We like our little like.

• 2:59:57John Coogan?

  It is crazy. Elon's never been to space. He's like the space guy, but he's never gone out.

• 3:00:01Jordi Hays?

  It's so crazy too, that astronauts have to keep a straight face and, and just like, it would be very embarrassing for NASA if they were freaking out.

• 3:00:11John Coogan?

  Oh, yeah.

• 3:00:11Jordi Hays?

  Sending, sending help messages out like Biden won't. Tweeting at, tweeting at Elon saying.

• 3:00:17John Coogan?

  At Boeing, like stop, like please let us out.

• 3:00:19Jordi Hays?

  But like Biden got to just leave the White House and go on vacation and they're sitting up there being like, really?

• 3:00:24John Coogan?

  Like, it's rough.

• 3:00:26Jordi Hays?

  We don't get to go home until somebody sends a spacecraft up.

• 3:00:30John Coogan?

  I mean, people definitely jumped on this because it was such like a pro Elon narrative, obviously. But then it was true. Like, it was like, okay, yeah, Boeing actually couldn't do it. ULA actually messed up. And then it was amid all the Boeing planes and stuff. It was just such a, such a mess last year.

• 3:00:44Jordi Hays?

  Yeah.

• 3:00:44John Coogan?

  Rough year for Boeing. Anyway, that wraps up our show. Thanks for watching.

• 3:00:48Jordi Hays?

  White suit day.

• 3:00:49John Coogan?

  Go leave us a five star review. Put an ad in the comments.

• 3:00:52Jordi Hays?

  And thank you for watching live and leaving comments. We enjoy, uh, we, we love podcasting and we, we love live streaming.

• 3:01:00John Coogan?

  Yeah.

• 3:01:00Jordi Hays?

  And, uh, we're excited to do this with your support for decades to come.

• 3:01:04John Coogan?

  And we'll see you tomorrow. Have a great day.

• 3:01:06Jordi Hays?

  See ya.