Sam Vs. Elon Continues, Turning Soldiers Into Superheroes, Boomless Cruise, Market Map Drama

TBPN.com is made possible by: Ramp - https://ramp.com Eight Sleep - https://eightsleep.com/tbpn Wander - https://wander.com/tbpn Public - https://public.com AdQuick - https://adquick.com Bezel - https://getbezel.com Polymarket - https://polymarket.com Follow TBPN: https://TBPN.com https://x.com/tbpn https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://youtube.com/@technologybrotherspod?si=lpk53xTE9WBEcIjV (02:18) - Sam Vs. Elon Continues (20:00) - Palmer's Making Superheroes (42:00) - Quiet Booms! (45:45) - a16z's Market Map (58:29) - Alien ETF (01:05:54) - GPU Whisperer (01:12:33) - WSJ Breakdown (01:27:37) - Hims Superbowl Ad (01:46:10) - The Timeline

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 number one live show in tech. We are live from the temple of technology, the fortress of finance. That's right, the capital of capital. It is Tuesday. What day is it? It's February 11th, three days from Valentine's Day. So get ready for that. This show starts now. We have a fantastic show for you. We're going through OpenAI's crazy fight with Elon. Anduril launched a VR headset. They're working on the new IVAS system with the military. Boom supersonic. They don't have a boom anymore. They're going boomless. We'll break it down. A16Z launched a new market map. We're going through an alien technology ETF. You're going to be able to bet on

• 0:43Jordi Hays?

  Let's go.

• 0:44John Coogan?

  ...technology in the public markets. We're breaking down the GPU Whisperer, a good buddy of mine who helps build out GPU clusters. We're going through a defense tech op ed, pouring some cold water on all the defense tech hot companies right now in the Wall Street Journal. And we're breaking down the Hymns Super Bowl ad. And then, of course, we have a fantastic timeline, looking through a bunch of posts on X for you. Jordy, how is your day? How have you been? What's new with you?

• 1:13Jordi Hays?

  Four espressos so far. About to crack a Red Bull, firing on all cylinders.

• 1:20John Coogan?

  Let's go.

• 1:21Jordi Hays?

  I got to, I got to hang out with Patrick O'Shaughnessy this morning, which was fun. And yeah, just got me really fired up on content. I love making it. I love listening to it. And I'm very excited about what Colossus has coming up. They got some big stuff in the works, but um, yeah, a lot of, a lot of news to cover. This, the timeline, the timeline has been consistently in turmoil, and it's a blessing for

• 1:50John Coogan?

  It's episode 50, Jordy. Can you believe that?

• 1:53Jordi Hays?

  It's episode 50?

• 1:54John Coogan?

  Episode 50, baby.

• 1:57Jordi Hays?

  Can you, I can't honestly, genuinely can't wait for episode 5000. That's really the one. That's the one.

• 2:02John Coogan?

  Takes most podcasters a year. We've been doing it a couple of months. We caught up.

• 2:07Jordi Hays?

  We caught up. We caught up. I love it.

• 2:09John Coogan?

  Bad day to be a weekly podcast. It's very weak. It's right in the name. Anyway, let's move on to, yeah, let's move on to the OpenAI news. We got a clip from Sam Altman. He is in France at an AI summit. J D Vance is there. Emmanuel Macron is there. Lots of heavy hitters, lots of size lords. But of course, they asked Sam about the craziness from yesterday. Elon submitted a bid to buy the OpenAI nonprofit for something like $97.1 billion or $97.4 billion. Obviously, that complicates the for-profit spinout and conversion process that's obviously kind of unprecedented at this scale. And so, let's

• 2:54John Coogan?

  go to Sam. Let's hear what he had to say in France about this offer.

• 2:58Speaker 02

  OpenAI is not for sale. The OpenAI mission is not for sale. Elon tries all sorts of things for a long time. This is the late, you know, this week's episode.

• 3:06Speaker 03

  You take it seriously at all? What do you think he's trying to drive at with this?

• 3:09Speaker 02

  I think he's probably just trying to slow us down. He obviously is a competitor. It's, you know, he's working hard and he's raised a lot of money for XAI and they're trying to compete with us from a technological perspective, from, you know, getting the product into the market. And I wish he would just compete by building a better product, but I think there's been a lot of tactics, many, many lawsuits, all sorts of other crazy stuff now this. And we'll try to just put our head down and keep working.

• 3:37Speaker 03

  Do you think Musk's approach then is from a position of insecurity about XAI?

• 3:41Speaker 02

  Probably his whole life is from a position of insecurity, I feel for the guy.

• 3:45Speaker 03

  You feel for him?

• 3:46Speaker 02

  I do, actually. I don't think he's like a happy person. I do feel for him.

• 3:49Speaker 03

  Okay. Do you worry that he has this proximity to the president and he can influence the decision-making of the US presidency and policies around this agenda on AI?

• 3:58Speaker 02

  Not particularly. Maybe I should, but not particularly. I mean, I try to just wake up and think about like how we're going to make our technology better.

• 4:07John Coogan?

  What'd you think, Jordy?

• 4:10Jordi Hays?

  Narrator, he wasn't just thinking about how to make the technology better. Like, you know, Elon, like, here's the whole situation. Elon feels that Sam has played extremely dirty, you know, doing the whole, I'm just doing this because I love it bit, you know, Senate, you know, testifying in front of the Senate to then converting into a for-profit. Elon is frustrated because he was very early to this trend. Now he's like playing catch-up with XAI. Both of them, in their own ways, have been playing dirty, right? Elon's choosing to do that through lawfare and it's in, you know, it's in many ways like

• 4:54Jordi Hays?

  exactly what Elon should be doing, right? He feels like he was, feels like he was slighted, feels like he deserves some aspect of, you know, some position in the company. And then simultaneously, Sam is doing exactly what he should be doing, which is fighting the lawsuits, trying to keep the team focused on the mission and the product and winning. And when I look at, every founding journey is like a roller coaster ride. Anybody that's built the company will tell you it's like a roller coaster ride. One day you're like super stoked, the next day you're, you know, questioning like, is this going to work? And if you think about Sam's like last two weeks, it's like, okay, DeepSeek launches and like, so that's like a low moment.

• 5:36Jordi Hays?

  And then they launched like Deep Research and then, you know, he's getting, and then it's like a Super Bowl ad and then like a new law, like new lawsuit, new offer to buy the company. So it's like, it's, it's, you know, the waves that he's going through, you know, I don't think, regardless of your position on Sam or OpenAI or Elon, as, you know, former CEO of a much, much, much, much, you know, a company that is like tiny, tiny, tiny, tiny fraction of the size, I feel for Sam in terms of like the roller coaster that he's going through and how difficult the job is where, you know, I just posted about this five minutes ago.

• 6:19Jordi Hays?

  Sam is actively competing with four of his former co-founders in OpenAI that have all raised more than, that have all raised billions of dollars. So not only is he fighting like the world's richest man, he's like in lawsuits, he's getting attacked by DeepSeek, he's fighting for, you know, three other of his former partners. And so the pressure, it can't be overstated how much pressure he's under. And so I think that he, I, I read this as like good talking points. He's nailing it, you know, he, it's a good response, but you can tell it's wearing on him. Like getting to the point where he's saying, I wish that they would just focus on the product or the technology. So it's clearly wearing on him and, and I don't know.

• 7:04Jordi Hays?

  There's not many people on earth that would be able to deal with this much pressure for this long, while being this much in the spotlight, while trying to, you know, innovate in a, in a very meaningful way, while trying to stay ahead of all these other labs, whilst trying to stay ahead of China. While facing, you know, I didn't even bring up like Meta and Facebook and Lama, right? Like that's been a whole other aspect. And so, you know, Sam made a choice to play the biggest game in the most competitive space. And now he's dealing with the repercussions on that. But there's not a CEO on the planet that's under more pressure than Sam Altman.

• 7:42John Coogan?

  Yeah. And it certainly does, it pales in comparison to like Steve Jobs was not under the same level of pressure when he was launching the iPhone. Even Zuck, I mean, they were making movies about him as a kid, basically. Basically hit piece movies about everything he did. It was rough. He did not have the world's richest man going after him at that time. In fact, he was partnering with Microsoft and Bill Gates and it was somewhat of a friendly relationship. It wasn't that much of like Google wants to kill you. Yeah, Google launched a Google Circles or whatever that was. I, I can't even remember the name, but it was like kind of a shot across the bow. It was nowhere near as serious as what's going on right now. And so what's interesting is that.

• 8:25John Coogan?

  Sam actually has to kind of restate the fact that, hey, this, the nonprofit is still going to exist. Like, people don't even understand what's going on there. It's not that the nonprofit is converting. It's that almost like you're running a nonprofit, you discover some, you know, gold in those hills that you happen to own. Or like, you invent something brilliant and then you're spinning it out as a company. You're effectively selling that asset off the balance sheet of the, of the nonprofit. And it's very, it's very confusing because the nonprofit does want to continue going on. And it's not really a full conversion. There's actually two organizations that are going to split out. But it's all been so complicated from day one that it's been just, there's been so many vectors to attack it.

• 9:10John Coogan?

  And it's not just Elon. Zuck has also put pressure on them in California for trying to do this. And what's interesting is that I think about the dawn of OpenAI, like what the initial pitch was and what the initial strategy was. And it's very clear to me that no one actually predicted scaling laws would be as capital intensive as they wound up being. The thought was, let's get the smartest people in the world, the smartest computer scientists. Greg Brockman, he already, he was the CTO of Stripe. He's already really, really rich, probably a billionaire. He, he's going to work for a nonprofit for whatever, you know, healthcare. It doesn't matter.

• 9:52John Coogan?

  And a lot of people are going to say, hey, yeah, I could make $2 million a year at Google doing ads. But, you know, this nonprofit is still going to pay for my health insurance, pay for my kids. It's going to be a fine life. And I get to work on the most important problem in human history. If it was just a human capital problem of just let's design the perfect algorithm for AI, game over. You don't need the capital. It works as a nonprofit. The original strategy works. But then they run into the scaling law and all of a sudden, it's very funny to me. It feels like the machine god of AGI is like, okay, humanity, if you want to summon me fully, you have to be all in on capitalism. None of this nonprofit, this nonprofit stuff does not work.

• 10:31John Coogan?

  You have to be a highly tuned capital formation machine in order to make this happen because I demand GPUs.

• 10:40John Coogan?

  I demand sacrifice of GPUs to the Shoggoth. And so it's very interesting how it's played out. But what else have you taken away? And then maybe let's move into some posts and some reactions to this.

• 10:52Jordi Hays?

  Yeah, it's just, it's an interesting scenario to think about. Would OpenAI be the company it is today if it didn't have this massive group of founders? That now is its biggest detractor, right? The fact that you have Mira going and raising billions for a company to directly compete with the original company. You have Ilya doing the same thing, right? You have John going to Anthropic, helping them out, now going, joining Mira, right? So in many ways, it's like, the company probably wouldn't exist in its current form if it didn't have like, all these brilliant minds working on it. But it also set it up because of how brilliant and independently gifted all those founders were. It also caused all of them to basically think, I can do this better myself, right?

• 11:37Jordi Hays?

  And I'm going to do this better myself and I can attract the capital. And, you know, if, who knows, right? And they're all sort of drafting off of OpenAI in terms of like, the billions of dollars that were spent on, you know, research internally and the learnings from that. And just like genuinely, you know, generally being able to go faster with their new ventures. But it's certainly completely unprecedented. And I can't wait to watch the, probably read the Ashley Vance book or documentary. Because it's going to be, it's going to be absolutely wild.

• 12:12John Coogan?

  For sure. Let's move on to some posts. Kevin Kwak says Elon's OpenAI bid, of course, is to move FMV, fair market value for nonprofit conversion. Interestingly, this has been gray area in tech startups because technically, anyone can screw up a company's 409A slash option pool, planning by sending unsolicited term sheet, which is very interesting. I didn't know that you could actually do this. Hasn't been a major issue because it would be a very aggressive move and burn bridges. Plus, mostly companies are fuzzier on all this stuff with IRS than they should be. But this has been a known attack area for a while. Kevin follows up and says, I really do want to spend one day, I really want to one day spend a weekend talking with both OpenAI and Elon's legal slash tax people.

• 12:56John Coogan?

  Not about this thing, just in general, they have such amazing structures they have navigated. Sigh. And I love that he's just like, I want to nerd out with these folks because they've done such crazy stuff. And it really is crazy. I know multiple. People that got early access to OpenAI in their first for-profit fundraising. And they just passed, even though it's like, how could you pass on that team? Like, the initial team was like Greg Brockman, Sam Altman. Like, it's just the most insane founding team. And it's like, they're gonna make money. Like, you should, it's all green flags. And then you just see the biggest red flag ever, which is like, you're not getting stock. You're getting units. And, and of course, like, it seems like it's gonna work out, and it could, but it's obviously such a knockout, knockout fight.

• 13:41Jordi Hays?

  Yeah, I mean, there are so many reasons that you could have written a memo and said, I love the team and the opportunity, but it's not the right fit for our firm. On his note about, you know, term sheets potentially screwing up for an A and A's and option pools. Every, every startup founder eventually goes to a position where they're expecting a term sheet. And then they're trying to process a bunch of like, you know, employee onboarding type stuff to make sure that it hits before getting that term sheet. And I've been in positions before where I've told the investor, wait until end of day Monday to send this. Because like, I need to get a few things in order to make sure that my, you know, people that are about to join the team are getting refresher grants. We're gonna get them at the, at the, you know, previous valuation effectively.

• 14:26John Coogan?

  And so SMB attorney says, what Elon Musk just did in his 97 billion bid for OpenAI is genius. The previous go private price was 40 billion. He's playing chess. Here's why. Delaware courts apply something called the Revlon rule to M and A bidding situations. When a board decides to sell a company, their legal fiduciary duty shifts to getting the highest price for shareholders. But OpenAI isn't a normal company. It started as a nonprofit, then created a for-profit arm, OpenAI LP, to raise investment. That structure creates a legal gray area. Musk's bid isn't about just buying OpenAI. It's about forcing a decision. If OpenAI's board considers, even considers transitioning fully into a for-profit company, Musk's bid puts them in a position where they might have to apply Revlon rules,

• 15:10John Coogan?

  maximizing value, just like any other corporate sale. It's a strategic move that could expose whether OpenAI is still mission driven or. If it's just another big tech company playing Wall Street rules and that's the real play. Musk is challenging OpenAI's relationship, OpenAI's leadership on both legal and ethical level, testing whether their decisions align with their original vision or the financial incentives of investors like Microsoft. Sam Altman and OpenAI's board rejected Musk's offer outright, but that response raises more questions than it answers. You see, they probably have a duty to create a special committee, consider all offers and entertain an auction. If OpenAI isn't a company that can be bought, why do they take billions in investment? If they are a company that can be bought, why turn down 97 billion?

• 15:53John Coogan?

  Either way, Musk has put them in a position where they have to justify their existence, not just to him, but to the Delaware Chancery Court. It all comes back to Delaware, baby.

• 16:02Jordi Hays?

  It's crazy because Delaware, I mean,

• 16:04John Coogan?

  Screwed over Musk.

• 16:05Jordi Hays?

  Elon has had his issues with Delaware, but the Delaware courts have proven to be unpredictable, right? Everybody would have said like, there's no way that they're going to entertain this ridiculous lawsuit from a shareholder that has like seven shares that that clearly is just basically working on behalf of lawyers that are going to make hundreds of millions if this decision goes. And just with that, you know, some people were predicting, we covered this last week, that the decision to end Elon's pay package could literally cost Delaware billions of dollars in lost tax revenue as companies say, hey, you know what? I'm going to go to Nevada. I'm going to go to Texas. So I feel like Delaware is unpredictable right now.

• 16:46Jordi Hays?

  They, we've seen their judges be, um, you know, make, make sort of more political decisions, but this is such an unprecedented situation, so much gray area, so many conflicts. It's such a, uh, I don't know that there's great precedent in Delaware for nonprofit to for-profit conversions that have already raised tens of billions of dollars. Like it's just, nobody really knows. And I think, um, yeah, we, we covered, we were able to live react to this on the show yesterday. It was very obvious that he was throwing like this $100 billion wrench or $100 billion grenade into the, into the for-profit conversion. And it's great to see SMB attorney kind of breaking down like, hey, what's actually going on behind the scenes here? And it really comes down to like, it's an ethics thing. There's a legal question.

• 17:32Jordi Hays?

  You know, it seems like if OpenAI's board just immediately rejected it. Then to me, like, at least the board is kind of aligned on the deal that they want to do. But then, again, if you if you get the courts involved, you know, maybe, maybe like, they they start poking holes in that decision.

• 17:50John Coogan?

  Yeah. Well, hopefully, there leads to some legal precedent that allows more nonprofits to convert to for-profits. We've been advocating for the Red Cross and PETA to go for-profit, and we'd love to see more nonprofits move over to the venture capital world, or maybe do private.

• 18:07Jordi Hays?

  Yeah, I want to see, I want to see PETA transition to a private military contractor and actually put it on the line and defend the animals, you know, commando style, you know, and if, if you could, yeah, basically.

• 18:21John Coogan?

  Black water for poaching.

• 18:23Jordi Hays?

  Black water for pets, yeah.

• 18:25John Coogan?

  Yeah, black water for poaching. Oh, you think you're taking down an elephant? Well, there's a Apache helicopter coming through, paid for by PETA shareholders.

• 18:33Jordi Hays?

  Yeah, yeah.

• 18:34John Coogan?

  Reaper drones, gonna be circling every hippo in the savanna.

• 18:40John Coogan?

  Anyway, let's close with some great analysis, as always, from Ben Thompson over at Stratechery, an absolute dog. He says, "The OpenAI nonprofit is controlled by its board, which does not have a fiduciary duty to maximize OpenAI's value." Again, because it's a nonprofit, that means it can't say no. At the same time, the structure that lets OpenAI's board say no is exactly what Altman is trying to get rid of in favor of a for-profit structure that will unlock new investment. And so he says, "I think that's as far as the story goes. While Musk needed to round up a viable investment group to make this offer legitimate, and would gladly take over OpenAI if his offer were accepted,

• 19:20John Coogan?

  the primary motivation and the primary outcome is very likely to be to make, to be to make an already complicated and pricey transaction even more so." So I think we'll close there. We'll see where it goes. Maybe there's more wrinkles in this story. I'm sure there'll be more drama. The boys are fighting. It feels like that scene in The Matrix when Neo and Morpheus are fighting and all the crew, Neo and Morpheus are fighting, and they gotta go in and watch because it's a, it's a knockout, drag-out fight. Two of the greatest tech entrepreneurs in, in, in the modern era, warring. And we'll be here reporting on it, folks, so stay tuned. Let's move on to some, to some other fantastic news.

• 20:04John Coogan?

  Palmer Lucky announced on X this morning that Anduril is taking over IVAS. And we don't have time for business as usual. Whatever you are imagining, however crazy you imagine I am, multiply it by 10 and then do it again. I am back and I am only getting started. And so for those who don't know, Anduril is taking over the US Army's Integrated Visual Augmentation System, the IVAS program. That's an augmented reality headset for the modern warfighter. And it's pending the Department of Defense's approval. We are now fully responsible for production, hardware, software, and integrating lattice to greatly expand warfighter capabilities. This is incredible news. And Palmer posted a whole blog breaking it down.

• 20:48John Coogan?

  Let's read through it now. As of today, Anduril Industries is taking the reins of the largest project of its kind in history, the United States Army's Integrated Visual Augmentation System program. For me, this announcement is deeply personal. Since my pre Oculus days as a teenager, who had, who had the opportunity to do a tiny bit of work on the Army's Brave Mind project, I've believed there would be a headset on every soldier long before there is a headset on every civilian. Because you can kind of mandate it and it can be designed exactly for what the warfighter needs, a very specialized use case. Given that America loses more troops in training than combat, the Squad Immersive Virtual Trainer

• 21:30John Coogan?

  side of IVAS alone has the potential to save more lives than practically anything else we can imagine building. Tactical heads up displays that turn warfighters into technomancers and pair us with weaponized robotics were one of the products in the original Anduril pitch deck for a reason. The past eight years we have spent building lattice have put Anduril in a position to make this type of thing actually useful in the way military strategists and technologists have long dreamed of, ever since Robert Heinlein's 1959 novel Starship Troopers. Fantastic book, great movie too. Not just day and night and thermal and ultraviolet, but peering into an idealized, interactive, realtime composite of the past, present, and future that will quickly surpass traditional senses like vision and touch. Put another way, Superman doesn't use menus.

• 22:15John Coogan?

  He just sees and does. I love it. If Andorol had been more than a dozen people when IVAS was first getting spun up all those years ago, at least the tragic heap guys didn't win, our country really dodged a bullet there. I do believe our crazy pitch would have won this from the start. As things stand though, there is no time like the present. The IVAS program, one of the most important programs to the army, represents just the beginnings of a new path in human augmentation, one that will allow America's warfighters to surpass the limitations of human form and cognition, seamlessly teaming enhanced humans with large packs of robotic and biological teammates. I can go on and read more, but Jordy, you got anything for me in the interim?

• 22:57Jordi Hays?

  Oh, I mean, it's just crazy because every time Andorol does anything, like, you know, around the world, multiple teams just cry out in anguish because the Andorol just ends up doing the thing that was the only thing in somebody's pitch deck, right? And this was just one of the things in Andorol's pitch deck eight years ago, and they're getting around to these things slowly as they build out this incredible distribution channel and relationship with the DOD. So anyways, I think, obviously makes a ton of sense. It's just wild how Andorol continues to basically own the product areas that were in every sci-fi

• 23:40Jordi Hays?

  novel that basically anyone has ever read, and they're just getting to these things first and just capturing, you know, not only contracts, but mindshare. And, you know, as always, you know, seems to be a huge win for Andorol. But also, you know, I love to see that the kind of even the language that they're choosing, technomancers is some great, great, great choices of words. So. Very cool, very cool to see. And this is the kind of thing, you know, like the reality is the average soldier today grew up playing Call of Duty. And so they like already had this experience as 12 year olds in the Xbox 360 lobby screaming, you know, and so

• 24:24Jordi Hays?

  these are all the things that I think our soldiers have, you know, expected and just simply haven't really existed, right? There's been heads up displays and things like that, but nothing that was, you know, truly, truly integrated and something that was on par with even an Oculus-esque experience. So to me, this is like, basically, this is probably a, this is clearly a product that Palmer and the rest of the team have wanted to build forever. And they're just now getting to the point where they can actually really deliver on these ideas that that seem like they're out of a sci fi novel from the 90s. But are, you know, very becoming very real, real. So.

• 25:04John Coogan?

  Yeah. Yeah, technology has advanced so quickly that the integration into the military just hasn't happened nearly as fast enough. There's funny pictures of like drone pilots using literal Xbox 360 controllers because the government doesn't have the resources to build their own. So they just patch that in. And sometimes that's great.

• 25:23Jordi Hays?

  There was.

• 25:24John Coogan?

  Google Maps is often used to as a targeting system because they just have the most reliable app for understanding where the roads are and great satellite imagery. And so you'll literally drop a pin, send it to the guy and be like, yeah, call in the artillery right here. It's crazy.

• 25:39Jordi Hays?

  Yeah. Do you remember when that submarine, the Titanic submarine went down? And then everybody like this video started going viral. They were like, oh, they were using an Xbox controller. Like, can you believe that? Like, of course they went down. But it's like, no, that's literally what our entire military, at least like running on like basically like Xbox controllers.

• 25:59John Coogan?

  Also, sometimes it's like, well, yeah, actually the Xbox controller is like one of the most mass produced products on the planet is probably the most reliable controller than some one off that you build. Like a lot of times it's like, why deal with that when you can just get something off the shelf that's been manufactured to. Like complete Six Sigma uh precision. Uh anyway, uh so a couple of years ago, I was doing a deep dive on IVAS and I asked Palmer, hey, like, like, you're like the perfect guy to do this project. Why is it still sitting with Microsoft? And he was kind of cagey like, oh, like, maybe we'll do it one day. And now we know it just was in the pipeline clearly. Um, so I, I wanted to give the, the listeners a little bit of background on the IVAS program. It's a really interesting

• 26:43John Coogan?

  story of how Microsoft won that contract, what was going on in the military at the time. Um, so let's, let's go through some of it because it, this, this idea of like BR AR for soldiers goes back decades. So in the early 2010s, uh VR and AR is going to be the next thing. Everyone's calling it Oculus is blowing up and Microsoft wants to get in the game. Uh, they launched the Xbox Connect in 2010, which was uh an augmented reality system that would track your motion and then put that in the game. And then they launched the first hollow lens in 2016. That never made it to a consumer device, but they did roll it out in some industrial capacities and it was more of like a tech demo. Um, so they ultimately, Microsoft ultimately determined that augmented reality

• 27:28John Coogan?

  was too cumbersome for everyday consumers. And I used the hollow lens and it was rough. It was heavy and the field of vision was very narrow. We're still, you know, a whole decade before Meta's uh glasses and the Meta, the new uh, I forget what they call it, the Icarus or something. It has some funny name. Uh, but uh, the, the, the, the new Meta glasses, they're not even out yet. And so we're still not there. Even the Apple Vision Pro is still not widely used, high churn. And so uh, Microsoft is just too early, but nevertheless, they decide that uh, they're good at selling to large enterprises, plays to their strengths and few enterprises are larger than the US military. So they get a $22 billion contract for a project called IVAS. And think about it.

• 28:10John Coogan?

  I mean, Anduril is raising on $1 billion uh ACV, one billion dollar revenue or something like that. A $22 billion contract goes out to Microsoft for this. Obviously, it's over a number of years, but still that's massive. Uh, and this is like perfect for Anduril to do. Um, so the initiative aims to equip over 100,000 American soldiers with augmented reality headsets based on hollow lens technologies. They're going to mass produce these. This is a lot of, a lot of tech going out. So IVAS was the latest chapter in the military's long-running fascination with augmented reality, and it starts all the way back in the 80s. So the army had recognized that technology was transforming battlefield intelligence as satellites and drones generated vast amounts of data that traditional communication tools like radio struggled to keep up with. So, you know, you can hear somebody in your, in your headphones over

• 28:55John Coogan?

  a radio, but it's so much easier if you can just be like, let me actually pull up the map and see what you're talking about. It's really hard to describe, hey, over that hill, there's a bad guy. And you're like, which hill? And you're like, the one on your left. And it's like, I can't hear that. Right?

• 29:07Jordi Hays?

  Yeah, I think people, people like, it truly is going to be so transformative where, you know, like oftentimes, like a corporate office is chaotic, right? It's like, you don't know where like, like, oh, where's like, where's your coworker? Where's this person? Oh, can you try to get this person over there? Imagine a battlefield where there's hundreds or thousands of vehicles that are all coordinating individuals, different platoons, teams that are working together, and the enemy engaging with you. And, you know, there's just like the most chaotic environment that you can possibly imagine. I, my great-grandpa fought in World War II and was like shot down like twice. And he's like, told me a bunch of stories about how like, once you're in there, it's just like

• 29:49Jordi Hays?

  all out chaos. And, and that, you know, that, like, that largely hasn't changed. Like, teams have gotten better, communication's gotten better, but it's still chaotic. And so the potential for this technology is like, it will become like impossible to actually engage in a productive way on a battlefield if you're not like, in this VR experience and having full visibility of the battlefield and where your teammates are and stuff like that. And it really will transform the effectiveness of the reason this technology is important and the reason that the military said, we're going to spend 20, $22 billion to try to get this thing. Is that it's gonna, you know, the potential is obviously there, but technically it's an extremely difficult challenge.

• 30:33John Coogan?

  And so the first thing that the Army does is they start this prototype project called the Soldier's Computer, but the results are really underwhelming. The heads-up display used the same low-resolution, red-only screen found in the Nintendo's Virtual Boy, which was a complete consumer flop. I don't know if you remember this thing, but you could play like Mario Tennis and it would have like, like basically just two planes of 3D. And it was really cool. I remember playing with it as a kid and being like, wow, for like two seconds and then being like, that's miserable. I'll just stick with the Game Boy. But it makes sense. So the project was moved to the US Army's Natick Soldier Center in Massachusetts. The budget increases, expectations soar, and now there's more money at stake.

• 31:17John Coogan?

  And so in 1992, the Soldier's Computer entered field testing. Early impressions were promising. Soldiers praised how thermal imaging extended their sight range and how the system enabled them to fire around corners while staying in cover. So they'd actually have a camera mounted to the gun and then they could see what the gun saw in their heads-up display. So they could put the gun around the corner, shoot, and basically, you know, stay in cover. It's pretty cool.

• 31:44Jordi Hays?

  That's so, so such a funny product that I imagine the soldiers in practice absolutely hated because it's so like, it's so, so out of a James Bond like villain movie. Like, I have my gun.

• 31:59John Coogan?

  Right.

• 32:01Jordi Hays?

  You're putting your gun around.

• 32:02John Coogan?

  There's also an old Soviet gun that actually has a curved, yeah, a curved barrel so you can aim around corners and it completely destroys the ballistics. Like it's a disaster. And I think if you put more than like a couple hundred rounds through it, it just completely melts down and breaks. Anyway, so there's, there's a ton of drawbacks. The head-mounted display was bulky. Data transfers lagged by up to 75 seconds. Over a full minute, you're waiting for it to refresh. The system crashes were frequent. A US Army Research Institute report featured blunt soldier feedback. They call it junk. They say it sucks. And they all mentioned how painful it is to wear. One particularly damning quote encapsulated the frustration.

• 32:44John Coogan?

  I don't know whoever put it on the soldier's back in the original configuration and had them walk around with it. It appears to me to be designed in a vacuum, as in, well. Well, we need all these things to make the system run, but we don't really consider the reality of a soldier walking on a street, hopping a wall, going through a door, coming out of a hatch. The equipment added 40 pounds to a soldier's pack. By contrast, the Meta Oculus Quest 2 weighs just over a pound. And so clearly, the technology has advanced. Everything shrunk down, like even, even like heavy headsets now. You know, you're talking about one pound, two pounds. You throw that on a ballistics helmet, it's not going to be that big of a deal. You throw a couple of pounds of battery packs in the backpack, probably doable at this point.

• 33:28John Coogan?

  So, but despite these shortcomings, senior military officials believed in the program. And there's this, there's this chain of like, hey, we gotta keep going. This is my job. I'm, I've been working on this for a decade now. This is my career. And so in 1996, the DOD rebranded the effort as Land Warrior, and they approved a billion dollar budget. Remember, they've spent all this money and this has never made it to the field, really. Like this has never been a successful project. And so the DOD appointed a Colonel to serve as an intermediary between engineers and soldiers. However, the project faced a fatal flaw. Levered to leverage cutting edge technology, the military began incorporating consumer hardware into the system's design. This is a smart move, but unfortunately, consumer grade equipment wasn't built for the battlefield. And so it's a perfect example of like, why you need Palmer in here?

• 34:13John Coogan?

  Cause he's, he's the consumer guy, he's built the Oculus. He's built, you know, the chromatic, but then he's also built stuff that needs to sit on the battlefield. Like, you know, all of the drones and sensor towers that Andrew has produced. And so the hard fail, the hardware failed in rain, couldn't withstand electromagnetic interference, and the effort to ruggedize it caused costs to skyrocket. By 1999, spending had increased 50%. A private company burning this much cash with little to show for it would likely face investor, intense investor scrutiny, but too many military leaders had tied their reputations to Land Warrior, making failure unthinkable.

• 34:50John Coogan?

  And so I can go on here. One of the project's biggest champions was Navy Admiral William Owens, who served as Vice Chairman to the Joint Chiefs of Staff during the Clinton administration. Owens was a staunch advocate for what he called network-centric warfare, which is actually a really cool idea. In a rare candid interview from the mid 90s, he declared, "I genuinely believe," and this sounds like it could be said today, "I genuinely believe in the next five years, there will be a revolution in the way this nation fights wars. It will come primarily from the smart front end of warfighting. That is, the ability to use high-technology surveillance of a very large battlefield. We have never in the history of warfare seen the battlefield that way." And so Owens' vision aligned with the Army's post-Cold War shift

• 35:33John Coogan?

  towards a smaller, better-equipped fighting force. And this was the story of the Gulf War. Iraq had a huge military, but it was really just America had way better technology. And so that war was supposed to go on for a long time. It ended in just a few days. In 2005, 229 infantry soldiers were equipped with the system. Nearly 20 years after the project had begun, soldiers in Iraq used the gear to digitally mark safe regrouping points, but enthusiasm remained lukewarm. More refinements were necessary.

• 36:05Jordi Hays?

  It's interesting because this type of headset is competing with with literally a radio that just can call out to someone else and be like, "Hey, here's the rough coordinates. Let's meet there." And then you're using this clunky headset, and it's like not working. And if it's not working perfectly, you're on the battlefield. You're in the most intense situation. Your life is at risk. Your team's life is at risk. The mission objective is at risk. If it's not perfect, you're just going to pick up the radio or call up to air support and say, "Hey, can you get a visual on this? What do you see? Cool." And it just quickly becomes something that... So it's crazy to think that however many $20-plus billion

• 36:48Jordi Hays?

  after 20 years nets out as a mid-product for 229 soldiers. Not the best trade, but again, there's an argument to say like, "Hey, they were right. They were just basically too early." And to me, the interesting thing here is like, I would love to...

• 37:09Jordi Hays?

  The long term, I think everybody has a sense that the battlefield long term will be a bunch of autonomous and teleoperated devices, right? In the same way that the people that fly UAVs in the Middle East for the United States, like are sitting in Nevada, right? Like outside of Las Vegas, like, you know, basically remotely flying these craft. And it does seem that you'll eventually have a range of different types of robots similar to that that will be teleoperated. And so I'd be interested to hear how Palmer and Trey and the rest of the Anduril and Matt and the rest of the Anduril team are thinking about what is, how does this new, you know, sort of augmented reality VR, I don't know, whatever, what this headset,

• 37:54Jordi Hays?

  how does that fit into the teleoperated future? Is it you have one guy on the battlefield that can use the headset to basically drop into like some type of drone or, you know, robot that they can then carry out other activities? Because ultimately, at the end of the day, it doesn't, you know, it seems like there's there's an obvious trend of just removing human life from the battlefield entirely because the actual loaded cost of a human, not to mention the value that the family and that person's family and that person themselves puts on their own life, but the full cost of a soldier annually is just so, every, every lost life is tragic because

• 38:38Jordi Hays?

  you know, we have an individual who's not going to go home to their family, but then there's also the economic burden of every individual soldier is always going to be worth an order, you know, orders of magnitude more than a robot that could just blow up and maybe it's unrecoverable, but it's replaceable, right?

• 38:54John Coogan?

  Yeah, yeah. The 22 billion sounds like so much, but I remember we were talking about the F-35 and I think I mentioned that it cost a trillion dollars and you were like, that's impossible. And someone followed up with me and was like, no, it was a trillion dollar project. Like, Jordy, it is an unbelievable amount of money. It wasn't over one year, it was over decades, but still, the total cost of that project was in the trillions. But in 2010, they actually did de-scope it and move kind of halfway, you know, VR headset's the future, radios the past, under the Obama administration, what?

• 39:26Jordi Hays?

  Over, over, over 20, over 20 billion in the hole. And you're like, guys. I think it's time to like, let's de-scope this one.

• 39:33John Coogan?

  Let's de-scope this, yeah. No, they literally do. And so in 2010, Land Warrior rebrands as Net Warrior. This is like the fourth name for this project. And the bulky pack and headgear are replaced by a Respect Android phone secured to the soldier's chest. And so they basically flip it down and then they can see maps and all the information.

• 39:52Jordi Hays?

  Yeah.

• 39:52John Coogan?

  But it doesn't need any of the headset, not heavy on the face. Kind of leaning into like what the technology was good at at the time. And so mobile technology had evolved to fulfill much of William Owen's vision. But the army was determined to extract more from its decades-long investment. In 2019, Microsoft engineers were invited to a military base to learn what soldiers needed from an augmented reality headset. That weekend birthed the mark of IVAS. Given the years of research behind the project and Microsoft's extensive experience with augmented reality, one might have expected a smooth rollout. Instead, IVAS encountered problems from the outset. Soldiers were blunt in their critiques. You've got to ask yourself the question. In warfare, where does this tech just become too much and not really worth having?

• 40:36John Coogan?

  It doesn't do any more to help the troops. It may actually hinder them because of the hassle factor. Another soldier warned, "My warrior, my worry is that if we give these to soldiers, they're going to rely on them too much. They need to know how to fight without them. They really do." Others were frustrated by the logistical burden. Perfect. All I heard was, "We have like five new pieces of sensitive items we have to worry about." Common sentiment was that the system was unwieldy. It doesn't look promising. I mean, this thing is just way too big. It looks uncomfortable. It's heavy. If you're sprinting, jumping, running, doing infantry stuff, you're going to be sweating. Despite these concerns, Microsoft and the army remain committed to making IVAS work. The project holds potential to improve soldier situational awareness. Moreover, the US faces pressure to stay ahead

• 41:21John Coogan?

  of technological advancements from Russia and China, both of which are also pursuing augmented reality programs. The military is determined not to fall behind. Their current goal is to deploy working hololens-based headsets into the field. This was written in 2022. They wanted to deploy it by the end of 2023. It's always just a few years away. Hopefully that changes going forward because Anduril's on the job and they've been able to ship stuff like a tech company, which is great. And so we wish the entire Anduril team massive luck in this endeavor. Go get them, build some cool stuff, get it out in the field, help our soldiers. And, uh, and I'm proud to be an American.

• 42:06Jordi Hays?

  Same.

• 42:07John Coogan?

  Let's move on to the next story.

• 42:08Jordi Hays?

  Let's do it.

• 42:09John Coogan?

  We got a massive news story from Blake Shaw over at Boom Supersonic. Boom Supersonic no longer has booms. They cracked it. Today, we are introducing Boomless Cruise Supersonic Flights up to 50% faster with no audible sonic boom. We quietly, ha ha, demoed this on XB1's first supersonic flight, three times, actually. How does it work? It's actually a well-known physics called the Mach cutoff. When an aircraft breaks the sound barrier at a sufficiently high altitude, the boom refracts in the atmosphere and curls upward without reaching the ground. It makes a U-turn before anyone can hear it. Mach cutoff physics is a theoretical capability on some military supersonic aircraft. Now XB1 has proven it with airliner-ready technology.

• 42:53John Coogan?

  Just as a light ray bends as it goes through a glass of water, sound rays bend as they go through media with varying speeds of sound. This means the supersonic booms can make a U-turn in the atmosphere without ever touching the ground. Boomless Cruise requires engines powerful enough to break the sound barrier at an altitude high enough that the boom has enough altitude to U-turn and real-time weather and powerful algorithms to predict the boom's propagations precisely.

• 43:21John Coogan?

  Now, I heard an interesting take on this, that even though they cracked the science, and I think NASA and some government organizations were working on sonic boom reduction, and the military's had some technology here. Obviously, it's a huge thing to get this into a commercial craft, so congratulations to the Boom team. But even though the technology might be here now, the law has not caught up. And I think it is, in many places, illegal to fly at supersonic speeds, even if you're not producing an audible supersonic boom on the ground, because we have a speed limit, not a sound limit. So, obviously, this needs

• 44:02John Coogan?

  some legal work to get in. And, you know, I hopefully, hopefully, this will be a bipartisan issue. Hopefully, this will be a thing that everyone supports.

• 44:12Jordi Hays?

  Don't give MKBHD a Boom supersonic, because he will just be ripping around school zones, being like, if nobody can hear me, I can't get in trouble. But, no, I think, I do ask myself, did they know, did they think that they were going to be able to achieve this when they named the company? And they just thought, hey, this is still, if we can pull this off, it'll be ironic that the Boom, the supersonic plane company actually doesn't produce a supersonic boom, it's just the Boom jet. So, I think it works either way, whether or not they were planning on it. But, I just, I just, this is such a great story

• 44:55Jordi Hays?

  to me. I'm, you know, it's still unfolding, but to, we've talked about this before, but to go from this, like, horrible recap, down round, everybody kind of rallying to say, hey, this is an important American company, we want to save it. Nobody else is, is, you know, we need teams working on this problem, to now seeing a very real reality where, a decade from now, we could be getting on a Boom jet and flying to, you know, across the country. And, you know, I don't know how long they're actually predicting that it'll take, but a fraction of the time is just really exciting. So, I look forward to doing a live, a live show in the jet, traveling at supersonic speeds. It's gonna be fantastic.

• 45:38John Coogan?

  Congratulations to Blake and the Boom team. It's incredible how long you've been at this, and the results you're finally getting. Patience is a virtue, and it paid off here. So, congrats. Well, let's move on to our next segment. Andreessen Horowitz has just released a new market map on text to web app. Market map time, text to web app and website generation market map from Justine Moore at Venture Twins. New A16Z thesis, building websites, apps with AI. There's been explosion of products that help users vibe code a web app from text prompts. We dove deep on these tools, who's using them, how they work and where they might be headed. Now, this got a little spicy.

• 46:20John Coogan?

  I quote tweeted this with a video of a Rainbow Six seed streamer saying incredible map knowledge, incredible map knowledge, holy map knowledge, just because I think it's like the funniest video ever. And I've been waiting for a market map to drop to post this clip. And I think she thought I was talking trash because she replied with a video saying, from girls, I believe, saying something to the effect of like, oh, you're coming after me just for trying, but I'm not, and I'm on record saying that there is massive alpha for the first VC firm to go back to simply talking about doing deals and making money. And so, Justine, I was not talking trash.

• 46:58Jordi Hays?

  That was, that was a banger. Let's, let's, uh, let's get this over 1K.

• 47:02John Coogan?

  Yeah, yeah, yeah. Go like this. We're 40, 40 likes away. And, and so, so I, I am, I am fully pro market map. I love market maps and I think that I understand why she thought I was talking trash because market maps have been derided as a little like, if there's a market map, you're too late. And I think that's true for people that are thinking about what company should I start? Or maybe even what company should I seed invest in? But if I'm a customer, like, I don't know about these products. This is genuinely helpful to me as a customer. Like, we need to build websites for our company, for our podcast.

• 47:41Jordi Hays?

  Yeah, I'm always.

• 47:42John Coogan?

  I want these and as a growth stage investor, someone who later stage, even in the public markets, being aware of this stuff, all of the, the work that's, that went into this market map is actually valuable. And I think it's a little bit of an odd, it's a little bit of an odd take because everyone's been talking trash about market maps for so long. But I am pro market map. I am pro this, this core venture content that stays away from deranged politics.

• 48:06Jordi Hays?

  I love market maps. I just, it's a way for investors to basically, you know, open source their deal flow and insights. And I think it's, it's people, yeah, people joke about it, but it's genuinely interesting to cover. And I actually think we should do more segments on the show where we break down a specific market. Obviously, we're doing, we're doing that now courtesy of Justine. It's kind of funny. They left off Webflow on the website generation section, which feels like a big player. That was one of the first things that stood out to me. Felt like Webflow is like very hot only a few years ago. But one thing that's, it's kind of this interesting dynamic.

• 48:47Jordi Hays?

  It seems like website generation or website builders like Webflow, you know, Framer, Squarespace, Wix. They seem to be good businesses overall because people set them up and generally forget about them. And they find ways to like stack fees. So it starts at $20 a month. And next thing you know, you're paying $150 for, you don't even know why. So they seem to be good businesses, but it seems like there's, because they're these sort of single player, one to many products. There's no moat in these businesses at all, right? So they're able to get to meaningful scale, but there's no reason, like Framer came out and I was like, okay, this is just a better version of Webflow.

• 49:31Jordi Hays?

  Right? It's like the billing is more clear. I like the user interface more. It's less clunky. And developers in my network quickly got comfortable with building on Framer when before everybody it seemed like was building on Webflow. So this is, and so the last thing that, the last thing that these companies that are more of these legacy website generation and hosting companies needed was more competition because they were already facing like tons of competition from each other. And so now you have this new category that really I think like the generative AI experience applied to websites makes a lot of sense. Right? Because if I'm working with a designer, I'm like, hey, here's two sites I like. This is my brand. This is what I want it to look like. These are the features.

• 50:15Jordi Hays?

  And then basically it's the same thing as like, I could just type that into a text box, add the, add the relevant links. And then hit generate and that's very similar to me just talking to a designer, explaining what I want and then coming back to it. And then even when you get a version one of the site, you can be like, change this, change that. And again, you can just still deliver that via, you know, the sort of LLM chat style interface. So I, I'm, um, I, I still wonder if it's one of those things like, you know, you sort of use this for like a quick V1 of a site. And then you just still transition to working with a developer, but you can imagine the developers might just end up. As these tools get better, just using the same tools in the same way that you use Framer or Webflow.

• 50:56John Coogan?

  Yeah, yeah. So I mean, I think text is the universal interface. Even, even if these website builders make it easy to change the background color, that can often be hidden in some UI six levels deep in menus. And just saying it into an LLM is often more universal and more accessible. So that's obvious. Now, the question of why Webflow is left off, it's possible that they haven't launched a text to web product yet. They might just be behind on that.

• 51:25Jordi Hays?

  Oh, got it.

• 51:26John Coogan?

  Because I think, I think this market map is specifically for, it is a chat interface or a text interface that then builds a website or a web app. But there are a lot of cool companies on here and it's interesting because during the Superbowl, there was an ad for a website generator. And it had, uh, Barry Keoghan, somebody, some famous actor was like.

• 51:45Jordi Hays?

  Was it GoDaddy?

• 51:47John Coogan?

  I don't remember. That's the thing. It was either Squarespace or Wix, but he's going around this Irish town and he's throwing laptops to, to let people know that they could design a beautiful website. If you're like the local pub and it was very cute. And he's riding this donkey and he's this famous guy. I think he dated Sabrina Carpenter and yeah, it was Squarespace. Okay. It was Squarespace, but it could have been Wix because I don't think of them as like super differentiated products. And there's a big question about, um, will the legacy generators be able to retool their brand fast enough to let the, the, the market know? Hey, we have the best text to text to web development tools. Like we've, we've rolled these out. We're not behind. Versus a new company that comes in with that has their main, their main like go to market hook and their main marketing messages.

• 52:32John Coogan?

  Hey, it's just text. Uh, that's a big differentiator and it's always hard for the, for the legacy companies to kind of say, hey, hey, we, we also have the AI tools. Don't worry.

• 52:41Jordi Hays?

  Yeah, so GoDaddy is a good example, this popular place to buy a domain. They absolutely jam their AI website generation tools in your face. It's actually really annoying to use it as just a pure play domain hosting registrar because they're so oriented around, okay, you've spent $12 on this domain. Now we're going to upsell you on this AI-generated website. And so I think that I can easily see some of these registrars just buying these text to website generators if they actually start to really execute on the product side because it has been a funny experience where historically you register your domain and then you then go to some other site and you got to connect the two.

• 53:24Jordi Hays?

  And Squarespace was pretty aggressive. They acquired Google domains, if you remember that. And that transition, I think, is still happening. And so all these platforms know that the two things should be integrated. But it's a weird challenge, too, because you don't know, am I developing? Over time, companies tend to want to just fully own their web experience and front end and they end up hosting on AWS or other platforms outside the registrar. So you're in this weird space of work building for prosumers and SMBs, individuals, and then who knows where it goes from there.

• 54:06John Coogan?

  Well, let's read through some more of this thread and Justine's analysis. To start, why is there so much buzz? Thousands of users, from consumers to experienced developers, are sharing what they've made with these tools. The growth is impressive. Bolt is at 20 million ARR, Lovables at 10 million in two months of monetization. Now, how do these products work? Most LLMs generate code based on the prompt and then run it through middleware logic for things like tracking files and API calls. The agents then push the code to a browser execution environment that streams the display to the user. But do they really work? Obviously, LLMs hallucinate a lot. There's a lot of risk. Justine says yes and no.

• 54:47John Coogan?

  They excel at simple builds, and if you can't code, otherwise they feel like magic. But there's a limit to what they can reliably generate. Integrations are difficult, bugs persist, and code can get too big quickly. Now, how do users pick a product? Justine says that A16Z interviewed dozens of customers and scoured thousands of posts and they created a flow chart. So where do you want to start? Code or text? Well, there's code generation and editing tools versus do you want to make a website or web app? If you want to make a web app, do you want fine grain control over the design? Yes, if you're a designer, do you need to be able to export the design as code? Then you're going to need UI generation tools with code migration.

• 55:28John Coogan?

  So all of this depends on the level of sophistication and really what the developer is end goal. Is this just some fun side project that they're trying to build in an hour? Or is this the start of a real business that will eventually have software developers coding with cursor? And then eventually they'll get Devin involved and be pushing things through a traditional GitHub repo? Or is this just something where I want this website live today and I don't even want to get off my phone? So she goes and gives shout outs to a ton of different companies. And that's what's so great about these market maps is that they do a great job of showing a bunch of different companies and highlighting everyone together. It really brings that the particular community together. And so there are a number of segments here.

• 56:13John Coogan?

  Obviously consumers, you think about the long tail of personalized apps that cater to unique interests and needs. There's a guy here who built a bedtime story creator, probably for his son or daughter. There's a second user segment, which is developers that people can code, but they use text to web app tools to get a leg up on prototyping and shipping new things. And then the last segment is consultants and agencies. These people aren't typically engineers, but they're hired to make websites for solopreneurs and SMBs. They previously used tools like Squarespace and Wix, but now they are using these AI generated tools.

• 56:49Jordi Hays?

  There's still alpha and going to your local plumber and offering to build them a website for a thousand dollars and generating it in two, in two seconds with, with one of these apps. There's, you've probably got like 10 more years before people fully figure it out.

• 57:05John Coogan?

  Yeah. It also just really speaks to the, the importance of distribution. Like the instantiation of these ideas is getting easier and easier. You can have an idea, spin up a website, have it live in a day, even if you're non-technical. But then.

• 57:20Jordi Hays?

  Yeah.

• 57:20John Coogan?

  Where are you going to share it? Are you going to run ads against it? Is the monetization funnel good? Or is it just going to live out there? Maybe you share it with some friends. Like, I'd probably use that Bedtime Story Creator, but I'm hearing of it for the first time now. There used to be a web. Did you ever use StumbleUpon back in the day? Do you remember this?

• 57:36Jordi Hays?

  Yeah, yeah, that was Uber founders.

• 57:38John Coogan?

  Yeah, yeah. Garrett, Garrett Cap built it. Really, really cool tool. You would just click it and it would take you to a random website on the internet that was submitted. And you would just find crazy websites and they open web. Completely not a thing anymore. I actually built a version of StumbleUpon that would scrape my Twitter feed and export all the links there. And then I could stumble upon the tweets, the links in the tweets

• 58:02Jordi Hays?

  That's cool.

• 58:03John Coogan?

  of my feed. And I could just look through all those. And it was really fun. It was really cool. Now it's impossible because no one shares links and links don't even work and stuff, so.

• 58:11Jordi Hays?

  It would just be, it would just be a feed of OnlyFans spam bots that are saying,

• 58:17John Coogan?

  Probably.

• 58:18Jordi Hays?

  Please look at the link in my.

• 58:21John Coogan?

  Awful, awful.

• 58:22Jordi Hays?

  Terrible.

• 58:24John Coogan?

  But yeah, great market map. Thanks for posting it, Justine. And hopefully there's no hard feelings about the Rainbow Six meme. I thought it was funny. Anyway, let's move on to our next top story. We got a way to invest in alien technology. I have been saying this for a long time. People say, oh, the aliens are here, the aliens are there. We got some evidence. And I've always said, look, call me when we're ready to commercialize the technology. It's not moving the market. I don't care. I don't care if there's a massive UFO parked outside in downtown LA. If I can't make money off of it, I'm not paying attention. But fortunately now you can pay attention to it because Tuttle Capital has filed for an Alien Tech ETF, the new fund to invest in reverse engineered alien technology based on government disclosures about UFOs.

• 59:09John Coogan?

  Tuttle Capital has filed to invest in reversed engineered alien technology. This is exactly what I was asking for. This is not financial advice, by the way. But I'm sure this will be available on public.com when it goes live. With the Tuttle Capital UFO Disclosure AI Powered Exchange Traded Fund, which is one of eight new products the manager has registered with the SEC. With the ticker UFOD, great ticker. And the actively managed UFO ETF will invest

• 59:36Jordi Hays?

  And.

• 59:36John Coogan?

  80% of its net assets in a basket of companies that Tuttle Capital believes to have potential exposure to advanced or reverse engineered alien technology.

• 59:46Jordi Hays?

  John, you're missing a big point here, which is that it's AI-powered ETF. So not only will it be, you know, an ETF with a basket of assets that may have exposure to reverse engineered or alien technology, it will be managed by AI, which to me is like, as a guy who loves AI, I mean, you're making the perfect ETF for me here, right?

• 1:00:09John Coogan?

  Yeah.

• 1:00:09Jordi Hays?

  You can't get any, can't get any better, right?

• 1:00:12John Coogan?

  We need to have Jesse Michaels on to discuss this, to get the, to get the take. We gotta have Paki on. I know Paki's been watching a lot of Jesse.

• 1:00:20Jordi Hays?

  I mean, this probably isn't, the, the SEC probably wouldn't allow you to advertise securities in this way, but you know, the obvious play for Tuttle and, and their UFOD ETF is to just like, create the New Jersey drone effect, but all over the country. So just like, put drones everywhere, you know, that are doing light shows that say, you know, fly a swarm of drones over a small town that's been untouched by technology. Do, you know, you know, make everybody think they're being invaded by aliens and then do a drone light show immediately after it says like, buy UFOD today.

• 1:01:00John Coogan?

  So I don't know if you can do that, but I know that you can advertise ETFs. I see ads for ETFs on Bloomberg and CNBC all the time.

• 1:01:08Jordi Hays?

  Yeah.

• 1:01:08John Coogan?

  It was really popular during the Bitcoin ETF launch, but also you just see iShares, QQQ ETFs, all sorts of tech ETFs that are out there, you know, downside risk mitigated ones, debt ones. People advertise ETFs all the time. So hopefully we'll be able to see some UFOD ETFs.

• 1:01:27Jordi Hays?

  So here's, here's some alpha. So AdQuick can help you execute drone swarm ads, like like the light show ads. And so what Tuttle should do the second they launch this, log on to AdQuick. Get, uh, get ready to, uh, you know, do a drone swarm ad for their ETF over the Manhattan skyline. But the key is make everybody think early on that it's an actual alien invasion. So people pull out their phones because we've talked about out of home strategy before. You want them to think that they're being invaded by aliens and boom, it's an ad for UFO D. Buy it on public.com.

• 1:02:05John Coogan?

  I love it. It's a great partnership there. So the companies in the ETF to start will include aerospace groups and defense contractors that may have research and development programs rumored to work with classified technology, potentially leading to groundbreaking advancements. Matthew Tuttle, the chief executive of Tuttle Capital, said he has been interested in UFOs for years. While they are by definition an unknown quantity, Tuttle said he believes, he believed investing in UFOs and the technology they may use could take off once his product hits the market. I'm a trader. I look at UFOs and I say, if they're using a power source that is light years beyond anything we have, if our government has this technology and it's released, that will be a game changer.

• 1:02:49John Coogan?

  Each ETF will be traded on the CBOE BZX exchange. The forthcoming products do not have set launch dates or listed fees. The ETF will short companies that are threatened or could be made obsolete because of any alien level technology that is discovered. So you, you gotta harden your business to alien technology, you know?

• 1:03:11Jordi Hays?

  Yeah.

• 1:03:12John Coogan?

  If you're out there and you're saying, hey, hey, our business is gonna be great as long as aliens don't show up. Well, get ready for a short position to get built in your company.

• 1:03:21Jordi Hays?

  Yeah. Uh, this is, this is a time every company that's privately held is, you know, feeling very grateful because, you know, you might be wanting to IPO in a couple of years, but that gives you some time to build up the narrative around that you're using alien technology. Like I want to see Stripe. I want to see Stripe talking about their alien payment rails that they're using. I want to see Ramp talking about their their alien payment rails. You know, I want to see

• 1:03:44John Coogan?

  I mean, I've said this. I've said this for a long time about Salesforce. Like, if you think about, you know, if you're an alien, if you're an alien species and you're managing essentially a fleet of sales reps across the entire galaxy, you're going to have some really advanced CRM running that program. And all of a sudden, if one of these, if one of these alien SDRs crash lands and we get a hold of this alien CRM, no one's going to be buying Salesforce anymore. And so that's a major risk to that stock. And so, obviously not financial advice, but I'd watch out if you're, if you're a Salesforce shareholder and the alien ETF is taking a short position. Anything could happen.

• 1:04:25Jordi Hays?

  Well said. Well said.

• 1:04:27John Coogan?

  And so UFD, UFO D's launch is not a sure thing. However, according to Tuttle, without sufficient information sourced from government disclosures on UFOs, the product might not go to market. But he's optimistic that there will be disclosures. The risky and opaque nature of alien investment is not lost on Tuttle and his firm. Can't believe that was printed in the Financial Times. Government confirmation or denial of advanced alien tech is uncertain and rumored breakthroughs might never materialize. This entire theme is highly speculative and subject to rumor cycles. The other seven, so they're launching seven others. The Agentic AI ETF, AI in healthcare, AI power generation, drone industry AI ETF,

• 1:05:10John Coogan?

  quantum computing AI ETF. UFO technology may be out of reach for the average investor, but AI is one known advancement that Tuttle believes is reshaping the financial landscape. What AI can do is a game changer, and I don't think people have fully wrapped their heads around that, said Tuttle, who added that he used AI for 90% of his investment process.

• 1:05:32John Coogan?

  And so we'll be following.

• 1:05:34Jordi Hays?

  I mean, I love, I love a total capital is just absolutely hurling ETFs at the market. I mean, it is, uh, it is impressive. Uh, he has, you know, more, more ETFs than some people have uh, positions. So, uh, an absolute dog.

• 1:05:54John Coogan?

  So stay tuned for more on UFOD. We'll be covering it here on the show. Uh, let's move on to the GPU Whisperer who's making software for data centers. This is Aaron Gin, the co-founder and CEO of Hydra Host.

• 1:06:08Jordi Hays?

  Wait, I hate to interrupt, but we got a comment from Calder in the chat. He says, SEC, uh, securing extraterrestrial currency. He said it was right in front of us this whole time. So, um, yeah, it was, it was programmed. Uh, well said.

• 1:06:25John Coogan?

  It's dialed. Great. All right. Well, let's move on to this article in the information, the GPU Whisperer, uh, covering Aaron Gin, uh, is going bare metal in data centers, the future of cloud computing? If so, it could signal a shift away from big, big cloud firms toward a new group of AI computing startups. Bare metal isn't a subset of rock music, but an industry term for renting servers to cloud customers on terms that give them access to the hardware, allowing customers to control servers directly and run their own operating software. Customers going this route miss out on some bells and whistles offered by big cloud firms like Amazon Web Services and Microsoft Azure, but they might gain better performance for more demanding

• 1:07:06John Coogan?

  and complex tasks like training and running AI workloads. We certainly saw this with Deep Seek. They were not on AWS. They had none of the niceties of the Azure Cloud. They were as bare metal as you get optimizing small tweaks in memory bandwidth restrictions on their, uh, cluster of kind of random hodgepodge Nvidia nerfed GPUs. Um, some of the industries such as Aaron Gin, CEO of software firm Hydra Host, think this is the future. Gin is known to some as the GPU Whisperer. This is a great moniker. If you're trying to get through, break through to the media.

• 1:07:41Jordi Hays?

  Yeah. So the other side, we've talked about, we've talked about coinages. There's a lot of alpha and coining, Coogan's Law. You know, you already know the Hayes Paradox. Uh, there's coin, new coins. Right now, there's more crypto coins emerging every day than there are coinages, but we're hoping to flip those soon. But you know, the other side of this is monikers. You want to be developing monikers all the time, shipping new monikers, testing, you know, testing the market with monikers and, you know, have your friends test them on you, you know?

• 1:08:12John Coogan?

  We have been pushing this. David Senter, the godfather of podcasting, you know?

• 1:08:18Jordi Hays?

  Yep.

• 1:08:19John Coogan?

  We, we, we, we throw these out all the time.

• 1:08:21Jordi Hays?

  The podfather.

• 1:08:22John Coogan?

  We need to come up with more because they really, they really help tell the story of an individual and help them break through in the media. And so he has an intricate knowledge of and connections to the firms that design, make and install data center servers. I won't explain the history of cloud computing, but one thing to remember is that the big cloud firms, AWS, Google Cloud and Microsoft Azure, were originally designed to allow companies to rent virtual machines for traditional computing workloads like running applications or databases. Many believe the new wave of AI computing startups might be better positioned to provide customers with access to GPUs for AI workloads, which are fundamentally different from hosting a website, for instance. Ginn is in that camp. The GPU whisper speaks.

• 1:09:04John Coogan?

  He wants to give operators of data centers, firms that typically own and operate facilities, cloud computers, cloud providers, use the ability to rent GPU servers directly to customers. Data center operators have long operated like apartment landlords, allowing companies like AWS to rent space in their data centers. Ginn thinks the rise of AI computing puts data centers in a position to be a hotel and generate more revenue from their real estate. They can actually have, they can actually do five day rentals, week long rentals, long term rentals, but they have no software to do it. Tooling in the data center space has been highly open to source because the main big money cow was the cloud. You either sold space to the cloud

• 1:09:46John Coogan?

  or you tried to get free software to kind of sell to an end customer. That's where Hydra Host comes in. Hydra sells automation software to data center operators so they can rent out GPUs to businesses or even cloud startups who want to rent out servers themselves. So they're going a layer deeper into the data center stack. We've been talking about data centers for a long time. Obviously, a big narrative in the AI race right now. Got anything?

• 1:10:15Jordi Hays?

  Uh, I mean, my head immediately goes to why haven't we personally put money into Hydra? Because it seems like everybody you become friends with 10 years later, their companies go public. So you learn from the mistakes of like 2012 John Coogan.

• 1:10:30John Coogan?

  You do. We gotta give Aaron a call.

• 1:10:33Jordi Hays?

  Yeah, let's, let's get him on the show.

• 1:10:37John Coogan?

  Big congrats to him. He already manages 15,000 GPUs with its software embedded in 30 data centers across 14 companies. He hopes to manage a million GPUs in the next two years. And massive breaking news, this has not been covered on TBPN yet, therefore it is breaking news. Hydra Host last month raised an $8 million in a round led by Scott McNeely's Flume Ventures. Boom, size gong, baby. Bringing its total amount raised to $22 million. The latest round was a simple agreement for future equity, safe, at a $500 million cap. Let's go.

• 1:11:14Jordi Hays?

  That's the most boomer way to write out. The latest round, like, if you write out that, you clearly don't know.

• 1:11:21John Coogan?

  It's the, uh, it's the meme of like this, the German meme from Inglourious Basterds, right? Like, oh, it's simple agreement for future equity. What's going on in the information, guys?

• 1:11:32Jordi Hays?

  Yeah, yeah. I don't think Jessica, I don't think Jessica caught this one.

• 1:11:37John Coogan?

  Uh oh, who wrote this? Got, gotta go to Y C Demo Day. Anisa Gardizi.

• 1:11:44Jordi Hays?

  Yeah.

• 1:11:44John Coogan?

  Get your game up. But massive congrats to them. $500 million cap, banger company, half unicorn. Crusoe, uh, so Crusoe Cloud, CEO Chase Lockmiller, who we've covered on the show before, uh, who, and a guy who just left Lambda Labs, they came in as angel investors. Trey Stevens from Founders Fund previously led Hydra's $8 million seed round, which included Palantir founder Joe Lonsdale. So all the boys are in this one. It's a great company. We're excited to highlight it on the show and congrats to Aaron, the GPU Whisperer.

• 1:12:20Jordi Hays?

  Let's leave it at that.

• 1:12:22John Coogan?

  Let's leave it at that and let's stay with with Trey Stevens and the defense boys because John Sindriu over at the Wall Street Journal has got an op ed pouring some cold water on the defense tech boom. Let's see what he's got to say. He says tech firms want to upend the Pentagon. The old defense guard has some has some lessons for them. Upstart defense, upstart defense contractors such as Palantir. Upstart, it's 20 year old company. It's worth a quarter trillion.

• 1:12:50Jordi Hays?

  Quarter trillion.

• 1:12:51John Coogan?

  It's a quarter trillion. It's two decades old.

• 1:12:54Jordi Hays?

  Give him a little credit.

• 1:12:55John Coogan?

  It's not 80 years old. They couldn't possibly know what they're doing. Like you can only know what you're doing if everyone who started the company is dead.

• 1:13:05John Coogan?

  I was looking at one of Palmer's rivals, like the General Dynamics founder or something. And there's a picture of him.

• 1:13:12Jordi Hays?

  Using a cane.

• 1:13:14John Coogan?

  Literally on a Civil War era submarine, because the guy developed like the first submarine for General General Dynamics, which eventually spun out General Atomics, which is now going head to head with Anduril in the in the CCA fight and collaborative combat aircraft. And so I was like trying to benchmark the founders and I traced it back and I was like, I was like, the founder of the of the company Palmer is fighting with or duking it out for this contract died 100 years before Palmer was born, something like that. It was like insane. I was like, his birthday, he's more than he's like 150 years older than Palmer. And like, this is the, this is the difference in culture. Like, we're gonna see, we're gonna put it to the test. Can the young bucks make it happen? Well, let's find out.

• 1:13:58Jordi Hays?

  Yeah.

• 1:13:59John Coogan?

  In this Wall Street Journal article. What you got, Jordan?

• 1:14:00Jordi Hays?

  I have so little trust in mainstream media, especially, especially op eds, which op eds are just an opportunity to just like basically fud whatever's going on. Like, it seems like every time you hear about an op ed, it's, it's.

• 1:14:15John Coogan?

  Or pump or pump. I mean, yeah, yeah, yeah. The world. That was an op-ed by Mark Andreessen.

• 1:14:20Jordi Hays?

  Sure.

• 1:14:21John Coogan?

  Teal's got some great banger op-eds out there floating.

• 1:14:24Jordi Hays?

  No, but I'm just saying.

• 1:14:25John Coogan?

  But yes.

• 1:14:25Jordi Hays?

  When you hear about an op- when you hear about an op-ed from somebody in our world.

• 1:14:29John Coogan?

  Yeah.

• 1:14:30Jordi Hays?

  It's usually to predict something about the future.

• 1:14:33John Coogan?

  Yep.

• 1:14:34Jordi Hays?

  When you hear about an op-ed that's not from our team, it's usually to fud something that that our team is doing.

• 1:14:42John Coogan?

  Yep, yep, yep.

• 1:14:43Jordi Hays?

  So.

• 1:14:43John Coogan?

  Our boys, they're coming for our boys.

• 1:14:45Jordi Hays?

  And and everybody's, everybody's deeply conflicted. If you're not deeply conflicted by the age of 30, you're not heavily invested enough.

• 1:14:52John Coogan?

  Exactly.

• 1:14:54Jordi Hays?

  So everybody's conflicted. Everybody's pumping their bags.

• 1:14:58John Coogan?

  Yeah.

• 1:14:58Jordi Hays?

  This guy writing the op-ed probably has, has, he's just mad because he's holding Northrop Grumman's Lockheed Martin.

• 1:15:06John Coogan?

  Yeah, Ben, pull up the side with the chart.

• 1:15:08Jordi Hays?

  Look at his chart.

• 1:15:09John Coogan?

  Chart. Pull up the chart. Yeah. This is, this is Northrop Grumman, General Dynamics and Lockheed Martin, flat for the last year and Palantir is like mooning up 300%. So a lot of, a lot of hot takes flying, given, given the spiciness in the market. Let's, let's read through some of this. Maybe we got to put it in the truth zone. We'll decide. Maybe there's some good points, you know? Maybe John's on to something. Let's, let's give him a shot. In the defense business, Silicon Valley's motto of move fast and break things doesn't always ensure victory. There is a divergence across military contractors. The stock of Palantir, which is riding the artificial intelligence boom, is up 34% from a week ago

• 1:15:51John Coogan?

  after the software and data analytics giant reported 75% growth in earnings per share for 2024. At the same time, shares in Lockheed, Northrop and General Dynamics have fallen over the past six months. What's going on, guys? Put together, their market value is now less than Palantir's. This is in part because Elon Musk's Doge has led investors to believe military procurement will be reshaped to cut waste, let in new entrants and give priority to software, drones and robotics. Palantir, as well as Musk's SpaceX, OpenAI and robotics and AI specialist Anduril Industries are cheering for change at the expense of legacy players. Quote, oh, from the absolute boy, Shamsankar, Palantir CTO.

• 1:16:34John Coogan?

  He says, we sense a huge amount of fear among the traditional systems integrators and providers here. Some legacy software projects, he added, are sacred cows of the deep state. Shom, not pulling punches. I love it. Let's go.

• 1:16:49Jordi Hays?

  Wow.

• 1:16:50John Coogan?

  A lightning rod for criticism of the Pentagon, including Musk himself, has been using, has been, it's used of cost plus agreements, which reimburse contractors for expenses incurred and add a fee for profit margin on top. Cost plus contracts were infamously, infamously used in Lockheed's F-35 Lightning II, not just for developing the fighter, as is almost always the case, since R and D is uncertain, but also to buy several initial batches of it. Only later purchase of the aircraft, which has become the most expensive military program in history, have started placing the burden of cost overruns on the company rather than the public purse. This is why the Air Force is now buying the first limited production units of the B-21 bomber in development with Northrop, under fixed price contracts.

• 1:17:35John Coogan?

  The US Space Force, created by President Trump in 2019, strongly favors them too, as do the Silicon Valley challengers. Indeed, analysts believe that the shift away from cost plus will accelerate under Defense Secretary Pete Hegseth, who has pledged to make procurement nimbler. But the industry has been down this road many times before. In the 50s, officials made heavy use of cost plus contracts to foster innovation. In response to huge expense overruns, Robert McNamara introduced total package procurement in the 60s, which involved fixed price deals. After many firms bid too aggressively for projects and ended up bankrupt or close to it, Lockheed had to ask Washington for a bailout. The framework was abandoned. Yet fixed price contracting regained popularity in the 80s,

• 1:18:20John Coogan?

  and the private sector once again burned its fingers. The pendulum has kept swinging back and forth since. So he's saying, hey, you guys have it good right now. Your stock's riding high, but you're doing these fixed price contracts. You get one wrong, you might wind up bankrupt. But, you know, we know the people that run these companies, and they're really sharp, and I don't think they're going to make mistakes, but we'll see.

• 1:18:40Jordi Hays?

  Yeah, it's interesting because every...

• 1:18:44Jordi Hays?

  Every business runs at risk, right? And it creates a positive. It means that capital generally does not get incinerated to the degree that it does within defense, right? That said, defense has two, you know, two factors out of many that drive this sort of overspending. One is projects become too important to national security to fail. And so sometimes startups, they have an ambitious product, they, you know, project or idea, they try to build it and they're unsuccessful and there's no, nobody to bail them out, right? The investors say like, we don't want to put more money into this, like it just didn't work, so it fails. The issue with technology that relates to national security is if our peer adversaries

• 1:19:28Jordi Hays?

  are developing the same technology and we want to, you know, maintain or exceed their capabilities, we just can't allow for specific technology to fail. And so there is some situations where things should be like they're, they're too important to fail. That said, the other factor is that you have internal cheerleaders for technology in the DOD or various, you know, parts of the military that be, that bet their career on a specific, you know, project or technology. And then suddenly they're the ones fixated on that thing working out because they've told everybody in their professional life, like, no, this is important and we need this and we just should keep spending and spending and spending.

• 1:20:08Jordi Hays?

  But what happens is one of, one of the, I'm an advisor, I mentioned this company on the podcast before to a company called Aon and they're like developing ground-based tactical missile systems. And already they're producing missile systems that cost 80% less than what the primes are able to make that for, right? And so it's a, this sort of cost plus model. Once you have an established program. And and the technology is working and it's deployed. It's almost like the cost plus model works for like super high risk R and D to incentivize. But then at a certain point, once it's established, you don't want it to be cost plus because then the manufacturer says, well, we're just going to run up the price on this so that we can

• 1:20:51Jordi Hays?

  generate more margin for our shareholders.

• 1:20:54John Coogan?

  Yep. So I think that the the cost plus thing really comes down to the iteration cycle here. And so when you think about all the R and D, even the best startup, the best people, the best technology, the hottest company, you're not going to be able to build a new aircraft carrier in a year. It's just not going to happen. And so when you look at something like the F 35, it's just a massive project. And although there were major cost overruns, it took way too long. It's something that was going to take decades, no matter who was at who was at the helm, at least a few years, like it was going to take a while. Whereas when you look at what Apple does, Apple's releasing a new iPhone every single year for better or worse. If the cost comes down, they can cut their costs that year.

• 1:21:38John Coogan?

  People buy new phones. Same thing if the cost goes up, they can raise the price a little bit. And and so for these things that are attributable systems, you have more ability to iterate on the price as well, because you're not locked into that same contract. And you can actually, you don't need to do the cost plus thing as much. Now, this would be very bad if you think about Anduril going bigger and going into the aircraft carrier space or going after the next F 35 project. They really could wind up saying, hey, we're doing a fixed price contract and they could get bitten. But Anduril's only playing and I think they will continue to play because of the way warfare is evolving in these attributable systems. And so what's the future of warfare? It's not an even bigger aircraft carrier.

• 1:22:20John Coogan?

  It's a drone swarm. How will drones be purchased? 100,000 drones every single year and there'll be a new drone that comes out every year. You're already seeing this with the Ghost platform at Anduril, their helicopter drone. They're on like Ghost 4 or 5. I can't even keep I can't even keep track. And when you think about the headset, the I VAS system, Microsoft was going to produce 100,000 of those. Obviously, that was not going to be 100,000 all in one go. It was going to be 10,000 and then 20,000 a quarter. And if Andor really nails the IVAS program, they're going to be iterating on that. There's going to be new headsets, new features coming out every single year. We see how fast the technology is advancing in the consumer space. There's no reason why the military

• 1:22:59John Coogan?

  would not want to integrate even better screens and better batteries and better CPUs and all this stuff. So it will look a lot more like an Apple product release, which gives them more flexibility to stay on that fixed price contract and not lock in a price that will, you know, that they have to deal with and they don't have to predict it out 10 years. They're saying, hey, we got a V2 here. This is what it cost us. This is what we think we should sell it for. You know, this is what we can deliver it for. We're working against that. And there's much less capital at risk. So I'm optimistic. Let's, let's close out with the end of this article a little bit. It says, as much as upfront setting of prices is the standard in the private sector, defense procurement is different. Yes, today's highly consolidated defense industry gives

• 1:23:44John Coogan?

  contractors more leverage, but it also exposes a single customer with unrealistic and ever changing goals. Big generational programs are scarce and firms must bid aggressively or risk losing a core business segment. This was the case of the B21, the Raider, which has now caused large write downs for Northrop. In its fourth quarter earnings report, Lockheed reported a 72% drop in operating profit alongside a $1.7 billion charge on fixed price contracts mostly related to missiles. In its own quarterly release, Boeing took a $1.7 billion hit related to fixed price contracts on its T-7A jet. And so lots of companies are in trouble for these big, big,

• 1:24:28John Coogan?

  massive programs that they take on. I think the new direction is avoid those big projects, both from a financial perspective, but also from the nature of warfare perspective. The future is critical. Yeah, I mean, it's hard. That results in more flexibility on the financial side as well.

• 1:24:46Jordi Hays?

  I don't think, I don't think it's, anybody should feel bad for the Boeings and the Raytheon's and the Lockheed Martins for taking a big risk for a huge payoff, right?

• 1:24:59John Coogan?

  Yep.

• 1:25:00Jordi Hays?

  They're, they're making a calculated risk in the sense that, hey, would we risk, you know, $10 billion to make $100 billion? Yes, right? You know, that's like a good bet to take. And so when it doesn't work out, they're going to complain and say that, you know, that they should have been bailed out or they should have been. But, but again, there's a difference between the taxpayers and the shareholders. They're not, there's, there's a Venn diagram, but they're, they're very different groups. And so it's not, it shouldn't always be the responsibility of the, of the taxpayer. If a defense contractor blows way over budget or fails to execute, right? Like there needs to be consequences.

• 1:25:43Jordi Hays?

  Otherwise you get situations like the, the Microsoft program where they get $20 billion to deliver nothing, right?

• 1:25:49John Coogan?

  Yeah.

• 1:25:50Jordi Hays?

  It just doesn't make any sense.

• 1:25:52John Coogan?

  Yeah, completely agree. Well, overall, I think this was a pretty good article. Raises some interesting questions, closes with, with a quote from Byron Callen at Capital Alpha Partners. He says, ultimately, I don't see how the smaller guys are immune to the same problems that have caught the traditional players. Obviously, I, I gave a counter argument to that already. None of this denies the market thesis that prime military contractors have gotten complacent and that the likes of Palantir and Anduril can reap large rewards from expanding their defense footholds, especially since their investors are laser focused on growth. In the case of software, which has shorter development cycles and a blurrier line between development and production, the recent pivot towards fixed, fixed cost contracts and tapping

• 1:26:37John Coogan?

  upstart bidders has a greater chance of being successful. Great strategists, however, must learn from the mistakes of the past. And I think that speaks to, you know, the real risk is one of the new defense companies taking on too large of a project, basically betting the entire farm on something that might not even be that relevant if a smaller, more attributable system can make it irrelevant to begin with.

• 1:27:03Jordi Hays?

  Yeah, take the risk, bet the farm. If you have the conviction in, in completely independent of a potential bailout, right? It seems like, you know, these contractors were willing to take big risks if they felt like there was a good chance that they would also get a bailout if they weren't successful. But we want them to, uh, you know, be comfortable with taking risks independently because, you know, the, the reward of, you know, massive future contracts should be the incentive, not, there, there should not be risk-free innovation, right? As a privately held company with, with shareholders and running as a for-profit organization.

• 1:27:40John Coogan?

  I agree. Uh, well, let's move on to our next story. Uh, the Hims Super Bowl ad. Uh, there's an article in the Wall Street Journal here. Hims Super Bowl ad spotlights weight loss drug copycats as clock ticks on their business. Uh, there's a full-blown war over copycat versions of blockbuster obesity drugs, but their days are likely numbered. During Sunday's Super Bowl, Hims and Hers Health, ticker Hims, a telehealth provider known for its provocative ads promoting erectile dysfunction and hair loss treatments aired a commercial portraying America's obesity epidemic as a rigged game where people are denied affordable weight loss medications because of a greedy healthcare system.

• 1:28:22John Coogan?

  The ad positioned Hims and Hers, which sells a compounded version of semaglutide, a copy of the active ingredient in Novo Nordisk's Wegovy and Ozempic, as a Robin Hood of healthcare. There are no, there are medications that work, but they're priced for profits, not patients, the narrator says, as Childish Gambino's social justice anthem, This Is America, plays in the background. Hims and Hers offers life-changing weight loss medications. They're affordable, doctor-trusted, and formulated in the United States. Predictably, the ad sparked backlash. Even before the big game, a pharmaceutical lobbying group called Pharma labeled it misleading. And Senators Dick Durbin and Roger Marshall, a Democrat and a Republican, sent a letter

• 1:29:06John Coogan?

  to the FDA calling it a deceptive advertisement that failed to disclose side effects of, or safety risks unlike traditional Pharma ads. A spokeswoman for Hims... Said the ad aims to raise awareness to a critical issue, the obesity, public health crisis by showcasing the impact of obesity and realities of the lack of access to life-saving weight loss treatments. And so HIMSS stock is way up. The company is doing fantastically, but little bit of controversy about the compounding strategy. What did you see the ad, Jordy? What did you think about it? What do you think about the ad, just the overall strategy of advertising weight loss drugs at the Super Bowl?

• 1:29:48Jordi Hays?

  So one, I think that TJ Parker had probably one of the better takes here. I don't know if you remember the post, maybe we could pull it up. He was hypercritical of it. So for those that don't know, TJ is the founder of PillPack, sold it to Amazon for a billion dollars. Built a health tech company the hard way, like being very, very, very diligent about following the rules and working well with the regulators. And that's part of the reason they had such a big outcome and were able to be acquired by, you know, a massive player like Amazon. His, he pushed back and he was basically like, you're completely disrespecting all, you know, patent law with this. You're selling at the same exact price as the, the people that actually own the IP.

• 1:30:34Jordi Hays?

  And you're playing in a very aggressive, you know, very aggressively in a gray market that isn't, you know, you're not even passing on those benefits to consumers. Right? So his, his main takeaway was you're selling this for the same cost as the other players, yet you are, you know, trying to position them as, as taking advantage of, of consumers. And so he felt it was somewhat disingenuous. I mean, this is not the first time that HIMSS has been in hot water. The CEO, Andrew, and this again, for context, like.

• 1:31:10Jordi Hays?

  Hims and Hers was like one of the big success stories out of the D to C era. There was like very few companies that made it public.

• 1:31:17John Coogan?

  At $10 billion, it might be literally the most successful D to C company, other than maybe Chewy to come out, but even that's more of an e-commerce platform.

• 1:31:26Jordi Hays?

  Yeah.

• 1:31:27John Coogan?

  In terms of, yeah, I mean, huge, huge success for everyone involved.

• 1:31:31Jordi Hays?

  And so, yeah, there was a very long period of time where people said this company was like basically a zero and like shouldn't be public because they were losing a lot of money and they flipped. And then they were in a bunch of, they had a bunch of controversy. It must have been back in the middle of 2023. But they, the CEO has, you know, family history in Palestine and like came out very aggressively in, against, you know, sort of Israel's action there. And then the stock like, you know, dropped dramatically. There was a ton of, you know, short selling pressure. So he's no stranger to controversy.

• 1:32:15Jordi Hays?

  And so anyways, I mean, I, I think they're just selling so much GLP-1s right now that the market is like, basically what the market is saying to me is, yeah, they're, they're, yes, of course, they're bending the rules around compounding and like, but they seem to be okay with that risk appetite because they're printing so much cash off of this that they're like, it's one of those situations where they're like, even if we get, you know, a few hundred million dollar fine down the road, like we'll just pay it and we'll be in a better position with a bigger customer base. And so I just think this is one of those things. Hims and Hers was like very well positioned to take advantage of this new development of this new drug.

• 1:33:00Jordi Hays?

  And we've talked about, you know, when we talked about Novo Nordisk. Novo Nordisk had very few customers in the US, right? It's very possible that Hims and Hers is like acquiring more customers on a day-to-day basis, even with heavy competition from Ro and individual doctors and things like that. So.

• 1:33:21John Coogan?

  Yeah, so I believe Ro is white labeling or reselling and really just a portal to the actual Novo product, which probably means lower margins. Whereas because typically, the the name-brand drug is on patent for a number of years and then it eventually goes generic. But if there is a shortage, the FDA will allow essentially patent infringement for from like the patent rules don't apply if there's a shortage of a drug and the FDA determines that the drug is important. And this kind of makes sense, you know, obviously, if if there was some sort of like, you know, like, you know, cancer drug that everyone was getting a certain type of cancer and

• 1:34:06John Coogan?

  there was some cancer shortage, we'd be like, let's make as much as possible in every possible lab. And so the the fundamental rule makes sense. And so the FDA recently declared the shortage of Eli Lilly's Monjaro and Zepbound over, but Novo's Ozempic and Wegovy remain on the shortage list. And so this has allowed compounding to continue unabated. And there's been a big, big discussion over, you know, when will the shortage end? When will this compounding not be allowed to happen? Is the compounding higher quality, lower quality? There's been a lot of debate there. The company said it's increasing supply and is in talks with regulators as it seeks to get off the shortage list. So Novo does not want to be on the shortage list because it means Hims can compound.

• 1:34:51John Coogan?

  But, you know, it's unclear what Hims' strategy will be. Post, post-s shortage ending, they could wind up acting just as an e-commerce platform to get the the real drug, the non-compounded version. There's a lot of different ways. And I think shareholders might be looking at, hey, they're acquiring all these customers, they'll still stick around and buy, you know, the quote-unquote "real" thing.

• 1:35:14Jordi Hays?

  A lower margin, yeah, yeah, the lower margin version of the product.

• 1:35:17John Coogan?

  Exactly. It is, you know, obviously, like, the whole dynamic of telemedicine is, it is embarrassing to go into your doctor and say, "I have a problem with erectile dysfunction," or, "Hair loss."

• 1:35:29Jordi Hays?

  Hair loss was the...

• 1:35:30John Coogan?

  And so, you click a button, it's very sterile, you just go through their web flow, and then boom, the medicine shows up at your doorstep. Great, like, consumer user experience, essentially.

• 1:35:41Jordi Hays?

  Yeah.

• 1:35:42John Coogan?

  And it's the same thing for being overweight. You might not want to talk to a doctor about that necessarily, and so, a telehealth/telemedicine interaction might actually be higher conversion rate for selling these drugs. And if they can sell more of them through, even if they're at a lower margin, maybe there's a bull case here. I don't know. We'll see.

• 1:35:59Jordi Hays?

  Yeah, TJ, I pulled up TJ's post. He said, this was on, this was on January 28th, so they released their ad early, clearly trying to front-run the other campaigns. TJ didn't hold back. He said, "Imagine shamelessly stealing IP, compounding their drugs, which results in patient harm time and time again, selling your fraudulent product for roughly the same net price as the original inventor, and then painting them as the problem in an effing Super Bowl commercial." So, you know, very, you know, that's his point of view.

• 1:36:33John Coogan?

  Didn't mince words.

• 1:36:34Jordi Hays?

  Didn't mince words. The thing about compounding pharmacies, it's fascinating, is you can go and just buy a compounding pharmacy for less than a million dollars and just start making drugs. And so, anybody...

• 1:36:46John Coogan?

  There was one in my YC batch, and I think they didn't even buy one. They just, they just set up and got the licenses. And I think they were doing retinol, retinoid, it's like acne medication, skincare, basically. So, I mean, in general, if you're trying to do something with health or FDA, you can usually go the nutraceutical, you know, supplement route, which is basically unregulated, and you can be like, "Alpha-gigabrain enhancement," and you can say all the crazy things you want, because you're not really making claims. You're only making, like, structure and function claims. Then, as you move up, you go into compounding, and then eventually you go into FDA drug. Typically, then you're a biotech company, you go through phase one, phase two, phase three trials, you get a patent,

• 1:37:29John Coogan?

  you are releasing, like, a real drug, and that's what Novo and Eli Lilly do. Startups in the Silicon Valley sense have never been able to really crack that. It's been more of, like, the biotech path. You go public really early, it's a different path. But now, we're in this gray area, blurry territory.

• 1:37:45Jordi Hays?

  Yeah, so these weight loss drugs fall into the like broadly into the peptide category. And so people are for a while, it's been this sort of gray market of you can get peptides and the same, you can get peptides for weight loss purposes, but you can also get them for, you know, that that stimulate testosterone production because peptides end up being these sort of precursors to hormones in the body. So it can be a precursor to HGH, right? It is one. So there's a, there's a famous peptide called BPC157 that is referred to as the Wolverine peptide. And this is, uh, this is what Aaron, I think Aaron Rodgers was taking where he tore his ACL

• 1:38:25Jordi Hays?

  and like basically was back on the field in like remarkable time. And so, uh, BPC157 allows you to heal from injuries like just ridiculously quickly. There's, there's, you can look up on forums, people that are like, I broke my leg and I was like fully healed in like six weeks, you know? So it's like really effective, really, uh, but they're super complicated. You're dealing with complex processes in the body. They haven't been, uh, many of them haven't been studied well enough. So it's very much a wild, wild west. I do know there's some startups that are looking to take advantage of the sort of gray market right now and, um, but it's a difficult space to build in because there's so much demand. If you tell people like, I will help you lose weight or be stronger

• 1:39:08Jordi Hays?

  in the gym or recover from injuries, it's going to be a lot of demand for that. But then are you going to be able to build durable IP value without these big pharmaceutical companies coming in? And TJ's point around, you know, patient harm related to compounding, it is a good, you know, there's a, you know, the, uh, pharma industry gets so much hate from so many different types of people because they have had numerous incidents where they've done, you know, sort of bad things or released drugs that they knew weren't effective or that had a bunch of harmful side effects. But one thing is if you're getting a drug that you know is effective, you actually really want it to be made in like the most, you know, professionalized, uh, commercial capacity with incredible testing. And, uh,

• 1:39:52Jordi Hays?

  that's something that, that the big pharma companies generally are going to do better than. You could be ordering, you know, compounded Wegovy and it's just some dude in, in a random compounding pharmacy that could just be one room somewhere. It's just a license, right? And he's just making this, putting it in, you know, a vial and shipping it off to you. And then you're just injecting this into your body. And so generally, I think we want patients and people that are using these drugs to have access to highly reliable, you know, intensely tested.

• 1:40:24John Coogan?

  Pretty clear that the compounding, like, I don't know, it's not even a loophole, but like the compounding pharmacy regulations were written for, hey, your town might have a local pharmacist and in a shortage, you should be able to walk down to the pharmacy and they should be able to make you, you know, something that they can't otherwise buy. And then this was taken, this law, it's very similar to the de minimis loophole for Timu, where it's like, no one thought that you could put $5 billion of product through one company through the compounding, like, regulations. But the free market will always put it to the test.

• 1:41:02Jordi Hays?

  Yeah.

• 1:41:02John Coogan?

  How about, we need a hims and hers for mass monsters. What about like Chad's and Stacy's? Something like that?

• 1:41:08Jordi Hays?

  No, but I mean, yeah.

• 1:41:09John Coogan?

  Just TRT, everything.

• 1:41:11Jordi Hays?

  I'll tell you, I'll tell you offline, but our, a friend of the show is making a peptide, sort of like telemedicine type company. He's going to send us some and we're going to inject it, we're going to inject it on the show.

• 1:41:23John Coogan?

  I don't know about that.

• 1:41:24Jordi Hays?

  So I'll inject it.

• 1:41:26John Coogan?

  I'm doing great natty and I think I want to, I think I want to maintain my natty, my natty status, but we'll see. Maybe if I get a terrible injury, I'll need to give that one a try. There's an interesting wrinkle in here. Once you have a large customer base, you essentially have a large voter base on your side and they could demand regulatory changes, which explores, and so while Uber disrupted the taxi industry, hims and hers is up against Eli Lilly, Novo Nordisk, and the entire pharmaceutical and health insurance complex. And the law is pretty clear that when it comes to a shortage is, when it, when a shortage is deemed over, mass compounding can't continue. That's why hims and hers doesn't sell compounded versions of Zepbound. It may take a few more quarters, but Novo Nordisk will eventually produce enough supply to end the shortage of its drug. When that

• 1:42:11John Coogan?

  happens, despite their efforts to influence public opinion, compounded versions will likely be severely limited. So fascinating story, very interesting use of a Super Bowl ad drove a lot of contentious debate on the timeline.

• 1:42:26Jordi Hays?

  Probably, probably good for, probably good for business. I mean, I, I, I knew some people starting, you know, weight loss telemedicine companies. And, you know, roughly two years ago, and I was kind of short new entrance into telemedicine. But many of them, the demand is so significant and there really is a shortage broadly of these drugs that almost anybody that launched and had any type of quality operating experience, you know, and capabilities like did pretty well.

• 1:42:57John Coogan?

  So a number of companies that just rocketed.

• 1:43:00Jordi Hays?

  And in general, in general, Hims can, Hims, you know, the narrative for Hims to take the high road is to say, uh, being fat is so unhealthy that we are willing to play in a gray market if it means helping more people lose weight. And they, they, they do have, there is a narrative to be like, uh, you know, we are, you, you can hate what we're doing, but you know, judge us based on our, on how our like, you know, customers feel after using the product because a person that takes a Hims and Hers, you know, compounded version of one of these products and then loses 50 plus pounds, I guarantee you they, they have positive feelings towards Hims.

• 1:43:44Jordi Hays?

  And so I don't think we'll know the sort of impact or if, if Hims was good or bad.

• 1:43:49John Coogan?

  Yeah.

• 1:43:49Jordi Hays?

  Until we can see like, you know, enough customer and patient outcome data.

• 1:43:55John Coogan?

  Yeah. I mean, just, just thinking about it, like from like a technologist, future of the internet thing, like having a doctor that's available on your phone or your laptop over a zoom call or a text message, that feels like something that will be real. We've thought very narrowly about these companies early on as like this one just does ED. This one just does hair loss. This one, now they're doing two or three, but eventually, I mean, you could see a lot of young people don't have primary care doctors. They could effectively replace that. And then, hey, we need some blood work. Go here, do this. Oh, we need, we actually need you to go in and get a physical. We need to like, you know, scan you or something.

• 1:44:37John Coogan?

  Go to this location. But for the basics and just the prescriptions, it does seem like the future is some sort of online telemedicine. That's not going away. And so, you know, hopefully, all the companies that are working on this can get through all the complicated regulations, play by the rules, and win on product.

• 1:44:57Jordi Hays?

  And I saw somebody on X saying that, uh, that Hims was a $1 trillion company.

• 1:45:03John Coogan?

  I've seen that too. That's very funny, but maybe there's something there with like all of healthcare in one app or something. I don't know.

• 1:45:13Jordi Hays?

  Yeah, I mean, I think it makes sense. You can make an argument that generally the next, the next trillion dollar consumer company will be in healthcare.

• 1:45:23John Coogan?

  Yep.

• 1:45:24Jordi Hays?

  Is it gonna be, um, is it gonna be Hims? No idea.

• 1:45:28John Coogan?

  There's never been a medical aggregator in that way. There are obviously massive hospital networks. There's massive drug companies, but there's never been anyone that's succeeded in really aggregating all the market power where it's like, you know, if you need paper towels, you're gonna open up Amazon. And that has not been the case where it's like, if you need a refill on your medication, there's one place you go. Unclear how much of a winner take all market it is. Obviously, we'd have to be extremely monopolistic for there to be a trillion dollar outcome in the space. But, uh, you know, exciting to watch it play out. I'm sure there'll be more drama in the future. We'll have to have TJ on. Maybe we'll have to have Andrew Dudum on, the CEO of Hims. Hear it from him.

• 1:46:07Jordi Hays?

  We gotta have, we gotta have PvP debates on the show where we just take opposing views and let them, let them duke it out, you know?

• 1:46:14John Coogan?

  I'm ready, I'm ready. Well, speaking of PvP, we got a post about PvP meme coins from ArjunBology. He says meme coins were once fun and pure, but the, but the industrialized trenches have turned a harmless PvP game into a predatory one, dominated by insider edge. Traditional casino games and meme coins share a core design idea, a high return to player that masks a built-in edge while delivering intermittent variable rewards to players. Traditional casino games like slots and blackjack offer high RTPs, 90 to 99%, meaning you might lose $1 in expectation of $100 of wagers. These games work because they leverage near miss effects and the gambler's fallacy,

• 1:46:59John Coogan?

  ensuring that the lure of a big win keeps you in the game even as you're bleeding bankroll. As I see it, the main issue with meme coins as gambling game today is that they have moved away from their purest form to a fully industrialized version of the trenches. Initially, they functioned more like PvP slot machines. Most bets evaporate, but there's a small chance to graduate with a 5 to 25x multiplier, or even hit a jackpot level payout of 100 to 1000x when they temporarily become PvE. The thrill is from catching a runner or watching someone hit a massive win. Now, only 1 to 1.5% of pump fun launches graduate every day.

• 1:47:38John Coogan?

  I would guess nearly all of these are industrialized, operated by sophisticated influencers and insiders who launch them to their audiences with ever-shortening half-lives. The death knell for these games is when RTP drops so low that uninformed players have no chance to profit. Gambler's fallacy and social media can temporarily keep the game alive by spotlighting winners. Over time, if nearly all profits are captured by the house edge, the player pool is liable to dry up and destroys the original harmless PvP thrills that made the memes fun in the first place. What do you think about meme coins, Jordy?

• 1:48:16Jordi Hays?

  So funny, funny anecdote. Jason Calacanis posted today, like, please ban these meme coins at SCC gov. And then, which is funny, because you can't actually ban meme coins, like the the nature of them being just like code that runs on a blockchain. It just kind of means that that no matter what the government says, they can make it harder to on-ramp funds. But even then, it's like, there's enough like actual uses for crypto that it would be hard for the SCC to be like Coinbase, you know, you can't on-ramp funds anymore. So cats out of the bag, you know, it's not going back in. But the funny reaction to that is somebody immediately launched a token called stupid effing meme

• 1:49:01Jordi Hays?

  coins. And then that went to like a multimillion dollar market cap and like immediately had a bunch of volume. So all it took is one post from Jason and somebody used that as an opportunity to launch a token. So

• 1:49:14John Coogan?

  I told you this, you're going to say, you know, not financial advice, like never buy meme tokens and someone's going to launch a meme coin called not financial advice, or never launch. Like, you can't even have fun with it. And that's what I really don't like about it. I follow the what would your mother say rule. If you can't explain it to your mom and make her proud, you shouldn't be doing it. This applies to the language that you use, the vitriol that you bring to the timeline, as well as the projects that you launch. A lot of these meme coins are low class and vulgar, and we don't support them here on the show.

• 1:49:45Jordi Hays?

  Yeah, we will never launch a token at Technology Brothers. But going back to the original piece, I think it makes a lot of sense. The the whole, you know, people are doing meme coins for two kind of real reasons. It's like very much an entertainment thing, right? Like gambling is entertainment. There's like this social entertainment exhilarating element to it of I might win a lot of money. But as you know, as more and more of these, you know,

• 1:50:16Jordi Hays?

  In the same, you know, basically meme coins incentivize groups of people to coordinate against groups of other people. So it's PvP, it's can be one on one, but then it ends up being, you know, small groups of, um, there's been a lot of pressure under, under a, on a group called the, the LA vape cabal, um, which is a group, uh, loosely led by somebody named, uh, FaZe Banks, who was like a famous, you know, uh, gaming, um, you know, part of the FaZe Clan, which I think FaZe Clan was like publicly traded, or maybe, maybe, yeah. Still is, um, I gotta see if they're still at it. Um, but, um, yeah, let's see there. Oh.

• 1:50:57John Coogan?

  The brand still lives on even though the stock's down.

• 1:50:59Jordi Hays?

  Wait, no, they're, they, I think they're at, they're at a $14 million market cap and you can't, they were delisted, it looks like.

• 1:51:07John Coogan?

  Delisted, but they still do sponsorships and there's still different content creators that join their collective essentially.

• 1:51:13Jordi Hays?

  Yeah. So anyways, uh, you, uh, solicited a $0 on public. Um, but, uh, but anyways, so, so there's been a lot of pressure on them. Uh, they had the Hawk2a girl. They like went on their podcast and then people were saying that they were sort of doing insider trading against that. So overall, like, it feels like they're, again, the president launched a meme coin. So, and, and it's just sort of like code that's out there running. It's not going back in the bag, but I don't, um, it, what, what Arjun is basically saying is like, unless you let the average player make some money sometimes, like people are going to stop playing the game,

• 1:51:54Jordi Hays?

  right? So it's possible that, um, it's possible that this thing becomes, it feels more likely that like it needs to find some independent equilibrium versus like the government solution to me, but who knows? It's a wild, wild space.

• 1:52:14John Coogan?

  Yeah, I don't know. I mean, we kind of went through this with the NFT boom. I'm surprised we're going through it again. I thought we learned our lessons there, but people keep going for this stuff. You can't stop gambling Americans.

• 1:52:26Jordi Hays?

  It is funny. It is interesting to think, you know, OpenSea at one point was a 14 or 15 billion dollar company. Like, I'm sure if they raise money now, it'd be a tiny fraction of that. It's very possible the same thing happens to Pump Fun and they end up at a point where, you know, people, you know, people just say, eventually get so burned like people got on NFTs where they're sitting there. They're like, I have a picture in my wallet that I paid $20,000 for and I don't want to play this game anymore because I'm not having fun. So we'll see what happens, but one thing's for sure, gambling always finds a way. So.

• 1:53:08John Coogan?

  Well, you know what else always finds a way? The consultants. Let's go to Rohit Matal. He says Accenture had $1.2 billion in new bookings related to generative AI and it has 69,000 people working in data and AI. Very funny number. 69,000 people who don't know anything about AI are helping the largest US companies with navigating the fast-changing AI world. One of the biggest grifts in the world. I don't know about that. I mean, you can get up to speed on some of this stuff. A lot of it's just like, hey, you're a massive company. Do you have a ChatGPT enterprise program, like, subscription yet? Because maybe your people could benefit from using ChatGPT more regularly. Like, some of the transformation

• 1:53:51John Coogan?

  stuff, so basic and it can drive a lot of, a lot of shareholder value if you're just improving. Everyone's like, just going in and saying, like, the recommendation from some of these companies might be like, hey, go install Devin, go get cognition. And like, hey, you know, okay, you just have an extra developer and the ROI on that contract is positive. And they, it's crazy to think because you think you would just go on X and figure it out yourself. But if you're a massive company and you need to pay Accenture to tell you this or put it together in a DAC or, or do all the implementation stuff on what's legal implications, how does this fit in our organization? So I understand where he's coming from with the grift idea, but not, not fully convinced, actually. What do you think?

• 1:54:33Jordi Hays?

  Yeah, I mean, the, yeah, totally. I mean, one, it feels absurd, but this has always been the business of consulting. There's a new technological trend and then they ride that trend in order to drive, you know, bookings and new demand for their services. I have talked with people in the past about, you know, there's a totally a possibility to build the AI Accenture that helps people use AI. So like basically like agents as consultants that are internal at companies sort of helping employees better leverage AI tools in the business. Because if, for example, you had an employee with basically some screen capture all day long,

• 1:55:13Jordi Hays?

  and it was just analyzing what you're doing all day and saying, almost like Clippy style, like, hey, did you know that you could like, you know, use this automation or things like that. So I don't know, I think companies wouldn't be spending the money if they didn't feel like there was some value. Sometimes the value of consulting services is so executives can just say, hey, we have an AI strategy that we're working on with Accenture. And they're experts, right? They're paid to be experts and the value is not necessarily the actual results they drive in the business. It's value to the management teams to be able to say that they have things under control if they're not.

• 1:55:50Jordi Hays?

  But again, I would look at this as like, you know, if I was like in college right now, I would be learning how to use these new AI tools and reaching out to legacy companies that maybe aren't in the target market of Accenture because they're smaller. But reaching out to 10 to 50 million dollar a year businesses and saying, I will help you use AI better in this part of your business. Or I will help your developers use AI tools to be more efficient, right? So if Accenture is booking, you know, 1.2 billion for their gen AI work, a college student should be able to print 10, 20 K a month, just helping other, you know, similar businesses better leverage AI.

• 1:56:30Jordi Hays?

  So we've talked about this on the show before. That's, that's the new version of I will help you to use Google AdWords, or I will help you to run meta ads, or I will help you do social media management. Like that is the opportunity on the ground. And so we had somebody in the audience ask.

• 1:56:50Jordi Hays?

  We had somebody in the audience ask, Green Gorilla says, brothers, what advice do you have for new college grads? What industries companies do you see the most upside in joining? If you were 22 or 23 today, what would you do? And yeah, I mean, one is just like, whatever you're doing, don't wait to join a company to learn how to use these tools. Like, just spend 18 hours a day, learning how to use these products, sharing your work on X is a good start. And then go, you know, there's so many companies right now, more so than than five years ago, where you can go and have that company go from $5 million of ARR to, you know, 100 in a very short period

• 1:57:31Jordi Hays?

  of time. So, but again, there's still, there's also opportunities with these legacy businesses to go in and say, I'm gonna find, find a, somebody with a $50 million annual business and show them how you can replace, you know, $100,000 a month of payroll by like leveraging AI properly in the organization. So.

• 1:57:53John Coogan?

  Yeah, I mean, that's a great take. Long Lake is doing that with HOAs. There's already companies doing that at larger scales with private equity buyouts. No reason that a young person couldn't start an amazing consulting business today. I love that take. I think that's a very good, very good advice for young people. Let's move on to a post from impatient ventures. This is an older post, but I wanted to highlight it just to give the audience a little bit more background on our friends over at Bezel. They raised an $8 million seed round. Of course, we've talked about Bezel before. It's a watch marketplace for buying luxury watches. We're huge fans of watches here. We're going to be doing a Valentine's Day gift guide. Lots of good stuff on Bezel that you could pick up for the loved one. But the seed round was stacked.

• 1:58:37John Coogan?

  They got John Legend, Kevin Hart, Steve Aoki, Michael Ovitz, Michael Rubin, so many good celebrities in there, tons of great VC firms, liquidity capital, Box Group, Shrugged, Abstract Ventures, lots of, lots of great VCs in there. And just wanted to let the audience know, Bezel is here to stay. They're making money. They've raised money. It's a solid company and we love what they do. And I'm quickly becoming addicted to the app.

• 1:59:07Jordi Hays?

  Yeah, it's funny that you you pulled this post from impatient too, because the GP of impatient. Jack was in the chat on the live. He was in the chat.

• 1:59:18John Coogan?

  Amazing.

• 1:59:18Jordi Hays?

  Said, I don't use social media until now. Now I'm a brother lover. And he sent sent from the sauna at the standard Miami. So.

• 1:59:27John Coogan?

  Fantastic. I love the standard Miami.

• 1:59:30Jordi Hays?

  Rip a fun rip a fundraising announcement and then just go hit go hit the standard.

• 1:59:35John Coogan?

  Great.

• 1:59:35Jordi Hays?

  And yeah, crazy, crazy lineup. They basically got all the most wash obsessed celebrities in the world into a single round. And best part about it, all those celebrities were marking me up. I got in at the prior round. I got it around. So thank you for the markup, John Legend. That's brother behavior right there. So.

• 1:59:58John Coogan?

  That's great. Well, here's a very random post, bit of a bucket pull, but I wanted to highlight on the show. It's from PF Young, a content creator on YouTube. He does mostly politics. I find him very entertaining. He has a series of videos describing online politics through the lens of League of Legends. And they're wildly entertaining, even if you don't know that much about League of Legends, you can watch these and understand how all of the different groups and sub formations of how Jordan Peterson and Candace Owens worked together and how Hassan Piker and Bernie Sanders worked together. Fascinating content creator. Love him. And he says, I am assembling a loyal cult following. And it's a screenshot of a comment, a comment on his YouTube channel.

• 2:00:41John Coogan?

  Says, at this point, I only watch because it's kind of fascinating to see how far someone can get as a political commentator who refuses to read the news or learn anything about politics.

• 2:00:54John Coogan?

  I love that.

• 2:00:54Jordi Hays?

  Amazing.

• 2:00:55John Coogan?

  Life of a political commentator. That's the life of every of every content creator. You just go out there and you rip the vibes and some people like it and some people hate it. But we love PF Young and we got to have him on the show. If we ever get into politics, he'd be a great guest, but.

• 2:01:10Jordi Hays?

  Now, and we.

• 2:01:10John Coogan?

  He's a very funny, fun guy.

• 2:01:12Jordi Hays?

  Somebody, somebody posted yesterday.

• 2:01:16Jordi Hays?

  That they posted a meme responding to Luke Metro and it was, it was the,

• 2:01:22John Coogan?

  I saw this.

• 2:01:22Jordi Hays?

  Uh, it was a cycle meme. I'm just, oh, I gotta,

• 2:01:25John Coogan?

  You're fine.

• 2:01:26Jordi Hays?

  Hold it way up there, but he says, I look for tech podcast. I find an interesting podcast downloads go up with politics. It becomes all political slop and then I look for tech, tech podcasts again. So,

• 2:01:38John Coogan?

  Yep.

• 2:01:38Jordi Hays?

  I'm going out, uh, to say, uh, to Elias that, uh, who posted this, that we're going to hold the line, uh, for you strictly tech and business forever. It's on record. Uh, we never discuss politics.

• 2:01:53John Coogan?

  Decade from now, we're still covering tech earnings, baby. We're still gonna be covering tech earnings.

• 2:01:59Jordi Hays?

  I genuinely am not qualified to discuss politics and your views are just too extreme to, to talk about without.

• 2:02:08John Coogan?

  Both of our views far too extreme for.

• 2:02:10Jordi Hays?

  Yeah. It would piss off. It would piss off everyone.

• 2:02:14John Coogan?

  Everyone, everyone on both sides of the aisle, actually.

• 2:02:16Jordi Hays?

  We can't share, we can't share anything.

• 2:02:17John Coogan?

  It'd be too rough. So we gotta, we gotta stay away from it. But yes, I mean, uh, that meme is pointing out a, a real phenomenon, which is that, uh, the addressable market, the TAM of tech content just isn't that big. And I mean, even though acquired has not become a politics show, they have gone out of tech. Originally they were doing acquisitions in tech. They would tell you like the story of Google Maps getting bought, or the story of Instagram getting bought. That's why it was called acquired. Then it became the history of Facebook, the history of Google, the history of Microsoft. But then they went over and did LVMH and Porsche and Mercedes and, and all these just amazing firms. And they've, and they've graduated out of that and become a broader show.

• 2:03:03John Coogan?

  And now I think of them as just a great business show. They still haven't gone full politics. But at a certain point, you just run out of tech content. And so you gotta, you gotta add in some other spice. Fortunately, we have discovered a hack, which is instead of talking about politics, we talk about luxury goods. So, so this, this might, this might go down and we stop talking about tech and we're just talking about sports cars. What happened at F1, the latest news in horse breeding. But we won't be talking about politics, that's for sure.

• 2:03:32Jordi Hays?

  Okay.

• 2:03:33John Coogan?

  We will be derailed.

• 2:03:34Jordi Hays?

  A little, little alpha for, for the listeners. So John and I, maybe we mentioned this on the show. We're exploring getting our own racehorse. So I don't think I even told you this yet, John, but tomorrow we have a call set up with a guy who specializes in, in helping acquire racehorses. So, uh, very, you know, this could just become a horse podcast. And in that case, it'd be cool because then we'd have just tech journalists come on the show.

• 2:03:58John Coogan?

  Exactly.

• 2:03:59Jordi Hays?

  They could talk about tech and we would just be constantly trying to talk about horses and it'd be this nice dynamic where they're like, what are you guys? You're the technology brothers, but you only want to talk about the, the, the, you know, prepping for the Derby, you know?

• 2:04:12John Coogan?

  Yeah, yeah, exactly. And everyone will be like, oh, I miss when it was a tech show. Now they just talk about horses. Oh no, it's all horse content. There's too horse pill. Like they just want to go back to the old days. The old episodes are so good. Well, that's the way the cookie crumbles, folks, you know? We might get derailed, who knows? But not today because we're still talking about tech and we have an update. Breaking news from Mateo over at Eight Sleep. He says, sleep fitness is taking over the world and the Eight Sleep Pod is now available in Mexico. So if you're listening from Mexico, go buy an Eight Sleep Pod, buy 10 right now. Code TBPN. I think that's our code. But we love Eight Sleep. I have been crushing it. Got a hundred sleep score, uh, my first two nights ago.

• 2:04:56John Coogan?

  Let's see what I did last night. It was a little rough. Oh, 100. Let's go. I got another 100. Sunday, 100. Monday, 97. Tuesday, 107 hours and 44 minutes of sleep. I'm feeling great.

• 2:05:12Jordi Hays?

  That's great. Here's the issue with, with the issue with sleep is most people. Overestimate how much they're actually sleeping.

• 2:05:19John Coogan?

  Yeah.

• 2:05:19Jordi Hays?

  You think that you're, you think you're getting, you know, your eight hours because you were in bed. But it's like, oh, well, maybe you didn't fall asleep for 40 minutes or you woke up at some point in the night. So, um, I'm excited. We were going to be announcing, uh, some, some big news on PMF or die. They kick off soon, but, uh, I got, um, uh, the players set up, uh, in the space yesterday. And we're getting pods for them. Uh, so they'll be sleeping, sleeping like, uh, sleeping like babies, uh, which I'm excited for.

• 2:05:48John Coogan?

  Fantastic.

• 2:05:49Jordi Hays?

  Um, and, uh,

• 2:05:51John Coogan?

  What else we got?

• 2:05:52Jordi Hays?

  I mean, let's just jump in. You got a post from Delian?

• 2:05:54John Coogan?

  Oh yeah. We got some breaking news from Delian. Delian broke the news on this. Uh, Google Maps has updated. Uh, that big body of water south of Louisiana, uh, it's now called the Gulf of America. And honestly, I've honestly forgotten what it was called before. I, I, I don't remember it as anything but the Gulf of America. I've been calling Gulf of Texas, I guess, but now we've expanded it to the Gulf of America. But I'm very happy to see it. Uh, it's very cool that Google hopped on the train. They didn't fight it. They said, look, if it's going to be the Gulf of America, if that's what the people want, it's the Gulf of America. A little bit of a mouthful. I don't know how long it'll stick around. I wonder if it's going to be one of those things that goes back and forth. We, we, you know, Democrat wins in 2028 and boom, it's back to something else.

• 2:06:40Jordi Hays?

  It's funny because it, it seems like a political issue, but it should, we should all be united around it. It's like, hey, this is massive body of water. Like, I didn't know, I didn't know that the US had the authority to write executive orders to get, you know, bodies of water renamed, but, uh, it's, it's a pretty, you know, one, if Mexico tries to make some, you know, international effort to rename it the Gulf of Mexico.

• 2:07:05John Coogan?

  Yeah.

• 2:07:06Jordi Hays?

  Uh, I think Trump would basically say like 50% tariffs on all goods coming in from Mexico until you, until you, you know, uh, just accept the Gulf of America, G of A, uh, for those of us that, that say it, you know, frequently, uh, but.

• 2:07:22John Coogan?

  I think this is the start of something great. I think we gotta take this renaming much further. New England Patriots, we're dropping the new, it's just the England Patriots. England, you're old England now. You're not, you're not just England, you're old England. Or we have England now.

• 2:07:38Jordi Hays?

  Yeah.

• 2:07:39John Coogan?

  I don't want that, I don't want that. Also Greenland, Iceland, it's always been confusing. Greenland's the icy one, Iceland's the green one. Let's flip those names around. Let's switch it. I want, I want to rename those. Let's go around. We'll just clean up the whole taxonomy. Any, any weird names out there, you're on notice. If your country name doesn't make sense, we're renaming you. If your body of water doesn't make sense, we're gonna rename you. It's gonna happen.

• 2:08:02Jordi Hays?

  Yeah.

• 2:08:03John Coogan?

  We got the keys to the kingdom here. Delian's gonna make it happen over at Google. And the Google Maps, you better take some screenshots now, because it's gonna look completely different in a couple of months.

• 2:08:14John Coogan?

  Anyway, let's move on to Kyle over at Wander. We got a post from him, his pin post, a banger from 2019. Just trying to give you some more color on who this guy is, Kyle. He runs Wander, company we've partnered with. Talked about them on the show before. They have wonderful rental homes, beautiful rental homes. You gotta go scroll the feed for Wander and see what's available. It's really amazing. Some of the greatest homes. People are saying it's fantastic homes, folks. They're saying it's fantastic. And so he says, "Underappreciated phenomenon. Working at a high-growth, margin-focused startup is a real-life MBA, where you get paid six figures plus equity to learn how to build a business instead of paying six figures to go into debt and learning how to do, how to build a theoretical one."

• 2:08:57John Coogan?

  Absolute banger, 5K likes. I can see why he got so much love on this post. And that really just gives you a little insight into how they're building this business. They are high-growth, but they're also margin-focused. Every dollar matters in this business. Because when you pay, you know, a couple hundred bucks, a couple thousand bucks to rent a Wander, they have to pass a lot of that cost on to the person, the renter, right? They only take a fee, they're a marketplace, remember? And they don't own a lot of their inventory, or I think very much of any of their inventory at this point in the future. It will be a marketplace business. And so, you know, he's obviously learned as they've been assembling the plane, as they're flying it,

• 2:09:40John Coogan?

  and, you know, gotten the real-life MBA, and it shows because the business is ripping.

• 2:09:45Jordi Hays?

  Well said. Well said. Well said.

• 2:09:49John Coogan?

  Well, let's move on to some more geopolitics, geography news. We never talk about politics, but Germany is in shambles again. EU regulators think it's too dangerous to simply break a bottle across the bow of a new ship. Instead, they insist on the use of this contraption. This is why the European Union is failing. This is economist, economy minister Habek flailing. And we can't show the video. We're still working on it, but the guy is absolutely hammering this, this champagne bottle, I guess, across the bow of this ship with this very awkward contraption.

• 2:10:27John Coogan?

  And Joe Lonsdale says, sad metaphor for overregulated Europe in 2025. 5K banger. We love to see it. Very funny, very funny, very odd. I don't know why they're using this.

• 2:10:39Jordi Hays?

  Apologies, apologies follow up to from another angle. And he goes, you switch the screen, Ben, so I can't see it. He says.

• 2:10:47John Coogan?

  He says, he eventually just does it the old way. And it works. A metaphor there.

• 2:10:53John Coogan?

  I love it. Yeah. So Germany, we put you on notice weeks ago when we talked about your crumbling economy. We told you, you got to stop reading out all of the documents during a financing close. That's unacceptable. That's un-American. Germany is a very un-American country and you're on notice. So.

• 2:11:11Jordi Hays?

  Start doing deals, start doing deals the old fashioned way on a napkin. We've been thinking about.

• 2:11:16John Coogan?

  Text message, napkins. Yeah. Huge napkin with an Excel sheet printed on it. That's the way.

• 2:11:21Jordi Hays?

  Your deal on there.

• 2:11:23John Coogan?

  You can map out a full DCF, multiple sheets, but it's got to be done on a napkin and closed over a text message. Let's move on to John Arnold with a fantastic story about Enron, the real Enron, not these Enron imposters who are selling scam cryptocurrency, but the old Enron energy traders from the Texas-based company that went bankrupt in around the turn of the millennium.

• 2:11:51John Coogan?

  He says, I can confirm this story from Bern Hobart. As head trader at Enron, when it failed, when it filed for bankruptcy, I received many calls from firms that were recruiting. I was busy trying to close out the trading book and wanted to take some time to decide my future, so I didn't take any meetings. But Citadel was by far the most aggressive. Other companies set up few interviews with Enron's senior people. Citadel interviewed seemingly everyone in the trading operation, all functions at all levels. Citadel's team called me twice, but I declined to meet. It wasn't, it was apparent to me that their intent was to reverse engineer the business, and I wasn't going to help them. They knew that people looking for a job, particularly if they didn't have a fiduciary responsibility to a current employer, would be very free with info. Interview everyone and you get a 360 perspective of the industry, how the business makes money,

• 2:12:36John Coogan?

  its competitive edge, who the best employees are, et cetera. Citadel probably interviewed several hundred Enron employees. In the end, they maybe hired five. Much more importantly, they built the framework for how to enter the energy business, which, as Ken notes, has been an enormous success. I eventually did talk with Citadel. On their third call to me, they asked if I would talk with Ken directly. I was at the airport heading to Aspen for a quick industry event, legendary. I didn't know Ken personally, but had great respect for what he'd built, so I told this rep, he could call me when I got back to Houston the following week. She said, great, but called back a few minutes later with a question. If Ken flew to Aspen to meet me in person the next day, would I? Out of respect, I said, of course. The next day, I had a great meeting with him, and later that week, he offered me a job as head gas trader.

• 2:13:21John Coogan?

  I wanted to fully run an operation and thought there was more upside if I could have my own fund, so I declined. I ended up building my own firm, starting with traders and hiring deep fundamentals expertise. Citadel started with the research, as is their DNA, and built up a trading operation around it. Both models worked fabulously well. I came away from the experience with an even deeper respect for both Ken and Citadel, and remain friends with him to this day. I started with a niche gas trading, built a niche fund, and burnt out after 17 years. Ken started with a niche convert arb, and built one of the most successful financial firms ever, and has never tired. And the quote image here is, yeah, Jordy, what you got?

• 2:14:03Jordi Hays?

  No, I mean, just amazing, amazing story that gives insight into just how savage a firm like Citadel is. You don't get... You don't get to be that impactful and that large by simply being a good investor. Or being smart or making some great trades. There's a level of professionalism and just execution in that industry where in venture capital, you can kind of sit on your hands and if you're at a good firm, you'll meet most of the best founders. And if you do one good deal every couple of years, you can make a great career out of that. And that's just like not how it works in the hedge fund world.

• 2:14:48Jordi Hays?

  You will get absolutely lapped by a firm that, you know, many of these firms are playing PvP and they will send an army out, you know, in a situation like Enron and just use that as an opportunity to launch a new business line and basically just completely mine Enron for all of their alpha in the sort of basically the dying days and the sort of, you know, during the funeral, basically. So absolutely, absolutely savage and I'm glad that story had, you know, a happy ending and that it sounds like he, you know, was able to do well independently. And yeah, it's cool to see.

• 2:15:29John Coogan?

  Yeah, a couple, a couple of takeaways from me. I mean, first is that like, a lot of people know Enron just as a fraud and they think about it like a Theranos fraud where there was never really a product that worked and that's just not true. Enron had multiple business lines that were doing phenomenally. Their gas trading business, energy trading, a lot of that was going well. They just cooked the books and had this accounting scandal and were doing this crazy mark to market thing and there's like all this crazy accounting cycles. We'll have to do a whole deep dive on Enron, but there were some super talented people there that went on to do great things in other financial institutions. And Ken clearly was able to extract the signal from the noise and understand that certain pieces of the business, you wouldn't want to touch with a 10 foot pole, probably the

• 2:16:13John Coogan?

  accounting department, but there were plenty of pieces of the business that were running like super tight ships and creating a ton of financial alpha and going and getting that alpha and those secrets was incredibly valuable. A lot of these firms, they Trade on some secret strategy, some insight, some flow, nothing illegal, just a different pattern of pricing, a commodity or a stock, maybe they have a different strategy, maybe it's highly quantitative, maybe it's highly qualitative, maybe they're doing a ton of research, there's hedge funds that are buying satellite data, for example, to understand, oh, if there's this many cars in the Walmart parking lot, Walmart's going to beat earnings. They, everyone has a different strategy, that's an obvious one, but there's a million

• 2:16:55John Coogan?

  that are subtle and those are hidden within firms, and if you can get the guy who knows that secret, when his firm's collapsing, you're just going to be able to take all that alpha that you got.

• 2:17:04Jordi Hays?

  Yeah, the, I always love the example of like using satellite data and like developing your own data sources to better, better price bets and, and that's the kind of thing you just don't, uh, VCs never do that, like, general, there would be more stories about them being like, yeah, I went to the competitor, I sat outside the competitor's office, or I paid somebody to sit outside the competitor's office and, and realize that, you know, XYZ company had a very flexible, remote policy, and so I decided to go all in on, you know, their competitor who was like in person, you know, maybe they're, they're looking at

• 2:17:46Jordi Hays?

  some of that same information, but it's not as much of a, it's more of like a positive sum game, and there's more risk, you know, not, not necessarily more risk, but there's more just sort of luck and patience required, that there's not maybe the same information arbitrage, or it's just not as serious of an industry.

• 2:18:07John Coogan?

  Yeah, when I worked at Citadel, I remember this hilarious story where you, you know, the, the weather reporter on the local news, they always say, let's go to the Doppler 5000, we got a Doppler radar system, we're going to tell you, oh, there's a cold front coming in here, it's going to rain on Tuesday, that type of stuff, and one of the, one of the weather traders, who's essentially trying to determine how much rainfall there's going to be, and that will affect crop yields and then crop prices, so you can trade the commodities based on the weather report, is like, yeah, their, their weather system, their Doppler radar, that's like a Honda Civic, we have a Ferrari here. And they could predict the weather much better than the local news. And you think about the weather report as like the most authoritative source because it is is just a random consumer

• 2:18:50John Coogan?

  of weather news, but the hedge funds have it way more dialed, way more dialed. And there's a million little micro areas where they figure out one market edge and then exploit the, you know, that 1% margin all the way up to the full market size. This is the original story of Ken Griffin. I mean, he found that convertible debt was, was, there was this massive arbitrage that was available. He completely mined it, but then completely capped out on the size of the market because he basically brought convertible debt. He arbitrated all the value out. So it was correctly priced. He had to scale up into other strategies. And that's where the quant side came from. That's where the global macro side came from. And he eventually built a very insane huge firm. And then that doesn't even take into account civil securities of the market maker and is such a

• 2:19:33John Coogan?

  bigger company now. And at one point he was doing an investment bank. It was thinking about going public. It is a crazy story. But anyway, fascinating story and a good lesson there that even in chaos, go get the good people because not everyone is a disaster when the ship is sinking.

• 2:19:49Jordi Hays?

  Yeah, I wonder if anybody did that when when Bolt was basically imploding. You know, I'm sure, I'm sure they were getting.

• 2:19:56John Coogan?

  I think Stripe did, actually.

• 2:19:57Jordi Hays?

  Yeah.

• 2:19:58John Coogan?

  Stripe went and put some people out.

• 2:19:59Jordi Hays?

  But but not as aggressive as like going and camping out outside, you know, the office, basically. So.

• 2:20:08John Coogan?

  Well, it's different because the, the, the thing with like, I'm sure Bolt had some great engineers. You put those people to work on Stripe's core business. They're going to drive some value. It's very different when there's like one key insight at this hedge fund that's delivering, you know, a billion dollars of profit if it's run effectively or a hundred million dollars of profit or something like that. And it really goes to this, this idea Ben Thompson was writing about in his, I think his Monday piece about how OpenAI's ChatGPT deep research is a fantastic product, but it is fundamentally flawed in some ways in that it's, it only has access to the internet. And so if you run a report from deep research on an industry where

• 2:20:51John Coogan?

  there are secrets, there are firms that no one knows about because maybe there's a big player in the or in the industry that barely even has a website, but they're actually really important and you know them by reputation if you actually operate in that industry, but there's just nothing about them online. Deep research just completely miss it.

• 2:21:10Jordi Hays?

  This was a, an example there around industry secrets. It's not even secrets, it's just like operating know-how. When, when the whole creator economy boom was happening in sort of 2020, 2021, I had been working with creators through branded native, my first company, and, and literally paying millions of dollars to creators. And so I would get pitched these ideas and I'm like, yeah, that's a good idea. And it totally makes sense if you've never worked with creators.

• 2:21:40John Coogan?

  Yeah.

• 2:21:40Jordi Hays?

  And, and, and so I, I didn't end up investing in any of those companies because I just knew fundamentally that they weren't gonna, they just weren't gonna work. And so you have, this, this happens. Tech, the, the, the good thing about tech and a lot of great companies come out of this is you have people that are talented and smart, but without industry experience will come into a new industry. And, you know, basically completely change it, upend it, disrupt it. By just having a fresh point of view and, and, and thinking, what if we just like, did, you know, did this from first principles or whatever, whatever their approach is. And for as many like success stories as there are, there's a bunch of, you know,

• 2:22:21Jordi Hays?

  low profile failures that happens when, you know, people that, you know, apply that sort of startup mentality, like I'm going to come into this industry with no experience and, and disrupt it. And, and the situation with Ken, he was like, I'm going to come in and, and take over this market or compete in this market, but I'm going to do that by downloading as like hundreds, thousands, in this case, thousands of hours of interviews where they're just grilling people on the exactly what they did. How do they win? Where, where, you know, what, what aspects of the business were really making money? Who was, who were the top performers? And then just drilling them, you know, grilling them even more. So, um, anyways, a lot, a lot of learnings from that.

• 2:23:01John Coogan?

  Yeah. Fantastic story. We'll have to do a deep dive on Ken, Citadel and Enron and so many more things. So stay tuned.

• 2:23:08Jordi Hays?

  Yeah.

• 2:23:08John Coogan?

  I'm sure there'll be tons more content.

• 2:23:12John Coogan?

  We will probably, we get some travel tomorrow, some board meetings tomorrow, so we might be on later. We might skip, but we will see you guys later this week and please leave us a five star review. Apple Podcasts, Spotify, please leave it on both. It really helps the show. And when you do, leave an ad for your company, a company you like, something funny. Just write a bunch of stuff in the comment with your five star review. We'll read it live on the show.

• 2:23:38Jordi Hays?

  We got one review I'll just read right now. From C5183 on Apple Podcasts, he says, rare combination of funny and educational. TB combines acquired caliber research with a solid amount of humor and self-awareness, which you don't get many places. It's poised to become Red Scare for guys who want to show you their deck. Couldn't have said it better.

• 2:24:00John Coogan?

  Couldn't have said it better. That was the exact idea I had.

• 2:24:03Jordi Hays?

  Yeah, that, that actually, yeah, you actually nailed it. That was, that was.

• 2:24:07John Coogan?

  Literally said that.

• 2:24:08Jordi Hays?

  Yeah, and I didn't even know what Red Scare was at the time and you were like, look at it. This is what we're doing. So.

• 2:24:15John Coogan?

  Format wise.

• 2:24:16Jordi Hays?

  The only, the only critique of, the only critique of that review is there's no ad in it. So I'm kind of feel a little bit.

• 2:24:24John Coogan?

  Much like Red Scare, they don't run ads. And the business could be so much better. Anna and Dasha, get it together. You wouldn't need to launch a coin, Dasha, if you just ran some ads.

• 2:24:37Jordi Hays?

  There you go. There you go.

• 2:24:38John Coogan?

  Anyway, thanks for watching. We appreciate you guys. Stay safe out there. We'll see you on the timeline. Have a great day.