Ryan Petersen, James Cadwallader, Quaid Walker, Sarah Guo, Nicholas Harris, Raunaq Singh, Deel Spy Scheme, Tesla Deliveries Drop

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 Numeral - https://www.numeralhq.com Polymarket - https://polymarket.com/ Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://youtube.com/@technologybrotherspod?si=lpk53xTE9WBEcIjV (00:43) - Deel Spy Story (38:42) - Tesla Deliveries Drop/Elon Possible WH Departure (01:00:33) - Ryan Petersen/New Tarrifs on the Horizon (01:34:17) - James Cadwallader (01:48:31) - Quaid Walker (02:01:14) - Sarah Guo (02:34:06) - Nicholas Harris (02:46:23) - Raunaq Singh

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

• 0:00John Coogan?

  You're watching TVVN. It's James Bond. Oh! It's Tuesday, uh, it's Wednesday, April 2nd, 2025. We are live from the Temple of Technology. The Fortress of Finance, the capital of capital. We are enjoying these, uh, these pistols. Yeah, apparently you don't get a gun if you're a spy for a B2B SaaS company, but you do get a gun if you're a podcaster. So that's fun. And you do get cool code words. Yeah, we're going to be busting out lots of code words. You're going to want to say. Send that watch to London, John. Send that watch to London. Uh, we love a good, a good, a good tech spying story. We've covered it before.

• 0:37John Coogan?

  The allegations that Deal implanted a spy or recruited a spy from Rippling, the rival B2B SaaS company that, that handles HRIS and payroll, uh, amongst other things. Uh, we've covered it when the story broke a few weeks ago when I was in Washington DC. Now we're back in the Temple of Technology and we're covering it again. Um, and it's fascinating because the spy, so to give you just a little bit of background,

• 1:06John Coogan?

  Guy works for Rippling. Deal is a rival. These two companies are very similar size and scale, but they've been bitter rivals for years, funded by different sets of, of venture capitalists. Uh, Guy from Rippling gets a, you know, starts applying for a job at, at Deal, maybe thinking about jumping ship or starting some consulting and doing some work with Deal, the rival company, um, winds up messaging with apparently the CEO of Deal and, uh, and sending over secrets and potential clients and strategies that Rippling is using to win the HRIS market. And, uh, it's a fascinating story because you think about spying

• 1:48John Coogan?

  as being much higher stakes and maybe reserved for the Palantirs of the world or something that SpaceX would need to worry about, or maybe Andorl needs to worry about it. You don't think about it in the context of your payroll provider. The lesson is, no one's safe. No one's safe. And so. I think we will go through the affidavit which we shared on X this morning. Parker Conrad, also the CEO of Rippling, also chimed in with his analysis. But I thought Everett Randall summed it up very nicely. You gotta hold it in camera. We got these water pistols.

• 2:24Jordi Hays?

  T move locks.

• 2:25John Coogan?

  T move locks, but they look very, I mean, you spray paint this black and you know, that's gonna be an issue.

• 2:31Jordi Hays?

  That's gonna be an issue.

• 2:33John Coogan?

  But they're fun. They actually click when you.

• 2:35Jordi Hays?

  Anyway, so Everett quoting.

• 2:38John Coogan?

  Everett summed it up really well with a great meme.

• 2:41Jordi Hays?

  Parker's post.

• 2:41John Coogan?

  So can we pull up the Everett post? Everett Randall over at Kleena Perkins, if you're not familiar, friend of the show.

• 2:45Jordi Hays?

  There was a deal spy.

• 2:48Jordi Hays?

  The deal founder told him it'd be like James.

• 2:53Jordi Hays?

  Spy was directly on founder's payroll through sloppy payment trail, which we'll get into. Founder's dad, also the CFO and chairman, set up a code language to make it feel more like a spy movie. I honestly am going to be using these lines for a long time. My favorite is send that watch to London.

• 3:10John Coogan?

  That watch to London is going to be in the canon of tech phrases forever. It's gonna be like sweet baby raise or, you know, the cat is in the bag, the bag is in the river, that whole phrase. I'm trying to think of the other like iconic Senator, we sell ads. That I'm not, I'm not, I don't, I'm not doing it for the money. What was the Sam Altman quote like that just became like a meme forever? There's a whole going direct founder mode. Send that watch to London. You know, it's gonna be iconic. That is going to be an iconic phrase. But let's start with, let's start with our post and then we'll do some reactions. And I'm sure there was some more reactions that are happening on the timeline right now. So I will run through a little bit of this. Jordy, feel free to scroll timeline.

• 3:51Jordi Hays?

  We covered this story the morning that this was all breaking. The original Parker Conrad post, it was very explosive. At that time, it was unclear, right? The spy, we talked about this, is sort of caught in the middle in a weird way, right? Nobody, he's not, not really on anyone's team at that point.

• 4:08John Coogan?

  We had so many questions.

• 4:09Jordi Hays?

  You know, just in the past month, he'd been paid by both Rippling and Deal.

• 4:13John Coogan?

  Yeah.

• 4:13Jordi Hays?

  But now he's out in the wilderness by himself, right? And so there's this big question of which side is he going to take?

• 4:21John Coogan?

  Yep.

• 4:21Jordi Hays?

  Because that obviously gives a lot of leverage to the, to the side that he sort of like says, this is my team.

• 4:27John Coogan?

  Totally.

• 4:27Jordi Hays?

  I'm riding with them. And so.

• 4:29John Coogan?

  And he'd even seemed like he was ready to, remember, he was like, I'm willing to take that risk.

• 4:32Jordi Hays?

  Yeah.

• 4:33John Coogan?

  And it felt like he was like ride or die deal. And then all of a sudden, he flips.

• 4:37Jordi Hays?

  Yeah.

• 4:37John Coogan?

  And goes, and he starts cooperating with Rippling. And so, why don't, why don't I do some, some reading, which kind of trade off the post that we highlighted this morning?

• 4:46Jordi Hays?

  So the affidavit is basically step by step, all the different sort of sections to the story.

• 4:51John Coogan?

  Remarkably readable, 12 pages.

• 4:53Jordi Hays?

  Well, yeah.

• 4:54John Coogan?

  And it's like, it's not total legalese. It's very much.

• 4:56Jordi Hays?

  Plain English.

• 4:56John Coogan?

  It's in plain English. You can just go read it. We posted it. We shared it. It's at the bottom of our main thread on the Deel Spy. And of course, one of the most fun exchanges here comes very immediately. And it's the reason we are in James Bond mode today with our pistols. It's because, so this all started in September of 2024. Alex, the CEO of Deal, who will need to remember his name's Alex, because we're just going to be calling him Alex. We're going to call Parker Parker. Rippling, there's a lot of people moving around, but Alex and the spy, his name has leaked, but I think we're just going to keep calling him the spy. Because, I don't know, why, why draw more attention to this guy than he needs?

• 5:37Jordi Hays?

  Yeah.

• 5:37John Coogan?

  Alex suggested that the spy and him consider, discuss career considerations, kind of a normal recruiting cycle. They talk on WhatsApp. They had a phone call and they, they had exchanged messages on LinkedIn and WhatsApp, very normal.

• 5:51Jordi Hays?

  Yeah. So the backstory here is the, the spy was working for Rippling.

• 5:55John Coogan?

  Yep.

• 5:55Jordi Hays?

  Applied to work at Deal.

• 5:58Jordi Hays?

  And didn't receive an offer.

• 6:00John Coogan?

  Which is normal.

• 6:00Jordi Hays?

  And so he reached out to, he reached out to Alex to get feedback on the application process. And Alex said, you, you kind of bombed your presentation.

• 6:09John Coogan?

  Yep.

• 6:10Jordi Hays?

  But they built a relationship from that point on, allegedly.

• 6:14John Coogan?

  Yeah, yeah. All of this is alleged. This is a signed affidavit. So I think if he's lying in here, he could be.

• 6:23Jordi Hays?

  Committing another crime.

• 6:24John Coogan?

  He's committing another crime. But let's just be honest, like Deal has not responded. Maybe they have some amazing response and like we're, we're, we'll, we'll hear them out if that comes out. It'd be super interesting. It'd be a crazy plot twist and we love plot twists.

• 6:36Jordi Hays?

  Yep.

• 6:37John Coogan?

  And so he takes a WhatsApp call with Alex from a meeting room in Rippling's Dublin office while he's at work. And Alex told him, I have an idea. He suggested that he remain at Rippling and become a spy for Deal, which is in quotes. So he must've said the word spy, not just like, he could have been like, you know, dog whistling and said like, hey, like, you know, we would, we would love for you to like, give us competitive intelligence. You know, no euphemisms, just straight up spy. And then, and then he says, he suggested that I remain at Rippling and become a spy for Deal. And I recall him specifically mentioning James Bond, which is hilarious, hilarious to be like, you're, you're, this is the opportunity to be James Bond in B to B SASS.

• 7:20John Coogan?

  He said, I asked him what he meant. He said, he offered me a monetary reward if I agreed to spy on Rippling for Deal. I told him I'd have to think about it. And so communication immediately starts spitting up between the spy, Alex and Philippe, who's Alex's father and Deal's CFO. So it's a father, father, son combo, kind of running the company. And they move from WhatsApp to Telegram. So of course they're unencrypted and probably disappearing messages. And so a lot of those probably won't enter the record anytime. Later they talk about how like a few videos and.

• 7:55Jordi Hays?

  Well, later the spy, to be clear, breaks his phone with an axe. Destroys his phone with an axe.

• 8:01John Coogan?

  Which as we know, destroys all the information inside for sure.

• 8:04Jordi Hays?

  Exactly.

• 8:04John Coogan?

  Maybe, who knows? He also flushed it down the toilet. He really like went after it. It's, it's, it's just iconic. This is like some, one of the best tech stories in history. So fun. So they have a three-way call between Alex, the dad, and who's Deal's CFO and the spy.

• 8:23John Coogan?

  Alex asked me if I was agreeing to his offer. Once I agreed, Alex said we should move the conversation to Telegram. And so he sets up Telegram to engage in secret communications. Now, this was something we were very interested in hearing was how much was the spy paid? Because it feels like extremely risky to do this. It's seems like it's extremely illegal, maybe criminal. It's like a lot of risk and and these are very high flying companies like the top people at these companies are making millions of dollars, right? Like they're getting huge comp packages, huge equity bonuses. You would think that to do something that's so risky.

• 8:57Jordi Hays?

  Yeah.

• 8:57John Coogan?

  And so, and also moves the needle for deal a lot. Like if they if they poach like one or two of Rippling's clients from this, like that creates millions of dollars of value.

• 9:07Jordi Hays?

  He needed an agent.

• 9:07John Coogan?

  And he should be capturing 50% of that. I would, yeah, if we were his agent, and and this was all legal, let's say, we would never advise him on that. We would have said, hey, you're going to put up some historic numbers for deal with with what you're doing. You're creating some massive shareholder value for deal.

• 9:21Jordi Hays?

  Yeah.

• 9:22John Coogan?

  You need 50% of that. So like, it's got to be 100K a month. But it wasn't 100K a month. It was 5,000 a month, which feels very low and it feels like 5,000 euros a month.

• 9:32Jordi Hays?

  Well, and the thing, the thing that makes this whole thing so serious is that some of these customers would have potentially, you know, not gone with Rippling or switched from Rippling to Deal.

• 9:44John Coogan?

  Yep.

• 9:44Jordi Hays?

  And those contracts, even if you land a few big logos, could be worth tens of millions of dollars.

• 9:50John Coogan?

  Over the lifetime, for sure.

• 9:52Jordi Hays?

  And not to mention that, but there was also, you know, the the spy was was allegedly passing information on the superstar talent.

• 10:01John Coogan?

  Yeah, yeah.

• 10:01Jordi Hays?

  Top performers, etc.

• 10:03John Coogan?

  And I mean superstar talent, if you can get someone like that, I mean, what's a recruiter fee? 50K, right? 30K, something like that. And so, you know, he's gonna, he's gonna feed some superstar talent and get 5K.

• 10:15Jordi Hays?

  Yeah. Yeah. So to put this into perspective though, 60,000 euros.

• 10:21John Coogan?

  6,000 euros. Or sorry, it's 5,000 euros.

• 10:24Jordi Hays?

  Sorry, 5,000. So 60,000 a year. And, you know,

• 10:26John Coogan?

  Yeah, yeah, yeah.

• 10:27Jordi Hays?

  5,000 annualized.

• 10:28John Coogan?

  For spying.

• 10:29Jordi Hays?

  Is what a general practitioner, like a doctor, makes in Ireland.

• 10:33John Coogan?

  Oh, interesting.

• 10:34Jordi Hays?

  And so it's actually like, you should put this into the equivalent of like, he's basically, if he was in the US, he'd be getting paid like, Three hundred thousand dollars a year.

• 10:42John Coogan?

  Okay, sure, sure, sure.

• 10:43Jordi Hays?

  Sort of like the entry.

• 10:44John Coogan?

  Yeah, yeah, yeah.

• 10:45Jordi Hays?

  Salary for a doctor. So it's not inconsequential.

• 10:47John Coogan?

  Yeah.

• 10:47Jordi Hays?

  It's very possible that he was making more from

• 10:50John Coogan?

  Spies.

• 10:51Jordi Hays?

  This arrangement than his

• 10:53John Coogan?

  Yeah.

• 10:54Jordi Hays?

  Actual base salary.

• 10:54John Coogan?

  Cause he wasn't super senior at Rippling. He just had access to all the system because he was on the team. And man, they must be redoing their security like crazy at Rippling right now.

• 11:03Jordi Hays?

  Yeah.

• 11:03John Coogan?

  Bull market in IT jobs over there. Sure.

• 11:06Jordi Hays?

  Well, the, the, the, the, there's so much irony in this whole story, but the great irony is that Rippling was selling payroll with IT.

• 11:16John Coogan?

  Mm hmm.

• 11:16Jordi Hays?

  And it seems like they were able to use their own product to catch the spy.

• 11:21John Coogan?

  Yeah, yeah, yeah.

• 11:22Jordi Hays?

  Which is a great.

• 11:23John Coogan?

  Yeah.

• 11:23Jordi Hays?

  I'm sure they'll use that as a case study basically forever.

• 11:25John Coogan?

  Yeah.

• 11:26Jordi Hays?

  On why you should use Rippling.

• 11:29John Coogan?

  Yeah. And so initially he wants to be paid in fiat because he's worried about volatility in crypto. And so he asks that payments be made through Revolut, but over time he asks to move over to crypto, which Deal's CFO incorrectly believed would leave no trace. And in fact, it leaves the most trace.

• 11:51Jordi Hays?

  Permanent, public one.

• 11:52John Coogan?

  In fact, anyone can trace it. It's on the blockchain.

• 11:54Jordi Hays?

  Well, in this case, I think he was getting paid to a centralized exchange.

• 11:58John Coogan?

  Yeah, so probably not, but like, you know, you can easily subpoena blockchain.com and ask what happened.

• 12:02Jordi Hays?

  He's claiming that the payment came from the wife of the COO of Deal. And the reason that that becomes an issue is if it's true, it just ends up incriminating basically the entire exec team. The CEO, the COO.

• 12:15John Coogan?

  It's like every single person was involved. Yeah. And then the lawyer comes, the, the, the general counsel comes in later too. Deal's lawyer. And so there's like.

• 12:22Jordi Hays?

  That was unclear to me. I couldn't tell if it was external counsel or somebody they brought in.

• 12:26John Coogan?

  Yeah.

• 12:27Jordi Hays?

  But it seemed at least one lawyer.

• 12:29John Coogan?

  Yeah.

• 12:30Jordi Hays?

  From Deal was like, you know, actively working on, on trying to fix this issue that, that seemed to be internal.

• 12:36John Coogan?

  Yep. And so he would get the crypto, he'd get Ethereum for, in his blockchain.com cryptocurrency wallet. And, and then he would liquidate the funds and transfer it. But it's, again, it's so funny. We've talked about a little bit of insider trading before. Like the most obvious thing is just like, oh, like, I don't want this payment to show up on my account because I'm working for a deal like, I'll, I'll have to use someone who's like arms length for me. And it's like your wife who's like clearly tied to you.

• 13:05Jordi Hays?

  Yeah.

• 13:06John Coogan?

  It's not like it's some, oh yeah, someone that you are not even connected with on social media. No one could possibly know, like you cross paths.

• 13:13Jordi Hays?

  And the issue is.

• 13:13John Coogan?

  Love each other, but like you never talk.

• 13:16Jordi Hays?

  Is the issue is.

• 13:17John Coogan?

  It's like so obvious.

• 13:18Jordi Hays?

  If, in this situation, if the spy had said, deal's my team.

• 13:23John Coogan?

  Yeah.

• 13:23Jordi Hays?

  I'm riding it out with you guys.

• 13:25John Coogan?

  Yeah.

• 13:26Jordi Hays?

  He, like, all this stuff makes it so much harder to, for, for them, for deal to spin, right? Cause you go onward where the spy is giving a record of the code words and phrases they use to coordinate payment, which Philippe, the CFO and chairman would say, would send a picture of a watch to the pay, the spy would send a picture of a watch to their payment chat. And Philippe would say, send that watch to London. And then he would respond, the buyer is very happy. Uh, and so they were sort of communicating and, you know, trying to imply that like, there was, I guess, some type of like watch transaction and that was the payment.

• 14:07John Coogan?

  Yeah.

• 14:08Jordi Hays?

  That's how I read it is they wanted some plausible deniability that like they were just trading watches with this guy.

• 14:13John Coogan?

  I think that's, I, I think that's what they wanted to paper over a little bit.

• 14:16Jordi Hays?

  This corporate espionage is brought to you by.

• 14:19John Coogan?

  Bezel. I mean, as soon as.

• 14:21Jordi Hays?

  We're not gonna, we're not gonna monetize this.

• 14:26John Coogan?

  But yeah, I mean, seriously, you should not, you should not be doing fake watch transactions. You should be buying real watches instead.

• 14:33Jordi Hays?

  That's right.

• 14:34John Coogan?

  Work hard, make, make legitimate money.

• 14:35Jordi Hays?

  Yeah. And so the crazy thing.

• 14:37John Coogan?

  Invest in.

• 14:37Jordi Hays?

  The crazy thing is that deals, uh, CEO would allegedly would message this by multiple times a day. And if the spy didn't respond quickly, would follow up and sort of double and triple text.

• 14:51John Coogan?

  His texting style is wild.

• 14:53Jordi Hays?

  Yeah, honestly, it sounds, seems like pretty cool.

• 14:58Jordi Hays?

  Throwing the word boss around.

• 15:00John Coogan?

  Yeah, yeah, it's funny because like he's the CEO of a multi-billion dollar company, very successful, and, and, and he has this spy who's like clearly on like many levels below him, only making 60K. Is there a reason you're pointing a gun at me constantly?

• 15:14Jordi Hays?

  No, sorry.

• 15:15John Coogan?

  It's very threatening to just do an interview. Jordy's like this at me, like just.

• 15:19Jordi Hays?

  Under the table, under the table.

• 15:20John Coogan?

  John, don't say, don't cut me off.

• 15:23Jordi Hays?

  Don't say, don't say what you're about to say.

• 15:28John Coogan?

  Never cut me off while I'm talking.

• 15:32Jordi Hays?

  Air one, air one coffee in one hand, pink Timu gun in the other.

• 15:35John Coogan?

  Can you see it on the other screen?

• 15:39John Coogan?

  But, but he texts in all lowercase, which has been a contentious issue on the timeline for a while, but he always refer, he always addresses.

• 15:48John Coogan?

  He always, he always addresses the spy as boss. So he'll say, hi, boss, or hey, boss, can you search for this? Alex would frequently message me on Mondays with, hey, boss, good weekend? With two question marks, which is something I don't normally do.

• 16:02Jordi Hays?

  Casual and fun. And hey, let's give him some credit. He wasn't calling him bud.

• 16:07John Coogan?

  Yeah, it could have been a lot, it could have been a lot worse. It could have been a lot worse. I like boss. I, I, I think, I think it's a good, good way to address.

• 16:14Jordi Hays?

  Are solid.

• 16:15John Coogan?

  Yeah, chief is.

• 16:16Jordi Hays?

  Respectful.

• 16:18Jordi Hays?

  Sorry.

• 16:19John Coogan?

  Take it on the other side.

• 16:21Jordi Hays?

  Can't stop pointing.

• 16:22John Coogan?

  He keeps pointing the gun at me.

• 16:23Jordi Hays?

  Water gun at John.

• 16:25John Coogan?

  Anyway, so what did deal actually want the spy to search for in Rippling Systems? Well, we heard about Tiny Bird before, but we also know that they were searching for Tom Brady. We don't know why, but I think maybe Tom Brady is building a startup and needs HRIS, maybe. You think that's what it is?

• 16:45Jordi Hays?

  I was trying to, I was trying to.

• 16:47John Coogan?

  Or maybe they were going to do a sponsorship with him or something.

• 16:48Jordi Hays?

  Anything we'd say here, I think would just be pure speculation. Iran seems pretty obvious.

• 16:53John Coogan?

  Yep. Cause there were, there were like allegations that, that deal was being used in sanctioned countries, I believe. There was like, there was a, there was rumor going around, and there were some reporting by the information that maybe some clients, and, and this is the nature, I mean, I don't want to be too, too harsh. Like this is the nature of like online platforms. People try and abuse them all the time. Sometimes it's, you're doing everything you can to stop abuse and you still get a little bit.

• 17:19Jordi Hays?

  Yeah.

• 17:19John Coogan?

  But the allegations were that they weren't really doing that much.

• 17:24Jordi Hays?

  Yeah, and who knows, but clearly he wanted to know if people at Rippling were talking about Iran.

• 17:32John Coogan?

  Yeah.

• 17:33Jordi Hays?

  And probably in the context of Deal.

• 17:37John Coogan?

  Yeah, interesting.

• 17:38Jordi Hays?

  But who knows?

• 17:38John Coogan?

  And then, yeah, they was also asking for superstars.

• 17:42Jordi Hays?

  What was up with Tiny Bird?

• 17:44John Coogan?

  I don't know. I don't know what Tiny Bird is. It was mentioned in the previous thing. I think it was like, wasn't it? Wasn't it the leak of the? It was, it was something that was, it was like, wasn't it like the honeypot? It was like, there was an article that was gonna go out that was gonna mention Tiny Bird and so.

• 18:02John Coogan?

  And so Rippling sent an email to the executives at Deal and said like, hey, there's this hit piece coming out that's implicating you. And it's about this thing called Tiny Bird. And then they, they knew that they've searched for it. And they would have no way to know that that was the keyword that was gonna be in that article unless they had read that and then passed it to the spy, which is exactly what they did.

• 18:25Jordi Hays?

  Um, Tom Brady, though, could, there's potentially a Tom Brady of B2B sales.

• 18:31John Coogan?

  Hmm. Oh, yeah, maybe that's it. You're looking for a superstar. You want to know who the goat is.

• 18:36Jordi Hays?

  Rising up the ranks.

• 18:38John Coogan?

  Yeah.

• 18:39Jordi Hays?

  Looking around.

• 18:39John Coogan?

  The next Sam Blonde, the next Sam Buck.

• 18:42Jordi Hays?

  The Sam.

• 18:43John Coogan?

  Everyone who's good in B2B SaaS, sales, Sam B, always.

• 18:47Jordi Hays?

  Yep.

• 18:48John Coogan?

  Sam Blonde, Sam B. Uh, the CEO and spy were friendly and enjoyed talking about sports. Alex, uh, the CEO of Deal was also just chatting it up about Paris Saint-Germain Football Club, the soccer team of Paris. Uh, he reached out to me multiple times today to request information about Rippling. It seemed constant. It had been a few hours since he had heard from me. He would reach out. Uh, and then the level of detail here and like the, the management, I mean, you join an organization, it's, it's usually pretty hard to get face time with the CEO. But you come in as a spy, you're gonna get direct access. You can chat him up. You can, you, you can get all the mentorship you want. Maybe this is the, the path, the career acceleration. If only it was legal.

• 19:29Jordi Hays?

  Yeah. So here's where it gets particularly spicy. So at the end of February 2025, Alex told the spy to search Rippling Slack system for the channel hashtag D defectors. And remember, this was part of the honeypot operation that Rippling was running to try to prove that Deal senior management was coordinating with the spy.

• 19:50John Coogan?

  Yep.

• 19:51Jordi Hays?

  The spy ran the search immediately and began to look at the results. Within minutes, Alex had messaged him and told him not to run the search because he believed it was a trap. The spy told Alex that by the time he got his message, he'd already done the search and Alex said, oh, S H I T.

• 20:06John Coogan?

  Wow.

• 20:07Jordi Hays?

  And the spy said, I told him that D defectors had Matt Plank, Rippling's chief revenue officer in the channel. Not who you want to find in the trap.

• 20:17John Coogan?

  It's such a virtual world of like, of like, walking into a room and like, the big guy is just there and be like, how about you have a seat? Like, the jig is up.

• 20:24Jordi Hays?

  The jig is up.

• 20:25John Coogan?

  I wasn't expecting HR to be here.

• 20:27Jordi Hays?

  Yep.

• 20:29John Coogan?

  I told him I was frightened, but he said, don't worry. Thereafter, he continued to press me to pass him information from Rippling, which is extremely bold. Like, you think it's a trap. It looks like a trap. It went in. You went in and looked around and it was like, only this chief revenue officer is there. No, the like, the thing that you expected was not there. It feels like a trap. You suspected it. And then he's like, don't worry, let's just keep spying. You're good. Like, they should have cut it down then in February.

• 20:54Jordi Hays?

  Yeah, who knows? But it was probably already too late. So maybe he ran the calculus of, you know, let's just.

• 21:01John Coogan?

  Should we talk about the escape attempt?

• 21:04Jordi Hays?

  I don't even think he attempted. I mean, obviously, when he was confronted in his office, this was the spy. The spy made a bunch of excuses and said, oh, my phone and my laptop are down here. He had them. He said he went into the bathroom and he flushed the toilet a few times, but I don't think he flushed anything, or that's what he implies.

• 21:27Jordi Hays?

  And where it gets particularly interesting is that the, apparently, a CEF, Deals in House lawyer.

• 21:36Jordi Hays?

  Was, you know, at this point, starting to talk to him and said that he was speaking in a personal capacity. Rippling has nothing. And Asif suggested that the spy and his family fly to Dubai that night, saying, "We all need a holiday." And

• 21:54John Coogan?

  We all do need a holiday.

• 21:55Jordi Hays?

  Dubai has, I don't believe, has extradition agreements with anyone, do they?

• 22:02John Coogan?

  I don't think that's true. I think they do. I don't think it's non-extradition. I think it's just hard to find someone if they're there, land low.

• 22:11John Coogan?

  I think you have to go like way, way more obscure, but I don't know, you can look it up. The spy proceeded to smash his phone with an axe. He also deleted his LinkedIn account. Like, that would do anything, but it's very odd.

• 22:23Jordi Hays?

  Yeah, they do. They signed an extradition treaty in actually late 2024.

• 22:29John Coogan?

  Ireland in control.

• 22:32Jordi Hays?

  Yeah, they were ahead.

• 22:33John Coogan?

  It makes sense. I mean, there's a lot of people that go there. It'd be weird for it just to be like a free for all of criminals, right? And so, "He smashed his phone with an axe and put it down the drain at my mother-in-law's house as Deal's lawyer, as the Deal's lawyer had advised."

• 22:51John Coogan?

  That evening, Deal's lawyer spoke to his wife for 45 minutes to an hour on a Telegram call, reassuring her and corroborating what I had told her, that Rippling was lying and making all of this up. My wife later expressed concerns to me about the call with Deal's lawyer. She said that what he was saying did not add up, and she felt he was being pushy. And so, the spy finally decided to cooperate with Rippling after getting a text message from a friend that said, "The truth will set you free." And so, the family members were advising him to just tell the truth, and that it was the fastest way to move past all of this. And so, he realized that he was harming himself and his family to protect Deal.

• 23:33John Coogan?

  He was concerned, and am still concerned, about how wealthy and powerful Alex and Felipe are, but I know what I was doing was wrong. After I spoke to my solicitors, I started to feel a sense of relief. I want to do what I can to start making amends and righting these wrongs.

• 23:50Jordi Hays?

  Yeah, and I'm not surprised now, getting his side of the story, that he very quickly flipped to...

• 24:00Jordi Hays?

  Team Rippling.

• 24:01John Coogan?

  Yeah.

• 24:02Jordi Hays?

  It just doesn't. It's hard to imagine, like seemingly if he went with Deal and this was the situation that it was going to be hard for him not to go down with the Deal ship. Now, there's a lot of different stakeholders and players involved here. There's, there's Deal and its management team. There's Deal's shareholders, right? And then on the other side, you have Rippling and Rippling shareholders. And it's going to continue to be extremely messy. But, uh, and to be clear here, like the spy, nothing about this

• 24:38Jordi Hays?

  makes the spy look any better.

• 24:41John Coogan?

  Yeah.

• 24:41Jordi Hays?

  In fact, it's like he knew what he was doing the entire way and repeatedly made the choice to commit crimes.

• 24:50John Coogan?

  Yeah.

• 24:51Jordi Hays?

  Steal.

• 24:51John Coogan?

  Like there are gray areas for some.

• 24:54Jordi Hays?

  There's not a lot of gray.

• 24:56John Coogan?

  There are gray areas generally in, not in like corporate secrets, but in like strategies. Like if you go, if you, if you go and work at, at, you know, some high growth company and then you're recruited somewhere else and you leave, like, yes, you can't, you can't export GitHub code, everyone knows that. But can you call up someone that you got drinks with and maybe you met them in a corporate context, but then you became friends and then you get them as a client? Like probably. Or, or can you just say, hey, at my last company, we worked really hard and we had this fast paced thing and this was our strategy. So why don't we implement that strategy here? Like that stuff happens all the time. That's the reason why VCs love to back like former Stripe operator now doing a startup. It's because it's like, well, we hope that you're going to kind of steal the Stripe

• 25:41John Coogan?

  culture or copy it in some ways and bring that to bear in your new organization. Now, the line is drawn at like stealing secrets, IP, contacts, connections. And then also, and then obviously way, way further. But the whole thing is that to your point. This wasn't even framed as anything like that. It could have been framed as like, hey, like you have this, you have this depth of experience at a rival company. We would love to get you out of there and then put you to work in a much higher growth scenario very quick, very, very quickly. Take advantage of this, all the expertise that you learned over there. Obviously don't steal anything, but you're going to hit the ground running very quickly here. As opposed to if you came from a company that has nothing to do with this industry.

• 26:25John Coogan?

  That happens all the time, right?

• 26:28Jordi Hays?

  Yeah.

• 26:28John Coogan?

  So, but it doesn't look like that at all. And the fact that they like literally kicked off with like, hey, do you want to spy and be James Bond?

• 26:35Jordi Hays?

  Yeah.

• 26:35John Coogan?

  Not good.

• 26:35Jordi Hays?

  And to be clear, we don't have any insight into Rippling's employment agreements. But there's things like IP assignments and things like that. And, and there's

• 26:45John Coogan?

  There's no spying clauses.

• 26:47Jordi Hays?

  Yeah, there's going to be plenty of documentation around that, that would make it very obvious that, that by giving company secrets and IP to, to a, and getting paid by a direct competitor is just going to be.

• 27:02John Coogan?

  Yeah.

• 27:03Jordi Hays?

  Yeah, that's, that's the thing that's sort of unclear with the case so far and how this is going to shake out is like, there's the civil case.

• 27:11John Coogan?

  Yeah.

• 27:11Jordi Hays?

  There's potentially criminal cases. The way this is shaking out now, I mean, we saw like, I think it was JD Ross said, never seen anything like this in tech. These guys are all going to jail and deal will likely die as a business. I don't know.

• 27:26John Coogan?

  Aggressive.

• 27:27Jordi Hays?

  Very aggressive. I don't know if either of those are true. There are so many layers of irony in the story. It's hard to even know where to start, which I do agree with. But the, the first part is it's hard for me to imagine how Philippe and Alex stay.

• 27:43John Coogan?

  Yeah.

• 27:44Jordi Hays?

  In management roles or, or the COO, right? Like seemingly like they all probably have to go for the company to move forward. Will they go to jail? It's unclear. I think that again.

• 28:00Jordi Hays?

  It will kind of be on Rippling and Rippling shareholders, whether Rippling wants to. Right now, I believe it's a civil case, right? And so that doesn't mean that, and there will be, if that were to proceed, there would be sort of penalties and, you know, a number of consequences for that, but it could switch to being a criminal case. And at that point, you know, who knows, there could be jail time. But before you get to that, you'd have Deal and Deal's, you know, board and shareholders broadly that could go to Rippling and say like, you know, this was clearly, you know, a big mistake. Here's what we're going to do to correct it. There's probably a massive settlement associated with that.

• 28:41John Coogan?

  Yep.

• 28:42Jordi Hays?

  It's, it's very possible that Rippling could basically get like a series E done here to move forward.

• 28:49John Coogan?

  Yeah, yeah.

• 28:50Jordi Hays?

  A non-dilutive series E type of thing.

• 28:51John Coogan?

  Yeah, yeah. Just like, hey, if you want this to go away, you're going to have to pay us a hundred million dollars or something like that. That would be crazy. It's possible. The, the thing that I was talking about with you earlier was, was, okay, so if Deal winds up paying Rippling a huge settlement to make this go away, well, now they have a new problem on their hands because their investors should be upset about that because that was a massive liability that was not disclosed to the investors. That could be considered securities fraud and they might have a case there. And so you're kind of fighting a war on two fronts. You want to keep Rippling happy, but then you also want to keep your shareholders happy. And if you can't do both, you're going to face pressure legally. And how, how that will manifest, I don't know if it's, if it's criminal, I don't know

• 29:36John Coogan?

  if it's civil, but like, you're going to face pressure and there's going to be unhappy people on one side or the other. And that's a really, really tough spot to be in.

• 29:43Jordi Hays?

  It seems like no matter how much control Alex and Philippe and the COO have over the business today.

• 29:49John Coogan?

  Yeah.

• 29:50Jordi Hays?

  Just purely from a corporate standpoint, I don't see how they make it out of this.

• 29:54John Coogan?

  Yep, I, I agree with you.

• 29:56Jordi Hays?

  Still running the company.

• 29:58John Coogan?

  Yes, I completely agree with that. There is the bigger question of like, this could be a where there's smoke, there's fire situation where like, there's other problems with the business. And there's been like rumblings about that and reporting, but let's assume that

• 30:11Jordi Hays?

  Yeah.

• 30:11John Coogan?

  Deal has, you know, huge book of business and a lot of companies that are, you know, relatively happy with the product and they run their payrolls on time and do HRS stuff and they're just like happy with it as a SaaS product and they couldn't even tell you the name of the CEO if they tried, you know, like we use, you know, sure microphones here. I can't tell you the CEO of sure. If sure was embroiled in a conflict or some controversy, like I wouldn't be aware of that. And so it's totally possible that a lot of deal clients just don't know that this is going on. And they don't care. And they're like, well,

• 30:47Jordi Hays?

  No, I think that's what I'm saying. You gave the example earlier off air.

• 30:50John Coogan?

  Yeah.

• 30:50Jordi Hays?

  Like tires, like if you went to the like, for people in tech, this is the biggest story.

• 30:54John Coogan?

  It is the biggest story. It's so dramatic.

• 30:56Jordi Hays?

  The year so far, even, even though, you know, Monday night, you get this like $40 billion biggest venture round ever. Who knows if that's, you know, completely real or not, but

• 31:08Jordi Hays?

  still, like, this is the craziest story ever is YC on YC violence, right?

• 31:13John Coogan?

  It's crazy.

• 31:14Jordi Hays?

  Like, talk about, talk about being in a rough spot. If you're Y Combinator right now, you're, you're looking at two of your darlings, just sort of duking it out in a very sad way. But, but the example you gave was tires.

• 31:27John Coogan?

  Kind of disagree with that, actually, because oftentimes competition is for losers. You want one power law winner. So, and so the value, the value of a single really concentrated winner might be higher and higher margin. Anyway, sorry.

• 31:40Jordi Hays?

  Yeah, yeah, yeah. But I, again, I don't believe that a deal with hundreds of millions of dollars of revenue is going anywhere.

• 31:47John Coogan?

  Yeah.

• 31:47Jordi Hays?

  Like they, they have tons of massive multinational companies working with them.

• 31:52John Coogan?

  Yep.

• 31:53Jordi Hays?

  It's going to be a big, you know, business, I think for a long time.

• 31:57Jordi Hays?

  But

• 31:57John Coogan?

  My example of the tires.

• 31:58Jordi Hays?

  Yeah, so the tire example I thought was good. If you go, if you work in the tire industry and Michelin and Bridgestone are doing corporate espionage on each other, you're like, this is crazy. We've never seen anything like this. Like, it's like you're fixated on it with your friends. But then if you go to like, if I went to my mom and I said, hey, mom, like, I saw you have Michelin tires. Did you know that Michelin was stealing from Bridgestone, like their rubber, you know,

• 32:24John Coogan?

  Yeah, yeah, yeah.

• 32:24Jordi Hays?

  Uh, supply chain.

• 32:26John Coogan?

  Yeah, you were just.

• 32:26Jordi Hays?

  Secrets and she would be like, okay, sweetie, like, that's you know,

• 32:31John Coogan?

  Yeah, exactly.

• 32:33Jordi Hays?

  You know, I'll keep that in mind. And then she's replacing her tires in a year and she's like, doesn't even remember.

• 32:39John Coogan?

  Yeah, unless it actually affects the client, like the way FTX locked your funds or Theranos was giving you the wrong information. But if there's just, if there's just chaos at the top and you never even knew who the CEO was, you might just be like, hey, I'm not going to rip out my HR system. I'm just going to stick with what's working. At the same time, it's got to be the best time in history to be a Rippling sales rep. Can you imagine sending those emails? Hey, I saw that you're a deal client. Did you see the latest affidavit about the spying thing? I'd love to hop on the phone and tell you about Rippling Service. Like, they must be having a blast selling this product.

• 33:15Jordi Hays?

  The sad thing here, and I'm sure the frustration for the deal team.

• 33:19John Coogan?

  Yeah.

• 33:21Jordi Hays?

  And the shareholders is that deal, despite the spying, ignore the spying, has executed phenomenally.

• 33:27John Coogan?

  Yeah.

• 33:28Jordi Hays?

  And has built a one of, it's one of the most impressive revenue ramps.

• 33:33John Coogan?

  Yeah.

• 33:33Jordi Hays?

  That we've seen in the last 10 years. And they had a big lead over Rippling. Sure, I don't know what their growth rates look like exactly. But the spying thing reeks of desperation.

• 33:47John Coogan?

  Yeah, it does.

• 33:48Jordi Hays?

  Didn't feel like they were quite in a desperate situation yet, right?

• 33:51John Coogan?

  No, I, I

• 33:52Jordi Hays?

  These markets are, these markets are huge, even if. Rippling and Deal just feasted on ADP and Paycom and all these big payroll providers. They could have each eaten, you know, another, you know, 500 million of ARR a year for a very long time.

• 34:08John Coogan?

  Totally.

• 34:08Jordi Hays?

  And both been fine. And now it seems very unlikely that this company is going to be founder-led, you know, by, you know, the end of this month, I imagine. I just don't know how you let this go.

• 34:22John Coogan?

  I wonder if there were any, any seri... like, I wonder what Deal was doing against ADP? Like, what was their strategy to beat Paycom, Paylocity? Any of those, like, larger, public payroll companies? Because, to your point, I think that really is somewhere where you could just, like, feast on the market cap for a very long time. And probably not as aggressive of a counterespionage effort as Parker Conrad, who clearly has taken Deal seriously as a competitor for a very long time.

• 34:54Jordi Hays?

  Yeah.

• 34:55John Coogan?

  He's like the... Yeah. He's the hornet's nest you probably want to kick.

• 34:58Jordi Hays?

  Yeah, when you look at their product strategies, right? Rippling is the original compound startup. They did R&D for years, I think, before they actually, like, went to market with their product. And Rip... Deal started with a simple, simple idea: enable global payroll. Complicated, you know, sort of, actually, underlying product and infrastructure to do that. But then they both were just converging back. You know, they sort of started in their own lanes, got up to hundreds of millions of revenue, and then started aggressively converging onto the same core opportunity, right?

• 35:33John Coogan?

  Yep.

• 35:34Jordi Hays?

  And, yeah, so these companies were just always destined to...

• 35:39John Coogan?

  Collide.

• 35:40Jordi Hays?

  Collide.

• 35:41John Coogan?

  Collide, they did. I liked Will Monetius's take here. He says, "Talking about Deal's CFO using code words and phrases to coordinate payments with the spy. Send that watch to London, the buyer is happy, etc." Will says, "It is a useful law of human behavior that whenever you're engaging in something your heart knows is wrong, your brain tries to rationalize it in narrative terms. The second you find yourself using code words, you're doing something wrong. Speak simply and speak truthfully." I thought that was a good take.

• 36:13Jordi Hays?

  Good take, Will.

• 36:16Jordi Hays?

  But code words can be fun, especially when you repurpose other people's code words for your own.

• 36:22John Coogan?

  Well, those are just memes then.

• 36:24Jordi Hays?

  I liked Andrew Reid's post. He said, paid man's in ETH on blockchain.com. Sounds like straight out of a UK rap song.

• 36:35John Coogan?

  You can always, I can always count on UK rap to tell me how many people were in the car. That's funny.

• 36:41Jordi Hays?

  You like UK rap.

• 36:42John Coogan?

  Yeah, Stormzy. We were listening to the Stormzy in the studio last.

• 36:46Jordi Hays?

  Paid man's in ETH on blockchain.com.

• 36:49John Coogan?

  Dot com. It's so silly.

• 36:51Jordi Hays?

  Yeah, Josh Pacchini says.

• 36:54John Coogan?

  This one went super viral, by the way.

• 36:56Jordi Hays?

  You're like James Bond, but you only make 60K. You don't get a gun and you steal B2B SaaS secrets. Not, not the best trade.

• 37:07Jordi Hays?

  But yeah, Europe, Europe honestly came like took some brand damage here.

• 37:13John Coogan?

  Yeah. If you're willing to spy for 5K euros a month, gotta get the economy going, guys.

• 37:19Jordi Hays?

  Risking it all, risking it all.

• 37:21John Coogan?

  Yeah, what are you doing?

• 37:22Jordi Hays?

  But yeah, I'm sure Deel Spy massively regrets his actions.

• 37:27John Coogan?

  Yeah.

• 37:27Jordi Hays?

  And I'm sure everybody involved does.

• 37:29John Coogan?

  Yeah.

• 37:29Jordi Hays?

  Except Parker.

• 37:29John Coogan?

  It's always, yeah, whenever there's a crime.

• 37:31Jordi Hays?

  War time, Parker.

• 37:32John Coogan?

  Yeah, wartime, wartime CEO for sure. Yeah, whenever there's a crime, like, you know, there's always, you know, there needs to be accountability, but at the same time, I think there needs to be some empathy. Like, this is a frustrating and difficult situation for all involved. And I think, you know, I just hope that there can be a resolution that where like there's some sort of

• 37:56John Coogan?

  resolution and we're closing the book on this chapter of tech history in a meaningful way across the board. But I'm sure there'll be a lot more news related to this over the next few weeks, the next few months. The story is moving incredibly fast. This whole thing started just five months ago. And then it broke just, I mean, the, the honeypot happened in February and then in March, boom, the story dropped. And so everyone's been moving very quickly here and it's been, it's been fascinating to follow.

• 38:24Jordi Hays?

  Moving quick. All right. Well, we should move into the next story.

• 38:27John Coogan?

  Yes. Tesla's global vehicle delivery sank 13% in the first quarter.

• 38:34John Coogan?

  Recent surveys have shown an erosion in the brand's appeal, especially among Democrats in the United States. And so Tesla was putting up massive numbers for the last two years, somewhere between 400,000 and 500,000 vehicles every quarter. In Q1 of 2025, Tesla delivered 336,000 vehicles. Still a lot of cars, but a 13% fall is nothing to ignore. And so you got to dig into it. And I was always wondering if there was going to be, you know, obviously there's a, there's a decline in, in interest from Democrats. Would that be offset by Republicans who now like the brand? Well, we kind of have the answer, at least right now, the, that demand has not-

• 39:17Jordi Hays?

  The issue is the average Republican that, that has switched and said, I'm a, you know, turned to an Elon fanboy loves Ford Raptors.

• 39:28John Coogan?

  Yes.

• 39:29Jordi Hays?

  And that's the big challenge.

• 39:31John Coogan?

  Yeah.

• 39:31Jordi Hays?

  It's like, no matter, you know, even if they, they think they're on team Elon now, the Ford Raptor is still probably, you know, the greatest-

• 39:37John Coogan?

  I still think that's an opportunity though, because there's no reason why Elon and Tesla couldn't build something like a Ford Raptor, a Ford Raptor R, like a lifted truck.

• 39:46Jordi Hays?

  Well, it's a cyber truck.

• 39:47John Coogan?

  No, not the Cybertruck, because it needs to have, it needs to have an-

• 39:50Jordi Hays?

  It needs to have a lift.

• 39:51John Coogan?

  Internal combustion engine, for sure.

• 39:52Jordi Hays?

  Yeah.

• 39:53John Coogan?

  And it needs to have, you know, you, you need to have an option on the Tesla configurator to say like, I want to check the, I'm rolling coal button. And then it just has the massive smoke stacks out the back. It needs to have a really, a really aggressive engine note. These things are important to the new customers of Tesla, and I think Tesla needs to adapt. But let's dig into it at Wall Street Journal. There's further evidence that a growing consumer backlash against the brand is hurting Tesla's business. The analysts were expecting 396,000 shipments. It came in at 336, much lower. Tesla shares were up 4% in midday trading Wednesday, following the release of its latest delivery figures. Fascinating that it went

• 40:35John Coogan?

  up, but I guess the, the, the market was expecting even more of a sell-off. Musk's active role in the Trump administration and vocal support of four far-right parties in Europe has made Tesla a target of political protests and boycotts in recent months, including in some cases by once loyal Tesla owners.

• 40:51Jordi Hays?

  Yeah, it's, Yvonne's probably looking around like now, watching the stock pop 5% being like, hmm?

• 41:00John Coogan?

  Interesting.

• 41:01Jordi Hays?

  Uh, but it's possible this is more of a reaction to, uh.

• 41:06John Coogan?

  China.

• 41:06Jordi Hays?

  No.

• 41:07John Coogan?

  Oh.

• 41:07Jordi Hays?

  The news that, that he may be leaving the White House.

• 41:10John Coogan?

  Oh, sure. So if he goes, if he goes deeper into just like, I'm back in just the tech world. That would certainly offset things. Yeah.

• 41:18Jordi Hays?

  It seems clear that, uh, there's a limit to his. There's some sort of limit to how much he can multitask.

• 41:27John Coogan?

  Yep.

• 41:27Jordi Hays?

  And I would, uh, imagine that Tesla shareholders will benefit from him shifting focus out of the government and back on to.

• 41:35John Coogan?

  Yeah. So we saw this from Joe Weisenthal. He took a picture of a computer showing Bloomberg and there's an article in Politico that says, Trump tells inner circle that Musk will leave soon. Uh, obviously just kind of rumor mill at this point, but, um, but interesting if true and unclear what that would mean for Tesla. Could the Democrats who have been buying Tesla's kind of forgive and forget and move on and

• 42:02Jordi Hays?

  Yeah.

• 42:02John Coogan?

  Come back to the, to the, uh, to the brand. I cer- I certainly think it's possible if Elon wanted that, he could go on. He's very, he's a very good communicator. He could go on a press tour and say, you know, like, hey, like, yeah, I'm, I'm actually just really focused on cars right now. And, you know, I, I was thinking about this, like Tesla should be the most nonpartisan vehicle in the world. Because it's, it's electric, so it appeals to Democrats and it's built in America. And so it appeals to Republicans and he could, if he was purely focused on that and didn't care about the politics stuff. He could have, he, he probably could have gotten the Tesla brand to a position where it was loved by everyone in the same way that like Nike is loved by both, or Apple.

• 42:47John Coogan?

  That these are very bipartisan brands, nonpartisan brands. Um, but I think he really did think that this, uh, He was a true believer in the, in this idea that the 2024 election was deeply important and it was worth him coming off the sidelines, risking everything to move Washington in a different direction. And he did that. Now he kind of, you know, there's going to be some, like, we were talking to, I think we were talking to Senator about this, like, like, what is the net effect of Elon's going political? Like, will it be good or bad for him? Like, and it's like, okay, what are we talking about here? Like aggregate net worth? Like, some of his companies might do better. Some of his companies might do worse. We have to like, add all those up.

• 43:26Jordi Hays?

  He was running the calculus would be like, this is probably short term bad.

• 43:30John Coogan?

  Yep.

• 43:31Jordi Hays?

  But if I can be effective and sort of change the course of history with the country.

• 43:36John Coogan?

  Yep.

• 43:37Jordi Hays?

  Then it will be net good in the long run.

• 43:39John Coogan?

  Yeah.

• 43:40Jordi Hays?

  But certainly it would have been hard to argue that going in short term was just going to be default good for everything.

• 43:46John Coogan?

  Yeah. I mean, you could even imagine it's like, okay, so what if the work that he does winds up, streamlining the FDA, speeding up Neuralink development and Neuralink, every single person winds up getting one and they cost $50,000 and all of a sudden, that's a bigger.

• 44:02Jordi Hays?

  Oh, really? They're opening up a patient registry.

• 44:05John Coogan?

  Fantastic.

• 44:06Jordi Hays?

  But there's two poly markets I want to look at. So right now Elon, out of Trump administration before July, sitting at 50%.

• 44:13John Coogan?

  50%.

• 44:14Jordi Hays?

  And then out of the admin in 2025, you know, sort of basically by the end of the year is at a 76% chance.

• 44:22John Coogan?

  Wow.

• 44:23Jordi Hays?

  So.

• 44:24John Coogan?

  I also wonder what that will mean because it's totally possible that, so people have been predicting like the Trump and Elon relationship is going to dissolve and blow up. It's going to blow up. Like they're two, they're, they're both two hard charging aggressive figures. It doesn't make sense. They just can't last. That's been the narrative, right?

• 44:44John Coogan?

  But it's possible that they, that Elon is no longer a member of the staff of the White House. Like he doesn't have a .gov email, but they're still friends.

• 44:53Jordi Hays?

  Yeah.

• 44:54John Coogan?

  That is a, that is a possibility. I don't know if that's where it's going. I really can't predict any of this. I'm not really tapped in in DC.

• 44:59Jordi Hays?

  It would be very short sighted for both of them to blow up the relationship.

• 45:03John Coogan?

  Yeah, I think so. It seems like it's been pretty mutually beneficial. I don't know. I mean,

• 45:11John Coogan?

  No one expected them to win and then they did. So, you know, it seems like it's good. Sales from China, which exports to foreign markets, fell 49% in February, but fared better in March after it started delivering the refreshed Model Y. I saw the first refreshed Model Y on the street the other day. It looks great in China. According to China Passenger Car Association, the company sold 78,000 China-made vehicles in the month, down 11% in the same period last year. Despite the decline, Tesla climbed back to third place in sales in the Chinese car market after dropping out of the top five in February. And they have some stiff competition that I'm actually very excited about. I, I think just from a consumer perspective, seeing some of the demos of the cars and the way the Chinese car companies are pushing things forward is awesome.

• 45:56John Coogan?

  Have you seen that demo of the adaptive suspension? So you're going around a corner, super hard and it's, and it's tilting the car. So you're, it's perfectly flat and they have a wine glass on the center console. It's not spilling. Amazing. Or like going over bumps and, and the car is like adapting to the bumps. So it's just perfectly smooth. There's all these like, they do all these like weird features. Like there's a car that floats. We talked about that.

• 46:20Jordi Hays?

  Yeah, there's, there's a bunch of simple features that just make sense.

• 46:25John Coogan?

  Yep.

• 46:25Jordi Hays?

  They have hand tracking. So you can be like this.

• 46:27John Coogan?

  Yep.

• 46:28Jordi Hays?

  And then it'll pull down.

• 46:29John Coogan?

  There's even like this LED bar on the back of some of these cars. So you can send a message to someone before, in front of you or behind you being like, like, sorry, like I, I was on my phone. That's why I didn't go when it was green. Like you could send that.

• 46:40Jordi Hays?

  And I think there's.

• 46:41John Coogan?

  It's all these funny weird things. There's explosion of, of innovation and like testing weird things. And I like that.

• 46:46Jordi Hays?

  Tesla.

• 46:47John Coogan?

  It puts pressure on our.

• 46:48Jordi Hays?

  Catalyze that.

• 46:48John Coogan?

  Totally. Yeah. Tesla did the same thing with the noise.

• 46:51Jordi Hays?

  Yeah, the part features.

• 46:52John Coogan?

  Yeah. Or like playing video games or playing, you know, all these different things. Tesla very much did that. And while I absolutely want American companies to win, I do like the idea that there's now pressure to say, okay, we really need to step it up.

• 47:07Jordi Hays?

  Innovation is good.

• 47:07John Coogan?

  Innovation is good.

• 47:08Jordi Hays?

  I want to see Mercedes execs look at these videos of these Chinese manufacturers and be like, okay, they're like way ahead of us on so many dimensions.

• 47:17John Coogan?

  Yeah. I mean, I'm pretty sure the, I don't know if it's a Yanghong U8, but the CEO of Ford was driving a Chinese car like daily for like weeks because he was like, I need to understand what's going on over here. And like, we need to figure this out at this company.

• 47:29Jordi Hays?

  Founder mode.

• 47:29John Coogan?

  Uh, yeah, yeah. Yeah. A little bit of, little bit of that. So in Germany, home to Tesla's European factory, new vehicle registrations fell 76% in February compared with the same period last year, according to the country's Motor Transport Authority. In the US, sales fell 2% in the first months of the year, according to research from firm Ward's Intelligence. And so that's not that much of a drop, considering that I think of Elon as being more politically controversial in America than, I mean, maybe in China, maybe in Germany, but it seems like it's a little bit more distant there, but I don't know.

• 48:05Jordi Hays?

  I think people make car, I think these purchases are super considered outside of somebody's home. It's one of the most expensive decisions that they make and are costly sort of products that they buy. And if you're looking at buying a car, you're looking at the cost, if it's an EV, you're looking at the range, you're looking at the features. Yeah, maybe you care a bit about the founder, but that's only one factor, right? And so right now Tesla is basically giving away these cars. You can get a, you can get a Tesla Model Y for 300 bucks a month.

• 48:42John Coogan?

  Your phone bill.

• 48:43Jordi Hays?

  Yeah, it's not far off from your phone bill. So it's an extreme, and who knows if that's at all profitable.

• 48:49John Coogan?

  Yeah.

• 48:50Jordi Hays?

  But it's, and it's extremely solid offer in the market. And the reason for the sales decline is despite these sort of massive incentives, every other manufacturer is overproduced EVs. So they're also giving these things away. You could get a Rivian pickup truck last year for like 500 bucks. It's like, it's like

• 49:08John Coogan?

  It's great.

• 49:08Jordi Hays?

  They're giving these things away. And, and so, yeah, it's a amazing time to be a buyer in the car market. You have a lot of options and the sales decline, like I'm sure was anticipated by analysts, right? Tesla basically had a monopoly on, on quality, cheap EVs for a period of time.

• 49:28John Coogan?

  It also feel like they were reaching saturation. Like every car on the road in LA is a Tesla. Like at a certain point. Like, I understand the monopoly power that accrues to the iPhone and the integration there and everyone wants the blue bubbles and everyone, it's nice if I have an iPhone, you have an iPhone, we can do airdrop. Cars, it's a little bit less so and I feel like cars are still a little bit more of like the status symbol, what it says about you, the difference of the Ford Raptor driver versus the Audi R8 versus the Lamborghini. Like, they all say slightly different things and at a certain point, if every single person is driving a Tesla, which is like this appliance car, there's just going to be some people

• 50:07John Coogan?

  in the world that say, you know what, I will accept a lower quality of car, even on a price per power, horsepower, any ratio that you want to measure, like quantitatively a worse car, just to express myself and actually say something about myself and say, hey, I have a convertible, like, and that says something about me, or I have a truck. And even if I don't need that space, I have it because like, it makes me feel like a cowboy and I like that. And like, if Tesla's not offering that brand feel, that will drive other adoption.

• 50:45Jordi Hays?

  Cars are so emotional, people use them, it's like a handbag for women or a watch for guys as a way to express yourself. Some people still just say, I'm gonna be practical, I'm gonna buy the cheapest, best option. Other people, you know, do what I did at one point and bought a lifted Ford Raptor because I just like wanted to live out my childhood dreams.

• 51:03John Coogan?

  Exactly, exactly.

• 51:04Jordi Hays?

  And I had a great time with it. And then it was so funny driving a Raptor because I felt like I'd go to a meeting and if the person I was meeting with saw me pull up in the Raptor, I had to like explain like, well, I'm actually like driving it like kind of ironically, like, I'm kind of driving this more for like my like 10-year-old self more than my current self. I just want you to know that.

• 51:24John Coogan?

  I'm not like really a Raptor guy, but like I kind of respect it.

• 51:26Jordi Hays?

  Completely murdered out and it's tinted and anyways.

• 51:32John Coogan?

  Yeah, that's great. So in California, where Teslas are among the best-selling vehicles, the new vehicle registration of Teslas fell 11.6% in the state. Obviously, California is like a D plus 30 state and so very democratic, maybe more affected there. But also, there's such saturation happening. The market cap of Tesla reached a high of 1.5 trillion in mid-December. In the weeks after the inauguration, the shares, the price per share returned to pre-election levels.

• 51:59Jordi Hays?

  Was that?

• 52:00John Coogan?

  There's also been vandalism.

• 52:04Jordi Hays?

  That was their all time high?

• 52:05John Coogan?

  Yeah. And so now Musk is trying to refocus investor attention away from car sales and on to its driver assistance software, which it calls full self-driving supervised and its Optimus humanoid robot technologies. He has claimed could one day boost the automakers market value to as high as $30 trillion. You'll love to see it. The humanoid robot market, it's also fascinating because everyone is so skeptical about it. Like the anti Elon people are like, it's teleoperated. It's a guy in a suit. Like it's nowhere near any commercial scale. And like, that's probably true. Like, the Optimus does not seem to be something that's going to be shipping anytime soon.

• 52:48John Coogan?

  But at the same time, like we've seen the Chinese humanoid robots, like they work. You can just buy one, like it can't do everything, but like it's out there. It exists. It's not some sci-fi. We have no idea how to do time travel. And it's like, people are writing academic papers about how one day you might be able to make a humanoid robot. It's like Boston Dynamics exists. You can see the Atlas robot running around. You can see the

• 53:14Jordi Hays?

  And you can actually get a Unitree robot dog for under three grand on Amazon.

• 53:20John Coogan?

  Yeah. And so, and so like Unitree is shipping these things. They're not great, but it's like, can Tesla copy that and just copy paste that? Absolutely. Can even figure Brett Adcock, like, like can they just set up a plant that copies Unitree? Like, that doesn't seem that crazy. Even the legacy carmakers were eventually able to make electric cars that were in the same ballpark as Tesla's. Like the Ford Mach-E is like, it has similar range, similar performance. Like a Tesla fan would say like, oh, it's like, you know, too expensive for the power and you don't get the self-driving stuff. And it's like, yeah, that's all true. It's, it's, but it's 80% of the way there or 90% of the way there.

• 54:03John Coogan?

  And there are some electric cars that give you a better experience than Tesla in certain, in certain categories. Like the Rivian, the Rivian has a full-size SUV. Tesla does not, like they, they have a crossover. And so, and, and even like the, the Taycan, the Taycan comes in a, in a wagon configuration. Like Tesla just doesn't have a wagon.

• 54:26Jordi Hays?

  Which I think looks fantastic.

• 54:28John Coogan?

  I like it a lot. And, and also like Tesla doesn't sell a convertible. Like if you want a convertible electric car, like you're out of luck with Tesla. And so there's all these ways where, where, where you could kind of like slice up the market, figure something out, but like, you know, these, uh, these humanoid robots, like they do exist. And so even though it feels silly to think about Tesla as like, oh yeah, they're going to win in humanoid robots. It's like, well, they're probably going to do something there. And they're probably going to make it. Yeah. They're probably going to make something work. Uh, and so I'm, I'm, I'm very interested to follow it. Uh, it's, it's, it's fascinating to see how this pencil's out and it'll be interesting to see how Elon kind of reintroduces the company, or if he does, he had Trump's,

• 55:12John Coogan?

  you know, pushing like, hey, go buy a Tesla. He, there was those note cards. You saw that? Oh, yeah. Of like, the Tesla costs $60,000, this and that. Um, is there a way that he can beat the Ford Raptor at its own game without putting in ice engine, which I think might, you might need to do.

• 55:32Jordi Hays?

  That would, that would go crazy. Cybertruck.

• 55:34John Coogan?

  Yeah.

• 55:35Jordi Hays?

  Internal combustion engine.

• 55:36John Coogan?

  He needs a Hellcat competitor. He needs a Dodge Charger competitor. Something that trades. Uh, I mean, one of the problems with, with Tesla, I'm sure.

• 55:48John Coogan?

  I, I, I'm sure one of the problems with Tesla is like, is like, there's too much technology in that. So you can't really like trade it on Facebook marketplace. Just like, here are the keys. Like, I don't have a title because like whoever actually, actually owns it will be able to just like, it has LoJack basically because it's so connected. Uh, and they could just disable the car. But if you, if they take some of that stuff out, they put in a V8 and, uh, maybe throw some superchargers in there.

• 56:13Jordi Hays?

  Yeah. Really get the secondary market pumping.

• 56:14John Coogan?

  Get the secondary market pumping. Get the thieves involved.

• 56:18Jordi Hays?

  Yeah.

• 56:20John Coogan?

  Anyway, we're having some fun.

• 56:21Jordi Hays?

  That was always a good bit of ours.

• 56:23John Coogan?

  Yeah. Yeah.

• 56:24Jordi Hays?

  Well, Tesla sells products online.

• 56:27John Coogan?

  Yeah.

• 56:28Jordi Hays?

  They sell cars, but they also sell. Stuff like merch, they'll sell tequila from time to time, but you know, a bunch of, you know, hats, things like that. And what should they use for sales tax compliance and automation?

• 56:41John Coogan?

  Numeral, baby. They should go to numeralhq.com.

• 56:43Jordi Hays?

  Benchmark Series A.

• 56:45John Coogan?

  Sales tax on autopilot, spend less than five minutes per month on sales tax compliance.

• 56:49Jordi Hays?

  They work with thousands of high-growth companies. And if you were selling products online or you're a SaaS business, go sign up for Numeral. And just for old time's sake, tell them the technology brothers sent you. They'll know, they'll know what you mean.

• 57:05John Coogan?

  And this is really cool.

• 57:06Jordi Hays?

  There's 25 states that are taxing software sales.

• 57:10John Coogan?

  Yeah.

• 57:11Jordi Hays?

  And if you have any type of scale with your SaaS business, I'm sure you're dealing with this already. So go, go check out Numeral.

• 57:20John Coogan?

  And this monitoring feature is actually genuinely very interesting if you're a startup and you're growing, because oftentimes you don't have to pay sales tax until you hit some sort of threshold. And so their example here is like, they're monitoring your sales in New Mexico. When you hit a hundred thousand dollars, you're going to need to register and start paying. But as long as you're under that, the, the, the state doesn't care, which is great, because the state, it's cumbersome to file these new tax, these new sales tax reports. So they're gonna, they're gonna, you know, track that and then help you file that as soon as you need to. So I mean, I've been caught so many times that like, can't even count, where it's like, oh, I, you know, we, we hit the threshold, then we had to go pay a lawyer to figure it out and like, do all these things. Like, this is a, a really

• 58:02John Coogan?

  great product. So go check it out. Numeral HQ. Anyway, let's move on to

• 58:12Jordi Hays?

  Vacheron.

• 58:12John Coogan?

  Watch news.

• 58:13Jordi Hays?

  Some big watch news. So we got Quaid.

• 58:15John Coogan?

  We got Quaid coming on.

• 58:16Jordi Hays?

  Co-founder of Bezel. He's calling in today. We're going to be breaking down what's happening at Watches and Wonders.

• 58:23John Coogan?

  Basically, every watch company launched new watches. The one that I want to highlight here is Vacheron Constantin has released the most complicated wristwatch ever created. The Solaria Ultra Grand complication, featuring 41 complications and

• 58:39John Coogan?

  1,521 components, eight years of research and development, 13 patent applications. And it tells you everything like, you know, sunrise, sunset, moon phase, day, month, year, time, you set alarms, like all these different things on it. And the funniest thing is, I'm sure this thing costs like a million dollars. But I was looking at this and I was like, yeah, like that's actually like really useful stuff. Like I need this. That was my reaction was like, yeah, this is like totally justifiable.

• 59:07Jordi Hays?

  Yeah.

• 59:08John Coogan?

  This is just like, this is just practically.

• 59:11Jordi Hays?

  Yeah.

• 59:11John Coogan?

  Just practically.

• 59:12Jordi Hays?

  High output, you know, podcasting, live streaming. You just kind of need this level of performance.

• 59:17John Coogan?

  Yeah, I was like, I'm sure they charge a lot, but like, look at all the complications. Like you kind of need this. I need to know where the tides are on my wrist and even with a mechanical device. I can't use my phone for that. But I mean, this is a fantastic watch and it looks very cool. And it's also pretty huge. And on the back, they have constellation charts. So do you see this?

• 59:37Jordi Hays?

  It's insane.

• 59:38John Coogan?

  You can see where, where the, what the night sky looks like.

• 59:40Jordi Hays?

  We've been saying this, but Vashron is, we believe.

• 59:44John Coogan?

  Yes.

• 59:45Jordi Hays?

  Going to go on a generational run.

• 59:46John Coogan?

  We think so.

• 59:47Jordi Hays?

  It's already on the run.

• 59:48John Coogan?

  It is. It's fantastic.

• 59:52Jordi Hays?

  Well, I'm excited to have Ryan on. He is going on with Kramer later today.

• 59:57John Coogan?

  Yeah.

• 59:57Jordi Hays?

  And so I think we should help him workshop some just crazy takes.

• 1:00:00John Coogan?

  Crazy bangers, crazy bits.

• 1:00:03Jordi Hays?

  Yeah, you just want to go big. You want to go extreme when you're on there.

• 1:00:06John Coogan?

  Yeah. I mean, we should set the table a little bit. Basically, Trump is giving an, a, a press conference today at 4:00 PM Eastern. So in exactly one hour, this should starts, this should start. Tariffs are looming, but Trump has called it liberation day, but the, the stock market is up, maybe. Calming fears that there will be really, really aggressive tariffs. The yield on the 10-year Treasury note ticked up as well, on pace to snap a three-day streak of declines. Gold prices rallied, sending the precious metals towards another all-time high. Trump has declared April 2nd Liberation Day for US trade policy.

• 1:00:48John Coogan?

  He is due to announce the contours of a sweeping tariff plan at 4:00 PM Eastern in a Rose Garden address. The Wall Street Journal will stream the president's tariff comments live. The tariff fight has ignited worries about a slowdown in economic growth, driving a steep sell-off in shares of small companies after weeks of unease about how Trump's tariff plan will shake out and which industries they will reshape. Investors and business leaders around the globe are hoping for more clarity, and that's the big deal here is just clarity. People want to know what to expect. You can't move a whole factory in a day.

• 1:01:24Jordi Hays?

  Yeah.

• 1:01:24John Coogan?

  It takes years to reshore manufacturing capacity, and the bigger the company, the harder it is to do it.

• 1:01:29Jordi Hays?

  Yeah, this was, this was Sean Franks', you know, big point, which was, you know, even if I want to react to tariffs, it's going to be, you know, damaging to my business and every other e-commerce business in the short term. And so Trump clearly wants to make big, quick change, but there's still, you know, a lot of companies caught in the crossfires in the short term.

• 1:01:53John Coogan?

  Cool. We got Ryan in the studio. Welcome, Ryan.

• 1:01:57Ryan Petersen?

  Ding ding ding ding ding ding ding ding.

• 1:01:59John Coogan?

  Are you not traveling?

• 1:02:00Ryan Petersen?

  Was yesterday. I'm back.

• 1:02:03John Coogan?

  You're back. Congratulations. Enjoy. Home sweet home. First, I mean, we got to ask you, are there, are there any spies? How are you dealing with counterintelligence, counterespionage these days?

• 1:02:15Ryan Petersen?

  Oh, there's always spies, yeah. We're good. We, uh, we try to make sure that our code base is super buggy, so if you steal it, it doesn't work. That's my tactics.

• 1:02:28John Coogan?

  Do you think this is a symptom of like, just zooming out from, you know, the deal Rippling thing and anything that's happening at Flexport, like, do you think this is a symptom of like, tech becoming a little bit less greenfield, a little bit less positive sum, there's like, two or three major backed companies in the exact same category now, and it's less of like, the anointed power law winner who's going up against some company that's so sclerotic, that there's just, it's just, it's just, oh, you're just stealing billions of market cap all day long, and it never really matters. So you're not, it's not so much of a knockout, drag out fight. Like, how do you think about this in the context of like, the history of Silicon Valley and like, your career?

• 1:03:08Ryan Petersen?

  Oh, I don't know. I mean, you know, our issue was like, I think very different than deals. Like, that was like, two arch rivals going at each other, and like, someone, you know, that was, that's crazy. I just read the deposition.

• 1:03:20John Coogan?

  It's crazy, right?

• 1:03:21Ryan Petersen?

  Really crazy. Our issue's very different. It was a couple of employees who just like, making bad decisions, down a lot of stuff on their way out, and the company they started is pretty insignificant. My general use never, never punched down, but when you see someone committing ultimately a crime.

• 1:03:39John Coogan?

  Yeah.

• 1:03:41Ryan Petersen?

  Yeah, there's a sense of moral righteousness that needs to happen, some justice in the world. So, but it's quite different. I mean, we're not, this company's not a threat to Flexport the way maybe Deal is to Rippling or Vice First, I don't know.

• 1:03:53John Coogan?

  Oh, yeah. Yeah, yeah, it's very different. So, yeah, I mean, on tariffs, like, what are you expecting? What are you looking for? What do you, how do you think it's going to go down in an hour?

• 1:04:02Ryan Petersen?

  It's, yeah, I don't know what to expect. I feel a little bit like, you know, maybe you're in Florida waiting for a hurricane and about to hit. Florida, man, I don't know if you get our American flag out and stand in the wind and enjoy the show, or be horrified and go, you know, get in your car and try to drive 1,000 miles away.

• 1:04:23Jordi Hays?

  There's no escaping in your business.

• 1:04:25Ryan Petersen?

  Yeah, there's no escaping. It's going to hit hard. It's really ugly for our customers already. I mean, they've already, on the, the China tariffs, it's hard to imagine how they go much higher, really. Because of the, they added 20% to what was already 25%. And then the Venezuela stuff hit today, I think, which is another 25% on top of that because China imports Venezuelan oil. So, what am I, 45 plus 25?

• 1:04:55Ryan Petersen?

  Seventy percent tariff and then if you do steel or aluminum, which if you have that component, you're you're pushing into eighty percent duties. Go a little bit higher. I mean, at some point, you're just like, oh, okay. So I don't know how much worse China can get. It can get worse. They can they can do whatever they want, I suppose.

• 1:05:13Ryan Petersen?

  The tariffs on other countries is the big wild card here. What other countries get? You know, you've already seen Israel and Vietnam both went to duty free on American imports. Uh, so we'll see. My my impression from having talked to a cabinet secretary last week that what he told me was that this would be April 2nd today is the start or not the end. Process. And he means that, I think, in a positive way for companies that they're going to come out with a big bang today. It's going to be ugly. And then he would expect that countries will come to the negotiating table and make deals to bring the tariffs back down. But they want to show send a very

• 1:05:55Ryan Petersen?

  clear message that they're dead serious about, you know, that they they mean business. And then he expects countries will will will come to the table. But some may some may read it the wrong way and kind of retaliate with their own tariffs. And then the administration may escalate further. We've seen that as a pattern. So my advice to all the presidents of the world is to go read the art of the deal and

• 1:06:20Ryan Petersen?

  not that hard to figure out how these guys work.

• 1:06:23Jordi Hays?

  No, that it's like similar to FF. It's like, how does FF make investments? You know, read zero to one.

• 1:06:30Ryan Petersen?

  Yeah.

• 1:06:30Jordi Hays?

  That's basically it. It's all out there.

• 1:06:32Ryan Petersen?

  They're still doing the playbook.

• 1:06:34Jordi Hays?

  Are you? Do you think? Is this already happening or is it going to happen? Companies sort of dying before they can onshore manufacturing? Is that is that something that you're super worried about? Or are people just battening down the hatches, like you said, Florida style and just figuring out a way to, you know, obviously, everybody wants to survive. Uh, but are we seeing sort of like an extinction level event within e-commerce yet specifically?

• 1:07:02Ryan Petersen?

  Certainly not yet. Um, I I it's very hard to say. I mean, the the reality is tariffs alone won't do won't bring most of these industries back to the US. The the US dollar is just too strong. I was talking with a company yesterday that imports garlic. I was like, wait, I thought California like has the best farmland in the world for growing garlic. Like, why do we need to import it from China?

• 1:07:25Ryan Petersen?

  But it's just even with the tariffs, it's cheaper to import the stuff from China. And it's the, you know, our soil is better than there. It's like California is the Gilroy is like the garlic festival. I mean, it's the best place in the world to grow garlic. So, but the US dollar just being so strong as the reserve currency makes it like, no matter what you do almost with tariffs, it's still cheaper to buy from another country. So I think that tariffs alone won't do it. It and and nobody's, there's no political will to make the dollar cheaper. But if you want manufacturing to come in the US, the US just can't, it just can't be that we're that much richer than everybody else on a dollar basis, because it's kind of fake.

• 1:08:03Jordi Hays?

  But haven't, haven't some people argued that with extreme enough tariffs, it would, you know, get people to, you know, try to just move off the dollar? Maybe it's impossible.

• 1:08:13Ryan Petersen?

  There's gotta be a number. Yeah, it might move off the dollar, which might actually cause their problem, not the way they intended to.

• 1:08:18Jordi Hays?

  Yeah.

• 1:08:20Ryan Petersen?

  I'm not like, I've always been a macroeconomic skeptic. It was, I'm either too smart or too dumb for macroeconomics. I'm not sure which. I couldn't figure it out. They have all these advanced, it all seemed more complicated than they were making it out to be. So.

• 1:08:36John Coogan?

  You never studied IS, ISLM, all the different charts and graphs, inter.

• 1:08:42Ryan Petersen?

  Like the only class I ever got a bad grade in in college was macroeconomics.

• 1:08:46John Coogan?

  Yeah. Uh, is there, is there a hope that, um, I mean, it seems like obviously there's like the micros, like what is the actual tariff rate in the country that I'm operating in? But then the real hope from the market, at least in companies, seems to be, give me a framework and a real understanding of what the future is going to look like. And does, is, is there a chance? I mean, it sounds like we're maybe even just starting that process of really understanding how the business community can respond to like a, a larger trade.

• 1:09:23John Coogan?

  Policy strategy and like, is that what people are pushing for? Is that i- i- is it really, is it really more about just clarity over the long term?

• 1:09:34Ryan Petersen?

  For sure, business needs certainty and clarity and it's really hard. These supply chains are multi-year, maybe

• 1:09:40John Coogan?

  Yeah.

• 1:09:41Ryan Petersen?

  Ideally decade plus investments that you're, you're making and how you're going to set up your supply chain. If you, if it's changing every single week, like you're just paralyzed. You can't make any decision at all. Um, I think Canada stuff's pretty harmful in that way because if there's going to be tariffs on Canada, then there's going to be tariffs on Malaysia, Vietnam, India and everybody else like so. It makes it really hard to make any decision. Let's say a company finally says, okay, it's very clear. We're going to have to move our manufacturing out of China, this administration. And the Biden administration, by the way, was also um, ratcheted up the first Trump administration's tariffs on China. They didn't lower them at all. So both parties are aligned on that. So if that's clear and you're ready to make that move, then you go, okay, where do we move it to? Unless you're ready to move to the US,

• 1:10:25Ryan Petersen?

  there's no ability to make a decision at all right now.

• 1:10:30John Coogan?

  Do you think it'd be better to take a more gradual approach to implementing these tariffs? I'm, I'm just thinking like, instead of saying, hey, there's a 24% tariff coming in in on this country. It's like, no, we're going to raise the tariff 1% per month for the next two years. And so you know exactly where it's going. It's not going to just, just destroy your profit margin today. But if you don't figure it out in two years, like you probably will be done. And so you're signaling to the market exactly where it's going to go. But it seems like I've never seen a policy like that rolled out.

• 1:10:59Ryan Petersen?

  Yeah, I've heard they, they were talking about that. I mean, I think that was one of the things that Trump or Lighthizer, one of the administration people across the administration said they were going to do during the campaign. No, I think it was Besenit who said that Treasury Secretary. Um, that would make sense to me, or even just giving people, you know, six months notice of this is coming. A year notice, like some of the policies they've enacted have said, okay, this kicks in tomorrow or next week. And you're just like, oh my God, like I have a friend who's importing stuffed animals. And he bought a hundred thousand dollars worth of stuffed animals. And while the container was on the water.

• 1:11:39Ryan Petersen?

  The duty rate went up and he got hit with his $20,000 bill and like, ah brutal, you know? And so you need some notice period that they haven't done that this time around. I think, yeah, gradual ratcheting it up, ultimately just providing clarity, like where are we going to be? It's also the ultimate challenge of the US system is, you know, here at least the two parties are mostly aligned. When it comes to China, we'll see about other, we'll see what policies they actually roll out. But the two parties are mostly aligned on trade. They both hate trade right now. And so at least you have some longer term view of what it's going to look like. If, but in the US system where it can totally flip overnight, it makes it very, it makes us very hard to deal with.

• 1:12:25Ryan Petersen?

  As a country, I mean, I, I think this is one of the things that has made it difficult for a deal like with Russia, for example. I mean, the two parties are just polar opposite in policy. So how do you, how can they make a deal with either party when it might just flip in four years to someone who's got, who won't hold up the deal?

• 1:12:42John Coogan?

  Yeah, I've seen, I've seen the, like the Flexport 747, there's one right behind you. If, if onshoring really happens and there's major, major production shifting to the United States, what does that look like for Flexport? Are you going to get into like more rail, more trucking? Is, is, is the market even big? How, how would you think about that? I would imagine there would be an expansion of the US opportunity, but like, what, what does that look like for Flexport specifically?

• 1:13:09Ryan Petersen?

  Yeah, winners and losers in different parts of our business for sure. The air freight, we, air freight business, a lot of our, we do a lot of e-commerce products from China to the US.

• 1:13:16John Coogan?

  Of course.

• 1:13:17Ryan Petersen?

  That's about 50% of all the air freight in the world now is coming out of the Chinese e-commerce. And so that, that is at major risk and the price of air freight will probably collapse. That, that would be bad for our air freight business. Our customs business is already booming as we help, we provide a lot of advisory services to help country, companies figure out. What this means for them, how to mitigate, minimize duties, be compliant, get refunds on duties every year, even before all these new tariffs, $7 billion is going unclaimed in refunds that people are owed. Right. That's crazy. So we, we, we got people $140 million worth of that last year. Oh no, that's our goal for this year.

• 1:13:59Ryan Petersen?

  But that's still a big market, you know, it should be 10 times bigger or even more than that.

• 1:14:05Ryan Petersen?

  So that part of our business is booming. Trucking, we do about 200,000 truckloads a year domestically, moving trucks that have nothing to do with the international freight. That will probably grow. We'd want to get more, we will be getting more into kind of trade with US and Latin America, US and other parts of the world. I, I, I don't really worry too much about the macro, like we're still pretty small. We estimate our market share is about 0.25%. Wow. Um, right now. So like, even if the market shrunk in half. Yeah. We, we, okay, now we're 0.5% and I hold on to the business we have, but it's all of it. So I, I, I'm too worried. Yeah.

• 1:14:49Jordi Hays?

  I have a question about a, a market I'm sure you've thought about. So we've been having a bunch of, you know, there's a bunch of new defense tech companies emerging. You know, they have to move big, expensive, flammable, you know, things around all the time. Is that a vertical that like you guys have looked at at all? Because I think it's obviously, you know, a bunch of compliance issues. It's, it's.

• 1:15:13Ryan Petersen?

  Yeah, a little bit. Um, I think you tend to want to be more, those guys want to work with people who own the assets.

• 1:15:19Jordi Hays?

  Interesting.

• 1:15:19Ryan Petersen?

  More tighter control, security wise. Like actually I heard about this company that does trucking for the DOD or for big defense contractors and they ship missiles. And it's like a very lucrative business, but they own all the trucks and we don't, we're trying not to own any assets. Sure. Very hard to maintain, to provide the kind of like ultimate security that one of those companies needs if you're not asset heavy. So they'll. It's a, it's a, it's a cool space, but probably not one that we're best suited to play in right now.

• 1:15:48Jordi Hays?

  Yeah.

• 1:15:48John Coogan?

  What about, uh, what about self-driving trucks? I feel like we're seeing so many, just like the Studio Ghibli moment, the ChatGPT moment, like AI feels so big and yet the self-driving trucks aren't really here. What are the dynamics and do you have a timeline for that actually affecting the market? What's kind of the impact?

• 1:16:11Ryan Petersen?

  It'll be huge. I mean, it's, um,

• 1:16:15Ryan Petersen?

  Waymo's here. My Tesla, I mostly drives itself now, um, and Tesla's making a truck. So, but I don't know how many of those Tesla semis they've really shipped and the, and there's two different problems of the electric truck and the self-driving truck that maybe you'd have been conflated like, cause I think the electric truck actually has more problems than the self-driving truck, it seems like.

• 1:16:36John Coogan?

  Yeah.

• 1:16:36Ryan Petersen?

  Um, just because of like charging and range and different things that don't make that much sense for a, from what I've heard, I'm not, I'm not that close to the physics of it, but the recharging network has just like not been there for it.

• 1:16:48John Coogan?

  Yeah.

• 1:16:50Ryan Petersen?

  It's going to be really huge though, and a massive impact on a lot of things, you know, right now, transit time even, like a truck that drives 24 hours a day can cross the country. I think the law says you can only drive eight hours a day. So crossing three, three times faster. Or today you would need three drivers and they charge you a huge premium for that, team trucking, it's called, where you have multiple drivers running shifts and

• 1:17:14John Coogan?

  Sure.

• 1:17:14Ryan Petersen?

  And like, it's a shitty lifestyle, like riding overnight, like never getting out of the truck as you cross the country.

• 1:17:20John Coogan?

  That is crazy.

• 1:17:22Ryan Petersen?

  And, but you could, it would be very competitive. You could, I once drove across the country in 53 hours with four friends, just taking turns.

• 1:17:30John Coogan?

  Were you doing a cannonball?

• 1:17:32Ryan Petersen?

  In hardcore, four, four, uh, broke college kids, like.

• 1:17:35John Coogan?

  Yeah. There's something about that, that sounds like amazing with your boys once, but I hear, I take your point on like, maybe as a lifestyle, it's tough.

• 1:17:43Jordi Hays?

  We've been talking about it.

• 1:17:44John Coogan?

  Yeah. We want to do a race, try and get across the country. I think the record is something like 22 hours, which is crazy. Yeah. It's over a hundred miles an hour, the entire time, uh, very illegal, very controversial.

• 1:17:55Ryan Petersen?

  Maryland, where I'm from to.

• 1:17:58Ryan Petersen?

  Oklahoma and actually, the only reason we stopped, the car broke down. We were gonna go the whole way without stopping.

• 1:18:03John Coogan?

  Yeah.

• 1:18:04Ryan Petersen?

  But, and so the 53 hours, actually, there was a stint while the car was in the mechanic.

• 1:18:10John Coogan?

  Okay.

• 1:18:11Ryan Petersen?

  Ignoring that part.

• 1:18:12John Coogan?

  Okay, yeah, yeah, you cut that out. Yeah.

• 1:18:13Ryan Petersen?

  And then we stopped at the Green Canyon and like looked around a little while.

• 1:18:17John Coogan?

  Yeah, yeah, yeah. The real cannonball is from the Red Ball Garage in Manhattan to the Portofino Hotel in California. And it's been done for years. Alex Roy was the famous guy who did it originally. And then Ed Bolian destroyed the record during COVID when there was no one on the streets. It's a fascinating story. You should go check it out.

• 1:18:35Ryan Petersen?

  Yeah, this will be big in trucking. Oh, not to, you know, jobs aside, it's like, I think truck driving is the most number one profession in 34 states.

• 1:18:43John Coogan?

  Yeah.

• 1:18:43Ryan Petersen?

  By a number of people doing the job. So that'll be massively impactful.

• 1:18:50Ryan Petersen?

  And yeah, like, I think there's a lot of positives for the industry and productivity and stuff, but certainly it's an interesting problem for the, for the society.

• 1:18:59Jordi Hays?

  Going, speaking on AI, you know, something we've talked about on the show is like, you had this Ghibli moment last week where something that was historically super time intensive and expensive and costly. Like if you wanted this sort of like beautiful hand drawn animation style. Yeah, you could go on Upwork or Fiverr and get that kind of thing done. It's not going to cost a ton. Most people wouldn't even bother to do it. And I think that we are racing towards like the Ghibli-ification of like all goods, right? On like a long enough time horizon, like automation, robots will just, you'll have sort of an idea for something that you want. And in theory, like, you know, you just, you know, something could be made with no human involvement and that could really drive the cost down.

• 1:19:42Jordi Hays?

  Now, if the cost of a lot of goods goes down over time, then in theory, there would also be a lot more sort of like a Jevons paradox dynamic where like if things get cheaper, people want more of them, which means that like we, we, there's a scenario where like we're, we're ordering 10 times as much China, stuff from China in, you know, 10, 20 years. How do you think about? Just AI, like it's easy to see how AI is, you know, going to make Flexport a better business by rolling sort of systems out internally and building these sort of customer facing experiences.

• 1:20:18Jordi Hays?

  But have you thought at all about like how automation broadly can actually sort of like impact like the flow of goods around the world at sort of a more macro level?

• 1:20:32Ryan Petersen?

  Well, actually just coming back to the peopleification of everything. So I'm a, I'm a, I'm a published children's book author. You guys may know. Yeah.

• 1:20:41Jordi Hays?

  There you go.

• 1:20:41Ryan Petersen?

  Big ship in the little digger. I wrote this myself. It was not written by chat GPT. It was not illustrated. I didn't illustrate. I just wrote it. So you can write a children's book about 45 minutes. I love it. And but the design took a long time. My designer who used to work in Flexport did this. Yeah. Great. Looks great.

• 1:21:00Jordi Hays?

  Beautiful.

• 1:21:01Ryan Petersen?

  Yeah, it's a wonderful story. Took him like, man, the better part of like six or eight weeks to do that. Yeah. I, when, um, when chat GPT released their new image model last week, I was like, oh, I'm going to write a new children's book and I did it in an hour. And on my phone, I could have done it faster if I would have been on desktop and had parallel tabs open or whatever, but on the phone, that GPT app didn't let me. But in one hour, I was able to create a really cool book. Yeah. And, and like, I think I could publish it and be done. It's also so cool to customization, being able to like making about more kids. I'm making these really cool iconic Flexport posters. We have 40 offices around the world and one for each office that like. That's super cool.

• 1:21:45Jordi Hays?

  Well, yeah, so using.

• 1:21:46Ryan Petersen?

  Like iconic from the golden age of like ocean, ocean travel, liner tunnel. Good prop for that. And it, I asked the same designer to do it for me. One of these posters, like, you know, I asked him six months ago and he quoted me something I couldn't afford. And now I just made them all last night in like an hour and I'm

• 1:22:07Jordi Hays?

  Yeah, so let's use a children's book as an example. My son is obsessed with reading. He's three years old. He could easily burn through five, six books a day. Like he would happily read, he'd probably read 20 new books a day if we had 20 new books available in the house.

• 1:22:21Ryan Petersen?

  And he'll read, I bet you he'll read even more if he's the protagonist of the story.

• 1:22:24Jordi Hays?

  Yeah, exactly. So if like he's a protagonist, it's customized to his interests. It's perfectly matching his level. But I also don't want him on screens. So like there's a world where if like the cost of producing the books drops, books are, you know, 80% less because there's, it's just generated. There's a world where I'd, I'd order five times as much and that means that you're going to be shipping in theory, like a lot more goods. And that's just like for one category, right?

• 1:22:49Ryan Petersen?

  Could be, yeah. Um, and there'll be categories like that. I, I, you know, if I wasn't so busy, I would definitely try to set the Guinness Book of World Records right now for whoever wrote the most children's books in the world. Right now, before they shut that.

• 1:23:02Jordi Hays?

  In a 24 hour, in a 24 hour period.

• 1:23:04Ryan Petersen?

  Yeah.

• 1:23:05Jordi Hays?

  2,000 children's books.

• 1:23:07John Coogan?

  Can we hear a little history of the Flexport Lion and the generative AI stuff? And is the Flexport Lion coming back or?

• 1:23:14Ryan Petersen?

  Yeah, yeah. Uh, well, when Dolly first came out, I, you know, I think every company should have a mascot. Yeah. Ours is the lion because it's king of the jungle. Um, you know, lion probably kill any other animal in the world. So that should be, but I, you know, I wanted to claim that and make it really, you know, we're the lion. You can be something else like, we're the lion. Uh, and so, yeah, I probably, I like went a little crazy on Dolly when it first came out, making lion in a shipping container or in port, whatever.

• 1:23:43John Coogan?

  Yeah.

• 1:23:44Ryan Petersen?

  Um, yeah. So you should expect to see more Flexport Lions out there.

• 1:23:48John Coogan?

  Yeah, I remember you got me access.

• 1:23:50Ryan Petersen?

  Every company should have a children's book for your marketing. It's great marketing. Kids love it. And parents love it. And then, uh, then you should have a mascot. The best of this is by the way, Duolingo, like apparently their owl is like.

• 1:24:01John Coogan?

  Oh, yeah.

• 1:24:02Ryan Petersen?

  Their owl has like 50 million followers on a different app.

• 1:24:06John Coogan?

  That's amazing. Yeah, we need to instantiate the Flexport Lion with its own.

• 1:24:11Ryan Petersen?

  Yeah, I need to make a story about it.

• 1:24:13John Coogan?

  Yeah, it can be posting.

• 1:24:14Ryan Petersen?

  It's not an obvious shipping reference. I don't even know if lions are good at swimming or anything, but.

• 1:24:19John Coogan?

  Well, I mean, you do. You do shipping over land as well, but yeah, it's not a pack animal.

• 1:24:23Ryan Petersen?

  No, but it's more just.

• 1:24:24John Coogan?

  King of the seas. I would expect, you know, an octopus, tentacles everywhere. Who knows?

• 1:24:30Jordi Hays?

  Are there any?

• 1:24:33Jordi Hays?

  Transportation platforms is probably not the right way to think about it, but things like airships, you know, drones that you're excited about. We had a founder on earlier this week who's building sort of.

• 1:24:44John Coogan?

  Conaplanes.

• 1:24:45Jordi Hays?

  Yeah, it's like a sea plane drone for like short term transport, you know, if you.

• 1:24:50Ryan Petersen?

  That one that went viral, they like five guys that made it in their living room or whatever.

• 1:24:53John Coogan?

  Yeah.

• 1:24:53Jordi Hays?

  Yeah, yeah. David, David, co-founder.

• 1:24:56Ryan Petersen?

  That thing seems sweet. If you like forgot something at home and you lived by a body of water.

• 1:25:00Jordi Hays?

  Yeah.

• 1:25:02Ryan Petersen?

  There and fly it to itself. I don't know.

• 1:25:05John Coogan?

  Yeah.

• 1:25:05Jordi Hays?

  But yeah, like I've been pitched airships, you know, there's been a bunch of attempts, you know, at that. I'd be curious to think, as you think about the future 10 years out, what's? What's exciting to you and are there? And is there a white space?

• 1:25:21Ryan Petersen?

  Definitely. The actually the man, I'm forgetting the name. Eli Dorado is a backer of this airships company.

• 1:25:27John Coogan?

  Yep.

• 1:25:28Jordi Hays?

  Yeah.

• 1:25:28John Coogan?

  I know that one.

• 1:25:30Ryan Petersen?

  Pretty high potential. I met with the founder recently and I originally was very skeptical. I'm like, I don't think anyone needs this. And sounds really complicated, whatever. But you walk me through it. It can carry the same volume as a 747. Take three days to cross the ocean instead of 15 hours, but like. Three days is pretty fast compared to a ship, could be container. So if you get to a price point in between air freight and ocean freight.

• 1:25:56Ryan Petersen?

  That's very compelling.

• 1:25:56John Coogan?

  It's just a new tier. And so some people opt into it for a certain class of goods.

• 1:26:01Ryan Petersen?

  That will be very compelling as a replacement for air freight.

• 1:26:03John Coogan?

  That'd be cool. Well, does that kind of unblock the port system? Because we'd have a new new set of ports. We could go automated from day one.

• 1:26:10Ryan Petersen?

  Well, what's really cool about his model is that his idea anyways, is that it would just go straight to your warehouse, not go to a port at all.

• 1:26:16John Coogan?

  That's amazing.

• 1:26:17Ryan Petersen?

  Land at your wherever your warehouse is and not need trucking or any, you know, laying on. It's pretty cool. Hopefully somebody awesome funds it because it's not cheap to go launch these things and. Uh, yeah, that's what real venture capital should be, right? Take some risk and do some badass stuff like that. So, um, rooting for them.

• 1:26:38John Coogan?

  Yeah.

• 1:26:38Ryan Petersen?

  Um, I think the self-driving ship, I see that all the time. It's really stupid idea. Just because there's only, these ships are like 20,000 containers with 20 guys. Like, there's just not that much labor savings here. And most of those guys are doing maintenance, like they're like painting it, painting it and

• 1:26:52John Coogan?

  Yeah.

• 1:26:53Ryan Petersen?

  Doing engine maintenance. Like, you still need them, even if it's self-driving. There's one guy driving the ship, like.

• 1:26:57John Coogan?

  Yeah.

• 1:26:59Jordi Hays?

  Well, yeah, you, you, you, we've had pretty good autopilot in boats.

• 1:27:02John Coogan?

  Yeah, it kind of drives itself anyway.

• 1:27:04Jordi Hays?

  Right, like.

• 1:27:05Ryan Petersen?

  So I think the self-painting ship is kind of interesting.

• 1:27:08John Coogan?

  Oh, that's cool.

• 1:27:09Ryan Petersen?

  Just kind of painting itself as it goes.

• 1:27:11John Coogan?

  What about those crazy, uh, ships that have sails or nuclear power? Different, different modes of power for ships?

• 1:27:20Ryan Petersen?

  Yeah, the nuclear power, I think, is going to be probably regulatory problem more than anything else. Like, nobody really wants that your nuke, uh, sailing into their harbor. It's been probably the problem there. Um, I've seen some cool ideas where like the ship, the mothership would stay offshore like 200 miles. And then deploy like little baby ships that would bring the cargo to support, uh, so that it never had to get within your coastline.

• 1:27:46John Coogan?

  But it's still a ways away. What about the sails?

• 1:27:50Ryan Petersen?

  Um, yeah, so I've also seen, there's a really cool company called Clipper Ship. Uh, really tiny seed round companies, uh, but with a big vision of little autonomous drones, sail ship, sailboats. That would carry like five or six containers worth of stuff. And again, like sail not to your warehouse, but to like a little tiny port. Upriver or something, uh, and set up their own network of ports. They're, they're trying to go live soon. I, all of this stuff's pretty cool and I have no idea.

• 1:28:22Ryan Petersen?

  You know, it requires venture capital and it's, it's very interesting. You know, founder's funds, the obvious one, but like, it's really interesting to see when do they get excited about something. It's not everything can be the next SpaceX and SpaceX was a crazy vision until it worked, right? And could have lost a lot of money if it didn't.

• 1:28:40John Coogan?

  Yeah. What about SpaceX point to point?

• 1:28:43Ryan Petersen?

  Yeah.

• 1:28:45John Coogan?

  I mean, obviously the first, the first like beachhead is like the most expensive like private jet traveler needs to get to Tokyo in like an hour from New York. And so they're like, yeah, 50K, no problem. But, but where do you see that technology going over the long term?

• 1:29:01Ryan Petersen?

  The problem is that like flying to can it can SpaceX launch like in bad weather and it's raining or something like you're.

• 1:29:07John Coogan?

  No, not really. I think they need pretty clear skies, but they're in Florida and Texas. It's pretty clear most of the time. They don't scratch too many.

• 1:29:14Ryan Petersen?

  I think from a cargo standpoint is probably not worth any premium because cargo doesn't care that much if it gets there in 15 hours or in 30 minutes. It's basically the same for most, almost everything for military. It's a big, those are very big differences. Like if you need to get supplies to some soldiers on the ground in 30 minutes, like that can be life or death versus 15 hours or whatever. So like, sure. Military applications are huge. Rich people. Care a lot more about their time. So yeah, I would be certainly bullish on that, but it's just like hard. The cargo doesn't care that much. If it takes 15 hours, very rarely you would spend that much extra for something and get it there that fast.

• 1:29:52John Coogan?

  I mean, maybe it would shorten down your trips, which would be nice.

• 1:29:55Ryan Petersen?

  One that I'm very excited about is zip line.

• 1:29:58John Coogan?

  Oh, yeah.

• 1:29:59Ryan Petersen?

  Which is, I can't figure out if they launched or didn't launch yet. They're supposed to launch any day now in Dallas and you'll be able to buy anything that's for sale in a Walmart on a drone delivery.

• 1:30:09John Coogan?

  Wow.

• 1:30:10Ryan Petersen?

  In less than five minutes. There's 25,000 items in a typical Walmart and 24,000 of them are small enough to fit inside their drone. Wow. And then I understand they're gonna go live, but I don't want to reveal anything I'm not supposed to, but they're gonna go live with some restaurant chains. Oh, cool.

• 1:30:28Ryan Petersen?

  Like a burrito in five minutes.

• 1:30:29Jordi Hays?

  This is, this is one of those things, like, you know, they, they had the early hype where like, everybody was like, oh, this is the future. And then like, they had to do the thing and like, actually like, make it work.

• 1:30:38Ryan Petersen?

  Forgot about it.

• 1:30:39Jordi Hays?

  The hype like dies down and then suddenly like, a burrito lands in your backyard in five minutes and you're like, we are so back. Last, last question for you. How do you think about sort of managing like the team and the company at a time when you're running a business that's, you know, most companies have the benefit, like, you know, if you're running like payroll software, you can be like, let's ignore sort of like politics and like what's going out.

• 1:31:03Ryan Petersen?

  Just pile on each other?

• 1:31:05Jordi Hays?

  Yeah, like, let's ignore the world and just like focus on our business and our customers. But like, you're in a business where like in 30 minutes, they're gonna announce some news that's gonna be very impactful to your customers. Like, you know, how, how have you messaged everything with the team? Like, do you got, are you gonna be like, you know, doing a war room as, as the news breaks out? What does that look like? I'm curious.

• 1:31:26Ryan Petersen?

  We always, there's, we do, we have war rooms, as we call it too, and there's Slack channels, basically, where we get together to go run UDA loops and observe what's happening in the world, orient ourselves, who needs to know about this, make decisions, take action. And, and our ultimate, you know, my message to the team is, is what my dad used to tell us when we go camping. It's a, you don't have to outrun the bear, you just have to outrun the, the campers in the next site over.

• 1:31:54Ryan Petersen?

  That's great. And our competition, we've just got to be better. We can't outrun this bear of tariffs or geopolitics, terrorists blowing up ships in the Red Sea or.

• 1:32:05Jordi Hays?

  Yeah.

• 1:32:05Ryan Petersen?

  Yeah. Where it might be, but we, we can be better at responding to this than any other competitor. And it's a moment for us to actually. Double down on being the most customer centric. You know, like, and tech gives us a huge advantage here. When, when the new tariffs hit, we will be ingesting that into our databases and publishing it to our customers within minutes, right? And our account management teams within the hour will have a plan, a script, and start calling down and letting people know what it means for them, what, how much it would have cost them, like, start setting up advisory appointments to talk through, you know, things like your, in tariffs, it's your value of your goods times the tariff rate, times the duty rate.

• 1:32:49Ryan Petersen?

  Well, there are a lot of perfectly legal compliance strategies you can do to reduce the valuation of your goods that nobody bothered with when it was times zero. And you can get refunds, as I was saying before. So it's all about how do you respond to these things. And yeah, we think we have a big advantage there. So it's fine, it's why Flexport's the most fun business in the world. I don't want to sit there and run payroll or other companies. Get out there, see what's happening.

• 1:33:15John Coogan?

  Hey, it's an entertaining time to be in payroll. You picked a bad day for that analogy. Because it is high stakes. It's James Bond out here. We got the guns in the studio, straight from China, the team of pistols, they're water pistols. But we're having a lot of fun today. We got James Bond on the soundboard. We're having a great time. But thanks for stopping by. This was fantastic. Always great talking to you. Good luck on Jim Cramer tonight.

• 1:33:38Ryan Petersen?

  See what happens with these tariffs. Maybe I'll, maybe I'll need to come back and talk through when we actually have to.

• 1:33:42John Coogan?

  Yeah, yeah, that'd be great. We'll have you back, of course.

• 1:33:44Jordi Hays?

  Yeah, have fun later.

• 1:33:45John Coogan?

  We'll talk to you later.

• 1:33:46Jordi Hays?

  Great to see you.

• 1:33:48John Coogan?

  Fantastic. Always an entertaining interview. Thanks to Ryan for stopping by.

• 1:33:52Jordi Hays?

  So we got James, an absolute lion. We got James from Profound calling in. We are going to be talking about, I spoke with James yesterday for the first time. What he's doing is absolutely fascinating. He's helping companies understand how they are appearing in LLMs.

• 1:34:11John Coogan?

  Okay, yeah. Let's bring him in. James, how you doing?

• 1:34:15Jordi Hays?

  Boom. What's going on?

• 1:34:21Jordi Hays?

  You live? Can you hear us?

• 1:34:24James Cadwallader?

  Yeah, I can hear you. Yeah.

• 1:34:25Jordi Hays?

  There we go. We're live. What's going on?

• 1:34:27John Coogan?

  Cool. We're good. Can you start with just like a brief introduction of yourself, your company, what you're doing?

• 1:34:33James Cadwallader?

  Yeah, I'm James, co-founder, CEO here at Profound. We're a New York City based startup.

• 1:34:41James Cadwallader?

  Yeah, we're building a marketing platform that helps brands understand and control how they show up in AI responses.

• 1:34:51James Cadwallader?

  We launched in August, August 17th of 2024 and kind of like came sprinting out the gate. We raised a three and a half million dollar seed round that was co-led by Keith Rabois, Coastal Ventures with Saga.

• 1:35:09James Cadwallader?

  Sort of co-leading. And yeah, we've, we've been growing pretty fast, pretty quick. We have built this platform that's relied on by brands like MongoDB, Indeed, Mercury, Rippling, Ramp.

• 1:35:25John Coogan?

  Ramp.

• 1:35:26James Cadwallader?

  Yeah.

• 1:35:27John Coogan?

  We love Ramp here.

• 1:35:29Jordi Hays?

  Yeah, talk about, talk about like the genesis of the idea because I think what you're doing and we'll get more into how it works. But what you're doing is now like blatantly, like it's a blatantly obvious idea, right? Because you, all you have to do is kind of compare like as search became a big market and companies sort of rapidly realized like we need to understand and control how we're showing up in results. You know, there's a lot of parallels to now, but I, I thought your backstory of kind of like how you guys discovered the, the opportunity in the first place, the beginning of last year was cool.

• 1:36:02James Cadwallader?

  Yeah, I mean, it's, it's, it's, you know, myself and my co-founder Dylan, we were at South Park Commons, which is like a VC incubator accelerator that one in SF, one in New York. We were lingering around the one in New York, spending our time trying to figure out what business we wanted to work on. And there was this kind of. Sort of ironic moment where as we were thinking about other businesses to work on, we kind of realized that we had just been using perplexity all day, every day for weeks or months on end without actually going, you know, doing traditional blue link search. And yeah, that is again, it's one of those ones where, you know, it seems more obvious now,

• 1:36:46James Cadwallader?

  but this is back then, but even at the start of last year, chat G P T didn't have web retrieval. Uh, so it was no good at search perplexity. It felt like this streaming to CDs type moment. And uh, we just went all in on that inflection point. We said, hey, you know, either perplexity is just going to take everything here because this is so good. And this makes A I answers makes so much more sense than blue link search. Or everyone else is going to jump on board and do the same thing. And probably closer to the latter is the way it unfolded. Uh, chat G P T introduced did web introduce web retrieval.

• 1:37:23James Cadwallader?

  I mean, Adobe did this huge study that they released like a couple of weeks ago. Uh, it's based on a trillion web visits on American retail. Um, and it's like, I think forty percent um of uh consumers now are trying uh A I search for shopping uh for commercial purpose. So it's definitely.

• 1:37:45Jordi Hays?

  Yeah, we had somebody, we had uh Aiden from OpenAI on yesterday who said that he just, anytime he wants to buy a product, even if he's just buying hand towels, he just does like a deep research report. And he's like, it's worth just waiting five minutes to figure out like what's the best product based on my interest. Uh, I'm curious like how aware, uh, it makes sense that companies like Ramp are using these tools every single day and they start to realize like, hey, this is a product discovery mechanism. We should get on top of sort of understanding how Ramp is is appearing in results. But for how aware are legacy companies, you know, sort of like multinational public companies aware of how uh, do they realize this is almost like a hair on fire problem yet? Or or do you have to kind of explain to them like, hey, by the way?

• 1:38:31Jordi Hays?

  You know, 20,000 people are searching about your products every single day and like, you have no grasp of how you're appearing or what that's causing people to do, et cetera.

• 1:38:40James Cadwallader?

  They're all over it. I reject this thing of the incumbents. I think the incumbents all had their lunch stolen in the early 2000s. And I think that everyone's like wiser now when they can sniff a platform shift. We work with some really big companies. Like I know everyone's got the founder yap, but we genuinely work with some of the biggest Fortune 100 companies in the world. I just can't say their logos. Because they just don't like that. But yeah, they're super clued up. They're super wise to what's going on.

• 1:39:12James Cadwallader?

  They may be a bit slower in terms of the workflows because the understanding is very different to like taking action and like trying to improve the results. But I mean, as an example, to give one of our customers who I won't say who it is, but that big company, 12,000 plus employees. They did like a big global PR push around this new product launch last, I think, a week or two ago. And they saw a 50% increase in their visibility on that, like their visibility in answer engine responses.

• 1:39:45John Coogan?

  Without giving away the secret sauce, can you just give us some general guidelines for how a company should think about steering how they show up in LLM responses? Because you could imagine everything from like, do more SEO stuff, get on Reddit, make sure you're in the next crawl in the pre-training data set. Or you could even go and say, hey, there's some inaccurate information about us. Let's just go directly to OpenAI and say, hey, can you trim this out of the data set?

• 1:40:13James Cadwallader?

  Yeah, so I guess there's a sort of wide aperture or sort of like philosophical response to this, which is, I think, understanding that the failure mode here is to think this is like traditional search where, I mean, traditional search was essentially a marketplace system. You had the website and the end user and the Google index just helped the end user, you know, come into a website, maybe top a funnel and, you know, thumb around in the ecosystem of eventually get pushed down the funnel into a conversion event.

• 1:40:46James Cadwallader?

  AI answers that there's three parties at. Acting here where we have the we said the same website and the same end user, but sat in the middle is the answer engine. The answer engine changes everything because it's not connecting the two. It the answer engine is essentially for all intensive purposes, stealing the relationship from the end user. Um, or stealing the the stealing the relationship with the end user from from the brand. So I most brands don't aren't really grocking this idea yet, but most brands are about to lose.

• 1:41:24James Cadwallader?

  The majority of connection they have with their end consumer. Because now when I'm researching a purchase, I go to chat G P T. And if I need more information, I send a follow up question to chat G P T. There's no need to click out and eventually, I mean, you know, if you read the the Stratechery article that came out, the interview with Sam, I think this week or last week. You know, it's obvious that OpenAI are going to go into shopability. So we're going to see like agentic browsing, agentic shopping start to take place and you will you will transact. Within these answer engines, you will consume media within these answer engines. You won't need to go, we're going into a zero click future. So as a brand, the impetus, you know, going back back to that sort of philosophical point that the your impetus is.

• 1:42:06James Cadwallader?

  How do I distribute information to these answer engines in real time accurately? The first step is like to just understand what the hell is going on. So, you know, if I'm. Ramp and I want to show up more in accounts payable. Cool, let's like run a bunch of interrogations, let's see how the answer engines respond when we send a huge variety of questions about accounts payable. Open ended questions, not brand direct ones about ramp. Let's see where they go, where which sources do they go to? Does chat G P T go to or perplexity go to or co pilot go to to get that information? And then from there, we can start building strategies. I mean, a ramp, you know, they we just published a case study with those guys. So it's it's public information. They increased their.

• 1:42:52James Cadwallader?

  Visibility by seven X in one of the indices that they were looking at by just looking at what was going on and what they could do about it. Then I guess, John, to give you a more direct response, like, you know, tactical stuff. L L M's dot T X T, our our our website, try profound dot com. We get as our web, our L L M's dot T X T now is getting as much traffic as our site map, which is pretty interesting. We think for like very for rich, extensive websites, you know, websites like, I don't know, Stripe is an example. We have tons of documentation. I think L L M's full dot T X T will be very interesting because it's just essentially cramming a huge T X T file of everything all onto one page.

• 1:43:33James Cadwallader?

  Because answer engines don't mind that. Um. I think going, you know, just sort of cycling through other ideas, you know, things that we're seeing work are lots of structured data um is very important, like, you know, remove all verboten, you're creating content essentially for a retrieval agent to pick up, not a human. Um. Images are useless. Uh. Answer engines don't care about images, so like kind of ignore them to an extent. Uh. Metadata, you know, needs to be very thoughtful. Like you can essentially, you can, you can just spoil the whole article with your metadata and that will often be like pretty effective. So, I mean, I could like, I could go through, I could cycle through.

• 1:44:10Jordi Hays?

  Yeah, what uh, I have a couple kind of questions. You're sort of building in a, what's a new category? Do you call it A A E O, like answer engine optimization? Do you, have you coined it yet? Obviously, you want to own it.

• 1:44:22James Cadwallader?

  Yeah, it has, that, uh, we, I think you have to let the kind of market decide what it's going to be called. A E O, A I O, L L M O, um, G E O gets thrown, a generative engine optimization gets thrown around a lot. Every, yeah, for considering we're all like techno optimists and, you know, Silicon Valley is meant to be full of techno optimists. It's the, the desire to use heuristic is quite interesting to me. I've seen like so, we, as human beings, we love to use heuristic. We just want to say this is S E O for A I. But there's all kinds of like new surface areas that just like didn't exist before.

• 1:44:59Jordi Hays?

  Yeah. Uh. Can you talk about, do you have any type of vision of what paid ads in L L M's will look like? I. Had gotten multiple pitches over the last year of people that were building these sort of like ad networks to fit within different L L Ms. And my general read is like, I sort of believed that, you know, paid ads would be heavily integrated into L L Ms. But I sort of felt like it might, I wasn't necessarily convinced that in a world where there's, you know, an infinite number of different answer engines, that everybody has a different favorite, maybe this sort of global network makes sense. But then if OpenAI is getting like, you know, long term or Grok or whoever's like the sort of

• 1:45:44Jordi Hays?

  power law winner, if if they're getting 80% of the traffic, like maybe they end up with more of like a meta style ad network where they just build it, you know, from scratch. But I'm curious what you think.

• 1:45:55James Cadwallader?

  I mean, I definitely, I kind of think, well, I believe there will be a more fragmented marketplace this time around. I think there's just more, everyone knows what's at stake here. Google search has been the biggest monopoly in the history of the internet. And I think there's more capital, more energy going into trying to ensure that doesn't repeat itself this time around.

• 1:46:20James Cadwallader?

  But answering the question, I, I think it's actually two things. I think it's generative advertising in a conversational user experience will be that the convergence of those two things will be one of the most powerful unlocks in the history of marketing.

• 1:46:40James Cadwallader?

  Language models are really good at language.

• 1:46:44James Cadwallader?

  And being able to synthesize net new ads on the fly that are perfectly tailored to that exact moment in the exact conversation in the exact way.

• 1:46:53Jordi Hays?

  Yeah.

• 1:46:53James Cadwallader?

  It's compelling, I think, is about to melt marketers' brains on and on the efficacy of like how powerful that advertising medium is going to be.

• 1:47:04Jordi Hays?

  Yeah.

• 1:47:05James Cadwallader?

  I mean, I'm, we want it to happen. We think it's very interesting and we think it will speak, it will, it will be a very obvious next move for our business.

• 1:47:16James Cadwallader?

  I don't know, we're not holding our breath right now. I don't think, you know, I'm not, I'm not sure if it, if it will unfold like that, especially with OpenAI. You know, they have that corporates, the corporate structuring, I think, is a bit of a hindrance, just they kind of the, the values of the business. I can't, I don't know. Your speculation is as good as mine, but yeah.

• 1:47:34Jordi Hays?

  Yeah. Well, very cool. I'm sure, I'm sure you're going to be raising a lot in the next few years. So when, when you're, when you're ready to announce anything, come back on and

• 1:47:45John Coogan?

  Come back on, break it down.

• 1:47:46Jordi Hays?

  And send me, keep sending me different learnings and stuff. In the meantime, I think we, we just have a ton of founders in our audience that probably aren't taking LLM optimization seriously enough now. So go DM James or sign up for a demo or whatever. And it's great having you on. Thanks for having me, guys. Yeah. Congrats on everything. That's cool.

• 1:48:07John Coogan?

  Yeah, thanks for stopping by.

• 1:48:08Jordi Hays?

  Later. We got, we got Quaid in the, in the waiting room yet?

• 1:48:13John Coogan?

  We got Quaid coming in to the temple of technology, breaking down watches and wonders, which of course is, it seems like the biggest watch event of the year. Every major watch brand announced new watches and we're going to get the update from Quaid. I'm very excited for this. We discussed the Vacheron complications watch that launched, but I want to hear about Patek. I want to hear about Rolex, Land Dweller. I want to hear about everything Quaid has to say. So break it down for us, Quaid. How you doing? What's going on?

• 1:48:45John Coogan?

  It's James Bond day.

• 1:48:46Jordi Hays?

  It's James Bond day.

• 1:48:47John Coogan?

  I hope you, I hope you have your, your, your, your gun because we're all secret agents today.

• 1:48:53Jordi Hays?

  Uh, what's going on? What time is it over there for you?

• 1:48:57Quaid Walker?

  It's 9:48 PM in Geneva. I'm in a tiny little Geneva hotel. So apologies for the background, but we're on the ground.

• 1:49:04John Coogan?

  You look great. Yeah. Break it down. What is going on? Why is everyone in Geneva? What's, what's going on in the world of watches?

• 1:49:11Quaid Walker?

  Yeah, it's watches and wonders right now. So it's kind of like the biggest year or biggest week in watches for the year typically. It's when the watchful comes together. A lot of the brands come out and they reveal the new models, discontinuations, and everyone comes out here and nerds out together.

• 1:49:26John Coogan?

  So what, what's making a splash? Like what are the biggest announcements? And then what are the, what are the announcements that I might've seen that are kind of overrated?

• 1:49:35Quaid Walker?

  Yeah, so it's typically a time when brands like Rolex and Patek come out and they announce like iterative improvements on their models. I'm sure a lot of you folks have started to see a lot of the press coming out of it. We got quite a splashy year specifically around Rolex. It's not very common for them to come out and release a new model. And so they dropped the Land Dweller. And it's definitely like penetrating popular culture a little bit more. I was in LAX on my way here and a bunch of people who clearly don't talk about watches were talking about the Land Dweller and that excited me. But so that was the big splashy one. First new model.

• 1:50:15Jordi Hays?

  What's the hardcore enthusiast collector reaction to the Land Dweller? I look at it, I'm like, okay, you took, you know, the best of AP and you combined it with, you know, a day date and that seems like probably like it's going to sell well, right? I just look at the bracelet, but like as, as a, you know, a very much like a hobbyist enthusiast, you know, I'm curious what the sort of on the ground reaction is to the new model.

• 1:50:44Quaid Walker?

  Yeah, I think there's like the consumerified reaction and then there's like the nerd reaction. I think the consumerified one is like integrated bracelet homage to the late seventies Oyster Quartz. I think Jordy, you're spot on there. Like it's the first moment in a long time or maybe ever where I think Rolex is building a fully integrated bracelet that like really puts a model directly in the Royal Oak Nautilus category. And so Rolex has been largely dominant without doing that. And, and so now that you have a bracelet where I'm wearing a Royal Oak today, like I haven't put on the Land Dweller, but does it make sense to have both in my collection? I think it's like you start to ask that question, which is quite exciting. For the watch nerds, they released a new caliber with it, the 7135, which has a new escapement in it.

• 1:51:29Quaid Walker?

  And so like for most people, they're going to buy the watch because it's a hype new Rolex. I'm sure every, every 80s line is getting blown up right now. But for the watch nerds, it's just a really efficient new escapement. It's pretty exciting to see it come out for the not watch nerds in the room. Like the escapement regulates the hairspring. The hairspring is what you're winding to power the watch and it's kind of being regulated and releasing and that's what's driving power to the gears. And so super nerdy, but to have a moment where they. Not just make a new model and make it exciting, but they also invest in kind of the technology and push the innovation forward in the watch perspective. And then to have the confidence to drop a new caliber and a new escapement in like

• 1:52:11Quaid Walker?

  a sport watch, I think it's just kind of a ballsy Rolex move. So I think the watch world likes it. I think everyone wants to like it.

• 1:52:18Jordi Hays?

  That's cool. I'm curious, how do you guys think about estimating how these things are going to price? Obviously, as soon as an AD releases a Land Dweller from their hands into a consumer's hands, some of them will get listed on bezel immediately. Do you have any sort of sense of how this is going to price? It's a little bit different than seeing a new GMT, you know, release where it's a different colorway, but there's, it's certainly not a new model.

• 1:52:44Quaid Walker?

  Yeah, it's, it's, it'll be interesting. And I think like, it's very hyped and it falls like right into the hype stream and everyone's going to want this. I'm sure AD's lines are getting absolutely blown up. It's also expensive at retail. It's a $14,000 watch, I think is the retail on it. So like, you know, it's 1,500 bucks more to get a Daytona at retail. Granted, those are obviously impossible to get, so it's not even real numbers. Whenever Rolex drops a new model, specifically one that's desired, you pay a premium to wear it first. And so I'm sure if you want to be courtside, you know, wearing your, your first Land Dweller, you're going to pay an insane premium on that. I would not be surprised if these things are, are selling like well over double retail.

• 1:53:25Quaid Walker?

  That probably seems like the entry ticket even at a stable market. But we'll see, it's like, you know, there's not a lot of hyped Datejusts out there. Even the hyped Datejusts are still trading in the mid teens. So it's certainly a new market, but I think it's going to be pretty frothy, I guess.

• 1:53:42John Coogan?

  Can you talk about some of the other launches and how they've been received either this year or specifically at Watches and Wonders?

• 1:53:51Quaid Walker?

  Yeah, so I think like it's been interesting like uh usually what ends up happening is like I I mentioned you'll drop a watch. It'll be popular, even if it's like a funky watch like we saw the the day date with the emoji, you know.

• 1:54:05John Coogan?

  I saw a Tetris one that was kind of wild.

• 1:54:07Quaid Walker?

  Yeah, like it's crazy, but because there's inherent scarcity in the tire, you end up seeing these things trade for in- insane figures.

• 1:54:13John Coogan?

  Sure.

• 1:54:13Quaid Walker?

  I think there's a lot of other really exciting ones that that dropped this year. They don't touch the Land Dweller, but it was kind of a theme of really interesting colored dials. You had the the Sprite get kind of a big brother, the the green and black GMT that's a left-handed. I never thought I like I thought they were gonna launch that model and then discontinue it because it just inherently was weird and a destro. Uh but we got a white gold version of it with the first ceramic dial that Rolex ever made. It's all green. It looks kind of hulky meets the sprites. That's exciting. Uh you got this crazy iron stone tiger iron stone dial for the full gold rupiah, which is like gemology uh mix of tiger's eye and all these other crazy metal or crazy stones.

• 1:54:56Quaid Walker?

  Um OP colors got some new ones. They brought in like a hyped turquoise dial in the Daytona, so it seems like they're investing in technology, but they're also playing like right into the hype cycle and giving colored dials and things that are.

• 1:55:08John Coogan?

  How are some of the Holy Trinity brands playing watches and wonders? I saw a launch from Vacheron. I saw some Patek news that you guys broke down on your X account. Uh can you give me just an overview of like how big is this year for each of the Holy Trinity?

• 1:55:23Quaid Walker?

  Yeah, it's not. It's not quite the level of Rolex, I would say like obviously Vacheron's had a big year with the two two twos.

• 1:55:30John Coogan?

  Yep.

• 1:55:31Quaid Walker?

  Uh kind of riding that lightning. As far as Patek goes, we got the sixty one ninety six P, the newest iteration of the Calatrava.

• 1:55:39John Coogan?

  Yep.

• 1:55:39Quaid Walker?

  The watch world loves it. It's kind of being hailed as the, you know, best modern Calatrava we've seen in a really long time. It has that amazing salmon dial that the market loves. So still active, but I would say like more like a normal year than uh kind of Rolex having the standout new model.

• 1:55:53Jordi Hays?

  What is the general sentiment? Like industry sentiment right now on the ground? We obviously had the COVID Zerp boom and then things crashed. There's a lot of models that are down.

• 1:56:07Jordi Hays?

  Fifty percent, they're obviously still trading, you know, high, you know, above retail. But is the sentiment good, even though we're maybe back to like a new normal? But the new normal is just like, you know, sort of higher than, than, you know, 2019, let's say?

• 1:56:23Quaid Walker?

  Exactly. Like, I think the, the hype models are still hyped, they're still trading well above retail. You know, Daytona 15.5 retail is still trading in the low 30s. It's not a $55,000 watch anymore, but you know, it's still trading at a meaningful premium, still very hard to get. And I think, you know, the correction that we saw over the last two years, actually, in many ways, I think accelerated the market. You have a lot of people that were watching the price of a Daytona being $55,000 and just feel prohibitive to enter the market there. Now, all of a sudden, see the watch at the low 30s and they either feel like they're buying the dip or they just want the watch well enough that they are willing to make that price at that point. So we're seeing a lot of energy come back in the market on our side. Last month was the best month we've ever had, ever. So, you know, we continue to grow.

• 1:57:08John Coogan?

  Congratulations. We love growth here. We have to shout that out. It's fantastic. Congratulations.

• 1:57:16Quaid Walker?

  Thanks, guys. But yeah, so I think the market's still frothy and it's there. A little bit less speculative than it's ever been. I think people saw the highs and they saw the drop. And now they're, you know, being more careful, but still a lot of watches to be bought.

• 1:57:28John Coogan?

  We love a little bit of froth. Not as big on speculation, but I love a little bit of froth.

• 1:57:33Jordi Hays?

  I love the froth. Is there anything else, anything else, uh, yeah, anything else that's been, anything surprising from, from this trip so far? That, or is it all kind of expected?

• 1:57:45Quaid Walker?

  It's all, all you'd expect. It's always fun to see everyone in Geneva rock, rocking the most fire watches ever. And they're just casually on the street. I had lunch today and I think I saw two crashes, a bunch of open works, like all sitting in the same vicinity. And it's fun to see how this stuff regulates on the secondary market. Like, we're already seeing these celebration dials. You know, they're, they used to be trading in the mid teens. We have a seller that's opportunistically listing them in the 30s now, trying to get the speculative buyers to be ready to move. But then we're also still selling them, you know, in the low 20s, right? So like, it'll, everything will shoot up immediately and then it'll find its way down. And if it's a hype model, the celebration model or dial is inherently a crazy watch. Like, it's...

• 1:58:29Quaid Walker?

  People who rock it, hats off to them because it's an impressive watch to be able to pull off. But for the ones that have staying power and they're discontinued and have a lot of demand, obviously the price shoots up.

• 1:58:39John Coogan?

  Can you talk about some of the smaller brands? What's going on with FP Journe and some of the more challengers, the up and comers, the brands that folks might not have necessarily heard of, but are making big splashes in the last few years? What are they doing at Watches and Wonders and what are they doing generally?

• 1:58:54Quaid Walker?

  Yeah, so I think most of the brands are here. Even some of the big brands like tend to be a little bit quiet, even not just the independents. Like AP didn't participate in Watches and Wonders, but did like some quiet announcements of new ceramic colors and things like that. I went today, there's a small little fair.

• 1:59:11Jordi Hays?

  Wait, just, just one step back. Is that like interpersonal dynamics? Like they don't like who runs the show? Like, why, why, why do you decide to not be at the biggest, you know, watch event of the year?

• 1:59:24Quaid Walker?

  I don't know if I, I don't have like the nuance there and I don't know if like reps and them are not participating and things like that, but I just know like they're not making as big of a presence as, as other brands are. And I think that's just like a selective choice. But obviously they announced, they love the ceramics and they announced a new blue ceramic that is aligned with the color of a specific sky in a Swiss valley, which is very AP and super cool of them. So yeah, they're just doing their thing. And on the independent side, there's a fair actually next to Watches and Wonders. They're in the same little area by the Geneva airport that is focused on specifically independents. And so I actually spent time there today and you're kind of working with, you know, brands

• 2:00:08Quaid Walker?

  like Ming and, and kind of these like new up and coming brands that are doing really cool stuff. So you get a mix where it's a fun moment where I think a lot of attention is brought into the watch world of Watches and Wonders. And I think, you know, rising tide rises all ships in this kind of stage.

• 2:00:21John Coogan?

  That's awesome.

• 2:00:22Jordi Hays?

  Love it, dude. Well, thank you for joining at 10 PM, your time. Have a great rest of your trip and thank you for responding to John and I at all hours of the day.

• 2:00:31John Coogan?

  Every time we have watch questions. With like the most obscure wrist checks. Hey, we, we, we saw this VC with this watch, let us know what it is. And you're always on top of it. We appreciate it.

• 2:00:41Quaid Walker?

  At Sells Watches, I'm, I'm available 24/7.

• 2:00:44John Coogan?

  Thank you. Yeah, it's been, it's been fantastic working with you and partnering with you.

• 2:00:48Jordi Hays?

  You're the man.

• 2:00:49John Coogan?

  Have a great, have a great rest of your trip.

• 2:00:51Jordi Hays?

  Yeah. Safe travels. Talk soon.

• 2:00:53John Coogan?

  Bye.

• 2:00:55John Coogan?

  Good timing. So much watch news. I'm glad we were able to have him on as our official watch correspondent. I love this stuff. Well, next up, we have Sarah Guo coming into the Temple of Technology, talking about, she runs a fantastic AI podcast, if you're not familiar, also a big time investor. And wasn't she the reason that Andrew Reid joined Sequoia? Wasn't that the story? Yeah, it was about the backstory. Yeah, and she's here now. Welcome to the show, Sarah. Good to have you. Hey, hey. What's going on? Great to have you.

• 2:01:26Sarah Guo?

  What's going? Thanks for having me.

• 2:01:28John Coogan?

  What's, what's new in your world? How did you process the Studio Ghibli moment? How are you feeling? I mean, you've been, you know, bullish on AI for years now. What's, how is it like updated your world model and what's exciting going forward from here?

• 2:01:46Sarah Guo?

  Um, well, it's super cute. Right. Sorry for that. I have a lot of generated a ton of images of me and my kids and my family, my friends. And so I could not be ignored like how much people actually do want to create. I think it updates. I think it should update a lot of people's world models in terms of how early we still are in quality. I think the fact that like quality is a very broad term. I think the fact that you had image generators make things that were beautiful or realistic. I feel like people kind of thought that, you know, to some degree, like images were solved, like other, like other

• 2:02:26Sarah Guo?

  domains were already more well solved. But like what I think the GPT-4O, it's Studio Ghibli moment taught us is, first of all, it's like a different technology for image generation, but it allows a lot of controllability. And there's more knowledge of like why the image is the way it is. And so I think we're going to keep seeing a ton of improvements in our ability to create different things that like surprise people.

• 2:02:51John Coogan?

  Have you gotten a chance to dig into how much of the, I mean, it's clear that like this new model, whatever they're doing is much better. How much of it is just the design, the algorithm, the strategy versus like scale? And

• 2:03:04John Coogan?

  I really hope that we have almost like a deep-seek moment where we're like, oh, now it now these now it's a filter on Instagram and it's just a button and it takes one second and it runs on your phone where it's compressed it down. That seems to be a trend in all of these models. Something comes out, it's really cool, it's really big, it's really expensive, then it gets really cheap and quick. What are you expecting this year as this evolves? And do you think any, do you think any of those trends will like unlock new use cases?

• 2:03:30Sarah Guo?

  I mean, I think this system can do things that were really hard to get right consistently before, right? And it is, it is different. I mean, I don't work at OpenAI, but lots of people believe that GPT-4O, it's not, it's not a diffusion-based image generator. It's just starting with noise and you like gradually cleaning it up the way like mid-journey. Models supposedly work, you're building images piece by piece, like sequentially, like you have tokens in a language model, right? And if the image parts are more like words in a sentence.

• 2:04:08Sarah Guo?

  And you're creating the image one element at a time. So it's like technology brothers in a cyberpunk city with a blue dragon. It's understanding the request with language, it's connecting the words to visual concepts it knows, and then it's doing it like step by step. And this is great because it's more controllable and it's really high quality, but it requires a lot of compute. Which is why Sam is talking about servers melting and you know, it's still slow.

• 2:04:33Sarah Guo?

  Do, I would take, I would take like every bet that in general, all types of AI capabilities due to competition and continued investment. And technical progress and distillate, like it all gets cheaper and faster, right? So anybody who's building with this stuff or using it should expect that curve to continue the way it has for the last 18 months. And I think a lot of it will be open. I mean, OpenAI just said they were committed to this too. And so like do, I, I definitely think that the, the.

• 2:05:09Sarah Guo?

  The data would would suggest that we should continue to see like new capabilities as the models continue to like invest in or the the foundation model companies invest in multimodality and continued scale.

• 2:05:24Jordi Hays?

  How do you, what advice would you give to somebody that's doing anything around image generation at the app layer? I think that prior to last week, if you were building like something that generates Facebook ads, you felt pretty good because you were like, well, we have great UI and like customers care about workflows and like, you know, we help with this sort of like effectively like, you know, baking in prompt engineering to get great outputs. And then OpenAI releases something that like consistently one shots, you know, prompts with like three words and it's like a fantastic output.

• 2:05:58Sarah Guo?

  Yeah.

• 2:05:59Jordi Hays?

  Do you think that, you know, do you think if you're working on like sort of image generation or ad generation SaaS that you need to like pivot to just having like new ideas and like kind of thinking deeper into the stack? Or do you think that there's, you know, do you think that you can still kind of like stay ahead by focusing on workflows?

• 2:06:20Sarah Guo?

  Um, I I definitely think there's a lesson here of like, watch what the labs are doing, watch what anybody who is doing like core research is working on and you don't want to fly too close to the sun, right?

• 2:06:36Sarah Guo?

  I I do think one surprise might be what Anthropic and OpenAI explicitly care about is like AGI or ASI, whatever you want to call it, right? And one might have argued that like image generation, voice, like these things are not on the path to AGI. Yeah. Right, they're they're products you kind of get for free. Yeah. I I think there's like maybe two lessons here for entrepreneurs. One is, well, these companies, they do care about making like end user.

• 2:07:15Sarah Guo?

  Progress and commercial progress in part because they need to build a business that requires consumer engagement to keep justifying the training cost and the research cost. Right? And so I think if they feel like there are capabilities that fit into a broader consumer engagement or like productivity platform, they're probably going to pursue them. But I also think that like the, at least my experience with creative tools is that people want a huge amount of control and like not one tool will serve everyone. And so like the things that OpenAI and the labs have produced are very democratizing.

• 2:07:59Sarah Guo?

  And yet like that is lowering the floor for if you want something that looks like a decent ad. I also think there's a lot of room to like continue working on the last mile and raise the ceiling and we're going to have just like much better content, much richer content, more diversity, higher quality from people spending a lot less money. And there is opportunity in that.

• 2:08:18Jordi Hays?

  Yeah, I think last mile is just like an interesting framework where like, you know, the base models are going to get you to like, you know, pretty great. And then how do you get to excellent? And there's like probably a lot of value that you can capture by delivering excellent.

• 2:08:32Sarah Guo?

  And I think you can make like reasonable predictions about what the labs care about, right? Like, uh, let's just use some examples, like, do they care about code generation? Yes, they care about code generation. They think it's on the path to better reasoning. But do they want to build every workflow for a certain type of code base or migration, every workflow and serve it like in customer service or law or finance or accounting or even, I don't know, video capture and editing? Like absolutely not. They neither can nor want to do that.

• 2:09:05John Coogan?

  Yeah, it seems like there's been this trend over the last few years of maybe don't train a foundation model, stick to the application layer and then go operate on highly protected data sets like legal or finance or investment banking, medical records, et cetera. And I'm wondering if there will be a version of that that relates to image generation. But do you think we're kind of at the end of that trend? Or do you think there's more niches that people can discover if they just think really hard about where the labs aren't building towards and then go find something really cool?

• 2:09:42Sarah Guo?

  I actually think we're still like pretty early in quality. Um, like in your like. Artists and advertisers and communicators like the the specificity that people have for what they want. In an image like, you know, the concept here is controllability. Uh, like. I think the ceiling is really high and to the point at the beginning, like, I think people thought we were kind of done. We're not done. And so um, I actually think there's still opportunity for large companies here. And then relatedly, like video is much harder than images and um, requires like different architectural change. And so if if images are this expensive and slow to generate today, like. I do think also efficiency is going to matter here and workflow is going to matter here and collaboration is.

• 2:10:27Sarah Guo?

  And so I um, I still think there's opportunity uh, for other companies that are not necessarily um. Just training pure text image models.

• 2:10:38John Coogan?

  Yeah. Do you, oh, sorry.

• 2:10:40Jordi Hays?

  I was gonna take it in a different direction, but.

• 2:10:42John Coogan?

  I I was gonna ask, um, it it it seems like there's been this evolution of the value will accrue to the foundation model layer. Now it will accrue at least in the short term to the application layer. Uh, every foundation model company kind of has a dance partner on the distribution side, whether it's. Uh, Google obviously has their own distribution through their apps and Meta has all the different. Uh, social media apps, X and XAI are now part partnered and together. Uh, even OpenAI has gotten so many people to install the OpenAI app and the ChatGPT app. Uh, do you think there'll be an increasing trend of, hey? Yeah, it's not enough to just be a foundation model company. You got to find a dance partner on the distribution side if you really want to accelerate over the long term and remain relevant.

• 2:11:27Sarah Guo?

  Uh, I I certainly don't think it hurts, but the. Um, like to the best example would still be OpenAI and ChatGPT.

• 2:11:36John Coogan?

  Yeah.

• 2:11:36Sarah Guo?

  They didn't actually like their their distribution is their own.

• 2:11:39John Coogan?

  Yeah.

• 2:11:39Sarah Guo?

  It depends on how novel the capability is. And so I think there's a deeper question in like maybe that you're implying that in what you just asked of like, well, are people going to build new experiences that are so different that they can create their own distribution?

• 2:11:55John Coogan?

  It is fascinating that they have this deep partnership with Microsoft. I've used Outlook for one email inbox for the last two years. Haven't seen any OpenAI products in there. I don't know if I just haven't clicked the right button, but doesn't seem like Microsoft is really pushing like, hey, we're going to build these models. And although they've talked a lot about co-pilots and different office products, but Jordy, what's your question?

• 2:12:18Jordi Hays?

  Uh, do you think that it it almost feels like there's there's never been more hype for AI, but I almost feel like it's like underhyped. Like you shared an article yesterday or a study that shows like AI therapy like actually seems to work really well. And the idea that like society broadly, everybody would have free access, infinite access to high quality therapy like should probably be like the top story in the world because of how transformative it could be if every individual could understand themselves better and sort of, you know, mature and whatever they're getting out of therapy. It it feels to me like just AI broadly is still underhyped even by the cohort of humans that is like, you know, like fully AGI pilled.

• 2:13:03Sarah Guo?

  Um, I think it's I I think it's wrongly hyped. Maybe that's the the answer. Um, uh, like it is still underhyped and the things that people are really excited about are not necessarily the right ones.

• 2:13:18John Coogan?

  Okay.

• 2:13:18Sarah Guo?

  Um, maybe I'll go back to like the Microsoft thing for a second. This is not like, I mean, clearly Saya has done an amazing job with Microsoft, but it's still a very large beast. And I think it is like kind of impossible to overstate how hard it is to get existing products in existing businesses.

• 2:13:38Sarah Guo?

  To move quickly, right? And all of this shit has happened so quickly. Um, and like, should there be intelligence in your email? Absolutely. Right? Like that technical capability exists today, but what does anybody who is a traditional email vendor? Microsoft or Google like navigating here and they're like, oh, what does our user agreement say about if we can process our data, that data? What is like the safety consideration around processing that data? What does the user promise around privacy? Right? Like there's um, how much is it gonna cost? Does like? Do we even have our infrastructure set up to share that data with model inference?

• 2:14:18Sarah Guo?

  Um, I, I think it's, it's complicated to go deploy this stuff, especially at scale with organizations that by virtue of actually having users and customers are more conservative and um, and so I, I think they're like, people can go challenge it by.

• 2:14:34John Coogan?

  Yeah. I mean, staying on email, I was, I was setting up a new Gmail inbox and it's, there's Gemini buttons everywhere, but they don't seem to do anything that I want to do. It's just like, oh, give me a two line summary of this email that I could already kind of skim. It feels like, you know, during the mobile era, there was this whole drumbeat of like mailbox. I don't know if you remember that company that got acquired by, by uh, Dropbox. It like went viral. Everyone was using it. It introduced a couple of different UI patterns that were really cool and then eventually adopted. And then it was never like a power law outcome, this massive trillion dollar company, but it was like a really cool product. People enjoyed it. It was probably a good outcome for the investors, the founders, the users. Everyone had a good time. And I feel like

• 2:15:17John Coogan?

  there's a little bit of a meme right now that like, oh, you're, you're just a chat GPT wrapper. You shouldn't even go and try and build that. And, and I've always wondered like, like, should we be telling founders like, just go build and maybe don't even worry if it's aligned with venture capital necessarily. It's okay to go build something because there's, there's so much opportunity with these new tools. You might become really big, but you also might just build like an okay subscription business and people are paying twenty bucks a month for it for a while. And then maybe you get steamrolled, but maybe you land somewhere great and you get acquired somewhere and it's all worth. And at least we get the product. It just feels like again and again, I think of a product and then I can reason my way out of that's not a venture bet. But we don't get the product in the interim interim. And I'm like, I just want the product right now as a consumer.

• 2:16:03Sarah Guo?

  Yeah, um, I don't think like you can give entrepreneurs advice on things that are really about like personal motivation, right? If they want to just build the product, like go build the product.

• 2:16:15Jordi Hays?

  Yeah.

• 2:16:16Sarah Guo?

  If you want to build a hundred billion dollar company, they should think a lot about like what's going to make a hundred billion dollar company.

• 2:16:21Jordi Hays?

  Yeah.

• 2:16:21Sarah Guo?

  Um, we're explicitly not going to back anything that's going to like be a small outcome that is a tuck in, at least that we believe is, right? But I, I also think that, um, there are spaces that people think of as like very red ocean that people have creative approaches to.

• 2:16:41Jordi Hays?

  What does red ocean mean?

• 2:16:42Sarah Guo?

  Red ocean.

• 2:16:43Jordi Hays?

  Like just overly complicated, you know, competition, a blue ocean. Yeah, the opposite of blue ocean. Yeah.

• 2:16:48Sarah Guo?

  Exactly, like a lot of people are fighting over it. It's not like an unknown market, like, um, you know, I think I'm pretty excited for Notion Mail. Lots of other mail services exist as.

• 2:16:58Jordi Hays?

  Sure. Yeah. Uh, have you, I'm sure you've looked at a bunch or got pitched a bunch. Have you done any AI rollups or do you have a broad thesis there? When I, when I look at some of these strategies where, where sort of, you know, uh, startup people like basically are trying to reinvent the private equity playbook, being like, we're going to buy businesses and make them more efficient. Like it's sort of the same thing as like, you can make them more efficient with software or, and now the narrative is, is AI. Uh, how have you thought about opportunities like that? There's obviously a bunch of them and I'm sure you've, yeah, probably seen them all.

• 2:17:31Sarah Guo?

  Yeah, um, we have something still in stealth in the portfolio that you might characterize this way. Um, I, uh, I'll, I'll, I'll like talk about what I think the component parts of this thesis um, are and uh, probably piss a bunch of people off by starting with, um, I think that there are asset classes where finance people are pretty good at finance.

• 2:17:53Jordi Hays?

  Yeah.

• 2:17:54Sarah Guo?

  Right? Private equity is a mature asset class and like a bunch of engineers being like, you know what? We're going to be really good at underwriting private equity. I'm like.

• 2:18:03Jordi Hays?

  Yeah.

• 2:18:04Sarah Guo?

  Like, why? Why would you have any alpha in this? Like, I think you seem really smart, like a very good engineer. But, but like the component pieces of, I think it's really interesting when people just like discover other sectors that have existed for a long time and don't think about what the basis of competition.

• 2:18:19Jordi Hays?

  Well, that's the classic Silicon Valley approach, being like, I'm an outsider. Like, I know how to do this better than you do. And then it's like, private equity is like the most optimized asset class ever, where there's people out there that were like, I will buy this knowing that I will only get a, you know, 7% return, but that's okay, because like, I'm gonna do it enough times throughout the fun lifecycle that it's gonna, you know, work or whatever.

• 2:18:41Sarah Guo?

  So, I, I, I, I'm glad we're on the same page here. Or, I'm like, I'm, I'm pretty skeptical of most of these things that start with like, we're just better at finance.

• 2:18:51Jordi Hays?

  Yeah.

• 2:18:52Sarah Guo?

  But being, you know, I could imagine, uh, hiring or actually being good at the under, like, the asset selection and underwriting piece of this as being like a baseline for a roll-up type play working. And then the, the other premises here are like, uh, we think that there are a bunch of sectors in the world that would benefit a great deal from technology or AI. And benefit being like, it shows up in the growth rate or in the EBITDA, right? Pretty quickly. But they're not, um, by, by virtue of the industry structure, they're gonna like, adopt these technologies very slowly. They're fragmented, they don't invest in technology, the, um, the user base is really

• 2:19:37Sarah Guo?

  far away from Silicon Valley, and like, sales is hard, right?

• 2:19:42Jordi Hays?

  Yeah.

• 2:19:42Sarah Guo?

  Like, that's, that's kind of the premise. And, and like, it, and maybe there's some broader technical thesis about why working across these companies is interesting. Um, I just said, there, there is something in our portfolio that you would characterize as a play on this. And, um, I would just want to believe that these component pieces are true, right?

• 2:20:04Jordi Hays?

  Yeah.

• 2:20:05Sarah Guo?

  That the team can be world-class at finance, the team can be world-class at the technology piece, and the technology piece is going to translate to something that is not like incremental, but fundamental to the quality of the business and your scalability in an industry or ability to compete.

• 2:20:20John Coogan?

  You heard it here first, an HVAC roll up for sure. HVAC plus DocuSign printing money.

• 2:20:27Jordi Hays?

  How do you think about as a GP wanting to constantly learn and learn about new industries and get enough conviction to make bets in areas where maybe you didn't have like a ton of context five years ago, while at the same time, sort of like knowing your lane and like having areas that you're super confident in and having a deep bench of sort of like experts? Because like, the thing that I think is, you know, every VC became an AI investor over the last, you know, year and a half, two years, but also a bunch of people became defense tech investors and a bunch of, and like for us, like we angel invest, it's low stakes. If there's a founder we like, we'll put money in and we want to support them. But then you're running a firm, you kind of have to know your edge and your lane. And

• 2:21:09Jordi Hays?

  I'm curious how you sort of like, sort of balance that, like what, and to think about like your sweet spot.

• 2:21:15Sarah Guo?

  Yeah, it's a pretty poor question. I was actually having this discussion with my friend Eric Vitria, who's at Benchmark, and he, you know, is like an infrastructure enterprise software person by background, more like me. And we're talking about companies that are out of domain. And his point, which I think is like, pretty aligned with my view is if you are too familiar with the status, now I'm gonna like, you know, make fun of myself, because I just said all this stuff about the private equity roll up. But if you are too familiar with the status quo, you, the experts in the field do not necessarily see the future.

• 2:21:56Jordi Hays?

  Yeah.

• 2:21:57Sarah Guo?

  And especially as you, like, I genuinely, I mean, believe that large models can extend to many domains that were not software before. Like, I was not particularly interested in vertical SaaS or the legal industry before Harvey. But I think Harvey's a really interesting company. I still don't know anything about the legal industry. I know like 1% of what like I should as an investor here. But like, the point is, the TAM has massively expanded because we are not just Doing some incremental little productivity thing. We're trying to take huge amounts of the profession and democratize it and raise the bar of expectation for what you get from your lawyers.

• 2:22:43Sarah Guo?

  Um, and, and so like if that opportunity is large enough, and I think the hammer is a really good hammer, like I am so excited to learn about the legal industry and work on it for ten years.

• 2:22:53Jordi Hays?

  We just got a legal bill like a day or two ago and John was like, oh, maybe we should have chat GPT'd some of that stuff. And I was like, I think we're like in the last like maybe like few months before we're gonna have good enough, you know, uh, legal AI.

• 2:23:07John Coogan?

  I think we're going back to handshakes and, uh, and smoky back rooms and threats of violence because we can't handle these legal bills anymore.

• 2:23:15Jordi Hays?

  But, but yeah, going back to your question, you said that I think is interesting thing to pull out. You said like, experts can't see the future, but they absolutely can see today. And it's like, sometimes you like, you know, look and you, you hear a pitch and you're excited about it. And then you talk to a friend who like actually knows the industry really well. And they just point out like, here's like the one reason like why this is not gonna work today.

• 2:23:35John Coogan?

  It's very, very different framing.

• 2:23:36Jordi Hays?

  Is it just you have to like step back and like almost kind of view things at a macro level and then ultimately make a founder bet?

• 2:23:43Sarah Guo?

  Um, I, I mean, like, why do we end up working in areas where we don't have deep domain expertise? It tends to start with like, we love the founders and there's some first principles view of like, it makes sense. Why like we should be able to restructure the industry or the technology is going to be massively important. Like the, the thesis just makes sense, right? Um, and so at, at least my personal approach is like, I'm going to try to understand what every expert in the status quo believes. And usually if it's a good thesis, like somebody thinks it's viable, right? And you'll just get mixed opinions back, but, um, I don't want to discover that there were obvious reasons it was not going to work.

• 2:24:27Sarah Guo?

  I would like to understand why everybody else believes it is not going to work and then like, you know.

• 2:24:33Jordi Hays?

  Still believe.

• 2:24:33John Coogan?

  Yeah. It seems like there's a lot of, I mean, obviously, there's a lot of money sloshing around in the AI deal making space right now, but at the same time, it's, it's easier than ever to test an idea and see, oh, well, we got to 100 million ARR in three months, like, maybe there's something here. Can you talk about just like the pace of play in AI, both on the deal making side and then on the actual revenue making side, because it feels very different than the dot com boom where companies were going public with like $2 million in ARR and they're trading at a billion dollar valuation. Some of these companies, they're at high valuations, but they have a lot of money coming in.

• 2:25:06Sarah Guo?

  Yeah, I mean, if any of you guys are experimenting your way to 100 million on run rate, please call me.

• 2:25:13Sarah Guo?

  I still think it's pretty hard, but I maybe to your point, like, people are doing it very efficiently. And I think it just speaks to like the technology, the magic box is very powerful. And you don't necessarily need, it's not like, if you just think about the SaaS world, right? Like, I need an army of engineers to implement the business logic of like, how does payroll work in Slovenia? Like, what, like, I'm, I'm turning the law into code.

• 2:25:41John Coogan?

  Yeah.

• 2:25:41Jordi Hays?

  Yeah.

• 2:25:43Sarah Guo?

  And I think that the experiment, like, the iterative nature of like, I'm trying to make a model, produce outputs that are great in these specific workflows, but the workflow is so valuable, enables some of these companies to grow in an unhinged way, like, the ROI is there. I think healthcare is a really interesting example of this, because for, you know, for like a 10 year period, I was like, oh, man, like, I would be really careful about, you know, with love to my friends who are healthcare venture capitalists, like.

• 2:26:16Jordi Hays?

  Massacres.

• 2:26:17Sarah Guo?

  It's not a, it's not a super fast moving area, huge part of the economy, very important, but it's just like, you know, it's not. It's not like an early adopter industry. And yeah, you have companies that like a bridge and others that like have massive revenue pacing, including in the enterprise. And I think the basic answer is like now people are making things that are worth buying quickly. So that the fundamental piece is like pretty exciting here. I think the pacing for entrepreneurs and for investors is either also very exciting or very stressful, depending on your personality.

• 2:26:52Jordi Hays?

  Yeah. Do you think, do you think some of the, the sort of bad activity in the space? Like, is there so much pressure now on like the bar in AI has now been set that like, if you're a general access product and you're not like two X-ing every single month or like, you know, not, not every single month, but like, you know, growing like extremely quickly. Uh, everybody's seen the charts of like, you know, whiz and cursor and ramps and, and, and deal and all these companies. It just feels like the pressure is now so intense that people are like counting CARR as like, you know, uh,

• 2:27:27John Coogan?

  And the trials, all sorts of stuff.

• 2:27:30Jordi Hays?

  Do you, do you find yourself giving advice to founders of being like, you know, ignore these sort of like, uh, ignore the charts and just like focus on your, on your customers because if you're too focused on like, how do we just grow? Like best in class, then you maybe end up like not building, you know, building stuff that's not reliable or, you know, robust.

• 2:27:53Sarah Guo?

  Yeah, I, I, I, I think people focus more on, uh, what's out there instead of what's possible for their business way too much, right? Like, I think it's a pretty, um, so there is something fundamental in what you said, which is like, the world has become faster and the internet gave us the ability to distribute software products much faster than previously. Like you were not going to go to like a hundred million a run rate in a couple of months before you could discover things on the internet, right? Like, what are you going to do? Like call somebody on the phone and be like,

• 2:28:25Jordi Hays?

  Come here with the CD-ROM.

• 2:28:28John Coogan?

  That's how SoftBank got started.

• 2:28:30Sarah Guo?

  I mean, or it was, it was just like structurally a bit slower.

• 2:28:33John Coogan?

  Yeah.

• 2:28:34Jordi Hays?

  Yeah.

• 2:28:35Sarah Guo?

  Uh, so, so I, I think the, the ambition for the number of connected people in the world, the number you, you can serve, how quickly things can grow should structurally increase for entrepreneurs. Um, but, and like an investor from the outside being like best in class is, This company, which has nothing to do with your company is not very useful. If it is like, if there is a data point in your customer segment of how quickly something can grow, and you are not winning, that is relevant data, right? Then the bar has actually risen and like you should figure out how to win. Um, but I, I don't, uh, I, I think there's also like a, an important question.

• 2:29:17Sarah Guo?

  Like we talk about, um, uh, uh, there's another investor who calls it chicken nugget revenue, but we just talked about revenue durability, right?

• 2:29:25John Coogan?

  Yeah.

• 2:29:25Sarah Guo?

  There, there's a big difference between like, deep usage, multi-year contract, enterprise revenue with integrations.

• 2:29:34John Coogan?

  Yeah.

• 2:29:34Sarah Guo?

  Um, and like, people trying something with 30% a month churn.

• 2:29:39John Coogan?

  Is that what chicken, uh, chicken nugget revenue is, is trial revenue, basically?

• 2:29:42Sarah Guo?

  Uh, I don't know if people like, yeah, you trial revenue or just like revenue that you know is, um, perhaps commoditized.

• 2:29:51John Coogan?

  Yeah.

• 2:29:51Sarah Guo?

  Right?

• 2:29:52John Coogan?

  Low switching costs.

• 2:29:53Sarah Guo?

  It's the novelty of people trying new things. Cause like AI can do so many cool new things.

• 2:29:58John Coogan?

  Yep, that makes sense.

• 2:29:59Sarah Guo?

  Really changing their day to day. Like, it's not like a 3D7 behavior where I'm somehow working better, like playing more, being happier. And so, um, uh, I, I think people should figure out what the bottleneck to growth is in their business for durable revenue and then anything else they should treat as distribution.

• 2:30:19John Coogan?

  Yeah.

• 2:30:19Sarah Guo?

  And it's like, I, I don't know what to tell investors about that, buyer beware.

• 2:30:23Jordi Hays?

  Buyer beware. Uh, last couple of questions. Uh, what introduction have you made that's generated the most enterprise value? Uh, Andrew Reid was on the show and, and said that, like, I think he said that you connected him to Pat and, and that's, you know, been, uh, pretty, pretty good intro. Is there anything else that, that comes to mind, uh, that, uh, that you're particularly proud of?

• 2:30:47Sarah Guo?

  Um.

• 2:30:50Sarah Guo?

  Uh, I don't, I don't know. I make a, I make a lot of introductions.

• 2:30:54Jordi Hays?

  Yeah.

• 2:30:55Sarah Guo?

  I, I think Reid is a very good investor. Um, no, I, I think the, um,

• 2:31:03Sarah Guo?

  I think like probably created the most enterprise value.

• 2:31:10Sarah Guo?

  I think there are companies that I've been a part of, be it Figma or Harvey, where I'm like giving an investor friend a hard nudge and being like, I really think this is gonna work.

• 2:31:22Jordi Hays?

  Yeah.

• 2:31:23Sarah Guo?

  This guy or gal's like, good, you should work with them. And that included, like Andrew Reid had the thesis at Figma, but I was also like, you should do this, right? Like to Dylan and Andrew, and I think, I think everybody's thrilled about that.

• 2:31:38Jordi Hays?

  Yeah.

• 2:31:38Sarah Guo?

  I introduced a, I introduced my husband, Pat, to Harvey. I think that is making progress. I introduced a very close friend, Sankeen Zeb, to Harvey at GV. And so I think I'm like excited about this company, right?

• 2:31:53Jordi Hays?

  Well, I'm excited, I'm excited, like, you know, 20 years from now for the email screenshots from you of like, you know, all the AI winners being like, yeah, I made that intro, I made that intro. Uh, last, last question I had, and then we'll let you go. I know we're at time. Were, were, did you, did you ever intend on being a solo GP? You hired, you know, Mike, I think that got announced last year. I'm assuming you just had this like 30 year master plan to like build a real firm uh, or, or something like that, but, but how did you think about?

• 2:32:23John Coogan?

  When are you IPO-ing? I've heard Andreessen's going out. When can we expect to buy some shares?

• 2:32:29Sarah Guo?

  I, um, I don't think we have the ambitions for selling equity carrier scale. So I, I think I would be much more interested in how high the hit rate can be.

• 2:32:41Jordi Hays?

  That's great.

• 2:32:41Sarah Guo?

  Um, and how high the multiple can be and how low we are by our entrepreneurs. So, um, master plan, no, kind of the opposite, right? I, um, I, I had a very strong instinct that I like, wanted to do, I wanted to do early stage investing in a concentrated way, and I believe in partnership. And then also, like, I was in a big hurry to, like, get going. Um, we launched in October of 2022, if you'd like.

• 2:33:07Sarah Guo?

  Seen research previews or

• 2:33:10Jordi Hays?

  Yeah.

• 2:33:10Sarah Guo?

  Played with AI or like thought about it for like it was it was accelerating. Right. And so I thought that there was a window to go figure out what was going on and try to be in great companies. And so I'm I just figured it would be better to like, start figuring it out and and like date very slowly, right? The idea that the perfect partners would be immediately available right when I was leaving Greylock seemed like unrealistic.

• 2:33:38Jordi Hays?

  Yeah.

• 2:33:40Sarah Guo?

  It took me a year to convince Mike that he like wanted to work 110% and I'm I'm super thrilled to be working with him.

• 2:33:47John Coogan?

  That's awesome.

• 2:33:47Jordi Hays?

  Amazing. Thank you so much for coming on.

• 2:33:49John Coogan?

  Yeah, this is fantastic conversation. We'll have to have you back soon.

• 2:33:52Sarah Guo?

  See you guys.

• 2:33:52Jordi Hays?

  Have a great day.

• 2:33:53John Coogan?

  See you.

• 2:33:53Jordi Hays?

  See ya.

• 2:33:53John Coogan?

  Thanks a lot. Coming in next, we got Nick from LightMatter.

• 2:33:59John Coogan?

  Going to go deeper on

• 2:33:59Jordi Hays?

  Nick Light Matter himself.

• 2:34:01John Coogan?

  Interconnect. It's a very interesting company. They raised a ton of money, all focused on how we can improve these huge, giga scale AI training runs. It's a fascinating company, very deep tech, basically. He's gonna have to do a lot of explaining for us because I'm not up to speed on his technology, but I'm excited to talk to him. So Nick, are you here?

• 2:34:24Speaker 06

  Yeah, I'm here. Good to meet you guys.

• 2:34:26John Coogan?

  Good to meet you too. How are you doing today?

• 2:34:30Speaker 06

  Doing great. Yeah, we just had a big launch event yesterday, sharing our products and excited to chat and tell you guys what we do.

• 2:34:36John Coogan?

  Yeah, yeah, yeah. Why don't you just start with a breakdown of yourself, your company and what you announced yesterday?

• 2:34:41Speaker 06

  Yeah, I'm Nick. I'm co-founder, CEO of LightMatter. Been building the company for about eight years now. We're based in California in Mountain View and you know, we're about eight years old, spin out of MIT. And we're looking at the future of computing. So our goal is to continue to make progress on the cost of computation, the scale of computation and the energy efficiency in a time when computer chips are no longer making progress. You know, really principally, the only way that chips get better these days is by if I want to double the performance, I double the number. Number of computer chips inside a package. And so you're seeing over the past 10 years, these chips getting absolutely massive.

• 2:35:24Speaker 06

  And then the next challenge is around, how do you link them together? Especially in the context of training these large language models for AI. And that sort of thing. And that's what we do is we build these optical links between GPUs to power foundation model training. And that sort of thing.

• 2:35:39John Coogan?

  So how does that interface with the rest of the products in the market? I mean, Nvidia is known for NVLink. I used to have two 3090 graphics cards that were kind of linked together over the PCI slots. Like, I imagine it's much more complicated on your side, but can you give us a couple more concrete examples of like, how this rolls out, what the timelines are for this type of thing, what kind of performance gains we can expect to see?

• 2:36:01Speaker 06

  Yeah, so right now, in terms of timelines, chips are coming out this year. We've got big semiconductor partners that will be releasing products this year based on our technology passage. And the way passage works is it's a silicon photonics engine. So it leverages all the semiconductor manufacturing supply chain that's used to build all modern chips today. So it's built in these big semi fabs. You hear about companies like TSMC, Global Boundaries. That's where we build the stuff. And what we do is we 3D stack GPUs and switches, these really like heavy data center AI products on top of our photonic wafer. And then you cut out the die size that you want, attach optical fibers.

• 2:36:45Speaker 06

  And now you can wire up these massive AI data centers. You know, you're hearing about XAI with 100,000 GPUs. You know, Elon and team deployed that thing in, what was it, 30 days or something like that?

• 2:36:58Speaker 06

  Which is breakneck speed. We are the wires, the photonic links that connect up these massive data centers. And the setups are enormous. So we just announced yesterday 114 trillion bits per second. State of the art is about 1.6 trillion bits per second. So about 100X.

• 2:37:15John Coogan?

  Wow. So obviously, there's a lot of trade offs here. I imagine that you're, yes, thank you. The gong goes off when we hear a big number.

• 2:37:24John Coogan?

  I imagine that there are trade offs, probably at the early stage, cost. But are we just talking about speed? Or is there also a heat component that's important to think about? I know heat dissipation is super important on these big training runs.

• 2:37:39Speaker 06

  Yeah, I mean, on the heat point, so something to notice, like at a global scale, we're building data centers, humanities building data centers that use as much power as the biggest cities on the planet. So five gigawatt data centers, New York City is 7.5 gigawatts, LA is 2.5 gigawatts. So if you were to look at planet Earth through a thermal imager, the brightest objects you would see would be the mega cities, the deserts, under sunlight, volcanoes, and these new data centers.

• 2:38:06John Coogan?

  Fascinating.

• 2:38:06Speaker 06

  That's the scale of what's being built. And the real task at this point is how do you wire them up? How do you continue to drive performance and build bigger monolithic computers to train these AI models?

• 2:38:18John Coogan?

  Got it.

• 2:38:20Jordi Hays?

  How did you process the sort of deep-seek moment? It feels like a decade ago at this point, but it, you know, the narrative was that they had GPU constraints, and so they found more ways to be efficient. Do you think the American, you know, sort of like tech world just hasn't cared enough about efficiency to date because it's all been about speed? And we sort of haven't had that much capital constraints just because of how much investment is sort of pouring into the category. But I'm, you know, sort of broadly curious how you and the team processed it.

• 2:38:53Speaker 06

  Yeah, on the deep-seek side, you know, what people are thinking is that you don't need as big of AI clusters to build a frontier quality model. And they had some innovations in how they train the model, and some people suspect that a lot of that came from using existing LLMs to build the new model. And that's not novel. Think about how we design computer chips, like the CPU today was designed using the previous CPU, and you're stacking up this ladder. That's how exponentials work. So to me, it's like, yes, obviously, that would, that would happen. I don't think it's really slowed things down. And I think that reasoning models are going to require an enormous amount of computation, and they require lots of links, like the kinds of photonic links that we build, so that you can take these models, if you ever tried deep research, it's like 12 minutes to get

• 2:39:37Speaker 06

  a result back. What if you could get it back in one minute? And what if the energy cost on communications was one-fifth?

• 2:39:45John Coogan?

  Yeah, can you talk about a few of the other paradigms for fighting with Moore's Law and improving the speed of these models and inference? I've, you know, there's etched, which is baking the transformer architecture down into silicon. There's, you know, if you look at the history of Bitcoin, they went from CPU to GPU to FPGA to ASIC.

• 2:40:07John Coogan?

  Are you excited about data interchange in a world where, you know, the latest and greatest DALL-E three or four model is baked down into silicon into an ASIC? Is that still valuable?

• 2:40:21Speaker 06

  Well, the past 30 years have been a million x improvement in operations per second for GPUs and for ASICs, a million x in 30 years. Interconnect is only approved by about 1,000x. Today, interconnect is the bottleneck and the next 1,000x in performance for AI training and AI inference will come from interconnect. And that's fundamentally what we innovate on. So that's the thing that we're excited about. I think if you look at ASICs, it's a spectrum. You start out with a GPU, which is relatively general purpose. And then you go to an ASIC that's like, okay, I'm going to target AI training or AI inference. When you talk about etched, that's saying like, let's go even further, all the way to the bottom. I'm going to bake one model into this thing. And of course, you should be able to get efficiency gains that way.

• 2:41:05Speaker 06

  But these are architectural tricks. You could have built that computer 30 years ago if you wanted to. So it's a one-off sort of hit. What you really need are new scaling laws. And at LightMatter, we're focused on the fundamentals, like how do you make compute faster and more efficient? Are there new ways to do compute? How do you make the interconnect faster and more efficient? We need new scaling laws.

• 2:41:26John Coogan?

  Got it. I don't know if you've been following George Hots's journey with AMD, but some of the Foundation Model Labs and the folks who are working on these big AI models have been kind of banging the table, saying like, the cost per flop should be better with these other chip manufacturers. And yet I'm locked into Nvidia's ecosystem effectively because of bugs and just go fix the bugs. Do you have any pushback that you have to overcome when you're pitching a, somebody who's building a big cluster to say, hey, slotting us in is not going to create any extra overhead on your software engineering team?

• 2:42:06Speaker 06

  Yeah, that's, you know, that's one of the exciting things. We're not building processors. We're building the interconnects that link them together. It requires no change to any software and thank God for that.

• 2:42:15John Coogan?

  That's amazing.

• 2:42:16Speaker 06

  There's, there's no lift.

• 2:42:18John Coogan?

  Yeah.

• 2:42:18Speaker 06

  And the TAM for this thing is absolutely massive. 300 billion a year spend on AI hardware.

• 2:42:23John Coogan?

  Yeah.

• 2:42:23Speaker 06

  About 30%, 25 to 30 is networking and that's where we play. So it's an enormous market that requires no software change. You can run CUDA, whatever you want. It's all fine.

• 2:42:34John Coogan?

  So what are the major hurdles or like next milestones for you in terms of scaling up? Do we need new machines? Do we need new machines that make the machines? Is it just, are you, are you demand constrained, supply constrained? How are you thinking about the next roadblocks in the business?

• 2:42:49Speaker 06

  So I would say that the, the ramps are happening now in terms of volumes. So this technology, silicon photonics attached to GPUs, attached to switches. It's happening now. You're going to see a rollout in 26, 27. Some of these big data centers are going to be using it. And the trick will be, can we make sure that the supply chain can handle it if everybody comes online at the same time? Right now, I don't think that that's possible, but I think you could handle at least half of the world demand. There's about 14 million GPUs or XPU's that are shipping per year. Think you could get at least half of that. And it's not too hard to imagine building out the capacity to get the rest of the way. But the tech's been ready for prime time, you know, for a couple of years now with us. And it's been an eight-year journey.

• 2:43:34Speaker 06

  So it's not exactly overnight. We've been working on, you know, all the problems on every front for quite a while.

• 2:43:39John Coogan?

  Well, we're still going to call you an overnight success when you go public and finally, you know, deliver some massive quarter. We're going to say, oh yeah, it just happened all of a sudden because we love, we love overnight successes.

• 2:43:50Jordi Hays?

  How skeptical are you when you see new seed stage, anything on the, the hardware side of AI? People love to come out and sort of make these big promises. And then some companies actually can manage to get public just purely on big promises. How, yeah, how like?

• 2:44:09Jordi Hays?

  Do you think we need more founders coming in and starting to build at the hardware level or is it just so hard that, you know, focus on the wrappers and, you know?

• 2:44:17John Coogan?

  Do we need to start an activist short hedge fund? Because he seems like he knows the science here and could probably make some good calls, but I'm sure he's too nice to do any of that.

• 2:44:27Speaker 06

  Yeah, so I would say that the pitch early on, so we started in 2017, that was the AI accelerator boom. You think about Graphcore, Samba Nova, like all of these companies, Cerebras, all coming out. Largely, that's been a really tough slog. Like, it hasn't really worked out. I wish those guys the best.

• 2:44:44John Coogan?

  Yeah.

• 2:44:44Speaker 06

  You know, to be frank here, I wish them the best.

• 2:44:46John Coogan?

  Of course.

• 2:44:47Speaker 06

  But it's hard. The software moat around Nvidia, the adoption, the models are designed to fit on Nvidia GPUs.

• 2:44:54John Coogan?

  Yeah.

• 2:44:55Speaker 06

  Like, that is the moat. Like, everything is architected for Nvidia. And so, good luck bringing in something else. So, the new pitch, the new, like, pitch for these guys is, everyone did this wrong. I know what they did wrong. If you just do this, it's going to be fine. But my fundamental issue with it is you're all using TSMC in the exact same node with the same packaging technology. You can't tell me you're going to have some breakthrough. It's the exact same tech.

• 2:45:20John Coogan?

  That's fascinating. Well, good time to be in the compliments to Nvidia, not in the substitutes business.

• 2:45:26Speaker 06

  Love it.

• 2:45:27John Coogan?

  I like your strategy. This was a fantastic conversation. I, honestly, I didn't know about the business last week, but I'm super excited we got to talk to you and we'd love to have you back. This was fantastic. Thank you so much.

• 2:45:38Speaker 06

  Awesome. Yeah, happy to be on and thank you, guys.

• 2:45:40Jordi Hays?

  Yeah, congrats on all the progress.

• 2:45:41John Coogan?

  And congratulations, and we'll talk to you soon.

• 2:45:43Jordi Hays?

  Cheers.

• 2:45:44Speaker 06

  See ya.

• 2:45:46John Coogan?

  Switching gears, we're going over to-

• 2:45:48Jordi Hays?

  Eight-year overnight success.

• 2:45:49John Coogan?

  An eight-year overnight success, an absolute dog. We gotta, we gotta hit the size gong again for all the big numbers we heard from that. Didn't understand most of them, but liked his attitude.

• 2:46:01John Coogan?

  I love the size gong. Well, we got Rome Mortgage coming in the Temple of Technology in just a few minutes. Fascinating business. Heard about this and the pitch made so much sense. You're locked in to a 2%, a 3% mortgage fixed. You want to move, you feel chained to that specific house forever. That shouldn't be the way it is. You can move and, and, and, kind of keep your rate or sell your, sell your mortgage. But I want to hear it from the founder, so let's bring him in. How you doing?

• 2:46:29Speaker 07

  Hey John and Jordy, great to meet you guys.

• 2:46:32Jordi Hays?

  Great to meet you.

• 2:46:32Speaker 07

  By the way, if you're wondering, I say my name like Bronk. It's like ironic without the I.

• 2:46:37John Coogan?

  Ronic, okay, great. Well, thanks so much. Would you mind, I tried to give the pitch, I probably botched it. Would you mind giving me the pitch for Rome, just from the horse's mouth?

• 2:46:47Speaker 07

  Yeah, it's basically you can buy a home with a 2% rate. You know, the basic problem we're solving is that today, there is millions of sellers who are locked up at home because they have this 2% or 3% rate. They don't feel like there is a value or ability to be able to move. And 75 million families in the US cannot afford a purchase because of how high rates are. So we help buyers wind back the clock and purchase the home with the seller's mortgage included.

• 2:47:10John Coogan?

  That's amazing. Is this a regulatory innovation or a technological innovation? Why didn't this exist a decade ago? Or is it just a function of we didn't need it when rates were low?

• 2:47:23Speaker 07

  Yeah, so actually, you know, these were very popular in 1980, 81, when mortgage rates went from 2% to 15% to 17%. And at that time, all mortgages were assumable, actually.

• 2:47:34John Coogan?

  Oh, interesting.

• 2:47:34Speaker 07

  And so, you know, for other reasons, because of the savings and loan crisis, we ended up regulating it such that all the other homes had to have their loan paid off.

• 2:47:42John Coogan?

  Sure.

• 2:47:43Speaker 07

  When the home was sold, so we could avoid, you know, everyone just purchasing the home with seller's mortgage. But what remained were these FHA and VA loans, so the government-backed loans. And there were 1.5 trillion of them, basically, if you think back to low rate years of 2020 and 21, when everybody was getting a 2% or 3% mortgage, that remained assumable. But the problem was, nobody knew how to find them, because no seller knows what type of loan they have. And if they know what type of loan they have, they don't think there's a marketing advantage to it. And even if, you know, by the grace of God, you could find one of these loans, it was impossible to transact on them, because the banks made less money on it. So we thought we could build a platform that basically vertically integrated all the problems within that, you know, purchase process, and give it to consumers as a simple tagline.

• 2:48:26Speaker 07

  Buy a home with a 2% rate, come to Rome, and you know, you could find all of the homes that are relevant.

• 2:48:30John Coogan?

  Yep.

• 2:48:32Jordi Hays?

  Yeah, so break down, I guess, what, what?

• 2:48:36Jordi Hays?

  Like the obvious thing is just like for Rome to be, you know, truly, you know, widely just incredible, right? You just need scale, right? You need options, right? When people go and they're looking at a specific, some people want to go down and, you know, I have friends that want to move to where I live and like, they're trying to buy one of like 160 homes and like 90% of them aren't on the market, maybe some are for rent and some are for sale. So how do you think about just getting, getting, it feels like it's a supply problem in terms of just getting the supply on and then, once you have the supply, then the demand is just obviously there.

• 2:49:16Speaker 07

  Yeah. So we actually did something pretty scrappy, you know, I think had we waited for every seller to come on board, it's like any other marketplace issue. If you wait for all of the supply to come on board and opt in, then try to aggregate all the demand, it's going to take like five years, you know, by that point, consumers have lost interest. So what we did is we actually, in a pretty novel way, found every home in America and then every mortgage record in America and cross pollinated it. So we just loaded up all the supply on the site.

• 2:49:40Jordi Hays?

  Technology. I love it.

• 2:49:43Speaker 07

  Yeah, I'm on board. So you solve the supply side because you can uniquely show all of those homes. And then you just hammer demand and you're basically like, hey, do you feel priced out? There's nothing wrong with that. All of us feel like we can't afford to purchase a home today. And there's a better way you can actually afford to do it and it's credible and legitimate and trustworthy. And in cases where, you know, for instance, like the banks wanted to drag their feet on closing some of these transactions. So, you know, we're like, let's just pay for it. Like, let's say that if it takes longer than 45 days to close, we'll pay for the seller's mortgage until it closes. So it's kind of a combination of using technology to find all of the homes that are relevant, taking advantage of some of the partnership stuff and getting some of the mortgage lenders to come on board and see that there's value in this. And then also just like really

• 2:50:26Speaker 07

  pushing on the experience, you know, like I tell the team every day, like if somebody doesn't want to close one of these, I will personally call and we will make sure that this gets closed, you know, it's like we'll just ask.

• 2:50:38Jordi Hays?

  Do people ever realize that, that they have like an assumable mortgage and then try to sell their house for more? Cause they're like, look, your carrying, your carrying cost is going to be a lot lower. You should be able to pay more, right? I know John has a very low, low mortgage rate and I was like, he was like, you know, if he ever moves, he could be like. Well, yeah, pay me more because your carrying costs is going to be lower.

• 2:51:02John Coogan?

  Yeah. Where does the value actually transfer accrue?

• 2:51:05Speaker 07

  So basically, an independent group of economists recently studied Rome and it's always fun, you know, when you like start a company, you're like, okay, we have like these set of ideas on like what the seller is going to get, what the buyer is going to get and what's going to happen. Uh, but like independently, a group of people who'd never even spoken to me studied Rome and what they found was sellers get 5% more for their home sale when they sell their home with their low rate mortgage included. Buyers $700 a month and that if this option was widespread, it would remediate basically the lock-in effect you see today. And one of the reasons I got really excited about starting Rome was that I was at Open Door before this, which is how I had a chance to work with Eric and Keith. And I just polled 50,000 homeowners and asked them, what's the interest rate on your mortgage and what's your preference share for sign of Open Door?

• 2:51:47Speaker 07

  And like 90% of people who had a 7% mortgage were willing to do it, but if you had a 2% mortgage, you would only do it like 5% of the time. Wow. So I intuited there was like a large chasm, both emotional and functional, that they wouldn't be willing to cross, but somebody could give that optionality to them.

• 2:52:01John Coogan?

  That's cool. Can you take us through the news today? What are you announcing? How to come together? Give us the story.

• 2:52:07Speaker 07

  Yeah. So, uh, today we announced that Keith and Kosta led an 11.5 million dollar round into Rome with Founders Fund. We actually only had two investors. Um, the whole process happened in like a week, so it was really fast, but we're thrilled to continue working with, uh, Founders Fund and Kosta. You know, Founders Fund led the pre-seed and the seed round and it's been great to have a chance to work with Keith and all three, uh, investments that we've done. So pre-seed, seed and series A. Keith led all three rounds and then he joined the board alongside Eric, who is the founder of Open Door in series A.

• 2:52:38John Coogan?

  And in terms of the use of those funds, I imagine it's almost entirely R and D. You're not putting up any capital for these mortgages or buying things. There's no, it's a very asset light business, right?

• 2:52:51Speaker 07

  Exactly. So we're not taking any capital risk. You know, I still hold all my Open Door shares, R I P and, uh, you know, saw some of the dynamics there, but, uh, basically we help people without putting balance sheet risk on. We're like connecting all of the layers through the stack. So, uh, yeah, no balance sheet risk in the business.

• 2:53:08John Coogan?

  That's great. Uh, what, oh, sorry. Yeah. Go.

• 2:53:10Jordi Hays?

  Do you just get frustrated that, you know, there's billions of people that are, you know, looking at Zillow all day long and you're just like, Like, I feel like the big problem in terms of scaling Rome is just like making people aware of it now. Like, do you walk down the street and yell at people and just say like, "By the way, have you heard about Rome? Like, you can get a 3% mortgage." Like, if I were you, I'd just be screaming it like on the street like a crazy person because it would probably be pretty effective, uh, marketing. Uh, but I'm curious, like, what do the next two years look like? This almost feels like, you know, uh, you know, with the Series A, it would be not super practical to spend it entirely on a Super Bowl ad. But this almost feels like the kind of business that you could be doing this just sort of like mass, you know,

• 2:53:55Jordi Hays?

  at-scale marketing and, and, and find results with that.

• 2:53:58Speaker 07

  Yeah, exactly. I mean, I, you know, I like walk into a bar, the first thing I ask people is like, "Do you want to own a home?" And then, "Do you feel like you can afford a home?" And like, 9 of 10 people want to be able to own a home, but like, 1 of 10 people feel like they can't. So that's immediately like the opportunity to tell everyone about is like, "We can close that gap." And then we think about getting distribution in three ways, basically. So we tell sellers and listing agents who like actually have that inventory with an assumed loan, that instead of advertising like everyone else, "You got a cozy two-bed, two-bath garage in Decatur, Georgia", you need to lead with the fact that your home is differentiated compared to everyone else. Because it comes with a 2% rate. That's why somebody's gonna buy it, you know? It's because it's not a rate that they can afford. And for buyers, it's, as you mentioned, more mass market. Just getting the word out there through media as well as through some, now we're trying a few paid channels.

• 2:54:43Speaker 07

  Uh, but telling people that they can actually afford a home with a 2% rate. And then, we're actually getting, uh, like, some other partners, you know, like mortgage servicers and agents to distribute their product for us to their clients. Because they see there's value in it now, too. So, so a lot of the distribution, you know, we had found signs of early on, but now we're diversifying that and bringing out really what's gonna be super repeatable as we look to get like, you know, massive scale.

• 2:55:07John Coogan?

  Sorry, I'm not distracted. I'm just shopping on Rome right now. There's some absolutely banger mortgages available here. I'm seeing, uh, some potential future.

• 2:55:17Jordi Hays?

  Yeah, yeah, yeah.

• 2:55:18John Coogan?

  I'm like, wait a minute.

• 2:55:19Jordi Hays?

  It's way, it's honestly, I think people, what you need to tap into is people's addictive behavior around Zillow.

• 2:55:27John Coogan?

  Oh, yeah, totally.

• 2:55:28Jordi Hays?

  And you just need to convert that to, because the dopamine of seeing like, I see a house that's, uh, it's, it's.

• 2:55:34John Coogan?

  Seeing a number that's like, oh, two grand a month or three grand a month. Like, it's like, oh, that's like completely, like the stinger shot goes away.

• 2:55:40Jordi Hays?

  So I'm seeing a house that is almost three times as expensive as my house within a half mile, but the mortgage is only like 60% more.

• 2:55:51John Coogan?

  Yeah.

• 2:55:52Jordi Hays?

  And it's like, that is like, the dopamine rush for a user to be that sort of like, basically, take the magic of like, look home shopping, and then you just make everything like, you know, whatever, whatever the average is, 30% cheaper from a carrying cost standpoint, because that's what ultimately drives affordability for most people.

• 2:56:14Speaker 07

  That's why we have this right through visualization, everything on Rome, because, you know, we didn't even need to make a map if Zillow would have done this. If you go to Zillow and you search for like, I don't know, like a city like Houston, and you go in keyword search, because that's how you'd have to find it, and you just look for sellers you're advertising a sum loan, you'll find like, literally two results. And then if you come to Rome and search in Houston, you'll find 2,000 results. And it's because sellers don't know they have it. And Zillow is basically just feeding what the MLS gives them, which is like, you know, an uninformed perspective into it. And, uh, you know, we raised the capital too. We had some investors ask like, oh, what happens if Zillow does it? I'd be like, great, you know, like now everyone knows, put a button on there that says buy this home with Rome and cut your monthly payment in half. So it becomes like a firm for home buying, where it's a button on every listing card

• 2:56:57Speaker 07

  in the US to help you cut your monthly payments in half.

• 2:57:00John Coogan?

  Yeah, that's very cool. Uh, I mean, speaking of customer acquisition, like what is working and what do you think the next year of customer acquisition will look like?

• 2:57:07Speaker 07

  Yeah, so right now, what's really worked super well, you know, pre-seed, seed, series A, like, when we did the pre-seed, you know, and we're like, okay, like, is this a real problem? Like, let's announce it. Uh, it was like the front page of the Wall Street Journal, you know, which like blew me away. And, uh, that's not because of me or anything that I've done, like, nobody even knows who I am. It's mostly about like, the fact that it resonates. So many people that they feel like they can't afford to buy a home. And so we saw that continue for like the last eighteen months, basically that there's just, you know, quarter million buyers that come to the site and we didn't pay for any of them. And they're just like looking to be able to buy a home. Now it's like, okay, how do you really deepen that penetration and get to work within each of the local markets?

• 2:57:47Speaker 07

  And so now we're finding ways to work with agents, which like for listing agents, hey, let's help you win more sellers. Because you can actually show them why you can get them to move, kind of relating to that study I did at Open Door. And for buyer's agents, it's like, hey, you got like ten thousand contacts in your CRM that basically said, no, I'm not interested because insurance is high. Taxes are high, prices are high, rates are high. Go and reengage all of them. Be like, hey, if I got you in a home with a two percent rate, you might find that you don't get qualified for three hundred twenty five K, but now you get qualified for four hundred seventy five K. So maybe that makes you interested in buying a home now. So.

• 2:58:20Jordi Hays?

  Have you seen, have you seen investors using Rome to buy homes with the intention of just leasing them out? Cause like I imagine, you know, I'm just like scanning the marketplace around LA. There's rental units that I'm, you know, or I'm, I'm seeing like three bedrooms that are whatever for like four grand. And I'm like, I know where that is. It's probably like a seven, eight K a month rental. And if you're an investor looking at this, I don't do anything in real estate. I prefer highly illiquid private shares of my friends' companies. But there are a lot of opportunity, I imagine, just like in, in kind of like, you know, potentially alpha on, on Rome.

• 2:58:57Speaker 07

  Yeah, totally. So we actually launched a page just for that. I think if you go to the homepage, there's a tab called investors. So it shows you all of the homes that have an underlying BA loan. Those don't require primary residency. And so any investor can purchase that. You can put in the cash and you can take over that loan and, you know, go on to lease it out. So facilitate those all the time. And most people don't even know that's possible. You know, there's so much misinformation about this stuff. Cause if you think about it, nobody's really incentivized for it to succeed. Most people are incentivized to originate new mortgages at seven percent, not like recycle the cash to purchase your friend's mortgage at two percent.

• 2:59:31John Coogan?

  Yeah, that makes a lot of sense.

• 2:59:32Jordi Hays?

  That makes a ton of sense. It's very exciting.

• 2:59:36John Coogan?

  Well, now we know you, we know how to pronounce your name. And yeah, we really appreciate you stopping by. This was fantastic. And congratulations on the Series A. Congratulations on success.

• 2:59:44Jordi Hays?

  Stacked lineup, too, on the round.

• 2:59:46John Coogan?

  Size going for you. Enjoy it.

• 2:59:48Speaker 07

  I appreciate that, guys. And then if there's anyone listening who is interested, I think of it as like the Manhattan Project for housing affordability. And we're actively hiring. This is going to be the most important, and I think only solution to affordability in the next five years.

• 3:00:00John Coogan?

  Fantastic.

• 3:00:01Speaker 07

  The politicians talk about like, oh, increase permits or something like that. That's just not going to take impact till like 2035.

• 3:00:06John Coogan?

  Sure.

• 3:00:07Speaker 07

  If you want to contribute to making it more affordable today, email me. I respond to every single email. I'm [email protected], R-A-U-N-A-Q, upwithroam.com.

• 3:00:15Jordi Hays?

  Amazing.

• 3:00:16John Coogan?

  Well, thanks for coming on.

• 3:00:17Jordi Hays?

  Fantastic domain, too. Hit the, yeah, yeah. Oh, with Rome, sorry. Hopefully you're getting Rome.com soon.

• 3:00:24John Coogan?

  Soon.

• 3:00:25Jordi Hays?

  Soon.

• 3:00:25John Coogan?

  That's Series B money.

• 3:00:26Jordi Hays?

  Yeah.

• 3:00:27John Coogan?

  We will have you back as soon as the Series B drops. And anytime there's housing news, we'd love to chat with you about it. But have a great rest of your day. Thanks so much for stopping by.

• 3:00:35Jordi Hays?

  Great to meet.

• 3:00:36John Coogan?

  We'll talk to you soon.

• 3:00:36Jordi Hays?

  Yeah.

• 3:00:37John Coogan?

  Bye.

• 3:00:39John Coogan?

  Well, you know, if you're looking for a new house and you're roaming around, you're trying to see if you want to live in a community, go on Wander. Find your happy place. Test it out. Rent a luxury home and then get on Rome and buy a house next door. Book a Wander with inspiring views, hotel-grade amenities, dreamy beds, top-tier cleaning and 24/7

• 3:00:54Jordi Hays?

  And what do we say about Wander?

• 3:00:55John Coogan?

  We say find your happy place.

• 3:00:58Jordi Hays?

  Find your happy place.

• 3:01:00John Coogan?

  And we also

• 3:01:00Jordi Hays?

  We're getting better every day at that.

• 3:01:01John Coogan?

  Yeah, we are. We're getting good. Well, let's go through some news and some timeline. This is an exciting story. So the co-founder of Robinhood has started a company called Etherflux, Etherflux. And Chad Byers was posting about it. Baiju co-founded Robinhood and helped scale it to a $40 billion company as today. He's back with a new company to help deliver energy from space. Excited to be a small angel to work on space lasers. So they're putting Solar panels in space, as I understand it, I had, I got like a pizza with him like a long time ago. I think he'll be able to come on the show in a few days. And, and I think they're putting solar panels in space and then beaming the energy down with lasers

• 3:01:42John Coogan?

  to a receptacle that that takes the energy. And it's all very sci fi and futuristic, but I'm excited to hear how he built out that model because that feels like something that lives and dies by the Excel spreadsheet of like, what are launch costs? What do the costs of the solar panels cost?

• 3:01:56Jordi Hays?

  Totally.

• 3:01:56John Coogan?

  And if you play it out, there's a bunch of controversial things about like, are we going to blackout the sun? Like, will we be able to see the sky? There's, there's space trash, space junk questions. There's also a ton of hard tech engineering stuff. We've talked to Deli and a bunch about how hard it is to actually manufacture something, get in, get it in orbit quickly. And so lots of challenges, but I love that he made a bunch of money in finance and then is taking it into hard tech. This is what we saw with Elon. This is what we saw with a lot of folks who had a first business.

• 3:02:23Jordi Hays?

  This is what everybody says. They say, I'm gonna, I'm gonna, I'm gonna get the bag and then I'm gonna change the world.

• 3:02:27John Coogan?

  And he's doing it.

• 3:02:27Jordi Hays?

  But few actually.

• 3:02:28John Coogan?

  And he's doing it. So, so, yeah, happy to support. And I'm sure we're going to see a lot more from his company in the near future.

• 3:02:34Jordi Hays?

  I wanted to cover the Circle IPO filing. They filed their S1 yesterday. We have a post from Omar, who I believe is over at Dragonfly. He says, nothing to love in the Circle IPO filing and no idea how it prices at $5 billion. Gross margins getting crushed with distribution costs. For those that don't know, Circle pays Coinbase, as an example, a lot to effectively distribute the stable coin. Omar says, core US market being deregulated and banks and financial institutions about to crash the private party. Spending over 250 year in compensation, another 140 million in GNA. Core income driver, which is rates already topped and heading lower, 90% chance of two cuts this year. And it

• 3:03:19Jordi Hays?

  were, they're pricing it at 32 times 24 earnings for a business that just lost its mini monopoly.

• 3:03:27Jordi Hays?

  And facing several headwinds and it's expensive when growth is structurally challenged. TLDR feels like a hail mary for some liquidity before the squad rolls in.

• 3:03:38John Coogan?

  Who is the squad in this case?

• 3:03:39Jordi Hays?

  Oh, it's just all the banks and other financial institutions that will launch their own equally stable coins.

• 3:03:44John Coogan?

  Sure, sure. Yeah, that makes sense. I heard a take from a crypto investor I was texting with. She said, you know, there's no real crazy take here, but it's the first stable coin IPO, which is just a cool way for public markets to have a clearer way to be long stable coins generally. And so that's a product that really hasn't existed. Prior, you had to go into private markets and invest in something like Bridge, which Sequoia did, or you had to go on chain and do all this more manual stuff and get some like leverage and do all these crazy DeFi things. And now you'll just be able to buy it on public.com.

• 3:04:18Jordi Hays?

  So if you are invested in Circle and waiting for the IPO and you're stressed out, what kind of bed should you sleep on?

• 3:04:25John Coogan?

  I need to sleep for sure. No doubt.

• 3:04:27Jordi Hays?

  Absolutely.

• 3:04:27John Coogan?

  Go to eatsleep.com/tbpn.

• 3:04:29Jordi Hays?

  How'd you do last night?

• 3:04:31John Coogan?

  I think I did poorly because I woke up so early because of the rippling deal spy news. We had to get up early to talk about that story, dig in. Let me see how I did. I imagine I'm a little low on total time. I was right. I got a 79. I was asleep for six hours and 31 minutes. What'd you do?

• 3:04:49Jordi Hays?

  We were, we were scooping in our defense.

• 3:04:52John Coogan?

  What'd you do?

• 3:04:53Jordi Hays?

  I did a 97.

• 3:04:54John Coogan?

  97. That's great.

• 3:04:56Jordi Hays?

  That pales in comparison to a friend of mine and listener of the show Bailey, Bailey Barrow, put up 100 last night.

• 3:05:03John Coogan?

  Ooh, congratulations to Bailey.

• 3:05:05Jordi Hays?

  Congratulations to Bailey.

• 3:05:08John Coogan?

  Give him a little gong for that.

• 3:05:09Jordi Hays?

  A little gong moment. But go to eatsleep.com/tbpn and get yourself a pod. You will not regret it and your body will thank you.

• 3:05:19John Coogan?

  Uh, who else should we talk about? Oh, uh, big news from Patrick O'Shaughnessy. Uh, he's, uh, launching issue number two of Colossus Review. We, we did a whole deep dive on the first edition of Colossus Review. It was a fantastic, uh, interview and, and, uh, really a lot of content in that magazine. Not, not light on content at all, uh, great layout. It will be free for everyone online, the, the print is magic. You gotta get the print edition.

• 3:05:43Jordi Hays?

  That's a good strategy, by the way.

• 3:05:44John Coogan?

  And I feel like one of my friends had, um, his parents had a subscription to natural, National Geographic since like the eighties or something. And so he has a collection of every single magazine of National Geographic. And so when you go over to his house, he'll kind of say, oh, like what month and year were you born in? You'll pull out the National Geographic from that year and you can kind of see what's going on in the world at that time. It's kind of a fun, like, party trick. And it's not every day that you get a chance to actually say, okay, I think this will be, I think Colossus Review will be around for a long time. If I order the first one and then stay subscribed forever, I could wind up with a library full of these things and actually have a complete collection. Uh, and I'm not saying that that's going to be like wildly valuable. It'll just be a cool artifact to put in your library one day.

• 3:06:30Jordi Hays?

  And a way to understand history from the lens of Patrick himself. Uh, I'm, I'm just excited this beca- about this, uh,

• 3:06:38John Coogan?

  Because of the topic.

• 3:06:39Jordi Hays?

  Yeah, because of the topic. Green Oaks is, is one of those firms that is intentionally

• 3:06:43John Coogan?

  Goaded.

• 3:06:44Jordi Hays?

  Under the, you know, there, there are many ways under the radar. You don't see him on the timeline a lot, but then every time there's a, you know, $10 billion plus exit, it's like they're, they're way in there.

• 3:06:53John Coogan?

  Snuck in.

• 3:06:55Jordi Hays?

  Very excited.

• 3:06:56John Coogan?

  Yeah, so they're covering Neil Metta and Green Oaks. It's written by Jeremy Stern and you really won't want to miss it. So check back tomorrow, uh, to get a copy of Colossus Review.

• 3:07:06Jordi Hays?

  Can't wait.

• 3:07:07John Coogan?

  I mean, I think Colossus Review, I'm, I'm, I'm super bullish, super long. I wish, uh, you know, Patrick obviously posts about it and he talks about it on his show, but I think he should buy some billboards. And I think you should go to adquick.com and I think you should make, you know,

• 3:07:19Jordi Hays?

  Put Neil, put Neil on the 101.

• 3:07:21John Coogan?

  Yes, 100%.

• 3:07:23Jordi Hays?

  I'm sure he would love that.

• 3:07:24John Coogan?

  I'm sure, yeah, I'm sure Green Oaks would love that. Uh, I mean, AdQuick would allow Patrick to tackle out of home advertising in an easy and measurable way.

• 3:07:34Jordi Hays?

  Yeah.

• 3:07:34John Coogan?

  You know, Patrick and Colossus, they'd be able to say goodbye to the headaches of out of home advertising because only AdQuick combines technology, out of home expertise and data to enable efficient, seamless ad buy across COVID. So it's like, it's kind of a no brainer for Patrick.

• 3:07:46Jordi Hays?

  It's a no brainer.

• 3:07:47John Coogan?

  Let them know. Should we go over to this this fun story that people were generating AI-generated receipts, trying to fool the expense management softwares? Ramp's on the case. They solved it

• 3:08:00Jordi Hays?

  Not today. Not today.

• 3:08:02John Coogan?

  Within 24 hours, Eric Lyman posts, "Spec: Designed and widely shipped to production in under 24 hours by Will Yee and the applied AI team at Ramp." And he shares the Michael Jordan meme of, "I took that personally." ChatGPT's new image generator is really good at faking receipts. Well, you're gonna have to try harder.

• 3:08:20Jordi Hays?

  Good luck.

• 3:08:21John Coogan?

  To sneak it by your Ramp expense policy because Ramp's on the case.

• 3:08:25Jordi Hays?

  What's the scenario where somebody's generating a fake receipt? They didn't catch a picture of the receipt?

• 3:08:33John Coogan?

  No, no, no. I think it would be you, you, you know, your boss says, "Hey, yes, you can go and take people out, but you can't get a bunch of drinks." And so you go and you say, "Yeah, we were at the, we went to this restaurant and we bought salads and we weren't buying liquor," basically, something like that.

• 3:08:48Jordi Hays?

  That is wrong.

• 3:08:48John Coogan?

  You know, you could change that.

• 3:08:49Jordi Hays?

  No power lunches.

• 3:08:50John Coogan?

  Because you're not going to be able to change the name of the swipe on the credit card, but you could fake the items that you purchased. So you could say, "Yeah, I went to Best Buy, boss. I got a new office chair, but really you got an iPad and you like sold it or something like that." So like that type of fraud, I think is what, not to give you any ideas, but that's the type of fraud you want to avoid. And that's the reason why why Ramp like is whole built around like take a picture of your of your receipt. So you know actually what people are are buying on the corporate cards.

• 3:09:19Jordi Hays?

  Yep.

• 3:09:19John Coogan?

  Anyway, speaking of Ramp, go to ramp.com.

• 3:09:25John Coogan?

  Time is mine to say both.

• 3:09:26Jordi Hays?

  A lot of people say, "Oh, Wanders where you find your happy place." But when it comes to corporate cards, expense management and bill pay, Ramp is where I find my happy place every day of the week.

• 3:09:36John Coogan?

  Corporate cards, bill payments, accounting and a whole lot more all in one place. What else would be good to go to before we wrap it up? We got.

• 3:09:46Jordi Hays?

  I liked I liked to round it out Chris Backy's post on.

• 3:09:52Jordi Hays?

  Quote, he said, uh, the plan, you're James Bond, but it's at a global payroll company. And you only get 5,000 euros a month. And when you get caught, you'll lock yourself in the bathrooms and delete your LinkedIn account.

• 3:10:07John Coogan?

  And immediately confess.

• 3:10:08Jordi Hays?

  Phone with an axe and immediately confess and join the.

• 3:10:11John Coogan?

  It's a great summary.

• 3:10:12Jordi Hays?

  Join the, uh, you know, the enemy.

• 3:10:15John Coogan?

  It's such a bizarre story. Uh, it's really entertaining. It's, uh, the truth is stranger than fiction. You can't, really can't write this.

• 3:10:22Jordi Hays?

  Um, it is.

• 3:10:23John Coogan?

  The new, the new season of Silicon Valley. Everyone says we did it.

• 3:10:27Jordi Hays?

  What a wild day.

• 3:10:28John Coogan?

  But yeah.

• 3:10:28Jordi Hays?

  Um.

• 3:10:30John Coogan?

  And yeah, thank you to all the sponsors. Uh, we show's been really fun. Go to public.com investing for those who take it seriously. And check out Polly Market, Adquick, Eight Sleep, Wander, Bezel, Numeral, all of our sponsors.

• 3:10:42Jordi Hays?

  Do it all.

• 3:10:43John Coogan?

  To them. Do it all in.

• 3:10:45Jordi Hays?

  Do it all. We gotta get a new, we gotta get a new. So I was looking on Polly Market. There's a lot of stuff on who will acquire TikTok. Apparently AppLovin and Amazon emerge as TikTok bidders ahead of the deadline. So right now, uh, perplexity, Larry Ellison, Oracle, et cetera. I don't know if App, AppLovin, I don't think is even listed or, or people. Yeah, we're not seeing it up there. So we're going to get this update or we're going to get this market updated. Uh, because AppLovin is in the race. And last I checked, I'm going to look on public. Uh, AppLovin actually had the market cap to potentially absorb something like this.

• 3:11:29Jordi Hays?

  And they have, you know, the, uh.

• 3:11:33John Coogan?

  Also, I mean, just the last thing we should cover today because it is news today. Uh, the tariff announcement did happen. Uh, Trump gave the speech at the Rose Garden for Liberation Day. And the result is that, uh, the U S will impose 10% tariffs on all imports and even higher rates for some nations. The president opened his remarks Wednesday by saying new tariff policies would make America wealthy again. He said he would be announcing reciprocal tariffs on countries across the world. It can't get any simpler than that. You tariff us, we tariff you. Later, Trump held up a chart with a list of countries saying it was too windy to put on an easel, which is kind of funny. There's a funny image going around. He began to read off the list with tariffs of the countries imposed on the United States and then the

• 3:12:13John Coogan?

  tariff he said the US would levy in response. He said that the US was going to be charging a discounted reciprocal tariff because the US is kind. For China, the US is levying a 34% tariff. Then for Europe, we're going to charge them 20%. Japan, 24%.

• 3:12:30Jordi Hays?

  This is crazy. 31% tariff on Switzerland, meaning that the price of your existing watches just went up.

• 3:12:39John Coogan?

  Oh, yeah. And in general, the market seems to like it. The Dow Jones is up half a percent. The S and P 500 is up 0.6 and the NASDAQ is up 0.8% today. And so not a not a bloodbath in the markets. People were expecting some stuff. They got some stuff. They got some, they met their expectations. And so things move forward. The march of capitalism marches on.

• 3:13:03Jordi Hays?

  We should have Joe on tomorrow.

• 3:13:04John Coogan?

  Sure.

• 3:13:05Jordi Hays?

  Be fun. I don't know if we have time.

• 3:13:08John Coogan?

  Oh, yeah.

• 3:13:08Jordi Hays?

  We've got a stack lineup tomorrow.

• 3:13:09John Coogan?

  Yeah, that'd be great.

• 3:13:10Jordi Hays?

  Joe Weisenthal. It'd be great. One of the top posters in the world. But, uh, wait, we got to give away, we got to, so let's give away the Dom tomorrow.

• 3:13:18John Coogan?

  Sure.

• 3:13:19Jordi Hays?

  I realize we didn't prep and pull all the new reviews and everything.

• 3:13:22John Coogan?

  Yeah, of course.

• 3:13:22Jordi Hays?

  But do the Dom giveaway.

• 3:13:23John Coogan?

  A little bit of an update. We are, we are giving instead of, instead of drinking a bottle of Dom Perignon.

• 3:13:28Jordi Hays?

  We are re-gifting Slow's bottle.

• 3:13:30John Coogan?

  We are re-gifting a bottle of Dom Perignon. And so leave us

• 3:13:32Jordi Hays?

  Thank you to Slow.

• 3:13:33John Coogan?

  a review on Apple Podcasts or Spotify. Send us a screenshot of your review and you will be entered to win this wonderful bottle of Dom Perignon. It is a 2015 vintage, if you care. But we think it all tastes pretty good.

• 3:13:47Jordi Hays?

  Everybody cares. Thank you, folks.

• 3:13:49John Coogan?

  Thanks for watching.

• 3:13:50Jordi Hays?

  Excited for tomorrow. Have a great rest of your Wednesday.

• 3:13:52John Coogan?

  Bye.