Trump's Tariffs, Market Crash, Zachary Perret, Scott Wu, Sam D'Amico, Peter Goldsborough, Nathan Mintz, Michael Laframboise, Fil Aronshtein, Chris Power, Brandon Tseng, Akhil Iyer

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

• 0:00John Coogan?

  You're watching TBPN. It is Thursday, April 3rd, 2025. We are live from the Temple of Technology, the Fortress of Finance, the Capital of Capital. This show starts now. We have a great show for you today. It's a terrible day in the market. Stocks have plunged. The dollar sinks after Trump's tariff blitz. The NASDAQ down 4%, S&P down 3%, Dow industrials plummets 1,300 points. Bad news, but we're going to take you through it. And it's a little bit of a Defense Day, a little bit of a manufacturing day. We're calling it America Day.

• 0:32Jordi Hays?

  That was the best word we could find for it.

• 0:36John Coogan?

  We got a bunch of people joining the show. We're going to kick it off with Chris Power over at Hadron. He has been beating the drum on American manufacturing. A lot of people thought he was crazy, thought it could never be done. Now he has a pretty sizable advantage. It's kind of crazy to watch. So excited to hear him talk about what the tariffs mean for his business, what they mean for other businesses, and break down how he's taking advantage of the new tariff regime. Then we got Delian and a ton of other defense investors.

• 1:04Jordi Hays?

  We got some absolute dogs, John.

• 1:05John Coogan?

  Yeah, we also have the CEO of Plaid's coming on, talking about the fundraiser that just brought drop today. And of course, Scott Wu from Cognition is coming back for his second TBPN appearance.

• 1:14Jordi Hays?

  This is a guest record for us, John. Do we have 10?

• 1:17John Coogan?

  I think we got 10. It's all in a hard day's work. JD Vance chimed in on the tariffs. He says, "We need change." He has a quote here. He went on Fox and Friends, says, "A lot of people have gotten rich from American companies moving overseas, but American workers have not gotten rich. And frankly, American companies have not gotten wealthy from increasing growth of foreign competitors manufacturing overseas." And so this is kind of the trade off. Like, I think we'll go through this again and again and again. But, you know, most economists would say that these tariffs are net harmful to humans or like the global economy. But of course, there are always winners and losers within these, whenever these rules.

• 2:00John Coogan?

  Like, you know, pencil out. And so, yes, Nike is getting hit really hard. They manufacture abroad. They sell to Americans. They're going to be hit particularly hard.

• 2:09Jordi Hays?

  Yep.

• 2:09John Coogan?

  But if you've been running a business that's making shoes in America, and the only benefit you had was just you'd throw the made in America logo on there and hope that people bought them. Well, today you have a serious economic advantage. And so you're probably pretty happy and you're a winner. And Trump and JD seem to be saying, you know, that's who we're speaking for. That's who we're representing with these. There's also this argument that over the long term, this will be better for America. Maybe this is even better for humanity as a whole. Uh, we're going to hear from various people, hear them out and see what they have to say. I think you and I were talking about this when we, we're working out this morning. Um, just that, you know, it's, it, I'm not entirely blackpilled on these.

• 2:51John Coogan?

  I'm also not entirely, we're in a golden age. A lot of the timeline seems to be much more split than we are, which is kind of odd. I mean, I feel like I, I felt.

• 3:01Jordi Hays?

  It's one of those things. Nothing is going to ever be as bad or as good as you think it is.

• 3:06John Coogan?

  Yes, but to, uh, on my point is like, I experienced the Studio Ghibli moment very much in tune with the timeline. Like the timeline was like, this is the greatest thing ever. And that's what I felt. I was like, this is the greatest thing ever. I'm having so much fun. I'm in tune with it.

• 3:20Jordi Hays?

  Yeah.

• 3:20John Coogan?

  And then, and then as the, as the mood shifted to like, what is the meaning of this slop? Is the, are there negative consequences? I was engaging with that too. And I was, and I was interested in those arguments. And I don't know if I agreed with all of them, but I was, I was here for it. And with the tariff stuff, uh, I feel a lot more split and, and a lot of the hot takes that I've seen, I haven't been like, oh, this is, this is my belief. Like this is now my take.

• 3:42Jordi Hays?

  It's one of those things. We're clearly running an experiment on the economy.

• 3:47John Coogan?

  Yep.

• 3:47Jordi Hays?

  And we haven't seen the results yet.

• 3:49John Coogan?

  Yep.

• 3:49Jordi Hays?

  So it's dramatic.

• 3:51John Coogan?

  Yep.

• 3:51Jordi Hays?

  It's thrilling. It can be scary.

• 3:53John Coogan?

  Yep.

• 3:54Jordi Hays?

  But we're gonna find out.

• 3:55John Coogan?

  It's the largest drop in the stock market in more than five years.

• 3:59Jordi Hays?

  Since March of 2020.

• 4:01John Coogan?

  Yeah, yeah, since COVID. And at the same time, I remember those drops and they were more significant and more and more scary and crazy, in my opinion, because there wasn't as much signaling going into them.

• 4:12Jordi Hays?

  Yeah.

• 4:12John Coogan?

  Like, this is very much a human decision that could be reversed, whereas COVID was, it felt like something that couldn't be just, oh, yeah, actually, we're, we're, we're changing course. And so the stock market should immediately go up. It wound up going up really quickly and bouncing back.

• 4:24Jordi Hays?

  Well, yeah, and the wild thing is, the market is, the S and P 500 is up 4.3% over the past year. So we're still.

• 4:32John Coogan?

  Over the past 12 months.

• 4:33Jordi Hays?

  Over the past 12 months.

• 4:33John Coogan?

  But it's down this year, right? This year's not been good so far.

• 4:36Jordi Hays?

  Sure.

• 4:37John Coogan?

  Because we had the Trump pump at the end of 2024.

• 4:38Jordi Hays?

  It's down 4% over the last six months.

• 4:40John Coogan?

  Sure.

• 4:41Jordi Hays?

  And 7% over the last month, but for the prior 12 months, it's up.

• 4:45John Coogan?

  But just this one move wiped 2.7 trillion in market cap off of the Dow Jones and, and the US market broadly. And I think that, you know, what JD is trying to say is like, yes, that, the 2.7 trillion was eviscerated and eliminated from the market caps of these companies, but we hope that more than 2.7 trillion is distributed in the forms of better and high payer, and more high paying jobs for Americans. It's an experiment. We'll see how it goes and we will hear everyone's takes.

• 5:17Jordi Hays?

  Interestingly, Nvidia was, is down almost 7% today, even though, even though some, well, semiconductors are excluded.

• 5:26John Coogan?

  Okay.

• 5:28Jordi Hays?

  So probably a smart exemption, but still Nvidia feeling the.

• 5:34John Coogan?

  Kind of second order ramifications where, you know, a company that does business abroad is going to be more conservative and they might buy less GPUs because they're, like, you can play all this out to, you know, a lot of, a lot of goods that are Chinese are bought on Meta, and so maybe Meta makes less money because there's people less, advertising less e-commerce products because e-commerce is hit so hard by this. And there's just a whole bunch of different knock on effects. So very complicated, but. Max Meyer had a good, the, what is this, the Norman Rockwell painting of the man standing up saying something contrarian. He says, putting 17 to 34% tariffs on high-quality industrial machinery from Japan, Germany, and Israel, Holland, etc. will hurt American

• 6:16John Coogan?

  reindustrialization and make it more difficult to operate factories and produce goods in the United States.

• 6:21Jordi Hays?

  Hard to argue with this.

• 6:22John Coogan?

  We gotta talk to Chris about this because he buys the Hormley, like CNC, the six-axis thing that they have like copy pasted 25 times in their massive facility. And I'm sure the prices of those machines are going to go up, but maybe there will be a carve-out at some point. Again, this was just one of those like, here's how we're thinking about it. A lot of it did go into effect very quickly, but all this stuff is always up for negotiation. It's the art of the deal, baby. This was a funny one from AF Post. So apparently Trump has levied a 10% tariff against the Herd and McDonald Islands, which are inhabited

• 7:03John Coogan?

  only by penguins. And so if you're a penguin in the McDonald Islands, good luck selling goods to America.

• 7:12Jordi Hays?

  Penguins, I mean the-

• 7:13John Coogan?

  Because it's going to be 10% more expensive.

• 7:14Jordi Hays?

  Traditional legacy media has taken a victory lap on this one. USA Today says Penguin Seals and Other Wildlife, only inhabitants of two islands, hit with Trump tariffs. NPR, Trump's tariffs are so far-reaching, they include several remote uninhabited islands.

• 7:29John Coogan?

  Yep. I'll come out and say it. I will say it.

• 7:32Jordi Hays?

  If you're Switzerland and you just got hit with 31% tariffs, maybe we'll see Rolex move some manufacturing out to the Herd McDonald Islands.

• 7:41John Coogan?

  Yeah. I mean, I think that it's a little bit edgy to say, but penguins have been free riding on American hard work for years and they got to pay their fair share. So if you're a penguin, get ready to pay some taxes. The external revenue service is coming for you. Anyway, very, very funny story. I liked Atlas Creatine Cycle. This is a good one. Get ready to learn how to put together iPhones, buddy.

• 8:08John Coogan?

  I love it.

• 8:08Jordi Hays?

  I can't wait. I can't wait. The thing is, if you can put them together, if I could know how to put this thing together, I could also know how to potentially take it apart.

• 8:17John Coogan?

  Yep.

• 8:18Jordi Hays?

  And then I could swap the battery out.

• 8:19John Coogan?

  So that's why they outsource manufacturing. They don't want.

• 8:21Jordi Hays?

  Yeah, they don't want you to replace your own battery.

• 8:23John Coogan?

  Yeah, I get it. That's a good, this is a good conspiracy theory.

• 8:26Jordi Hays?

  Yeah, so we go through some of Joe Weisenthal.

• 8:29John Coogan?

  Joe Weisenthal dropped a beautiful blog post in the iconic orange Bloomberg font because he, of course, is delivering his newsletter, not just through email, but also through the Bloomberg Terminal, as any self-respecting financial journalist should. We should really start syndicating on the Bloomberg Terminal. That would be the ideal. I don't know what it takes, but we got to make it happen. He says, "Once again, I'm just going to list random thoughts that are going through my head right now. I want to start with Nike, actually. At the time of this typing, the stock is down 14% pre-market. As far as I'm concerned, Nike is the perfect specimen of American capitalism. The profitable design work is mostly done in the US. The manufacturing is done in countries like Vietnam.

• 9:09John Coogan?

  And the whole brand exists as it does because the US is a global powerhouse for exporting culture like star athletes. It just makes perfect sense for the stock to get nuked like this, as both its basic business model and the American brand values get trashed. Other American apparel brands like Lululemon and Deckers are similarly getting clobbered this morning. Speaking of Nike and Vietnam, in his chart book today, Adam Tooze notes that 50% of Nike's products are made in Vietnam. And of course, the Vietnam shift, Ryan Peterson pointed this out, that a lot of companies were trying to be proactive about relocating from China. Also, manufacturing in China has gotten more expensive.

• 9:44Jordi Hays?

  That wasn't just tariff risk, that was geopolitical risk as well.

• 9:49John Coogan?

  And just, and just economic factors in China, like, like as China has.

• 9:54Jordi Hays?

  Got more skilled.

• 9:54John Coogan?

  Yeah, got more skilled, like it's more expensive to manufacture there. So.

• 9:57Jordi Hays?

  Yep.

• 9:58John Coogan?

  Stuff has moved. AirPods are made in Vietnam famously. And that there are half a million people in the country working for the, at, at, at least 155 factories that make Nike goods. Now we're slapping massive tariffs on them, but the question is, to what end? Do we think there are hundreds of thousands of people in the US eager to work in sneaker and t-shirt factories at the wages that sneaker and t-shirt factories pay? T-shirt factories pay? Are there people eager to work in sneaker factories even at good wages? Do we think that the US has the level of robotic capability to replace these factories without having to hire a lot of workers? And if not, what is the administration trying to accomplish? I think the steel man here is like, is like, there's a learning curve to the robotics capability,

• 10:39John Coogan?

  where if you don't have the facility in America at all, it's very hard to get the reinforcement learning data to train the robots. And so, yes, it makes sense to potentially, in the very long term, if you're super AGI pilled, you should overpay for human training data, essentially.

• 10:58Jordi Hays?

  Yep.

• 10:58John Coogan?

  And, and yes, maybe those, maybe because of American working conditions, the output would be lower, the prices would be higher. But if the tariffs lead to a situation where you're willing to take that trade, that puts us on the learning curve to develop humanoid robotics. Again, I'm just steel manning here. I'm not, I'm not fully convinced of that.

• 11:17Jordi Hays?

  I think broadly, and this is what I'm hoping to get from a number of our guests today, is for America to re-industrialize, we need to lead with innovation, right?

• 11:29John Coogan?

  Yes.

• 11:29Jordi Hays?

  We don't have the skilled manufacturing labor base that is going to allow us to onshore all this stuff overnight, even if, you know, you could immediately snap your fingers and have the facility. So it needs to be innovation-led.

• 11:41John Coogan?

  I heard a very, a very hot take at some sort of re-industrialized conference, where someone was saying, like, I'm extremely bullish on American manufacturing, but I don't think it's ever coming back. I think we're going to rebuild it with robotics from the ground up, and we will be a manufacturing powerhouse, but it's not going to be American labor-led. It'll be innovation and technology-led.

• 12:03Jordi Hays?

  Yeah.

• 12:03John Coogan?

  And that's an interesting, like, that has its own problems you've got to grapple with, but I thought it was interesting. Anyway.

• 12:09Jordi Hays?

  And to be clear, that still creates jobs.

• 12:11John Coogan?

  Totally.

• 12:11Jordi Hays?

  Because somebody needs to oversee the facility, and it's not, you're not, you're not going to have end-to-end autonomous factories.

• 12:17John Coogan?

  I mean, OpenAI employs thousands of people.

• 12:19Jordi Hays?

  Yeah. OpenAI is still hiring software engineers.

• 12:22John Coogan?

  Yeah, yeah.

• 12:22Jordi Hays?

  Same with Anthropic.

• 12:23John Coogan?

  Yeah. And you can imagine a lot of different higher-leverage operations where you're puppeteering 10 robots at a time and doing tele-operation. A lot of interesting paths to making American manufacturing great.

• 12:34Jordi Hays?

  So he says,

• 12:37John Coogan?

  Oh, you want to keep going on this? We have two minutes.

• 12:39Jordi Hays?

  Okay.

• 12:40John Coogan?

  I was going to move on to Sheil. He says $1 was worth 1 euro at the beginning of the year. The dollar is declining in value, now worth 90 euro cents. Your European summer just got more expensive.

• 12:51Jordi Hays?

  Well, hopefully for the VCs that were planning trips, they can get another fund closed before then and just make up for it with management fees.

• 13:01John Coogan?

  Should we talk about Jeremy Tsai, a very successful entrepreneur who runs a company that the whole plan was direct from the factory

• 13:11Jordi Hays?

  Yep.

• 13:12John Coogan?

  to delivery to American consumers. So why buy the Hermes bag when you could buy an identical bag from a

• 13:19Jordi Hays?

  Yep.

• 13:20John Coogan?

  facility that was built

• 13:21Jordi Hays?

  And it's even less, Hermes is maybe not the right example, but it's like

• 13:24John Coogan?

  luggage and stuff.

• 13:25Jordi Hays?

  Restoration hardware towels.

• 13:27John Coogan?

  Sure, sure.

• 13:28Jordi Hays?

  We'll give you the same towel

• 13:29John Coogan?

  Yep.

• 13:29Jordi Hays?

  or the same quality of towel

• 13:31John Coogan?

  Yep.

• 13:31Jordi Hays?

  for a fraction of the price.

• 13:33John Coogan?

  And so he says, "Consumer prices are built with percent targets, not absolutes, meaning cost increases are exponential. If the cost is 10 and the price is 50, to maintain product margin, a $1 cost increase equals a $5 price increase. A $5 cost increase equals a $25 price increase." These are multiplicative. And so he's arguing that this will lead to consumer inflation, which of course is a risk. Taking the other side of this argument, Sean McGuire, he says that "This is the first long-term thinking president in my lifetime." He's obviously supportive and it seems like he's excited about it. I'm excited to talk to him about how he's processing this and playing that out.

• 14:11Jordi Hays?

  Yeah, this is playing into, you know, short-term pain,

• 14:15John Coogan?

  Yeah.

• 14:15Jordi Hays?

  long-term gain. And that's what, you know, you've got to be oriented around if you believe these are good policy decisions.

• 14:23John Coogan?

  And Paul Merlucky came out in support as well. He said, "Unprecedented embrace of protectionism, they say. No, reciprocal tariffs are the opposite. The whole point is to encourage free trade rather than lopsided free trade we currently have with so many countries. It's very simple. If they charge us, we charge them." And so this would be an interesting long-term play. What if this triggers a reduction in tariffs?

• 14:46John Coogan?

  And, and, and Trump says, "Yeah, we're gonna stick with reciprocal and as you lower your tariff, we'll lower ours." And all of a sudden, we go to a truly free trade. That would be a very interesting outcome. I don't think a lot of people are expecting that or pricing that in, but I think Palmer's saying that that could be a potential outcome here. Anyway, we got, we got Chris Power coming in the building. I wanted to play this video first. Do we have the video? We're cultivating Chris Power. Yeah, we're cultivating Chris Power in America. I wanted to hear Howard Lutnick talk about the tariffs and give us a little breakdown, and then I think Chris could do some analysis for us. Let's see what else is going on. There's some more posts here.

• 15:27John Coogan?

  Tyler Cowen did not love Liberation Day. He said, "Trump's reciprocal tariffs impose hundreds of billions of dollars in new taxes on Americans without public congressional input." So arguing that this should not come from the executive branch. They're based on secret calculations. Okay, I think we got the video. Let's play it on the show now.

• 15:48Speaker 02

  What happened to the world is the global governments have backed taking our factories away from us. I mean, there's nothing about Taiwan that they should be making semiconductors. There's nothing about Korea, they should be making all of the appliances and the electronics of the world. What's happened is they had a policy of their governments to let's back our companies and let's take this business from America while America's not paying attention. So our factories went overseas. But what you're going to see is the most modern factories of the world come back here. We are going to start on one of the great training programs of the world to teach our employees what tradecraft is, you know, how to build factories,

• 16:32Speaker 02

  and not the old kind of factories. I'm talking the most modern, the most high-tech factories. When you say HVAC, what we're talking about is cooling a high-tech semiconductor plant, probably one of the coolest jobs you can have, right? Mechanics, fixing robotics. That's what's coming to America. The coolest factories, the highest-tech factories, they're all coming home, and Donald Trump's bringing them home, and he's gonna create a renaissance of high-tech manufacturing in America. That's why America's gonna win.

• 17:04John Coogan?

  He's news maxing. He's news maxing. And he's given the pitch for why these tariffs are good. We're going to hear from Chris Power, who's in the Temple of Technology, talking about these tariffs. How you doing? He's back. We're cultivating.

• 17:16Chris Power?

  Great, guys. I would argue that we are sitting in a high tech factory, but it's nice to see you on the show again.

• 17:21John Coogan?

  Fantastic. How did you process the news? Give us the high level breakdown.

• 17:27Chris Power?

  I think it's incredible for all manufacturing businesses. And I think the pushback you're seeing from people who've got crappy e-commerce businesses built on the backs of Chinese Timu textile facilities are the problem. I mean, what happened since the seventies through the nineties is we offshored all manufacturing to developing countries because we didn't want to deal with it. And all great power conflicts hang off the back of commercial manufacturing being able to pivot to defense when it really matters.

• 17:58Chris Power?

  And Ludwig is absolutely right. And what people miss is China especially, but all developing countries are not just cheaper in labor. They've been actively subsidizing, you know, basically to make it free, energy, capital, equipment, labor. And when they export manufactured goods to the U.S., often they are, you know, they're getting refunds of the government of 30 to 50% through this kind of export tariffs. So this is not, you know, us raising tariffs unfairly. It's just leveling the playing field for what's already been happening. I mean, often what we see with competitive Chinese prices for CNC machining is that the cost of the raw material we can buy is more than the part that Chinese selling to a U.S. manufacturer.

• 18:41Chris Power?

  And that's just all through subsidies, right? Of all these key areas and these export tariffs. And what that's done to the country is, you can think about this as kind of like a balance sheet, right? It's kind of like what, um, you know, DeepSeek is doing. That obviously doesn't cost a cent per query. They're subsidizing it so they draw the consumer into that platform. They gain all the leverage over OpenAI. It's the exact same thing with manufacturing. And then what happens over three decades is you offshore all the skills and the capital equipment to developing countries. And then when we go into a conflict, they've got all the manufacturing capacity. So I think this is a very accurate response to the forced deindustrialization of the U.S. through aggressive trade policies from China over the last 40 years. And this is just barely making it even.

• 19:25Chris Power?

  Now, yes, are some goods and services going to be more expensive? One hundred percent. What this is going to cause, though, for American manufacturing, and bear in mind, I would say ninety percent of what American manufacturers buy, even if their revenue is on the NASDAQ, is offshore. So we're flowing ninety percent of the volume from NASDAQ revenue or Nike shoes to developing countries and paying them to do our stuff. And then they're subsidizing it by fifty or sixty percent. So what you'll see from here is this forced re-industrialization of the US, because now we're going to have to build more factories, more factories, more factories, more factories in the US, which is going to cause this now huge boom in manufacturing skills and talent to serve those factories. And because our skilled labor in the country is aging out,

• 20:09Chris Power?

  because, you know, we told all the kids in the eighties and nineties that if you didn't have a four-year college degree, you're an idiot, is now we have to build factories that are highly advanced, use a tenth of the people, and are exciting for kids to get into. And it's not about replacing jobs, it's just going to be different jobs. You know, you're going to be a robotics technician, you're running ten machines at once versus like, you know, doing absolutely everything with your hands. And this is the way we prepare for, you know, twenty twenty-nine, and this is, this is the strategy, right? It's you tariff everything. We bring back manufacturing to the US, and the next four to five years, you're going to see the greatest re-industrialization of the country so that we actually have the skilled trades onshore so that, you know, God willing, we don't get into a conflict. But if we do, we might have a hope of doing it, because you can turn a dishwasher facility into a missile factory pretty quickly.

• 20:51Chris Power?

  Um, and I think everyone who's kind of complaining about this is like, you know, kind of part of the problem where, oh, we don't want to deal with manufacturing here. Oh, my, like, Timu, my, my, you know, shitty rapper over Timu and my e-commerce business. Yeah, that's the, you're part of the problem. You've been like trading dog and cat pictures on the internet for thirty years and we gave away the farm to China. Like, what are we talking about? This is a real country, you know, we're going to make stuff in America. Um, we've been pushing through this through NIA and obviously through Hadrian for, for a while. And I think the administration has got it absolutely correct. Um. The second thing I think people miss of, I've heard a lot of complaints about targeting Vietnam, targeting Taiwan.

• 21:33Chris Power?

  What people miss is a lot of the Chinese manufacturing volume, so they get out of the, you know, kind of export controls. Is they just ship it across the bridge to Taiwan and then sell it to an American company?

• 21:44Jordi Hays?

  Hmm.

• 21:45Chris Power?

  It's kind of like fentanyl coming from China through Mexico. So this whole cluster of Southeast Asian manufacturing. Often behind the scenes, you know, it's like Taiwan CNC is kind of a dodgy wrapper over Chinese CNC. You know, to use the tech analogy. Um. So I, I think, yes, it's going to hurt some industries that have based their business on selling high-priced goods to consumers while they've got a cost of goods of five dollars in China or Vietnam.

• 22:10Jordi Hays?

  Yeah.

• 22:10Chris Power?

  Uh, one hundred percent, but for the country, it's an incredibly good thing and the jobs in the Midwest and in places like Ohio are going to go through the roof because we're going to have to reindustrialize based off this balance of trade equation that's just massively correct. Um, I think it's an incredible thing for the country. It's certainly an incredible thing for the business and I can't say enough good things about how seriously the administration is taking the reindustrialization of the country and not through subsidizing companies. They're just recreating the dollar cost of the market to incentivize all these global companies and American companies to invest in manufacturing because now the price equation is such that people need to buy American. And then let the private markets invest behind that market signal. I think it's a brilliant strategy. Because otherwise they would have had to spend, you know, a trillion dollars subsidizing

• 22:52Chris Power?

  a handful of companies to build in America and now they kind of get that investment for free and you're going to see this huge multiplier effect of every hundred people who work in a factory, great, you need a coffee station. You need like support and trade services, you know, you're going to get towns built around these factories and more housing and more construction. And that plus deregulation is a huge boat. Um.

• 23:12Jordi Hays?

  What do you, um, in your world, you know, obviously semiconductors were excluded from the tariffs, but a lot of industrial machinery from places like Japan, Germany, Holland, um, weren't excluded. Uh, do you think that, that kind of, uh, those kind of products should be excluded from the tariffs to order, in order to help? You know, uh, Adrian obviously purchases machinery from, from countries outside of the US just because you have to.

• 23:42Chris Power?

  We have to, I I don't think anything should be excluded. Uh, we said this in the last show is that, you know, why does the US not make CNC machines or foundry machines anymore? We offshored it because they got subsidized. So like, let's add it to the stack. And, you know, for our business, yeah, my CapEx just got fifteen percent more expensive. But our CapEx is kind of free because we just use leverage debt and financial engineering anyway. But I think people miss the fact that, you know, American manufacturers are somewhere between forty and two hundred percent higher than China, right? And we see this because a lot of our customers do source things to China and they competitively bid us if they can't, if they're forced to manufacture it in America, right? And right now, we are, as a business, because we're highly automated, often thirty percent more expensive than China.

• 24:26Chris Power?

  So you add the tariff back on that and now you've got like a twenty billion dollar machining TAM in the US now becomes a hundred because all the US companies are going, well, why wouldn't I reassure this? Because now my parts just got fifty percent more expensive.

• 24:39John Coogan?

  Yeah.

• 24:39Chris Power?

  So like, let's just bring it back to America, you know?

• 24:42John Coogan?

  How how are you thinking about, uh, polymarket has the chance of a US recession just jumped to almost fifty percent? There's kind of a narrative that like, the best case here is maybe it's, we're taking some medicine, short-term pain, long-term gain. Is that a reasonable framework to think about this? Or do you think that there's a way that we avoid any of the short-term pain, other than, of course, the the the the market sell-off today?

• 25:07Chris Power?

  I I think we're going to take some short-term pain, but I I think that's really like, do you care about the S and P five hundred? Or do you care about what actually underpins GDP, GDP, which is jobs in like the American heartland? Who like, you know, can't get food or, you know, I mean, look, I'm Australian, right? But like, here's a great example. American farmers have not been able to export beef to Australia, haven't sold a dollar of it because it's banned. We, as a country, huh, I'm saying this now, uh, America imports twenty-nine billion dollars of Australian, uh, you know, beef and cattle products. So it's like, okay, all the American farmers are getting screwed. So like, I don't know, we should probably be eating American beef. Realistically, though, knowing knowing the administration, I think what you're gonna see is they are forcing a very hard reset to reset the economy,

• 25:51Chris Power?

  which means deregulate, tariff up, rebuild the United States, so we have the productive capacity. But bear in mind, the interest rate is extremely, extremely high, right? Right now.

• 26:02Jordi Hays?

  Uh huh.

• 26:02Chris Power?

  Uh, it hasn't really been leveraged down. And inflation, and and by the way, reindustrialization is a deflationary event. Yes, it might make some goods and services come up. What you'll see is like wage growth and jobs growth behind it, so that the balance of inflation comes down a little bit. What I expect to happen is that everyone complains for about three to six months. And I don't know what the interest rate is sitting at now, but bear in mind, I think it's like four or five percent on the Fed rate. You can notch that down one, one and a half, maybe two percent over the next kind of three, four quarters, and you're gonna, we're gonna get back to zerth mode. And then the S and P will come up as, you know, everyone puts their cost of capital on the spreadsheet. So, yeah, I think we're taking some short-term track pain.

• 26:43Chris Power?

  I think we've been, I think the, you know, Federal Reserve and the Bureau of Labor Statistics have been lying to the American people for a better part of two to three years. I think we're already in a recession. It's just like we're fudging with the numbers and not talking about it. Um, but realistically, no, I I think the boom starts in like two quarters or so. Um, as the federal budget gets covered with Doge, people are going back into the economy and being productive. Tariffs come up and there's a bunch of volume and activity happening in the country that's producing real GDP, like jobs and factories. And then I think he ticked down the interest rate like one or two percent, and I think you've got three years of like zerth mode of cost of capitals going down, all the valuation's gonna go up. Uh, I think it's gonna be a banger. We just gotta like sit here for a quarter or two. It's gonna be great.

• 27:27Jordi Hays?

  Is is part of the issue that tariffs and trade balances are just so complicated that it it's almost impossible?

• 27:36Jordi Hays?

  For anybody to fully understand, much less somebody who's just sort of passively reading the news or not involved in it, because I've gotten messages today, you know, I got a message from my mom, who is, who is, you know, just basically seeing everything red, just being like, this is bad, you know, and so like, there's this sense of this, you know, people are going to have this emotional reaction to the market because it's the most like, real time indicator of sentiment, but do you think the administration could do a better job, sort of communicating, you know, J D Vance was on TV earlier, and I think he had some, some pretty good comms around tariffs broadly, but do you think there needs to be better communication on why this is happening and how there, there

• 28:21Jordi Hays?

  might be some, you know, you know, it very well could have a, you know, very positive long-term impact?

• 28:29Chris Power?

  Yeah, and I, I, I think they can be communicating to the American people a little bit better. I think the communication that's come out is actually pretty good. It's just that it hasn't reached many people and you're right, they just see like stock go down, you know? But I think over the next six to nine months, I think it's going to be incredibly positive, both for, you know, S and P and Dow Jones and da, da, da, Nasdaq, and for the actual underlying real economy. But yeah, you know, it's like, you feel pretty bad going to the gym for the first four weeks when you're a little bit overweight, and then you start feeling good in the first four weeks, feel pretty bad, because you're like, wow, this is really tough. And then you realize, okay, I'm just out of shape, you know, we're getting

• 29:06Jordi Hays?

  And you're repping two plates?

• 29:07Chris Power?

  Yeah, you're gonna, and then we'll be repping plates, you know, Jay Powell will drop the fucking hammer and we'll be, we'll be, we'll be deadlifting, you know,

• 29:14John Coogan?

  Yeah, Jay Powell's the creative on the top, exactly.

• 29:17Jordi Hays?

  How, has your, has your phone been ringing off the hook from investors that maybe passed two years ago, saying reindustrialization's not going to be a thing? Anybody, anybody capitulate yet?

• 29:27Chris Power?

  I have no comment on whether or, whether or not we're getting calls from customers trying to resource massive volumes from China or accelerating our factory build outs, and I also got a drop in a minute, and I'm not going to make any comment about future or potential fundraisers in case the S E C

• 29:39Jordi Hays?

  Yeah, yeah.

• 29:40Chris Power?

  Wax me on the head with the bad

• 29:41John Coogan?

  Yeah, it's been great having you. We, we gotta have you on more regularly to kind of track this story as it develops. This is fantastic. Thanks so much for taking the time to join.

• 29:50Chris Power?

  You're welcome, guys. And thanks for having me back to Capital to Capital.

• 29:53John Coogan?

  Keep cultivating Chris Power over at Hadrian. We'll talk to you soon. Bye. In the meantime, let me tell you about Ramp. Time is money. Save both. Easy to use corporate cards, bill payments, accounting, and a whole lot more, all in one place. Head over to ramp.com and we have a Ramp investor coming on the show next. Delian Asperuhov is joining, partner at Founders Fund, co-founder of Varda. He'll be joining.

• 30:17Jordi Hays?

  Many people have called him a global export expert on tariffs, trade wars, real war. You know, the list goes on.

• 30:27John Coogan?

  I mean, he's really dialed in.

• 30:29Jordi Hays?

  He's now, he's dialed in.

• 30:30John Coogan?

  He's also an investor in Eight Sleep, nights that fuel your best days. Turn any bed into the ultimate sleeping experience. Go to eightsleep.com/tbpn for an Eight Sleep.

• 30:39Jordi Hays?

  Do it.

• 30:39John Coogan?

  Get it, get it.

• 30:40Jordi Hays?

  Oh, I put up.

• 30:41John Coogan?

  It's fantastic.

• 30:42Jordi Hays?

  I put up a hundred last.

• 30:43John Coogan?

  You did? Oh, you're killing it, Jordy.

• 30:45Jordi Hays?

  I really.

• 30:46John Coogan?

  Well, we gotta ask, we gotta ask Delian how he'd do, how he did. Because I know, I know he's on one and I know he hasn't been traveling. I got a 95. I was a little bit low on time.

• 30:57Jordi Hays?

  Proof of work. Look at this.

• 30:58John Coogan?

  I got the 80s.

• 30:59Jordi Hays?

  95.

• 31:01John Coogan?

  95. You got a hundred?

• 31:02Jordi Hays?

  Hundred.

• 31:03John Coogan?

  Hundred. Oh.

• 31:03Jordi Hays?

  Look at this. Look at this.

• 31:05John Coogan?

  I was like a hair's breadth away. If I'd gotten two more minutes of sleep, I would have gotten 100. Two more minutes. But, you know, had to keep the, had to keep the alarm at 5:40 a.m. Got to get up, got to get in the gym, got to start wrapping two plates.

• 31:19Jordi Hays?

  You get up an hour after me?

• 31:21John Coogan?

  An hour after you, yeah.

• 31:24John Coogan?

  Yeah, but you've been in bed two hours before me. So, you know, it works out.

• 31:27Jordi Hays?

  True.

• 31:28John Coogan?

  Anyway.

• 31:30Jordi Hays?

  Somebody's got to be up late just texting to get 10 guests on a single episode.

• 31:35John Coogan?

  Yeah.

• 31:36Jordi Hays?

  It's not easy.

• 31:37John Coogan?

  Exactly. It's hard work. Anyway.

• 31:40Jordi Hays?

  Yeah, one thing I, one thing I wanted to ask Chris that we didn't get to was, what, what does Nike do here? Do they figure out how to make shoes in America? I know they have probably some American-made shoes, but it's certainly, it's got to be less than half a point of.

• 32:00Jordi Hays?

  Of their revenue.

• 32:02John Coogan?

  Okay, Delian is out. He, we just messed up the invite, got double booked, but let's go through more tariff reaction because I want to talk about Tyler Cowen's Liberation Day post. Because I think he gives, I mean, obviously, Chris Power at Hadron lays out a very, like a very reasonable and bullish scenario. And as someone on the ground building a factory,

• 32:29John Coogan?

  it makes a ton of sense. Like, it's his thesis that he's had for years.

• 32:32Jordi Hays?

  And the thesis wasn't actually predicated on massive

• 32:36John Coogan?

  Correct.

• 32:37Jordi Hays?

  global tariffs.

• 32:38John Coogan?

  Yeah, no, no.

• 32:39Jordi Hays?

  It was more so predicated on we should make things in America, specifically products necessary for defense manufacturing.

• 32:48John Coogan?

  Yep, yeah.

• 32:49Jordi Hays?

  Aerospace.

• 32:50John Coogan?

  Yeah.

• 32:50Jordi Hays?

  Sort of super critical industries.

• 32:53John Coogan?

  But yeah, it's interesting to hear the other side of this, kind of the more buttoned up economist take. And so Tyler writes that markets have responded accordingly with the Canadian currency hit especially hard and S and P futures sinking immediately. And we saw the market actually did sell off quite a bit. I'm not exactly sure where it is now. Maybe you can hop on public.com and check that out. Investing for those who take it seriously. Go to public.com and sign up. Because I actually would love to know, like, what, how is the market trading during the day? Obviously, we saw it opened down 5% and some stocks were hit very hard, but I'd like to know overall how things played out.

• 33:31Jordi Hays?

  S and P is down 4% today.

• 33:33John Coogan?

  So a little bit of a pop off the bottom, maybe bouncing along the bottom.

• 33:37Jordi Hays?

  I mean, Nasdaq is five and a half.

• 33:38John Coogan?

  The dead cat bounce, as they call it, potentially. It's interesting, you know, be greedy when others are fearful, potentially, or maybe get everything out while you can. Who knows? We don't give you financial advice here. We just yap and you make up your own decisions. Anyway, with President Trump, one never quite knows what one is going to get, says Tyler Cowen. So any assessment needs to be provisional. But that is a big part of the broader problem, high and persistent uncertainty about the basic rules of the game. And this was the question that I was going to ask Chris if he had a chance to stay on longer was. Okay, I understand that you're excited about the current, like what happened yesterday, the breaking news, but

• 34:18Jordi Hays?

  And to be clear, it's phenomenal for Hadrian.

• 34:20John Coogan?

  Of course, of course.

• 34:21Jordi Hays?

  Like, I'm sure they will have more customer inbound today.

• 34:24John Coogan?

  100%.

• 34:25Jordi Hays?

  Than probably any other point in history.

• 34:27John Coogan?

  Because, I mean, they're, they're a young company, they are using American labor, they're based in California, like, things are expensive, there are a lot of places where, even though Chris is great, he's a really great founder, like, there are just structural elements that make his product less price competitive, and he wants to get there with software and automation, and eventually get to a place where he's completely price competitive. He's always differentiated on pace of play, time. If you're in Southern California, building a defense tech company.

• 34:56Jordi Hays?

  Or an aerospace.

• 34:57John Coogan?

  An aerospace company, and you need a part tomorrow, Hadrian will stay up all night, get it done, and you won't have any of the shipping times. That's been the key differentiator, but now it seems like he could potentially be more price competitive. But, the question that I wanted to ask him, and what we were talking to Ryan Peterson about yesterday, was, is there, is, is what's going to happen with this Rose Garden and this reciprocal tariff framework, you might have seen some of these like, mathematical formulas floating around, like, is this enough of a framework to bring confidence to the market? Because there's a, there's a huge difference between, okay, it's, it's 20%, it's bad, we're ripping the banding off, bandaid off, but you know that this is the end of the story, it's 20% forever. You can plan for that, you can update your Excel models, your financial models,

• 35:39John Coogan?

  you can plan for that. Versus, it's 20% today, then it's 10%, then it's 15%, then it's 50%, then it's 10%, like, chaos and uncertainty.

• 35:47Jordi Hays?

  This is like two people pointing a gun at each other, you know, sort of waiting, no more, no more, yeah, the James Bond day is over, John, put the squirt gun down. And anyways, it's like, who, who's gonna sort of make a move first?

• 36:02John Coogan?

  Who's gonna blink first, yeah. And, and what's interesting is that, I think that, I think that this is potentially enough of a framework to understand where, okay, all I need to do is monitor, you know, what is the reverse tariff? How much would it cost for me to import my product to the country that I'm making in it, making it in, and then I can expect that that will be the tariff that goes the other direction. The question is just like, Is this a, will these tariff rates stick around for years, for four years at least, or maybe eight years, who knows? Or, or is this going to be something where literally every single one of these countries comes to the table and starts renegotiating immediately? And we're seeing tariffs jump around all over the place, week to week, and we're seeing,

• 36:45John Coogan?

  oh, turns out like Swiss, Switzerland came to the table and they cut their tariffs so that now Swiss, Switzerland rates are lower and like all of these different things happening. Like you, you imagine that there's going to be big discussions between China, Vietnam, like the major countries, but it could be all of the countries. And so that uncertainty, I think, is something that businesses really, really detest because it, it makes it really hard to plan, especially things like capex, right?

• 37:09Jordi Hays?

  Yep. So this is a good line. Like a game show host, Trump announced a series of tariff rates on many of America's major trading partners. How did he come up with the rates? It seems by a crude formula, a given nation's trade deficit with the US divided by the nation's exports to the US. There's a base rate of 10% to be applied to the UK, Costa Rica, and some other friendly nations. For India, it is 26%. For Japan, it is 24%. And for the European Union, it is 20%. The most incomprehensible are those on Vietnam. The new tariff rate is 46%. Sri Lanka, 44%. South Korea, 25%. Cambodia, 49%. And Taiwan, 32%. Are those not some of the major countries we are expecting to hold China at bay?

• 37:51Jordi Hays?

  Do we not want Chinese manufacturing to end up moving to those and other countries who are less dependent on the Middle Kingdom? What could possibly, and again, Chris was highlighting that, you know, some of these countries are basically sort of producing goods and then, you know, passing them through China and.

• 38:09John Coogan?

  Yeah, he was making the argument that it was, that some of these countries are kind of fronts. I would be skeptical about the, about the idea that, you know, like 80% of what we import from Taiwan is Chinese made at the source, but I think his point is probably correct, that there is some amount of, of product passed.

• 38:28Jordi Hays?

  He says, what could possibly justify the fact that Taiwan, which is a US ally, being threatened by China, now faces almost the same tariff as China, 34%.

• 38:36John Coogan?

  That is a very, very good question.

• 38:38Jordi Hays?

  Trump calls these reciprocal tariffs, and the claim is that we are taxing foreign nations at only half the rate they are taxing our imports. The numbers are illusory, however, some of them apparently made up, Brazil at only 10% and others counting. A VAT is a net tax on American imports, which it is not. In any case, we will be moving into a future with higher prices, less product choice and much weaker foreign alliances. The tanking of the stock market and other possible asset price repercussions may tip America into recession and increased joblessness. This is perhaps the worst economic own goal Tyler has seen in his lifetime. I cannot think of any credentialed economist colleague, Democrat, Republican or independent who would endorse it.

• 39:21Jordi Hays?

  And I haven't even mentioned the risk that some foreign nations will retaliate against American exporters damaging our economy all the more.

• 39:28John Coogan?

  Pavel Asparuhov had a great tweet about this. He said, texting all my close friends to go F themselves so I can learn to be more independent. Short term painful, but there was literally no other way. It's a good, it's a good, it's a good take that it's like, we're not making a lot of friends with this policy, folks. This is going to be rough.

• 39:49Jordi Hays?

  Yeah. And one could argue that if you truly are America first, that means putting America above.

• 39:59John Coogan?

  Yeah.

• 40:00Jordi Hays?

  Our even people that are allies.

• 40:02John Coogan?

  Yeah.

• 40:03Jordi Hays?

  Pavel's point is that at some point in, you know, when he was starting his company, he basically had to tell his friends to F themselves. So he could.

• 40:11John Coogan?

  I mean, he's joking there, but.

• 40:12Jordi Hays?

  No, of course.

• 40:13John Coogan?

  But yeah, I mean, there was a little bit of that for sure. I think this gets to this interesting idea of like, like, like this America first stuff is, is not just, people, people think about it as like, you're either like a nationalist or a globalist, right? Like you're either like, you should be able to manufacture anywhere. It doesn't matter where the jobs go. Have every company be completely global. It doesn't matter where the jobs are. And then there's the other side, which is like, everything needs to be made in America. And like, I don't care about Canada. I don't care about the UK. But then there's this, there's, there's a pretty wide middle here where you have something like the five eyes and like all the different allies between, I mean, we sell nuclear submarines to France, right? Like, like they're a very, very close ally.

• 40:56John Coogan?

  And, and this is what Alex Karp talks about at Palantir, like the idea of the West and the idea that like, like, yes, like.

• 41:05John Coogan?

  If, if, if America goes it alone and China builds a bunch of allies through the Belt and Road, and not only has more than a billion people, but also has a much larger economy when you bundle them together with Russia, Iran, all of Africa, a bunch of other countries, North Korea aside, and like tons of other countries are like, well, if partnership with America is off the table, all of a sudden partnership with China seems a little bit more reasonable, then America could get really, really smoked, right? And so there's this question of like, how important are these alliances? How important is it to have friends in the global community? I'm obviously all for making American jobs viable and lucrative and fantastic.

• 41:46John Coogan?

  But I mean, there, there is a cost to some of this that I think Tyler's right to point out. So where did you fit, where, where, did you leave off at damaging our economy all the more?

• 41:58Jordi Hays?

  Uh, yes.

• 41:59John Coogan?

  Okay, so you might think there is something to be said for a reciprocal, reciprocal approach to tariffs. Usually it consists of cutting off your nose to spite your face, but it can sometimes work. It requires a president and Congress who is predictable and trustworthy. That's now how, that's not how foreign nations view the current administration. If you're wondering about the trade treatment of Canada and Mexico, that remains cloaked in mystery. The threatened 25% rate on those two nations from earlier in Trump's term violates the NAFTA redo that was negotiated by Trump, Trump himself. Why trust in reciprocity here? Oh, and did I mention that tariffs, according to the constitution, are supposed to be the province of Congress, not the president?

• 42:41John Coogan?

  Congress did voluntarily turn some of this authority, negotiate again, and we will be in for yet another round of tariff musical chairs. But it's not a game. There is real money and therefore real lives at stake here. And so he was not a fan. And I think that, I think that the tariff musical chairs could potentially be the bigger issue and the bigger fear here.

• 43:02Jordi Hays?

  Bill Ackman.

• 43:04John Coogan?

  Yeah.

• 43:04Jordi Hays?

  The activist man posted earlier, sometimes the best strategy in a negotiation is convincing the other side that you are crazy. And it is very possible that Trump is being very effective there.

• 43:19Jordi Hays?

  Logan had an interesting point. He's, it was basically a meme that said, I'm adding tariffs. And it's a guy with a Make America Great Again hat that says, this will create jobs. Trump, and then it's, I'm removing tariffs. He goes, art of the deal. I'm adding tariffs. This will create jobs. I'm removing tariffs. Art of the deal. And.

• 43:39John Coogan?

  I mean, it's, it's, it's, it sounds really crazy and copy, but like, how many times have you been in negotiation where there's back and forth? Like, this does actually happen in real life. Like, it sounds stupid when you say it that way.

• 43:52Jordi Hays?

  Classic negotiation strategy is to start and just be, why, you know, completely extreme and then know that you may be.

• 43:59John Coogan?

  Do you, on negotiation strategy, do you buy into that philosophy? I, I, I have found, and a lot of negotiation consultants that I've talked to have kind of advocated more for, come in with something that's, first, build vision. Make sure you're talking to the right decider, like the person who can decide. Build a really clear vision of what you want the partnership or the deal to look like. And then come in with something that's reasonable, that you would accept. Never bluff. And get a deal that actually sticks instead of just wildly oscillating, saying, I, I think their budget's a hundred bucks. So I'm going to open with 300 and be prepared to negotiate down. That's actually like a harder way to get a deal done. But I don't know. What do you think about negotiation generally?

• 44:42Jordi Hays?

  No, I aim for deals that I think are fair and great for all parties involved. And then I'm very explicit if I feel like it's drifting into a territory where it doesn't make sense.

• 45:00John Coogan?

  This is another thing interesting from Ryan Peterson, eliminated from all countries as soon as the systems are ready. And so we talked about this a little bit with the Timu de minimis shipping tariff from China. But apparently it's being eliminated from all countries. And so this idea of, oh, well, if we can't do the Timu exclusion in China, we'll just do it in Mexico. And still slide in under that de minimis shipping threshold. Well, it seems like it's off the table entirely.

• 45:30Jordi Hays?

  Yeah.

• 45:31John Coogan?

  The market's crashing. We're crashing our streaming software, but we're back up. Thanks for paying attention. Thanks for sticking with us as we continue to run the show.

• 45:42Jordi Hays?

  Do you know if this charger is working?

• 45:43John Coogan?

  Yeah, it was working for me.

• 45:45Jordi Hays?

  There we go. We're back.

• 45:47John Coogan?

  So there's a quote from JP Morgan. I don't know if we want to read through this. It's pretty interesting.

• 45:52Jordi Hays?

  Yeah, this was yesterday, which is more or less a lifetime ago.

• 45:55John Coogan?

  Yeah. On a static basis, today's announcement would raise just under 400 billion in revenue, or about 1.3% of GDP. Static basis, meaning like if all the goods stayed the same and people just pay the taxes, which would be the largest tax increase since the Revenue Act of 1968. We estimate that today's announced measures could boost PCE prices by 1 to 1.5% this year, and we believe the inflationary effects would mostly be realized in the middle quarters of the year. The resulting hit to purchasing power could take real disposable income growth in Q2 slash Q3 into negative territory with the real risk of consumer spending could also contract in those quarters.

• 46:36John Coogan?

  This impact alone could take the economy perilously close to slipping into a recession. We of course saw on Polymarket that the probability of recession is now up around 50%.

• 46:47Jordi Hays?

  Yep.

• 46:47John Coogan?

  Headlines about retaliatory measures by US trading partners are already coming out, and we expect to learn more in coming days. The somewhat confusing nature of today's news, coupled with the uncertainty over how long these tariffs will remain in place, should make for an even less friendly environment for investment spending. We mentioned that with the capex stuff, though that is one way to narrow the saving, investment imbalance, and hence narrow the current account deficit. We plan to revisit our forecast later this week. So JP Morgan is not very optimistic.

• 47:20Jordi Hays?

  Yeah, Joe Weisenthal highlighted a chart from Polymarket. It's, he says, the odds of US recession in 2025 just jumped from, they were sitting at 40%, jumped 25% to...

• 47:36John Coogan?

  Did you see the Restoration Hardware CEO reacting live? Oh, yeah. Finding out their stock is down 25%. That was so dark. So Restoration Hardware was having an earnings call after the market closed, as one does. But it happened to coincide with this tariff announcement, which of course Restoration Hardware probably sources from all over the world, will be very seriously hit by this. And he just has some expletives. "Okay, oh, oh, S H I T, okay, uh, uh, uh, I just looked at the screen. I guess, I guess, you know, the, the, the, the, the stock went down, you know, based on some of the numbers we reported, and then it got killed because of, oh, oh, really? I, I just looked at the screen. I hadn't looked at, you know, it got hit with, I think the tariffs came out.

• 48:20John Coogan?

  And, you know, I think everyone can see in our 10K where we're sourcing from. So it's not a secret. And we're not trying to disguise it by putting everything in an Asia bucket, you know? And he's just like having a really bad day. Rough. Oh. Very rough. Logan Bartlett took us back a couple of months ago from a quote from Stanley Druckenmiller, the billionaire investor. Stanley Druckenmiller believes Trump's reelection renewed a jolt of speculative enthusiasm in the markets and surging optimism within businesses. Quote, "I've been doing this for 49 years and we're probably going from the most anti-business administration to the opposite," Druckenmiller said on CNBC Monday. "We do a lot of talking to CEOs and companies on the ground, and I'd say CEOs are somewhere between relieved and giddy. So we're a believer in animal spirits.

• 49:05John Coogan?

  That was certainly the case during the Trump pump shortly after inauguration and the election. But then things have been cooling off, let's say, potentially in free fall because of how, how rough things have been." Rough. You liked this post by Trevor Scott. "Tariffs on Bangladesh slash Vietnam are like a hedge fund manager fighting with his cleaning lady to get the right back to clean his own toilet." Saying that like a lot of the jobs that we've sent over there, America doesn't want, that's always, that's always, it's always up for debate because when, when America does something, we do it a little bit differently. We still end up producing the product. Obviously we use a lot of automation and the things that are made here. And, and, and there's been, there's been

• 49:49John Coogan?

  a shift to bring, you know, auto manufacturing back to the US and a lot, but although a lot of that's still done in, in Mexico and Canada. But it, but it, but it is interesting to see, you know, if there really is big onshoring efforts, what will those new factories look like? I would imagine that they are highly automated, at least, at least hopefully.

• 50:10Jordi Hays?

  Yeah, it's wild. Apple's also down nine percent today so far, still just barely over the three T mark.

• 50:19John Coogan?

  Hmm, rough. But hopefully it doesn't affect Tim Cook's comp package because he was just scraping by.

• 50:25Jordi Hays?

  Yeah, poor guy.

• 50:26John Coogan?

  Yeah, poor guy.

• 50:27Jordi Hays?

  Poor guy.

• 50:28John Coogan?

  Should we go to Ryan Peterson? He says, remember that these duties are on top of existing duties. So for China, you have the original duty of seven and a half to 25% duty from section 301, then 20% from earlier this year, then 34% today, and 25% for China's purchases of Venezuelan oil. So it's over 100% just in the past few years, based on, on Chinese products. And so we should see that work its way through the economy. I do, I do wonder, I mean, a lot of Chinese products, like they're just so cheap that even if you double the price, it's like, well, a DJI drone is still going to be cheaper than a GoPro drone because like they were never price competitive to begin with. But it will be interesting to

• 51:08John Coogan?

  see, like, this is all just news right now. It's not really something we're feeling. But the next time I'm like walking around a Best Buy or scrolling on Amazon, I wonder if the prices will actually shock me. It's, it's kind of unclear. I don't think of myself as like shopping that much generally, let alone shopping for international goods. But again, so much stuff comes from abroad, but a lot of times. The things like, I mean, these water pistols that I bought, they were probably like $2. And if they go up to $4, like it's hard to notice that. You're still just like, wow, that's the cheapest thing I've ever seen. Like, a lot of the prices were suspiciously cheap, honestly. Like, we talked about this with Timu, where Amazon launched a clone and they were saying like,

• 51:51John Coogan?

  "Okay, guys, if you're gonna sell couches, the couch can't be more than $25 to be on this app." And it's like, I don't know if anyone would want to sit on a $25 couch. Like, that doesn't seem safe. They were like, guitars can only be $8. It's like, I feel like a guitar is like a $100 item, right?

• 52:06Jordi Hays?

  Yeah.

• 52:06John Coogan?

  So like, if that doubles to $16, would people still notice it? I mean, certainly there would be an effect on the economy. Like, people would buy less guitars. This is just supply and demand. Obviously, the demand for guitars is not fully pricing elastic. But it is just very funny that some of these prices were so, so low. I mean, Nike, you know, obviously, the, the cost of goods is gonna get, is gonna go way up. But I, I feel like Nike shoes are $100 plus. And so if those go up, uh, you know, people are still gonna want to buy Nike, maybe. I, I, it's unclear to me. I mean, it certainly hurts their margins, certainly hurts their business. But it's unclear what it actually will be.

• 52:43Jordi Hays?

  It's just interesting. Again, it's hard because Nike react with how many shoes they need to make. And then not having, if, if this was going to be, if these tariffs were gonna be steady state indefinitely, they would have to make, you know, massive, massive changes.

• 53:01John Coogan?

  Yeah.

• 53:02Jordi Hays?

  But if, if they think they're gonna be rolled back, you know, it's just, it's so.

• 53:06John Coogan?

  I was thinking about ways to capitalize on this. And I think, uh, the price of billboards in America, probably unaffected by these tariffs. So you should go to adquick.com, out of home advertising made easy and measurable.

• 53:16Jordi Hays?

  No tariffs.

• 53:17John Coogan?

  Say goodbye to the headaches of out of home advertising.

• 53:19Jordi Hays?

  Billboards, folks.

• 53:19John Coogan?

  Only AdQuick combines technology, out of home expertise and data to enable efficient, seamless ad buying. And, uh, yeah, I mean, if you have an American-made product, like, you really should buy a billboard right now. And you should tell everyone, because it used to just be, "Yeah, rah rah, America, America, 4th of July. Like, we're, we're made in America." There are plenty of companies that have been beating that drum for a while. But now is like, really, really the time. It'll drum up investor interest, it'll drum up employee interest. Like, if you are, if you are long America, like, it's, it's a great time, as we saw with, with Chris and Hadrian. Anyway, there's another post in here I want to go through. I want to finish out some of Joe Weisenthal's thoughts. Yeah, let's see that.

• 54:00John Coogan?

  So, okay, so this is Joe continuing writing in his Bloomberg newsletter. He says, "Okay, well, maybe we shouldn't set economic policy for the whims of the stockholding class. Yeah, I'm down with that. But what's interesting to me, too, is just how reviled all of this seems to be across the board, with the only real specific voice of support, the old legacy industrial unions, which are not a big part of the economy. Again, go back and look at the comments from the manufacturers in the latest ISM. They all hate it. Or go back and look at the comments from the latest survey of oil and gas companies by the Dallas Fed. It's just really hard to find a major material constituency for this level of trade. And the reason it's hard to find big supporters of this policy is because the logical or

• 54:44John Coogan?

  sequential link between trashing trade and creating new wealth is very hard to see. What are the new growth industries going to be? Who is going to finance the redevelopment? China famously crushed its own real estate and internet sectors a few years ago, but at the same time, it directed its banks to lend more aggressively to its hard tech and manufacturing sectors." And so I think Chris would say, "Yeah, that's exactly what we want to do. We want the government to direct the banks and the venture capitalists to lend more aggressively to hard tech and manufacturing sectors." And we're kind of seeing that, but it's interesting because we, I don't think broadly in America, people believe in the American dynamism movement. Yeah.

• 55:29John Coogan?

  I think in VC, people think it's cool. And I feel this way, where it's like, we're talking to a kid from Stanford today who makes laser weapons. And I was just like, "That sounds awesome." But when I really think about it, I'm like, "Look, I don't know if you have a real business yet. You probably don't. You're young and you're just figuring it out. And I don't know if there's a program record and a really good, easy way for you to scale this business up and create a power law company, blah, blah, blah, blah, blah." But I just think it's cool. And I think that's how a lot of people perceive these hard tech and manufacturing projects. They're like, it's a cool science project. I don't know if it's going to work out, but I want to support it. So I'm just going at it. Whereas I think, I think China was a lot more rigorous about this is a good financial bet for us.

• 56:12John Coogan?

  We're going to lose a lot of money in the short term, but we're going to gain a lot in the long term. And I don't think as a country, we're thinking like that yet. Like, there's a lot of people that go to the reindustrialized conference and they're like, this is awesome. I hope it happens. But like, I'm not really going to pull my money out of Fang to do this, right? I'm not going to move, you know, a hundred billion dollars over for this. There needs to be the AI narrative for to get like the Masa's of the world to do it. And then even when Masa does it, you have plenty of people that are like, this is a top signal. This is too crazy. It's impossible. And I don't think they were saying that in China, which is interesting.

• 56:44Jordi Hays?

  No, and it's a fascinating situation right now where so many people in our, you know, industry and in our corner, the internet broadly, think this is just a terrible idea.

• 56:55John Coogan?

  Yep.

• 56:56Jordi Hays?

  We have some people that think it's great, but a lot of smart people think it's a bad idea. And I'm sort of sitting here hoping that the admin, you know, as somebody that ultimately wants America to win and thrive. I'm hoping that, you know, we're at a very crazy time right now, but I think I'm sort of hoping that the admin has a crystal ball that the rest of us don't have and is, you know, clearly they're, they were convicted enough in, in this initial decision yesterday to go out and do this press conference.

• 57:34John Coogan?

  It's not the first time they've been convicted.

• 57:36Jordi Hays?

  Yeah, that's true. It's also true. But, uh, but yeah.

• 57:42John Coogan?

  Let's continue with Joe. In fact, oh, I think we got our next guest coming in, but first let me tell you about Bezel. Go to bezel.com, getbezel.com, buy a luxury watch, folks. I know the stock market's down, but there's never a bad time.

• 57:56Jordi Hays?

  We were talking with Craig yesterday after the show, but, uh, you know, prices are going to have to go up.

• 58:03John Coogan?

  Yeah.

• 58:04Jordi Hays?

  From ADs, but if you move quick on marketplaces like Bezel, uh, it's very likely that people won't immediately price, reprice their, their.

• 58:15Jordi Hays?

  Watches, so it'll be interesting to see that.

• 58:17John Coogan?

  The market goes down, but you still, you look at your beautiful watch and you remember that the point of a watch is not to tell you the time, but to tell you the time of your life.

• 58:28Jordi Hays?

  That is right.

• 58:28John Coogan?

  Shop over 24,500 luxury watches, fully authenticated in-house by Bezel's team of experts. And

• 58:35Jordi Hays?

  Thank you to Bezel.

• 58:36John Coogan?

  Thank you to Bezel. Coming into the studio, we have Akhil from Shield Capital. I'm very excited to talk to him.

• 58:42Jordi Hays?

  Boom.

• 58:42John Coogan?

  Yesterday, how you doing?

• 58:44Speaker 04

  Hey, good John, good Jordy. Good to see you guys. Thanks for having me on.

• 58:47John Coogan?

  Yeah, thanks so much for taking the time. Would you mind just giving us a little brief overview, maybe some of your history, what you're doing now and just kind of generally how your week's going?

• 58:57Speaker 04

  Yeah, absolutely. And a great discussion prior to, I think, a good tee up to what needs to happen by 2027 and what needs to happen by 2049 when it comes to our own national industrial base. But by way of background, Akhil, yeah, from Buffalo originally, did RTC in college, wanted to go serve, had the opportunity to serve in the Marines as an infantry and special operations officer. Left my time in active duty in 2019, like many other vets, Brandon included, that you'll have here soon. Both amazed by the type of technology we had that the US and its allies could provide and also incredibly frustrated by the lack of some of the basic commercial tools and had the opportunity via some mentors to connect and help build a new fund, a new venture

• 59:42Speaker 04

  capital fund, Shield Capital, where our focus is this nexus between commercial technology and national security. We cover early stage, you know, so as early as a dream in a team on day zero across autonomy, cybersecurity, AI and space.

• 59:55John Coogan?

  That's great. Jordy, you want me?

• 59:57Jordi Hays?

  I mean, I'd just be interested to get your immediate reaction to the news yesterday. And yeah, and then, and then there's, you know, we got a bunch of other questions to go into. Did you have an immediate reaction yesterday? Our point of view, I'm sure you heard is, you know, it's hard, some stuff is going to, you know, go poorly, some stuff, you know, some, some groups and companies and industries will benefit, but I'm curious what you thought.

• 1:00:24Speaker 04

  Totally, yeah. I guess I'll reemphasize the point that I made to start off. It is, we had a look at this near term, 2027, this Admiral Davidson window, for those who are familiar with it, how do we protect our interests in the Asia-Pacific region? And how do we look at it in 2049? Structurally, right? So tariffs, whatever you want, has immediate near-term structural effects. But a lot of that's not, we are going to have the industrial base we have by 2027, right? That's not that, that's 18 months from now. So we have to figure out what we can do with the capacity we have. And I'm always reminded by Churchill's quote, "While America might be first, the only thing worse than fighting without allies, I'm sorry, fighting with allies, is fighting without them." So there's an aspect to that.

• 1:01:07Speaker 04

  But ultimately, how do we make the structural changes long-term? So as we look at this 2049, particularly as, again, looking at this in the national security context, how do we beat and win out technologically, geopolitically against the PRC, what that structure looks like, far beyond four years' worth of tariffs?

• 1:01:24Jordi Hays?

  Can you break down the significance of 2027 and why we need to be sort of like orienting our defense planning around that date? Just for, obviously, people in the industry, you know, understand it, but a lot of our listeners are, you know, in other industries.

• 1:01:42Speaker 04

  Absolutely. Well, you know, this comes originally from Admiral Davidson, who used to, prior to his retirement, run the Indo-Pacific Command. So this is the Asia-Pacific four-star command that's really in charge of protecting U.S. interests and deterring would-be adversaries, namely the PRC, from conducting actions, whether that's Taiwan or elsewhere. And 2027 came about as this sort of potentially vulnerable moment in which we as a nation, and those that are willing to support us, to be ready to defend our interests. And so you'll see that a lot in the narratives, and you'll see that a lot in terms of what capabilities can we really deploy at scale and at speed. To defend our interests come 2027. And that stands, obviously, that's super near term, guys, right?

• 1:02:26John Coogan?

  Yeah.

• 1:02:26Speaker 04

  You know, only so much can get done within that period. And so there's this two horizons, just like any, you know, coming from the venture world, right? You, you, you want entrepreneurs to be looking at multiple horizons, the near term one, but then also look for what that long term structural changes will be. And so that's the 2049, and really that's, that aligns with the, you know, 100 years of, of the Chinese Communist Party.

• 1:02:47John Coogan?

  Can you talk a little bit about Chinese competition with regard to robotics? There's some high flying startups in America. There's some just young hacker kids building cool stuff, lot of awesome demos, but it feels like the financial markets aren't taking humanoid robotics as seriously in America as they are in China. Is that a mistake? What are you seeing in humanoid robotics?

• 1:03:09Speaker 04

  Yeah, great question. And I'll tie together with AI, just because there's, there's so much intersection between

• 1:03:15John Coogan?

  Totally.

• 1:03:15Speaker 04

  The digital AI world and then AI applied to hardware, right?

• 1:03:18John Coogan?

  Yeah.

• 1:03:19Speaker 04

  I grow increasingly concerned that we are just frankly behind.

• 1:03:22John Coogan?

  Yeah.

• 1:03:23Speaker 04

  In terms of the model development, the application of hardware and the synthesis therein, both from a hardware standpoint, from the software standpoint, and then critically, the ability to test.

• 1:03:34John Coogan?

  Yeah.

• 1:03:34Speaker 04

  I mean, part of it is just, let's get the things out there. You know, as a prior Marine, I'll, I'll always remember, you know, we get taught in, in sort of military history class, you know, the French had better tanks when World War II started. But who tested them better? It was the Germans, right? They just got them out there and they, they just started testing with them and experiment them at a pace and scale that was far greater than anyone else. And so you see this environment now, and you know, a lot of the things that need to happen are actually regulatory in nature, right? How do we reduce the barrier for folks to actually go, go, go out and test either all sorts of robotics applications, right? Doesn't actually have to be pure humanoids, it can be autonomous systems too. And then how do you combine that with actually getting some of these deployed, you know, at a scale that you need to?

• 1:04:18Speaker 04

  The last point I'll say specifically around robotics and autonomy is that I don't think

• 1:04:25Speaker 04

  Well, let me say, from a capital deployment perspective, I think there's a real interest in, you had some folks come on last time, last week, when we talked about defenses, is being willing to make some really big bets and be able to buy the necessary capital to help them deploy at speed and scale. Obviously, we're an early-stage, small fund to start off it. We have big dreams, but we want to be a part of that journey, particularly if that journey is here in the US.

• 1:04:48John Coogan?

  That's very cool. Can you talk a little bit about logistics and just how can we increase resiliency there? And what startups are kind of tackling that? Or how should they even think about tackling that?

• 1:04:59Speaker 04

  Yeah, great, great question, too. Let me start framing it by, I look at the defense, national security space. And again, we at Shield, we think pretty broadly when it comes to national security, right? So that is anything that touches autonomy, AI, cyber and space that has an application to build. When I think about the national security context, it's how do you sense, make sense, affect and sustain? Sense is easier, right? That's satellites, like TOFER came on, one of our portfolio companies, right? He's sensing the environment and making sense of it. How do you affect it? So what are you actually going to do about it? And that could be something physical. That could be branded in and shield AI drones, or that could be non-physical, digital in nature. And then there's a sustainment part. And I think this is just such a huge opportunity. There's a lot of companies working on it and so much more to do.

• 1:05:41Speaker 04

  And I specifically call it sustainment, not logistics, for a couple of reasons. One, this term of contested logistics, while important, doesn't get to the root of the issues, which is how do you both operate in a constrained environment? So how do you do things when you know you're going to run out of fuel? Are you going to have these certain constraints? And then what are you going to, how are you going to sustain it more broadly, not just from a physical movement? So there's two aspects. There's a, there's a very physical hardware component to it. We need just more munitions. We need more capacity here to do it. Knowing though, back, back to the two horizons, by 2020, by 2027, we may not have all of that. So you just need to be able to digitally operate and be more efficient with the things that you might have now or within 18 months.

• 1:06:23Speaker 04

  And so I think there's just so many opportunities here in terms of how you deploy at the edge. So what capabilities do you decide to go produce, you know, in, in the edge being some location where it's just easier to get to? How do you combine the two together? And then how do you use artificial intelligence to actually optimize it all?

• 1:06:42Jordi Hays?

  How do you think about 2027 as a wedge for new defense tech companies that are emerging? A lot of companies come in and they're just focused on legacy systems. Like, I want to build a better version of this missile. And I think I'm going to be able to get a contract because the DOD doesn't want extreme vendor dependency on like one or two old primes versus looking at 2027 in Taiwan and saying, hey, we want to build a capability for this specific potential conflict. And is that an opportunity? Or is that not even the right way to think?

• 1:07:23Speaker 04

  Yeah, I mean, a lot needs to happen in 18 months, right? But that's not the only timeline. I thought you brought up some great points in the group that came last week about trying to build a feature within the defense space. There's only going to be so many andurals, right?

• 1:07:36Jordi Hays?

  Yeah.

• 1:07:37Speaker 04

  There's only going to be so many that can speed and scale. Now, do I think there's more opportunity to do so? Absolutely, that's why we're in this business. It's not the only business, though. I think there's a lot of enabling features to your question. Some of the most interesting things that I found from, say, the conflict in Ukraine weren't necessarily the missiles and drones. It's how did they move their administration to a digital environment? Using outposts and snowballs to actually make sure that the state functions. But you wouldn't necessarily think that's like core national security, but to me, that absolutely is. Half the challenge with a lot of the AI applications is you don't have the models accredited. You don't have the models deployed in a way that they can actually be used. And obviously, that has a compounding advantage. The more times you can get hardware, the software and the data together.

• 1:08:22Speaker 04

  But directly to your question, I mean, I still think there's a ton of room, right? There's a really unique moment in time, especially now with the desire to want more startups within the ecosystem. And my colleague just testified to the Senate panel with regards to cyber reform. So how do we actually use our small business innovation research dollars to actually incent, not necessarily just small business or ones that are churning that through, but the ones that actually want to go and scale it and go scale to something bigger? Like a traditional pilot program should be.

• 1:08:53John Coogan?

  Can you talk a little bit about Edge AI? We've seen like the Studio Ghibli moment. We've passed the Turing test. Waymos are driving around. Like, is there something that we should? We've seen those drone shows that seem like, okay, that's a weapon system. What AI kind of Studio Ghibli moments are we waiting for in defense? Is there anything that you're excited about in Edge AI?

• 1:09:14Speaker 04

  Yeah, you know, with you guys at Founders Fund, we're investing in a company together called Armada. And it's really kind of giving me a new glimpse into what not just edge. So edge being where am I going to deploy compute? Again, go back to the sense, make sense of the environment. But how am I going to connect together with some cloud-based, right? It's always going to be some disaggregated network there. But what I'm excited about is, I mean, there's just so much that can be done with smaller models and with reasonable compute, knowing that we're only going to get so much compute. We talked about tariffs earlier, right? There's, there are those bottlenecks that exist. We're not going to produce the best in semiconductors overnight. And so we have to be able to do more in those environments. And you know, Andrew is an early pioneer at that, right? In the national security space.

• 1:09:59Speaker 04

  How do you bring computer vision and other aspects of sensor fusion with other modalities together? And that's just only the start. So I'm super excited by that. And I think it meets a lot of the customers where they're at, not just for national security, right? People are worried about cloud bills. People are worried about how much, like, what am I actually getting for AI return on investment with all the compute that goes into it?

• 1:10:20Jordi Hays?

  Do you think there's enough private capital going into defense tech broadly? You know, there's been talk of, you know, we've seen over the last year, investors that have no background in national security, you know, sort of FOMOing into the category, but maybe that's actually good for America because we just should have more private investment coming in?

• 1:10:43Speaker 04

  Yeah, I guess as a, let me first say, I'm glad that there's more people interested. I mean, I don't think you need to have a military background to do this. I think there's amazing American patriots that just want to get involved and they have really core technical skills elsewhere. I think it's helpful that, you know, folks came from the visceral operating experience, but that's not necessarily necessary, nor arguably is that, is that why you should go pursue that path, right? Go serve because you want to go serve and you want to go defend the nation. It just so happens that I came out of that experience having some really, you know, interesting insights that I thought I could go leverage and go help out, you know, with, within the space and be able to support. Actually, my, I love, most importantly, I love when non-military, non-national security,

• 1:11:27Speaker 04

  just amazing entrepreneurs and technologists just want to go tackle these problems and we're able to help them out. I'm not the best when it comes to, you know, what's next in computer vision or distributed models, but you know what? I can help you find the right customer set or identify the right contract vehicles. That's what our fund does. And so that part's actually most exciting is how do you get, you know, the folks who may go to Snapchat working on, you know, some background filters, actually work on some like really cool problems within national security space that have the same technical aspects.

• 1:11:57John Coogan?

  I, I, I think our audience is probably familiar with the idea of like, if you're starting a defense tech company, you might start with some SBIR money, then you're kind of sprinting towards program of record. Maybe there's the valley of death where you have something that's working, but you're not ready to really start producing it at scale. What are the other pools of revenue that defense tech entrepreneurs should be thinking about? And can you give us a little more granularity or sense of scale of, you know, how should I be thinking about an SBIR? How should I be thinking about a program of record and everything in between?

• 1:12:29Speaker 04

  Yeah, absolutely. I'll keep it quick because I know, uh, we're on, on a clock here. Let me, let me give you a financial answer and a non-financial answer. I think both, both are important.

• 1:12:37John Coogan?

  That's great.

• 1:12:37Speaker 04

  The first is right. It's not just CIBR's and program of record, right? And you saw the Secretary of Defense's memo around use of, you know, the newer software acquisition pathways and specifically other contract vehicles or other transactions to help facilitate this. And that's exactly what organizations like Defense Innovation Unit are there for. So there is this middle ground that I think is being tapped now far, far greater by the new entrance within the national security space. I'll give you a non-financial answer too. Sometimes an unpaid pilot is super helpful.

• 1:13:06John Coogan?

  Oh, yeah.

• 1:13:07Speaker 04

  Going on a CRADA, um, which I think, you know, Saronik and others had, had done in the early days. Access to data, access to testing environments is just as important, particularly for those within the autonomy space, right? That need to go test and validate, get access to the right data, or just have ranges where you have at least a little lower barrier to entry when it comes to flying, certifying, etc.

• 1:13:29John Coogan?

  That's great. Last question?

• 1:13:31Jordi Hays?

  No, this is great.

• 1:13:32John Coogan?

  Yeah, this is awesome. Thank you so much for stopping by.

• 1:13:34Jordi Hays?

  Yeah, it's great to have you.

• 1:13:36Speaker 04

  Thanks, guys.

• 1:13:36John Coogan?

  Yeah, we'll have to have you back on soon. Thanks so much.

• 1:13:39Speaker 04

  Yeah, I would love to.

• 1:13:39John Coogan?

  We'll talk to you soon. Well, next, we got Phil Ernstine from Dirac coming in the building. We'll see when he gets here. Any minute now.

• 1:13:48Jordi Hays?

  Do you remember my brutal mispronunciation?

• 1:13:51John Coogan?

  Oh, yeah. What was that?

• 1:13:53Jordi Hays?

  Never again.

• 1:13:53John Coogan?

  Was it that you mispronounced his name, or was it that you called him a kid and he was upset about that? There was something.

• 1:13:59Jordi Hays?

  I think it was probably both.

• 1:14:00John Coogan?

  Now is your opportunity to say, "You're sorry, man, culpa."

• 1:14:03Jordi Hays?

  I did, I did. We made up.

• 1:14:05John Coogan?

  Never apologize, always claim victory. I pronounce your name more correctly than you pronounce your name.

• 1:14:12John Coogan?

  No, I love Phil. I met him, must be a couple of years ago, probably through Augustus, and I think he moved out to El Segundo, was like sleeping in the factory with Augustus, getting the company off the ground, but has done some amazing work building out his business, and we're excited to talk to him today. So, welcome to the show, Phil. How you doing?

• 1:14:32Jordi Hays?

  Boom.

• 1:14:33Fil Aronshtein?

  Living life. Life's good, rocking and rolling. We're out here in New York. Very apt introduction. Thank you, Mr. Coogan.

• 1:14:41John Coogan?

  Yeah, I heard you're in the Empire State Building, is that right?

• 1:14:45Fil Aronshtein?

  That is correct. We are in the Capitol Building of the capital city of the empire. You know, what better place to help rebuild the American empire? If I take my camera and pivot behind me, you can kind of see overhead. Now, that's the view. That's a dozen yards back there. Little bit of a foggy day, but on a clear day, you can actually see New Jersey.

• 1:15:07John Coogan?

  Oh, very cool.

• 1:15:09Fil Aronshtein?

  You've intentionally positioned it such that, you know, we can keep an eye on them, make sure they don't invade.

• 1:15:13John Coogan?

  Okay, okay. Yeah, yeah. A little Manhattanite nationalism. I like it.

• 1:15:17Jordi Hays?

  Uh, have you thought about getting, have you thought about trying to get logo rights on the building?

• 1:15:22John Coogan?

  Yes.

• 1:15:23Fil Aronshtein?

  So funny enough, if you text like one of those five digit numbers, you can actually get daily updates on how it'll change the colors for the building.

• 1:15:31John Coogan?

  Really? Okay.

• 1:15:32Fil Aronshtein?

  So yeah, we're, you know, we've got something cooking, you know.

• 1:15:34John Coogan?

  Yeah, you gotta get like an iconic colorway for the company so that when you throw it up on the building, everyone knows these guys are working late tonight. They threw their colors up on the building. You know, like Ramp owns yellow, Y C owns orange. You need to pick a color.

• 1:15:47Fil Aronshtein?

  Well, it's probably gonna be, you know, we're building the blueprint of the future. So maybe some variant of blue.

• 1:15:53John Coogan?

  I love it. I love it. Uh, gave me just, I mean, we jumped right into it, but can you give a little background on like the company, what you're building, where you are in terms of what kind of stage and size?

• 1:16:02Fil Aronshtein?

  Sure. Um, I'll give everybody a little bit of background about myself. Um, background's originally in electrical engineering and robotics. Uh, was over at Northrop Grumman for a little bit, you know, got TS clearance, worked on some pretty cool radar stuff over there. Uh, did a little bit of EE work, a little bit of MECKY work, a little bit of technician work over there. Just got to see how absurdly archaic all of the infrastructure was in the manufacturing side of things. Was starting to get the feeling that the West was forgetting how to build great things. I wanted to make sure that that didn't happen. So got my best friend and co-founder and what have to go start to rack. Um, so as a company, we are building the first automated work instruction plant. Uh, sounds like a very vague, very niche thing, but turns out everybody actually has had experience with work instructions.

• 1:16:45Fil Aronshtein?

  Uh, if you've ever built like IKEA furniture, a little paper instruction book that tells you how to build a thing. Uh, turns out that is actually basically how they make missiles and cars and everything in between. So that process is like, imagine you're a dude in a factory. Somebody says, here is a CAD file or 3D model of like an engine. Go figure it out. Literally go figure out. They will like pull this assembly apart. They'll figure out what order to do the assembly in super duper manually. Take hundreds of screenshots or photos and then throw all that together into a several hundred page document or word doc or PowerPoint of the course of weeks or months. Super brutal, super manual, sounds as awful as it is, almost as bad as being like a McKinsey analyst with like a hundred page PowerPoint.

• 1:17:29Fil Aronshtein?

  It's like making an IKEA slideshow by hand.

• 1:17:32John Coogan?

  Yeah, yeah, I think we saw this week, some videos went viral of folks painting artillery shells by hand and the artillery shell moves from one station to the other and there's the the basic commentary was like, how are we still doing it like this? This is not great. But you could imagine some work order system was built at some point for that and that that that kind of concretizes what you're building. So, so yeah, how's it going? Where's the business now? Are you live in public beta? How much does this thing cost? Like, how how does the business actually work?

• 1:18:04Fil Aronshtein?

  Right. So what CAD, you know, CAD's offer was for mechanical engineers. We're building basically that 21st century update to the process for their blue collar counterpart. First we call the manufacturing. We price pretty similarly. We price 5K per seat per year. It's like a CPAS system. We actually, great timing for me to come on the pod and chat with you guys. We actually just went live and announced Build a West V1 yesterday, you know, fully live. We are now enterprise grade. I talk compliance, you know.

• 1:18:35John Coogan?

  I talk compliance. We love an I talk compliant company on the show. Congratulations.

• 1:18:40Fil Aronshtein?

  Ah, epic. Thank you, fellas. So yes, we can now deploy on prem to defense customer. We're already working with some defense companies, working with a bunch of automotive companies. We love tier one through three suppliers, OEMs. Got a bunch of really cool companies that are not just, you know, aerospace and automotive. These are like the two, the only two industries that apparently most people think exist. But, you know, we're working with like agriculture, construction manufacturers. These are companies that like. Recent, recent one that we just started working with, super cool company called Spudnik. These guys make the potato harvesting equipment.

• 1:19:13John Coogan?

  Spudnik, I love it. It's a Spudnik moment for potato farming, apparently. They're saying, yes.

• 1:19:20Fil Aronshtein?

  So we're off to the races, product is live, we're deploying.

• 1:19:25John Coogan?

  What, what is it like deploying on prem? Does that mean you have to package your software up and send them like a CD or something or floppy drive? Like.

• 1:19:33Fil Aronshtein?

  Not a CD. The caveat here is that they have to have their own cloud-based resources themselves.

• 1:19:38John Coogan?

  Got it. So you can still interface with APIs as you need to.

• 1:19:41Fil Aronshtein?

  Yeah, yeah. It's a little bit more complicated than that, but I'll sort of leave it at that. Like they have to have some sort of like cloud-based infrastructure.

• 1:19:47John Coogan?

  Okay.

• 1:19:48Fil Aronshtein?

  Deploy it via tariff form. This is a thing we can now do, ladies and gentlemen.

• 1:19:51John Coogan?

  Oh, cool. Yeah.

• 1:19:53Jordi Hays?

  What? I'm sure you've been talking to your customers constantly as one does, but what's their broad reaction been over the last 24 hours? Are people, I imagine some of your customers are super excited about the tariffs, others unsure, others negatively impacted in varying ways. But, you know, give us the update there.

• 1:20:15Fil Aronshtein?

  Yeah, so on the, on the whole tariff thing. Man, so some of our customers are a little bit upset because prices are going to go up for them. It sort of depends where you are industry-wise.

• 1:20:27Jordi Hays?

  That's, yeah, so that's, that's like the input costs are going to go up because maybe their sourcing.

• 1:20:34Fil Aronshtein?

  In the short term, in the short term. You know, they're, they're pretty upset about that on a, on a couple of different vectors. But it again depends like, if you look at the, what's really cool about like our company is we get to see like the widest varieties of like the coolest CAD files, coolest assemblies you'll ever see. And so, you know, if you look at like the hierarchy and the structure of a CAD file, it's very tree-like. And so that hierarchy of like an assembly of sub-assemblies and sub-assemblies and sub-assemblies really neatly mimics the supply chain of that product. There's some really, really neat novel insights that we get to see. And so if you are like a, one of those sub-assemblies, you're called like a tier one through three supplier. If you're making like the top level thing and you're like, you know, an Anduril or a Toyota, you're an OEM.

• 1:21:15Fil Aronshtein?

  The OEMs are a little bit more upset than the tier one through three suppliers as from what I've seen.

• 1:21:22Fil Aronshtein?

  And so more broadly, like materially put costs are like closer to the tier one through threes than like the OEMs. The OEMs get like the final markup, which is sort of like a pain. And so that's kind of what we see. But I think by and large, people are short term like upset, long term, pretty excited because what it means is it's going to force a lot of capital to be allocated towards rebuilding domestically, which is honestly what a lot of the folks that we work with want, right? You want your supply chain proximal to you. You want to have expectable lead times. Now, that's been like one of the, one of the worst things that a lot of folks we work with have seen. So.

• 1:21:55Jordi Hays?

  For a company, for an at scale company like, you know, like a prime like Northrop, what percent, for the average product at Northrop, do you have any sense of what percentage of the parts that go into a specific end product are American made today? And do you think that companies at that scale are going to, you know, feel like they need to react and even invest in some of these tiered suppliers?

• 1:22:21Fil Aronshtein?

  So I don't have a perfect number for you, but what I do know is that companies like Siemens, companies like Stellantis, these are companies that are global in nature and actually not like traditionally headquartered in the US. And we're seeing a lot of them shift more of their production to the US immediately. Like over the past, you know, couple of months, we've seen huge announcements from Siemens and Stellantis to move production to the US and open up new facilities, triple down on, you know, American based production because if you are selling to the American market, you want your cost to be as low as possible. And so it only makes more sense to have your production be domestic. So, yeah.

• 1:23:02Jordi Hays?

  Yeah. How do, how do you think about, I feel like one of the bottlenecks to Duroc's growth, I said that right, correct?

• 1:23:11Fil Aronshtein?

  Correct.

• 1:23:12Jordi Hays?

  Dirac, Dirac, I'm gonna get it this time. It's Iraq with a D.

• 1:23:17Jordi Hays?

  One of the bottlenecks to Dirac's growth is gonna just be having enough, if you're selling by the seat, having enough manufacturing engineers, right? I don't, I wish I knew more myself. How do you think about kind of like the talent equation to solving, you know, to re-industrializing?

• 1:23:35Fil Aronshtein?

  So there's, okay, I can get on my soapbox. There's like a couple, there's like two to three pieces of this. Get on it, get on it.

• 1:23:41Jordi Hays?

  Get on it.

• 1:23:42Fil Aronshtein?

  You know, broadly, kind of interesting, the number of manufacturing, I'll give you a little bit of like the history lesson. Please. The blueprint in general. So basically until like the like early 70s, mid 70s, engineers and manufacturers were connected by one thing, and that was the blueprint, right? Like classic cyanotype blueprint that you imagine in your head when you say blueprint. And then like the, you know, late 70s, early 80s, CAD software emerged and became ubiquitous. And basically, all of the mechanical engineers were on the shop floor, super well-integrated in production. They were more blue collar than white collar generally. All of them basically moved to the back office, went from being generally blue collar to white collar. And basically since then, like manufact, like the mechanical design had become like totally divorced from reality.

• 1:24:25Fil Aronshtein?

  You often now have like mechanical engineers, never going to shop floors, oftentimes designing systems that are generally like not manufacturable. And so the blueprint was basically like fractured into two parts. CAD software, the design side, work instructions on the build side. CAD software got a ton of upgrades for 50 years, work instructions never did, that's what we're working on. And so when that happened, you also saw like the, you know, the archetypal mechanical engineer also fractured, you know, fractured into two different people. Like the mechanical engineer that's like your more typical like design engineer and a manufacturing engineer. So actually, if you look like statistically in the US, there are actually roughly the same number of mechanical engineers as there are manufacturing. So there's like around 300,000 of these folks in the US.

• 1:25:08Fil Aronshtein?

  I'm in globally. So it's actually like a really big popular job. It's just like, you know, this is where you would like get a mechanical engineering degree and like, you know, half the time, people will just like go into manufacturing. And so there was an enormous, uh, so back to like the, the portion amount of labor base. These are the folks who will get a CAD file and like figure out how to put this thing together. And their documentation systems suck. I mean, it is like oftentimes if it's not PowerPoint or Word, it's a Post-it or like the back of their head. So what we've been seeing unfortunately is, you know, especially post-COVID, you know, a lot of these folks are retiring. A lot of these folks have all this information locked up in the back of their heads as tribal knowledge. And so, yes, like we're automating like a good chunk of the groundwork of making work instructions.

• 1:25:52Fil Aronshtein?

  You know, we take a CAD file in, we automatically figure out how to put together, automatically generate 80 to 90% of the work instruction, but that 10 to 20% that we can automate, that is like the tribal knowledge component. And that is what we serve as like a data aggregation platform for. So a lot of what we see is, you know, average age of the American manufacturers, like somewhere between like 45 and 55. I like to say 55 just to be a little bit more precautionary. And, you know, in the US, we do not want cheap labor, right? We want smart labor. That's what we want to be advocating for. We want to build new technologies and we want to build new manufacturing systems that take advantage of automation. But we do not want to like replace people in general. We want to augment and aggregate as much of their tribal knowledge

• 1:26:35Fil Aronshtein?

  and bake it into the systems that we use for the next generation of American manufacturing. Like, that's kind of how we see it. However, what we've seen like for our customer base, generally speaking, is, you know, the, the, the classic question of like, uh, oh, like I buy like some DRAC software. Now, because I can do the work of 10 people with one person, I can lay nine people off. And it's like, no, no, no, it's actually that, uh, you know, because nine of your people retired, you're still up with one. Now I don't have to shut my manufacturing facility down. So like that's where we see a lot of the value add and value generation, but also more broadly as a company, we're not just staying in work instructions. That's just, you know, where we're

• 1:27:12Jordi Hays?

  What do you, what do you think about MBAs, you know, buying small manufacturing businesses, rolling them up?

• 1:27:19John Coogan?

  Last question.

• 1:27:21Fil Aronshtein?

  Brutal, brutal as a concept, awful idea. I'm actually generally pro engineers and manufacturers, rolling up like SMBs, like mid-market manufacturers. This is a, you know, I think a very interesting concept as a whole. If you were to like, you know, if you as a, as somebody with a like a hardware background, had a very specific like search fund for like pumps or valves and you like really knew who to like, like where the optimizations could be generated. If you came in and you were like, we're going on Google Drive, guys, like no more like writing stuff on Post-its, like that could be very interesting. That's useful. But like an MBA comes in, they look at the P and L and they're like, ah, like cut everybody over 50. And it's like, no, the tribal knowledge. That's

• 1:28:04Fil Aronshtein?

  like where those guys knew how things fit together. You didn't write it down. And now your factory doesn't know how to build shit anymore. And now we're Serbian, we're kowtowing to China and it's over. And it's over. But we don't want that to happen.

• 1:28:15John Coogan?

  Never kowtow, never kowtow. Well, thanks for coming on the show. This is fantastic.

• 1:28:19Jordi Hays?

  This is great.

• 1:28:20John Coogan?

  You gotta come back when you have more news. I'm sure there's gonna be a ton this year. It's a crazy time, crazy year, and we're excited for what you're doing out in New York, keeping Manhattan safe from those New Jersey folks.

• 1:28:32Fil Aronshtein?

  Yes. Thank you guys for having me and I will catch you guys later.

• 1:28:35Jordi Hays?

  Looking forward to the next one. Cheers.

• 1:28:38John Coogan?

  Hello, Phil. Great dude. Always.

• 1:28:41Jordi Hays?

  What a guy. Very well spoken.

• 1:28:42John Coogan?

  Yeah, just high energy, knows his business, lots of good takes, tapped in. You'll love to see it. Well, speaking of tapped in, we got Zach from Plaid coming in next.

• 1:28:52Jordi Hays?

  He had some big news today.

• 1:28:53John Coogan?

  Fascinating story, fascinating company. If you ever authenticated on Oath with your bank, you've probably seen the Plaid pop up and he is here now. I'll let him explain the business because he probably knows it way better than I do. Zach, welcome to the show.

• 1:29:07Zachary Perret?

  Hey guys. Thank you so much for having me. It's great to have you.

• 1:29:10John Coogan?

  Yeah. Can you give us a little background, maybe brief introduction to the company I think most people know, but then specifically, what are you announcing today?

• 1:29:16Zachary Perret?

  Totally. So Plaid, we build infrastructure for digital finance broadly. The core thesis is banking was built for a world that didn't envision the internet. We wanted to help people be able to get loans, open bank accounts, pretty much do anything in their financial life online. So we created the API for your bank account. You probably utilized it when you linked your, let's say Wells Fargo checking account to the Venmo app. Any bank account that you links to pretty much any fintech company, we build the plumbing for all of that. Increasingly, it's not just fintech companies now, but it's the big banks, the way that you open a checking account with Citi goes through Plaid, and then a ton of enterprises. So the way that you pay your rent with Invitation Homes or a bunch of those, all that stuff's going through

• 1:29:59Zachary Perret?

  Plaid. Last few years, we had a big change to our business. We historically just focused on bank account linking. Now, we're very focused on utilizing a lot of the aggregate data that's coming through our system to build things like a new version of fraud scoring. If we can see your patterns, you see that you committed fraud in Robinhood, we can tell Venmo that you committed fraud, we can tell your bank that you committed fraud, so on and so forth. We built a credit scoring division that builds alternative credit scores. We built much tooling to do better bank things payments. So it's been a big evolution for the business over the last two years or so.

• 1:30:29Jordi Hays?

  Yeah. Yeah. Talk about the time period, I guess it was like late 2022, 2023, everybody just said, okay, fintech is over, but you obviously have like more better data than everyone. And so you can see that like, no, in fact, like fintech was not over despite VCs, you know, maybe.

• 1:30:48John Coogan?

  Opining on podcasts.

• 1:30:49Jordi Hays?

  Yeah, talking on podcasts. I'm sure you never lost faith, but I guess like talk about, you know, where we were a couple of years ago versus now.

• 1:30:58Zachary Perret?

  Totally. I mean, like, I, I, fintech had a winter. Crypto has winter, fintech definitely had a winter. Basically, there's a crazy amount of fintech demand pulled forward into 2020 when people couldn't go into their bank. They need to figure out a way to do financial services online. 2021, zero interest rate environment, you had, you had things growing like crazy, you had tons of ad budgets, so on and so forth. First half of 2022 was kind of a continuation of, of all of that. And then interest rates started going up in the second half of 2022. And in large part, the fintech market wasn't prepared for that kind of change, certainly not that kind of change at the speed with which it changed. A lot of fintech businesses were, were predicated on lending and lending slowed down quite significantly.

• 1:31:40Zachary Perret?

  And a lot of them were predicated on, on investing or crypto and those markets slowed down quite significantly. And so you saw a slowdown of fintech in the second half of 2022 and then kind of like a bit of lethargy throughout kind of the first half and almost the second half of 2023. And a lot of that was the businesses themselves, like retrenching, going in and focusing on profitability. It was no longer growth at all costs. You got to build a model in which you're actually profitable. You're, you're, you're not just gross margin profitable, but your operating margin profitable. A lot of it was also like retooling from focusing just on, you know, investing and crypto to also doing things like core banking and a bunch of other services. And so you saw this whole rebuild of all of the fintech companies. And then going to 2024, there was a rebound in 2025.

• 1:32:25Zachary Perret?

  You know, we've seen very much a fintech spring, as I like to call it. So things are moving really quickly. There's a ton of startup formation at the earliest stages. In the mid-stages, these companies have retooled or are now back to growth. At the late stages, you're about to see a couple of IPOs. So Klarna is coming soon. We think we've heard that Chime is coming soon. I've heard that a bunch of others are coming soon. And so, you know, it is very much a sense of optimism right now. But you're going through these cycles of difficult times. I think it makes companies and in our sense, I think in industry, a lot stronger. But I can't say it's fun to go through.

• 1:32:59John Coogan?

  Can you talk about stablecoins? How are you thinking about that in general? It seems like there would be some cross pollination there, but also like it's a wildly different industry in many ways.

• 1:33:09Jordi Hays?

  Yeah, and specifically, you know, you don't need to speak to this, but we were covering the Circle S1 briefly.

• 1:33:16John Coogan?

  There's been a lot of news about it.

• 1:33:17Jordi Hays?

  It feels like they benefited from some amount of a monopoly temporarily, and maybe that's fading, but just creates more opportunity for other fintechs, SMBs and banks.

• 1:33:28Zachary Perret?

  Totally. Well, I haven't read the Circle S1 yet, so I wish I could comment on it.

• 1:33:31Jordi Hays?

  No, don't, don't comment on that, to be clear.

• 1:33:34Zachary Perret?

  Yeah, broadly, stablecoins, like a huge opportunity. You know, in the US, if I want to send you money over the ACH system, it takes three days. That doesn't make any sense. We have this whole new thing that's rolled out over the last few years called same day ACH. Great, I can send you money the same day. There's an RTP system, real time payment system, where I could send you money theoretically instantly, except not every bank accepts it. It doesn't work universally, like there's still some issues with it. And stablecoins, I can just send you money really easily. And so there, there is no question in my mind that stablecoins are going to grow quite massively. I think there's still a question on like consumer utilization. How is it going to get actually into consumer payments? Where, you know, no one's going to walk into a Starbucks and buy a coffee with a bank account. No one's going to walk into a Starbucks and buy a coffee with a stablecoin. Certainly not for any amount of time that I can think about,

• 1:34:19Zachary Perret?

  you know, maybe 10, 15 years in the future. But for a lot of the core, you know, business to business, especially cross border where it's really messy types of transactions, I expect it to grow quite a lot. So definitely an area that we're participating, we're working with a lot, a lot of companies on, and we're excited to support.

• 1:34:36John Coogan?

  On, on that topic of like the slow ACH transactions, that feels like something that I, I understand the value of crypto, but also like databases are fast now. Is there a world where if you were put in tards of like Doge for finance, like D O F E or something, and you just had like carte blanche in the government, you could speed it up? Or is it not like a personal issue? You can, you think you could do it?

• 1:35:00Zachary Perret?

  Yes.

• 1:35:00John Coogan?

  And how would that actually work?

• 1:35:01Zachary Perret?

  It's like the, the Federal Reserve has a system called FedNow.

• 1:35:05John Coogan?

  Yeah.

• 1:35:05Zachary Perret?

  And FedNow is actually just like instant bank to bank transfers.

• 1:35:08John Coogan?

  Yeah.

• 1:35:08Zachary Perret?

  And they're cheap. The interesting thing is it's actually a new revenue line. So the bank, bank would make processing revenue from this. So there haven't been a lot of new, new revenue lines for the banks recently. The issue is like getting banks to install it, getting banks, like setting up the right incentive systems to get banks to actually set it up. There are like, you know, a few hundred banks, and they're mostly small banks that are using it. I think there are like four or five easy changes. You change the incentive structure. You create a mandate that every bank has to support it. They're like, like this, this, the small set of changes that you could get instant bank payments running in the US very quickly. Uh, now it's a question of like, does the government have the appetite to force things upon the small banks? And like,

• 1:35:44John Coogan?

  Sure.

• 1:35:45Zachary Perret?

  It is costly for the banks to implement it. It's not crazy costly, but it is not zero cost. And so does the bank, does the government actually have the appetite for something like that?

• 1:35:53John Coogan?

  That's really helpful.

• 1:35:54Jordi Hays?

  What, what are you, it feels like there's so much to build still. I had to go to the bank yesterday to send a large wire and it's still like, every time you do that, you're like, you know, they're looking at your phone and they're like writing down the wire instructions and they print it out and they're like, can you confirm it again? And then they're like, can you sign this and can you sign that? And then I gotta text the, you know, recipient and the whole thing still.

• 1:36:19John Coogan?

  Do not copy and paste your account number twice. You can copy paste it in the first box, but not the second box.

• 1:36:24Jordi Hays?

  I feel like this is such a beautiful time for Plaid. You're, you know, founder run company. You have incredible distribution and there's still so much yet to build, you know, sort of what, what gets you most excited in terms of, I'm sure you just spend a lot of time like talking to big bank CEOs and startups and your position is just like, how can we enable you to do what you want to do or, or improve existing products? But kind of what, what are you most excited about in the Plaid ecosystem or?

• 1:36:57Zachary Perret?

  I get to have the most fun conversations in the world with our customers and with the banks. I get to go in and say, hey, what frustrates you about the financial system? And they will just like talk for 30 minutes. I'm like, amazing. We can't solve all that. We can solve these things. And we can work together to solve those things. And like, maybe over time, we can, as an industry, find, find, find a way to make it better. So they're incredibly fun conversations. To your point, like financial services is just barely becoming digital. And, you know, it, it's crazy to say that because you have online banking and, you know, maybe you use Venmo and maybe you buy some Bitcoin, Bitcoin, Bitcoin basis. You can make a trade on Robinhood. That seems really easy to you. But to most people in the US, most of their financial life is still not fully digital.

• 1:37:36Zachary Perret?

  And so I think just the core, the core of our business like has a lot of room to grow, a long way to keep running. Like we gotta get rid of that, like hold your phone up, like type in your account number. All that stuff can become instant and easy. I would say like the two big areas that we've really been investing in that I think will be game changers kind of over the longer term. So obviously the core business matters a ton, but the two new areas. The first is fraud detection. So online financial fraud is going up at somewhere between 20 and 25% a year off of a gigantic base. Deepfakes are having a big impact on this. A lot of AI tooling is having a big impact on this. I mean, there's like, you've probably heard of like the pig butchering stuff that's going on where like people are like, you know, calling folks and tricking them into sending Zelle payments to crazy places, so on and so forth.

• 1:38:19Zachary Perret?

  But that is at an all time high and going up really quickly. And so we've built a set of tools that look across all the data in our network. They ingest a bunch of third party data. We have customers reporting fraud data back to us. And you can kind of think of it like Palo Alto networks for financial services. So like, how do we notice if something is weird over here and then tell everyone over there that they should maybe be on alert for it? So that's one big area that we've been focusing on. The second big area is around credit scoring. So right now, if you get a new job tomorrow, your income goes up by 3X. It will take a very long time for that to show up in your credit score, right? And, you know, because you have to get loans, you have to then repay the loans and like for the whole thing to trickle through the system, it doesn't make any sense. But you are a better credit risk today because you got that new job. And so we've built a series of tools, including our own credit score

• 1:39:04Zachary Perret?

  that looks at real time data and brings it into the model. And then increasingly will allow more and more people to get loans that are based on today's data, not five years from now's data. So that's what I'm excited for.

• 1:39:14Jordi Hays?

  Yeah, on AI specifically in Plaid, just in fintech generally, do you think it's, it certainly hasn't felt like the most hyped category and maybe that's because, you know, 10 years ago, people were promising the sort of like AI based lending and all that stuff. And maybe it was AI, maybe it wasn't. Do you think it's getting enough attention? I'm sure you guys are taking it seriously internally.

• 1:39:39Zachary Perret?

  We're taking it very seriously internally. Look, from an internal efficiency standpoint, like leaning in hard, and frankly, a lot of the banks are leaning in hard. And so I think that'll be a big step forward. I don't need to talk to you about that. You've talked to everybody in the world about that kind of stuff. From a financial services product-specific lens, other than like, you know, AI causing fraud and then using AI to fight fraud, but like from a like core banking product standpoint, I don't think you're going to see a lot of changes fast. I think behind the scenes, if you go to a bank and you talk to a teller, or more likely, like you do a Zoom call with like a wealth advisor, they're going to have an AI dashboard and a bunch of AI tools that are real time telling them like, hey, what's going on with John's portfolio? You know, what recommendations should we be making?

• 1:40:22Zachary Perret?

  You know, how might it be different? But you're not going to get that direct like AI bot-style interaction for, I think, a long time, mostly because there's so much regulatory overhead, so much trust overhead that goes with it, that I think the banks are going to be hesitant and slow to launch. Look, I'm on the furthest edge of this. Like, I would love to have a like, set of AI bots that just like move my money across my accounts, like leave it in treasuries until the minute that I needed to pay, you know, whatever bills I need to pay. And then if I have excess left over, like move it back into treasuries or balance across my loans to pay the lowest interest rates. But I'm probably like way on the furthest edge of that.

• 1:40:54John Coogan?

  I have two questions. Out of the big bank CEOs, who's the best DJ?

• 1:41:00Zachary Perret?

  Well, you know, only one of them plays a cappella.

• 1:41:05John Coogan?

  On a serious note, I feel like there's this interesting dynamic with Plaid where you guys have, it's a financial infrastructure company, but you take design incredibly seriously. Where does the design chops come from? Like, how did that become so instilled in the in the company?

• 1:41:22Zachary Perret?

  So from the earliest days, our mission has been unlock financial freedom for everyone. Like, it is a consumer-centric mission. Like, our goal is to help consumers and small businesses that have a greater amount of financial freedom, have more control over their financial lives, and be able to do things that they want to do that are out there. And so, like, we took the position that we need to fight for the consumer, even though we build a B2B product. And thus we're B2B to C, or like B2B to small business. And with that in mind, we knew that we needed to build a brand that resonated with consumers. It doesn't need to be the loudest brand, but like, in a lot of senses, we take inspiration from Visa. Like, a lot of consumers don't know what Visa does, but they certainly know that it helps them make payments. All right, well, we want to learn from that, like- We would like every consumer to know what Plaid does. We're also realistic to understand

• 1:42:07Zachary Perret?

  that not every single one is necessarily going to fully understand it, but we want them to have tools that come from us. We want them to have trust in us. And so we focus a lot on building that type of consumer experience. And then you see us also like in the press and the media, like, try to go fight these battles on behalf of consumers. So fighting the open banking battle, like, fighting against the de-banking stuff that's going on, like, being very public about saying like, hey, we believe that every consumer should have access to every financial policy that they might want. And like, we think that if we continue to live up to this, like, this somewhat idealistic view, that consumers should be financially free, and that's going to drive a lot of value for the company. And that then flows through into the products that we build, the way that we act, the design sensibilities, and so forth.

• 1:42:51Jordi Hays?

  Last question on my side. Do you have any advice for founders in maybe defense tech or AI that are sort of like riding the high that fintech maybe felt in 2021? Like, is it time to, you know, I'm curious, because like, you know, this is such an amazing moment for you and the team to come back. You obviously, you know, the company's been marked up. You have a bunch of, you know, a world of opportunities, but you had to go through a couple darker years. Any words of advice?

• 1:43:21Zachary Perret?

  I mean, as the saying goes, things are never as good as they seem, nor as bad as they seem. I would say that the dark times, honestly, is my favorite. And it's the time that really forms the company. And it lets you know who you are. It lets you know who's really on your team. And it forces you to make like, the most important decisions. Nothing's ever going to be easy in startups. Nothing certainly is ever easy for Plaid. But knowing that we've like formed kind of an amazing team, a good set of customer relationships, like, we've made good product decisions in the times that are really hard, but allow us to go fast in those times where it gets a little easier. So I don't know if I have any specific advice, other than like, just keep on keeping on.

• 1:43:58John Coogan?

  It's great. Yeah, I mean, that is the best advice you can give, I think.

• 1:44:01Jordi Hays?

  No, I'm genuinely excited and I can't wait for you guys to build more products because every time I use Plaid products, it's a breeze. And every time I use, you know, anything from, from the legacy banking world, it's absolutely brutal. So you're doing-

• 1:44:14John Coogan?

  Don't talk too much trash about all those partners.

• 1:44:17Zachary Perret?

  We love the banks and our goal is to make things better.

• 1:44:20John Coogan?

  We're very thankful for everything you're doing.

• 1:44:21Jordi Hays?

  Make the banks better.

• 1:44:22John Coogan?

  Good luck and congratulations on the round. We'll ring a size gun for you.

• 1:44:27Jordi Hays?

  It's great having you on. Always welcome. And congrats to the whole team.

• 1:44:31John Coogan?

  We'll talk to you soon.

• 1:44:31Zachary Perret?

  Thanks for having me.

• 1:44:33John Coogan?

  Bye. Next up, we got Nathan Mintz coming in from CX2. Very excited to talk to him. Going back to defense tech, had to give you the update because there's some breaking news about Plaid. Not a defense tech company, but still got, still snuck in a defense tech question, Jordy. I like how you did that. That was very good.

• 1:44:50Jordi Hays?

  You gotta bring it back. No, it's just, we're, we're at this moment, you know, Plaid was started, you know, got to, you know, form itself when, when fintech maybe wasn't so hyped and then went through this period of exuberance and, you know, insane valuations, the same multiples, you know, we were seeing in AI today, fintech companies were getting, even lending companies were getting.

• 1:45:12John Coogan?

  Yeah. Well, we're talking to a veteran of defense tech. Nathan, welcome to the show. How are you doing?

• 1:45:18Speaker 07

  Hey, good, John. Good. Good to be here with you. I was listening in and I'm, I'm bummed that I don't have as good a hair as Zachary or around to talk about.

• 1:45:25John Coogan?

  He has fantastic hair. You know, we get some compliments on our hair every once in a while, but he blew us out of the water, I think. So, you know, the fans are just going to flock over to Plaid now.

• 1:45:34Jordi Hays?

  Yeah.

• 1:45:35John Coogan?

  But, but yeah, how, how are you doing? And can you give us a little intro on yourself and some background and what you're building now?

• 1:45:41Speaker 07

  I'm doing great, actually. Yeah. So, you know, right now, it's sunny and 72 degrees outside in, in El Segundo. And, you know, it's, it's, it's a great day to be in defense. We're seeing just, you know, it seems like every hearing that I watch of these appointees for this new administration seem to be echoing our talking points. So it's kind of nice to know that the last few years of, of pushing for a transformation and, and the way we do our force mix and, and how we fight wars is actually, someone's actually been listening.

• 1:46:18Speaker 07

  So as you know, I've been in defense for about 20 years. I started out at the big Soviet tractor factory primes. I spent 14 years at Boeing and Raytheon as a radar systems engineer, electric warfare engineer. I worked on, you know, programs with names like next generation jammer and

• 1:46:37Speaker 07

  the radar for the F-15 and the F-18 and a bunch of space programs and stuff. And then in about 2018, an old friend from college, Joe Lonsdale called me up and said, hey, we're starting a defense vertical. Do you have any ideas? And I came to him a couple of months later for with the idea for what turned into Eperus, which is a high-power microwave to kill drones and other electronics. So got that started, ran that for a couple of years, then moved over into the automotive radar space. Started a company called Spartan Radar that does, you know, software that makes automotive radars have higher resolution. That one we ended up selling to a major equipment OEM in the past year.

• 1:47:21Speaker 07

  And so we've exited that one at this point. And then about a year ago, I got together with my co-founders, Mark Treffgar, Porter Smith, and Lee Thompson. And we started CX2 with the goal of transforming the way that the US fights warfare in the electronic warfare domain. So that's where we are today. The company's about 24 people. We're here in, based here in El Segundo. We're backed by HVC and Andris Torowitz. And right now, the office is pretty empty today because most of my team's out participating in an exercise. So exciting times abound.

• 1:47:57John Coogan?

  Yeah, you know, you see those viral videos of the Chinese drone displays where it looks like a dragon and everyone immediately quotes it and says like, that's a weapon system. At the same time, as scary as that is, it feels like between Eperus and Anduril and, you know, Allen Control Systems is just pelting bullets. And we're talking to a company today that's building laser weapons to take down drones. There's a lot of different companies that have addressed this. Is it as dangerous as we think? Or is it more of a solved problem maybe than we already know? Or is it just like, we need to scale up the systems we have?

• 1:48:33Speaker 07

  So I'll give you a couple of statistics. When I was over in Krakow at the NATO Innovation Summit last year, the Ukrainians threw out a statistic that thirty percent of the of the casualties that they were experiencing were due to drone strikes.

• 1:48:49John Coogan?

  Wow.

• 1:48:50Speaker 07

  I think today in the Kursk Offensive for the Russians, it's the majority, if not almost all of them, certainly for the tanks and vehicles. So it's become a mainstay of modern warfare.

• 1:49:02John Coogan?

  Yeah.

• 1:49:02Speaker 07

  And right now, that's where we are today is just the beginning. Most of the systems that we see used, it's these FPV, first-person view, with some guy sitting there with goggles like he's playing a video game. And it's very one V one. Well, in the next few years, it's going to become one V many.

• 1:49:17John Coogan?

  Yeah.

• 1:49:18Speaker 07

  And at that point, those command and data links that today are essential for that drone to get there, and we're figuring out how to make them work more autonomously, because there's all these countermeasures, like you mentioned, to try and jam that data link or deny it. It's going to become even more vital, because one, one person suddenly, that archer is going to be firing a hundred arrows, right? We're kind of taking a step past that at CX2, and we're trying to develop the systems that shoot the archer, not the arrow, with that in mind. And a lot of it comes down to finding the drone controller, which becomes an increasingly harder problem as the cat and mouse game continues in modern warfare.

• 1:49:58John Coogan?

  So what, what does the device look like that's sending out the signal to find the drone operator? Are you putting up your own drone? Or is this something that can be tracked from satellites or UAVs or any sorts of other devices? Or can you even talk about it?

• 1:50:13Speaker 07

  Yeah, so we're building our own electronic warfare stack to find, fix, and finish on those emitters of interest. And that starts with a drone that does SIGINT and finds and fixes on those signals. We call it Wraith. It's a, it's a Group II drone with about, you know, forty-five minutes of later time or forty kilometers of range, depending on how you think about it, that takes off and geolocates those emitters. And by that, I mean it finds the position of those emitters. It's a little different from systems on the ground today that mostly kind of give you a line of bearing and say it's out there. We'll actually give you a fix on it and identify what it is. From there, through our Nexus operating system, we'll hand off to an attack drone called Banshee.

• 1:50:58Speaker 07

  That'll go out, it's a loitering munition with a home on emitter seeker that'll go out and take that emitter out. So you go find the controller and then you, you have another drone that follows it and, and actually takes it out comically, right? So that's, that's the current, the, the, uh, the full, uh, when I talk about the full attack stack that we're building, right? Um, and alongside that, we've actually built an FPV kit with a version of the Banshee seeker that can snap on to another drone. We call it Badris, uh, that will actually go out and seek, uh, that emitter out and it provides an overlay. So the FPV user sees a line of bearing, uh, and kind of the strength of signal on you're, you're getting warmer, you're getting colder.

• 1:51:41Speaker 07

  No, no, no. Fly left, fly right and can, uh, home in on the particular signal. So the, that's kind of our product mix. Wraith Banshee Badris Nexus, uh, you're kind of seeing a Halo theme in here.

• 1:51:51John Coogan?

  Yeah, I like it. Very cool. You have a question or I, I have another one. I can.

• 1:51:55Jordi Hays?

  Yeah. I, as you're talking, it feels like there's some, there's plenty of, you know, companies in, in the gundo and just defense tech broadly that can just sort of like think long-term about capabilities and trying to win these bigger programs. It feels like you have to take a much more iterative approach because things are kind of evolving in real time. And potentially that's like the, the, going to be the case for the entire lifecycle of the company, right? Where you're just always trying to stay, um, always trying to stay whatever, a, a step ahead of adversaries. Is that different than you think, you know, working at, you said Boeing and Raytheon back in the day,

• 1:52:38Jordi Hays?

  where they're just sort of thinking in sort of big programs and big capabilities and, and you're now having to be like nimble and, and constantly trying to stay at the edge?

• 1:52:46Speaker 07

  Yes, absolutely. The way that we used to do product development in aerospace was very much a bell curve with a long tail of sustainment. Right? So pretty much all the effort would culminate around critical design review. And then at that point, most of the systems engineers and stuff would roll off and the program would go into manufacturing sustainment. Whereas if you look at software products, if I was to look at how Facebook does a rollout. Or, you know, Google or any of these others, for instance, it's much more of kind of a logarithmic plateau. It gets up to a certain point. There might be a little bit of a hump in effort. Once the the posts are kind of put in on the house, so to speak. And at that point, there's a software sustainment tail that's much more much larger that takes place

• 1:53:30Speaker 07

  over time. And that's what we see in Ukraine with like the drone manufacturers that are over there. There's like 200 drone companies in Ukraine that are out building the million or so drones that they're putting to use right now. What what they're able to do is that they're able to rapidly iterate using commercial, you know, C I C D commercial was a constant integration, constant delivery type of processes. The the most extreme report I've heard of this is they they had cases where the Russians were rapidly changing tactics and employing new systems where they were updating software to rate of six times a day. And like with with the systems I used to work on, I mean, the missiles would get

• 1:54:11Speaker 07

  software updates so infrequently, they called them tape updates because they had to go out there. Yeah. And so, you know, they were lucky if they had an update every two years, much less, you know, six times a day. So the way that we do software acquisition in the D O D has to fundamentally change. There's been some good signs in that respect with the rules that the Sec Def has pushed out for software acquisition pathway, where they're saying, we really need to buy software using commercial processes as a default, as opposed to still using the traditional waterfall, you know, I call it the Soviet tractor factory way of procuring things, right? And and, you know, I think on the hardware side, we eventually

• 1:54:55Speaker 07

  need to move that direction as well. It's a little harder when you're building a multi billion dollar aircraft. I mean, just realistically, that is building a drone. But let's start with software and iron that out because that's where the most palpable need is right now.

• 1:55:08John Coogan?

  I love I love all those phrases. They're going to stay in my mind forever. Can you can you break us down? Can you break it down for us about D J I? There's a lot of fear that we're never going to catch up. There's also just a general fear of like, are all the D J I drones going to rise up one day and attack us? You've probably seen like the internals of these drones, you know how to probably take them over, the drop of a hat, you could probably do it on your phone if you wanted to. How much of a risk is DJI? We've had other guests on the show say maybe we should ban the importation entirely. Where do you stand on DJI?

• 1:55:42Speaker 07

  I mean, you know, we already have export or import controls in place and like they're banned from use from US government agencies, for example, with with exceptions. The solution is we got to build our own drone, you know, industry here in the States. I think we're doing a good job in that. The CX two is part of that, but we're also partnering with Ukrainian drone firms. I don't know if you saw, there was a big piece in the Wall Street Journal talking about us and and Skyfall, which is a Ukrainian drone firm. And so like partnering with the guys that are already building a million drones a year overseas and try to take their lessons, learn and scale it over here is one cheat code that we can apply

• 1:56:22Speaker 07

  to catch up faster, right? The the big advantage that the Chinese have is they applied consumer scale technology and manufacturing to the drone problem and they took advantage of our own regulatory, you know, blockers that we're putting in place. I don't know if you're aware of this, but to fly a drone in the US, you had to have a, I think it's a FAA type 109 license. So what's called and the Chinese got around that by labeling what they were doing a toy. So anytime that the US drone manufacturers, you know, we'd been building FPV drones since 2005, 2006, but nobody could get funding to actually scale it because of these regulations and the fact that, oh, it's too hard to train

• 1:57:04Speaker 07

  the pilots. It's not scalable. The Chinese, on the other hand, found the loophole and they scaled up as a result, right? So our own barriers from our own regulatory infrastructure are what need to be revisited and that'll unleash US innovation and allow us to to compete with them toe to toe.

• 1:57:19John Coogan?

  Got it. Are there any considerations for Indo Paycom versus what's going on in Eastern Europe? Clearly, you're very focused on Ukraine, but are you looking ahead to any other theaters?

• 1:57:31Speaker 07

  Yes, I mean in Indo-PACOM, the ranges are just a lot larger.

• 1:57:35John Coogan?

  Yeah.

• 1:57:35Speaker 07

  So you're going to have bigger drones with, you know, larger scale. Right. That's the main difference. Also, the Chinese are just more likely to, to bring out, you know, more sophisticated systems. I mean, you know, the Russians, for all the talk about, you know, the ZU-57 fell in, the reality of it is, is they fielded all of 12 of them. The Chinese J-20s and J-31s are starting to get into the hundreds. That's their quote unquote, fifth generation stealth fighter. I can make an argument that it's not quite fifth generation, but anyway. And then, and then just their, the amount of drones that they're talking about bringing at scale, they, they recently disclosed that they have an order for a million kamikaze drones that they're putting forward, right?

• 1:58:17Speaker 07

  In Indo-PACOM, right now, our plan is to deploy a whole bunch of legacy Battlestar Galactica assets with names like Riva Joint and Compass Call that are mostly on older aircraft, some are on 707s, some are moving into Gulfstream 5s, to do a lot of these capabilities. And they're going to be pushed way back from the Taiwan Strait. The only thing we have that can really get close is the Growler. And all of our missiles that we're using to do this mission cost millions of dollars. That's what we're seeing over in, you Gulf of Aden right now. You need a $6 million missile to take out a $20,000 drone. So we're here to help bring the cost parity back.

• 1:58:50John Coogan?

  Well, thank you for everything that you're doing. We certainly appreciate, and we appreciate you stopping by. You got to call back in when there's more news, more updates. Those are some great takes. We could keep. Yeah, we could keep talking to you for another hour, I'm sure. We're just going to go into, I mean, it's the fa, it's the most fascinating geopolitical situations, the most fascinating technology. And yeah, we thank you for taking the time to chat with us today. And I'm sure we'll have you on again soon. So thank you.

• 1:59:14Speaker 07

  Absolutely. Happy to be here. Thanks for having me on.

• 1:59:16John Coogan?

  Have a great day. Talk soon. Talk soon. And we got Brandon from SHIELD coming in to the studio in just a minute.

• 1:59:24John Coogan?

  I believe he's here. Let's bring him on in. We got one minute.

• 1:59:34John Coogan?

  If you're not familiar with SHIELD AI, develop, test and deploy autonomy faster than ever. Autonomy for the world, another defense tech company. And he is here now. Brandon, welcome to the show.

• 1:59:46Speaker 08

  What's up, guys? How you guys doing?

• 1:59:47John Coogan?

  We're doing great. How are you?

• 1:59:49Speaker 08

  Doing great. Fantastic Thursday afternoon.

• 1:59:53John Coogan?

  That's great. Yeah. Thanks for taking the time to be with us. For those who don't know, could you just give like a little intro on yourself and the company?

• 1:59:59Speaker 08

  Uh, yeah, sure. Quick intro on myself. Mechanical engineering background. I went to the US Naval Academy, became an engineering officer onboard a ship, deployed to the Arabian Gulf on that ship. Then laterally transferred, became a US Navy SEAL, and did three deployments, two to Afghanistan, one to the Pacific. Got out in 2015 while concurrently going to business school, started SHIELD AI with my brother and have been at it for the past 10 years. That's background on myself. Quick background on SHIELD AI. Mission is to protect service members and civilians with artificially intelligent systems. In pursuit of this mission, we've

• 2:00:41Speaker 08

  been building the world's best AI pilot. Easiest way to think about an AI pilot is self-driving technology for unmanned systems. It enables them to maneuver without GPS, without communications. It enables them to maneuver without a remote pilot, enables the concept of swarming or teaming. Notable milestones along this journey, we're the first company in the world to put an AI pilot on the battlefield in 2018. We put it on a quadcopter, we'd go inside buildings ahead of special operations forces. That was deployed through Iraq, Afghanistan, Syria, most recently used in Israel to rescue hostages, which was really cool. Have the text messages back from Israeli counterterrorism forces during, from October 2023. And then,

• 2:01:28Speaker 08

  Also, we were the first company in the world to put an AI pilot on an F-16 and fly an F-16 autonomously. We won the Dark Alpha Dogfight in 2020. In 2022, did the first F-16 flights. In 2023, we did the first ever AI piloted F-16 versus human piloted F-16 dogfight. And then in 2024, the Secretary of the Air Force flew our AI piloted F-16. We were finalists for the Collier Trophy, which is given to the greatest achievement in aeronautics or astronautics. Wright Brothers won it. Chuck Yeager won it for breaking the sound barrier. We were finalists and lost to some NASA asteroid mining thing. Cool, whatever.

• 2:02:11John Coogan?

  Yeah.

• 2:02:12Speaker 08

  But, uh, yeah.

• 2:02:13John Coogan?

  Paying attention.

• 2:02:14Speaker 08

  Yeah.

• 2:02:15John Coogan?

  I mean, it sounds like an overnight success, the type of overnight successes we like to highlight on the show.

• 2:02:21Speaker 08

  Overnight success.

• 2:02:22John Coogan?

  That's always the way it goes. Although, all the greatest overnight successes take decades in my experience.

• 2:02:28Jordi Hays?

  Yeah, I mean, it's a 17-year overnight success if you count the naval experience.

• 2:02:33John Coogan?

  Yeah, exactly.

• 2:02:35Jordi Hays?

  What's it like going, uh, having your, your first, you know, real startup, you know, become a multi-billion dollar company? Most founders have the benefit of, you know, starting a couple of things that don't maybe, you know, little ideas or things like that. Is it, you know, going back 10 years ago, at this point, I guess, nine years and 11 months, uh, did you feel like you knew what to do from the beginning or you had good people around you? I'm curious, you know?

• 2:03:05Speaker 08

  Um, one is you don't know what to do in the beginning. Um, you want to surround yourself with great people just to be directly responsive to those aspects of the question. Um, it's, uh, I, I don't think too much about like, you know, that, that aspect of, um, like the aspect of, oh, it's now a multi-billion dollar company, principally because it's a night fight every day. Um, it's a lot of pain and suffering. I tell everybody that, like, when Jensen Huang from Nvidia talks about pain or suffering. When Elon talks about the pain and suffering that goes into building these these types of businesses,

• 2:03:44Speaker 08

  it's absolutely true. And so like there's a massive amount of stress. There's a massive like number of times that you fail. There's a massive amount of embarrassment like when you fail in front of customers and when you disappoint customers along that 10 year journey. And so, you know, I think the, you know, one of the reasons I think we've been successful is the resiliency, the ability to keep moving forward, the ability to pick yourself up once you get brought to your knees, like when you get got punched and it certainly happens. And so, you know, in that sense, you know, I think we had that when we started. I experienced that in the SEAL team. So I was, you know, grateful to have those experiences and

• 2:04:30Speaker 08

  and basically used to the life of suffering. So, you know, that's that's paid off well over the past several years.

• 2:04:37John Coogan?

  Can you talk a little bit about the path to full autonomy for fighter planes? We saw this with chess where, you know, Deep Blue beat Garry Kasparov, but for a long time, a combination of AI and human would outperform. They called it like Centaur chess. Some people say we're in the Centaur era of AI image generation, or a lot of people use ChatGPT, but then they're editing it themselves. It's not a pure AI creation. It's not pure human. Are we in the Centaur era of air supremacy right now? Or are we getting there and how long do you think it'll last?

• 2:05:13Speaker 08

  I, I, I think

• 2:05:17Speaker 08

  at this stage in the game, autonomy is at superhuman levels of performance. And so I don't, yes, people will always augment machines and make those machines better and more useful to the people. But the level of involvement in doing that is becoming minuscule in terms of like what's required. And so.

• 2:05:39Speaker 08

  Look, you know, that journey, right, for us to fly, starting to fly an F-16, unfortunately, in 2015, when you're, you know, three-person founding team with zero money, zero track record, they don't hand you the keys of the, keys to the F-16 right away. And so we had to earn our right, you know, our path, you know, our right to fly that aircraft. That took a long time and we stair-stepped our way to get there, right? Took seven years before first flight to F-16, proving it on a quadcopter, proving it in simulation with the DARPA Alpha Dogfights, proving it on our Vbat aircraft. And eventually, you know,

• 2:06:21Speaker 08

  they, you know, more and more people now are giving us, quote unquote, the keys to their jet aircraft.

• 2:06:26Speaker 09

  Yeah.

• 2:06:27Speaker 08

  But it's, um, I, yeah, I'll just say, like, autonomy is a really, really hard problem. It's also a really, you know, valuable thing to create. And we're at the stage now where, you know, I, yeah, I'm a big believer. I think the entire future is going to be an autonomous future. I think, I agree with Elon Musk when he says there's going to be, you know, millions of autonomous systems in the world. His goal is to put a billion humanoid robots on the planet. You know, we'll have millions of self-driving cars. I believe there will be millions of self-driving aircraft and millions of other autonomous systems. And S.H.I.E.L.D. AI, our objective over the next 10, 20 years is really to enable that future.

• 2:07:11Jordi Hays?

  Can you talk about the developer platform that you guys were building? I know that's part of the, that was part of the announcement that you did with the new round at the beginning of last month?

• 2:07:21Speaker 08

  We asked ourselves the question, you know, how do we put a million AI pilots into customers' hands in the next 10 years? We spent 10 years building the world's best AI pilot for all the reasons I mentioned. I feel like we've checked that box. And then it became, how do we, how do we put a million AI pilots into customers' hands? And the answer was, we have to, we have to supercharge the aerospace and defense market. We have to supercharge. The autonomy industry and we took a page out of Amazon Web Services playbook, right? If you're unfamiliar, Amazon Web Services, they had basically built a great internal product.

• 2:08:03Speaker 08

  Team said, hey, what if we, you know, brought this to market? What if we commercialized it? Would it be valuable for other people? All this infrastructure, these data pipelines, these developer tools? And obviously the rest is history massively valuable for Amazon Web Services, most profitable business unit they have. And so we basically said, let's package up all of our developer tools, our infrastructure, our pipelines, and enable the rest of the defense industrial base and again, the rest of the autonomy industry and those interested in autonomy to actually develop, evaluate, test and deploy autonomy.

• 2:08:43Speaker 08

  And so spent, you know, the better half of last year or more than last year, really focused on building that product and rolling out to beta customers and we're going to general availability here in May for that product. And the response has been game changing. It essentially enables you

• 2:09:01Speaker 08

  to reduce the number of engineers, reduce the time to actually build autonomy and take it to market by 10 to 50x. So it's just massive improvements. We're flying first flights on a jet aircraft, two engineers in six weeks, right? If we had these tools back in 2015, they may have let us fly the F-16 right out of the gate. So it's incredibly powerful.

• 2:09:25John Coogan?

  Yeah. Speaking of the F-16, what is actually the hardest part of flying an F-16 in a military scenario? I can imagine that dogfighting feels like the most intense, it's the most high stakes, but then it also sounds really hard just to fly an F-16 like into the theater for six hours straight. You get tired and then landing on an aircraft carrier in like stormy seas, that seems really hard. Are you trying to do it all? Is there, is this the idea like self-driving? You kind of turn it on when you're on the highway?

• 2:09:55Speaker 08

  Yeah.

• 2:09:55John Coogan?

  What's the most difficult?

• 2:09:56Speaker 08

  So, but just to be clear, the work on the F-16 was to burn down the technical risk for this next generation of uncrewed fighter jets.

• 2:10:04John Coogan?

  Yeah.

• 2:10:05Speaker 08

  But in terms of like what the, you know, the most technically hard, like the technically hardest part about it is actually around safety and certifiability, right? Um, the US Air Force, the US Navy, they're not putting up 20,000 pound aircraft in the air, right? That are just going like not perform, right? Especially in a, you know, in the dogfighting scenario, when we have relative closure rates between two 15,000 pound aircraft going 1,200 miles per hour closure rates within like, you know, call it 50 meters of each other. You have to be able to say, I can guarantee the safety aspect of what's going on here.

• 2:10:50Speaker 08

  Yes, there's risk, but this is how it's been burnt down. This is why it's safe. This is why we believe it's going to do exactly, or why we know it's going to do exactly what it said it's going to do. So as people think about, you know, and I think that's where Shield AI has really shown is our understanding of not just like the autonomy aspect, but that intersection of autonomy, jet aircraft, safety, reliability, certifiability. That's where Shield AI stands out.

• 2:11:20John Coogan?

  Do we need?

• 2:11:20Speaker 08

  They spent a long time working on.

• 2:11:22John Coogan?

  Do we need a new Top Gun movie where the protagonist is a software developer?

• 2:11:29Speaker 08

  Um, it probably won't be as entertaining as Maverick 2, but we're, you know, or as Maverick, but I'm open to it. Yeah.

• 2:11:37John Coogan?

  I'm open to it. I'd love it.

• 2:11:38Jordi Hays?

  How do you, how do you think about M and A going forward? I think you guys have made a couple, or at least a couple acquisitions to date. There's now a ton of new investment, but you guys have spent 10 years winning customer trust, you know, winning, you know, contracts, et cetera. And I imagine there's going to be some companies that develop, you know, cool technologies or have great talent, but don't quite reach the, where you guys are. You know, how, how do you, how do you look at that opportunity going forward?

• 2:12:09Speaker 08

  Certainly, we've built in acquisition muscle and acquisition arm in our, in our company. Um, and we are constantly looking at opportunities and there's just a very, very, um, it has to go through a lot of different wickets for us to say, let's, let's get serious about something. Um, right. Ideally, it's strategic, um, because it takes up a lot of executive time. If it's truly going to move the needle for the business, at the same time, you'll see us do smaller acquisitions. Um, we'll announce like a really, you know, a smaller IP type acquisition here, um, in the next several weeks. Um, and so there's that range, but in the ideal world, um, you know, strategic needle moving for the business.

• 2:12:54Speaker 08

  Um, and you know, gives us better market access, gives us, uh, enables us to build a better product. Uh, one that's aligned with our strategy roadmap, with our product roadmap, with our vision for the business. And so we're always on the lookout for, uh, new companies.

• 2:13:10John Coogan?

  It's fantastic. Last question or we're good?

• 2:13:12Jordi Hays?

  No, that was it. I mean, come back on when you have, uh, whenever you have news.

• 2:13:15John Coogan?

  This is fantastic. I mean, such a fascinating business and like such a entertaining and just dramatic in so, in so many ways. Uh, I mean, we could go way deeper, uh, but thanks so much for taking the time to talk to us. Uh, really fun conversation.

• 2:13:27Jordi Hays?

  Thank you.

• 2:13:28Speaker 08

  Thanks, guys. I'll see you.

• 2:13:29John Coogan?

  We'll talk to you soon. Bye.

• 2:13:32John Coogan?

  Jordy's, uh, head in the bathroom, but, uh, in the meantime, we have Peter from Rune Technologies here. Let's bring him in and I'll have him do his intro and then Jordy will hop on in just a second. Uh, so Peter, are you there? Can you hear me? Hey, Peter, how you doing?

• 2:13:46Speaker 10

  Hey, I got you.

• 2:13:48John Coogan?

  Cool. Uh, yeah. Thanks so much for joining. I've heard a lot of great things about the company. I actually haven't gotten a chance to really dig in too much. So could you just give me a brief intro on you, your backstory? And kind of what the company does today?

• 2:14:00Speaker 10

  Yeah, absolutely. Absolutely. Happy to give you an intro and then tell you more about the company.

• 2:14:03John Coogan?

  Great.

• 2:14:03Speaker 10

  Uh, but myself, I'm, I'm the CTO of Rune. I lead the product engineering team here and uh, before Rune, I was an annor for four years as a software engineer. Uh, had some incredible opportunities there with some amazing teams and before that I was at Facebook for three years, uh, Facebook data research.

• 2:14:19John Coogan?

  You're the meme. You're the meme of like you were building ads and then Palmer said, hey, come do something meaningful with your life.

• 2:14:25Speaker 10

  Exactly. I got lured over by Palmer.

• 2:14:27John Coogan?

  I love it. Yeah. It's amazing. It's real.

• 2:14:29Speaker 10

  And, um, actually dropped off college to join Facebook when I was 19.

• 2:14:32John Coogan?

  Cool.

• 2:14:33Speaker 10

  Um, interned in London at the time and, um, I'm originally, um, from Austria. So I like to consider myself the most patriotic Austrian American since Arnold Schwarzenegger.

• 2:14:41John Coogan?

  Arnold Schwarzenegger, I was gonna say.

• 2:14:43Speaker 10

  Exactly. But yeah, I had the opportunity to come here when I was 19 and, you know, participate in the American dream and I'm grateful for that ever since.

• 2:14:50John Coogan?

  That's fantastic. Well, yeah, what, what, what about Rune? Can you tell me?

• 2:14:53Speaker 10

  Yeah. So about Rune, so, you know, in short, we're a military logistics technology company.

• 2:14:57John Coogan?

  Okay.

• 2:14:57Speaker 10

  And really the, you know, the realization was that, you know, over the past few years as defense technology companies have in, in it on, on drone swarms and hypersonic missiles and autonomous submarines. You know, what they haven't had the focus to think about is, you know, well, if, if that drone breaks down in the fight, you know, where do its spare parts come from, right? Or if you shoot one hypersonic missile, where do the next 30 come from? Or if you have a collaborative combat aircraft, where does the fuel to charge the battery to get it off the ground come from? Right? Those, those logistical considerations and, you know, as I, as I looked more into logistics, I realized that it was sort of the forgotten part of the military, especially at the tactical level. And I realized there was an opportunity to bring, you know, the great innovation that other companies have brought to intelligence and command and control and fires, but now bringing it over to, to logistics because

• 2:15:41Speaker 10

  you know, I also knew that, you know, the great quotes of amateurs talk tactics and professionals talk logistics and you know, I knew how much logistics mattered to Pat's third army. And so it was just such a stark contrast between logistics really matters. But then when you look at logistics in the field, they're using whiteboards and Excel spreadsheets and, you know, scraps of paper. And there was a gap and that's where we found it ruined to fill that.

• 2:16:02John Coogan?

  Yeah. I don't know if you ever played like Hearts of Iron four, but it's very funny that, uh, You know, Call of Duty is wildly popular, but Hearts of Iron IV is this like intense military simulator where you can spend 12 hours just optimizing like the flow of oil to the frontline. It's very logistics based and people say it's like never, never play the game because it's too addictive and you'll just be playing it all the time, but you're playing it in the real life. Can you, can you talk to me more about what contested logistics mean? I've heard that term thrown around, but I don't really understand it. Is that, is that relevant to your business?

• 2:16:33Speaker 10

  Yeah, it's an interesting term because when I, when I started out with Rune, I also really tried to get into what does contested logistics mean? Because that, you know, it's a buzzword that's out there.

• 2:16:40John Coogan?

  Yeah.

• 2:16:40Speaker 10

  The more and more I spoke with logistics, they actually laughed when they heard that term because all the logistics in military they've ever done is contested, right? The military operates in contested spaces.

• 2:16:50John Coogan?

  Yeah.

• 2:16:50Speaker 10

  So the contested logistics is, is really not, you know, it's actually not necessary. It's just logistics. So, you know, what we're building is not software for contested logistics. We're building software for logistics.

• 2:17:00John Coogan?

  Got it. Can you take me through some of the history of logistics? Obviously it was like pen and paper and I don't know, even before that, probably like carrier pigeon. But then of course, you know, we've heard that like Microsoft has actually been a great partner to the DOD and they've vended in everything from Microsoft Outlook to Excel. And those tools, although they seem silly, they're probably very helpful in terms of just understanding like, how many bullets do we have in the bear, in the, in the armory? Or how many rations do we have? But, but has there been, what, what has the progression of technology and the adoption of technology looked like over the last 20 years, like post, uh, uh, global war on terror?

• 2:17:40Speaker 10

  Yeah, I mean, logistics always has mattered, right? And there's actually a great quote all the way back from Alexander the Great where he called his logistics a humorless lot because they were the first to be slaughtered if anything went wrong. Right? So it's always mattered and always been important. You know, when it comes to technology, one thing that's interesting about the global war on terror is that logistics wasn't actually really the focus there because, you know, we really had air support. So every shipment from, you know, Germany or the US that had to get to the Middle East, made it there in one piece, right? It really wasn't the primary focus. And it's really now more so as we're looking towards Ukraine and your future conflicts with your adversaries, logistics is starting to matter again, the way it did in past large scale conflicts, right? And, you know, seeing, you know, Russia, for example, really almost fail at taking Kiev

• 2:18:24Speaker 10

  in large part because of logistics, where it's like kind of what people up to that problem again. Now, in terms of the technology, there's been less focus on it and, you know, of course, you know, Excel and PowerPoint are great general purpose tools. But, you know, logistics is a really focused, you know, specialty with lots of doctrine and, you know, tactics and procedures. And so, you know, you can solve any problem with PowerPoint, but that doesn't mean you should. And so, you know, the software we're building is really focused on what does a logistician need when they're in the field and solving their problems?

• 2:18:55John Coogan?

  Yeah. How do you think about the trade off between flexibility of the design of your system versus creating something that's more deterministic, more enforcing rules on the user? You, obviously, like the worst thing when you're building software is like, yeah, we did the demo, we did the install, and then a week later they fell back to Excel, right? I'm sure you want to avoid that.

• 2:19:17Speaker 10

  Yeah, you know, working with our customers, it's often a back and forth between understanding their current workflows and supporting them, but then also showing the art of the possible, what new technology can bring to the fore, right? You know, what you can do in Excel, you know, isn't what you can do with AI, for example. And so it's actually showing them what's possible as well as supporting their current workflows, you know, at the same time. And, you know, when it comes to generalizing the software, that's where, you know, we work with a lot of different service branches now, you know, with the Army, with the Marine Corps. You know, we're looking very closely at the Air Force and their branches. And so looking at how logistics is done in different parts of the military helps us build really general purpose software that could even scale beyond just the military one day and disaster and rescue, you know, oil and gas also have similar logistical needs.

• 2:20:01Speaker 10

  And also coming, you mentioned earlier, you know, Microsoft, there's also something that is a unique realization for us is that, you know, the military doesn't always have perfect infrastructure available when it comes to its internet bandwidth and whatnot. And so we've also really focused on, you know, building the software to run on a laptop in the jungle, in the Philippines, in the trenches. And the way you would write your software in that kind of environment is very different than in a stable, you know, data center with infinite bandwidth and infinite resources. And so, you know, supporting that tactical, you know, trench warfare kind of environment is also what's unique about what we're doing.

• 2:20:35John Coogan?

  So you're not melting GPUs every time you fire up a query in Rune?

• 2:20:39Jordi Hays?

  Yeah, to me, the interesting thing is, you know, if you look back at the start of the Iraq war, the iPhone didn't release for years after that, right? So I'm interested to think about how you think about mobile and now there's just like, in theory, like an order of magnitude more devices out in the field that. Theoretically could be used for, you know, to, to make what, you know, the sort of logistics operations more efficient. So is mobile like, you know, sort of widespread with these systems to date? Or is it, or is it again, like, you know, the, the sort of laptop scenario in, in jungle and, and just, yeah, I'm curious how you think about mobile broadly?

• 2:21:20Speaker 10

  Yeah, mobile is popping up a lot, especially at the lowest levels where you really have, you know, soldiers or marines with their phones typing in logistical reports. That's, that's happening right now and we're working on projects to integrate with that. But, you know, what's, I think even more interesting is how do you get away from humans even doing the county right now? So you're very honest, the way the military right now knows how much fuel is in a certain place is that you have, you know, a private dipstick in and see how far up it goes, right? And so, you know, that's how it's done right now and your phones get you to, you're reporting that perhaps more quickly. But what we also want to get to is how do you not have a human loop in there at all with, you know, sensors to just measure that, you know, whether it's ammunition in a, in a base or a fuel, you know, ideally that's all automated.

• 2:22:00Jordi Hays?

  How do you, how much, you talked about Ukraine and, and learning, you know, maybe what not to do from, from the Russians. How much do you think that the US has to learn in Ukraine around logistics? Or is, is, is Ukraine doing anything really well? Are we being sort of efficient there?

• 2:22:22John Coogan?

  We heard from Nathan, they're making a million drones a year already. So it seems like there's some industrial capacity there. And then I've also heard those reports that like Russia was like ripping like semiconductor chips out of like washing machines and like old Ford F-150s because they were so out of like supplies. And I don't, I never know what to believe with these stories, but I'd love to hear your take.

• 2:22:42Speaker 10

  Yeah, no, yeah, I certainly think that the United States would have fared better in Ukraine, right? The way we fight is different. But, you know, what's not too different is how we track logistics at the tactical level right now. You know, Ukrainians are using, you know, papers and whiteboards and that's why there largely isn't data at the tactical level and what they're actually consuming. And the United States military isn't too different from that right now. So, you know, even when it comes to tactical logistics, you know, the US military has a lot you can modernize on that front. And that, you know, that's what we're interested in doing right now. And so, you know, that's, that's what our focus has been.

• 2:23:13Jordi Hays?

  Do you find, who do you connect with most on the customer side? Like, are there people, you know, within the DOD that are just like clearly logistics nerds? And you guys just like, you know, have a 30-minute call and end up going two hours? And it's just like, you know, you finally are like, yes, like you get it.

• 2:23:28John Coogan?

  A logistician.

• 2:23:29Jordi Hays?

  Because I feel like if you're, you know, anybody that's a true sort of student of history, you know, could get to the point where they're like, yeah, actually, I care less about like the sixth-generation fighter and more just like the basics of like how we get one thing from point A to point B.

• 2:23:45Speaker 10

  Yeah, you know, honestly, from the get-go, the one thing we've never had to convince somebody of is that what we're tackling is a problem. Everybody understood that logistics matters. Everybody understands that, you know, the technology that logisticians have in the United States military is not where it's supposed to be. And you know, there's obviously the logistician branch of the military, and when we work with them, and they've been, you know, our closest design partner so far, you know, they understand these problems because they live them every day. But even other warfighting functions and other, you know, military members understand the problem as well. They sometimes need to be, you know, they need to understand why logistics needs to matter to them, you know, when you're talking to an artillery officer, for example, you know, they do sometimes have to, you know, be led to understand how can AI for logisticians

• 2:24:29Speaker 10

  allow them to be more lethal, right? Because they're gonna have munitions when they need them, before they need them, in the right place. So that's sometimes, you know, something that we show the art of the possible, but in general, everybody understands this really matters.

• 2:24:41John Coogan?

  How are you thinking about the go-to marketing, like the revenue side of the business? Is this the standard, like get some SBIR money, then make it through the Valley of Death, land it program of record? Or is there just like a very different model because you're selling software in logistics?

• 2:24:57Speaker 10

  You know, the good thing is that, you know, over the past few years, the military has woken up to logistics really mattering a lot. So, you know, there's a lot of buzz around it now. And, you know, in terms of what that allows us to do is, one, we can both go to operational units in the field who actually need the software, right? They'll most often be our design partners and help us develop. That's not gonna be the big dollars, but it's really important for us to build the best product. And then we're also going to the innovation labs, you know, across the services, there's organizations that, you know, help field technology, you know, and from the innovation stage. And then there's also the program offices themselves and, you know, across the services, there's very large projects or programs underway that includes sustainment now. They maybe wouldn't have two years from, uh, two years ago, but they do now. And so it's really across the board from the largest modernization projects in the army,

• 2:25:42Speaker 10

  to the innovation labs, to the operational units, we're, you know, going to all of them and having success with all of them as well.

• 2:25:48John Coogan?

  What kind of skill sets are you hiring for right now? It feels like AI would be really important, but maybe not today. Uh, what's like the kind of the, the, the type of engineer that fits in really well at Rune today?

• 2:26:01Speaker 10

  Yeah, you know, obviously we've, we've been, um, you know, scaling rapidly. We're 12 people now and we have an engineer onboard every single week for the past four weeks.

• 2:26:09John Coogan?

  Nice.

• 2:26:09Speaker 10

  You know, so that's, that's been really exciting growth for us. We're actually now looking for more product minded individuals or product managers that, you know, have lived the dream and, you know, perhaps were, you know, veterans themselves, but now want to build technology and understand that as well. So we're looking, you know, to scale our product team right now. Um, you know, and as we grow, you know, further, you know, engineering will always be our greatest asset. So engineers that have, you're really, um, care about the mission before, right? You know, uh, we both care deeply about the mission, what we're building for, as well as, you know, having the right engineering skill sets. So engineers that identify with wanting to, you know, like I did, not build ads anymore, but, um, you know, build military technology, you know, that we're always going to be looking for those.

• 2:26:48John Coogan?

  Three?

• 2:26:49Jordi Hays?

  That's it.

• 2:26:50John Coogan?

  I, I had one more question about kind of, uh, just on the data integration side, is it important for you to build, uh, integrations into different, uh, data lakes, data warehousing? Uh, is it important to just do really great like PDF ingesting? How are you thinking about actually, getting, I mean, I'm sure as you grow and scale, like there will be times when you run into like, okay, there actually is a lot of data here. Let's bring it in and, and onboard it. Uh, is Palantir a piece of all this? Like, how do you see Rune playing into like the broader ecosystem of like military data broadly?

• 2:27:26Speaker 10

  Yeah, so it's important with logistics that it does really require very holistic decision making. And then you can't just know what you have on hand, but also what transportation you have to get it from A to B, along which routes, with what crews to actually move that equipment. If you don't have any of those pieces, you're not making holistic decision and it might actually just, you know, break down when it comes to the real world. So we're very, you know, interested in integration. We have a super, you know, open architecture that lets us integrate with programs of record, you know, their systems, you were talking to lots of other companies that want to integrate with us. And then we're also allowing, you know, manual inputs as well, you know, like you said, whether it is, you know, like PDFs or Excel's or your manual inputs too. It's kind of like a mix of, of, you know, other integrations, manual input,

• 2:28:06Speaker 10

  and you're combining all of that to give that, you know, real world recommendation that connects all those pieces that I just mentioned.

• 2:28:12John Coogan?

  Yeah, that's great. Well, good luck to you. Thank you so much for stopping by. This is a wonderful conversation. We'll have to have you back when there's more news.

• 2:28:20Jordi Hays?

  Yeah.

• 2:28:20Speaker 10

  Yeah, thanks.

• 2:28:20Jordi Hays?

  Great to meet you.

• 2:28:21John Coogan?

  Yeah, have a great day. Very cool. We got Sam. We're switching gears here. We're going into, uh, from, uh, defense tech into hard tech impulse stoves. I want to talk to Sam about what Big Stove is doing in reaction to, uh, the tariffs.

• 2:28:41Jordi Hays?

  Well, before we get into this, you know what somebody that's selling stoves online should use?

• 2:28:47John Coogan?

  Oh, I know.

• 2:28:48Jordi Hays?

  I think you know, John.

• 2:28:49John Coogan?

  Numeral, baby.

• 2:28:50Jordi Hays?

  Numeral.

• 2:28:50John Coogan?

  For sure.

• 2:28:51Jordi Hays?

  Put sales tax on autopilot.

• 2:28:53John Coogan?

  Yes.

• 2:28:54Jordi Hays?

  They put it on autopilot for thousands of leading e-commerce and SaaS businesses. It is the platform for sales tax compliance.

• 2:29:01John Coogan?

  You don't want a guy like Sam spending any more than five minutes per month.

• 2:29:06Jordi Hays?

  Five minutes is honestly the perfect amount. You want to be dialed in, you want to be paying attention to it, but you don't want to be over investing.

• 2:29:13John Coogan?

  Reversing a steak and posting a great video and doing interviews. You don't want him wasting time on sales tax as he sells these all over the country.

• 2:29:20Jordi Hays?

  We should film an ad where we give an ad for Numeral while searing, you know, a steak.

• 2:29:27John Coogan?

  You could probably do your sales tax faster than searing a steak on a.

• 2:29:33Jordi Hays?

  You could maybe make it a ritual. You could maybe make it a ritual and just say every month, I'm going to spend five minutes on sales tax compliance.

• 2:29:39John Coogan?

  Yeah.

• 2:29:40Jordi Hays?

  And, uh, while I cook a steak.

• 2:29:42John Coogan?

  And you know where I expect to see a lot of these stoves installed?

• 2:29:46Jordi Hays?

  Where's that?

• 2:29:46John Coogan?

  In Wanders, for sure.

• 2:29:47Jordi Hays?

  That's right.

• 2:29:48John Coogan?

  You check into a Wander, you find your happy place. Find your happy place. Find your happy place. Book a Wander with inspiring views, hotel-grade amenities, dreamy beds, top-tier cleaning, 24/7.

• 2:30:00Jordi Hays?

  I gotta say, John, Andrew, Kyle, let's get some Impulse stoves in Wanders.

• 2:30:03John Coogan?

  I would love that.

• 2:30:04Jordi Hays?

  People are gonna be begging for them.

• 2:30:05John Coogan?

  I wanna be able to filter for it. They have a bunch of filters. You can filter for great wifi, has pool, uh, king bed, all these different things. You want, I wanna know if there's an Impulse stove. Anyway, we got the founder of Impulse coming into the studio. Welcome, Sam.

• 2:30:18Speaker 11

  Boom.

• 2:30:19John Coogan?

  How you doing?

• 2:30:20Speaker 11

  Great to, great to chat with you guys live.

• 2:30:22John Coogan?

  Yeah, yeah, I'm so glad to hear. Uh, we've, I think we featured your post before. We've talked about you. We've always said that it's, uh, it's interesting that I feel like in some ways, Impulse is kind of like a dividend of Andorl. It's not Andorl for stoves, but it's something that like, people didn't think that you could start a new stove startup in, a few years ago, and now you can. And so, uh, give us the pitch.

• 2:30:45Speaker 11

  So basically, for context, um, though I think I overheard you guys talking about me before, but basically we make a stove that's about six times, seven times faster at boiling water than most other stoves. So like, you can boil like 10 cups of water in like a minute and a half or something crazy. So like, your mac and cheese is immediate.

• 2:31:00John Coogan?

  Yeah.

• 2:31:00Speaker 11

  Um, but then it also lets you set an exact temperature, sort of like an oven. So it's like, instead of low, medium, and high, you can turn our like, cool magnetic knob to an exact number. And you don't get smoke. You can like fry with seed oil, without seed oils for all of your esteemed health-conscious followers.

• 2:31:15John Coogan?

  Oh, yeah. So there's lots of pairs.

• 2:31:16Speaker 11

  Um, and you can buy it right now at impulse labs.com. We ship in about 12 weeks.

• 2:31:20John Coogan?

  That's amazing.

• 2:31:21Speaker 11

  And you can lock in, you know, you know, current pricing at that point. I'll joke about that later.

• 2:31:25John Coogan?

  And, uh, and, and, and just, uh, like the technological innovation here is that there's like a massive battery pack.

• 2:31:30Speaker 11

  There's a massive battery inside. So basically, it's like value prop is you get this cool stove and it has all these capabilities you, you can't get in a newer stove. It's like a, a, a fundamental leap in performance, but it wedges a battery into your house.

• 2:31:41John Coogan?

  Cool.

• 2:31:41Speaker 11

  And once we install enough of these, we actually deploy a decentralized battery network, kind of across the grid. And you can actually get like more distribution of batteries than like Tesla Powerwall relatively straightforwardly. If you essentially intercept the like 55 million major appliances sold every year in the United States. So like, there's been like 400,000 total Powerwall installs in the US and Canada, apparently. Um, but like, there's always an appliance installation truck on your block like every couple of days. So like, it's, it's actually this really interesting thing of. You can actually deploy a crap ton of battery stores that way.

• 2:32:16John Coogan?

  Yeah, that's the big vision, right?

• 2:32:18Speaker 11

  Yeah, and then we've actually figured out how to get the distribution unlocks. So one is you can buy the stove at impulse labs.com. It's awesome, but we're also partnering with a bunch of major appliance OEMs to get the tech in there. And so you can go to some random appliance showroom like Joe and Bob's appliances. Buy a brand you already know and it might come with impulse inside. And so starting to roll that out of next year.

• 2:32:37Jordi Hays?

  Are you thinking about even, I'm sure you've thought about this, but I'm curious if you're doing it partnering with people that are building homes because it's a big.

• 2:32:44Speaker 11

  Yeah, so the turns out interest rates being high means that that's a little less like, like high volume. It turns out that like you want to intercept the like, you want to intercept like. Where expensive appliances are made to start because you you're putting a battery in it and like we managed to push the battery cost down. Substantially, but it's it's still something where it's like there's an item that's not in the bomb of a normal stove. And so you kind of want to start high end, very similar to Tesla and all that stuff. But then where are the high end appliances sold kind of diffusely? So getting into these brands. Having a standout brand of our own, but then also getting into brands that people are already buying lots of. Is is is the way to do that. And like, I then have to talk to like 10 different OEMs versus.

• 2:33:27Speaker 11

  Thousands of developers, basically, it's actually and then and then you monetize the battery the same way either way, like. Once the batteries on, once the thing is installed, the battery is under our software control. And so we can sell that battery to utility, we can rent that battery to utilities. For grid services and stuff like that. So we get access to revenue either way.

• 2:33:45John Coogan?

  Awesome.

• 2:33:46Jordi Hays?

  Wait, talk more about, talk more about that, like talk about the grid integration and and and, you know, getting that. Extra leverage and specifically recurring revenue.

• 2:33:56John Coogan?

  I mean, is the is the base, is the base value prop even beyond like selling energy back to the grid? Is it? Is it more just like if the power goes down in my neighborhood, this stove could potentially power my house for a couple hours a day? What am I thinking?

• 2:34:09Speaker 11

  Stove itself works and it's got an inverters which can share power with the rest of your house. So if you've got like whole home backup, it will support that whole home backup. So it'll add like, it's like a quarter of a power wall, basically. And so the vision is, once we've rolled this out to multiple appliance categories. And multiple brands, like you could just turn this thing on and you'll have like, you won't have to have a power wall, you'll just have this tech.

• 2:34:31Jordi Hays?

  How do you, I love the design of the product. How do you think about making smart tech stupidly sort of easy to use, right?

• 2:34:44Jordi Hays?

  I got a

• 2:34:46John Coogan?

  Yeah, if I need an app on my phone, I'm not buying it.

• 2:34:48Speaker 11

  We don't have an app.

• 2:34:49Jordi Hays?

  No, so the other day, the other day I walk into my bedroom and I, and I go to like raise the blinds.

• 2:34:57John Coogan?

  Yeah.

• 2:34:58Jordi Hays?

  And it doesn't work. And I asked my wife about it and she's like, oh yeah, we need to charge the blinds. I'm like, what do you mean? And I look up, there's like a cord. I gotta like charge it once a year. I'm like, give me a break. I don't want to think about charging my blinds. It's hard enough keeping this thing charged.

• 2:35:11John Coogan?

  Yeah, yeah.

• 2:35:12Jordi Hays?

  Uh, so I think like we're entering into like, there was like, the last 10 years have been like the smart home era.

• 2:35:18John Coogan?

  Yeah.

• 2:35:18Jordi Hays?

  But everything, in many ways, we need to get smarter, but also dumber at the same time.

• 2:35:23John Coogan?

  We've been in the midwit, the midwit home era.

• 2:35:26Speaker 11

  It's the midwit home. It's the midwit home. It's the midwit home. It's like, um, it's, it's like, okay, does your smart home require someone who's like an IT expert to set it up? And then you don't want to touch anything because you'll like disconnect your light switch? And then by the way, like Google Home still doesn't have an LLM to it and it still doesn't know how to set an alarm properly. And like, if I ask it to play a certain piece of content, it thinks I mispronounced it, even if I always request that content. Like it is actually crazy how bad this stuff is.

• 2:35:53John Coogan?

  Yeah, it's wild.

• 2:35:54Speaker 11

  What we realized was like, okay, people hate these touch panels on the stoves and stuff like that. So we, we figured out a way to do knobs where like they're magnetically removable. So you can clean all the guns underneath them.

• 2:36:04John Coogan?

  Oh, that's cool.

• 2:36:05Speaker 11

  Um, so, so that was pretty cool. But then, um, basically the UI is really simple. It's like you, it's, it's the same as like a gas stove. It's like you basically push in and twist and you get, you get heat. Like, it's not like any sort of, any crazy, it's like, it's like, and then the smart feature we realized was make it hold temperature accurately. So instead of like, you can say low, medium and high, we still have that, but like you also can say 315 degrees. And then like your eggs come out exactly the same every day. Um, and the butter doesn't burn. Maybe it lightly browns. If you don't want the bottom of the egg to brown, you can set a lower temperature. But like, basically we just give you like direct control over the thing that people actually want to do, which is not play back a smart recipe and like. Be on rails with New York Times Cooking. It's like, no, I just want to be able to do the

• 2:36:50Speaker 11

  thing that good chefs are able to do by like covering the pan over the burner and like doing all the right motions that.

• 2:36:56Jordi Hays?

  How do you think about, uh, what's your vision for humanoids in the home? Cause I, it's not hard to imagine, you know, my, my humanoid going grabbing the steak out of the fridge, slamming it on the impulse and then, you know, just like, you know, doing that. Uh, but maybe they don't even need to touch the knobs, right? If you just have the integration, like they're just like.

• 2:37:13Speaker 11

  So you don't really have to touch the knobs with our thing either because you just turn it on once and then it's just like, it's just like at the temperature you don't have to mess with it. But like, I realized that the number one automation in cooking was actually just holding temperature consistently on a, on a pan. And if you can do that, you elevate a mid-wit cook to a decent cook. And so do that. And then that's, that's kind of the 80/20 of, that's the 80/20 of kitchen automation. Like I, I cook at the office. I made some like crazy braised thing and it was like super simple. Um, I made rice without a rice cooker. Like you don't even need these accessories.

• 2:37:44Jordi Hays?

  Yeah. Do you have a rule with your team where it's like, you can't order out? Like you have to use the product every day at lunch?

• 2:37:49Speaker 11

  Yeah. I gotta, I gotta tell everyone that the tariffs are, you know, cutting into the lunch budget now.

• 2:37:55Jordi Hays?

  Oh yeah. Yeah. Let's talk about the tariffs and your supply chain. Uh, I'm sure you're impacted. It's impossible not to be.

• 2:38:02Speaker 11

  Yeah. And one, uh, one thing I'll, I'll lead with is like, we're, we're in an interesting space because all of our competitors are also impacted. So like basically even the US-made appliances, like, so if you go to like a Whirlpool factory, all the circuit boards in there are actually like made by like a German or Chinese companies. So, or a German company in China in many cases. So it's like, basically if you tear down any induction stove, you pretty much like see Chinese and German components inside, even if it's made in the US. And so for that reason, it's like, okay, we're, we're building our stuff overseas. We're going to figure out, hey, what the. Lowest tariff regime is, you know, make it in Vatican City or whatever, whatever, whatever, whatever works.

• 2:38:42John Coogan?

  Hopefully blessed by the Pope. Yes.

• 2:38:44Speaker 11

  Yeah, yeah, we can commiserate over our Italian heritage, but, um, but the, uh, our shared Italian heritage. But, but basically, uh, but basically the point is like, everyone's going to be impacted because inputs are impacted. So like, even if I go in, if I build a factory in, in, let, in, let's call it like Phoenix, Arizona, um, I'm not like, my sub suppliers haven't on short yet in volume. Like an example was like, I'm like, I'm an investor in Hadrian, like Hadrian, like, does not have enough CNC machines to make all the world's iPhones yet. For, for instance, like it would take them, it would take them a, a second. I'll, I'll, I'll, I'll, I'll, I'll overestimate, I'll, I'll, I'll be optimistic here, but it'll take them at least a second to, uh, to, uh, to, to get that capacity up and running.

• 2:39:25Speaker 11

  And this is going to happen across the board. So like, the lesson from the last wave of tariffs was Vietnam. Basically Vietnam was this like kind of quote unquote loophole country that now is seeing like 45 plus percent tariffs or whatever. But Vietnam was, the tariffs were only on China. There was a lot of Chinese manufacturers that just basically just drove across the border and set up a factory. And all the, all, all the engineering staff Chinese, like they're just flying in. It's kind of like two hour flight, one hour flight situation from Shenzhen. But effectively it's a Chinese run factory. Now to get the made in Vietnam, you had to actually get make some of the components there.

• 2:40:05Speaker 11

  But what this meant was all of the large format injection molding machines, because when did people move there first? Televisions. Um, they moved all the TVs, like $600 TVs and stuff like that. They moved them there, but that meant all large format molding machines are just completely occupied. And so like, if we want plastic parts, like our like induction coil assembly or something like that, want to do that in Vietnam. We probably couldn't find the machine. We'd have to import that part from China regardless.

• 2:40:31Speaker 11

  Because the machine would be occupied and then there's a back order of those machines and like all that other stuff. So it ended up like, even to get to this point where a ton of consumer electronics from like Samsung, LG, Meta, et cetera, moved to Vietnam. It took like six year or five or six years.

• 2:40:46John Coogan?

  Wow.

• 2:40:46Speaker 11

  From when those tariffs kicked off. And so if you want to like a preview of what like US reshoring would look like, it's going to be something of that nature. Or prices are just going to go up a bit and people want to put it in the, put it in the lineup and check out. So like weirdly enough, it's like we're insulated from this a little bit by making a high ticket item. That's cool. Um, and like, maybe we'll get permission to raise prices by, by other folks or whatever. I don't want to be the leader in that space. Because I think that that would stick my neck out, but it's something where. And then additionally, like as a component supplier to all these appliance OEMs where we actually make our money in software and recurring revenue from the battery storage. We're very insulated in that respect to the business. Um, but it's something where like.

• 2:41:29Speaker 11

  I had kind of a reaction to this being like, it would be really cool if, uh. I, I would have a different approach to reshoring manufacturing in the US and it would be more around like. Making it legal to build a factory in San Francisco again and stuff like, and stuff or the Bay Area, the San Francisco Bay Area again, without getting like angry NIMBYs on your, your ass. Um, or having to build a tent in the parking lot like Elon did like five times.

• 2:41:52Speaker 11

  I mean, Elon's the only guy who did it because you have to basically operate it. It's like legal gray area.

• 2:41:57John Coogan?

  Yeah. Uh, where, where else are you seeing the most opportunity in home appliances or just like tech for the home? Uh, ovens seem adjacent. I don't know.

• 2:42:10Speaker 11

  We can do that with the battery really well.

• 2:42:11John Coogan?

  You think so? That's fun. Uh, anything else come to mind?

• 2:42:15Speaker 11

  Yeah. So I mean, I think there's actually, there, there's some interesting, the home tech and the humanoids come to mind is like, I think just making a laundry machine that folds stuff at the end. Would be sick.

• 2:42:23John Coogan?

  That'd be amazing.

• 2:42:24Speaker 11

  People would spend like five grand on a laundry machine if it did that.

• 2:42:26John Coogan?

  Totally. Yeah.

• 2:42:28Speaker 11

  And it would basically reprice the whole like laundry market if you, if you, like, and I think the tech for that is going to exist like next year.

• 2:42:35John Coogan?

  Yeah. I think you just spawned like five Y C companies with that.

• 2:42:37Speaker 11

  Yeah. And then they can go, you can license P like pies models or whatever.

• 2:42:41John Coogan?

  Yeah, but I'm excited for that. That, that sounds amazing.

• 2:42:43Speaker 11

  Yeah. But so, so you can do that. Um, we're, we're actually thinking like, I want to be the index startup for anything with a power cord effectively. So anything with a power cord, realize that like most appliances are used intermittently. And even within that intermittent use, they're not used at full power. Like you're, you're not like. Blasting a turkey fryer level of power. We can do, we can actually fry a turkey indoors on our thing. But you're not, even when you're frying a turkey, you don't need full power all the time. You just need it to boil. And so, um, and so.

• 2:43:12John Coogan?

  I'll be able to blow dry my hair in two seconds. And it's just like.

• 2:43:15Speaker 11

  It's a problem with like maximum temperatures and you know, you don't want to burn your hair and stuff like that.

• 2:43:20Jordi Hays?

  They've tried it. They've tried it.

• 2:43:21John Coogan?

  Tried it, but yeah.

• 2:43:23Speaker 11

  But basic, basically I, I, I think that there's this play where you can essentially realize that energy is used super intermittently, but the grid is sized for peak use all the way around. I think power companies had a really good explainers on a bunch of these things as well, but basically we solve a similar set of issues, kind of like even at the more hyper local level than even at the home panel or something like that.

• 2:43:41John Coogan?

  Sure, sure.

• 2:43:42Speaker 11

  But, um, it turns out you can basically any device that kind of has like high peak, low average draw, shove a battery in it and have an inverter in it. So when the device is not active, it's able to share the battery with the rest of the building. And so that's the vision. Get that into as many devices as possible. Turns out stoves are a kind of juicy target to start and then, then go from there.

• 2:44:00John Coogan?

  And why don't you just drop the link one more time for the fans who want to pick one up? Where do they go?

• 2:44:05Speaker 11

  Pulse labs.com. And if you order it now, um, it ships in like, I think it'll ship like early summer. And we just got most of our compliance certs all like officially granted and the rest of them should come first, like momentarily. So it's legal to install in your house as well, which is exciting.

• 2:44:20John Coogan?

  Fantastic. Well, thanks so much for stopping by.

• 2:44:23Jordi Hays?

  This was fun.

• 2:44:24Speaker 11

  Thanks for hosting. I'll be around for peanut gallery on tariffs and trade and all their stuff whenever you want. So.

• 2:44:28John Coogan?

  Fantastic.

• 2:44:29Jordi Hays?

  That'd be great. You, you got, you're a takesmith. I can tell.

• 2:44:32John Coogan?

  Yeah, yeah.

• 2:44:33Speaker 11

  A takesmith? That sounds terrible. Okay. Oh.

• 2:44:35Jordi Hays?

  No, it's a good thing. It's a good thing. Uh, you got good takes.

• 2:44:38John Coogan?

  Ready to fire them off.

• 2:44:39Jordi Hays?

  Yeah. We need to slap an impulse. We're getting a new studio soon.

• 2:44:42Speaker 11

  You just put the stove in the middle and you guys can do some hot pot or something and it'll work.

• 2:44:45John Coogan?

  Yeah. Yeah. I just want to be, uh, yeah, eating, uh, steak all day long throughout the show. That's my future for sure.

• 2:44:52Speaker 11

  Yeah. You do let me know if you want one down in LA. I can, I can.

• 2:44:54John Coogan?

  Yeah, yeah, yeah. We'll, we'll figure it out. Awesome.

• 2:44:56Jordi Hays?

  Awesome.

• 2:44:57John Coogan?

  Thanks so much, Sam. Great to talk to you. We'll see you soon. And we got Scott Wu from Cognition coming in to the studio. He's not here yet, but I did get an interesting question for him. I posted, tune into TBN today at 1:45 Pacific for our interview with Scott Wu. If you have any extreme, extremely complicated math problems you want him to do in his head, leave it in the comments and we got one.

• 2:45:23John Coogan?

  Someone said-

• 2:45:24Speaker 11

  Is it from Aaron?

• 2:45:25John Coogan?

  No, no, no, no, that was more of a joke. Brian Chow says, "Ask him if he really did cheese IOI 2014 problem six. He'll know what I mean." Scott, welcome to the show again. Great to have you back. We will get to the amazing cognition news, but I gotta know, did you cheese IOI 2014? Problem number six.

• 2:45:47Scott Wu?

  You know, I can't answer that question actually, but no, it's great to be back and it's great to see you guys again.

• 2:45:54Scott Wu?

  How are you guys doing?

• 2:45:55John Coogan?

  We're doing great and I mean, congratulations on the launch. Can you break it down for us? What is different about Devon and cognition today?

• 2:46:03Scott Wu?

  Yeah, yeah, absolutely. And so what we rolled out today is essentially an agent native IDE. What that means is, you know, I think there are a lot of great products out there that are about really accelerating you in a synchronous workflow. What we've always built Devon for is to be truly asynchronous and to be able to delegate and to have your own team of Devens that's taking on tasks, you know, and to be able to manage several Devens at once or to be doing other things while you're working with Devens at the same time. And what we're rolling out essentially is a way to really cleanly, interactively work with your Devens as you're using it. And so it's a full IDE experience. It's a collaborative planning experience at the start of each, at the start of each session. And then, you know, some of these other features like Devon Surge and Devon Wiki that we've been rolling out.

• 2:46:50John Coogan?

  What else you have? I want to.

• 2:46:53Jordi Hays?

  No, no, go into it.

• 2:46:54John Coogan?

  Well, I want to just get into your overall thesis for AI and why and how the market's moving broadly. Almost 10 years ago to the day, Sam Altman posted a blog post called Bubble Talk where he said, everyone was saying we're in a bubble. Here, let's format it as a bet. And he said, the top six US companies in terms of unicorns are Uber, Palantir, Airbnb, Dropbox, Pinterest and SpaceX. They're currently worth just over 100 billion. He thinks that in 2020, those companies would be worth over 200 billion. There's a few of those companies that are worth over 200 billion alone. He also said Stripe, Zenefits, Instacart, a bunch of other companies will be worth more than 27 billion. And he was, I think he was off, but only by a few weeks.

• 2:47:39John Coogan?

  And it was this interesting thing where everyone felt like it was a bubble. He formulated into a bet. He was correct. But how are you, how are you feeling about the overall like murmurs about, oh, is AI a bubble?

• 2:47:51Scott Wu?

  Yeah, yeah. And I think he was forecasting like a 3X or something in just a few years. And so whether he was like barely off or not quite, you know, or barely made it. I mean, I think it's like, you know, certainly if you just hear that list of companies, you know, Uber and Airbnb and SpaceX and Stripe and all, you know, it's, it's, I think the point was very clearly there that those companies did have real merit and real value. And they proved out a lot more of that, actually. I mean, it's almost comical to, it's, it's been 10 years now since then and to just think, wow, like these are, these are some of the great public companies, right? And I think that, you know, I, we were talking about this, but I was thinking about it a lot because it's been almost exactly 10 years. And it's also, I mean, it's super cool. Sam was running YC at the time, which is why he put that out. Obviously now he's running OpenAI.

• 2:48:33Scott Wu?

  But, but yeah, I mean, I think people talk about bubbles so much in AI. And, and it's, it's almost, I feel, I feel almost the exact opposite where the, the value that we are suddenly proving out in AI is almost underrepresented in, in what we're seeing and, and what is, what is going on, you know? And, and you see this in all these different spaces. And, you know, I think as we were saying earlier, like code is one of the first ones because it's, it's, it's so nicely automatable. There's a clean feedback loop and, and all of these things that you can really train models to get really good at code. But I think we're really starting to see it basically everywhere. And it's a, it's a crazy thing to think about, but a lot of these businesses that we just mentioned, you know, these are really, really amazing businesses and really powerful businesses, right?

• 2:49:15Scott Wu?

  And a lot of what they do arguably is, you know, they make particular flows of your life. 1% easier, you know, something like that, right? They come in in this like particularly painful process and solve that hard part for you and deliver this. And obviously, these are incredible, incredible businesses. This is less about the businesses and more just about just how big the world is out there, you know, and how much value that there is to provide, right? And now, when we're talking about AI and we're thinking about what AI can do, you know, for consumers, it's, you know, an AI assistant that does all of your work for you, you know, does all your hobbies and takes on all these things, right? And in enterprise, obviously, you know, we're talking about multiplying every single person's output by like 5X. And so I think that the it's it's it's I was thinking about it especially because, you know, it really does feel like across a lot of these different layers, you know,

• 2:49:59Scott Wu?

  the foundation model layer, the application layer and so on. It's sure, it's a tough question to decide which one is going to succeed, which one's not going to be, you know, and only a few companies get to be the Google and Amazon and a lot of companies, obviously, you know, have a tougher time. But if you just ask the question overall is, is AI as a space going to deliver massive, massive value? And is it going to build these multi-trillion dollar companies? I mean, I think at this point, it's pretty clear that it will.

• 2:50:22John Coogan?

  Yeah. Can you talk a little bit about the Studio Ghibli moment happened last week? And I'm wondering, like, with the Levels I O Flight Simulator vibe coding, under Karpathy coined that term, it kind of took fire. It really it really was a great term for something everyone was kind of dancing around. Are you expecting a Studio Ghibli style moment for programming? Because I think what was so magical about Studio Ghibli was that it took the it took the onus of creativity out of the process and it made it personal because you could just take any photo from your camera roll, any selfie, you could take your own dog or your own profile picture, type one word and you get something that feels cool and different.

• 2:51:05John Coogan?

  Is there a world where we get something where it's like, hey, make a video game about my life or something? And yeah, and it just does it. What would a what would a mass adoption moment for AI driven programming look like?

• 2:51:17Scott Wu?

  For sure, yeah. So I think there's two kind of different categories, I would say, within AI coding. And one is, you know, I'll call it kind of the more general purpose, like, let's say, single-use software type or more hobbyist type work, right? Where you, you know, you want to build a cool website, you want to do this, you want to make a nice game, or you want to put a lot of these elements together. And I think that's going to, I mean, it's, honestly, it's already taking off pretty massively. It's, you know, you don't have to know how to code anymore, and you can put together like a really cool website and, you know, set things exactly as you want them and so on, right? And I think there will, I'm sure there will be more exciting moments to come where, you know, as we cross these new tiers of capabilities, you know, the interface is going to change for that and the set of things that you can do.

• 2:51:57Scott Wu?

  On the other side, I would say, is kind of the massive kind of just software engineering industry, which is a little bit more, obviously, is a little bit more oriented towards, you know, a lot of big companies that are spending maybe millions of hours of, you know, software engineering time developing like really, really great software, right? And making it super resistant to all the different things you can think of, you know, figuring out all the little details of architecture and so on. And I think on that side, you know, I think for the time being, that's going to be primarily focused on software engineers. Just because, you know, it's while we're still working with these layers of abstraction, you still really need to have all of these kind of concepts in your mind and the ability to really just like reason with the computer architecture.

• 2:52:41Scott Wu?

  But there, it's kind of like, you know, we'll see like a 5X there. So maybe one way to describe it is like, I think there will be a level of kind of programming and being able to interact with the world through code that everyone will have access to, which is super, super exciting on the one hand. And then on the other hand, I think for a lot of the deep technical work that we do, I also think that, you know, engineers who are focused on that and working on that are going to be able to do like 5X more. So we're kind of seeing both of those sides at the same time.

• 2:53:04Jordi Hays?

  How do you, what advice do you give engineers that are just joining the cognition team? You guys have such a ridiculous sort of, you know, sort of, probably, I would assume that average engineer at cognition is a 10X engineer in any other organization. And so you're looking for like, you know, there's, there has to be this pressure of joining, you're building the tools that build the tools. You know, how do you think about sort of ramping people to the sort of, to the output that you want to see out of engineers at every level of the organization?

• 2:53:41Scott Wu?

  Yeah, yeah, I was gonna say, I mean, there's very little advice that I can give because these folks are all way smarter than I am. But no, I mean, I think it's, you know, it's, it's interesting. I mean, one, one thing that, that comes to mind is, you know, people ask me all the time, like, should, should I even be studying CS? Like, should, should I even be, you know, how, how do I even think about software engineering? And, and I think the, the main thing I would call out here is just, um, you know, as, as the capabilities change, the, the, the interface of AI product changes a lot as well, right? And so it's one thing, you know, it's, for example, like, you know, there, there was a phase where, where text completion was, was the, the main thing. And that was, that was where the model capabilities were at, right? And you could get a lot of value from just pure text completion, right? Uh, and I think we're already past that and, you know, pushing into a lot of new things.

• 2:54:22Scott Wu?

  But each new era that we get into in terms of capabilities is going to unlock a new product experience in AI code. And I think that the main thing to call out, because I think a lot of this is going to happen so quickly, is just, it's really, really important to, as an engineer, to stay on top of all these tools and to, to understand how best to work with them. I think at this point, it's, you know, there's no shortage of things to do in code. You know, I, I don't think we're going to run out of things, you know, software that we want to build anytime soon. And so I think it's more a question of how do you stay maximally effective, um, at, at, at, at building software? And a lot of that is just, you know, really being up to date with everything that's happening and understanding each of the new waves and learning how to use these new technologies, because it does take time to learn.

• 2:55:00Jordi Hays?

  How do you think about AI adoption among engineers broadly? Or has every, you know, there, there has to be, uh, you know, I, I, I think about the example of like the Japanese soldiers that like didn't know the war ended and so they were just like on an island and like, you know, still like in like, you know, warfighting mode. And it would have been like 20 years or something like that. And so I think there has to be engineers out there that like, you know, that, that maybe they don't know about cognition or they don't know about OpenAI or any of these other tools. And, uh, but it has to be some, like, I would imagine like 90% of people that are just obsessively writing, you know, code every single day. 90% plus are sort of aware of these tools, but how, how do you think about adoption broadly?

• 2:55:39Scott Wu?

  Yeah, yeah, for sure. No, and, and I mean, I think at this point, there's a, um, yeah, I, I mean, a pretty significant fraction of all the, of, of all the top engineers in the world are, are using these AI tools every day, um, and they're getting a lot of value out of them. The main thing I would just say here is, this is where, you know, and, and folks sometimes like to, to get a little kind of wishy washy about, you know, AI is going to come in and then suddenly all of our problems are going to be solved, right? And, and I think one of the things that we're finding, you know, even in code is, Yeah, there's just a lot of practical work to do out there in the world, right? And so I think it's one thing to be able to solve these theoretical problems in a vacuum. It's another thing to, you know, all of these different code bases out there, all of these different development environments, all these details, you know, there's a lot of cobalt out there in the world still, you know, there's a lot of all these various different languages

• 2:56:24Scott Wu?

  or all these crazy idiosyncratic setups. And so I think one of the big things, honestly, that we're solving as a space is actually not just the capability itself, but just solving for a lot of these practical constraints and getting the technology to the point where it works for everyone and not just, you know, the subset of people who are building the latest and greatest apps in Python and TypeScript or whatever it is, you know.

• 2:56:46John Coogan?

  Can you talk a little bit about the importance of multimodality and image diffusion and understanding images in the context of coding? I think a lot of people assume that, well, it's just code, you don't even need to think about the advantages of being able to process images effectively, but at the same time, it feels like the more data you throw at these models, the better they get, even if it feels completely tangential. Just having, you know, the ability to not just know Python, but also speak Russian and Chinese and Japanese and all these different languages, it seems to increase overall intelligence, even though it's not the narrow set that you thought it was.

• 2:57:25Scott Wu?

  Yeah, and by the way, it's actually a fun exercise, if you've never done this before, to basically, you know, a lot of the queries that we feed language models of just like raw, massive blobs of text, to try to do those yourself, like as a human. And one of the things that you find is like, wow, it's actually really hard if you're just looking at some massive chunk of text of just finding the thing that you want and getting the right thing. Like, humans naturally, you know, there's just like a lot of systems and how we process information visually and all these things. And what I'd say, yeah, I mean, I think in terms of code, for example, the...

• 2:57:56Scott Wu?

  I think it's one thing for it to be, call it theoretically possible, you know, it's from the set of information I'm giving you, it is theoretically possible to extract out exactly what needs to be done. And you know, you could say this, for example, with, with, let's say you're trying to build a new feature and you just say, all right, here's the entirety of my, you know, one million line code base. Just tell me what I need to do to build the feature. And obviously, no human can do that on the first try and just tell you exactly what needs to happen. And really, and for most of these more complex tasks, no AI can either, you know? And in practice, you know, the way that we solve these things is obviously through a much more iterative process that involves using all of our different tools. And, you know, it might involve, for example, running the front end locally and then clicking around on the website and seeing what happens.

• 2:58:39Scott Wu?

  And, you know, you're trying to fix this button, so you go around and click on it, you know, and you move around and you see what errors come up in the logs when you do that. And so that's how you, you know, solve your problem, right? And so a lot of it, I would describe it as almost like setting the stepping stone instead of the rock cliff face, where you can make the incremental progress towards a solution. You know, this is what we do all the time in software engineering. And similarly, I think, you know, being able to use image or being able to interact with these other data sources is what really gives AI that same capability.

• 2:59:10Jordi Hays?

  Please. One question that you are uniquely suited to answer. Do you think we see an AI win an IMO gold medal this year? It was silver last year.

• 2:59:21Scott Wu?

  Yeah.

• 2:59:22Jordi Hays?

  And I imagine we made some progress since then, but what's your take?

• 2:59:25Scott Wu?

  Yeah, I'd be pretty surprised if we don't. We have a, so the greatest competitive programmer of all time is a guy named Taurus. His name is Gennadi, he's from Belarus, and he works at cognition, actually.

• 2:59:40Scott Wu?

  You can look this up. No, it's true, it's true. It is objectively true. It's a

• 2:59:46Scott Wu?

  and, and so Gennadi, you know, we have kind of a bet going internally on mainly the question, not of whether it will be like a, you know, like a, you know, top level high schooler, which is essentially what the IMO or IY gold medal is, but whether it will beat Gennadi, who is, you know, the greatest of all time. And I think most folks Think it's probably going to happen this year. Yeah. And if not this year, then the next year. Yeah. I think Gennadi is, uh, he, he, he's, he's pretty adamant that he'll still be able to do it. Uh, and so I'm kind of looking for, I mean, I feel like we should have the, we should do the whole show match. You know, Gary Kasparov style and, and do it.

• 3:00:21Jordi Hays?

  Let's do it live. Let's do it live on TV.

• 3:00:23John Coogan?

  Uh, well, can you give us the call to action? It sounds like cognition and Devon are much more accessible. How can people get started? How can they sign up? How they can, how can they play with this tool and see if it works for them?

• 3:00:34Scott Wu?

  Yeah. So we rolled out a whole new experience and then on top of that, we, you know, we've, would really love to hear what folks think. And so we're, we're making it a lot easier to try out. And so we have a new plan that starts at a $20 minimum. And it's all available at app.dev.ai. So you can, you can sign up immediately. It's fully generally available and you can try it out on your codebase.

• 3:00:52John Coogan?

  Very cool. Well, I hope those GPUs don't melt. Hope the servers stay online and good luck with, with the next couple of months. As I'm sure it's going to be a continued rocket ship.

• 3:01:03Jordi Hays?

  Yeah. Congratulations to the whole team.

• 3:01:05John Coogan?

  Appreciate you. We'll talk to you soon. Thanks a lot, Scott.

• 3:01:08Jordi Hays?

  Talk soon.

• 3:01:09John Coogan?

  Bye.

• 3:01:10Jordi Hays?

  He's like, yeah, he's actually on the team.

• 3:01:13John Coogan?

  Yeah. Well, I, I've met Gennadi because he, he worked at Ramp and I interviewed him and, uh, a lot of what he said went over my head, if I'm being honest, but, uh, he's a beast.

• 3:01:23Jordi Hays?

  Well, it's crazy. So, so on Polymarket, there's, it's only at a 59% chance that AI wins an IMO.

• 3:01:28John Coogan?

  They're selling dollars for 59 cents, folks. Not a financial advice, but you heard it here. Like, it seems pretty obvious. Anyway, we got Michael from Aurelius coming in the studio. Welcome to the show, Michael.

• 3:01:41Jordi Hays?

  What's up?

• 3:01:42John Coogan?

  How you doing?

• 3:01:42Jordi Hays?

  How are you breathing today? You got the nose strip. Is the oxygen?

• 3:01:45Speaker 09

  Good. How you doing? Going well, dude. One of my nostrils like barely works. It's just all jacked up. I gotta, I gotta figure that out at some point, but you're out for a while if you get like a, like an ENT fix.

• 3:01:55Jordi Hays?

  Oh, yeah, yeah, yeah.

• 3:01:56Speaker 09

  It'll be fun.

• 3:01:57Jordi Hays?

  I think I have the same.

• 3:01:59Jordi Hays?

  I've tried those. I've tried the nose strips for sleeping at night. They're pretty, they're pretty wild.

• 3:02:03John Coogan?

  This guy's the Alex Fermozzi of laser weapons.

• 3:02:06Jordi Hays?

  Yeah.

• 3:02:07John Coogan?

  But, uh,

• 3:02:08Speaker 09

  I gotta get a new thing then.

• 3:02:10John Coogan?

  Yeah. And I appreciate you DMing me. You just said, hey, let's talk about laser weapons. And I was like, I've never heard of this guy before, this company, but I'm in. And, uh, and, and so I, I did a little research. I want to hear about your experience at Stanford. I want to hear the basic pitch for the company, your background. Can you just take me through kind of the, the 101 level of who you are and what you're building?

• 3:02:29Speaker 09

  For sure. Yeah, for sure. So I'm an engineer, worked all across a bunch of different heavy industrial systems. I've worked in, a lot of my time was spent in electro-optic system development. I helped work at the biggest US laser company on laser weapon systems and in R and D capacity. And then I went into sales and I sold a bunch of systems, including some components into a lot of the primes for the big laser weapons that are that are out there. I didn't, I didn't, you know, I didn't go to Stanford, but at we had a Stanford, we were essentially, when we first started the company, we were hiring the first round of engineers. We had sent out hiring calls to a bunch, you know, among LinkedIn and X and stuff, also to a series of universities and all of them were cool with it, except that we got kicked back from Stanford where the Stanford Hiring Board was

• 3:03:11Speaker 09

  like, you cannot, you know, post here because you have like, you're a weapons company, right? And, and you know, that's really bad, I think, for Stanford students, but great for us because we just start posting it. We're like, dude, this is, this is a BS. This doesn't make any sense. And it's great. That was, that was, you know, Larson Jensen made a bunch of posts about it. And we'd continue to, to kind of chat about it and got a lot of interest on that, especially for hiring. Like, if people want to work in defense, there's not that many companies in the one that's getting flamed because they make weapon systems. You know, if you want to make weapon systems, there's a good chance you've applied at our company.

• 3:03:45Jordi Hays?

  Yeah. Can you, can you talk about the history of lasers?

• 3:03:51John Coogan?

  I was gonna ask the same thing. You said the big laser weapon systems?

• 3:03:53Jordi Hays?

  Yeah, yeah.

• 3:03:54John Coogan?

  Are there laser weapon systems right now?

• 3:03:56Jordi Hays?

  And after you talk about the real history, maybe you can sort of talk a little bit about, I have a big tinfoil hat here.

• 3:04:04John Coogan?

  The Death Star is real.

• 3:04:05Jordi Hays?

  And no, there's been a lot of, there's a lot of conspiracy theories about directed energy, weapons, space lasers, things like that. But talk about the sort of the history from your point of view.

• 3:04:16Speaker 09

  Yeah, definitely. Well, you know, the Death Star doesn't exist yet, but the Death Star and stuff like that is how we've become, you know, like a trillion dollar company. Eventually, we become an orbital weapons. Platform company. So probably the only way that you do like low earth orbit, trans lunar or trans Martian warfare is through light. You know, if you're going to take the missile system up into low earth orbit and there's 50,000 Chinese satellites, there's almost no way that you can do it shooting down in a cost effective way. But orbital weapons platform is great. But um, history of directed energy weapons, you know, maybe 40 years ago, when lasers started to kick off in the um, in the, you know, commercial space in terms of cutting and welding, and then also in the communication space, people like, wow, I can cut sheet steel with this. Can I shoot down a missile from like 1000 meters away? And that kind of kickstarted a bunch of effort and interest. Um, those systems haven't necessarily

• 3:05:01Speaker 09

  panned out over the last 40 years. Um, I think in the last 10 years, we started to get a series of systems that are deployed by Lockheed and Northrop. And so, you know, there are massive warships that will have, you know, when you're building the ship, you have to build a laser weapons system turret into it. But we've deployed, I think there are eight ships that have a series of like multi hundred kilowatt laser systems on it. And you can cut the wing off of a plane from 10 miles away with those systems in about 10 seconds. So they're pretty, they're, they're pretty metal. They're pretty rad. And that's what a lot of the, the directed energy supply chain is like, or the direct energy R and D development has looked like in the country.

• 3:05:35Jordi Hays?

  Uh, does blue, is blue effective against lasers? The color blue? I know that, that like, uh, isn't there something about like a specific frequency of blue that sort of prevents damage from lasers? Am I making that up?

• 3:05:50Speaker 09

  To the, the power density and the lasers we're talking about, like you need some very, very specialty materials to kind of defend against them in any kind of, you know, scaled capacity. So, uh, like the color blue, I'm not sure about that. I mean, you could, like, you have mirrors that reflect the laser light, right? But they're very small and they have, they have extreme like extremely expensive materials that are kind of doped in those mirrors for, for reflectance.

• 3:06:16John Coogan?

  It looked like, uh, one of the first things you were starting with was anti drone, counter UAS systems. We've seen a lot of, we talked to a lot of these companies, Allen Control Systems, kind of putting a gun on a truck. There's, uh, electronic warfare attempts. We just talked to Nathan Mintz. Uh, Andorol has a, a variety of systems for counter UAS, uh, projects. Uh, why is that the landing? Why is that the beachhead for you? Why are laser weapons so effective against drones?

• 3:06:42Speaker 09

  Yeah, definitely. So fundamentally directed energy systems, the promise there is that if you are using electrons as your ammunition, then you have an extremely low marginal cost to shoot down. Like you bring the price to shoot down a drone, you know? If you're using a missile, it can be millions of dollars. If you're using an Anduril drone, it could be a hundred to two hundred fifty thousand dollars per drone shoot down. You know, that's an improvement, but it's still extremely expensive and you don't have a cost differential on your side. If you turn a laser for three seconds to shoot down a drone, that's like twenty five cents in electricity cost to, to, to shoot those down. Essentially. So that's, that's really, that's really what we're looking at on, on that front. And then your second question was, was there was a second one?

• 3:07:21John Coogan?

  Oh, I mean, I mean, I, I just love to know, like, like, it feels like this technology is still somewhat sci-fi. I mean, you've said that they've been deployed, but you know, we haven't seen like videos of this, like, oh, in Ukraine, it's changing the battlefield or like, or like with the, uh, what was it? The, the, the shoulder mounted rocket during the, uh, during the Ukraine war, when that broke out, we were like, like, there's not enough in the supply chain. Like, it was like, not just it's real, it's like, it's having such an impact that they're using too many of them. And now we need to figure out the supply chain. Uh, I haven't seen any stories like that about laser weapons or directed energy weapons. So where, where are we actually in the rollout of this technology?

• 3:08:02Speaker 09

  Yeah. So there are large, like, like we were talking about earlier, there are large laser weapon systems that are deployed across like the Navy, for example. Those are really, really big. Um, Prime, Primes generally are interested in making extremely expensive bespoke systems. This is like the Anduril player, right? Is, is that their business models do not, do not allow them to, to do anything other than like the particularly, heavy expensive bespoke system. What, what we're doing, what we're doing is we're coming from the bottom up and saying, what is the lowest swap? Like, what is the lowest weight? What is the lowest size? What is the lowest cost for a directed energy system? Coming from the bottom up and, and doing it. Um, we're approaching our target for, we're approaching our target for distance very rapidly on our RD systems

• 3:08:40Speaker 09

  that will then go out and we'll look to deploy, um, early, early to mid next year in, in fielded capacity through some of the, through some of the DOD units. Um, I think a really salient part of what we do is like, when you're talking about some systems, like maybe microwave systems or radio frequency systems, or even bullet systems, is the range is extremely limited. I mean, when you're firing a, a, a round out of a M two four nine, the bullet, the muzzle, the muzzle speed's like seven hundred meters per second. So you have to lead something. You know, when you get out to seven hundred meters, it takes one second for the bullet to land. So you're arcing a bullet. The drone is flying dynamically. That's a very hard control problem. We are, we are shooting things down at the physics limit, like the, like the speed of action, essentially, this where, you know, when we shoot a pulse of light at something a thousand meters away

• 3:09:25Speaker 09

  and it's moving left to right at maximum speed, say a hundred miles an hour, the, the, the drone moves that draws thirty microns, twenty microns in the period of time that it takes for the light to hit it. So we have some salient control benefits and we also could continue to move out further and further and further, you know, as we kind of build out the system and build more products on top of it. The pathway that one, two, three, four, five kilometers is, is right there.

• 3:09:46Jordi Hays?

  Have you, uh, I'm curious if you've thought about defending various assets against drones that are non-military. So you could imagine if, if somebody has, uh, let's call it an oil rig somewhere and, and, uh, it, it's threatened by drones for one reason or another and, and, or, or potentially a better example is something like, you know, an NFL stadium that's worried about, you know, potential drone-based terrorism. Can you, have you thought about, you know, putting these, you know, turrets? Uh, cause one of the issues with, with traditional kinetic anti-drone weapons is you're sort of shooting bullets into the air. Those bullets are going to land somewhere. Uh, theoretically with lasers,

• 3:10:26Jordi Hays?

  you could take the drone outs without any, uh, risk of, you know, uh, you know, undesired damage.

• 3:10:33Speaker 09

  Yeah, definitely. So, you know, in an urban environment or at the border, right? You know, like you're not going to shoot a missile or a bullet, you know, in an urban environment at, at some drones. But there are, you know, I think that the Super Bowl had, had something like fifty, fifty to one hundred, something like, like on, on, on unseated airspace, like injections of drones where that we're not supposed to be there and you couldn't really do any, like, like DHS couldn't really do anything about it.

• 3:10:56Jordi Hays?

  Yeah.

• 3:10:56Speaker 09

  So, you know, we go forward and we become an option where we're probably the only option in an urban environment where the laser is invisible, it is silent, um, we can autonomously target, detect, track and destroy, uh, drones in, that is, that are threatening civilian infrastructure. Um, so that's a great point. That's exactly what, that's exactly what we want to do. Um, and, you know, when we, you know, when you focus the laser onto target to get a high density, there's a, there's a small depth where you get a very, very high density. You also de-conflict and defocus past targets. So we have this kind of depth where it's fairly lethal to targets, but then we can de-conflict pretty easily as well.

• 3:11:29Jordi Hays?

  Interesting.

• 3:11:31Jordi Hays?

  Yeah, this is sort of a scary thought, but do you do you expect there to be drone-based, you know, terrorism, like some type of drone-based terrorism event in the next five to 10 years? It seems like a huge threat that we don't necessarily have any, it's not like a police officer standing outside some, you know, soccer stadium somewhere is going to see a, you know, drone coming in and take it out with a handgun. So it doesn't seem like we necessarily have any defenses for that kind of attack. And you don't need such a sophisticated actor to pull it off necessarily.

• 3:12:11Speaker 09

  Yeah, definitely. I mean, there's almost certainly, there have been attempts that the FBI has thwarted. So I think maybe three months ago, someone was planning an attack in Tennessee on a, on a, either a power plant or a nuclear reactor, I forgot which. But they thwarted the guy in advance. They found him, checked his communications and stopped it.

• 3:12:30Jordi Hays?

  Wow.

• 3:12:31Speaker 09

  But, you know, almost certainly, I think one of the main dangers and what people are afraid about with drone warfare is that it allows non-state actors to inflict massive damage on trillion, trillions of dollars of human and infrastructure assets. So, you know, I don't think that we're too far off from a major attack happening. Obviously, our, our state defense apparatus is doing everything that they can to stop stuff and they're fairly successful. But like if you miss one out of a thousand, it's, that's pretty, that's pretty damaging.

• 3:12:57John Coogan?

  How are you thinking about the, the revenue and growth side of the business? I can imagine pulling in some SBIR money. I could imagine this being kind of like a DARPA project almost. Long-term, you probably want to be a program of record, but how are you thinking about staging things out? And what does it look like so far?

• 3:13:14Speaker 09

  Yeah, you know, we have a lot of interest from a lot of the, from a lot of the national labs in terms of going straight to OTA, in terms of procurement contracts. We are moving, like, people didn't really think that this could be done. No one was looking at small-scale, lightweight, edge deployed, directed energy. And at this point, we're moving so quickly, like it'll like by the time, by the time a CIBR, like is written for like exactly what we're doing right now, we'll be like a year down the line and we'll be ready to produce like 50 to 100 minutes. So at this point, you know, our, our customers are pretty, pretty well receptive to that if you're deploying directly to. If you're deploying directed to DOD and then we just have an unending list of people that want to want to demo the turret on their vehicle platforms. Like so, existing vehicle companies, like all the way, like small startups, mid startups,

• 3:13:59Speaker 09

  prime, stuff like that. And so I think we're trying to find that sweet spot where, you know, where do we deploy? We have, it's like, we have, we've done a good job building for system. Everything that we're doing makes sense. And then what we're going at is like, where do you go from here? Which of the, which of the promising opportunities do you tackle with limited resources?

• 3:14:17John Coogan?

  Yeah, well, I'm a, I'm a potential customer. I'm big into big game hunting and I'd love to take this on my next hunting trip.

• 3:14:23Speaker 09

  Dude, and it'll be cooked. It'll be cooked.

• 3:14:24John Coogan?

  Yeah, that's, that's what I'm looking for.

• 3:14:26Speaker 09

  And shoot deer and then you can just like eat it right there.

• 3:14:28John Coogan?

  Yeah, that's, that's exactly what I need. I'm sure Peter will love that. Uh, so thank you.

• 3:14:33Jordi Hays?

  Uh, it's great. It's great to meet Michael.

• 3:14:35John Coogan?

  Yeah, this is a lot of fun.

• 3:14:36Jordi Hays?

  Doing what you're doing.

• 3:14:36John Coogan?

  Yeah, yeah. Thanks for the message and thanks for hopping on. Uh, really fun chat and good luck to you.

• 3:14:41Speaker 09

  Thank you, guys. Thank you, of course. Thank you so much.

• 3:14:44John Coogan?

  Yeah, we'll talk to you soon.

• 3:14:45Jordi Hays?

  Cheers.

• 3:14:46John Coogan?

  Uh, well, what a fantastic tour of DefenseTech. I feel like I learned a lot about all the different companies and got to talk to some really interesting people. Uh, do you have anything else you want to cover before we jump off for the day?

• 3:14:58Jordi Hays?

  America Day.

• 3:14:59John Coogan?

  America Day was a success.

• 3:15:01Jordi Hays?

  I just want to say that America Day doesn't end when

• 3:15:05John Coogan?

  The stream stops.

• 3:15:05Jordi Hays?

  When the stream stops. It's going to keep going, uh, forever.

• 3:15:09John Coogan?

  Forever.

• 3:15:10Jordi Hays?

  Sort of a perpetual day.

• 3:15:12John Coogan?

  Yeah.

• 3:15:12Jordi Hays?

  Regardless of what the market's doing.

• 3:15:14John Coogan?

  Yeah.

• 3:15:15Jordi Hays?

  But, uh, no, I want to say thank you to Ramp, uh, Polymarket, Public, Bezel, Numeral, Adquick, Eight Sleep and Wander. They make the show possible. We are a hundred percent corporation supported.

• 3:15:27John Coogan?

  Yes.

• 3:15:27Jordi Hays?

  And, uh, we're very grateful for it.

• 3:15:29John Coogan?

  Yeah, thank you, everyone.

• 3:15:31Jordi Hays?

  Uh, we will see you tomorrow. Can't believe it's Friday tomorrow, John.

• 3:15:34John Coogan?

  It's crazy. Flew by.

• 3:15:35Jordi Hays?

  One more stream this week.

• 3:15:37John Coogan?

  Yeah.

• 3:15:38Jordi Hays?

  It's going to be a rough weekend.

• 3:15:39John Coogan?

  It's going to be great.

• 3:15:41John Coogan?

  Thanks a lot.

• 3:15:41Jordi Hays?

  Thanks, guys. Cheers.