David Senra, Nichole Wischoff, Daniel Yanisse, Ryan Sandler, History of "Golden Dome", Johnson & Johnson Pivots AI Strategy, Google & Meta Facing Legal Threats, EU Delayed Penalizing Apple & Meta Platforms

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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 TPN. Today is Friday, April 18th, 2025. We are live from the Temple of Technology, the fortress of finance, the capital of capital. This show starts now. We're going to take you through some of the headlines. We want to give you the top 10 news stories that we're following, and then we'll break it down. We'll go some deep dives. We'll get some guests, and then we'll give you some timeline. So, number one, AI startups soaked up a record 58% of global venture capital money in Q1 2025. Seventy-three billion dollars flowed into AI companies, more than double their share a year ago, as investors chased generative AI growth. Every founder, every, every founder

• 0:39John Coogan?

  has found a way to wrap their narrative in AI, and every VC has decided that artificial intelligence, little cherry on top.

• 0:50Jordi Hays?

  And the good thing here is that there's a lot of revenue growth across that sector, right? I don't know, you know, the, the investment is certainly outpacing revenue by a long shot, but that is the function of risk capital.

• 1:04John Coogan?

  And we have a deep dive story a little bit later about how some big companies like Johnson and Johnson tried a bunch of stuff with AI.

• 1:12Jordi Hays?

  Generative Johnson.

• 1:13John Coogan?

  Generative Johnson, and then they, and then they're starting to pull back, and that's causing churn. And so that should give us some more in, kind of, just insight into how the AI market and how sticky these deals are, how easy it is to get a Fortune 500 company to buy your product, but then it's harder to get them to stick, stick around for a long time. So, the second stop story is Nvidia Jensen, Nvidia's Jensen Wong made a surprise trip to Beijing right after the US chip curbs, the new, the new restrictions on the H20s.

• 1:44Jordi Hays?

  Strange timing, but I'm sure he had to, well, it, it makes sense, but.

• 1:51John Coogan?

  It is strange timing in the sense that.

• 1:53Jordi Hays?

  It's an interesting signal.

• 1:54John Coogan?

  Yes, the, the headline from the H20 news was basically like, look, it's over. It's completely over. It's never been more over.

• 2:00Jordi Hays?

  Yeah.

• 2:00John Coogan?

  Stop selling anything to China at all.

• 2:03Jordi Hays?

  But he's probably over there, basically.

• 2:05John Coogan?

  But that's not actually the rule. The rule is, you know, Nvidia, we've heard this again and again, if the speed limit's 55, we're going to go 54. If the speed limit's 45, we're going to go 44 miles an hour. But we are going to go as fast as you let us. We will never break the rules, break the law, but we're going to do it.

• 2:26Jordi Hays?

  Walking speed, we're gonna get our steps in.

• 2:27John Coogan?

  We're gonna get our steps in, yeah. And so, you know, this, this, this discussion could be, hey, gaming GPUs aren't banned. Can you do AI stuff on gaming? Well, can you do AI stuff on gaming? Absolutely. I trained a, a custom version of stable diffusion on a PC that I built with two 1080, I think 1080 Ti's, like, pretty old, but they had like eight gigs of RAM. It was pretty fine. There were a bunch of, there were a bunch of models that you could fine tune and run locally on, on gaming graphics cards. And so, if, if the name of the game is just, is just get

• 3:07John Coogan?

  some sort of AI system inferencing, you can distill these down pretty, pretty small. And I think that that might be a, a bit of a narrative going forward. I mean, Apple Intelligence, you know, not a great product, but it's been able to run inference of LLMs on phone hardware. And so, if, if Nvidia can still ship something to China, it still is an important part of the business and they will continue to maintain that relationship, I'm sure. And they have employees and manufacturing and all sorts of stuff on the ground, I'm sure.

• 3:38Jordi Hays?

  And despite the visit, Nvidia is down another, is down, according to public, another three-ish percent today.

• 3:46John Coogan?

  Not great.

• 3:46Jordi Hays?

  So, not great.

• 3:47John Coogan?

  I also want you to check the, the, how Google is doing in the markets because the US judge rules Google illegal monopoly, illegally monopolized key digital ad markets. We talked about this on yesterday's show.

• 4:00John Coogan?

  But

• 4:00Jordi Hays?

  Down 1.3%.

• 4:02John Coogan?

  Okay. What's the market doing overall?

• 4:05Jordi Hays?

  Probably something similar.

• 4:06John Coogan?

  Okay.

• 4:06Jordi Hays?

  Doesn't feel super significant.

• 4:08John Coogan?

  Yeah. And Google will appeal this. That was something that we talked about on the show yesterday. It does open the door to possible breakup remedies and briefly knocked Alphabet's shares before a partial rebound.

• 4:21John Coogan?

  OpenAI and SoftBank's Stargate project eyes the UK for part of its $500 billion data center build out. This is a kind of an interesting twist because the whole pitch for Stargate was like, we're gonna spend a half a trillion dollars in America.

• 4:35Jordi Hays?

  America. They even got the president

• 4:37John Coogan?

  Yep.

• 4:38Jordi Hays?

  of America to, you know, come out and basically do a keynote for them.

• 4:46Jordi Hays?

  So anyways, fascinating. I mean, it makes sense.

• 4:47John Coogan?

  Yeah.

• 4:48Jordi Hays?

  The UK is an ally, so they should have great data centers as well.

• 4:54John Coogan?

  I guess. I don't really understand exactly where this is going. We'll have to dig into that more, but.

• 5:00Jordi Hays?

  It could be a, it could easily be a capital.

• 5:05John Coogan?

  Play?

• 5:06Jordi Hays?

  Play, right? If they're trying to raise $500 billion.

• 5:09John Coogan?

  Yep.

• 5:09Jordi Hays?

  That's a huge number.

• 5:10John Coogan?

  Yep.

• 5:11Jordi Hays?

  If they went to variety of sort of institutions in the UK and say, hey, we'll make the UK a part of Stargate. So you can have, you guys can have some type of AI narrative.

• 5:21John Coogan?

  Yeah.

• 5:22Jordi Hays?

  But you need to put out.

• 5:23John Coogan?

  I guess the one, yeah, the one, the one thing that we've seen time and time again is like, these deals are extremely flexible. Right? And so it can be, it can be, we're buying from you, you're buying from us, you're getting equity, you're getting tokens, you're getting all sorts of different stuff. And so could you see a world where Europe is trying to develop AI supremacy? And so they pay for a huge portion of this AI data center, but there's kind of like a rofer where they can buy it out and use it for their own model in the future. And that justifies, and that meets their, their goal of like, you know, nationalist power around AI.

• 6:01John Coogan?

  Just having the mega project built in their country, even if that's, you know, serving an American company right now, maybe it grows into something bigger over, over time. I don't know. But on the other side of the.

• 6:13Jordi Hays?

  Yeah. Did you, did you, were you diving into this too? Just that it, it could be like an EU wide thing where everybody's kind of pitching to get, get a part of the project.

• 6:24John Coogan?

  Yeah, yeah. No, no. It makes sense. OpenAI also debuted flex processing to have API costs for non-urgent jobs. We saw this with the, with the 03 and 04 mini models. This trade slower responses and occasional, occasional downtime for a price cut. We saw Mike Newp over at Zapier and Ark Prize talk about this a little bit with the.

• 6:50John Coogan?

  When they beat, when OpenAI beat Arc AGI one, the precursor eval, it cost something like, I forget, it was like, it was like thousands of dollars per task. They had to really, really throw a ton of reasoning tokens at it to get it done. And so a lot of these models, there's always this, they're always trying to be better. And people really only care about the better models, but they're also trying to cut the costs.

• 7:14Jordi Hays?

  Yeah, there's a lot of work.

• 7:15John Coogan?

  So there's like a huge cost curve now.

• 7:16Jordi Hays?

  There's a lot of knowledge work that gets done that doesn't need to be done in real time.

• 7:19John Coogan?

  Totally.

• 7:20Jordi Hays?

  Like, it's amazing that these models can do like a deep research report.

• 7:23John Coogan?

  Yep.

• 7:24Jordi Hays?

  In, you know, a minute.

• 7:25John Coogan?

  Yep.

• 7:26Jordi Hays?

  But it's great, it's, it's equally valuable to basically, you know, send a request and just say like, yeah, sometime, you know, tomorrow morning would be great. Just have it, have it to me by tomorrow morning, but like, you know, deliver it in the most efficient way. So I can easily see that becoming a huge amount of, of their kind of like API calls over time.

• 7:46John Coogan?

  Totally. Databricks bought incremental computing engine Fennel to turbocharge real time feature engineering. We've talked about Databricks a little bit. They, the, the, the goal here is to promise faster model iteration and lower compute bills for streaming ML pipelines, somewhat related to the flex processing going on in OpenAI.

• 8:08John Coogan?

  I'll have to dig into more, more into Databricks as they prepare to potentially go out.

• 8:13Jordi Hays?

  Yeah, Fennel's only a three-year-old company, haven't been around for a long time. But I think we're going to see a lot more of this happening, right? It just makes sense. Windsurf is a, you know, the most prominent recent example, but I can see a lot more of these deals happening where, you know, just great, great early teams realize that they can do a lot more as part of a much bigger platform.

• 8:35John Coogan?

  Yep. Two, two Apple headlines today. The iPhone 16E was successfully made in Brazil. And so this is kind of a leak, but there were some retail boxes that were spotted by Mac Magazine, showed assembled in Brazil, signaling that Foxconn's Sao Paulo plant is producing the latest entry level model to hedge tariff risk. And so Apple and Foxconn have been on the case for a long time. It is interesting because like.

• 9:02Jordi Hays?

  Yeah, and this is a Taiwanese company going international, right? I think people have this idea that they, they always associate Foxconn with China.

• 9:09John Coogan?

  Yep, exactly.

• 9:10Jordi Hays?

  But Foxconn is. Out of Taiwan and still headquartered in Taiwan.

• 9:14John Coogan?

  Yep.

• 9:15Jordi Hays?

  And has, you know, global ambitions, which I think is good, right?

• 9:18John Coogan?

  Totally.

• 9:18Jordi Hays?

  It's easier for Foxconn to set up production somewhere new than, you know, a new kind of like subcontractor.

• 9:25John Coogan?

  Yeah, it's also interesting, Brazil specifically has not been in the conversation that much. People are talking about Vietnam, India. But if you go back to like the original BRICS report that was put out by Goldman Sachs, that was Brazil, Russia, India, China. These were the emerging markets that Goldman said would be like major, major contenders in the, kind of like coming two decades, right?

• 9:47Jordi Hays?

  Yeah.

• 9:47John Coogan?

  And then you, I think that, that report was probably published around 2005 or something. And it looked like they kind of got it wrong because it was just China, China, China, China. Like, like Brazil didn't really do too much. Russia obviously kind of turned inward and India did okay, but was nowhere near on the same scale as, as China in terms of like.

• 10:09Jordi Hays?

  You weren't hitting the big gong.

• 10:10John Coogan?

  Exactly.

• 10:13John Coogan?

  We have a, we have a giant gong in the studio now, but we are not.

• 10:17Jordi Hays?

  We're not debuting it today. Can I debut maybe the?

• 10:21John Coogan?

  The sound?

• 10:22Jordi Hays?

  No, just the.

• 10:23John Coogan?

  Oh, oh, yeah, yeah. Show, show the mallet. You have to show. So this is the, this is the old mallet. This is the old mallet. And that's the new mallet. It gives you an idea of, of where we're going with the gong, the scale of the gong.

• 10:37Jordi Hays?

  Look at the, uh.

• 10:39John Coogan?

  Yeah.

• 10:39Jordi Hays?

  I mean, this thing is.

• 10:40John Coogan?

  We were up at, at 6:30 in the morning and Jordy was just.

• 10:44Jordi Hays?

  I was waking up all of Los Angeles with this gong.

• 10:48John Coogan?

  It was so loud. It's great. Anyway, I'm very excited to roll that into the show as we, as we keep improving things. Anyway, the other Apple leak, a lighter Apple Vision Air headset will use titanium and launch in midnight black. Not a huge leak. We kind of knew this was coming. Obviously they need to make it cheaper and lighter. Carmack has said this, everyone knows this, but it, but they are working on it. And every time you see these leaks, it's just a reminder, hey.

• 11:13Jordi Hays?

  Lighter and cleaner. They're dropping the pro.

• 11:15John Coogan?

  Yep.

• 11:16Jordi Hays?

  Branding.

• 11:16John Coogan?

  Yep. And they should definitely. Yeah, I, I wonder if titanium is really the lightest thing. Like I, I, with this, I think it's just like light at all costs. Like if titanium doesn't sound super light, but I don't know, I would probably go aluminum or something, but.

• 11:29Jordi Hays?

  We'll wait till the experts chime in.

• 11:31John Coogan?

  Then, than, than I do for sure. Uh, and we'll have to have big screen back on when, when it drops to give his, uh. The founder of Big Screen to give his take as he dukes it out in the VR market. Anyway, new Dwarsh Patel show dropped, very interesting, taking the exact opposite approach as the AGI 2027. AI 2027. So the AI 2027 guys came on and they're like, this is happening in 18 months, I guess. I mean, 2027 is 18 months away. It's so close and they forecasted all out and it's very, you know, kind of doom and gloom.

• 12:08John Coogan?

  But then he dropped this three hour episode, which you should go listen to, talking about how AGI is really more like 2050, more than 30 years away and whatnot. And it was very interesting to hear about.

• 12:21Jordi Hays?

  And the big argument, I haven't been able to listen to the whole thing yet, is that reasoning is not intelligence. So.

• 12:28John Coogan?

  Yeah, I was thinking about that because the, we love to reduce these things down into like very pithy statements, like attention is all you need. I was thinking about that, like the attention mechanism of the transformer. It allows the, it allows the neural network to focus on specific subparts of the input. So you give it a picture. Typically, most image generation algorithms, like all the compute is spread across the image equally. But that doesn't make sense because as soon as you get an idea that it's like, oh, I'm trying to actually identify if there's a cat in the corner. So I know that there's a blurry animal in the corner. Let me zoom in on that essentially. It's essentially zooming in is like kind of what attention is. Somebody's going to correct me, but it's like close.

• 13:12John Coogan?

  It's this idea of like, like attention allows the, allows the neural network to focus on the most important aspect of the computational problem. And, and it's very clear that attention is not all you need when you're talking in the context of like AGI. Like, like just the transformer, we scaled up the transformer. That's the raw LLM that's just next token prediction. We had to drop tool use on top of that. We had to drop reasoning on top of that. We have to drop memory, databases, internet queries, the search engines. Like, we have to, we have to use all of these tools together. So attention is not all you need. And same thing with scale. Scale probably isn't all you need.

• 13:55John Coogan?

  You probably also need some algorithms in there, some, some like novel design of these things. And so it seems like there, there are definitely like breakthroughs that need to be, you know, worked on until we fully get to AGI. But it's fun to, to track and, and I, and I, I can see it's, it's more definition. It's more like a debate about definition than anything else. Like they can be correct and Tyler Cowen can also be correct, uh, which is why it's fun to debate this stuff.

• 14:22Jordi Hays?

  Yep.

• 14:23John Coogan?

  And the last rumor that was going around, uh, Elon Musk actually said, this is not true, but Reuters did report that, uh, that SpaceX, Palantir and Anduril, uh, are talking to the US government about a golden dome project, which I think Trump mentioned a while back.

• 14:42Jordi Hays?

  He likes the idea of, we know that.

• 14:44John Coogan?

  I mean, it's a great brand. What's interesting, I mean, I, I want to dig into this, um, because, um, we, so, so the, the, the, the claim is that they're, they're pitching between 400 and a thousand tracking satellites plus 200 armed satellites. So you put a bunch of satellites up in low earth orbit. They track missiles, uh, that are potentially coming into the United States. If, if somebody's sending a missile to, you know, TBPN HQ to take us out, that one of the armed satellites would go into action and blow up that missile before it can blow us up, right? Pretty basic. This is one of those things that comes out and like, wait, you guys aren't already doing this?

• 15:27John Coogan?

  I would really appreciate if this already existed.

• 15:30Jordi Hays?

  I mean, some forms of it already exist.

• 15:32John Coogan?

  Yes, but, but so, so we can actually go through the whole history of the like domes generally, I guess. Because I think it's really interesting if we have some, and we have some time. The first guest is coming on at 12:30 and so I think we should run through a history of Golden Dome, Iron Dome. What do you think?

• 15:53Jordi Hays?

  Let's do it.

• 15:54John Coogan?

  Okay, so the US Department of Defense formally launched the Golden Dome Plan in April of 2025. Do you want me to share this with you?

• 16:02Jordi Hays?

  Yeah, that'd be great.

• 16:03John Coogan?

  Let me send this over to you. In 2025. Copy this link, there we go. Send to Jordy, boom, there we go. And the, and basically the plan is to ring the planet with hundreds of sensor satellites and roughly 200 space-based interceptors capable of shooting down ballistic and hypersonic missiles in their boost phase. SpaceX, Palantir, and Anduril are currently the leading industry team, which is, I mean, it's just like a wild combo of companies, right? Because it's like all F's. Which is why I should, I actually don't know anything about this and, and you know, I think

• 16:47John Coogan?

  all of these companies would, would decline to comment on speculation and I have no inside information here. But I'm excited about this, so we're gonna talk about it anyway. So of course there are other subcontractors on stuff like this. There's more than 180 firms ranging from Lockheed Martin, RTX, to newer startups vying for pieces of the project that maybe may cost well over 300 billion. So Golden Dome revives the idea.

• 17:13Jordi Hays?

  Jordy's about to make the loudest gong hit in history if he can't control himself.

• 17:19John Coogan?

  So do you remember Star Wars? This was Ronald Reagan's 1983 Strategic Defense Initiative and he was like made fun of for this because everyone was like, oh, stupid president thought, saw Star Wars and wants to build laser weapons in space. But like, it was actually

• 17:35Jordi Hays?

  Probably a good idea.

• 17:36John Coogan?

  Like a good idea, exactly. And so this

• 17:40John Coogan?

  And so, so, so, so Golden Dome is kind of like revising that, plus what the, uh, the United States already has, which is called the layered homeland shield, I guess, the, the Patriot, the THAAD, the Aegis BMD, ground-based mid-course defense. Uh, and so, uh, let's go into the, to Israel's Iron Dome and how that works. And then we will contrast that with the American, uh, current situation and then where we might go.

• 18:06Jordi Hays?

  Yeah. So I'll give some backstory here. After the 2006 Lebanon war, showered northern Israel with roughly 4,000 rockets, the Israeli Ministry of Defense rushed development of Iron Dome jointly built by Rafael Advanced.

• 18:19John Coogan?

  Rafael.

• 18:20Jordi Hays?

  Rafael Advanced Defense Systems and Israel Aerospace Industries with Raytheon providing US co-production. The system entered service in March 2011 and scored its first combat intercept two weeks later. Quick turnaround. Uh, since then, Iron Dome has logged over 5,000 successful kills with a claimed 90% success rate. So those kills are, uh, missile, uh, kills. So this is a missile defense system, to be clear. So, um, US, uh, financing has been, uh, decisive, divisive. Um.

• 18:55John Coogan?

  Yeah. A lot of people don't like that America's paying for Israel's Golden Dome. Um, but of course there's like all the strategic decision-making about, well, they're an ally in a very complicated area, complicated region, you, you back them. Also, there's a lot of Israeli citizens that come to America. We want to support them and stuff. So we're not going to go into all the geopolitics of it, but.

• 19:14Jordi Hays?

  Yeah. So Congress has spent about 1.6 billion between 2011 and 2021, plus another 1 billion emergency tranche in 2022.

• 19:22John Coogan?

  But I think what should be non-controversial and non-partisan is that, hey, if we've invested a ton of money in this technology, we should get a claim on some of this IP.

• 19:32Jordi Hays?

  Yeah.

• 19:33John Coogan?

  And we should be able to bring that back and it should be able to protect Americans.

• 19:35Jordi Hays?

  Yep.

• 19:35John Coogan?

  Uh, and, and I think that that's probably something that most people would be in favor of.

• 19:40Jordi Hays?

  So in exchange, the US Army gained two Iron Dome batteries for limited homeland and expeditionary use and early experiment in importing allied systems.

• 19:49John Coogan?

  Exactly. So they build it there, they test it there, and then they bring it back to us.

• 19:52Jordi Hays?

  Um, and anyway, so the key takeaways, uh, for, you know, I think, you know, basically the takeaways that, that the Golden Dome, uh, will, will use, look to implement is software-first design. Enables basically like rapid updates to the system.

• 20:09John Coogan?

  Yep.

• 20:10Jordi Hays?

  Uh, networked launchers, radars and battle management lets operator, operators, uh, mass interceptors at the most dangerous threats. Um, basically like conserving and effectively ammunition. Um, and just this constant pressure.

• 20:27John Coogan?

  Oh, this is, yeah, this is interesting.

• 20:28Jordi Hays?

  Is forcing, uh, iterative improvement in a way that a US system just never would, right?

• 20:34John Coogan?

  Yeah, because America's famous for like the exquisite system, like the F-35 took two trillion in like 30 years because like,

• 20:41Jordi Hays?

  No, I think it's.

• 20:41John Coogan?

  It's not like, it's not like, oh, F-35s are blowing up and getting shot down constantly. So we gotta make them better.

• 20:45Jordi Hays?

  But it's also like, we don't have Canada and Mexico constantly launching rockets into the US.

• 20:50John Coogan?

  Yeah.

• 20:50Jordi Hays?

  If we did, we'd be able to iterate really quickly.

• 20:52John Coogan?

  We're in the, we're in what, what the fat on the couch era and we're gonna get back in shape, right? And so this is, this is us getting back in shape. And so, um, uh, giving a little bit of history on how America thinks about this. I mean, obviously there's a, there's a few different layered shield systems that have, that have built up over time, but it all goes back to that Reagan Strategic Defense Initiative, AKA Star Wars, announced on March 23rd, 1983. Uh, the idea was space-based lasers would sound crazy, but kinetic interceptors, which actually makes a lot of sense, and exotic sensor webs to render nuclear missiles obsolete. Congress ultimately spent roughly $30 billion in current dollars on prototypes such as brilliant

• 21:37John Coogan?

  Pebbles miniature interceptors and Alpha chemical lasers. But the collapse of the Soviet Union and severe technical hurdles led to program curtailment by 1993. So of course, like, can you imagine how difficult it would be to put, how expensive it is to put, uh, technology, lasers, interceptors, drones, anything like that, into space when you don't have SpaceX launching a new rocket every single day? Like you have to use NASA for that. It's extremely expensive. Uh, you, you, you just don't have the cost, the cost to Leo. So you can't iterate or anything like that. And then also a lot of these, a lot of these like, you know, drone-based systems were not really developed yet.

• 22:20John Coogan?

  And so, uh, all of it was a little bit, um, Too early, but it did seed today's hit to kill technology infrared sensors and the political idea that the US could defend rather than simply deter against nuclear attack.

• 22:34Jordi Hays?

  Yeah.

• 22:35John Coogan?

  And so the Golden Dome has this like kind of this is all kind of rumor at this point, but you can think about two different layers to the Golden Dome dome like core. So two ring satellite constellations, wide field tracking layer, that's 400 to like 1,000 satellites, CubeSat class, which is like star, think like Starlink in 500 kilometer orbits, provide a global persistent infrared coverage, PIR coverage, queuing interceptors within seconds of a hostile launch. So basically you put up all the different sensors and you're and then you're seeing is, are there any missiles that are launching? And then the shooter level is a larger platform to carry kinetic kill vehicles, K K Vs.

• 23:17Jordi Hays?

  And this is a cool part.

• 23:18John Coogan?

  Or mega watt class solid state lasers.

• 23:19Jordi Hays?

  Laser.

• 23:20John Coogan?

  They're actually doing the laser thing, allegedly. This is all alleged. But yeah, it says it can destroy, can destroy missiles 50 to 150 seconds after boost.

• 23:29Jordi Hays?

  Yeah. And a lot of what the, the real role of deep tech is to turn science fiction into reality.

• 23:37John Coogan?

  Yeah.

• 23:38Jordi Hays?

  And so this, this is sort of crazy conceptually.

• 23:42John Coogan?

  Yeah.

• 23:43Jordi Hays?

  But if it's, you know, if, if effective, it will be extremely cost efficient way to mitigate the threat of, you know, ICBMs and, and.

• 23:54John Coogan?

  Also, there's this rumor that it will be offered on a subscription model. Did you see this?

• 23:58Jordi Hays?

  Elon's like, hey, Starlink's actually a pretty good model.

• 24:03John Coogan?

  Yeah.

• 24:04Jordi Hays?

  Put people on, didn't really churn.

• 24:05John Coogan?

  But it also makes sense then, as opposed to building like this exquisite system. Like it really is, it sounds funny, but it is, it is a reasonable way to, to finance this type of development and the ongoing upkeep and the, and the iterative improvement of it. So the Missile Defense Agency issued its first industry sources sought notice on April 4th, 2025. I think that's probably what's driving the news today. Calling for concepts that can just, that can demonstrate initial boost phase intercept by 2026 and expanded capabilities through 2030. The Space Force will own command and control. And so. Like the companies that build this stuff, whoever they are, might be SpaceX, Palantir, Anduril, might be completely different companies, but they're not going to have their finger on the trigger. Yeah.

• 24:49John Coogan?

  Command and control operates with the space. Yes, because we are a democracy. Yeah. And this was something that was, it became a point of debate with Starshield and Starlink. And so there was a moment where Starlink was so dominant and there was no real path for the US government to buy Starlink in a meaningful way, like buy it as a capability, not to buy the company. And so people were saying like, well, if Elon turns on Starlink in the Ukraine, that's helping Ukraine. If he chooses to turn it off, that's hurting Ukraine or Israel or Taiwan or any of these countries that are in geopolitical conflict.

• 25:31John Coogan?

  And so all of a sudden, the decision about our geopolitics actually rests with his business decision. And so that is something that should, I think, be decided democratically through America's normal process for how we engage with allies and adversaries. It should not be a purely economic consideration for the company that just wants to maximize shareholder value, because you could imagine, you know, if you're just trying to maximize shareholder value, you're like, yeah, okay, we're going to turn Starlink on for both sides of this conflict because we just want to make as much money as possible. But so Elon got all this intense like criticism, oh, Elon's just playing like, you know, God

• 26:14John Coogan?

  and like, you know, he's deciding what's going on with this war. He shouldn't have that much power. But I always said like, that's not going to be an issue because the US government will just be able to buy it as a capability. And they wound up doing that, and that's Starshield. And then, and then it's actually like a more, more secure version of it. And it's something that the US government then decides. And this is going to be the same thing. Where it's leveraging technology from private citizens that have been developed, but ultimately, the decision of how it's used, the command and control rests with the government and ultimately, the American people, which is great. So, the government will pay an annual service fee rather than buying hardware outright, which sounds funny because now it's like SaaS, but it's way better that way because of

• 26:57John Coogan?

  course then you can upgrade and you can iterate and you can improve.

• 27:01Jordi Hays?

  Yeah, and these annual service fee proposals seen by Reuters so far, which again Elon denied.

• 27:08John Coogan?

  He denied it, yeah.

• 27:09Jordi Hays?

  Suggests a 30-year lifecycle that could reach $600 billion, roughly equivalent to three years of the entire US defense budget. So, really, eye-watering numbers.

• 27:22John Coogan?

  Yep.

• 27:23Jordi Hays?

  But makes sense in the context of preventing full-scale nuclear war and having hundreds of ICBMs flying through. This guy is effectively in the interests of all of humanity.

• 27:39John Coogan?

  I agree.

• 27:39Jordi Hays?

  So.

• 27:39John Coogan?

  I agree. Take out all of them. Of course, it gets more complicated because like, everything that's, like, the line between like, defensive technology and offensive technology is pretty loose, right? So, it's like, if you can build this like, KKV vehicle or secrecy vehicle that can, or space laser that can shoot down a missile, it can also shoot down like a 747 with the president on it, or it can shoot down, you know, an adversary or can conduct an assassination.

• 28:09Jordi Hays?

  Yeah.

• 28:09John Coogan?

  So, like, you still have to, like, even if you, even if you create the best golden dome possible and make nuclear war a thing of the past, like, you will still have the risk of conflict, right?

• 28:20Jordi Hays?

  Yeah.

• 28:20John Coogan?

  And so, you always need to come back to just like how we actually resolve these conflicts. Interesting to hear a little bit about. Who, how, how all these companies could fit together hypothetically. Obviously SpaceX has launched the cheapest mega constellation with Starlink. And they also have the Starlink bus, which is like the platform that Starlink is built on. So they could easily swap out internet for, I guess it's infrared.

• 28:49Jordi Hays?

  Yep.

• 28:50John Coogan?

  And then just start spamming those up there on the subscription, which is actually how I would describe their, their approach to, to putting up Starlink satellites. It is just spamming them up there, but it's great. It works really well. And I'm sure there's a lot of work that goes into positioning them perfectly and whatnot. But, um, so they'd be like potentially the prime integrator, the Falcon nine R and Starship launches would be putting up these satellite buses.

• 29:14Jordi Hays?

  Yeah, but there's, this is going to be a huge collective effort, right? There's so many different primes that are, you know, wanting to participate in this. You have the new primes, the Palantirs, the Andurals, and then you have Lockheed Martin, Northrop Grumman, RTX, which is Raytheon, Boeing. Boeing has a bunch of heavy satellite experience. Raytheon has a bunch of relevant experience.

• 29:39John Coogan?

  In like missiles, for sure.

• 29:41Jordi Hays?

  Very oriented around these, I think has built, yeah, has built missile interceptor products in the past and collectively.

• 29:50John Coogan?

  And a lot of rocket motors too. So if you want to deploy some sort of missile from the, from like a satellite platform, uh, actually building that rocket motor. They have, they do have a heritage there. There's good things you could say about them. There's things where they're falling behind.

• 30:05Jordi Hays?

  And Northrop actually had a huge explosion on April 16th. Drew had a post yesterday. I'll just pull it up on my computer, but he said, a real setback for America. This rocket motor plant was such a pillar of national security capacity that Northrop had agreed to be a supplier to Boeing. In a competition to build the LGM 35A Sentinel, a key part of the US nuclear triad. So anyways, unclear if this explosion was just an accident or if there was something else going on. These types of facilities are super dangerous, but again, uh, this is Northrop and Boeing already being a.

• 30:47Jordi Hays?

  That they were basically leveraging this facility to to contribute to the US nuclear sort of defense apparatus.

• 30:55John Coogan?

  Yeah, it's it can be dangerous stuff. So more than 180 firms responded to the April Industry Day, including laser specialist, General Atomics, L3 Harris for space radars. Everyone shows up, even AWS and Azure, Microsoft showed up, said, hey, we got the data backend covered. And it makes sense. This should be bipartisan. It's like protecting us from nuclear war. This is amazing. And I'm very excited to learn more about this. And it's always tough because like, they are probably not going to tell everyone everything, right? Because it's going to be classified and like, because as soon as you say, this is exactly how it works, well, it's easy to start shooting them down and taking them out and figuring

• 31:36John Coogan?

  out what the what the anti-missile, anti-anti-missile is, right? So, anyway, you know, it'll be interesting. In terms of just the history of missile defense, in the 1960s, we have the Nike Zeus and Sentinel. These are silo-based sites. And so, like, you know, we got to fire it off from the ground. 1983, we see SDI Star Wars. The tech was premature, but they did create the idea of like this IR sensor and KKV field, which is kind of the modern strategy, I think. I think that we're not we're not reinventing the wheel on that. We're just using the latest technology and actually being able to get it to scale.

• 32:19John Coogan?

  And then, of course, the the Iron Dome is kind of like the gold standard here, until the Golden Dome becomes the gold standard, hopefully, because it's been combat validated with 90% greater success. And so, I don't know, I think we should keep following this story. It'll be interesting to see where where it lands and how much we learn. I mean, at the very least, it will be. I think it might be more of a business story than a technology story because I think a lot of the technology will be classified effectively, but we will be start like as, I mean, Palantir is a public company. So if there is a big award, it will show up in their earnings and that's cool and that will drive the market and that that's interesting to follow.

• 32:58Jordi Hays?

  Yeah, and it's coming at a very interesting time. Obviously Reagan's Star Wars program and campaign was was made fun of in many ways, partly because of the name. Golden Dome will be made fun of too, because it's a kind of a funny name.

• 33:13John Coogan?

  It's almost.

• 33:14Jordi Hays?

  But at the same time, it's coming at a time when the commercial space economy is flourishing.

• 33:19John Coogan?

  Yep.

• 33:19Jordi Hays?

  We're putting stuff into orbit every, almost every single day.

• 33:22John Coogan?

  Technology is so much more mature.

• 33:23Jordi Hays?

  And so the timing feels right. And over time, this could replace a bunch of systems on the ground that are very, very, very costly and to, you know, create and maintain.

• 33:35John Coogan?

  Well, if you think the legacy primes are going to do well, if you think Palantir's going to do well, or vice versa, you can go express your opinion, your independently formed opinion on public.com investing for those who take it seriously, multi asset investing, industry leading units, trusted by millions.

• 33:53Jordi Hays?

  You got pretty, pretty much every asset on there.

• 33:57John Coogan?

  Pretty much every asset on there. And we got to do another ad ramp. Time is money, save both. Easy use corporate cards, bill payments, accounting, and a whole lot more all in one place. Back to back, baby. But we got to move on to Johnson and Johnson.

• 34:11Jordi Hays?

  We should get a card reader here to just swipe.

• 34:12John Coogan?

  We have a card reader. We, we ordered one for a shoot that we did. And I, and I got some very nice cinematic shots with Ben for the card reader.

• 34:21Jordi Hays?

  There we go. Well, let's talk about generative Johnson, John.

• 34:25John Coogan?

  Generative Johnson. So Johnson and Johnson is making a shift to focus only on the highest value generative AI use cases and shut down pilots that were redundant or under delivering. And this is big news because a lot of companies have probably sold huge generative AI transformation projects into all sorts of companies and we'll see how many stick around.

• 34:49Jordi Hays?

  Yep.

• 34:50John Coogan?

  And so they used to, previously Johnson and Johnson was experimenting with generative AI pretty broadly across the healthcare conglomerate. And now they're taking a more focused approach and they want everyone to know.

• 35:02Jordi Hays?

  Let's try a bunch of stuff.

• 35:03John Coogan?

  Talking to the journal about it.

• 35:04Jordi Hays?

  Let's try a bunch of stuff.

• 35:05John Coogan?

  Makes sense.

• 35:06Jordi Hays?

  And then see what's what's working well today.

• 35:08John Coogan?

  Yep.

• 35:08Jordi Hays?

  What would could be working well in the future.

• 35:10John Coogan?

  Best.

• 35:10Jordi Hays?

  And then churn.

• 35:12John Coogan?

  Yeah, we hate to see churn.

• 35:14Jordi Hays?

  Anyways, so Chief Information Officer Jim Swanson said the move ensures the company allocates resources only to the highest value generative AI use cases while it cuts projects that are redundant or simply not working. That was a pivot we made after about a year of learning, Swanson said. Now we've moved from a thousand flowers to a really prioritized focus on Gen AI. The thousand.

• 35:37John Coogan?

  Funny, what a funny analogy.

• 35:38Jordi Hays?

  Golden dome, thousand flowers.

• 35:40John Coogan?

  Thousand flower approach involved a number of use case ideas germinating from across the company, which made their way through a centralized governance board. At one point, employees were pursuing nearly 9,000 individual use cases, many that were redundant or simply didn't work, he said. And as the company tracked the broad value of AI, including generative AI, data science, and intelligent automation, it found that only 10 to 15% of use cases were driving about 80% of the value, he added. Interesting. And I imagine, yeah, I mean, I'd love to know exactly what they're what they're what they're using, but you can imagine like, you know, when all you have is a hammer, everything looks like a nail.

• 36:21Jordi Hays?

  Yeah.

• 36:21John Coogan?

  Let's throw generative AI at everything. But there's going to be places that are like, oh, wait, we we still have a division that's just transcribing paper receipts or something.

• 36:30Jordi Hays?

  Yeah.

• 36:30John Coogan?

  Should just get on ramp.

• 36:32Jordi Hays?

  Yeah, so here's where it's working. J and J is drilling down into high value Gen AI use cases around drug discovery and supply chains. Zach Weinberg might put the drug discovery one in the true zone, as well as an internal chatbot to answer questions on company policy. So, eh, hard to hard to know if this.

• 36:52John Coogan?

  It's like, okay, chat with your company handbook, basically, which that's fine, but I don't think people care at all.

• 37:00Jordi Hays?

  Drag the handbook into.

• 37:02John Coogan?

  Chat GPT.

• 37:03Jordi Hays?

  Enterprise enterprise version of Chat GPT in your Azure cloud and ask it questions.

• 37:08John Coogan?

  Yeah.

• 37:09Jordi Hays?

  Not probably something they're paying.

• 37:11John Coogan?

  Yeah.

• 37:11Jordi Hays?

  For a standalone product for.

• 37:13John Coogan?

  Sure.

• 37:13Jordi Hays?

  Or maybe will long term, it's hard to say.

• 37:15John Coogan?

  Sure.

• 37:15Jordi Hays?

  I know there's companies like Glean that have, you know, gotten to, you know, multi-billion dollar valuations.

• 37:22John Coogan?

  Yeah.

• 37:22Jordi Hays?

  Doing something like this.

• 37:23John Coogan?

  Yeah.

• 37:24Jordi Hays?

  Anyways, so.

• 37:26John Coogan?

  It's also just funny because you know that like. With a company like J and J, like McKinsey was like all over this being like with like millions of decks of like, let's put it in this, let's lot in here, let's do all this.

• 37:35Jordi Hays?

  Yeah.

• 37:37John Coogan?

  And, and, and then there's also, there's just all the forces aligned to do 900 projects. Because

• 37:44Jordi Hays?

  Yeah.

• 37:44John Coogan?

  Anyone who's

• 37:45Jordi Hays?

  Huge company.

• 37:46John Coogan?

  J and J and wants a promotion is like, well, yeah, I'm not just a marketer. I'm a technology enabled marketer and I, my team is using AI. So we're going to be more efficient. We're going to drive more shareholder value. Then, then you have the CEO who's like, oh, I gotta tell Wall Street an AI transformation story.

• 38:01Jordi Hays?

  Yeah.

• 38:02John Coogan?

  Oh yeah, we're firing everyone. It's all AI. So

• 38:04Jordi Hays?

  Very interesting.

• 38:04John Coogan?

  We're not doing it this quarter. We're not firing everyone this quarter, but like AI is coming and you can, you can price this as a stock today.

• 38:10Jordi Hays?

  It's interesting that they use a centralized governance board to lead the thousand flowers AI transformation like.

• 38:18John Coogan?

  It's like the one thing you shouldn't do is just like instead just, just diffuse the, the research. I mean, I think the way you actually transform an organization is just say like, hey, everyone, like AI exists. It's the Toby Look key approach. It's Shopify. It's like AI exists. Like whatever your job is, like use chat GPT. If you need to expense chat GPT, it, it's the same thing as like Google exists. If you hired an employee and they didn't use Google, you'd be like, whoa, whoa, whoa, what's going on with this person? Like they need to be Googling stuff.

• 38:47Jordi Hays?

  Yeah. One example that is working is a rep co-pilot, which helps coach sales representatives on how to engage with healthcare professionals about new treatments.

• 38:55John Coogan?

  We actually use this to coach our sales reps on how to pitch the show to other people that are listening to other podcasts.

• 39:02Jordi Hays?

  Yeah. And I think we have, you know, our sales team isn't as big as J and J, but it's close.

• 39:08John Coogan?

  Yeah.

• 39:08Jordi Hays?

  Right?

• 39:08John Coogan?

  Dozens.

• 39:09Jordi Hays?

  As you, you know,

• 39:10John Coogan?

  Yeah.

• 39:10Jordi Hays?

  dozens of thousands, I think. But anyways.

• 39:16John Coogan?

  The company is piloting this in its innovative medicine business segment, which develops new treatments for oncology and other areas, and is now working to expand that pilot to its med tech segment, which sells robotics and hardware like hip replacement and lenses. So the rep co-pilot, that sounds like. AI SDR, but not going all in on the agentic motion.

• 39:38Jordi Hays?

  It's more like an AI sales manager.

• 39:41John Coogan?

  Uh, maybe, but I, I, I, I would imagine that what works well in, in sales rep co-pilot is, okay, I just got an email from someone we're trying to sell to. They asked these questions instead of needing to go back to the team and say, hey.

• 39:57Jordi Hays?

  That's what I'm saying. Going back to the sales manager.

• 39:59John Coogan?

  Yeah, yeah, yeah. I guess that's the right question. Exactly, exactly. And so that's just, that's just information retrieval. It's L L M's as a knowledge engine and help with copyrighting, right? Which is like what we know these things are so great at.

• 40:13Jordi Hays?

  Yeah. And then it has a little bit more on the internal chatbot. Uh, it says that the internal chatbot ingests information about company policies and benefits to help produce the some 10 million interactions employees have every year with the services team.

• 40:28John Coogan?

  Yeah.

• 40:28Jordi Hays?

  And so this is just like, hey, uh, am I allowed to take this day off?

• 40:32John Coogan?

  Yeah.

• 40:33Jordi Hays?

  Uh, I already used, uh, 14 of my vacation days.

• 40:37John Coogan?

  We should actually develop something like this because I'm getting sick of everyone on our team asking like, how much creatine should I be taking? Like, is it chest day? Or is it back day? Or is it leg day? Like, you know, if we could just have a chatbot that they could ask all that stuff. It would really speed things up.

• 40:51Jordi Hays?

  Am I, am I, am I allowed to work on Saturday? I've worked, you know, uh, 10 weekends in a row and I know it's required that I take one Saturday off every 10 weeks. Um, can I, uh, do I have to take it off?

• 41:04John Coogan?

  Do I have to take it off? I want, I want, I want to keep grinding. Yeah.

• 41:07Jordi Hays?

  Uh, this is, uh, potentially more interesting.

• 41:10John Coogan?

  Yeah.

• 41:10Jordi Hays?

  Um, in drug discovery, the company is looking at whether Gen AI can help researchers find the optimal moment to add a solvent to turn a liquid molecule into a solid.

• 41:20Jordi Hays?

  And they're also doing stuff on the supply chain side specifically around supply chain risk, um, which is relevant now, given, uh, some of the shortages and, and, um, you know, trade war stuff that's going on. So. Anyways, the good news is if you were working with J and J and you didn't and they didn't churn, probably on the right track at least. And so I think this will be a good signal. We need more companies to like overspend and then scale back to figure out like what's actually valuable.

• 41:52John Coogan?

  Yeah, it's also unclear to me, like, maybe we should try and find like some sort of like consultant or someone who has worked inside these Fortune 500 companies and kind of seen what is actually working or not. We might need to have them call in like anonymously, honestly. But I'd love to know like of these, like for a representative organization that's done like a thousand AI projects, how many of those are just, hey, we had our team sign up for ChatGPT Pro versus, hey, we had our team buy a trial with a enterprise, like an AI SaaS company versus we built something internally. We had our teams implement something because obviously a company like J and J has a massive IT team.

• 42:33John Coogan?

  They have CIO who's commenting to the Wall Street Journal. So clearly they have, you know, the ability to roll out software and automation across, it's entirely custom to their business. And I would be interested to see like what tools are they using because they probably haven't built their own AI co-pilot for coding. But are they using Windsurf? Are they using Cursor? Are they using Devon? Like what's sticking around? Yeah, it's interesting. But.

• 43:00Jordi Hays?

  Well, if you're looking for AGI for watches, many people have said that bezel is super intelligent.

• 43:08John Coogan?

  Exactly.

• 43:09Jordi Hays?

  Buying your next watch.

• 43:12John Coogan?

  Your bezel concierge is available to source any watch on the planet. Seriously, any watch. Head over to getbezel.com, download the app, build a wish list and pick a great watch.

• 43:23Jordi Hays?

  Can't recommend them enough.

• 43:24John Coogan?

  We can't.

• 43:25Jordi Hays?

  We got another headline here. The EU delayed punishing Apple Meta just before trade talks started. They postponed an announcement that was initially planned for this week, earlier this week. So the European Union recently delayed penalizing Apple and Meta Platforms. They're just always, always coming after our big tech. I said earlier, I will defend big technology.

• 43:51John Coogan?

  You didn't just say that. What did you say?

• 43:54Jordi Hays?

  What did I say?

• 43:56John Coogan?

  You didn't say you would defend them. You said you would die for them.

• 43:59Jordi Hays?

  No, I said I would take a bullet.

• 44:01John Coogan?

  Okay, take a bullet. Yeah.

• 44:02Jordi Hays?

  I would probably hold out my arm.

• 44:03John Coogan?

  Yeah, yeah, yeah.

• 44:04Jordi Hays?

  And just flex as hard as I could to try to, you know,

• 44:07John Coogan?

  Yeah.

• 44:08Jordi Hays?

  block it, but not.

• 44:09John Coogan?

  Yeah. Yeah, I mean, I mean, that is the goal of like this, the Secret Service. Like if Sundar Pichai was over there and I was wearing a bulletproof vest, I would dive in front of it for sure.

• 44:18Jordi Hays?

  That's right. That's right. Diving in front with a bulletproof vest.

• 44:21John Coogan?

  Exactly. That's the level of dedication. Still a lot of dedication.

• 44:24Jordi Hays?

  Totally.

• 44:25John Coogan?

  But, you know, it's not.

• 44:26Jordi Hays?

  You're gonna get badly bruised by that.

• 44:29John Coogan?

  But you're gonna look like a hero.

• 44:30Jordi Hays?

  Totally.

• 44:30John Coogan?

  For big tech.

• 44:31Jordi Hays?

  Crisis. Anyways, what's new? EU coming after big technology, but they had initially planned to announce cease and desist orders targeting the tech giants on Tuesday and had informed at least one of the companies of that timing. People familiar with the matter said,

• 44:48John Coogan?

  What are they?

• 44:48Jordi Hays?

  They're like, hey, by the way, we're going to send a cease and desist and slap you with some fines. The decision to postpone the announcement was made shortly before EU Trade Commissioner Maros Sevkovik met with US officials in Washington on Monday for his first in-person talks since President Trump announced a 90-day pause on some tariffs. I think this is a good call by the EU. There's kind of bigger fish to fry right now. And it says, in addition, this week, Italian Prime Minister Giorgia Maloney met with Trump, who said he would have very little problem making a trade deal with the EU.

• 45:23John Coogan?

  Yep. Okay, so the actual cases here, what's going on? Meta and Apple, they're both under pressure from the EU for alleged breaches of the Digital Markets Act. This is a law that seeks to make it easier for small companies to compete with their big tech rivals. The commission opened investigations in March of 2024 and issued preliminary findings in both cases last summer. The cases carry a potential fine of up to 10% of the company's global annual revenue.

• 45:53John Coogan?

  Though people familiar with the matter said that they expect fines would be much lower. But can you imagine that? You're vending, you know, the iPhone. You're selling iPhones in Italy or something. And because you're not in compliance with the Digital Markets Act that says, oh, you got to have like open app store competition, or you got to let this API work in this particular way. So someone can build on top of Apple in like a more competitive way. You violate that. They catch you and the fine is 10% of your global revenue. Which is like hundreds of billions of dollars across these companies. Like it is, it is insane amount of money. But of course, this would all be negotiated and there's a lot of leverage because

• 46:37Jordi Hays?

  Again, regulators.

• 46:38John Coogan?

  Consumers like these products.

• 46:39Jordi Hays?

  Regulators are basically negotiating.

• 46:41John Coogan?

  Yep.

• 46:41Jordi Hays?

  We saw the FTC coming after Meta.

• 46:43John Coogan?

  Yep.

• 46:44Jordi Hays?

  Saying we want 30Bs.

• 46:45John Coogan?

  30Bs.

• 46:46Jordi Hays?

  30Bs. We see you spending on AI capex.

• 46:49John Coogan?

  We know you got it. We know you're good for it, Mark.

• 46:50Jordi Hays?

  We want.

• 46:51John Coogan?

  We saw that cupidus on your wrist.

• 46:52Jordi Hays?

  Yeah.

• 46:53John Coogan?

  We, we saw that, we saw that FPJord.

• 46:56Jordi Hays?

  Yeah.

• 46:57John Coogan?

  Give us some of that. When flexing goes wrong.

• 46:59Jordi Hays?

  Yeah.

• 47:00John Coogan?

  Everyone just goes.

• 47:02Jordi Hays?

  Yeah. Anyways, they say, European officials say they won't water down their tech regulations in response to US pressure. But some lawmakers in the European Parliament have questioned whether the cases have become political. Hmm. Wonder if they've become political as the EU seeks to negotiate a deal with the US on trade. The Meta and Apple cases both relate and you covered this already.

• 47:23John Coogan?

  So, so, so with Meta specifically, the EU is upset that Meta has a policy of you either have to buy a subscription and pay for Facebook or Instagram, or you have to allow Meta to use data for targeted advertising. And, and the EU is arguing this does not comply with the Digital Markets Act. Meta, they said, hey, here's an olive branch. Let's introduce an alternative that allows you to see less personalized ads without buying a subscription. Third option, but they say that's still not good enough. We want you to just show random ads all the time, I guess.

• 48:00Jordi Hays?

  It's so wild because that's so harmful to

• 48:04John Coogan?

  Businesses.

• 48:05Jordi Hays?

  Small businesses.

• 48:06John Coogan?

  It's incredibly harmful for small businesses.

• 48:08Jordi Hays?

  It's, it's, it's actually okay, like Apple, Nike.

• 48:11John Coogan?

  Yes.

• 48:11Jordi Hays?

  You know, a, a big insurance company, a big bank, they have billions of dollars to spend on advertising. They can just basically spend money in a completely non-targeted way.

• 48:20John Coogan?

  Yep.

• 48:20Jordi Hays?

  And so policy like this over time will just hurt small businesses that you think you're trying to protect.

• 48:26John Coogan?

  Exactly.

• 48:27Jordi Hays?

  Even, even companies that would go on to compete.

• 48:29John Coogan?

  Yeah.

• 48:30Jordi Hays?

  With, uh, with these big tech giants.

• 48:33John Coogan?

  Yeah.

• 48:33Jordi Hays?

  Are going to struggle when they're like, hey, we have a million dollars to spend on advertising this year. And all we can advertise to on Google is just this random audience.

• 48:41John Coogan?

  It's terrible.

• 48:41Jordi Hays?

  So the ads are going to be terribly inefficient. You know, caught, you just CAC will, will go through the roof.

• 48:48John Coogan?

  Yep.

• 48:48Jordi Hays?

  And we saw this with, with, um, uh, this sort of iOS tracking.

• 48:52John Coogan?

  Yep.

• 48:52Jordi Hays?

  Changes. And so anyways, these types of.

• 48:57John Coogan?

  App tracking transparency.

• 48:59Jordi Hays?

  Yeah, all of this is just absolutely insane to me and.

• 49:04John Coogan?

  Well, some people hate small businesses and they just want to hurt them.

• 49:08Jordi Hays?

  It's possible that the EU regulators.

• 49:10John Coogan?

  Small businesses.

• 49:11Jordi Hays?

  Yep, they want to support.

• 49:13John Coogan?

  I mean, that was the most ironic thing about the whole ATT thing was like, it just made Facebook stronger because they were the only company that could actually do machine learning based ads and, uh, and non-deterministic ads. So they didn't need to track you anymore because they had enough data that they could infer that this person wants a Ridge Wallet just from what they're watching on the actual Facebook platform.

• 49:33Jordi Hays?

  It also doesn't.

• 49:33John Coogan?

  But no one else can compete.

• 49:34Jordi Hays?

  Even on the consumer side.

• 49:36John Coogan?

  Yeah.

• 49:36Jordi Hays?

  I want ads.

• 49:37John Coogan?

  I completely agree with this.

• 49:38Jordi Hays?

  Perfectly targeted.

• 49:39John Coogan?

  I completely agree with this. Like do not show me ads for dementia medication or like.

• 49:44Jordi Hays?

  Yeah.

• 49:44John Coogan?

  You know, I, I don't know. There, there's a million things that I'm not in the market for, and I just, it's a complete waste of time to show me. Like even just products that are sold to women.

• 49:53Jordi Hays?

  Yeah.

• 49:54John Coogan?

  I don't need to see any of those. And and all of that's just like a waste of time. And I actually enjoy and get value out of having ads. If I'm going to see an ad, it should be targeted at something. It should educate me about something that I'm already in the market for considering buying.

• 50:09Jordi Hays?

  And every, every, every once in a while, an American VC will go to Europe and make a joke about cookies.

• 50:14John Coogan?

  Yeah.

• 50:15Jordi Hays?

  I, I, in the past, I've made jokes about cookies.

• 50:18John Coogan?

  Yes.

• 50:19Jordi Hays?

  But it's still just like funny how they're like high level tech policy really works. You go over there and you will spend if you're just using the internet.

• 50:28John Coogan?

  Yeah.

• 50:29Jordi Hays?

  I hope you enjoy cookies because you'll be accepting a lot of them. So anyways.

• 50:34John Coogan?

  Well, if you're traveling, you should find.

• 50:36Jordi Hays?

  Your happy place.

• 50:38John Coogan?

  Find your happy place. Book a wander with inspiring views, hotel.

• 50:43John Coogan?

  Dreamy beds, top tier cleaning and 24/7 concierge service. It's a vacation home, but better, folks.

• 50:49Jordi Hays?

  And Wander's just been on an absolute tear.

• 50:50John Coogan?

  They have.

• 50:52Jordi Hays?

  Many people are calling it an overnight success, both in the speed at which they're crushing it.

• 50:56John Coogan?

  Yes.

• 50:57Jordi Hays?

  But every time you stay at a Wander, it's effectively an overnight success, right? So.

• 51:06John Coogan?

  So we have, we have new data on Apple in China. They're losing ground in the smartphone market as local rivals gain. The US tech giant dropped a fifth place with a 13.7 market share. They lost its top spot in the China smartphone market, dethroned by Xiaomi as Beijing's consumption boosting subsidies helped buoy demand for cheaper products. The US tech giant's share of China, China's highly lucrative phone market shrank to 13.7% during the first quarter from 15.6 a year earlier. That is a pretty big drop.

• 51:38Jordi Hays?

  Yeah.

• 51:39John Coogan?

  Apple's been facing increasing competition in China in recent years, despite claiming the top spot in the final quarter of 2024 with a marginal lead. The iPhone maker lost out to local rivals Vivo and Huawei on annual shipments that year.

• 51:53John Coogan?

  And it is interesting, have you seen any of these Chinese phones? Some of them, I mean, it feels like there's like a Cambrian explosion. Like, I saw iShow Speed was over there and looking at this, it's a tri-fold phone that basically turns into like an entire tablet. But it's almost the same size as an iPhone. Like, they're doing cool stuff over there. Like, the tech is cool.

• 52:13Jordi Hays?

  I want a phone that's structured like a newspaper, John. I want, I want it to, you know, basically fold up like this. And then I want to be able to unfold it like this and just, you know, you're sitting in the back of a Waymo.

• 52:24John Coogan?

  They're getting close.

• 52:25Jordi Hays?

  So, that's where we're headed. I just, I, I, I would not be surprised to see Apple drop out of the top five.

• 52:32John Coogan?

  Yeah, I agree.

• 52:33Jordi Hays?

  In, you know, even in the next year, it just does not seem like they are welcome there despite having their supply chain oriented around it. And the competitors are just iterating quickly. They have a cost advantage.

• 52:45John Coogan?

  Yep. And, and, and there's also a major cultural shift in China about like nationalism, like let's buy, let's buy Chinese-made products from Chinese brands.

• 52:54Jordi Hays?

  And government subsidies. Xiaomi's return to the top spot after nearly a decade was largely due to government subsidies. So they're just directly subsidizing, and that is resonating with just the, the Chinese citizens broadly.

• 53:11John Coogan?

  Yeah, I mean, it's, it's, it's funny to compare Apple's experience in Europe where it's basically like an anti-subsidy. It's like, get out of here, pay us 10% of your global revenue.

• 53:22Jordi Hays?

  Accept our cookies and leave.

• 53:23John Coogan?

  And, oh, by the way, like, what has Nokia done in, I mean, it's the only broadly European phone company. And Nokia is completely out of the game. They're not really producing new phones that are competitive whatsoever.

• 53:36Jordi Hays?

  When you go to nokia.com, by the way, one.

• 53:40John Coogan?

  What do you get?

• 53:41Jordi Hays?

  They, they just, the name of the site is just Nokia Corporation, which is not super optimized. Apple just says Apple, but Nokia Corporation, and they, there's not a single mobile device on the homepage.

• 53:56John Coogan?

  Yeah, I think they're out of the game. So it's it's very odd where where, you know, China has upstart companies that are competing with Apple and they're subsidizing them and being very aggressive to push and win. And then Europe is taking the opposite approach where they're like, Apple still is a China hasn't banned iPhones in China. Like you can still sell them. They are subsidizing their national champions, but at least the end result of that will be more technology, better homegrown competitors, right?

• 54:30Jordi Hays?

  Yeah.

• 54:31John Coogan?

  Versus Europe is just, give us 10% of your global revenue. And yeah, we're not going to even try and compete. We're just going to try and tax you.

• 54:40Jordi Hays?

  Yeah.

• 54:41John Coogan?

  It's like, yeah, it's a very, very weird strategy.

• 54:44Jordi Hays?

  Well, hopefully Harry Stebbings.

• 54:46John Coogan?

  Yeah, maybe, maybe someone in, maybe someone in Europe will try and build a phone and and take some market share, but it doesn't seem like it's happening.

• 54:55Jordi Hays?

  Yeah.

• 54:55John Coogan?

  And so very, very odd.

• 54:56Jordi Hays?

  Subsidies are basically oriented towards 75% of the country's entire smartphone user base. So no matter what kind of product Apple releases to try to hit that lower end of the market, they're going to have trouble competing.

• 55:13John Coogan?

  So basically, if you buy a phone in China, that's under 6,000 yuan, the equivalent of 821.92 dollars, 821.92 cents, consumers, like the subsidy applies. So consumers can't use the benefit to buy products with bigger price tags like high end iPhones. And so the whole, the whole push will push Chinese consumers to replace their phones with products that cost less than 3,000 yuan, a segment that makes up 75% of the country's smartphone user base. This is also a great industrial policy or economic policy, because if you can get your entire, your entire country on phones, on smartphones, you're going to

• 55:54John Coogan?

  increase, you know, finding jobs, doing remote work, like communication, economic activity, paying each other, like everything, like the smartphone is the backbone of the economy. And so getting everyone in in the entire, even at the lower end of the lower and middle class on smartphones is is just good economic policy domestically. It's like, it's, I mean, it's kind of like what we talked about in, in. The US where there's this push to get high-speed internet into rural communities. It was an absolute disaster. Instead, the focus should have just been, hey, let's try and subsidize potentially like smartphones that connect to Starlink satellites. Something like that would have been a much, much more like free market approach.

• 56:37John Coogan?

  We're getting out out-capitalismed in China recently. We've got to step it up.

• 56:42Jordi Hays?

  And They're good.

• 56:44John Coogan?

  Yeah, and and Europe needs to Europe needs to step it up, too. Anyway.

• 56:49Jordi Hays?

  Apple is under threat in China if they don't want to just give up on the market entirely. What should they do?

• 56:54John Coogan?

  I'm thinking what you're thinking. They should buy some billboards. They should get on adquick.com.

• 56:58Jordi Hays?

  They should buy every billboard.

• 56:59John Coogan?

  They should buy every billboard in China. Out-of-home advertising made easy and measurable. Say goodbye to the headaches of out-of-home advertising. Only AdQuick combines technology, out-of-home expertise and data to enable efficient, seamless ad-buying across the globe.

• 57:13Jordi Hays?

  Thank you, AdQuick.

• 57:14John Coogan?

  Well, we're staying with big tech. Big tech is under attack left and right. We've big Google, Meta and Apple are under attack in Europe. Apple's under attack in China. And then Meta and Google are under attack in the US for antitrust. And we talked about this yesterday.

• 57:32Jordi Hays?

  With Adam.

• 57:34John Coogan?

  With Adam, which was great. Great segment. You should go listen to it if you haven't already. But they are the two titans of digital advertising are facing unprecedented legal threats over tactics they use to reach dominance.

• 57:46Jordi Hays?

  And it's wild because I'm sure this will get into it, but basically the FTC and the Justice Department are basically like, let's just divide everything up.

• 57:54John Coogan?

  Yep.

• 57:55Jordi Hays?

  You attack and we'll attack.

• 57:56John Coogan?

  Yep.

• 57:57Jordi Hays?

  And, you know, they'll be facing an attack from, you know, both sides. So the key points, Google and Meta are facing antitrust pressure focused on tactics they use to grow into tech giants. Google lost its second antitrust case in eight months. Moment of silence affecting its core ad business. Meta faces a trial with the FTC, which is seeking to force the company to part ways with Instagram and WhatsApp. So two things here. One, the case yesterday that Google lost, or was it Wednesday? Losing track of time, is not really its core ad business, right? This is like the sort of display network business that was impacted. And then Meta very clearly feels like they have a super strong case here because

• 58:42Jordi Hays?

  they are fighting over something that happened roughly 13 years ago.

• 58:47John Coogan?

  Yeah, and it all comes down to market definition. And they're trying to define the market as what? It's like Meta versus Snapchat and like WeMe or something?

• 58:55Jordi Hays?

  Yeah.

• 58:56John Coogan?

  What was the other?

• 58:56Jordi Hays?

  MeWe.

• 58:57John Coogan?

  MeWe?

• 58:58Jordi Hays?

  We gotta have the MeWe founder on.

• 58:59John Coogan?

  We really do. MeWe.

• 59:01Jordi Hays?

  MeWe. If you've used MeWe.

• 59:03John Coogan?

  Should we be on MeWe? Should we be distributing the show on MeWe?

• 59:06Jordi Hays?

  Well, it's called the next gen social network.

• 59:08John Coogan?

  Oh my God, get on there then. We gotta be socially.

• 59:10Jordi Hays?

  They've got 20 million people.

• 59:12John Coogan?

  That's pretty good.

• 59:13Jordi Hays?

  Yeah.

• 59:13John Coogan?

  Congrats.

• 59:14Jordi Hays?

  Yeah.

• 59:15John Coogan?

  But yeah, I mean, the FTC is trying to force Meta to sell Instagram and WhatsApp. And I mean, already, those are so intertwined.

• 59:24Jordi Hays?

  I feel like Zuck had a pretty good faith offer, half a billion dollars, to say like, hey, let's just make this, let's make this all go away, right? And they denied it and they're pushing, the FTC is pushing forward. And again, they're trying to ignore TikTok entirely.

• 59:42John Coogan?

  Yeah.

• 59:43Jordi Hays?

  And, you know, TikTok is not necessarily an example of completely organic adoption, right? They spent billions of dollars on user acquisition.

• 59:52John Coogan?

  Yep.

• 59:52Jordi Hays?

  And who knows if you could start a completely independent TikTok and compete? But.

• 1:00:00John Coogan?

  How do you think that would play out if the FTC forces Meta to part ways with Instagram and WhatsApp? Like, does Adam Mosseri become the CEO of Instagram? Do they try and bring back Kevin Systrom? Are they just like bringing in some McKinsey guy or some HBS search funder?

• 1:00:17Jordi Hays?

  No, I mean, the thing here that's interesting is Zuck made a very concerted effort years ago. Remember the Meta rebrand? Remember when they started rolling out messaging?

• 1:00:28John Coogan?

  Yep.

• 1:00:28Jordi Hays?

  Like, you know, sort of universal messaging across different products? And all of that was in anticipation of this type of, you know, kind of conflict.

• 1:00:40Jordi Hays?

  And so, um, smart move to like get ahead of it and show that like, yeah, these products are deeply interconnected. They have a lot of overlapping users.

• 1:00:50John Coogan?

  Yeah.

• 1:00:50Jordi Hays?

  And.

• 1:00:52John Coogan?

  I would just be very bearish if they spun out Instagram and it went to some like manager mode person. Some manager mode CEO.

• 1:01:03Jordi Hays?

  Yeah.

• 1:01:03John Coogan?

  Like, maybe it could win if they bring back a founder, but I would be very, very skeptical of it running well as a business independently without Zuck at the helm. Like, that's the bull case for Meta is that he keeps taking all these risks and building all these different tools and integrating them all in very aggressive ways. Be very, very odd.

• 1:01:24John Coogan?

  Maybe just sell it to private equity and just like try and squeeze as much cash out of it while they wind it down, do it for like an asset fire sale, like fire everyone. Like, that would be the outcome.

• 1:01:31Jordi Hays?

  Like a lot of.

• 1:01:32John Coogan?

  That the FTC would really want.

• 1:01:34Jordi Hays?

  Seems like there's a common thread of, of, uh, social network type platforms, just internet platforms in general, getting a manager mode operator and just being run into the ground.

• 1:01:45John Coogan?

  Yeah. I don't know.

• 1:01:47Jordi Hays?

  AOL, Yahoo, et cetera.

• 1:01:49John Coogan?

  Um, there's, there's actually interesting, uh, so, uh, Zuck inferred that Snapchat, which he tried to buy twice, the second time for six billion, isn't as successful as it could have been if Meta had bought the disappearing photos app. And there's a, uh, Rajvir dropped a little history lesson on the Snapchat Facebook tragedy of 2013 that kind of backs this idea up. So Evan Spiegel turned down a $4 billion acquisition offer. Zuck asks for a counter. Evan doesn't respond and moves to close a fundraiser of $3 billion valuation. Zuck loses hope, but makes one last ditch call. Evan hints at wanting $1 billion liquid post tax. Mark Andreessen.

• 1:02:32Jordi Hays?

  Just pause for a second because it's, it's a.

• 1:02:37Jordi Hays?

  Makes total sense.

• 1:02:38John Coogan?

  Why not?

• 1:02:38Jordi Hays?

  And it's also very funny.

• 1:02:40John Coogan?

  It's great.

• 1:02:41Jordi Hays?

  It's like, yeah, could be interested, but like, would need to be a liquid billionaire to even consider.

• 1:02:47John Coogan?

  Yeah, I mean, we'll go through the numbers, but achievable, achievable with what he built. Like, he deserved it, in my opinion. Mark Andreessen tells Zuck to buy it at any price. Zuck tells his suits to come up with the cash and presents final offer of 6 billion. So Zuck starts at 4 billion, raises it to 6 billion. Evan says offer is good, but later turns it down, wants to stay independent. Zuck is upset. Facebook since then, up 900%. Snapchat since then, up 123%. Both sides would have been richer if the deal happens. But at this point, if, if, if they owned Instagram, Snapchat, and WhatsApp, and Facebook, like, the FTC would be even more upset, for sure.

• 1:03:31John Coogan?

  But here's, here's the actual email that, that eventually leaked in, in a, in a legal proceeding, from Mark Zuckerberg. Subject: Re Sasquatch Update. Privileged and confidential. Well, not anymore. It's been leaked onto the internet because of the lawsuit. I delivered the offer to Evan, and he seemed to take it well. He told me that he could get it done and that he'd call me back quickly. Five hours later, he called me and told me he was turning down the offer. He says the offer is, um, the offer is what he wants, but he just wants to build the company on his own. I'm disappointed and frustrated by this. I don't know what else to say to him. At this point, we should probably prepare for it to leak that we offered 6 billion for them and all the negative that will come from that. Hmm. Interesting.

• 1:04:15Jordi Hays?

  Cool to see the actual email.

• 1:04:18John Coogan?

  Yeah.

• 1:04:19Jordi Hays?

  And, um...

• 1:04:20John Coogan?

  Yeah, I mean, the big question is like, where would Snapchat have gone if, if, if Zuck had been behind it? I think the, the easy answer is just, uh... Meta has been the one company that's really, really been dominant in the post ATT era in terms of driving higher revenue from advertising based on the AI-driven ad matching essentially. And so even if, first off, Snapchat probably would have grown into its own thing and not been as competitive with Instagram over time. So like if he buys Snapchat, does he clone stories into Instagram?

• 1:05:03John Coogan?

  Or does he let stories live in Snapchat as its own thing? Like that might be, that might have been some of the, some of the strategy. Eventually, stories got cloned into everything, like even LinkedIn, I think, got stories for a while. Remember, remember Twitter had stories for a little bit?

• 1:05:17Jordi Hays?

  Yeah.

• 1:05:17John Coogan?

  What were they called? Fleets?

• 1:05:18Jordi Hays?

  Fleets.

• 1:05:19John Coogan?

  Fleets, yeah.

• 1:05:21Jordi Hays?

  They really didn't take off.

• 1:05:23John Coogan?

  There was like, there was like a three-month period where like every social app needed like stories. And people were joking like now XL has stories.

• 1:05:29Jordi Hays?

  And it's interesting to put these numbers into context. So Mark was telling Zach to buy it at any price. And, you know, with $6 billion eventually being turned down. Clubhouse got a basically $4 billion. I believe they got a $4 billion acquisition offer despite not having anywhere near the traction or scale that Snapchat had at that point, which they turned down from Twitter, as everyone knows at this point. And, you know, ultimately got cloned and, I don't know, the latest server there.

• 1:06:03John Coogan?

  What is, what is Snapchat's market cap right now?

• 1:06:06Jordi Hays?

  They are still a $13 billion company.

• 1:06:09John Coogan?

  So, I mean, arguably, he should have taken Mark Andreessen's advice and gone back and said, seven, eight.

• 1:06:19John Coogan?

  Evan, come on. I know you want to be independent, but you must have a buy it now price.

• 1:06:23Jordi Hays?

  Yeah, and they've just really, really struggled, year-to-date down 30%.

• 1:06:26John Coogan?

  They did have a crazy spike, right?

• 1:06:28Jordi Hays?

  At some point they went, we ripped.

• 1:06:30John Coogan?

  Yeah.

• 1:06:30Jordi Hays?

  A lot of people were longing it hard in 2021.

• 1:06:33John Coogan?

  Yeah, yeah, yeah.

• 1:06:35Jordi Hays?

  They were at $74 a share at their, $83 a share at their peak. They're down at seven.

• 1:06:42John Coogan?

  Seven bucks a share now.

• 1:06:43Jordi Hays?

  Seven dollars and 88 cents now, so.

• 1:06:45John Coogan?

  I mean, I still think Evan Spiegel is like a fantastic entrepreneur and has a really fascinating story. And to even compete in that, it's a network effects driven business. Like it's so monopolistic at its core. It's the classic example of like a compounding monopoly advantage. And as soon as that snowball gets rolling, it's really, really hard to play in that space at all.

• 1:07:07Jordi Hays?

  Well, it's also a company that doesn't get nearly the use that many of these other platforms do among

• 1:07:15Jordi Hays?

  our networks, right?

• 1:07:16John Coogan?

  That's true, but I mean.

• 1:07:18Jordi Hays?

  Probably five years.

• 1:07:18John Coogan?

  Yes, but that was because of Zuck. Like if Zuck had not, had not gone after Snapchat so aggressively, Snapchat would have kept growing and had been the app like most, most millennials, most Gen Z kids.

• 1:07:31Jordi Hays?

  Anecdotally, I was aging out of Snapchat before.

• 1:07:35John Coogan?

  You think so?

• 1:07:35Jordi Hays?

  It was.

• 1:07:36John Coogan?

  Before it was cloned? I think that a lot of it was like you were aging out because Instagram was effectively on the defensive and, and it was working. It was like, yeah, like, like you have a stronger network over at Instagram and they have all the same features. So why would you open that other app? But I agree, I went through the exact same, I went through the exact same experience where I was on Snapchat for a little bit. And then eventually Instagram was good enough for everything. And so I went back and then I never really opened Snapchat again.

• 1:08:05John Coogan?

  But, well, I don't know, we'll, we'll, we'll figure it out. It is, it is fascinating that, that, you know, Snapchat was, was able to hold on to the users that they did. It wasn't, it wasn't declining in user base. It was just kind of flatlining and that's the same thing that happened with TikTok. Once Zuck really moved aggressively on reels. But they are stuck in this interesting place, which again, it's a 13 billion dollar company.

• 1:08:27Jordi Hays?

  Yes.

• 1:08:27John Coogan?

  So at this point, you have to ask the question of, uh, did they get bought by a foundation model company?

• 1:08:34Jordi Hays?

  Interesting.

• 1:08:35John Coogan?

  You need more distribution. If you're not like Lama is aligned with Meta and Instagram. XAI is aligned with X.

• 1:08:44Jordi Hays?

  Anthropic.

• 1:08:45John Coogan?

  Google has, you know, YouTube and Google search for distribution. Yeah, maybe you take Anthropic and put it together with Snapchat. That'd be interesting. Dario just, oh, I just wanted to work on safety. Now I have to work on viral TikToks or viral Snapchats. I don't know. It does seem, it does seem like it's interesting. It's like floating out there as this like pretty solid platform and distribution and they have a lot of tech and a lot of interesting ways to push content out.

• 1:09:15Jordi Hays?

  The other issue with Snapchat from an acquisition standpoint is even if you're a foundation model, let's say you're massively loss-making foundation model. Snapchat is also losing, they lost $700 million in 2024.

• 1:09:29John Coogan?

  Wow.

• 1:09:29Jordi Hays?

  Despite being how, how many years into the business.

• 1:09:32John Coogan?

  Yeah, yeah, yeah.

• 1:09:33Jordi Hays?

  Hard for a CEO that even wants, you know, massive distribution among a, you know, younger sort of cohort. Still, it's hard to say, you know, is it, is it going to be worth it to, you know, have that be my problem now, you know?

• 1:09:48John Coogan?

  I mean, if, if AI allows for better monetization and it turns Snapchat into a stronger engine, like part of the reason Snapchat is not monetizing that well is because of things like ATT, app tracking transparency, harder targeting, but maybe you start, you know, inserting chatbots into the conversation and driving more personalization, better targeting, better monetization through that. I don't know.

• 1:10:15Jordi Hays?

  I think the question just comes down to where is the consumer value for the Anthropics, the Open Eyes, the Grox, et cetera, really going to come from? And I think there's a good argument to say it will come from the sort of personal assistant capacity. If Snapchat is big on college campuses and with high school, you know, students and things like that is Snapchat, you know, suddenly like, you know, trying to force an LLM, forcing kids to say like, hey, I know you're in here to talk with your friends, but like, why don't you use us for your homework?

• 1:10:48John Coogan?

  Yeah.

• 1:10:48Jordi Hays?

  Like, maybe that works, or maybe they're just like, yeah, when I'm on my computer, I use ChatGPT. And when I want to talk to my friends, I

• 1:10:54John Coogan?

  Yeah.

• 1:10:55Jordi Hays?

  It's just like.

• 1:10:55John Coogan?

  I still think like the X, XAI integration is actually a pretty good case study for AI in a social context, where you see someone post something and you want to fact check it essentially, or get more context around it. And so you just click a button. And so I could imagine you're watching content on Snapchat and then you click a button and you're dropped into an interface where you're discussing that with the LLM. And that could be somewhat valuable. So you see a viral video for, you know, a handbag. Click on the chatbot, get more context on the handbag industry, what the different options are. Maybe there's a, there's an agent that helps you buy that.

• 1:11:39Jordi Hays?

  Yeah.

• 1:11:39John Coogan?

  And you check out all in Snapchat and it's becoming more of an e-commerce engine.

• 1:11:44Jordi Hays?

  Yeah.

• 1:11:44John Coogan?

  Not sure. Maybe.

• 1:11:46Jordi Hays?

  Snap's one of those companies that always, and Evan, I would love to get an up, like a proper.

• 1:11:52John Coogan?

  It seems like he just loves running the company still. It seems like even though, yeah, maybe financially, it wasn't the best decision not to sell. Like, he probably could have gotten a bunch of meta stock and then 10x that. 10x that.

• 1:12:02Jordi Hays?

  10x that.

• 1:12:03John Coogan?

  It is the meme.

• 1:12:03Jordi Hays?

  10x it again. If he just got the 6 billion.

• 1:12:06John Coogan?

  If he got a billion, he could have gotten a billion in, in meta stock. He could have gotten a billion in meta stock, like for sure, at the 6 billion price, based on what he owns. Like, he could have gotten a billion in meta stock. And then he, and then the stock price would have actually 10xed and he would have had 10 billion. It's crazy. And then he just has 10, that 10x that three more times and he's trillionaire.

• 1:12:23Jordi Hays?

  Yeah.

• 1:12:23John Coogan?

  So, yeah.

• 1:12:24Jordi Hays?

  Honestly, the math is like pretty simple.

• 1:12:25John Coogan?

  Yeah, the math is pretty simple. More people should be doing this.

• 1:12:30Jordi Hays?

  No, Snap's just one of those companies. I mean, it, we got to get the full update from Evan sometime.

• 1:12:34John Coogan?

  Yeah, yeah. Yeah, I reached out to his team to try and get him on the show.

• 1:12:37Jordi Hays?

  I, I really think that it's a company that has consistently shown so much potential.

• 1:12:43John Coogan?

  Yeah.

• 1:12:44Jordi Hays?

  Spectacles, VR, shopping.

• 1:12:47John Coogan?

  Yep.

• 1:12:48Jordi Hays?

  You know, early AI avatar.

• 1:12:50John Coogan?

  Yep.

• 1:12:51Jordi Hays?

  You know? And never has like quite, they just haven't hit a home run on any of those.

• 1:12:57John Coogan?

  Yeah, it is interesting. They have like enough resources because it is a 10 plus billion dollar company. There's a lot of cash sloshing around so they can go and do a VR project. But Zuck has a hundred times more resources, right? Because he's a trillion dollar company. And so it's literally a hundred to one fight on everything. You want to train a model? Well, Zuck has a hundred times more resources. And so Evan for a long time was, I mean, I think still, I think still on his LinkedIn, he puts like, I'm like the, I'm like the VP of Ideas at Meta. Because his, his whole idea is like, he comes up with the ideas and then Meta clones them. And it's like, yeah, but when you have a hundred X, yeah, but when you have a hundred X,

• 1:13:41John Coogan?

  the money to spend, you can actually win in those markets sometimes. Anyway, you want to read this post from Ryan Peterson?

• 1:13:49Jordi Hays?

  Yes. Ryan says, "Bowl market are n for the number of business people admitting to customs fraud on LinkedIn." So.

• 1:13:57John Coogan?

  A lot of people are saying, "Oh, I figured out how to get around the tariffs," basically. It's like, no, that's not how it works.

• 1:14:02Jordi Hays?

  That's not how it works.

• 1:14:02John Coogan?

  You can't just figure out a workaround. You have to pay the customs.

• 1:14:06Jordi Hays?

  I talked to somebody that works in apparel manufacturing and they're, they're like, everybody's just working a way to figure out loopholes, a way to effectively show that their COGS are maybe lower than they actually are. So the tariff is not as substantial. So folks, if you are importing products to the United States, why don't you go and just talk to the Flexport team before you think you've, you cracked the code?

• 1:14:36John Coogan?

  Yep.

• 1:14:37Jordi Hays?

  They will help you out.

• 1:14:38John Coogan?

  Don't skimp on your customs bill. Don't skimp on your sales tax. Go to Numeral HQ. Put your sales tax on autopilot.

• 1:14:47Jordi Hays?

  You would be crazy not to use.

• 1:14:48John Coogan?

  Spend less than five minutes per month on sales tax compliance. Go to Numeral HQ.

• 1:14:53Jordi Hays?

  Benchmark Series A.

• 1:14:57Jordi Hays?

  That's my favorite, my favorite line to just sprinkle in there.

• 1:15:00John Coogan?

  I love it. Well, let's move from Benchmark over to Sequoia. Andrew Reid says, founder to their therapist. Hey, look, I want this to be more of a conversation than a presentation. Please jump in with questions anytime.

• 1:15:14Jordi Hays?

  Classic board meeting.

• 1:15:16John Coogan?

  Clearly takes a lot of pitches.

• 1:15:20John Coogan?

  Yeah. When you're pitching, there, I don't think you have to say that to make it a conversation. You should just actually have a conversation.

• 1:15:28Jordi Hays?

  Yeah.

• 1:15:29John Coogan?

  But it is a little bit of an art.

• 1:15:31Jordi Hays?

  Yeah, I mean, the right approach generally is explain very clearly what you're doing in about three to five minutes.

• 1:15:38John Coogan?

  Yeah.

• 1:15:38Jordi Hays?

  And then talk about it.

• 1:15:39John Coogan?

  Yeah. I told you about that founder I got on the phone with. And he spent, I was eating lunch and I just put myself on mute and he just talked for 20 minutes straight. And at the end I was like, hey, like, I'm not an investor.

• 1:15:55Jordi Hays?

  I'm not on the investing team.

• 1:15:57John Coogan?

  Yeah. And he just did not understand that. And I was like, I should have jumped in 15 minutes ago. But I was just eating. So I was like, okay, just keep talking.

• 1:16:07Jordi Hays?

  Steak doesn't eat itself.

• 1:16:08John Coogan?

  It was wild. That was very funny. So yeah, don't make the mistake. Make, actually make it a conversation more than a presentation. People like conversations. People hate presentations. Stick to the, stick to the conversations.

• 1:16:18Jordi Hays?

  Long conversations, short presentations.

• 1:16:20John Coogan?

  Aaron Harris gives a shout out to Sequoia with some best practices for VCs. I think everyone should probably follow this. The truth is, is isn't complicated. One, make the calls you say you will. Two, schedule the meetings you say you will on time. Three, if you ask for a data room, actually look at the data room. If you ask for customer references, do them quickly and promptly. If you want to pass, you have to tell the founder. You can't just whisper it into your pillow. If you want the deal, chase the founder. If you want the deal, don't disappear for a few days. Be extremely responsive. Yeah. If you, if you can't do that, you're not going to be competing. This isn't just a Sequoia thing. I think all the best VCs follow the same playbook.

• 1:17:01John Coogan?

  And that, and that like, I mean, it is crazy how, how bad some VCs are at passing. They just cannot bring themselves to do it. And it's like, It's like a pretty easy part of the job.

• 1:17:10Jordi Hays?

  Unfortunately, we're gonna.

• 1:17:12John Coogan?

  The hard part is picking the good companies. Like, the hard part should not be just saying like, yes, I have enough conviction to say like, I'm passing on this round. Like, go find someone else. There's a million VCs. Like, no one's gonna be like offended forever.

• 1:17:23Jordi Hays?

  Every now and then you'll see, like, some exchange where a VC passes and then the founders, like, basically, like, start swearing.

• 1:17:32John Coogan?

  Yes.

• 1:17:32Jordi Hays?

  F you, all this stuff. But those founders don't tend to go anywhere at all. Uh, and usually, uh, founders are gonna really respect a just, like, kind of really direct prompt pass.

• 1:17:45John Coogan?

  Yeah, of course.

• 1:17:46Jordi Hays?

  Most, most of the big funds now are very much multi-stage and, and, uh, there's not a lot of value in making enemies. So.

• 1:17:53John Coogan?

  Exactly. Um, anyway.

• 1:17:56Jordi Hays?

  We have a post here from, uh, Architectural Digest.

• 1:18:01John Coogan?

  Oh, you want to do this one? Okay.

• 1:18:02Jordi Hays?

  Yeah.

• 1:18:02John Coogan?

  Let's do it.

• 1:18:03Jordi Hays?

  Yeah, let's pull it up. Um, I just thought this was a fantastic house.

• 1:18:06John Coogan?

  I wanted to look at this house because I was, I was looking specifically for the bed. I wanted to see if the bed had an eighth sleep on it. I don't know if the photos just, uh, doxed the bed that Dan Romero, the founder of Farcaster, uh, sleeps on. But he does have a fantastic looking house, uh, that's been profiled in Architectural Digest. I, I did a lot better last night. Eight hours and 11 minutes. Hundred percent sleep quality. The routine's still off because I'm all over the place, but 91. How'd you do?

• 1:18:35Jordi Hays?

  Let's see.

• 1:18:37John Coogan?

  And, you know, you were talking trash to me. You beat me. Of course. You got a 100. Oh, let's go. Um, yeah, you were talking to her. Oh, just beat me twice. Just beat me twice. I, I, you beat me once and then I beat you twice. You beat me once and then I beat you twice. Well, I have twice as many children, right? Or young children. So it makes sense.

• 1:18:55Jordi Hays?

  Okay, okay, okay. You're trying to, you're trying to change up the rules now.

• 1:18:57John Coogan?

  I, I just think, I just think like.

• 1:18:59Jordi Hays?

  You have three kids. I have two.

• 1:19:01John Coogan?

  Yes, yes, but, but, but the young ones are the dangerous ones.

• 1:19:04Jordi Hays?

  Yeah.

• 1:19:04John Coogan?

  The young ones are the ones that kill the sleep score.

• 1:19:07Jordi Hays?

  Those are the wild cards.

• 1:19:08John Coogan?

  So when you have two young, young ones, uh, that's two extra bad nights of sleep. And so I think the ratio of good sleep here in this, in the, in between me and you, it's actually completely understandable.

• 1:19:19Jordi Hays?

  I needed, I needed, I need a button here that just says, "Giga excuse."

• 1:19:22John Coogan?

  Giga excuse. Anyway.

• 1:19:25Jordi Hays?

  Um, anyways, Architectural Digest did a fantastic.

• 1:19:27John Coogan?

  This was a really cool story. They bought four houses and merged them all together into some mega compounded It's pretty cool. I didn't realize.

• 1:19:35Jordi Hays?

  I actually used to live, I used to live on this street.

• 1:19:39Jordi Hays?

  Same street and this house just looks absolutely phenomenal. They did an amazing job with it. Dan and his wife, who I haven't met, but she's.

• 1:19:48John Coogan?

  Julia DeWol.

• 1:19:49Jordi Hays?

  Uh, Julia.

• 1:19:50John Coogan?

  Founder of Antares Nuclear, very cool nuclear.

• 1:19:52Jordi Hays?

  Very cool. I think she was at SpaceX for a long time. And they just did an incredible job with this and it's very.

• 1:19:59John Coogan?

  Let's hear for a beautiful house. We love to see a beautiful house. Overnight success. Anyway, uh, go to eadsleep.com, uh, five year warranty, 30 night risk free trial, free returns, free shipping. They got the prod for ultra. Check it out.

• 1:20:12Jordi Hays?

  Loved how you turned an AD home feature into an eadsleep ad. That was just phenomenal.

• 1:20:17John Coogan?

  That's all that matters.

• 1:20:19Jordi Hays?

  Well, I have a post here from Sean Frank.

• 1:20:21John Coogan?

  Yes.

• 1:20:22Jordi Hays?

  I believe Sean Frank is in the YouTube chat right now.

• 1:20:24John Coogan?

  Oh, yeah.

• 1:20:25Jordi Hays?

  Hanging out.

• 1:20:26John Coogan?

  Really?

• 1:20:26Jordi Hays?

  Uh, he says, second order effects. Talked about this on a call with Ryan Peterson today, but ocean freight out of China is capital D E A D, dead. Prices should collapse, right? Well, it is so dead. Ships aren't sailing. They're just canceling the voyage instead of losing money on the cargo. So ships are waiting around for weeks, waiting to fill up, driving up the costs to get an actual, to get on an actual departure. Ironically, freight costs out of China are peaking. So.

• 1:20:54John Coogan?

  Interesting.

• 1:20:54Jordi Hays?

  Uh, weird, uh, second order effects. Uh, and this again is just.

• 1:20:58John Coogan?

  Little wordplay there, Peking, Peking, China.

• 1:21:01Jordi Hays?

  Yeah. Uh, this just makes it even harder if you're in, you know, manufacturing products in China and needing to get them to the US. Not only are your actual, effectively your COGS going up due to the tariffs, your, your, um, you know, transportation costs are going up as well.

• 1:21:18John Coogan?

  Back to three kids in a trench coat, walking through TSA security with all your goods. That's the way you get stuff out of China these days. Fly there. Yeah. I don't have 75 iPhones on me. Don't worry about it. I'm all good.

• 1:21:33Jordi Hays?

  Trench coat with, with a bunch of iPhones.

• 1:21:35John Coogan?

  Yeah. I don't know. It seems rough. I have not tried to get anything out of China. Hopefully, we can manufacture all our merch in America. We did get this giant gong, which we have not revealed yet. I think it came from China.

• 1:21:49Jordi Hays?

  It would have been, the gong would have been hit hard, except it was a gift, so.

• 1:21:52John Coogan?

  Yeah, we'll, we'll reveal it soon. We'll reveal it soon. There's a time and a place. It's so loud.

• 1:21:59Jordi Hays?

  It's way too loud.

• 1:22:00John Coogan?

  I was dying laughing.

• 1:22:02Jordi Hays?

  Anyways, we got a post from Yaseen. He says, girl, science is real. Manifestation, manifestation is real. It works. What else are girls right about? I'm gonna start looking into astrology. Maybe I should listen more.

• 1:22:15John Coogan?

  Yeah, I've been, I've been long on astrology for a long time. And, but my thesis was like, you can actually get to the same conclusion via something that feels more like boy science, I guess. Which is that, so what is astrology? It's like, if you're born in this month, you have a certain personality, right? And that seems like weird, random, like, why would it be that case? Like, is it really like the moon and the stars and the certain alignment like makes who you, who you are, that doesn't really, doesn't really track if you're like a science guy. But I always thought about it like, well, if you're born during like tax season and your parents are stressed out about tax season, and that's your main memory of like your birthday, well, could that make you more neurotic about

• 1:23:00John Coogan?

  money? Like, probably. What about if you're born during Christmas and every Christmas season, you're frightened by warmth?

• 1:23:08Jordi Hays?

  Drinking mead.

• 1:23:08John Coogan?

  Yeah, or, or, or, like, there's all these differences, even just being born in the winter and spending more of your life in harsh winter conditions and, and having more rain, more gloomy days be imprinted on you. Could that make you a gloomier person? Like, that's certainly possible, right?

• 1:23:27Jordi Hays?

  You might have cracked the code, John.

• 1:23:28John Coogan?

  And so, and so I always thought that like, the, the astrology thing, like, it's, it maybe isn't straight up like this moon and this sun and this star at the same time, but just the idea of like, when you're born, that affects you. Even you look at the NHL, the hockey, hockey guys.

• 1:23:46John Coogan?

  Many, many of the hockey stars are born right before hockey season starts or something like that, so that they're older, so they're bigger on their young teams, and then they outperform again and again and again, and then they, and then they get reinforcement on that. And so, like, there's a, there's a probably like, Like, there's, there's more. I remember on my high school football team, the best guy was born in July and was really old for the class and the worst guy was born in September and was really young for the class or something like that, you know, it wasn't worse, but like, you know,

• 1:24:20Jordi Hays?

  there's a whole strategy.

• 1:24:20John Coogan?

  Just being a year bigger, a year older was valuable.

• 1:24:22Jordi Hays?

  Yeah, there's a whole strategy if you really care about your children's athletic pursuits.

• 1:24:26John Coogan?

  Yeah, hold them back, right? Hold them back. And there's all those things about like, oh yeah, there's a foot. I remember there's a football player in LA, this guy, I think he went to go play at Notre Dame, but he was like, driving himself to Pee Wee football games because he'd been held back so much. So he was 16 in like eighth grade. He was like a 16 year old eighth grader. He should have been like a junior, but he was like amazing because he was older. And then there was all those like, all those debates about the baseball players who came from other countries and they'd like fake their baseball, fake their birth certificates. So like, it's very clear that like, when you're born affects like how you accelerate in different trades, different things.

• 1:25:01Jordi Hays?

  My parents are doing, my parents are doing that with YC. They say, don't, don't do YC until you're, you know, 60, okay? Like, wait till you've accumulated incredible immense knowledge and a network. Come into YC, get the check, raise $200 million in the first week and just steamroll the class.

• 1:25:20John Coogan?

  Same, same thing about the, like the Thiel Fellows. Like, people are always trying to, you know, kind of reinvent themselves at age like 38 and be like, oh yeah, I dropped out of college. Like, let me go through a Thiel Fellowship, right? And, and it's all just a ruse, but it's effectively like holding yourself back. If you hold yourself back and you're like, yeah, well, I, I had, I had a career, 10 years on Wall Street. Then I went back to college undergrad and then I dropped out of undergrad for a Thiel Fellowship at age 36. Like, all of a sudden, everyone's like, wonder kid. He's amazing. And this guy is incredible. Like, he knows, he has encyclopedic knowledge of business because he's, it feels like he's been on Wall Street for a decade. But

• 1:26:05John Coogan?

  he's a Thiel Fellow? He's super young? How old is he? Oh, oh yeah, 24, you know? People lie about their ages all the time, you know? And this is kind of, this is all, this is all related to.

• 1:26:15Jordi Hays?

  It's all hearsay.

• 1:26:16John Coogan?

  To astrology. Anyway, I, I think it's, I, I think, I think Yaxine is on to something. Anyway.

• 1:26:24Jordi Hays?

  Well, I'll be right back.

• 1:26:26John Coogan?

  And we have our first guest, actually two guests, coming in to the temple of technology. We got Daniel from Checker and Ryan from Truework coming into the studio to discuss a very cool merger that's happening, an acquisition. So Checker, C-H-E-K, C-H-E-K-R, C-K-R, Checker. Employee background screening for companies. Streamline your hiring with the fastest, most accurate background checks. So you've probably run into these background checks, not just when you're hiring on, for a job, but also, this was a huge thing during the, those marketplace boom of, you want to put your product on, or your, your, your house on Wander, for example, well, they're

• 1:27:11John Coogan?

  gonna wanna see your ID, they're gonna wanna know who you are. Same thing with your car on Turo, they're gonna wanna make sure that you have, you know, they know who you are. Even Coinbase is a customer of Checker here. And so, when you go through the KYC flow of Coinbase, Checker's the company that helps Coinbase understand the ID verification, all the document verification. Coinbase didn't have to build that in-house. Instead Checker built it and sold that into DoorDash, Fenwick, FIFA, Harris, Hot Topic, Instacart, wow, they're really in everything. Domino's uses Checker, that's cool. Anyway, and the deal that was announced.

• 1:27:55Jordi Hays?

  It was announced yesterday morning.

• 1:27:56John Coogan?

  Yeah, let's break that down. Checker, Truework deal, let's see, Checker acquires Truework in, it was an employment verification rollup. I'm getting a paywall on Axios, let's see if there's something else we can do. Big news, Ryan Sandler, he writes, Truework is being acquired by Checker. Together Checker and Truework will achieve the vision of a truly one-stop Consumer verification product when Ethan Victor and and Ryan here started True Work in a back alley office in the Mission in 2017. It was a dream to get to where we are today. Over the past eight years, they've grown as an incredible team to over 100 employees, pretty big company, raised five funding rounds, called six different offices home,

• 1:28:39John Coogan?

  operated in three cities, had two name changes, and most importantly, helped millions of consumers get approved for homes and apartments. True Work now services thousands of customers from the smallest family-owned businesses to eight of the 10 largest mortgage lenders in the country, including Rate, PennyMac, and Fairway. We've gotten to the scale only because we are obsessed with giving our customers the highest completion rate and accuracy in the in the industry. Today marks a major milestone, but the journey is just beginning. I'm excited to see True Work and Checker continue pushing boundaries of what's possible. Together, we can unlock endless opportunities from powering Checker's background checks with True Work employment data to expanding Checker into new verticals like mortgage

• 1:29:22John Coogan?

  and property management. It's going to be incredible journey ahead. So.

• 1:29:25Jordi Hays?

  Well, looks like we got both of them.

• 1:29:27John Coogan?

  Fantastic. Let's bring them in. Let's bring them in. And I'd like you to kick it off with a little bit of an intro. Get the background from them and I will be right back.

• 1:29:37Jordi Hays?

  Sounds great.

• 1:29:41Speaker 02

  Yes. Okay, all good. Sorry, there was a Google Meet link in the same invite. I clicked on the Google Meet, not the Zoom.

• 1:29:47Jordi Hays?

  That's on me. Sorry. I messed it up. How are you guys? Exciting week. Yeah. Great to meet and great to see you, Ryan.

• 1:29:56Speaker 03

  Good to see you.

• 1:29:57Jordi Hays?

  Uh, it's been a long journey. Why don't you guys give your own kind of quick intros? And and then John will get back and we can go from there.

• 1:30:07Jordi Hays?

  Great. Good point, Ryan.

• 1:30:09Speaker 03

  Cool. Yeah, Ryan, Ryan here, founder and CEO of True Work. And Jordy, it's great to see you. Um, you know, we started True Work eight years ago, grew it to quite a large company and excited to see the vision really continue and accelerate under Checker. So I'll let Dan show himself.

• 1:30:27Jordi Hays?

  Awesome.

• 1:30:28Speaker 02

  Yeah, hey guys. Yeah, Daniel here, founder and CEO of Checker. We started 11 years ago. We invented the API for background checks and verifications. And so we've been pretty big in the employment space and verifications for employment, access to marketplaces. And I've known Ryan and the TROK team for many years as well. I was an investor in their B round and been following the journey. And we're excited to announce that our teams are going to join forces and we can continue to build the product and platform together.

• 1:31:05Jordi Hays?

  Amazing. When did the... Did you know when you were investing in the B, did you have any idea that your guys' journeys would really intersect at some point? I'm curious when that conversation, you know, or that idea even popped into your head.

• 1:31:21Speaker 02

  I mean, we love... I love the space because I love, you know, APIs and data products and verifications. I wasn't sure if it will ever intersect at some point. You know, I thought that the challenge that they're taking was great. And then I think it's only in the last, I would say maybe in less than last year, that we started thinking that that could align with our long-term data platform vision.

• 1:31:52Jordi Hays?

  Awesome. Talk about, I guess, the last... Your guys' opinion in the last few years. You know, I know Checker's more on the HR category. Truework, you know, more of a, like, you know, fintech darling. But Ryan, how was it the last few years navigating, you know, all the ups and downs to get to this point?

• 1:32:16Speaker 03

  Yeah, we saw immense growth during COVID with home buying freeze. And once the interest rate went up, you know, we definitely had to navigate a higher rate environment. That meant lower volumes for mortgage lenders. We expanded into other verticals like property management. That was a little less cyclical. But we were able to keep up, you know, really strong growth despite the market that we're really proud of. And now there's a way for us to expand to even more verticals like background check.

• 1:32:43John Coogan?

  Can you talk a little bit about the different tiers of verification and kind of like the the the different pools of TAM that you're going after together like I I run a I started a nicotine product company and we need to age verify so we do background checks loosely we do ID verification but it's sometimes like a $30 checkout so you know we need to be under a dollar per verification versus if you're hiring some engineer and you need to verify them that could be hundreds of thousands of dollars in the value essentially totally worth paying you know I don't know $10 $100 per verification what are the different pools

• 1:33:28John Coogan?

  and and what's most exciting what's the biggest TAM and how do you kind of divide up the market?

• 1:33:33Speaker 02

  Yeah, yeah, so we're going after over a $50 billion TAM on on different types of verifications and identity products which like a started in the 14 plus billion dollar employment market Ryan and team they've been going after financial underwriting property management which is also you know 12 billion plus TAM we also are going after the risk and fraud market and TAM which we also size at about $10 billion you know specifically competing with companies like LexisNexis in financial fraud and financial risk and then we also have a nascent

• 1:34:15Speaker 02

  consumer offering and products that's going quite well and that's also a multi-billion dollar TAM so yeah we're quite busy and once we start to build a consumer driven profile with verified credentials identities employment work information that can that can be used to sort of lots of use cases in different industries.

• 1:34:37John Coogan?

  Can you talk about the war between artificial intelligence here?

• 1:34:43Speaker 02

  Yep.

• 1:34:43John Coogan?

  I saw a post recently saying, oh, the new chat GPT images. You can generate a fake receipt. You can generate a fake ID and use that and upload that. At the same time, I'm sure you can use AI to weed some of that out. What technologies are the most interesting to you today?

• 1:35:03Speaker 02

  Yeah, so I mean, Ryan's product and ours, we've been more on the data side, which is a little bit harder to fake by AI. I mean, AI can fake anything. It's just a question of cost of, you know, the bad actors. How much money are they going to spend to try to do fraud? So we're not focusing on taking pictures of driver licenses. I think that's going to become very challenging over time. We're focusing more on verified data sources, you know, from, from government signals like the DMV, payroll companies and payroll records, from, you know, employee records. So we stitch together, you know, different verified data sources, also consumer generated data. We triangulate it, we score it, we verify it.

• 1:35:47Speaker 02

  And so that's a lot of our approaches that are a little bit more resilient, I would say, to AI fraud.

• 1:35:55Speaker 02

  We're also, we're also both in our products have, you know, document based verification and processes in case, you know, there's, there's no data available on, on different systems. And we also use AI to combat AI fraud on documents. So it's, it's definitely a multi-pronged strategy. And AI, I think, is both an opportunity because it's going to create a lot more fraud and problems for customers. So it gives us a lot more work to do. And at the same time, it's an opportunity because we're going to use AI tools and technology to combat AI fraud.

• 1:36:29John Coogan?

  What is it like working with the DMV as a data source? When you hit the API, do they make you take a ticket and wait for the response? Or is it a little bit faster on your end?

• 1:36:42Jordi Hays?

  Yeah, and I'm curious about the evolution. I imagine, you know, when Ryan started Truework and Daniel, when you started Checker, even farther back, I imagine there was things that you had to do with humans that you maybe anticipated that you could do with AI at some point, but

• 1:36:58John Coogan?

  Yeah, yeah.

• 1:36:59Jordi Hays?

  More immediately possible, just given, you know, now we have products like computer use that could

• 1:37:06John Coogan?

  Yeah.

• 1:37:06Jordi Hays?

  Sort of like, you know, navigate systems that don't necessarily have APIs.

• 1:37:11Speaker 03

  Yeah, I mean, for us, like, we, you know, as Daniel mentioned, similar to Checker, we try to get our data from as automated of sources as possible, like directly from the payroll system, directly from your bank account, et cetera. But in some cases where, you know, you work at a mom and pop store and there's just no other way to access the information, we have to get in touch with the HR department. We have to, we have to get verified data back from them. And it's a mix of automation and manual work, but there are some HR departments that just only use a fax machine, for example. They will only respond to fax machines, crazy. And so we've had to kind of build a lot of automated flows on top of these manual processes. AI, LMS are definitely making that easier. You can automatically, you know, send a fax, email communication, even make a phone

• 1:37:55Speaker 03

  call to these teams in an automated way. So it's, it's changing, but there are still all these businesses that are really stuck in the legacy past.

• 1:38:04Jordi Hays?

  It's really funny to be using like the future of technology to like work backwards with like legacy technology.

• 1:38:11John Coogan?

  I mean, that's like every SaaS company, right?

• 1:38:12Jordi Hays?

  Yeah.

• 1:38:13John Coogan?

  They all build on top of these like archaic systems. What's your take on eyeball scanning, WorldCoin? This is the future?

• 1:38:21Jordi Hays?

  Yeah, I was gonna, I was gonna ask. I imagine every time you guys see somebody walking around with a, you know, an orb

• 1:38:27John Coogan?

  An orb.

• 1:38:28Jordi Hays?

  Scanning eyeballs, you're like, that's cool, but you can also sort of triangulate

• 1:38:32John Coogan?

  Yeah.

• 1:38:32Jordi Hays?

  Personhood, but they're, they're less focused on, on the US market. But I'm, but I'm curious how you guys think.

• 1:38:39John Coogan?

  Yeah, what do you think about the far future of, of verification?

• 1:38:43Speaker 02

  No, I think on on on identity, I think we're laughing about it, but I think in in person is gonna become important when you want to want to have the best assurance. Because online will be able to be faked so much easier and cheaper. So I think there's gonna be actually more, it it depends, it depends on the use case, but if you have some very, very important transaction, like getting a passport or, you know, like very important points, you still are gonna need the biometrics in person. It's gonna be, it's gonna be hard to fake that.

• 1:39:14Speaker 02

  So I think we'll see more in-person use cases and probably in the identity stack, more solutions. The the the other thing that I'm bullish on is electronic driver licenses and wallets. You know, like Apple and Google are starting to have your driver license in your wallet, like Apple Pay. And I think, you know, and the governments, especially in Europe and other countries, they're moving to mobile driver licenses that connect to the government. And if Apple and Google are are opening their SDKs and continuing to build them right, I think that's gonna be a more elegant solution than scanning your, you know, picture of your driver license, for example.

• 1:39:54John Coogan?

  Yeah. How do you think about, like, I don't know, the the the the cost curve on this technology? A lot of people are complaining about like the dead internet theory, all social networks will just be filled with spam and bots. Is there, is there a world where you can get this to a scale where it's so cheap and effective that we can reliably put an end to the bot problem on the internet? Or is that just intractable because it's like a capital fight?

• 1:40:23Speaker 02

  No, I think the the cost is definitely going down. I mean, just to give you an example, you know, the verifications Ryan and I were doing, they used to cost tens of dollars because a lot of human labor. With AI and automation, we can now automate its end-to-end and bring it to pennies in terms of cost, many of them. For example, do the criminal checks, we can do it at very high scale, very low cost. And that allows us to open new use cases, like not just hiring an engineer background check, but we can, you know, provide safe On online dating marketplaces, car rental marketplaces, home sharing marketplaces for a fraction of the cost and it's an instant product. So as you with technology, you can lower the costs.

• 1:41:06Speaker 02

  You can make it instant. You can open new use cases. So I think we'll be able to do similar things also on on risk and fraud over time.

• 1:41:14John Coogan?

  Yeah, we see this with like like Ramp often looks at like the B to B trend report of where companies are spending more money than ever before. Do you have data like that as well? Because I see on your website, like, you know, you're in gig and marketplace, staffing, hospitality, retail, manufacturing, healthcare, technology. Do you have an idea of what industries are doing like a exponential growth in verification?

• 1:41:44Speaker 03

  I guess like ours quickly, you know, you had Daniel, like we have a pretty good view of the mortgage market. Like, you know, mortgage mortgage lenders, thousands of lenders on platforms. So

• 1:41:52John Coogan?

  Yep.

• 1:41:53Speaker 03

  We will see pretty early if volumes are going up or down.

• 1:41:57John Coogan?

  Sure.

• 1:41:58Speaker 03

  I think what's interesting, these other verticals like property management, like we are seeing a huge uptick in using technology here. I mean, 90% plus of property managers were using very manual processes. Hey, give me your pay stubs, give me a tax return. And you're seeing real momentum in that space of folks bringing on AI and automation.

• 1:42:20John Coogan?

  There was this tweet a while back that we talked about something like you'll meet your acquirer like four years before the deal gets done, something like that. How'd you guys originally meet?

• 1:42:30Speaker 02

  That's been true for us, right, Ryan?

• 1:42:33Speaker 03

  Yeah, exactly. You know, Daniel and I got connected, I believe, by a mutual investor and, and, you know, Daniel's been incredibly helpful, just obviously really close to the space, invested in our series B about four or five years ago. So

• 1:42:47Speaker 02

  Yeah, and we're both part of Y Combinator. So you know, we are well connected with Y founders and so

• 1:42:53John Coogan?

  Gary Tan wins no matter what. Again, another another million dollars for Gary. Love to see it. That's great.

• 1:43:01Speaker 02

  It's great. It's been great to just work with other founders. You know, I think there's, there's lots of small Y C companies who, you know, some of them are going to break through, some of them it makes sense to join forces and build products together. So Y C founders, working with Y C founders has been one of the most, most fun thing for me to do.

• 1:43:18John Coogan?

  I think a lot of people don't. Often get like the inside story of like how an M and A event comes together. Can you give us some color on like how long the deal took? What, who, who were the parties in the room? Was it just handshakes over dinner and steaks and Dom Perignon? Or was this in a boardroom with all the lawyers and you're screaming at each other? What, what happened? And then I also want to go through the post merger, merger integration stuff. But let's, let's talk about the anatomy of the deal first.

• 1:43:46Speaker 02

  Yeah, we can share some story, right? When, when did we go on that walk, Ryan?

• 1:43:50Speaker 03

  I think it was July of last year. So it's quite the long process, about 10 months. Overnight success.

• 1:43:58John Coogan?

  That's great. And, and yeah, I mean, like, like, how do you build vision? What are the, uh, what are the hurdles that you guys have to overcome to kind of get a deal done? I think a lot of founders are open to acquisitions, but what, what are the parameters that you guys were thinking about? That, and the discussion points that led you to think that this would make a lot of sense?

• 1:44:22Speaker 03

  Yeah, I think, I mean, I, one thing I was really impressed by, uh, how Daniel and team approached it is I think it really started a lot with the product. And is this, is this a product that is, that works really well? Is this something that we want to buy? And, um, you know, there was testing of the product and our completion rate and how it could potentially look like a part of the checker environment. I really appreciated that as like one of the first steps.

• 1:44:46John Coogan?

  So are you both based in San Francisco?

• 1:44:49Speaker 02

  Yeah.

• 1:44:50John Coogan?

  Okay. So you just went on a walk. Where was the walk specifically?

• 1:44:53Speaker 02

  Around my office right here in One Montgomery. Yeah.

• 1:44:57John Coogan?

  Very cool. So the deal comes together. What, what does post merger integration look like? I imagine that there's, you know, teams can work together. You guys can merge offices. You can go into a new office together. What, what are you thinking? What are the, uh, what are the hurdles that you both want to overcome?

• 1:45:14Speaker 02

  Yeah, yeah. So it's still very fresh, right? I mean, we literally signed. It was, it was a bit of drama getting all the signatures on Wednesday evening, like less than two days ago. Like at 2:00 AM. The last few days were a lot of lawyer calls, like more than my entire life. Like I have enough lawyer call, I don't want to do more. Like, but unlike small details that are not very important, like we're both sides were like, let's, let's get it done, guys, you know? It's fine. It's just like legalese. Um, so it just got signed. And then we just announced it yesterday externally and to our employees and everything. So it's still very early.

• 1:45:51Jordi Hays?

  Yeah.

• 1:45:51Speaker 02

  Um, we've done six different acquisitions, bigger and smaller over the years. So kind of trying to learn how to get better at it. And a lot of acquirers mess up the acquisition, as you know, right? Like a lot of company, it's a failure because mostly because of the acquirer just not, not doing the best to welcome the team and to continue the growth and the business. So our top priority is like to continue what's working at work. A lot of things are working, want to accelerate their growth and give them more support. We don't want to suffocate them in a, in a bigger company. So I think that's been early alignment with Ryan and Ethan and Victor and the team. Um, and so also the, the rationale for the acquisition is both we tested their product

• 1:46:34Speaker 02

  and the employment verifications are 10x better than, than what we have. So it's gonna, their product is gonna make our product much better for all of the customers. And we're excited to expand into the, the financial and the writing space.

• 1:46:47Jordi Hays?

  Sure.

• 1:46:47Speaker 02

  So double rationale and on that they have.

• 1:46:50Jordi Hays?

  Yeah, it's cool to, it's cool to think about, you know, I can imagine you guys are in a much better place to do this extensive diligence because you have such as, you know, similar and potentially overlapping businesses over time than even somebody that'd be writing like a nine-figure check, right? Uh, on the, you know, VC side, just because, uh, yeah, who's going to be able to get into the weeds more and, and really understand the product. So it's a. Huge vote of confidence in the platform.

• 1:47:18John Coogan?

  Yeah. I remember hearing a story from a lawyer about like getting a signature from a VC who was this is not a joke, literally on the ski slopes and they had to fly someone out with the paperwork to get them to sign at the top of the hill because they were on vacation. They're like this, you have to sign this day. This is super important. So I'm sure I'm sure there's a lot of drama and I'm sure there's going to be a massive legal bill for you, but good luck. I think it's going to work out. Obviously, it's a lot easier when the companies are growing, right? Because this doesn't become about like, oh, let's chop it up and like really cut costs. It's like, hey, we're all growing together. This just will accelerate things. What is you're both private companies. Is there like an FTC approval process for a deal like this? Or is that just something

• 1:48:02John Coogan?

  that doesn't even come into play at this level? Is Lina Khan punching the air, watching two companies merge, even though both of you guys seem pretty happy about this?

• 1:48:10Speaker 02

  Yeah, I think it's I think this one was below the threshold. We've had it for previous bigger acquisitions.

• 1:48:16John Coogan?

  Sure.

• 1:48:17Speaker 02

  Yeah.

• 1:48:18John Coogan?

  Is there any like regulatory process? How do you even how do you even think about that as a as a startup? I mean, we've all heard the story about like, you know, the big ones like the Figma, Adobe, back and forth. You know, they're still litigating Instagram and Meta right now. What advice would you give to founders as they're growing to think about acquisition and merger and acquisition strategies broadly in the regime as it's evolved over the last few years?

• 1:48:50Speaker 02

  Yeah, yeah. I mean, I think M and A, and I was talking to them in a bankers, you know, last year and this year and the trends. M and A with the big, big, big four tech companies like Amazon, Google, everything, it's been very difficult, especially in the last regime. Lots of deals canceled and everything. I don't know for right or for wrong, you know, I think it is important. We are startup guys, like we root for new startups to succeed, right? I think we that's what we like to do. But I think in the opportunities of for small and medium part startups to join forces and do M and A, and I think it's a good M and A market right now. The roads to IPO is longer than ever. The bar is higher than ever. I mean, the IPO window just got shut again.

• 1:49:34Speaker 02

  And even before that, you know, Experts and friends and people are saying like, hey, even $500 million in revenue, it's not, it's not strong enough these days. You want a billion plus in revenue.

• 1:49:46John Coogan?

  Yeah.

• 1:49:47Speaker 02

  Strong growth, super strong profitability, super diversified business, very high bar. There's very few companies to get to that level. And so even for us, you know, I think the opportunity is like, we have a big vision. We work in the data and identity space. What other startups can kind of join the venture and we all work together to be a bigger, stronger company and, and, and quantify over time.

• 1:50:09John Coogan?

  Yeah, uh, yeah, Ev Randall was talking about how he pulled up a screen of SaaS companies with over $500 million in revenue that are public and there's hundreds of them now. And so, uh, just as a public markets investor, like you can kind of satiate your demand for SaaS companies in like almost any vertical. And so the bar's never been higher. Uh, I mean, you mentioned that like the M and A markets are heating up. Is that, is that, are you looking backwards towards a year ago when this start process started or is this what you're feeling even this week? Because obviously there's been some market turmoil. Do you think that, uh, the mood in Silicon Valley, the mood in San Francisco has shifted

• 1:50:53John Coogan?

  at all around M and A? Cause obviously Wall Street reacts much faster with like the, the IPO window is closed like as of a week ago.

• 1:51:02Speaker 02

  Well, it might be open again.

• 1:51:03John Coogan?

  It might be open again. Who knows? It may, you know, it changes so fast, but I feel like in Silicon Valley, the M and A market moves much more, much more slowly as VC funds scale up and scale down. Obviously there's still growth funds that are getting bigger than ever. What, what are you seeing in terms of M and A over the last like year? And do you think there's going to be a shift this year?

• 1:51:23Speaker 02

  Yeah, I mean, I think it's from the seller side, there's going to continue to be a lot of appetite because the, again, the valuations were so high in 2021.

• 1:51:31John Coogan?

  Sure.

• 1:51:32Speaker 02

  It's really hard to catch up, especially when you're like raising at a hundred times revenue multiple or things like that.

• 1:51:37John Coogan?

  Yep.

• 1:51:38Speaker 02

  If the, if the scale is not there, profitability is not there, companies might really struggle to fundraise more. So I think we're going to continue to see. Companies interested in joining forces and demand on the seller side. That started over a year ago and it's continuing today. I think on the buyer side, I have seen some anxiety in the last few weeks from investors. You know, should we really do M and A or not? It's, you know, it's scary out there. There's anxiety. And so, you know, it's always a big investment. So, you know, people don't want to invest or take risk. When, when things are scary out there, but from our perspective, I'm fortunate. We have a strong financial position, strong long-term investors and, you know, we, we continue to win for it. We did that M and A.

• 1:52:22Speaker 02

  Because it's the right thing to do in the long term. So we're really playing the, the long-term game here.

• 1:52:26John Coogan?

  Yeah.

• 1:52:26Jordi Hays?

  Love it. Last question I have, Ryan, is there one investor maybe besides Daniel that comes to mind as the most helpful? Somebody that stands out on the, on the eight-year journey that, that

• 1:52:39Jordi Hays?

  you would, you know, highlight?

• 1:52:42Speaker 03

  Yeah, I mean, it's, it's, it's hard to single out just one. We, we're lucky to have many really, really great, helpful investors. I mean, all three investors on our board, Alfred Lin from Sequoia, Keith or Boy from Cosla.

• 1:52:55John Coogan?

  Really stacked.

• 1:52:57Speaker 03

  Yeah, stacked board.

• 1:52:58Jordi Hays?

  Who is, who is the last one?

• 1:53:00Speaker 03

  And Steve Saracino from Activant.

• 1:53:02Jordi Hays?

  Yeah, awesome.

• 1:53:04Speaker 03

  Yeah. So they're stacked incredibly helpful, incredibly supportive from the beginning till now. I really couldn't have asked for a better board. We got really lucky.

• 1:53:12John Coogan?

  But gun to your head, Keith or Alfred. Just kidding. No, I, I, I do want to know, like, maybe last question for Daniel. There's been this back and forth meme about chat GPT rappers, GPT rappers, just we're, we're the AI sales force. Maybe we're the AI checker, you know? There's a lot of those companies. Some of them, they felt like they were overvalued and then some of them ramped up revenue really nicely. But they still feel like I wouldn't want to be building one of those companies when there's a active venture-backed company in founder mode, building in the same category, because I think that they're going to figure out how to rap if they need to rap. But what are you thinking about in the early, early stage of like?

• 1:53:56John Coogan?

  AI empowered disruption, how important is it to do a greenfield project, build something? We're seeing that Windsurf is getting acquired and I think a lot of people were saying, oh, that's just a chat GPT wrapper. OpenAI is just gonna build that. Well, maybe they will buy it. And so what are you thinking about the latest crop of kind of AI driven startups?

• 1:54:16Speaker 02

  Yeah, I mean, I think we are the AI checker in found mode. So good luck. Good luck if you want to come, come in our space.

• 1:54:24John Coogan?

  Yeah.

• 1:54:25Speaker 02

  No, but I think AI is just the latest software, right? Like you used to say, we're like the SaaS company to do CRM, where the AI company, we're a cloud company to do CRM. Now we're AI company to do CRM.

• 1:54:37John Coogan?

  Yeah.

• 1:54:38Speaker 02

  But I think in B two B and we're in B two B, it's like, what B two B problem are you tackling? Are you tackling sales? Are you tackling underwriting? Are you tackling HR? And AI is just a way to build modern products. If you think about it this way, it applies to every category, every business. And it's not enough to just be the AI wrapper. You have to come in and say, why is AI gonna be a differentiator to replace all of the, you know, other players? And if you have a strong story on that and the others players are not doing and leveraging what you're doing, I think there's a chance it's highly disruptive. Building AI products is not the same as building the products we've been building as product and edge people in the last 20 years. The paradigm, the UI, the experience is different, the stack is different.

• 1:55:21Speaker 02

  So either there's gonna be opportunity because bigger companies are not gonna change fast enough. But I'm racing in my company to transform everyone to be like, hey, guys, we gotta relearn everything from signup flow to monetization to, you know, buttons and dashboards. It's, it's, we have to rebuild products AI first. It's, it's different.

• 1:55:42Jordi Hays?

  Yeah. Have you thought at all, we always say last question and then there ends up being more questions, but we have one minute left. Have you thought about a world, you know, maybe you've done this already, but integrating with something like a chat GPT, where if somebody's using chat GPT at work and they can say like, hey, I have a new hire coming on board. Would there ever be a world in the future where you would actually like integrate into the, you know, agent layer? If you're looking at something like a chat GPT as an agent, or is that not even the right kind of workflow?

• 1:56:16Speaker 02

  No, that's futuristic, but it could be. It could be. You know, I think if you look at, who was it like Klarna, who's not even using Workday and Salesforce anymore and just like directly agent to do the workflow. Yeah, you could skip some of the traditional recruiting and hiring process and go straight into the agents. Yeah, could happen.

• 1:56:36Jordi Hays?

  Awesome.

• 1:56:37John Coogan?

  Interesting. Well, thanks so much for stopping by.

• 1:56:39Jordi Hays?

  Congratulations, guys. Very exciting. Excited to watch you guys dominate together. Seems like it was fate. And yeah, congrats to the whole Truework team on the eight-year run, too, and the continued success. Thanks, guys.

• 1:56:54Speaker 02

  Thanks a lot. Thanks, Ryan.

• 1:56:56John Coogan?

  Bye. Really rubbing it in Lina Khan's face. She hates a merger, doesn't she?

• 1:57:01Jordi Hays?

  She hates a merger.

• 1:57:03John Coogan?

  No, I'm sure she's fine with this one. Little tech, little tech building up resources.

• 1:57:09Jordi Hays?

  Future big tech.

• 1:57:10John Coogan?

  Future big tech, but little tech right now. Gary Tan at the helm.

• 1:57:15Jordi Hays?

  Yep.

• 1:57:15John Coogan?

  One hand washing the other on this one.

• 1:57:17Jordi Hays?

  Yeah. Well, we are going to be talking about

• 1:57:19John Coogan?

  David Center. He's coming on the show.

• 1:57:20Jordi Hays?

  Big technology, big Dell.

• 1:57:23John Coogan?

  Big Dell. The history of Michael Dell, the history of Dell.

• 1:57:27Jordi Hays?

  Technologies. He asked to pull up a post.

• 1:57:30John Coogan?

  Yes.

• 1:57:32John Coogan?

  Some of the most historic runs for a founder. Dell, are you looking at the revenue over time?

• 1:57:37Jordi Hays?

  Yeah.

• 1:57:37John Coogan?

  Is that the one? Oh, man.

• 1:57:38Jordi Hays?

  1984, $6 million. This is the first 16 years. 1985, $33 million. 1986, $67 million. 1987, $159. 1988, $258. 1989, $388. Goes all the way up to $25 billion by 1999. And let's bring Center in. What a run. Boom.

• 1:58:04John Coogan?

  David.

• 1:58:05David Senra?

  What's up, brothers?

• 1:58:07John Coogan?

  What's up? You're looking great today. I like the suit.

• 1:58:10David Senra?

  Of course. I text you last time. I came on with a hoodie. It was completely unacceptable. So it will never happen again.

• 1:58:17John Coogan?

  You look much better in a suit. You look fantastic.

• 1:58:19David Senra?

  Everybody does. Before we jump into Dell, which is a crazy story, can we talk about the fact that Larry Ellison has now started following TPP?

• 1:58:30John Coogan?

  Say hello, Larry. Hi, how you doing? Good to have you in the audience today.

• 1:58:35David Senra?

  And what you guys called him? Do you remember the nickname you gave him?

• 1:58:38John Coogan?

  The big technology father? Was that it?

• 1:58:44John Coogan?

  He's not a tech bro, he's a tech father.

• 1:58:47Jordi Hays?

  Yeah.

• 1:58:48David Senra?

  Yeah, but I think I texted you guys and then what I love is how fast like you are with it. You're like the original technology father, like immediately.

• 1:58:57Jordi Hays?

  Basically created.

• 1:58:58John Coogan?

  The database, basically, the mainframe, yeah. I mean, what a fantastic, fantastic.

• 1:59:04Jordi Hays?

  What a, what a incredible book that which you covered. What is it, the difference between God and Larry Ellison is that?

• 1:59:11David Senra?

  So, so there's actually, it's funny, um, cause he, I think he's gonna be, I, I just did Michael Dell. I'm working on the founder of Sony, Akio Morita. Sure. And I think I'm doing Larry Ellison again. I've done three on Ellison, but it's been like four or five years. So there's three books about him. The best one is probably Softwar.

• 1:59:28John Coogan?

  Yep.

• 1:59:28David Senra?

  Because.

• 1:59:29John Coogan?

  He got the.

• 1:59:30David Senra?

  Footnotes.

• 1:59:30John Coogan?

  Yeah, this is so, such a funny story, tell this, please.

• 1:59:34David Senra?

  So to get to, to agree to cooperate with the author, he's like, you can write whatever you want, but I must be able to answer on the same page and like have my like counter argument. And so the bottom, it's like L E writes his initials. And you, I could almost do an entire episode, like you might want to just read the whole book and just read L E writes.

• 1:59:53John Coogan?

  Just his notes.

• 1:59:54David Senra?

  It's hilarious, but um.

• 1:59:55John Coogan?

  More books like that should exist. Somebody should go do that for, you know, all the major tech people today with that style. Because on the one hand, it's like, it's not what journalism is about, like you're, it's not, it's not, it's not gonna drive the same narrative. It's not objective because he's like putting his footnotes everywhere, but it's just an awesome format. I think more people should do that.

• 2:00:17David Senra?

  Yeah, we go back and forth, like actually, no, I disagree with it. I was there, it, this is what I think happens. And then there's even better, uh, so I think I'm gonna do Softwar. You know, cause I think the founding story of Oracle is told best in that book. There's only, you know, shocking, the only three books on them. But then he did a book called, uh, there's a book written about him called The Billionaire and the Mechanic. And I think when I did that episode, I was like, yeah, it's technically about Larry Ellison, but it's about extreme winners. And I think that's when I realized like, oh, uh, Larry Ellison has probably like more in common in terms of his competitive drive with like Michael Jordan than he does with like most other like founders. And I said something like, uh, you know, if, uh, Michael Jordan sold enterprise software, be Larry Ellison. Like they're just ruthlessly competitive and the, there's a fantastic scene in The Billionaire and the Mechanic.

• 2:01:03David Senra?

  Because Larry Ellison was best friends with Steve Jobs and he'd go on long walks. And so I'm pretty sure the book opens, or maybe I opened the episode with it, with them debating who the greatest person in history was. And, and Jobs went more like Gandhi, like peaceful. And I'm pretty sure if I remember correctly, Ellison went like conqueror, like Napoleon or something like that. It's like, all right, here's your two personalities, you know, basically explained in this conversation you, you guys are having, so.

• 2:01:30Jordi Hays?

  I, I hope you can uncover what, what Ellison's longevity regimen is.

• 2:01:36John Coogan?

  He looks fantastic.

• 2:01:37Jordi Hays?

  I know, I know it won't be the focus, but to live such an intense, high stress, you know, lifestyle.

• 2:01:43John Coogan?

  Yeah, you think it would take a, it would take a toll on him, but it seemed like it hasn't at all.

• 2:01:47David Senra?

  So thi- this is actually interesting because I feel like every time we come on there, we talk about founder mode.

• 2:01:53John Coogan?

  Sure.

• 2:01:54David Senra?

  And one thing that was like striking that, missing from that essay is the fact like, you know, like it was like, well, there's a manager runs a company one way and a founder runs a company the other way. It's like, no, like the founder runs it based on the personality, who they are. And so I, I was having private conversations about this and it was like, well, take, take two competitors, Larry Ellison and Bill Gates. It's like Bill Gates was a grinder. Larry Ellison, by his own admission, is a sprinter. He'll work excessively hard for like three weeks and then he'll disappear on his boat with some Italian model for a few weeks and he comes back. He literally says that over and over again.

• 2:02:26John Coogan?

  During COVID, he sent an email, like everyone in Oracle, just saying like, I'm on the island, I'm on.

• 2:02:30David Senra?

  No, he's like, yeah, we're all going to work remotely. It's like, yeah, but you're working from an island that you own.

• 2:02:34John Coogan?

  An island that you own. He only owns 96% of it.

• 2:02:37David Senra?

  But, but the point, the important part was like, he was like that, you know.

• 2:02:41Jordi Hays?

  It's not really his island.

• 2:02:42David Senra?

  Decades ago, he was like that decades ago. It wasn't just now as like an 80 year old man. So like, you know, he, there's, there's a lot of different personality types where Bill Gates was just like ripping his, you know, there's this great story that Michael Moritz tells when he, before he was a VC, he was a phenomenal writer, still is a phenomenal writer. I just finished reading his down, his hidden book on Down Valentine, which is remarkable.

• 2:03:06David Senra?

  But Moritz tells a story, I think it's Stanford, you can see this on YouTube, where he's like, oh, you want to know what Focus is? Like, I'll tell you a story about Focus. Like, I'm riding with Bill Gates, probably in the early 80s. And he's like, oh, somebody broke into your car and stole your radio. And Bill Gates is like, what are you talking about? He's like, no, I took that out. He said, why did you have it taken out? He's like, well, it takes me eight minutes to drive from my house to Microsoft. And it takes me 11 minutes to drive from Microsoft to the airport. And he does the math. He's like, so, you know, if I had a radio, that means I wouldn't be thinking about Microsoft for those eight minutes or for those 11 minutes. And then I go to work every day. So that's like 40 minutes, whatever the timeframe is. It's like insane focus, insane level of grinding. That was not, Allison, by his own admission, that was not him.

• 2:03:46Jordi Hays?

  Well, there wasn't.

• 2:03:47David Senra?

  He worked a lot, but not like that.

• 2:03:48Jordi Hays?

  Founder's podcast didn't exist back then. So.

• 2:03:50David Senra?

  No.

• 2:03:51Jordi Hays?

  He might have kept the radio in there and just been hearing you over the airwaves.

• 2:03:55David Senra?

  So I talk about this. We were talking in our group chat that I'm probably going to do an episode on Jangus Khan. And I said on, there's a fantastic book on Bill Gates, which everybody should read. It's really hard to find. It's a biography, the first 35 years of his life. It's called Hard Drive: Bill Gates and the Making of the Microsoft Empire. I've done two episodes on it. And in that episode, I said a line that now, like, years later, still gets spit back to me like every week. And they're like, you realize the similarities between like Jangus Khan and Bill Gates? I was like, oh, Bill Gates is like Jangus Khan in a Mr. Rogers costume. Like, he's like dressed like Mr. Rogers, but he's unbelievably, like ruthlessly competitive with, yeah.

• 2:04:37David Senra?

  Like, when he lost a contract, when young Bill Gates lost a contract, let's say, you know, you lost us a $50,000 contract. He's like, you didn't lose us a $50,000 contract. That's a $100,000 contract because we lost to 50,000 and our competitor got to 50,000. There's this great, I can't remember which one of his competitors was. But there's a great story that one of his competitors tells that Bill Gates wipes the floor with and knocks the guy out of business, where he sees Bill Gates sitting in the corner at a conference one day. And he's sitting in like a foldable chair and he's looking at something in his hand. He's like, just really focused, kind of shut out the world, shut everything around him out except what he's looking at. And so he walked, the competitor walks over to Bill to like say hi to him and talk to him. And what he realizes is that Bill is looking at a picture of his face.

• 2:05:22David Senra?

  It's like if I come to the TV and studio and like I walk in and there's pictures of other podcasters face that you guys are looking at.

• 2:05:34John Coogan?

  I think we actually have a picture of you up as the godfather of podcasting.

• 2:05:38Jordi Hays?

  Yeah, we're still sending framed photo around here.

• 2:05:41John Coogan?

  Yeah.

• 2:05:41David Senra?

  That's, that's a, that's a positive thing. I know, I know some other people that you would have like fucking bullseyes on.

• 2:05:48John Coogan?

  For sure.

• 2:05:49David Senra?

  Yeah, just super competitive.

• 2:05:51John Coogan?

  What, what do you think about the, uh, the post economic adventuring of the greatest founders? Uh, what I'm talking about is like, you know,

• 2:06:01John Coogan?

  there's a very, I mean, a lot of the, there's like a lot of commonalities between what the founders do when they build their companies and how methodical they are about that. But once they're super rich and they're thinking about their legacy, some of them start hospitals, some of them, uh, get involved in politics. Larry Ellison is really into sailing, I guess. Nathan Mervold at Microsoft, he owns more T-Rexes than anyone in the world. He owns the T-Rex skeletons and he's created this like massive. Yeah, yeah. So he, he actually put all of his money to go and find new T-Rex skeletons.

• 2:06:37David Senra?

  He needs to bring them back. We need Jurassic world.

• 2:06:39John Coogan?

  Yeah.

• 2:06:40Jordi Hays?

  I saw Deck for a dinosaur fund.

• 2:06:42John Coogan?

  Yeah, yeah, yeah, yeah. And, and, and, uh, you know, William Randolph Hearst obviously built this like unmanageable castle that became a museum. I, I'm, I'm kind of beating this drum about like, we need our elites to go and do even crazier things, just like build the world's tallest building, build the world's biggest house, build a castle, build a library, build a museum. And I'm not seeing it enough, but what do you think about that? What interesting kind of like side projects have you seen from the greatest founders in history?

• 2:07:09David Senra?

  I, I, it's interesting. Like what would be the most interesting, uh, one that's done? Honestly, I, I prefer them to do like what Steve Jobs did. You know, if Steve was alive today, he'd be what? Seventy? So still young.

• 2:07:20John Coogan?

  Sure.

• 2:07:21David Senra?

  The idea that he wouldn't be still working all the time at Apple to me is just unfathomable. Like I think, like he, I'm all for charity and all that other kind of stuff, but like, you know, every biography is kind of written like that where it's like, you know, focuses on the early life and then the rise. And then gets really boring once they're like super rich and like naming, like that's not relatable to other people. It's like, yeah, I donated a wing to, you know, the hospital named after my mother or something like that. I'd prefer them to not have side quests. I'd prefer them to work on what they're working on until their debt.

• 2:07:51John Coogan?

  You want Bezos to go back into Amazon now that Lina Khan's out and the heat's off. Cool it with the Blue Origin, cool it with the

• 2:08:02David Senra?

  No, that's actually a great example. If you're gonna have a side quest, like the Blue Origin, like then build like another company.

• 2:08:07John Coogan?

  Make it a company.

• 2:08:09David Senra?

  Yeah.

• 2:08:11John Coogan?

  The Long Now Foundation, have you heard about the clock?

• 2:08:13David Senra?

  Yeah, of course, of course.

• 2:08:14Jordi Hays?

  Even even Ellison did this. He took his island and turned it into a sensei, which is like, you know, this amazing like hotel. It's not, it's not a, David might say it's not a month, but Larry, when you hear this, I love sensei. I think your properties are phenomenal.

• 2:08:33John Coogan?

  Yeah, they're fantastic.

• 2:08:34David Senra?

  I'm sure they're excellent. I would expect nothing else.

• 2:08:38Jordi Hays?

  Interesting lore. He, so Larry has six homes on PCH. He's invested heavily.

• 2:08:44David Senra?

  More than that.

• 2:08:45Jordi Hays?

  Well, no, he's got like dozens of properties in Malibu.

• 2:08:49Jordi Hays?

  And I think there's six that are just in a row on PCH and I think the fires got to two of them. And at some point, the firemen decided to make like a last stand and were basically like, the fire's not going past this point. And so a couple of them went down, I heard in the, in the January fires, but four still standing. And I'm sure he's doing a ton to, to kind of help with the recovery effort broadly in Malibu.

• 2:09:15David Senra?

  No, I think this is a perfect like segue into what I actually want to talk to you guys about, which is Michael Dell. It's like, he's 18, he starts Dell when he's 18, 19 years old. He's 60 now, right? I talked, you had Zach Dell, his son, his co-founder on last week for base. I talked to, I talked to, yeah, I talked to Zach for a while before I did the episode. And, you know, he's like, the idea that my dad is ever going to stop is just never gonna happen. He's just like, he had so many opportunities. Like he didn't, when he took the company private, when he came back public, he didn't have to be the CEO. It's like, he was, he's just obsessed with it. Like you go to his house, like he will, he's working on his computer. He wants to talk to you about the, the company. Like he's completely in love with what he's doing.

• 2:10:00David Senra?

  And that's probably the, the highest and best use of his time as opposed to like another side quest. So. I do like, the response for this episode has been really, really nutty. Um, in, in terms of like, everybody knows, they've heard Dell, right? They know who he is, they've heard of his company. But the feedback I'm getting is like, they didn't understand his life story. And just how, I think I just tweeted out, like, I study uncommon people, uncommon life stories for a living. And Michael Dell is uncommon amongst uncommon people. I'm, I, I almost 400 episodes in, I can't think of another single comparable founder story to his. In the sense that like, this guy was a money-making machine since he was like 13. You guys, I just heard if, uh, I don't know if you guys put it up on the screen.

• 2:10:44David Senra?

  I heard you talking about it, that, that tweet that he has where he starts with, you know, $6 million the first year.

• 2:10:49Jordi Hays?

  Can you break down doing, how did he manage? I haven't, I've been so focused on TBPN this week. I haven't been able to listen to the episode yet. I'm going to get to it this weekend. But how do you go from zero to netting 6 million? Uh, or, or grossing 6 million in the first year? Like, what does that even look like?

• 2:11:10David Senra?

  It, it's even crazier than that, where like, he started the company with a thousand dollars. No co-founder, no VCs. Okay? So like, this is what I mean, like, uh, I, I, I've been getting a bunch of text messages. And one of them was like, I don't think there's another, uh, like fucking startup story like this ever. I forgot what the text said, it's definitely an F word in there. And I posted it too. Um, because I, I just can't think of another, like, that successful, that fast with so limited means. And he's, his head competitor was Compact, which was, he's in Austin. He, he launches Dell in his, in his, uh, dorm room. Austin's, uh, Dell, uh, Compact is in Houston. They raised, I think, 25 million initially. So I think 25 million at the beginning, and then in the first early years of Dell, they'd already raised like 100 million in capital. And he smokes them.

• 2:11:55David Senra?

  They wind up getting bought and then, you know, Dell still is thriving and, and Compact no longer exists. But the, one of the things that, um, is obvious in, in the story is just like, he, a lot of these outside successes, obviously, like, you have, you have to be the right person with the right set of skills at the right time. And, you know, in 84, the personal computer is the, the first time, the first very popular personal computer, computer appliance is what Steve Jobs called it. It was the Apple II. That's the first computer that, I think, uh, Dell was 14 years old when he buys. And there's a crazy stories about how big of a hustler he is and the businesses he was making. He was making more in high school than his teacher was. Like, just a money-making machine from day one. And he buys an Apple II with his own money, right?

• 2:12:40David Senra?

  You'll love him, Coogan, because he buys a Porsche. He buys a BMW and then a Porsche. He gets arrested when he's like 19 for going like 92 and like a 55 and a red 911.

• 2:12:50Jordi Hays?

  Are you throwing Coogan under the bus like that?

• 2:12:52John Coogan?

  I think both of us like this.

• 2:12:53Jordi Hays?

  You'll love him because he was speeding.

• 2:12:58John Coogan?

  I defended Marques Brownlee for speeding.

• 2:13:01Jordi Hays?

  Yeah, yeah, yeah.

• 2:13:02John Coogan?

  I think it's fine.

• 2:13:03David Senra?

  So he's obsessed with, you know, beautiful cars and going very, very fast. But to answer your question, it's like a lot of this is because the market was pulling out. So I, a long time ago, I think it's episode 50. Have you guys ever read Mark Andreessen's blog archive?

• 2:13:20John Coogan?

  Most of it, I think.

• 2:13:21David Senra?

  Yeah, do you remember, like, this is a long time ago, so a lot of young founders don't even know this. He was like a prolific blogger before he started A16Z.

• 2:13:27John Coogan?

  P. Marka, that's like the blog name.

• 2:13:30David Senra?

  Exactly. And I think you go to A16's website now and you can pull the archive and it's absolutely incredible. And one of the most important things that, that Mark says in that was very fascinating because he's like, well, you know, a lot of people debate. What is the biggest predictor of startup success? Is it like the product? Is it the, the, the, the actual people, the founders, the team? Or is it market? And he's like, if I had to pick one, my thing would be on the market. And he's like, in a great market with a lot of real customers, the market has to be satisfied. The market will pull product out of, the market will pull product out of the company and the market will be satisfied by the first viable competitor that comes along. And so Dell, kind of before he goes all in on it, he travels to England.

• 2:14:14David Senra?

  He's making a ton of money essentially just buying IBM PCs, souping them up and then selling them to rich architects, dentists, doctors and stuff like that, right? That's how it starts.

• 2:14:22John Coogan?

  The man's story of.

• 2:14:23Jordi Hays?

  Yeah, yeah, yeah, the brabus.

• 2:14:25John Coogan?

  The brabus of PC market, of IBM PCs.

• 2:14:29Jordi Hays?

  The AMG.

• 2:14:29John Coogan?

  Yeah, yeah.

• 2:14:31David Senra?

  So, and so then he goes to England and he's like, wait a minute. I thought like all this, like, there was just like computer fever in Texas. Goes to England and he's like, I'm in these stores, the, the, the product sucks. The salespeople don't know anything and yet they can't keep the inventory in stock. And that's when he realizes like, oh, I need to go all in on this. He winds up dropping out at 19, telling his parents, hey, you know, if this doesn't work out, I'll go back to school. He never goes back to school and you see the, this running goes on.

• 2:14:59Jordi Hays?

  Was he technical at this time or was he just a hustler?

• 2:15:02David Senra?

  No, he was, no, no, he was like a computer nerd, but I think he was much more like in, in the sense of like a hardware. He liked, his favorite thing to do is to take apart computers. So let me give you an example. Uh, another crazy stat that people don't understand. He starts a company in eighty-four, eighty-eight, they go public. Okay. Uh, by the time he's twenty-six, he's in the Fortune five hundred. Twenty-six years old. Like what, I'm telling you right now, when you listen to this episode, you're gonna be like, holy shit, there's not another story like this. So his favorite thing to do, um, he recruits this older guy because we can talk about the fact that they, they, he made a lot of money because, you know, people give him money. They were paying him credit cards back then. So the customer pays today and then I go buy the parts, right?

• 2:15:45David Senra?

  Um, and then eventually he starts selling to governments and, and businesses and, and schools and everything else. So he needs to get credit. And so this where he's like, my bank will give me credit. I need to extend credit to governments and everything else. Can I pay my credit cards? So he, he winds up partnering with this guy named Lee Walker, who is like a forty-five-year-old, very successful venture capitalist entrepreneur in, in Austin. And he was really, played a really important role in the first like four years of Dell. Um, but one of the most fascinating things is that, uh, what Dell then does.

• 2:16:15David Senra?

  They, how would I, like, let me back, back up real quick. Lee Walker is the one that has the relationships with the bank to get the credit that Dell needs to start selling to, uh, all of these, uh, like to, to, to issue the credit. Like they're selling to like US government and Monsanto and, and all these different, um, companies. He's also the one that helps Dell go, right, uh, go public. So Goldman Sachs, uh, does, recommends, they, they choose Goldman Sachs to do, to, to, to, uh, take Dell public. They say, hey, let's do a private placement first. Okay. The, this is gonna answer your question, Jordy. So the private placement, right? There's like a couple hundred private placements that are, that are in the works on Black Friday, which is the stock market crash in nineteen eighty-seven. Okay. Which we talked about last time I was on here with Sam Walton.

• 2:17:02David Senra?

  Lee Walker goes in and is telling a young Michael Dell, we're screwed. Like they're, they're going to cancel our private placement. They, the stock market drops in 23, I think it's 23% in a single day. And he goes in to Dell's office and he finds Dell to tell him this is bad news. And what's Dell doing? Dell's like, I was taking apart the, the computers of my competitors to see how we can improve. So I don't know if he was technical from a software perspective or more hardware perspective. He was, he understood how they worked. He liked putting them together. He liked taking apart, putting them together, making them go faster and perform better.

• 2:17:35Jordi Hays?

  Yeah, the concept of a computer nerd almost like died off, right? In some ways, not, not died off, but it was just way more of a thing. And then it became like, well, if I'm really into computers and I'm just going to make software.

• 2:17:51David Senra?

  He talks about now they're way too complicated. You used to be able to take away the first Apple two, the IBM 5150, which I think is the first one he gets. You could take it apart and actually understand what every single component was doing. Now it's impossible to do that.

• 2:18:03John Coogan?

  Yeah. Can you, can you compare Dell to Jobs? Similar revenue ramp at Apple, actually, although a little bit slower in the first year. I think Apple made under a million dollars the first year, but that was 1997. By 1984, Apple was doing over a billion dollars in revenue. So Dell comes in with six million, the market's a little bit more established. And then if you look at what Dell's done today, they're selling servers for businesses. That's about $40 billion revenue. And then laptops for often computers, personal computers, but for business workers. Another 40 billion or something in revenue.

• 2:18:47John Coogan?

  He seems much less focused on product design, brand, all the different things that Steve Jobs was known for.

• 2:18:55John Coogan?

  Um, is he more of like a private equity financial mastermind? Is that what makes him special?

• 2:19:01David Senra?

  No, he's definitely, he's, this is the weird thing too, where again, not really comparable to any other people. He was upset, he was a computer nerd, like he'd get in trouble in high school because he'd just sit in the back of class and read like Byte magazine. And like, which is just stuff with computers, but his parents were successful in business. And so every single conversation they'd have when he was a kid. Like this dude was reading Fortune and Forbes magazine at 12 years old. And then we didn't even get to the point where like, he does, he takes Dell private, by the time they, they, they go off on this crazy run. By the time, uh, they start hitting a lot of headwinds like 2005, by the time they get to 2012, 2013, he's in real big trouble.

• 2:19:38David Senra?

  And so he takes this huge risk of doing the lever, the, the, uh, the biggest technology leverage buyout in history with Silver Lake Partners. So they take Dell privates in 2013. Okay. The story gets even crazier. So he understands, he, he was actually preparing for the age of AI like 10 years ago. And so Jensen, I, I talked about this in the, um, in the episode where I, I found an interview with Jensen Wong and Michael Dell. And Jensen's like, well, there's only one company in the world that can actually build these data centers at scale and give, do every single thing from the storage to compute and everything else. And that's a Dell. And that's why they're such an important partner to us. And Dell was like moving into storage and servers and stuff a long time ago, way before AI. Like the proliferation, proliferation of AI, I should say.

• 2:20:20David Senra?

  And, um, the, I got the, the, the most interesting is like, so he takes, he does the largest technology that they buy out Dell all, they take a private $24.4 billion if I remember correctly. Okay. Two years later, while he's still a private company, he does the largest technology acquisition ever.

• 2:20:36John Coogan?

  EMC, right?

• 2:20:38David Senra?

  I, I, I was at dinner tonight and, uh, we were with our wives and I had to apologize. Uh, you know, I was like, listen, I don't mean to be vulgar, but I have no other way to say this. It's like Dell's got balls the size of watermelons. Like the guy is a private company. He buys EMC VMware, right? $67 billion with like four billion of equity. Yeah. So it's like, there was like a special dividend or something like that, but they wind up borrowing like 50 billion. Fifty billion dollars. He's like, hey, I'm gonna take this risk. I'm gonna go fifty billion dollars into debt to buy this company. There's a great story I talked about on the podcast, it's also in the book. Where EMC, I think a Boston company, the board director's a little older, a little different.

• 2:21:19David Senra?

  And so Dell's coming there saying, he's pitching this as a merger, not an acquisition, but you know, it's more of an acquisition, I would say. But merger acquisition, whatever you want to call it. And he brings Jamie Dimon with him, right? And there's a great story in the book where the board, he's talking about what his vision for EMC, what he wants to do and everything else. And then they're like, okay, and they lean forward, this old guy on the board is like, but Michael, we're talking about a lot of money here. Do you have the money? And Michael is about to answer and Dell goes, or Jamie Dimon goes, they have the money.

• 2:21:51David Senra?

  This is like the guy running the most valuable bank in the world is telling him he has the money. We got the money. We will get you the money. So yeah, and then what happens? He buys that for sixty seven billion. They spin out VMware. This will go back to your question. He's obviously technology, he's also really gifted at business. He understands finance and everything else. So he buys EMC VMware for sixty seven billion. I think in two thousand twenty two, they spin out and they sell VMware by itself for sixty one billion.

• 2:22:19David Senra?

  That's insane. Like, that's insane. And then EMC, I forgot the dividends. It's in the book. They were making like six or seven billion a year in cash flow anyways, every single year. So it was like, it's one of the most successful acquisitions of all time as well. And the foundation for all the, like, building all the AI and everything they're doing now. Again, I just, I've never, I'm almost eight years, nine years into this project, four hundred biographies written. I just cannot think of another comparable to Dell. Now, if you want me to contrast him with Jobs, yeah, Jobs was much more interested in, you know, the, there's a great, uh, there's a great clip that just went viral on Twitter the other day where it's like Steve Jobs back in ninety seven, sitting there with Tim.

• 2:23:01John Coogan?

  Well, I think you want to mute.

• 2:23:02David Senra?

  Good share. Yeah. And his whole thing was like, no, no, no. Like, I'm not worried about market share. I'm worried about building products that I can be proud of. So yeah, completely different.

• 2:23:10John Coogan?

  Much less acquisitive. I mean, Apple's never really done that opportunistic acquisition thing generally. And it seems like it's still in the DNA of the company now. They buy some IP, they buy some foundational technologies, but they're not just going to go buy a VR headset. They're going to build their own.

• 2:23:24David Senra?

  And then if you look, I've been told by people that know way more about finance than I do, that Dell's family office is the most financially successful family office in history. He's actually built it into a firm and like some of the things they've done around that. So like every single thing this guy does, he's just an extreme winner. And then he just owned, I think when they went public, he owned like 73% of Dell the first time. When they went private and then went public again, he wound up owning like something like 45% personally. So huge ownership. And then I think he personally profited from a friend of ours that I can't mention who, that knows a lot about finance, told me this, where it's like, you have to also look that when he sold VMware to Broadcom, he took a shit ton in stock. And if you look at the acquisition date and Broadcom's stock, it's up like 3X.

• 2:24:07David Senra?

  So Broadcom buys VMware for 61 billion and then the stock is up like 3X from that since then. And a lot of that was his own personal money, from what I understand. So it's just like, when it just, the guy, the guy just can't help but win. It's crazy.

• 2:24:19Jordi Hays?

  What, uh, what's the backstory on his broadcasting company? Did you, did you follow that at all? He started OTA Broadcasting in 2011, which seems like maybe kind of a...

• 2:24:30David Senra?

  No, so the book has actually a weird structure. So I read, I read his first kind of autobiography. It's called Direct from Dell. It's published in 1999. Then he publishes during COVID, Play Nice But Win. So Play Nice But Win is, is the one I wanted to focus on because I think it's actually like, and he like reads the audiobook. It has a very interesting structure because the first chapter is him fighting with Carl Icahn, who's trying to steal, steal his company from him. And it's about to take private Dell. Then every chapter alternates, right? Between the fight to take his company private to the startup of Dell. It's a very interesting structure for an autobiography. And then the next chapter will go back to the fight. And then it'll, and then the next chapter after that will go, okay, now we're in 90, you know, we're in 84, we're now in 87. It weirdly stops in like...

• 2:25:16David Senra?

  I think maybe 99 or 2001. He talks about the troubles they were having in 2005, 2007, 2011. It is the first chapter of the book, but no, I don't even think that's in the book if I remember correctly.

• 2:25:27Jordi Hays?

  Yeah, that makes sense. It's crazy to see where Dell imagining if he was still running the company today. It trades at two thirds of their like the value today, the market cap is like two thirds of their revenue last year.

• 2:25:42John Coogan?

  Wow.

• 2:25:43Jordi Hays?

  So which is just.

• 2:25:44John Coogan?

  60 billion dollar company.

• 2:25:46David Senra?

  What was it like? Yeah, what was it last year, though?

• 2:25:50Jordi Hays?

  Well, they did like 95 billion dollars of revenue last year.

• 2:25:53John Coogan?

  Yeah.

• 2:25:54David Senra?

  Yeah, but it was only it was the market was over 100.

• 2:25:56John Coogan?

  Yeah.

• 2:25:57David Senra?

  100 billion, right? What was it? Or two years ago?

• 2:26:00John Coogan?

  Yeah, yeah, yeah. It was it was the stock was at 118, stocks at 84 today, down 30% over the last year. So, yeah, they were around 100 billion last year.

• 2:26:14John Coogan?

  And it's pretty, it's pretty fascinating comping them to Apple like they Dell was significantly bigger than Apple for like a decade. Like 1999 Dell's doing 25 billion in revenue, Apple's doing seven. 1998 Dell's doing 55 billion in revenue, Apple's doing 6 billion in revenue. Apple had a like also had went through like this really rough period of transition in the late 90s, early 2000s before having the breakout success that they've had now. And now they're up in like that 300 billion revenue and of course traded a much higher multiple.

• 2:26:49David Senra?

  They also invented, they also invented the most successful consumer product of all time.

• 2:26:53John Coogan?

  And and then also built the services about and then they also built a very, very high margin services business around that. And that's something Dell has never been able to do, build like this high margin locked in monopoly on top of the technology in the software.

• 2:27:07David Senra?

  I remember, I remember in the early days of the making the podcast, just how disorienting like this success, the outside success of the iPhone was. Cause I think it's one of the first episodes I did on Steve Jobs and I've done like 10 or 15 or something. And they made the point that like Apple makes more from the iPhone if they just had the iPhone and nothing else than like Disney does from every single thing they've ever like they they everything, all their theme parks, all their movies, everything else. Just like that one single product.

• 2:27:37John Coogan?

  Yeah, so I mean Larry Ellison is 80, Dell is 60. He's got another 20 years in him.

• 2:27:44David Senra?

  No, no, there's not.

• 2:27:46John Coogan?

  He's not, he's not stepping down or anything. So, uh, I mean Larry Ellison is in the conversation to buy TikTok now. Uh, you think Dell's got like a second, third, fourth, fifth act coming up?

• 2:27:58David Senra?

  I got a great, I got a, yes, I got a great text message. Uh, somebody, uh, they said, dude, when you said he's only 60, I had to Google it real quick because he's so young. There's going to be another addition of the book for sure. He has another era of domination coming.

• 2:28:13John Coogan?

  For sure.

• 2:28:13David Senra?

  Uh, yeah, I think there's going to be for sure. Like I, okay. So we've talked about this last time I was on here was like, oh, people say if you love what you do, like you'll do it for free. And I was like, no, there's actually another stuff to that. It's like, if you love what you do, people couldn't pay you to, no, people couldn't pay you to stop.

• 2:28:28John Coogan?

  Yeah, yeah.

• 2:28:29David Senra?

  He, Dell takes it another level in the book where during 2012, uh, when he's fighting to take the company private, they're like, why are you doing this? Like it was very painful. He could have lost control of the company with his name on it. They're like, you've already made so much money. Like just go retire to Hawaii or why don't you start a new company? And he goes, I don't want to retire. I don't want to start a new company. I want this one with my name on it. And then he takes it to another level. He goes, I will care about this company after I'm dead.

• 2:28:57John Coogan?

  Legend.

• 2:29:00David Senra?

  Founder mill.

• 2:29:04David Senra?

  And then, hold on, I do, I do have to say one.

• 2:29:08David Senra?

  I, I do have to say one even, and, and again, uh, a lot of the people I cover on the podcast are kind of cautionary tales. They're like obsessed to the point where they destroy everything around them.

• 2:29:16John Coogan?

  Dell seems great. Seems like a great life.

• 2:29:19David Senra?

  I, I, I think it's really important. First of all, it's a much longer episode than I normally do. Um, it's really important to get to the last few minutes of the podcast because like I save what I think is the most important lesson for the very end. I'm not trying to like hide it in the fact that like, when I talked to Zach and the way he talked about the way his kids think about him and how they look at their father, you know, they, they're, they're, he's a hero to them. Uh, he was talking about like, you know, Dell's running one of the most complicated, largest companies in the world. And yet anytime his son calls him or any, his kids call him, it's like, he'll drop everything for them. He's legitimately great dad, still married to the same wife. Like this is what I mean. He's just uncommon amongst uncommon people. I cannot think of another single like comparable to him.

• 2:30:04John Coogan?

  It's fantastic.

• 2:30:06Jordi Hays?

  Absolute legend.

• 2:30:07John Coogan?

  I think you kind of compare to him, actually. I often think of you as like the Michael Dell of podcasting.

• 2:30:12David Senra?

  No, one thing I will say, he's got excellent, excellent taste in podcasts. He sent, Michael Dell, a few years, like a year and a half ago, sent me the best DM I've ever got. He says, "Your podcasts are A+ and a little trophy emoji." I was very proud of that. And then today, he wound up tweeting, he's like, "You're very good at what you do." I was like, "It's fucking crazy that you're saying that."

• 2:30:29Jordi Hays?

  Real recognize real.

• 2:30:31John Coogan?

  Real recognize real. It's been great. Thanks for, yeah, thanks for coming on, hanging out. This is always fun. Jordy's got something queued up on the soundboard. Let's hear it.

• 2:30:41John Coogan?

  Brother behavior.

• 2:30:45David Senra?

  Thanks for the invite. I love you guys.

• 2:30:46Jordi Hays?

  Love you. Have a good rest of your Friday.

• 2:30:49John Coogan?

  And Nicole Wischoff's got some news, right? Wischoff?

• 2:30:53Jordi Hays?

  I mean, she put out a post, she's in the waiting room. Which, she said, "Yesterday spent two full days with institutional LPs. Can safely say that 98% of them are fed up with venture. Funds are too big, especially for new fund spinouts. No one does math anymore. No liquidity. Godspeed to whoever is out raising."

• 2:31:12John Coogan?

  You don't need to do math. We have AI now.

• 2:31:15Jordi Hays?

  Intelligence is too cheap to meter.

• 2:31:17John Coogan?

  Yes.

• 2:31:18Nichole Wischoff?

  Yeah, that's true. We have to take AI to meetings and let them speak. And then more funds will get raised, I think.

• 2:31:24John Coogan?

  Yeah, break it down for us. Name names. Who's, who's the dumbest venture LP in the valley?

• 2:31:31Nichole Wischoff?

  No, I wasn't even NSF, but I don't want to throw it in under the bridge. So I was in a big money hub, if you will, less probably tech companies, but a lot of capital. And I did, so I tried to, every six to nine months, just to like set the stage here, I tried to just go to the LP tour. Existing LPs, as you guys probably know, you want to get to know institutional folks years before they invest. Or that's the expectation, that they know you for a super long time. So I do my, you know, grand old tour across the US, you know, twice a year, and this was one of those. So I took six, like hour-long meetings in person, over the last two days with like endowments, pension funds, you name it, all of which are largely pretty active in venture or have become increasingly so.

• 2:32:17Nichole Wischoff?

  And so yeah, just just setting the stage there, but happy to either you guys. Yeah. Let me know what's most interesting.

• 2:32:22Jordi Hays?

  Break down. Yeah, break down the post. There was kind of a lot in there, but the idea that, you know, venture is clearly an important asset class, or at least we would always like to believe, even though it's a small percentage of actual dollars allocated. I'm curious, the quote, "No one does math anymore." To me, that stood out as potentially, you know, you have a $200 million seed fund, you start running the math and you're like, wait, we need to back six unicorns at seed to deliver a 2X fund. And then is that what you're kind of getting at there? Or it's just like?

• 2:33:02Nichole Wischoff?

  I don't want to butcher some quotes here from from meetings, but I think it was along the lines of fund managers come to raise funds. I think, and what I what I should caveat is it seemed like a lot of the house cleaning was done on the existing kind of blue chip relationships with a lot of these institutionals, like a couple over the last few years. So I think that the negative sentiment was actually towards maybe newer funds or like the funds that are on fund three and fund four, but going out and still trying to raise these like aggressively large, like over $300 million funds. It seemed less, I think they did some house cleaning already when they were frustrated with the big funds that they've had in the portfolio for over a decade and did some house cleaning there. And so I think that feels like it's sort of settled. They've picked the folks they want to

• 2:33:46Nichole Wischoff?

  concentrate with. And then, but I think the new relationships are getting a little bit blurry. And so from that perspective, it was a lot of, how are we supposed to invest in like the next generation of the blue chip funds and like being in their fund two and fund three? When we have these folks coming to us who don't have a portfolio construction model trying to raise over $100 million, which may seem small to folks, but it's a lot of money. And then they're saying things like, I forget exactly what what this CIO said to me, but something along the lines of like, yeah, so I'm asking like, what returns the fund? And like, oh, we expect, you know, of our like 25 to 30 positions that like five will be decacorns and like five will be unicorns and that like, it's just.

• 2:34:28Nichole Wischoff?

  You guys get it from there. And so it's like, wait, I'm sorry, can you please back me into the math? And so they were saying that like, you know, 80% of the meetings they take, and these are folks on Fund Two and Fund Three, like clearly have never like opened up a spreadsheet and like walked through portfolio construction. But I think they've been able to get away with that for their past few funds.

• 2:34:48Jordi Hays?

  Do you think part of it, part of it is that math is not commonly used in venture? Cause you're kind of trying to predict outcomes 10 years down the road. But then that CIO is getting pitched by some traditional private equity fund. That's basically saying, we are going to invest in, you know, six companies a fund and they need to do, we're going to exit within four years and all we're really aiming for is to just consistently get sort of an 8% return on.

• 2:35:18John Coogan?

  Well, there's two different types of math a VC can do. They can do math about the market size and, and you know, DCF on the value of the company they're investing in. But then they can also do math on the portfolio construction side. And it feels like vibe investing might be okay. Just find the insane founder, invest in, oh, it's one on 10 or it's two on 20, whatever. That might not matter, but if you're not thinking about the portfolio construction at all, you might turn away some LPs.

• 2:35:43Jordi Hays?

  And then simultaneously, the, the other thing that I think is interesting is, is venture and private equity. We're always under the same, in the same category, yet they're starting to like overlap more in different ways.

• 2:35:58Nichole Wischoff?

  I mean, I felt like one CIO that manages like, like, I think they're around 15 billion was saying to me that like, she's like, I would just rather, I'd rather just do private equity all day. She's like, the IRR is better. She's like, I have a window into like liquidity that is not that long. And so they're obviously safer investments. I think where people are, I would say that the net takeaway is that folks are just sitting on their hands. And I think frustrated that they're still sitting on their hands as in there's no liquidity. So there's no, no one would say this, but there's not a lot of fun that's going on right now. Like no one's super excited about like these massive exits where they've got to think that the problem that they're thinking about is where do we deploy this cash? Right? Like most folks go into every year and they have a five year plan and they know we're going to deploy a billion into venture this year. But I think that's just been.

• 2:36:41Nichole Wischoff?

  The other takeaway was from really large folks that are active in venture. I don't know how everyone else is still investing in these funds when no one has any cash. Like they're like, I just don't understand. There's been no liquidity for any of us. We don't have a lot of money to deploy right now. Like, I don't know where this like cash is coming from. Um, and so it just seemed like some of the bigger, I think, more legitimate folks that have been around and ventured for a long time. Don't understand maybe the newer entrance.

• 2:37:06John Coogan?

  Hasn't always been driven just by shifts away from other asset classes? Like, you know, large LPs rotating out of real estate or treasuries or the public markets. Like, like anytime there's a boom in venture, it's always dwarfed by the other asset classes. So we're just looking at like, if they take, you know, 2% of their equity or their public equity strategy and roll it into venture, that will like double the size of venture, right?

• 2:37:29Nichole Wischoff?

  Yes. Yeah. Yeah. No.

• 2:37:31John Coogan?

  But maybe they're tapped out.

• 2:37:32Nichole Wischoff?

  Yeah, but it's, it's hard. I mean, right. This is all, this is just all cyclical, right? Like, we're going to be in a war. I bet in 24 months, I hope that I'm on the show and we're talking about this. And everyone's going to be like, wow, we like tripled our exposure in venture and everything's going fantastic. And like poo poo on private equity and like, you know, so I do foresee that happening. I think that just for right now, it's just been like three plus years of crap. I think everyone feels like they're taking this beating. So no one's optimistic.

• 2:37:59Jordi Hays?

  Well, is the three plus years of crap coinciding with a boom in AI? You know, 58% of venture funding in Q1 went to AI startups. Is part of, are, are, do you feel like LPs are like, yeah, well, we had to stretch ourselves a little bit thin effectively so that we could get as much exposure here as we wanted? Or, um, like, yeah, how, how do you think they're like?

• 2:38:30Jordi Hays?

  Yeah, I'm curious, like, in many ways, you could, you would imagine that. I think over time, it will become clear like, yeah, deploying into, you know, AI startups from 2022 to 2025 was, you know, yeah, there were some overvalued companies, but like some generational winners, I would hope.

• 2:38:51Nichole Wischoff?

  Yeah. What, what does seem to be true is that especially with AI and there's so many unknowns, right? Like how much capital do these companies actually need? We're seeing record-breaking seed rounds, for example, and insane prices, like Mira's company, two on 10 billion, like goodness, you know? So I think a lot of it right now is, it is actually making more sense to me that I think the data last year was that like, what was it? Like 75% of VC funds, or maybe north of that, went to like 10 funds, or sorry, capital raised for venture funds went to like the biggest ones, the GCs, the Andresons. I imagine a lot of it is that, one, they're clearly master storytellers, so they're able to say like, here's what we estimate will happen in the market and how much we need to deploy

• 2:39:31Nichole Wischoff?

  now. And maybe those vintages will be fantastic. I think what is really confusing and some of the conversations I was having, and I actually got this data, I sent DST to this presentation for some of my portfolio companies a month ago, and it was, they wouldn't give me the slides, but I have it like burned in my brain, which was like at growth, what's super hard is that for growth funds, is that they've traditionally underwritten companies to say, great, if you're a DST, you've got 30 billion plus in AUM, you're typically a growth investor. You're looking at a company and your timer starts for their year-over-year growth, once they hit 2 million in ARR. And so like from 2 million in ARR, is that if you grow, and it's kind of nuts, and I, I might be butchering some of this, but we can like verify it. But it was like, if you're growing only 200% year-over-year from 2 million

• 2:40:13Nichole Wischoff?

  in ARR, then it will take you like, I think it was like 29 and a half years to be a $10 billion company. They're not going to invest, that's like forever. If you're growing 300% year-over-year, then I think that number was around like 14 and a half. And if you're growing 500% year-over-year from that 2 million, I think it was like seven and a half years. But what happens when that window from like, one, like that, that 2 million, right now companies are going from like zero to what was it, like 70 million? I just saw in like a year or like two years. So the entire underwriting model of like a great business for growth funds is broken. So everyone now, I'm sure from an LP perspective is like, Are you YOLO-ing cash? Like, you know, like, what is the new model that you guys are underwriting to? Like, what does a great exit look like? And what is the, the big question you get in venture is like,

• 2:40:57Nichole Wischoff?

  how do you identify a great business? Like, what are the metrics that make sense for you to deploy 50 million into a business? And, and like, I, I shouldn't speak for DST, but they were like, they talked to all the other growth funds and all the guys that run them, and they're all sitting around a dinner table, wondering like, well, how do we underwrite these businesses? So I imagine as an LP, you're thinking, shoot, I'm going to trust the guys that have made us a bunch of money over the years versus these net new, let's say, AI funds where no one knows, right? They haven't proven that they've done anything in the past.

• 2:41:25John Coogan?

  Um, on the AI stuff, maybe on the venture side, uh, do you think with a windsurf rumored acquisition by OpenAI changed the conversation? There was a big meme, don't build it, don't build a chat GPT wrapper. GPT five is going to steamroll you. Well, it looks like, uh, Sam might be opening up the piggy bank and shelling out for some companies that could be described as somewhat as rappers. And if that trend continues and all the foundation model companies are buying a ton of consumer products that are built on top of them, well, those could be some really great exits. Uh, what is your take?

• 2:41:57Jordi Hays?

  One thing is we don't, we don't necessarily know, we don't have details on that acquisition. It might not be a liquidity event, right? It might just be like, you know, our windsurf investors getting rolled in. You know, I'm sure there's, uh,

• 2:42:11John Coogan?

  They're getting votes in the nonprofit.

• 2:42:13Jordi Hays?

  Yeah, nonprofit.

• 2:42:14Nichole Wischoff?

  Yeah, I guess I have, I have too many questions there that I have answers, right? Like, I actually don't even know who most of Windsurf's investors are and how much I,

• 2:42:21John Coogan?

  It's a Green Oak's deal, actually. Green Oak's did the seed and the Series A.

• 2:42:25Nichole Wischoff?

  Um, of course.

• 2:42:26John Coogan?

  Neil Meta.

• 2:42:27Nichole Wischoff?

  That's amazing. No, that's amazing. Look, I, I hope, I hope that the people make, look, we are all incentivized to see cash, right? Like, to see some liquidity. I think I would summarize all the sentiment to being just like, obviously, as you guys know, a lack of liquidity. And so people are looking for new reasons to get angry. Like, I was hearing even things like, I hate the 2 and 20 model. It's such BS. And then big funds ask for more than like 20, you know, if they hit like over a 3X net, you know, then it becomes 30. And like, I, I feel like a few CIOs were like, F this market, you know? But that sentiment's going to change as soon as they see liquidity. And then it's going to be, oh, my God, it's amazing. Our exposure is like tripled. Um, and so I just can't wait for that to happen. I just think people are grouchy.

• 2:43:06John Coogan?

  Hmm.

• 2:43:07Jordi Hays?

  Grouchy.

• 2:43:08John Coogan?

  Are you telling an AI story to LPs that mirrors cloud or mobile or fire or electricity around AI? You kind of picked your metaphor and depending on how bullish you are, you pick a more extreme metaphor.

• 2:43:23Nichole Wischoff?

  Look, I think me co-founding a business to build next-gen AI data centers shows where my head's at. It's in the infrastructure, like the physical infrastructure and the power. And so like, and that's obviously non-Wischoff Ventures related, though I've told you guys, like I gifted my shares into the funds. But I think that like that, that's, but that's like a non kind of LP pitch from that perspective. I think the, from a Wischoff Ventures perspective, I am very bullish on the vertical AI applications. I think I can't, I don't know who can, I can't really predict where everything goes at all on the AI front, whether it's horizontal, it's foundational, I don't know. What I will say is the more specialized you are in your vertical and the more you can enable a home services business,

• 2:44:04Nichole Wischoff?

  for example, to, you know, hire less people and bring in more business. I think the more like, you know, insulated you are, it's harder to rip you out. And so I'm really, really all in on like these vertical applications where folks are specialized and they can kind of walk their users to this type of automation. I think people like really, really like don't think deeply about how hard it is to get people to adopt this. I know the idea is to like decrease headcount, but like no one understands this stuff. No one knows how to implement, no one knows how to think about it. And so I just think it's like down to the folks that know how to like tangibly articulate the value of an offering. And being in SF and it's kind of why I'm grateful not to live there, though I love it, not knocking it.

• 2:44:46Nichole Wischoff?

  But like you just kind of get sucked into this like, oh my God, of course, it's like so obvious. Like everyone's going to adopt and pay a million dollars for this and enterprise value is like on a balloon. And like, we're forgetting that there's a whole world out there that's like never even heard of like GPT. And so, yeah.

• 2:45:01Jordi Hays?

  How do you, are you staying away from consumer AI? I talked to a founder yesterday that pitched me like a, what was like a great idea and application of the tech, but I just like immediately, he was like, tell me why I shouldn't do this. And I was like, I believe that this is like not something that OpenAI has like explicitly said is on their roadmap, but is like an obvious. Thing that agentic, you know, like an agentic assistant would just do automatically.

• 2:45:33John Coogan?

  Yeah.

• 2:45:33Jordi Hays?

  And so how are you thinking, are you feeling like, you know, a lot more confident in these like sort of B to B verticalized applications versus like a lot of consumer right now, if it's not

• 2:45:45John Coogan?

  Like anime filter was not on the OpenAI roadmap, but they crushed it just by working on images long enough, right?

• 2:45:54Nichole Wischoff?

  Like NFTs, they come in and they're so cool for like five minutes and then it's like, wow, we spent a lot of money there. I mean, that's probably not fair. And if watch NFTs come back in like 12 months, like I think that the, honestly, I don't know. I mean, I toy around with a lot of this stuff. Like the great thing about consumers that I can just mess with it and like try and figure it all out. I don't know that I, I've found anything even personally sticky enough that I'm like every day, like, you know, like messing around with it. And I, well, I guess it's not fair. Like obviously like OpenAI, like Claude and perplexity. But I think like on the everyday, I haven't really, I always have an open mind. Some of the YC companies I've seen have been super interesting, but I haven't really found longevity for myself using them as like a, you know, personally.

• 2:46:35Nichole Wischoff?

  But maybe my mind's not open enough. I just try to think, I realize this is a pretty irrational business, but in some, you know, like I try to take more of a rational lens around like, could this make it 10 plus years as a business?

• 2:46:47John Coogan?

  You're hiring in San Francisco, looking for two to three folks that are operators. Why did you settle on that language operators? We've talked to VCs who have been top of their class at Goldman, come in and just work the spreadsheets for a decade and put up historical runs. Also founders, you know, but operators specifically, why, why, why do you think that's the key to success in venture?

• 2:47:11Nichole Wischoff?

  Look, I think for my style of what we do and like where we try to like add value to companies is absolutely saying like, oh, been there, seen that. Like here's what worked for us. Here's what didn't. And like just being fast to that response because things have to get done. I have hired, so I have Neil on my team as a senior associate and who he comes from venture, doesn't have operating experience. And so this July, when it's quiet in DC, Neil is full time at one of my portfolio companies in LA as on the biz ops team operating. Like that's important to me. Like I'll cultivate it. Like that's the thing I want in our DNA. If you don't have the operating experience, I don't want to lose you to it, but you're going to go get it. And so I want to keep that DNA. I think it matters. In SF, we need exposure there. Over half the deals done last year, you know, we're in California. We do a ton of deals in SF. We

• 2:47:56Nichole Wischoff?

  see a lot, but I want folks that are boots on the ground. It's sort of kind of like to start, I want to hire someone there full time, but for now, sort of like scouting, people that are excited about venture, but still really like operating that are writing small checks. But I want to pull them in. So unlike scouting now, where you just source and then ideally get some carry, I want them to see a whole deal through. They source a deal that we do it. They're joining every call. They'll learn how to, we underwrite the deals, how we do the work. And then eventually they can put that on their resume if they want to, but we'll see. And ideally, I can hire one that's fantastic. But just an approach I want to take. I don't know how these venture firms do their thing and do their scouting stuff. I don't care. But it's something that I just want to test out and see how it works.

• 2:48:37John Coogan?

  Very cool. Jordy?

• 2:48:38Jordi Hays?

  No, this is great. I wanted to just get a, get a gut check for, I mean, we have a lot of managers that listen to the show that maybe aren't fundraising right now. Hopefully they're having, you know, doing little mini checkups.

• 2:48:49John Coogan?

  Doing some math.

• 2:48:50Jordi Hays?

  Doing some math.

• 2:48:52John Coogan?

  Two plus two.

• 2:48:53Jordi Hays?

  Open up that calculator app.

• 2:48:54Nichole Wischoff?

  To answer the question, how do you return 50 million, whatever your fund size is, you know, like, like literally, and then walk through tangible examples. And apparently, no one does that or can do that on the fly.

• 2:49:05John Coogan?

  You see one, you see one trillion dollar company in the portfolio. Just get out the unicorn, decacorn thing, just buy 10% of the next Facebook.

• 2:49:14Nichole Wischoff?

  Seriously.

• 2:49:14John Coogan?

  For a hundred K.

• 2:49:15Nichole Wischoff?

  Yeah.

• 2:49:16John Coogan?

  It's easy.

• 2:49:17Nichole Wischoff?

  No, and the other thing that was interesting is a lot of, I was actually, I didn't mention this, but I was asking about spin outs. There's a lot of great people, I think, right, you know, spinning out of, of, of notable funds and raising funds. I think what's confusing for them is they were like, look, a lot of these guys took the strategy, even though they, even the blue chips do this, and this is why they're so active in seed. And this is coming from the LPs. They're so active in seed because. The individual investors are like, well, hey, if we take 30 million and divide that out by a ton of two, three million dollar checks, if we lose a few, it's not such a blow to the reputation of that, of that, you know, partner at the firm. Versus taking a 30 million dollar check and putting it into one company and saying like, hey, like I'm a pretty good picker if that works out.

• 2:49:59Nichole Wischoff?

  And so I think it's made it really, really hard to underwrite these guys because they've just done whatever they wanted and candidly haven't taken a lot of risk. Or maybe have been able to. Um, so it's going to be interesting to see specifically, I think right now we're seeing the most probably good quality spin outs. It sounds like over the last six months raising funds. Um, but I think it's also, I thought that like shit, it's just hard for me because I've never been in venture before and I'm trying to like do something substantial. But it turns out that like even the folks that spin out are still getting kicked in the teeth. So I think it's what you're saying. Go meet LPs really early and be able to answer these like tangible financial questions. I mean, it seems obvious it's not, but like it really, that matters.

• 2:50:35Jordi Hays?

  Yeah, it's funny to look at if you just ignore like, you know, looking at a spreadsheet of portfolio construction and you just look at somebody. And you look and you say, if, if this person has a hundred million dollars to deploy in the next three years. Do I think they're going to be able to give back hundreds of millions of dollars? And when you really just like look at somebody and just like ask yourself that question. Sometimes I, sometimes I look at a manager and I'm an LP in a, in a fund. Uh, here in LA, uh, uh,

• 2:51:05John Coogan?

  And you didn't do any math? It sounds like that was a vibe LP investment.

• 2:51:08Jordi Hays?

  It was a vibe LP investment, but I look at, you know, I'm talking about a buddy of mine, uh, Jack, uh, Drayfus and like, he's got a 30 million dollar fund. I look at him and I'm like, yes, I believe he's going to give back around a hundred million dollars to his LPs. And like, it's not like it's purely vibes based, but the guy knows how to, you know, knows how to do deals.

• 2:51:29Nichole Wischoff?

  Yeah. Well, the other, yeah, and I'll leave you guys this. I know we're over is like, so I was talking to, um, uh, like a managing director at a pension fund. It's got like over 55 billion. And they're super active in venture. And he was actually saying, he's like, go after the pensions because he's like, endowments will actually leave you, like, they will churn. But he's like, pensions don't. So if you get in, it's like, pretty sticky, but they do have a high bar for like, emerging folks. But he was like, I almost, he's like, I could make a killing if I left here and just advise managers that are trying to basically institutionalize, because he was like, the hard stuff are things like when to exit. He's like, you could be, you could have great access, you could actually pick the right deals, and you could just never exit at the right time. And he's like, that is just like, a lot of what we see. So there's just an art to how do you institutionalize your firm, that he's like, a lot of folks miss. So if emerging managers are

• 2:52:13Nichole Wischoff?

  listening, that's like, the big chasm that is really hard to cross. Like, have you hired appropriately? Even if you're a solo GP, like, do you have-

• 2:52:19Jordi Hays?

  Wait, but when you talk about when to exit, are you talking about, let's say, a breakout company in the portfolios raising a round at $5 billion, and there's a lot of enough demand for the round, and you're saying, like, when to exit those positions? Or what did you mean by that?

• 2:52:35Nichole Wischoff?

  I would say that largely, most folks, especially emerging managers, at least as far as I know, are tell LPs, and this is what I do as well. I'm not a public markets investor. When my companies go public, as soon as we're out of lockup, like, that's ideally around the time that we sell. And then it's your responsibility to do what you want to do with the shares. So I think a lot of it is on the way there, especially, I mean, and this is probably a lot of what we're seeing because of 2021, a lot of folks should have probably sold secondary on the way up, because people got priced at like, sky high valuations, and there was secondary happening all over the place at an insane premium. And I think they're referring to VCs never selling secondary. And then those rounds go from being a $5 billion Series D, where they could have sold secondary in '21, to like, a billion dollar company right now. And they're

• 2:53:17Nichole Wischoff?

  sitting on these. And it's like, just still on the books. And so I think it's a lot more of that that never happened. But that's hard.

• 2:53:22Jordi Hays?

  Well, that's another reason to keep your fund small, because if you have a $50 million fund, and you get an opportunity to sell, you know, secondary-

• 2:53:33Jordi Hays?

  Like that could return the fund potentially, but if you're, you know, $500 million fund, it's hard to ever figure out an opportunity to sell secondary that's going to like meaningfully, you know, you know, return the fund or, or, or anything along those.

• 2:53:48Nichole Wischoff?

  That stuff can haunt you too, because I'll hear stories of people selling Facebook when it was like, you know, 20 bucks. I think I heard the craziest story from Tiger once, which like, actually, nevermind. I was like, I don't even know if that's on the record. But yeah, yeah.

• 2:54:00John Coogan?

  They love doing PR, actually. Tiger loves just like, they're open book, those guys.

• 2:54:05Nichole Wischoff?

  That is not my story to tell.

• 2:54:06John Coogan?

  There's definitely not a book about them where all the names are changed floating around.

• 2:54:11Nichole Wischoff?

  Actually, no, it's gotta be public knowledge. They sold, they, oh my God, they sold so early at Facebook. That's all I'll say. It is, it hurts because they didn't believe.

• 2:54:18John Coogan?

  Money people sold. I mean, like Sequoia sold Google and we, we've talked about this, like they, you know, IPO and then they just distribute. And it's like, oh, like they sold Google at like 50 million or 100 million or 500 million. Like way, way, way too early.

• 2:54:30Nichole Wischoff?

  Finally, I have no idea that, look, I just think it's the, it's the angle, this is the approach you want to take. If they want to take that capital and the returns they made and dump it right back in, then they should do that. But yeah.

• 2:54:39Jordi Hays?

  Yeah.

• 2:54:40Nichole Wischoff?

  Awesome, guys.

• 2:54:40John Coogan?

  Anyway, this is great. We'll talk to you soon.

• 2:54:42Jordi Hays?

  Thanks for squeezing this in and have a great weekend.

• 2:54:44Nichole Wischoff?

  Y'all too.

• 2:54:45Jordi Hays?

  See you soon.

• 2:54:46Nichole Wischoff?

  Thank you.

• 2:54:46John Coogan?

  Talk to you soon. Bye. Let's go to Zach Kukoff. He says, know your audience. Chief of Staff Edition in DC. They're either 24 or 45. They're the second most powerful person in the room. They run the show. In San Francisco, it's a new grad, glorified associate, best case, or EA base case, and they run the Slack.

• 2:55:04Jordi Hays?

  Slack.

• 2:55:04John Coogan?

  It's funny.

• 2:55:05Jordi Hays?

  Very real. SF stole the, the title Chief of Staff.

• 2:55:11John Coogan?

  Co-op did that language. Yeah.

• 2:55:12Jordi Hays?

  And made it extreme in the opposite direction.

• 2:55:14John Coogan?

  They did. Yeah. Got to bring it back. Sheel says, thoughts and prayers for our glass preneurs. The business is down 75%.

• 2:55:21Jordi Hays?

  Yeah, this is crazy. Gary Tan has cooked so hard.

• 2:55:25John Coogan?

  It's incredible.

• 2:55:26Jordi Hays?

  That glass is not getting broken.

• 2:55:28John Coogan?

  So San Francisco auto glass shops are now suffering as car break-ins plunge.

• 2:55:34John Coogan?

  It really does seem like San Francisco is cleaning things up. There's a new mayor. There's a lot of new investment and obviously the AI boom, but I think just a general vibe shift, not even around the federal election, but just around enough is enough. And so they're mixing things up there and it seems like good progress. And also anytime anything bad happens, somebody tags Gary Tan, who's Batman.

• 2:55:57Jordi Hays?

  I kept telling friends who live in the Bay, I'm like, you realize that like, like 2023 was the time to be buying an SF because the vibe shift was happening?

• 2:56:07John Coogan?

  Yes.

• 2:56:07Jordi Hays?

  Homes were, when I, when I compared home prices in prime central SF to like suburbs outside of LA.

• 2:56:17John Coogan?

  Yep.

• 2:56:17Jordi Hays?

  I was like, how does this make any sense? The only reason it makes sense is people had gotten so depressed. There was not a lot of, you know, people saying, you know, certainly less people going, I'm going to move from Austin to SF.

• 2:56:28John Coogan?

  Yeah. But people did get dramatic with the moves out of SF. It's like, you could have gone to Marin. You could have gone to Atherton. But instead they were like, I need to go to Mogadishu, Somalia. I have to leave the hemisphere. I have to be so far away from San Francisco because it's so bad. I have to go to North Korea. I would rather be in Pyongyang than, than, than Incline Village in Tahoe. There's so many good options, even if, even if San Francisco, the city is rough, like Sunnyvale is fine. Like there's so many places in the Bay that are great. You can go to San Hill Road. You can go to Menlo. You can go to Palo Alto. None of those places were ever bad. But it got really,

• 2:57:09John Coogan?

  really dramatic for a while. Anyway, here's a rumor from TechCrunch. Expense management startup ramp is being considered for a charge card pilot program by the US government's General Services Administration.

• 2:57:22Jordi Hays?

  Well, we're going to take a little credit for this one.

• 2:57:24John Coogan?

  Did, did they plant this in our head and then we joked about it? Or did we joke about it and plant that in their head? I don't remember.

• 2:57:31Jordi Hays?

  No, we were just joking about it.

• 2:57:32John Coogan?

  We were joking about it.

• 2:57:33Jordi Hays?

  But we were joking about it in a serious way.

• 2:57:34John Coogan?

  Yeah. And then, and then we got a, a deep dive on it. Eric put out a longer post, started taking it more seriously and it sounds like it's actually being considered, which is crazy. But you love to see it and it would be very cool. I mean, we always have the question of like, where does the money go in the government? Why not have some insight in that? Why not have the receipts actually categorized? That makes a ton of sense.

• 2:57:56Jordi Hays?

  Makes a lot of sense.

• 2:57:57John Coogan?

  There's some debate over whether or not-

• 2:57:58Jordi Hays?

  Instead of having to send every card to a dollar, like what they've been doing recently.

• 2:58:01John Coogan?

  Yeah, yeah, yeah. Very, very bizarre functions. And I mean, you can just imagine that if there's no oversight, there's going to be more like just looser spending and that hurts the taxpayer. So, very excited about this. I hope it happens. Anyway.

• 2:58:16Jordi Hays?

  Anyways.

• 2:58:16John Coogan?

  Let's move on. We talked about the Golden Dome. Anything else in here we should talk about? Should we close out with Wilmanitis? Talking about Don Valentine?

• 2:58:26Jordi Hays?

  Yeah, let's do it.

• 2:58:27John Coogan?

  Don Valentine.

• 2:58:28Jordi Hays?

  Don Valentine.

• 2:58:29John Coogan?

  He says on pricing and 25-year-old entrepreneurs, Valentine says, maybe, maybe we should go back and forth here. I'll be Valentine, I guess. Can I make an observation before we switch?

• 2:58:40Jordi Hays?

  Sure.

• 2:58:41John Coogan?

  Absolutely. Because John, I, we're, John and I were talking about this in the car and one of the great things about that venture business is that you're in an opportunity to learn constantly. One of the large number of things that were brilliantly recognized and executed was the pricing of the product. We have in general at Sequoia, lots of trouble and difficulty in persuading 25-year-old entrepreneurs that you've got to price the product higher. And our agenda for that conviction was the fact that 25-year-old, that a 25-year-old cannot run a company- Activate Golden Retriever Mode. On 35 or 40% gross margin. They need 60%, 65% gross margin in order to compensate for the mistakes that we know they're going to make. Not specifically, no, but in general, we know

• 2:59:25John Coogan?

  they're going to waste a great deal of investment capital. That's a great insight. Like, like, they're going to over-hire. They're going to get over their skis on CapEx. They're going to be excited and say, oh yeah, let's just pay up for this talent.

• 2:59:36Jordi Hays?

  And if you are making a lot of money, you can afford to make mistakes.

• 2:59:41John Coogan?

  Yeah, it's fine. And Cisco was early on, no, and no influence from me or other investors able to recognize the need of, first of all, pricing the product very high, sustaining a very high price, and continuing to make enhancements to the product that provided them with the opportunity to continue at high, at a high gross margin level or increase the high gross margin level. So, one of the miracles of the launch of Cisco was the creation of an enviable cash flow that was early on very positive when most companies are negative. And I remember conversations not seriously had, but not often had either about what we were going to do with all this cash we are accumulating. Now startups do not have accumulation problems. They have the opposite problem. So they need to persuade the founders.

• 3:00:24Jordi Hays?

  Yeah, I love where I love where Will pulled this from Cisco Oral History Panel Part Two.

• 3:00:31John Coogan?

  I love it. He's got the PDF.

• 3:00:33Jordi Hays?

  Esoteric Valley PDF. Big PDF guy, but I think that's a good where place to end the show.

• 3:00:41John Coogan?

  Yeah, this was fantastic.

• 3:00:42Jordi Hays?

  Hope everyone has a fantastic weekend ahead.

• 3:00:45John Coogan?

  Thank you to Polymarket. If you're trying to monitor the news in real time over this weekend, head over to Polymarket. They got a bunch of markets to check out what's going on.

• 3:00:52Jordi Hays?

  Yeah, the Polymarket news platform never stops. I shared earlier this chart, the largest company end of April and Apple and Microsoft were neck and neck and then Tim Cooked and Apple is now sitting at, you know, 92% with a almost a couple of weeks left in the month. So who would have thought that Apple would be still on top in a trade war with China, their primary supplier?

• 3:01:22John Coogan?

  They're doing great.

• 3:01:23Jordi Hays?

  Tim is goaded when it comes to supply chain management. So anyways.

• 3:01:31John Coogan?

  We were in one of those interviews. I just looked over at that stupid giant gong and I started laughing.

• 3:01:36Jordi Hays?

  When we roll out this gong, it's going to be, it's going to be insane. We keep going to the wide angle and the gong is not even, it's too big to fit in the shot.

• 3:01:43John Coogan?

  It's such a tease. Anyway, have a great weekend, everyone. Happy Friday. We will see you soon. Goodbye.

• 3:01:50Jordi Hays?

  Looking forward to Monday. Cheers.