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### Human: Thanks for listening to Phil Liben's Ask Me Anything. If you'd like to participate in weekly AMAs and discuss all aspects of startup life with Jason and our community of 25,000 founders, join us at thisweekinstartups.com slash slack. Thanks again to LinkedIn, Salesforce, and Pitney Bowes for making this possible.### Assistant: Hey, everyone. I am Phil Libin. I am the CEO and co-founder of AllTurtles. Before that, I've done a bunch of other things. Programmer by background, started a few companies, probably the most notable was as a co-founder and CEO of Evernote. I was a VC and now I'm back in the startup world, so glad to be here. Okay, let's get into questions from the Slack channel. Nick says, in your state machine model, how early should companies prioritize looking into resurrection? lines five and nine of inactive users into low and high value users. That's a really good question. I wonder how many people know what Nick is talking about. I gave a talk about the state machine that answers all startup growth questions. I'm sure it's online somewhere. I'll probably put a link to it. Yeah, good question, Nick. I think basically, you should focus on this as early as you actually have inactive users. So the idea is most companies think about getting new users from people who have never tried their product before. So they do a lot of sales and marketing outreach that way. But over time, you build up this large group of people who had tried your product, they just don't use it anymore. They're inactive. In the beginning, there's not very many people in there, and so it's easy to ignore them. But over time, that builds up into a bigger and bigger pool, and it may actually be a lot more efficient, a lot cheaper to try to resurrect those people, to try to reengage them. You should start taking that seriously, I think, as soon as you have a big enough pool of people that are inactive. One way to think about it is you look at how many new users you're getting, new customers you're getting every month. And if the number of new customers you're getting every month is like maybe 10% of the total number of people in that inactive bucket, then you can probably start actually getting as many people or close to as many people from reactivations as from new people. And it's usually cheaper to reactivate than get new people. So I would think about it like that. Look at the percentage and decide when it makes the most sense. David Fox asks, thoughts on Notion. I've been an Evernote user since 08. Me too. Thank you. 07 for me. But Notion seems to be winning over Evernote fans. So I think Notion is pretty good. We use Notion at AllTurtles. We mostly use it as a Kind of as a good internal wiki and project tracker, which isn't something that I think we ever made Evernote to be particularly great at. I still use Evernote every day for kind of all of my personal stuff. But yeah, I am a Notion fan. I think they're doing a good job. Tom Preet, three questions. Question the first, as CEO, what brings you the most joy as a CEO? Any examples? Wow. One thing to point out is people often ask me if I'm having fun at my job. And I pretty much always say no, because it's not actually that much fun. To be honest with you, I don't know any good CEOs that are really having fun. It's actually not a job that most people enjoy doing. Some people do, psychopaths. Uh, but I think most people I know who are actually pretty decent CEOs don't enjoy it. They don't do it because they enjoy it. So it's not necessarily optimized for fun. It's very fulfilling. Um, but, uh, joy is kind of a, kind of a, an interesting word. Uh, but yeah, yeah. Sometimes, uh, things, things do bring me joy as a CEO. Um, The small picture, like the very tactical version of that is like my favorite thing to do in the past year or so has been to get in Figma and just see what all of our designers are working on kind of in real time. Just see like the whole ant colony and see where people are swarming and be able to zoom in and take a look at stuff. So I kind of just get joy like pretending to do real work as a CEO in Figma and I can like comment on things and talk to people. So I think Figma has, uh, is, is kind of my favorite small joy, you know, guilty CEO pleasure on the bigger and kind of more scalable side of things. Uh, you know, like my favorite thing in the world is when I see that someone did something professionally, like at my company or companies and, uh, and it came out really great. And I didn't know about it beforehand. That's the best. Oh my God. I love that feeling. The greatest feeling as a CEO is when your employees like do something and it comes out amazingly well and you didn't even know about it beforehand. You know, I think the more frequently that happens, the more you can say you're succeeding as a CEO. So that when that happens and I'm really lucky enough where it actually happens quite a lot. It's great. It's when I am happiest. Question the second, as a software engineer, what was one of the most difficult things you had to overcome? I don't know. Everything is difficult. I mean, I'm a giant nerd. I've always been kind of socially awkward. I'm shy. I'm introverted. This is difficult. Doing this is painful. I'm not even like talking to anyone. We're just looking into a camera and like just this is like hard. None of it comes naturally, but there's lots of people with lots of worse problems than I have, and I just try to focus on what I'm trying to accomplish and just do it, get reasonably good at what I'm doing. There was a lot of bad habits that I had that I think I've broken a little bit. So I've been trying really hard to establish healthy habits, both in terms of actual health, but also in terms of management style, and work, and being in companies. So there's a lot of things that I don't know if overcome is the right word, but they're like habits that I've broken that have to do with hiring people, and delegating, and leadership, and communications. the current thing that I'm struggling with the most that I think I'm making progress on. But I've actually, it's been very easy for me to neglect regular communication with my co workers. In the past, I tended to make many decisions based on very quick casual conversations with people who were physically near me. So at Evernote and before that and after that, a lot of strategy, a lot of big decisions are just made by me walking down the hall or walking for coffee with someone, making a decision. And that's kind of sucks for remote people. But that's just like the way it's been. And I've been aware of that as a shortcoming in my management style. And of course, now with the lockdown, everyone's remote. I don't get to like go walk for coffee with anyone. So I really had to like force myself to communicate and over communicate. And I'm communicating much more now than I've ever had before. And it's hard. But it feels like actually we're a lot more productive. So I think I am better because of it. Tom's question the third, what's one thing early founders don't think is important What's one thing early founders don't think is as important as it really is besides culture? Because I think I've probably given talks where I've said that culture is the most important thing. Yeah, I mean everything, right? Founders, I think, discount everything other than the thing they're great at. The way most startups work is the founders have superpowers and something, something pretty narrow and they're great at that and they think that's the only important thing and everything else is not important. And it actually turns out that no, most of the other stuff is really important too. You just happen to suck at it. And you're not really going to scale very far if you continue with that. One example, for example, is price. So at Evernote, the night before we launched it, we were freemium at Evernote. So we had a free version and a paid version. And the night before we launched it, I realized at 3 a.m. that, oh, crap, we forgot to decide what the price is going to be. And so I just randomly picked it. I'm like, five bucks a month, random selection, because, you know, $4 is too cheap. $6 is too expensive. $5 sounds right. So we picked that price at random, and then we didn't change it for six years. So for six years, Evernote cost five bucks a month. And I knew it was the wrong price. For six years, I knew it was the wrong price, because I remembered that I picked it at random, and I thought, well, the odds of me picking the right price at random are pretty low. Um, but I didn't know anything about pricing and cause like, and startups, you know, people who understand pricing don't usually hang out at startups. Uh, and so for six years we optimized everything else. We did massive testing and every feature and everything, but the price was always five bucks. And then finally, like six years later, we're already a unicorn. We already had hundreds of millions of users. We hired somebody who understood pricing and they explained pricing theory to me. And I thought it'd be boring, but it's actually endlessly fascinating. And then we started doing pricing experiments and we like doubled our revenue within like, I think a year or something or 18 months without changing the product mix, basically from just being better at pricing. So that's a good example, right? Pricing is something that like most startups don't understand and therefore think is not important. But actually, it's really important. Rule of thumb on this is whenever you go from not doing something to doing something half-assed, that's like an easy doubling. So if there's like something that you're not doing in your startup, like just going from nothing to like kind of okay, Like not thinking about pricing to being like just barely competent with pricing, easy double. And there's ample opportunities for that. Graham G asks, Hi Phil, your talk at scale was among the highlights of my trip. Thank you. I don't know which one exactly, but great. During the early days pre-product market fit, do you think that more metrics are always better for founders or would you recommend focusing on those North Star metrics that can keep founders focused on the most important business levers? Thanks. This is a good question. I've got a chart that I used to draw about this. And it kind of looks like this. So imagine at the beginning is a timeline in the x-axis. And the y-axis is all the way on top is 100% instinct, 100% like intuition gut feel. And at the bottom is like 100% data driven, metrics driven. And the chart is like what percentage of your decisions as a company over time are like, how much are they just like gut driven, like instinct driven? vision and how much of it is metrics based. And what happens at most startups, most successful startups is they start out like all the way on top. So in the beginning, you're basically doing things based on your gut feel, your founders understanding and intuition of the customer. That's what it takes. There's really no data. Before you do anything, you do a whole bunch of analysis that rarely leads to anything really good. I really believe that in most of the things that I'm involved in or successful things that I've been a part of or invested in, in the beginning, it's just vision. It's all gut. And then over time, like people like, oh, you know, we're not really listening to the customer, we're not making decisions based on enough data, let's institute more metrics, let's make the state machine. And then over time, it kind of goes down, down, down, down, down until like, all of the decisions are data driven. And then you start hearing complaints the other way, oh, it's not, you know, it's not as cool anymore, we don't have like the same innovation, we're just like micro optimizing things, and then it starts to creep back up. And then it goes down, and then it like oscillates. So Over enough time, a mature product, a mature startup will oscillate between making important decisions based on somebody saying, I think we're going to do this because that is my founder level, designer level intuition versus here's how we slice the metrics. I think at an early stage, pre-product, my guess is actually don't overanalyze because you're just better off having a strong opinion about this is the right way to do it and then you do that. And then as you get more metrics, you get more metrics. And the state machine that we've talked about a lot, I think is a good way to know whether you've got meaningful metrics and decide what to optimize for. But in the beginning, I think it's instinct as well, as long as you understand that that's going to get you into trouble in the long term. So in the long term, you have to go to data, but then that's going to get you into trouble. So then you have to adjust and get back into it. Craig says, how have setbacks or failures in the past changed the way you approach problems or roadblocks? What changes will you make after COVID? I mean, setbacks or failures is like, I mean, man, that's a lot, right? There's a lot of setbacks and failures in life. I guess it's interesting to maybe define what a failure is ahead of time and what's not a failure. I think a failure is if I wasted my time, if I did something and in hindsight, I shouldn't have done it. I should have made a different decision. It isn't necessarily whether or not the product succeeded or something like that. It's like, did I do something that in hindsight, I'm like, well, that was stupid. And I've been lucky that hasn't happened to me that much. I mean, once in a while, maybe more in my personal life than my business life, but once in a while. But for the most part, like even things that haven't worked out financially, I've kind of said, yeah, like if I had to do it all over again, would I do it the same way? Yeah, I probably would. But setbacks are like constant, right? Like there's all sorts of stories about how at Evernote, we almost ran out of money and were bailed out at 3am by an investor, you know, phone call and lots and lots and lots of setbacks constantly. The biggest mistakes, the biggest setbacks, the biggest errors are always people related. It's always – I mean, usually it comes down to not firing someone quickly enough, right? Usually, if I had to boil everything down to its essence, if I had to boil it all down to the number one most essential frequent problem, it's not separating from somebody quickly enough professionally. Like you kind of know that it's a bad fit, but for whatever reason, it drags on and on. That's the most common thing. I have a thing, like a principle around this that I think I've drawn as a graph. I call it the tip of the fuckberg. It basically means that when you actually get around to firing someone, the reasons, you know, for poor performance, the reasons like after you fire them, the problems that you thought they were making are like teeny, teeny, teeny little tiny portion of like the actual things that you're going to find out are the problems after you've gotten rid of that person, because they're not there anymore to cover things up. And you're just going to discover all this stuff. This is universally true. This is like the truest thing I've ever said. Every like CEO that I ever know that I say tip of the fork work to is like, Oh my God, yes, that has happened to me so many times. So that's usually comes down to that. It's like the unwillingness to part ways with you know, someone that it's obviously not working out with. And it's hard stuff to do. I'm still not particularly necessarily great at it, although I've tried to get better. In terms of what changes I'll make after COVID. That's a really good question. We're taking that very seriously. I mean, I think I said this a couple of weeks ago. I had this realization right a few weeks ago where it finally sank in how I'm non-essential. because obviously through a lot of repetition, I'm not essential. That was a weird feeling because I'm used to thinking myself as vaguely important in some unspecified way. Here I am, obviously non-essential. It's odd. What does that mean? I decided the way to think about that is to say, okay, well, yeah, I'm not essential right now to the current management of the problem. How do I become essential to the rebuilding? How do I become essential to gluing the world back together? How do we, because most people I know are also non-essential to the actual short-term crisis, How do we become essential to the recovery? How do we make the post-COVID world better than the pre-COVID world? What is the new essential? So all the projects that I'm involved with, that I'm either running or investing in or involved in, we have moved all of them into thinking, how do we become essential to gluing the world back together through the repair? And we're working on products around that, lots of things in healthcare, lots of things in productivity. I'll come back and demo some stuff hopefully soon. I think it's going to be tons of changes. In terms of actual work changes, yeah, I don't know when we're going to go back to work physically. I just announced today that in all hands that we're definitely not going back to any kind of physical location until September at the earliest. I don't know what's going to happen in September, but certainly between now and September, we're not going to go back into an office space. And I just did that because I wanted people to have like the – a few months if they're trying to figure out where to spend the next few months or something, they know they're not going to get called back in. But we'll see how it goes after that. asks, how would you compare Notion versus Roam Research versus Evernote? What are strong and weak sides of each platform? I haven't used Roam stuff very much. I've seen it. It looks kind of interesting. It looks kind of involved. We I made Evernote for me and I'm kind of lazy and disorganized. This is like a common misconception is like people think I'm like well-organized because I was like, you know, co-founder of Evernote. Nope, not well-organized at all. I kind of – the system that we made, we made because I'm like poorly organized and I wanted to be just as productive as organized people without actually having to do the work of organization. So I kind of like the, just dump everything into it and it figures it out. But I haven't used Rome, but I've heard good things about it. It's probably not for my kind of mentality. In terms of notion, yeah, I just talked about that. I think it's actually pretty good that we use it more as like a publishing, like a wiki project manager type of thing and Evernote for actually like remembering everything, keeping track of stuff. But I'm not an expert in, honestly, by now I'm not an expert in any of it. I haven't been involved in it with Evernote for What, four years now? Something like that? That's a long time. But still a big fan, still use the product every day, and still have lots of friends there. Chef says, have you completed your goal of one pull-up? Last I saw, you banged out a chin-up in 2017." Yeah, where did I say this? Maybe it was like a – I forget. Somewhere I said that like my goal, maybe it was like a Tim Ferriss podcast or something, I don't know. But I said that my goal in life is to be able to do a pull-up because I've never done a pull-up, never, never been able to. I've never been able to do a chin-up. Remember back in from like elementary school being constantly tormented because I just couldn't do a pull-up or a chin-up. abnormally weak, T-Rex arms, I guess, I don't know. And then I was really overweight for a very long time actually, kind of morbidly obese for a long time. And so, yes, I've been working on it and I did do a chin-up and I'm actually up to five now. I can do five chin-ups, which is great. And yeah, I can do one pull-up. just one. But yeah, I have. I have met my goal. I can do one pull up. I'm not even going to try for more. I'll do more chin-ups, but I'm happy with one pull up. And yeah, I can do it. And I did it about a year ago, maybe a year and a half ago, still at one pull up. So small wins. Thanks for that question, Jeff. That wasn't embarrassing at all. Sina B or Sina B, I don't know, says, Hi, Phil. As you said, many companies focus on just one market and build up from there, but you guys invest in a global presence early on in the process and try to have users from specific regions in the early days. How did you guys manage to do that? Was it only marketing campaigns? Did you guys have strategic partners in that region? I guess I'm not sure who you guys are, if you mean Evernote or you mean any of my other companies or Alternals, but in general, most of the things I do, I'm just more interested in things that are global. I don't know, there's more fun to work on. And certainly at Evernote, we were global from the beginning and the vast majority of our users were global, were outside the US. And we did it organically, but we were just software. So there wasn't like heavy logistics or infrastructure. We learned a lot. And there's a lot of nonsense. There's a lot of like bad advice that comes along with this. The biggest thing was a lot of people told us that Oh, man, you could never be successful in Japan because Japanese consumers have totally different tastes. Japanese software users have totally different tastes. It's very hard for an American product to succeed in Japan. Oh, my God, you can never succeed in China because Chinese users have totally different expectations. We actually heard advice like, Chinese users don't like a UI that's too nice. They want things to be cluttered and messy. Really? That sounds like extreme bullshit, but got a lot of that from consultants and advisors. Yeah, it turns out that all of that is wrong. I like to think of it like this, like General Motors makes a lot of cars globally. When I'm in China, I realized that, hey, there's a lot of GM cars and roads here. The GM cars in China are actually different. They're like different names, different brands. They look different from the GM cars in Europe. The GM cars in Europe are different from the GM cars in Brazil. And the GM cars in Brazil are different from the GM cars in the US. So General Motors spends a lot of time trying to figure out what is the exact market dynamics and what is the local taste? How do we make a car that's going to do the best in each market? Obviously spend a ton of resources on that. But BMW sells more or less the same car everywhere. And iPhone sells more or less, I mean, Apple sells more or less the same iPhone everywhere. And Tesla sells the same thing everywhere. And World of Warcraft. is the same everywhere and has global players. So what I kind of realized is regional differences in taste matter for the mediocre. So if you're making kind of an average car, then yeah, you can optimize, you can sell slightly more of them by really finally trying to understand the alleged differences between Brazilians and Japanese. Or you can just use those same resources to just make a product that's so good that it transcends local differences in taste. And everyone wants it. And so that's what we try to do at Evernote. That's kind of what we try to do in our other products when that's appropriate. And the way to do that is to just, yeah, just really have a high bar for quality. And the other thing we did at Evernote is we had teams all over the world. And we built Evernote all over the world. We designed it and built it, not just... We weren't designed in California and made in China. We were designed in California, and Japan, and China, and Zurich, and Brazil, and everywhere else. So we tried to get the best people and the best ideas from everywhere. But our team in China wasn't trying to make Evernote for the Chinese market. It was trying to make Evernote for everyone, but using those influences and those ideas. We try to do that for everything now at Old Turtles. It doesn't make sense for everything because some of our products are have logistics aspects, they only make sense in a certain country. But when possible, I prefer to do it globally. And actually, no, we spent very little money on marketing. Although we did take a lot of the localization very seriously. We had very high quality trying to understand the local culture and speak in the language correctly. Tatiana says, hello, Phil. I was really touched by your post on LinkedIn about being essential to helping overcome the crisis. Thank you. We just talked about that. Do you consider in this matter taking some mentoring as real address help? If so, I would like the opportunity to apply for your mentoring if possible. What's the best way to do it?" That's very kind of you. Yeah. Look, I'm always happy to talk to people. One of my biggest phobias in life is I am afraid of disappointing people. It's really difficult for me. I am very reluctant to set expectations for what someone would get from mentoring relationship or whatever with me. Having said that, I am also totally – I need to drink coffee every day and I'm happy to drink coffee and have interesting discussions with people. I am definitely happy to get together with anyone who's interested over a virtual coffee. I'll work with the folks at this AMA to get my contact info. And yeah, if anyone wants to meet up for a Zoom coffee, or hopefully at some point a real coffee, I am always pleased to do that. Just don't expect that to be a world-changing experience for either of us. Luke Lightning says, question, hey, Phil, which products being developed at Alternals are you most excited about? Is that like asking who my favorite child is? I'm just joking. I don't have any children. I don't particularly like them. But I'm really excited about everything we're doing or else we wouldn't be doing them. Literally, the best thing about the way – Look, many things about the way that I've set up my life are not ideal. I work a lot. I'm not necessarily the happiest person all the time. But there's one thing that I've managed to do, which I'm actually really proud of, which is I've managed to structure my life so there's very little bullshit in it. Almost none, once in a while, but almost none. I have this allergic reaction to like boredom, to bullshit, and I've managed to structure my life so that I have very few meetings where someone is just saying some random nonsense that I don't care about, or that I'm just dealing with stuff that I don't care about. So literally, like, if I'm not excited about something, I'm not going to work on it. And it's not just me. The team that we have is this kind of amazing team and we really try to have this ethos where we try to care about important things and we try to be excited about it. I guess the flip side to that is that there is no project at All Turtles that I'm not excited about or else we wouldn't have started and I wouldn't be working on it. Now, it doesn't mean that I'm excited about all of them the same. There are some that I think are more timely or something like that. We have a couple of projects around really reinventing what health is, like how to think about personal health and wellness that I'm super excited about. One of our companies is called TELUS. They do precision radar for elder care, which is like nuts. They're just doing really well. It's this little magical device that you plug into a wall and it automatically figures out the health status of everyone in your room. It sees your heart beating, it sees your breathing, it sees how you're sleeping or walking and changes in behavior and it can be used to help elderly people stay at home longer. It's amazing, kind of world changing. has passed all sorts of tests and trials, and they're actually selling the product. So that one is pretty amazing. One of our projects called Spot, it's an AI for workplace harassment and discrimination reporting, and really reporting and training about any kind of sensitive issues. It just won the Fast Company's Ideas that Changed the World 2020 Award. So I'm really excited about that. I think in this concept of what are the new essentials, what are going to be essential to the reopening of the world? Well, one of them is going to be How do you continue to have cultures where there's as little discrimination and harassment and bullying as possible? This is a big part of it. Carrot, one of our portfolio companies is doing fertility care and they just launched a new product. because of the COVID pandemic, which is now they're helping employers help their employees who are pregnant because it's very stressful to be pregnant right now during the coronavirus crisis. So a bunch of things that I think are the new essentials that I'm really excited about. And there's a secret project that we're hacking on right now, which is a very germane Jackson to COVID and to working remotely and to productivity. That's just like a super lot of fun. And I hope to be at a point where I can actually demo that in a couple of weeks, but that's still secret for now. Presh says, hey, Phil, big fan of your work. Thank you. What's the framework for deciding which products problems you'd like to focus on at all turtles? We actually published this whole framework of this whole taxonomy. We've classified problems into five different types and we gave them funny names like there's the flying shoe and the costner and things like that. I think it's on our podcast and a few things. I'll find a link. It's actually a really cool framework that Jessica, one of my co-founders and I recorded how we think about it pretty rigorously. That's been really fun. I'm not going to repeat all of it here, but you should check out the podcast. But the short version is the word problems is important. So I think there's like two – There's basically like – Think of like two families of approaches to innovation. There's like things that are just meant to be like – That are like artistic, like inspirational, that aren't necessarily solving problems. They're just creating something new. And then there's problem solving. And we're better at problem solving. We're not as good as the, like, hey, let's come up with a crazy thing that doesn't solve a problem necessarily, that would not a problem that people know about. And if they don't know about it, it's probably not a real problem. But just like make something that no one knew they needed, but it's actually this cool or beautiful thing for the world. To me, that's art. And there's definitely many really cool products and companies that are created that way. I don't know that Instagram was solving a problem that people could have articulated beforehand. and yet it did a thing. I've never been good at that approach. And that's not all turtles game. We solve problems. So the first thing is to whatever it is that we're going to work on, you have to articulate it as a problem. You have to say, what's the problem? Which means you have to point to actual living human beings that have this problem right now. Not a hypothetical future problem. No like blockchain nonsense. Actual human beings have a problem. that are live right now, quantify what the problem is, quantify its impact, and then decide like, is this a problem worth solving? In fact, we have a framework that we call problems worth solving. We think about like, well, what's worth doing and what's not, but we consider it like that. So it really starts with stating it specifically as a problem, stating who does this problem Do we think that helping those people is possible and a good use of time? And once we have that, then a bunch of other factors come into place. But the primary thing is, what's the actual problem? And again, that's not the only way to make startups. You can do the other thing. You can do the just kind of artistic approach. And that's great. I just don't have that kind of talent. So we do problem solving. Catherine McIntosh says, changing how you eat or don't eat. Oh, I guess she's quoting me. Quote, this is easily the top three most important things in my life that I've ever done. It's absolutely transformative. What are the other two things? It's good. Yeah, it's a good question. I do know what the other two things are, but I don't know that I can necessarily talk about them. Basically, one of the most important things in my life that Catherine's been talking about is when I When I started fasting and taking it seriously and kind of working on my health, it has been totally transformative. It's just like ridiculously important. Another one of those things is partially related, but a few years ago, I don't know if you guys remember, but a few years ago, it was legally required for every investor or CEO in San Francisco to get into meditation and mindfulness. It was like some kind of a state ordinance or something. People were being imprisoned if they were insufficiently mindful. So, like everyone else, I followed the law and I got into meditation and mindfulness. And that's been also transformatively important and very useful, which I know isn't the point. In fact, I know that if you say that you're doing Buddhism because it's useful, you're not. That's a fundamental misunderstanding of what Zen is for. It's not a productivity hack. But it kind of is, and it's kind of been great. And I could talk about that for hours. And it's really opened up my way of thinking about everything. And then the third one, I guess, actually just happened recently. I just spent two weeks in the Amazon with an indigenous tribe, just like in the middle of the Amazon. And it was great, amazing, amazing, total brain rewired, change of perspective. understanding what a system is, what complexity is, what balance is, what power is, all sorts of things to talk about. So yeah, maybe those are three good things. I'm sure there's a couple of other ones as well. But thanks for calling me out and just randomly picking the number three. Jason. Hey, Jason. Calacanis says, thanks for doing this, Phil. Thanks for having me. Are you kidding? This is great. My question, can you talk about your massive weight loss and how that didn't impact you as a founder leader? Do you think you were perceived differently based on your weight as a founder leader? Sorry, this question feels too personal, but I'm coming into someone who struggles with weight and thanks for your advice over the years. Yeah, no, it's not too personal at all. I went back actually, I asked my mom to send me like old photos of myself because I was interested. Like when did I get fat? because I didn't remember. Because I remember like as a kid, I was skinny. And so, she sent me a bunch of old photos like me at age 5, age 7, age 10. And I was pretty skinny. I was a skinny, skinny kid at 5, at 10, at 12, at 15, at 17. And then there was a photo of me at 19 and I'm fat. And I'm like, huh, I don't remember this. But something around the very end of high school or the beginning of college, somewhere around my 18th birthday, I like just became overweight. And then it just like went from there. And a few years ago when I was kind of at the height, I think I was like 260 or 265 pounds. And my BMI was like north of like 35, which is kind of in the morbidly obese range. And it just happened. And then I said, all right, I got to take this seriously. And I tried a few things off and on, but I thought, okay, I started reading a lot about fasting. Actually, Loic Lemer told me about it and sounded stupid. I'm like, Loic, this is stupid. This is another thing that you're just into, but it's dumb. But I looked into it because I basically wanted to prove to him how fasting is super dangerous and stupid. So I read about it. And as I started reading about it, I'm like, this actually makes sense. The metabolic pathways here make sense to me. Maybe I should try it. And so I tried it. I decided, okay, fine. If he can do it, I can do it. So I'm just going to not eat anything for three days. So I decided just to try. First day, I was like, oh my God, this is so hard. I'm hungry. I'm going to die. But whatever, I'm just trying it. If Louie can do it, I can do it. Second day, hardest thing in the universe. I feel miserable. I feel like crap. This can't possibly be good for me. Woke up in the morning of the third day, best I've ever felt in my life. Just like morning of the third day, it was like things are clear. I feel great. And then I read more, started doing it more and yeah, it's been transformational. So I lost like about 90 pounds. I've kept it off for about three years. I kind of go up and down a little bit. I'm about 10 pounds higher than my normal weight now because of the just much less motion and much more eating during the lockdown. But I can control it. I actually haven't eaten in three days. I'm going to have a good meal. right now in about two hours, my first meal in three days. It feels great. I have not positioned myself as an expert on this. I don't give medical advice, but I know what kind of works for me and I've done a ton of research. I'm very quantified, talked to a lot of doctors, a lot of researchers. I have been incorporating that into a few of the products that we're working on. Not necessarily fasting, but just some of these core principles that that are fascinating. That's actually a whole topic that I would love to talk about with more time about just what we've learned about health and the kind of bullshit that most people just do incorrectly. And yeah, it's totally affected me, Jason. Thanks for the question. It's totally affected me, I think, and how people perceive me. I don't see how it couldn't and that's not fair, but it has. I definitely feel a lot better. Well, first thing, I feel better, right? And so, I feel better and I look better, not great, but better. And that makes me more confident and that obviously projects and makes a big impact, right? Like how you feel about yourself has a massive impact on how other people perceive you, so just that. But also, yeah, I think the country and the society, you know, unfortunately is quite quite sensitive to weight and to age. And I think I look and feel younger. So yeah, I think I have been perceived differently. And with employees, with investors, how often I get on TV, all that kind of stuff. Not necessarily in Japan. I think they liked me better when I was fat in Japan. Oh my. It's kind of a different culture. There's different norms. I remember being in Japan a few times and people would, in business meetings, They would like rub my stomach and laugh because I was so fat. And they're like, that was okay. And I had to be like, wait, what? This is a thing we do here? Yeah, I guess it is kind of funny. So not in the US, but yeah, I do feel a lot better. And I'm not recommending it for anyone. Although I do think that thinking through, like I think we have enormous amount of really bad ideas about health and weight and exercise and eating that are just wrong in this country. and sadly, most of the world. And I think it's interesting to talk through them and to see things differently. So I'm glad that that's been okay for me. Alex asks, we're building a real time platform called Answerable. It's a good name. And we're wondering what critical tipping point a platform has enough data to really derive good insights. Yeah, I mean, so I talked about this at the beginning, right? Like in the beginning, at the start, it's probably not a lot of data. It's probably your intuition. And then you start getting data and then you decide when you have good data. There's two things here. So one is a platform. The word platform is interesting. Are you really a platform? That's an interesting thing to ask yourself. I remember when I first met Bill Gates, I met him at some fancy thing when I was CEO or whatever. I met Bill Gates and I was introduced to him and CEO of Evernote. And this was pretty early days of Evernote. And he had kind of heard of us, but not really. And so he said, oh yeah, what do you guys do again? Can you remind me? And I said, yeah, we're a platform for memories or something like that. But I used the word platform. And he's like, you're not a platform. Like, okay, really? He's like, yeah, platform means that you have made something that you create more external value, you create more value to the people that build things on top of your platform, then you capture yourself. So he said, like Microsoft, like Windows is a platform, because the amount of value that is created by everyone building on top of Windows is much more than the value that Microsoft will end up getting from Windows. He said, Facebook's not a platform. Because if you add up all the apps that run on top of Facebook, they're not equal or greater to what Facebook is worth. And he said, Evernote's not a platform. Yeah, you've got people that are building things in Evernote, but most of that value is going to you. And I was like, man, that's kind of a dickish thing to say. But yeah, you're totally right. He was right about that. And it really motivated me to think more about, as I'm building platforms, I think old hurdles is a platform, but the definition for me is that there's more value created on top of it than we're capturing. I don't know if that applies to you or not, but it's fun to think through. Not fun, the opposite thing, kind of unpleasant and obnoxious, but true. In terms of how much data you have, yeah. I mean, look, just Google how to do statistical significance and probability and those relatively well-established, right? It's not a question of – I can't tell you how many data points you need because that depends on what is your null hypothesis. What are you trying to prove or disprove? But it's relatively well-established and it's surprising to me how very few investors and founders actually remember their basic statistics. So yeah, just Google. S-tests and P-tests and statistical significance. It's pretty straightforward. In the beginning, just use your instinct. Alex asks, what would you suggest for a very regulated company, SEC, where user testimonials with referrals are either straight up not allowed or require superfine inspection with regards to disclosures to avoid being sued? I don't know. I mean, I think if your primary concern in your company is to avoid being sued, I think you should have a serious think about whether or not you're doing the right thing. Do you want to be spending? I wouldn't want to be spending my days if that was my primary concern. If I'm like, shit, the thing I'm worried most about is how not to get sued and how to cover my ass. I would just be like, eyes, because that just sounds stressful. Now, maybe you're doing something super important for the world and you've decided to bear that stress. Maybe this is a healthcare thing or something where it's like, yeah, that's just part of the game. In which case, yeah, you made an explicit decision that dealing with lawsuit bullshit is just something that you have to do because it's so important and try to have clarity around that. But again, without more context, it'd be hard to say. But I would have a hard time working on something like that unless it was really, really, really super worthwhile for the world. And I don't mean worthwhile in terms of making money. I mean like I would consider the price of worrying about this to be a really heavy price, and I would ask whether I really am ready to pay it. Juan Juan, it's a great name, says, I remember when Twist first started and Jason had you on the show. Huh, better memory than I do. I remember that it happened, but I can't remember what we discussed. I remember your story when you were planning to close down Evernote and an angel came to your rescue and gave a check at the runway to success. How did that happen? What were you feeling at the time? Yeah, this is totally right. I came within 10 minutes of having to shut down the company. I decided that I was going to shut it down the next morning. It was 3 a.m. I decided, okay, that's it. We're out of cash. I need to go to sleep, wake up, come to the office the next day, tell everyone that they are laid off. This was during the 2008 financial meltdown, the previous managing through crisis. This is the third one of these things that I've tried to manage through. Right before going to bed, I got an email and I said, I'll read one more email and it was from this random Swedish guy who said, hi, I'm a random Swedish guy and I just want you to know that I love Evernote. I love using it. It's changed my life. I was like, oh, that's nice because it made me feel better because they say if you help one random Swedish guy, it's worth it. So that made me feel a little bit better. And then he just went on to write, so I'm just writing to see if you need any investment. And I was like, why yes, we would like some investment. And then I stayed up instead of going to sleep. And 20 minutes later, I was on a Skype call with him. And two weeks later, he wired us half a million dollars and we stayed alive. And then that was just enough to get us through the crisis. And then after that, we raised like $300 million more, not all at once. over the next few years. So yeah, that actually happened. That is a true story and that's what it was. I mean, I guess the moral of the story for me is always reply to emails from Swedish people. Vitaly says, how do you estimate tech risks while investing or building an ML product? I guess machine learning maybe. I have an MS in data science and was working in the industry for five years. I saw many companies fail to ship because they didn't make an algorithm to work. Building a product is hard and ML in most cases makes it even harder. Yeah, definitely. I think this is true of AI in general. I think you got to ask like – so, We don't invest in or build AI companies or products, right? We solve problems and we're looking for the most direct solution to the problem. And if that solution, if the most direct solution requires machine learning, great. But it's not like we don't start with what's a cool, like how do we use machine learning? We start with how do we solve this problem? And it happens that there's a large class of problems. In fact, this is kind of the old turtles, you know, a big part of the old turtle framework. Someone asked previously is, um, you have to solve a real problem and, you know, we have to have experts as founders who really understand it. And it has to be, you know, self-sustaining. And, uh, the last one is kind of important. we have to be able to solve this problem for real within 12 to 18 months. So we only give ourselves a 12 to 18 month window to get an initial product to market in a way that would have been impossible two to three years ago. So what technology has changed to make a problem solvable today, for real, not like in a science project, Whereas like three years ago, it would have been crazy to think about. And a lot of times today, the answer to what's changed is, well, we have better ML tools, we have better AI, we have better networking. So a lot of times that answer is technology. Not always, sometimes it's societal. There's probably a whole lot of problems that are solvable now because of how people are relating to COVID that were probably crazy to attempt to do a few years ago. So if you start that way and you say, what's the solution? Then the risk takes care of itself, right? Because you haven't tried to stuff ML into some kind of a product. You've said, this is how I'm going to solve this problem. And it requires this exact particular step. And I'm an expert at it, or I have experts at it. So I think a lot of the companies that I've seen that have failed to do this, they're not clear exactly. It feels like they were sort of tech first. They were like fetishizing the buzzword, the technology, not the problem. Having said that, you can always fail, right? Failure is always an option. And one advantage of having the problem-solving mentality is we're looking for founders who understand the problem completely, whose life work has been to put a dent in this problem, who are in love with the problem and indifferent about the solution. They might have a hypothesis about the solution, but they're hopefully willing to iterate through many possible solutions to see which one solves the problem best. So if solution number one is do something, something with machine learning and that doesn't solve the problem, great. What's solution number two? What's solution number three? And again, the founders are problem focused, not ML focused. So it's more scalable. Tammy asks, will remote work actually be permanent? A lot of folks I know can't wait to get back to an office. Others are happier campers than they've ever been before. I don't know. I mean, I like working at home. It's fun. I avoid most people. I compulsively do math. Yeah, it's kind of I'm kind of living my best life. This is kind of cool. But I also know that I'm lucky because I don't have a real job. Most people can't do this. So I think I think remote work is going to be An aspect of being remote is going to be present forever now. For example, I think that most meetings, even when offices reopen, I think most meetings will have some remote participants. Even if some people are there in person, they'll always have some remote participants. I think we'll have very rarely things that are all in person in one space. I think even after the pandemic is done, certainly while the pandemic is going on, which may still be for another year or two, there will be a remote component, even if it's not all remote. And I think that changes a lot of things. So we're working on a few things about that. And in terms of my, in terms of all turtles, or some of the other companies that I'm involved with, Yeah, a lot of them have been remote forever, I mean, for a while. And I don't think any of them are like necessarily itching to immediately get back to a physical location. So I think it'll be – I think remote stuff – I think all remote will last for a while longer. And then even after it lifts, it'll be some remote and that'll probably be permanent. And I think that's generally a good thing. Again, for people who can do their work remotely, which I think is probably like a third of all the possible jobs. Vince says, question, after scaling Evernote and then working as a VC, I'd assume you'd advise many companies not to go the VC funding route. Why would you assume that? Did you raise money for AT or did you bootstrap and when would you advise in either direction? I'm asking because impact-oriented businesses may not have aligned short midterm goals with a typical investor and the investor could pressure product team without having any knowledge of the market or problem space. Yeah, I mean, look, I had a lot of VCs at Evernote. Sequoia was our biggest investor, and we had Morgenthaler, which is now called Canvas, and Meritech, and Kotu, and a few others. And in general, my experiences there were good, were very good. Not easy, but good and useful. At Old Turtles, we have great investors. We have VCs, we have General Catalyst, we have Salesforce Ventures. We have a bunch of just friends and contacts of mine that I've known from Evernote days or before. I put more money than I probably should have into it myself personally. I guess, when should you bootstrap versus raise VC money? Well, I guess the first thing is, can you bootstrap? Yeah, if you've got a few million dollars laying around or have easy access to it, then sure, why not? That's not very common, right? Most people don't have that. So I think for the vast majority of people, you kind of need outside capital. So then the question is, where are you going to get that capital from? Where are you going to get that money? And money comes from three different sources, debt, or equity investment, or revenue. Most startups don't have easy access to debt unless you're running a restaurant or something, in which case, yeah, debt is maybe fine. Plus, I'm an immigrant and I guess immigrants don't really like or understand debt. My brain doesn't really work with debt very well. I try to avoid that when possible, although we have some now. It could be very useful. Then really, it's a question of investment or revenue. Both of those are expensive. One is not better than the other. They both have a cost, right? The cost of investment is you give up some ownership of your company and you have to deal with investors, which is your right. They sometimes are very annoying, but sometimes not. The cost of revenue is you have to deal with customers who are always very annoying. So you have to decide which of those is better. But honestly, usually, you don't have a choice, right? I have not met many businesses other than those that have been started by third time entrepreneurs that just have a lot of access to money that have much of a choice. Usually, if you have access to VC money, you're going to take VC money. If you have the kind of product or maybe you're a consulting company where you have services where you can bootstrap with revenue, maybe you can do that. It's rarely that you have access to all of these things that you can choose. It's usually like you do the thing that your business calls for. I guess I'm currently in a phase of my life where I'm very much enjoying running a self-sustaining company. All turtles is we're self-sustaining. We're no longer living off of investor dollars. We're more or less profitable, some months more than others. That feels great. I've been a CEO for 23 years. Of those 23 years, my first two were profitable because my first company, we didn't know that investors existed. We didn't know there was such a thing. So we were just profitable for the first day. But then starting in about 2000, starting my second company, I learned all about VCs and investors and then pretty much was never profitable since then. I think Evernote was profitable for one month when I was there. We basically got it to profitability and then raised a ton of money and like hired and grew a lot. It's profitable now but that took 10 years, 11 years or whatever. So in the last 20 years of being a VC, up until two months ago, I was profitable for one month. And now that AT is profitable, I think I've tripled that. So like, I think I've had two profitable months at AT, give or take. So I have increased my experience as a CEO threefold in the past two months. And it feels pretty good. It feels nice to run a profitable business. I like it. I don't know exactly how long I want to keep doing that. Maybe at some point, we want to raise a bunch more money and expand again. Maybe not. But at this point, we're able to be profitable. So why not? So I think it kind of comes down to that. It's what do you need for the business? Would you be doing it anyway? And then what would you have access to? Sir Charles asks, the first browser plugin ever installed was Evernote. Me too. Thank you. It made me nervous. Me too. Was there friction for others? I don't know. I mean, do you mean like for what? Like privacy, that kind of stuff? Like we built it really correctly. So I wasn't nervous about that. And I really liked, like, I liked it a lot. It was super popular. I think we were the most popular browser for a while. Maybe, maybe still are. I don't know. Well, sorry. No, the most popular browser was always like ad blockers. We were the most popular non-ad blocker browser. And yeah, for a long time, it was the only browser plugin I had. I think it's still the only browser plugin I have. I think maybe now I have Zoom as well. For a while, the only other browser, the only browser plugin that I found to be as delightful as the Evernote browser plugin was, I forget what it was even called, but there was a plugin that basically just changed every instance of the word literally to figuratively. Whenever you were reading anything and it said literally, it would just change it to figuratively. That's it. It changed my life. It improved the internet immeasurably. It was figuratively mind-blowing and life-changing. All right. Let's do one more because I really do have to bail. So sorry, I'm just doing this in order. We'd love to answer more questions maybe if we had more time. Steph asks, hi Phil. In the aftermath of the current sanitary crisis – I thought I had a green screen. You can't see my apartment. I wonder what is going to become the norm. Companies looking to exclusively hire local folks to create stronger bonds and minimize carbon footprints or distributed companies with employees all across the country world. What's your take? Well, both obviously. I think companies that can function distributed and remotely will do so. That's just the superpower now and will be forever. If you're building the kind of product that is good at being done remotely, I think you will do that and companies who are good at that and who are able to do that will have massive advantages. I think distributed and remote working has just gone through a step function where it has become much more important than it ever was and it's going to stay super, super, super, super important. Having said that, there's lots of things that you can't do remotely. And for those, yeah, I think we need much more resilient local ties and bonds and businesses and minimizing corporate footprint and travel and all of that stuff. And I think that'll be long lasting as well. So I think for things that can be remote, they will be. And yeah, I don't expect that to change. And we're betting on that. We're working on a few things.

### Human: So I think that's what most are.### Assistant: Cherry is in the analytics space. For an urban tech, it's real estate analytics. Data provider is what they do. Tissue analytics and health. So it's across health, urban tech, and secure tech is where we've focused for the last few years. But lots of companies, we've had about 350 companies go through. Health is the oldest of the verticals, about 130 companies have gone through. So there's a lot of companies at different stages of their growth. So we're going for companies that have products in market. So you're not an incubator. You're not incubating idea. Somebody comes in says I have a business plan. I have a mock up a prototype I made over the weekend. You're not doing that stage of company, correct? We're not doing that stage. We started there. But it's like, you know, we're not, we're not interested in sitting there and explain to a founder, what's a cap table? How do you incorporate it's just it's not as value added. And it's not as interesting for us. And we think, there's more founders, we can help once they get past that to really accelerate, really build and grow the company once they've gotten just a little bit of like, the smoke is coming out of a little TP of wood. And then we want to really help. Isn't it also a bit of a cow if they can't even get a basic product and one customer to use it? I mean, in today's day and age, you could do that with sweat equity with two or three people and whatever, maybe 10 weeks of work. So if you can't do that, don't you disqualify yourself from kind of even being in the startup game? Absolutely, absolutely. And you know, we'll go a little bit early if we see something that is exceptional, the founders exceptional, what they're doing is exceptional, it's really unique. And we we know our verticals so well. But I'm probably like you, yeah, there's so many founders we talked to, and they're pitching us. And we know so much more about the vertical than they do. But if we see something exceptional, we'll go a little bit earlier. Maybe they don't have revenue, they just have a couple of unpaid trials. Like you said, they're not think you've talked about They're not customers, they're free users, they're freeloaders. Maybe they have that, but you're starting to see the way that people are reacting to it. Once in a while, we'll go a little bit earlier if we see something that really catches our eye. But yeah, we're looking for that little bit of early traction. And you said there were three verticals. Explain those verticals again and why. Sure. Yeah, the three verticals that we focus on health tech, which is really focused on digital health, medical devices and diagnostics. The original thesis, by the way, behind that we started health tech about eight years ago, it's when electronic medical records were coming online. And we thought, wow, if these EMRs and EHRs, you know, if you remember, Jason, when you used to go to the doctor, when you were a little kid, there was no computer, you know, they pulled the paper chart off the wall, and they had a lot of little two letter Yeah, a lot of file cabinets are gone, right? We said, well, if this all gets digitized, and Obama made it mandatory, and there was funding for that, oh, my God, the data that this is going to throw off will be enormous. That's why we started Dreamit Health and Dreamit Health Tech. It was like, this is going to be huge. And luckily, we were right. So health tech is, again, digital health, medical devices. It's really cool. Right now, while we're recording this, in 2020, a lot of those companies, we have over 15 companies that are getting sucked up so quickly because they have COVID-19 frontline solutions. So that's really cool. So that's health tech. Secure tech is three kind of areas. We focus on cybersecurity, physical security, and things like fraud. It's, We love the space because they're really big problems. They're urgent problems. Security and cybersecurity is such a big issue. It's a really big pain point. We have a managing director for health that's Adam Deakin. Mel heads up SecureTech. So those, again, cybersecurity, physical security. So it's not just the digital side, but there's all the, whether it's cameras or detecting. That type of things like fraud, counter-fraud, anti-fraud, any money laundering, they're just big problems. They're interesting, they're very B2B and enterprise, and we're good at that, and we have domain expertise. The last one is urban tech, which focuses on construction tech, real estate tech, prop tech, huge trillion-dollar industry around the world, lots of big things going on, and we find it just a really interesting space. So again, there's like, each vertical is a very big umbrella, and then there's sub within those verticals, and that's what we focus on. What if you have a consumer company that looks really promising and they're making a game or a subscription service for doing, you know, workouts like yoga or something and you just fall in love with the founder and you love their progress, you don't invest and you just pass them on to other folks? I'd say call Jason at launch. I'm not kidding. You're very agnostic for all the right reasons. And I love your thesis. We focus on three things. And I think we do it exceptionally well. And I think we do it better than anyone in the world. And I know you're going to have like 10 different accelerators on. I think there's a handful of venture firms that do acceleration like this, like a pre-investment program or acceleration. I think there's a small handful, single digits around the world that know what they're doing. Yeah, we know what we're doing. And the areas we work in, we're exceptionally good. We don't, you know, it's a consumer app for game. Nope, we won't do it. We won't invest in it. It's just and it also well, in order to pursue your, your tours, when you go on that road trip, and you do a customer sprint. Yeah, if you had 30 different verticals, you'd have to do 30 different sets of correct customers, it wouldn't be possible. Here you have three different verticals and the customers are all going to be in those three. So do you run the classes on a rolling basis or is it one class and is it one theme per class or do you have a mixture of those three in each class and how many people per class? Great question. So we think of them as cohorts. We run two timed cohorts per year, much like a YC. We do a spring and a summer. They call it winter. But we do a spring and a fall cohort, two cohorts per year. All three verticals run at exactly the same time. It gives us Scalability, and by the way, I think of Dreamit a lot of times like a startup, right? We're a business that helps other businesses. It's so funny. By the way, I don't know, you're an entrepreneur at the end of the day also, and like everybody at Dreamit is too. And people be like, well, now you're not a startup, you're not an operator anymore, you're an investor. No, we're still an operator. It's just, I'm innovating. I mean, if you're a VC, you are writing checks and it is different. But when you run an accelerator, you have a customer the startup, and you really have to build a product that appeals to them. Right, and the way I think of it, and I'm sure you do it with launch too, right? I don't know if you're gonna interview yourself for that, because I mean, what you guys are doing is really cool. I'll interview you, we'll flip around. But anyway, no, and we think about it, just to digress for a minute, we think about it with Dreamit, and we think about investors, the number of times, how many of you times have you done this, Jason, as an entrepreneur? You'd meet with an investor, and they say to you, Well, Jason, what makes you unique? What's your moat? What's your defensibility? You know, what's your cost of customer acquisition? How you know, what's your IP and the number of times as an entrepreneur, I'd want to meet with that investor and hold a mirror up to them and say, I have a question. What the fuck is yours? What makes you so special? And so at Dreamit, we almost, we just think about that all the time. We obsess. What makes us unique? What makes us different? What makes us special? How can we get our startups to win? So we think and build Dreamit along those lines, like any other type of company. Sorry for the digression. No, no, it's a great fucking digression. When we get back from this quick break, I want to know what you think is the most important part of what an accelerator can do for a startup. The anointing of them, in other words, saying this is a valuable company worthy of your attention to the downstream investors, the money or the advice when we get back on This Week in Startups. Now more than ever, we need people with the right skills to support our communities, especially the frontline workers who provide resources and care for those most in need. To help, LinkedIn is offering free job posts for healthcare and essential service organizations that need to quickly fill critical roles with the people who help us all. How amazing is that? If you're hiring for one of these organizations, LinkedIn's active community of over 679 million members unbelievable how big it's gotten, can help you find the right people for the frontline fast LinkedIn jobs, screens candidates for the skills and experience you're looking for. 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Plus, if you need to hire for healthcare or essential services, you can post your job for free. That's awesome. LinkedIn, go to linkedin.com slash power for $50 off your first job post. That's right. linkedin.com slash powers because this is the power of accelerator series. Again, linkedin.com slash power terms and conditions of course apply because they're giving you 50 bucks. Okay, let's get back to this amazing episode. Welcome back. It's our special 10 part series, the power of accelerators. First up, Steve Barsh from dream adventures. When we left for the break, I wanted to know what you think is the most important thing that accelerators as a category do for startups, if you had to rank these three first ranked the advice, the money, or the anointing stack rank those for me, which one is the number one, which is number two, which is number three. So I think it depends. I think for Dreamit, it's hard to pick. It's like pick your favorite child, right? Yeah, I think for us, the advice is really important. Again, we have probably like you do at launch, we have so many startups that come in, that are well on their way, they're a few years in, and we just start tearing into them and pressure testing all over the place. And You know, once they come in, we take the gloves off, right? You know, you made it through final round interviews, welcome to dream it. And by the way, I look at it, and again, I think it's like what you do and other people do. I think of dream it like a Harvard or Stanford. How many students have you met that graduated from the universities that you're like, yeah, they're not that smart? They're all brilliant. By the way, they're brilliant. They wouldn't have gotten into Harvard or Stanford if they weren't brilliant. Their job is to make them better. At Dreamit, our job is to attract the best of the best, pick the best of the best, and then make them better. So I think part of it, like those universities, there's a branding component to it. Like, ooh, they're a Dreamit company. And in the verticals we operate, that really means something. If you're health tech, secure tech, urban tech, People say, oh, it's a Dreamit company, I know it's gonna be good, because so few of these companies get in. So that curation is really important. I think though, again, what I was getting to, the advice side, the mentoring, the pressure testing, companies that come out change materially. Like when a Dreamit company talks with another Dreamit company from a previous cohort, they're like, oh my God, you're going through Dreamit. I remember that, that's pretty intense. I think those are the top two, the anointing of advice. So advice is your number one, the mentorship and advice. Then where do you put the money and the anointing factor? I'd put the money probably last. And also, again, like we talked about a little earlier, we don't write an upfront check. We got out of that business. We want an investment right, and we don't want to do some bullshit valuation that's artificial, like we'll give you 120 for 6% of your company. Our companies, every single company, 90% of Dreamit companies, that would be a down round if we did that, if we wrote that check. So it's not the money for us. It's going to be to help them get that round as they go through the investor sprint, through that process, and we write a check afterwards. But yeah, I'd say money is last. Yeah, money's last for me. I put the anointing first, but that might be unique to me, and then the advice second. Not that we don't do a lot of advice and not that we don't try to hash through it. Maybe the founders would pick something opposite. I'd be interested also in hearing what our founders say about this in terms of rating our programs. How do you know, since the advice, and you've now mentioned twice, that you really hammer them and you try to be candid with them? Um, most VCs today say there is no downsize, there is no upside to criticizing an entrepreneur when you meet them or giving them any kind of hard medicine or doing anything that is even remotely interpreted as criticism because you might upset the founder and they might not want you to invest or you might get a reputation for being too candid, too blunt. I know I got that early in my angel investing career. So how do you know when to turn that on and not have it be obnoxious or unnecessary, but to have it actually be constructive? When they, you know, when thousands of startups, thousands and thousands of startups apply to dream it every single year, We don't turn that on in a big way until they're in, right? The beating doesn't begin until they're in. When we're doing final round interviews, we'll ask them tough questions. And we've talked about this. There's a bunch of corporations that have talked to us, like, how do you do what you do? How do you, we'll go into corporate accelerators, by the way, and they're like, oh, come in and take a look at our startups. And we'll spend, you know, an hour and talk to eight startups and say, what do you think? Well, who are the winners? And we're like, there's nothing here. You don't know how to triage startups. You just don't understand the questions you should be asking. So when companies go through a final round interview with Dreamit, we want them to walk away and say, you know, because you have a brand, like you're talking about, you have a reputation. And it's that joke definition of diplomacy, right? What's the definition of diplomacy? You know, being able to tell someone to go to hell and they enjoy the ride. We need somebody to go through a final round interview with Dreamit. And if they're not gonna get in, they say, you know what? Those questions were tough, but they were fair. But we won't give a lot of advice. We're just gonna ask a lot of hard questions, which is what our job is, and we always do. Once they come in, and they are a Dreamit company, in the first week they do something, we do something with them called deep dives, where we go back through with them, because Dreamit is not pre-programmed for every startup. It's customized because every startup comes in at a different stage, different funding, different market. We do a deep dive with them. It's like a diagnostic to understand where are they strong, where are they weak, and where do we want to focus on with them for the next 14 weeks. During that deep dive process, the gloves come off, the true thoughts come out, and I'd say 90% of the startups go, oh my God, this is crazy, I love this, can we do this some more? It's like, we're gonna get along really, really well if you think that, so that's how it goes. Yeah, I mean, the truth is, if you are really trying to win, any criticism you're gonna look at as a gift, a way to get better. Right. What are the questions you like to ask during those interviews and why? Okay, great question. So what are the questions I'd like to ask? The first thing we'd like to hear about is what problem are you solving, right? It's kind of standard stuff, but I'll just tell you why. To me, Jason, I think about, again, a lot of what we do, it's triaging, high-speed triage. And I wanna understand, we wanna understand what problem are you solving? Is it a big and urgent problem? And what's your unique insight around that problem? The reason why is, just to use a medical analogy, If a patient gets wheeled into the ED, by the way, we've learned that in health tech, you can't call it an ER, it's not an emergency room because it's not the cardiology room and it's an emergency department. So if a patient gets wheeled in from an ambulance into the ED and I put their fingers on their pulse and there's nothing there and their body is cold, I don't need to do a CT scan, an X-ray and pull lab work, we're done. If a startup comes into Dreamit and starts pitching us and we don't believe the problem, you know the fact, right? 50%, over 50% of startups fail because they're not solving a big and urgent need. First thing, what big problem are you solving? We're going to put our fingers on the pulse and see if we agree with that. What evidence do you have that the problem exists? Then we want to start understanding, What tell us about your solution? What's unique about your solution? What's your unique insight? The solution doesn't just need to be a technical solution. We do a lot of series called the dream at dose. And we talked about this there. How can you be clever on more than one axis is are you being clever in the product in your go to market strategy in the way you're acquiring customers? How do you think about all that? So we look at problem, we look at solution. We do look at total addressable market. We want to understand that and how they're thinking about it. Competition and competitive differentiation. We have a great dream at DOS on that on competition. We always talk about no magic quadrants. Don't want to see your bullshit magic quadrant. Want to see a well thought out competition. And when most startups are pitching us, they're going to not do well on these, but we can ask enough questions to figure out if we like it or not. and then understand the team, that type of thing. So kind of the usual things, what's your go-to-market strategy? It's another, if I want to pull the rug out from under a startup, I could say, tell me about your pricing, where'd it come from, and tell me about your go-to-market strategy. Usually they'll fall down on that. We can fix that at Dreamit. We can really help them fine tune that. But problem, solution, how big's the market, and what traction do you have? What evidence do you have that people care about this greatly? Which one of those questions at the stage you're investing, do people struggle the most with? on competition and go-to-market strategy. They just don't even understand. What's your go-to-market strategy? Direct sales. That's not a go-to-market strategy. That's a sales strategy. I find they struggle with that a lot. So explain that to me. What does go-to-market mean for Dreamit and for you? Sure. And there's another Dreamit dose on this, go-to-market strategy. So the way I think about it is, particularly for early on, and we just had Jeffrey Moore on from crossing the chasm, And I remember, that's where I learned this from originally, right? You know, he's talking about what's the definition of market. We want to understand who is your first target customer. And most of our companies are B2B kind of enterprise-y type companies. What's the targeting criteria and why? What type of customers are you looking for? Like, I love to go fishing, so we make lots of fishing analogies. You're going fishing for what type of fish? And I'm not worried if you're going for flounder or tuna or bluefish. I'm worried about the criteria, like, What are your best criteria? What are your best target customers you want to go after? And why? So for that go to market strategy, we really want to understand what market are you going after? What type of customers? Why? And then how does that evolve over time as you grow, your solution grows, and your brand grows? And I find 95% of startups, you just pull the rug out from under them. They're just all over the place and random. Give me a great example of a company that really defined that and dialed that in if you can. Let me think of a company that defined that and dialed that in. I don't know, most of us, I can't think of one off the top of my head. Most of them, we make pretty big adjustments. I'll give you an example, by the way. We do a lot of health tech companies, and they're all chasing what are called AMCs, academic medical centers. And we'll say, why are you chasing an academic medical center? Everybody's chasing them. It's like on I live on the East Coast, United States, right? So if you want to go fishing, you go over to New Jersey, it's like tuna fishing, you're trying to catch something, it's 80 to 100 miles offshore, it's nearly impossible to catch. If you catch one, you're eating and you're doing well, if you don't, your boat runs out of gas, and you're going to die of starvation. And we see a lot of startups. So we try to adjust them to think about how do you start getting fish in the boat? Like, let's start making money here. Let's start getting traction. Let's start getting out there. So a lot of them, we adjust their thinking around that or go to market strategy. How do you mess with pricing? How do you do almost like a price guarantee where you as the startup, if you believe so strongly in your product, how about you take risk and say to the company B2B, look, if it doesn't work, you don't owe us anything. So we also play around with their business model in that sense. I think understanding your ideal customer profile, who you're going to go after first, that tip of the spear, the wedge strategy. Some people haven't even given that much thought, huh? Nope. Very poor thought. It's just kind of random. And look, they're young companies, and they're being opportunistic, and I understand that. It's a little bit like, I don't know, if you know lawyers when they graduate from college, there's a joke. What kind of law do you practice? Door law. What's that? Whatever walks in the door that day, that's the law I'm practicing. So they're a little bit like door startups, like, look, these are customers that happen to be local. But then once you get going, it's like focus, because you know, right, so many startups die, because they're not focused, they're all over the place, they're scattered focus. And for that ideal customer profile, like you talked about, who is going to suck up this solution? Where do you fit insanely well with what they're doing? So you're not spending 18 months pounding down a door, but the doors open for you because you're well aligned from a value proposition. Yeah, I mean, if you put it on an X, Y axis, there's how easy it is to sell the person. And then there's how much value they get from it. Or you could do how easy it is to sell them and how much money do they spend. And if you've got a product where people are just lining up to use it like Slack or something, you don't really need to go top down and try to get IBM to buy 50,000 seats when you're starting. You just get startups to buy 5 to 50 seats. Absolutely. It's like Brex, right? How did Brex launch Brex and comes out of YC and goes back to YC and they do a lot of stuff with us, right? We're going to go back after startups. Our value proposition fits ridiculously well with a startup. That's what we're going to focus. Explain what Brex is. Oh, Brex is the really cool credit card that if you're a startup, and, and you don't have it, you don't want to sign a personal guarantee and get a credit card that gives you $5,000 worth of monthly spending or credit line. Brex is more focused that if you're a venture back, they'll look at how much money you have from your venture round, and they'll give you that basically that amount of credit. Plus they have a financial products. We have the CFO on dream it live actually, a month or two ago, great story. And they're your investors in them. No, no, no, no, no, we're not investors in Brex. You just know them really well, and they're part of when you come into Dreamit, you get a Brex, you know, preferred rates with Brex. Yeah, and they sponsored this pod, in fact. Oh, cool. Yeah, when we get back from this quick break, I want to know how much of the program is focused on the customers and the advice and the stuff we've talked about, and how much of it is based on fundraising and what your best practices are for your companies to close rounds when we get back on This Week in Startups. I got so much going on here. Obviously, the podcast is doing great. The Launch Accelerator is amazing. We've got over 100 graduates now in my fund. A ton of events. We just did Angel University for 250 people. Foundry University, we've done 15 or 20 times. So many projects, and my team members are so in the weeds, getting so much done. How do we surface and control and organize all this information, all the different projects we're doing? Well, we use something called Notion, N-O-T-I-O-N, Notion. And it is amazing. It's one tool that does many jobs. You can organize your notes, kind of like a wiki, or your docs, kind of like a word processor, as well as projects and workflows in one spot. And it lets you use all kinds of different free flowing objects. So you can have a list, you can have a table, you can have comments, you can have bullet lists. So what we did was we started a book club in the This Week in Startups Slack, you can join that this week in startups.com slash slack. And somebody who was in the Slack said, here's my notes on the first book we're doing. We're doing Robert Iger's book, The Ride of a Lifetime. So we did the first book club. And like 60, 70, 80 people showed up on the Zoom in Slack. And those are great for talking and chatting, but they both suck for taking notes. One of the members of the community made an outline of the book. And then two of my team members, Laura and Tracy and Presh, three of my team members, were contributing all of their thoughts on the book and taking what people were talking about and making an outline of notes of everything we learned from the book. And we did that beautifully. And you can see it here on the screen in Notion. So we had this incredible, flourishing conversation that would have went into the ether, the ether, but it got captured on Notion for all time. Then we took that experience that 60, 70 of us were having, and we shared it with 10,000 people. I'm not kidding. And now all those people are going to read Robert Iger's book. I guess by the way, all of this was done with notion. And it works so well for startups. It is a complete no brainer. It's your wiki. It's your managing projects, creating documents and taking notes all in the same place. So here's your call to action. Get started with notion. and they're going to give you 50% off their team plan for your first year by going to notion.com slash twist please i know you don't need to save money in a lot of cases but use that url so that they know you came from the pod notion n-o-t-i-o-n dot com slash twist i am addicted to this product. It is like one of the great products of all time. And I know this is an ad read. I know they're partners with the program. We were using this long before they decided to sponsor the podcast. It's kind of got that magical feeling like Uber or Wikipedia or slack or zoom had when you first use it. You get that tingle. We get that notion tingle notion.com slash twist 50% off their team plan for your first year. It's a great offer. It's a great it's not it's not a great product. It's a world changing product. I can say that. It's a game changing product. Alright, let's get back to this amazing episode. Okay, welcome back to this week in startups. We've got another 10 part special for you. It's called the power of accelerators. And this is our first episode in this series. With me is Steve Barr. She's a managing director at dream adventures. You can visit them at dreamit.com. They've got over 350 companies that have gone through their accelerator. They get a little bit of advisership fees and then the option to put $500,000 in your round. They focus on three verticals, security and healthcare and urban. And urban is a pretty wide one, but I think you guys understand what it is. You pick the nice easy ones, healthcare and construction. Wow. Right. Exactly. Simple little industries. Yeah, didn't want to go into the music business, huh? No. Journalism, interesting to you? Media? When we went to the commercial break, I wanted to know, I get what you're doing in terms of customers and helping them with how to think about their market and their go-to market strategy. Let's talk about the fundraising process. Obviously, we're taping this during the coronavirus, but let's put that aside and let's talk about in a normal market, maybe not as hot as we were in, maybe not as dry as we're in right now, but in a normal market. What are the best practices and how much of what you do is about the fundraising process or do you do such a good job on helping them build a great customer base and clients that it's just a formality of you just introducing people? Um, it's a great question. I think it's a third, third and a third. You know, the customer, customer sprints, getting in front of lots of customers face to face is very important, getting them ready for that. So they're fine tuned. The coaching, the mentoring is very intense, and it's a game changer for them. And we really changed the way they think about their business, and they talk about their business. And then the investor sprints and getting them ready for that process. I think it's about a it's a third, third and third all the way across. What gets them, and then was your question, what gets them ready for the investor sprint? What's that process like? Yeah, I'm curious what the process is like. Do all 10 companies come in and do two minutes each? Do they do 30 minute interviews with them and do you set up individual meetings? What's the actual tactical process of those fundraising tours? Sure. So let me walk you through that. So when companies come back from customer sprints and go home, we start getting them ready for the investor sprint. We know basically what we want to make sure they have in their investor deck, where they're going to get asked questions. We want to make sure it's really extremely well thought through because Reminder, these are all pre-series A companies, but they've got revenue. So the question, they're going to get down into the weeds of, well, what does your sales pipeline look like? How do you think about the pipeline? How are you growing the pipeline? But everything that's going to be in a deck that needs to be in there, we want to make sure that story is solid. There's no record scratches in it. It all holds together from that front slide to the back slide. And by the way, crescendos with a really great vision. We see so many startups that make the mistake of, I'm raising $2 million to get to a $3.5 million run rate. Okay, then what? So people like yourselves, other great investors, they don't want to be hitting singles. How are we going to build this into something really big? So it's one of the areas we focus on, by the way, that we see a lot of founders like, but what's the vision? How's the world change three to five years from now because you're in it? So we spend time on that. So then getting them ready for the investor sprint, we start reaching out to all the investors we know, which is a couple thousand on both coasts of the United States. We email them and say, these are the one-pagers, these are the companies that are getting ready to come. Who do you want to meet with? You pick who's interesting to you. So that curation saves a lot of time for everybody. Typical Dreamit startup will have 15 to 18 one-on-one meetings on the East Coast and the West Coast. So all of that's getting curated. The investors pick who they want to meet with. Startups are going into their offices. They get usually 30-minute meetings. We always tell startups, look, your job in that 30-minute meeting, there's one thing you want to do is stay away from no. You're not trying to close the deal. You're trying to whet their appetite and say, this is interesting. I want to find out more. Those startups are very tuned to the point right before they go on investor sprints, we do something called mock VC interviews. and we have friends of ours that are VCs, we do it, and we start beating the crap out of them. And it's like a real VC meeting. We actually say, turn off your deck. I wanna talk to you. I don't give a shit about your deck. I invest in people, not decks. Why are you doing this? And we'll distract them and do all kinds of all the nasty tactics we can think that as entrepreneurs we've been through and really get them ready for that experience. Then the process is curated. They go out for two weeks. High watermark for a Dreamit company, they'll have 30 to 35 VC meetings, individual meetings in a two week period, average 15 to 18. That's what their process looks like. Our definition of success, our KPI of what we're looking for at that stage of going through Dreamit, is what percentage of companies raise around within six months of getting out of Dreamit. And roughly that hovers around 50%, about half raise within six months of getting out of Dreamit, and then we're looking to write a check as part of it. And I'm sure out of the ones that raise or don't raise some number of them, maybe don't want to raise at that point in time, they want to go back to work and raise at a higher valuation, where they haven't dialed it into the point at which, you know, VCs are going to be truly interested, correct? Sure, absolutely. And as a matter of fact, it's interesting you brought that up. Let me unpack that a little bit. About a year and a half ago, two years ago, we actually unbundled Dreamit. We'd have companies that are like, I want to come into Dreamit. We actually have a lot of companies that come from seed stage firms. They write a check for a million dollars and say, go to Dreamit so they can go do all that heavy lifting. Let them get for you in front of customers. And then we get all the metrics and and investment rights that work for us and it makes sense. So they'll come in, they just close their seed round a month before they got into Dreamit. They don't need to go on an investor sprint 14 weeks from now, it's a waste of time. So they can actually unbundle that and do the investor sprint in the next cycle. Or they can come in and just do half a customer sprints and say, I don't really need customers, I'm fine on revenue, I need more help on investors. So they can actually unbundle Dreamit. We don't want them like, get on the bus, it's leaving. They can modify Dreamit so it works best for them. And our platform and platform team is actually set up for that. When a founder is considering going to an accelerator, what's the best way for them to judge how good that accelerator is? It's a great question. Talk to founders that have been through it. It's just like, you know, if I want to find out what's, you know, what's Jason like as an investor? You need to talk to previous companies. Talk to previous companies that have been successful. Talk to previous companies maybe that haven't been successful. I've done that for VCs that have invested in startups that I've run. It's the best way. And when you're like a Dreamit and some other great accelerators, there's a lot of companies that have gone before you. It's like if I'm touring a university and my son's going to college or our daughter's going to college and you want to find out what the school's really like, talk to some students there that have been through that process. So that's, I think, the best way is to find out. Talk to people that have actually been through it. What are the top three things that somebody can tell you in an interview for your accelerator that make you a heck yes? I'm working on a really big, urgent problem, and here's the evidence I have. Here's all the customers I've either been selling to, talking to, but you have evidence. You know, it's like, don't bullshit a bullshitter. Don't sit there and come in with fake crap. So, you know, it's a really big, urgent problem. And I think like Brad Feld talks about, that's where I learned it from years ago. It's the first time I heard it, I don't know about you. You know, it's a little bit like in that problem area, are you selling vitamins, aspirin, antibiotics? It's an antibiotic. It's a really big, urgent problem. The thing, I don't know if you've ever heard this, Jason, we use sometimes, it's like, you know when you go to the dentist and they tap on your tooth? Jason, is it this tooth? No. Is it this? No. This. Oh, oh, that's the one. We're looking for companies that solve a really big pain point and it's clear. We're looking for a company that has a solution that's based on a really interesting, unique insight. And then finally, the other thing is we wanna understand that you understand the competitive landscape, what makes you unique, what makes you different. We wanna make sure you have a really good understanding. If those three things, those are probably the top three things that we're looking for. Should a company go to multiple accelerators and under what circumstances should they? You know, I think so. You don't wanna do it too many times. And the way I look at it, by the way, if you think about an accelerator from Dreamit, and again, we think of ourselves more as a venture capital firm these days with a pre-investment program. It's a little bit like I go to undergraduate school and then I go to grad school. And Dreamit's like a grad school for startups. We have a lot of companies, let's say, I don't know, 20, 30% have been through an accelerator before Dreamit. That's fine. You want to be careful. You don't want to, if you're signing all these notes again and again and again, are you making any real progress? And there's a lot of like accelerators that are just not very good and they don't add a lot of value, but they take something from the startup. Um, so I think it's okay. We see a number of startups that have gone through dream it. They're like, this is easy for the minor amount of advisor equity. And we get an invest, we give an investment, right? This is like a biz dev function for us. It's like, holy shit, you guys are gonna get us in front of 20 potential customers over a 14 week process. It saves us six to 12 months. So I think in that case, if you have a group like ours, a team like ours that can put you in front of decision makers and important customers, and a lot of them, it's a great thing to do. And I don't think it's okay to do more than one. And who shouldn't go to an accelerator? Who shouldn't go to dream and obviously, outside of people who are not in the verticals, but when is it not a fit to go even go to an accelerator, or to your specifically? So let me, it's a great question. Let me ask you a question, Jason. Jason, do you have any side hustles, which really aren't a scalable business, but you just kind of do something? It's monetary, you're making some money, but it's just a side thing. Hold on, the podcasting team all of a sudden says, wait a second. Nick's like, job security, right? It's a side hustle that is done well. It's a side hustle. You know, I have a couple side hustles. They don't deserve to go through Dreamit. Look, if you want to have a pizza shop, if you want to have an auto body mechanic, if you want to do something that it's going to, you know, it's look, if I make a half a million to a million dollars a year, and there's seven people working here, and I'm happy, I'm fine. I don't need all the aggravation. I don't need investors. Don't go to Dreamit. Like Dreamit and brethren like Dreamit companies and teams that do what we do. They're for companies that really want to scale. So if you want to scale something, go into a dream it, you know, if you don't, you know, why go get a PhD if you that type of thing, right? So if it's for companies that want to scale, and I have a couple side little things that I do on the side, they're not scalable, it doesn't make sense. There's no need to And when you put in the 500,000 in that case, what is your follow-on philosophy? You said you're like a venture firm. A lot of venture firms are really into following on and doubling down on the breakout winners. Do you follow on after that 500k check? Absolutely, there's a reserve right again for that same amount. Oh, absolutely, we want to follow on. So that's the intent. And we have ratios of what our expectation for follow on, but there's a reserve that we put in place for that for those companies based on certain ratios that we do want to follow on. Absolutely. So you assume that we can one out of four or five, you're going to follow on with something in that range? I don't know the ratio, so another managing partner dream, it runs more on the fun side. I'm on the whole kind of front end. I don't remember the ratio off the top of my head, but it's a lot. It's designed for a lot that we do that follow on. Yeah, it's the way we think about it. And how do you think about companies that are struggling and need a bridge and saying no to those companies, because you're not really designed to be bridge funding, I assume. Sure. No, we're not designed to be bridge funding. We will participate in a bridge, but it's something, you know, I was in EIR a long time ago with Josh Koppelman at First Round Capital and just learned so much. And I remember the expression there, it's a bridge to where? Like where's it, is it a bridge or is it a dock? And I'm gonna just walk out and I walk off and I'm in the water. So it's really understanding where's it getting to you? Why do you need a bridge? What are the fundable milestones? What magically is gonna happen when you get to the other side of that bridge? So we'll participate in a bridge if it makes sense. If the business isn't working and it's a bridge to nowhere, it's not as interesting. And at the end of the day, look, you know, when we have companies come into Dreamit and we talk to our managing directors that run the different verticals all the time, So you realize you're getting married to these companies. And I, the number of times, and I'm sure like you, especially when the times are tough, we're talking to our startups all the time. Text messages from founders at 11 o'clock at night, one in the morning, you know, my CTO just quit and we're getting on the phone. We're there to help. We're all entrepreneurs. We want to get in it to win with them. And we enjoy that. We're not just, you know, I've met some VCs, you know, they have an MBA from Harvard and they never ran a company. We love to build companies. It's our passion. We want to drive them to success. So we will participate in bridges when it makes sense. And we're always there to advise and guide and really brainstorm and soundboard through difficult issues and challenges. When you look at downstream investors, what are the top two or three firms that you want your founders to get meetings with and to hopefully close an investment from? What do you think has the biggest impact downstream for you? I think they get in front of some of the... the most prominent investors you can think of. But again, we're in these verticals. So if it's urban tech, it's Fifth Wall Ventures. If it's health tech, it might be HealthX, which is you'd think, who's HealthX? But they're a great firm in Madison, Wisconsin, terrific. As a matter of fact, we have a lot of HealthX companies that come into Dreamit. They write a check and they come into Dreamit. And sometimes it's the other way around. So it really varies by vertical. Sometimes it's the big brand name investors, whether they're gonna meet with an Andreessen Horowitz or Sequoia. they're going to meet with them. But a lot of ours are very, very, you know, they're specialized verticals and health tech isn't for everyone. So maybe it's a four or six ventures out of Boston or that type of firm. So so there's the concept being there's a the if you're specializing these verticals, you know, specific downstream investors who are also in those verticals. And you've sent them three, four or five companies in the last year already. So they know the quality that you're bringing. And it gets back to my point about the role accelerators play in anointing and picking winners. And by the way, and they're sending us companies, it goes both ways. They've written a check and send it or they're like, you know, they're not ready for their Series A. But you should go back into Dreamit and come back after you've been through that process. After you, as I wrap up here, after you go through those, like, say, 20 customer meetings, what's the chances you actually land one of those in the next year, or two or three of them even? Does that happen? It's a great question. Yeah, it absolutely does. It actually happens in the meeting sometimes, not all the time. We've actually, and it's a little bit like when you go fishing, you go fishing for one type. We've had once or twice in the last year where people are on customer sprints and they turn out to be investors. They're like, wait, wait, wait, we weren't looking for money. So it varies. Look, the number one thing, we talk to Dreamit startups all the time. When you go on customer sprints, don't sell. Talk about how you want to partner because they don't want to be sold to, if they feel like a piece of meat when they're in there, they're not doing it for that reason. So a lot of times they're looking for proofs of concepts and trials and to move forward. That's the ask. They have a very clear ask. Like, can we do a POC? Can we do a trial? How do we get this to the next stage? I'd say most companies come out of Dreamit with maybe one POC-ish, but what we hear time and time again is, we're accelerating the process. You got us in front of 20 decision makers over the last 14 weeks, and you have accelerated our pipeline by six to 12 months. And oh, by the way, the CISO of American Express, BNY Mellon, and JP Morgan, that's one day of Dreamit when we're in New York City. They'll meet with those three chief information security officers in one day. It's like I couldn't have gotten a meeting with any of them and in the next four months, they won't even return my calls. So it accelerates that overall business development process. So there's something about an investor saying, hey, I want you to meet with our latest investments that is easier than a random company, because there's so many random companies coming in the front door. It's your anointing, right? They're anointed, dream it, in these verticals. And those customer sprint partners, they don't pay us anything, by the way. There's no money changing hands between us and our customer sprint partners. I don't know if I can use the term anymore. It's a quid pro quo, right? We get our companies in front of great people, and then our companies get a chance to grow. So we don't charge for that, because it's like bullshit to us. It's so valuable for our companies. Tell me, which other accelerators do you take notes from and think highly of as we wrap up here? I think highly of YC, think highly of Techstars. Those are the ones. Sometimes startup health, a little bit in the health side. Those are the two that I think about. I like to see what they're doing, and I think they do, and I think particularly YC does really interesting, great work. I think it's interesting some of their later stage companies they work with, and I like what they're doing in biotech and health, and they do, we overlap in a lot of areas. So I think those are the two. The others, like I said to you, I find, you know, you see most accelerators around the world, and I'm sure you have too, you have visited, and launch, by the way, will be in the area. What you guys do is absolutely awesome. Yeah, no, no, what you do is really, really awesome. But it wasn't, but I know you weren't, but you know what the hell you're doing, right? You see somebody's accelerators, and the person who's running it has their MBA, is a year out of school, and they're advising startups on how to build and grind it out. What the hell do they know? Nothing. There's very few. I think most of it's tourism, like you call it tourism, right? It's entrepreneurial tourism. Having a bunch of startups in a cool space and it looks all startup-y and you do fun things and you serve some alcohol and some dinners and have some great speakers, you're not adding any value. You're just kind of sliding around over the place.

### Human: You were successful. And I'm successful. And I'm wondering, are you happy?### Assistant: Okay, now I'm just gonna play it again, and I'm gonna play it at a lower volume here while I talk over it. It does sound a little robotic on the margins, you can hear that tinny-ness. But boy, if are you I saw this in a actual trailer. And I did watch this trailer actually, and I didn't pick this up. But and that is means it crossed the uncanny valley other moments of uncanny valley that may have not crossed for you. Scorsese did the Irishman and they and they made everybody look younger. That was clearly did not cross the valley for me. But Luke Skywalker in the Mandalorian spoiler alert, Luke Skywalker shows up in Return of the Jedi kind of format post Return of the Jedi. I bought it. Maybe I wanted to buy it. And so that's part of this. But here we go. We're now at a point where a dead person could be in a film or a younger version of a person. And just closing the loop on this great article that found this nugget. So congratulations to the to the reporter, who actually figured out that this, you know, asked a really good question, like, where did you get these clips? If you watch the film, other than that line, you mentioned, you probably don't know what the other lines are that were spoken by the AI and you're not going to know, Neville says. we can have a documentary ethics panel about it later. And that's one of the things about documentary films, because they are, you know, an interpretation by a filmmaker of a subject, they have very loose rules. That's why you'll see, you know, in a narrative film based on a true story, kind of gives them a little bit of ability to wiggle around is this actually this actually happened to these conversations happy happen. Anyway, I I think this is amazing. I think Bourdain would love the fact that, you know, they did this and you could actually hear his voice savings and it had more resonance. Of course, you could use this in a cheesy way. And you could do it in a disrespectful way. But this is the world, right? And I I think about all the wonderful possibilities here. Heath Ledger, tragically died early of an overdose taking five or six different pills was really tragic. I don't do that stuff, kids. Like literally, the doctors may give you 10 types of pills that you're not required to take them. Certainly don't take them, you know, in a cocktail. But it would have been amazing to see Heath Ledger's Joker again. Now, is it disrespectful? Or is it an homage? Or is it honorable to bring him back? I think it's honorable to bring him back. And I would love to see Philip Seymour Hoffman, you know, do a comedic role again. I mean, talk about a tragedy, again, another overdose, just this artist overdosing is just so tragic. But you know, you remember Along Came Polly, the amazing Ben Stiller film. And he a lot of people say that I play basketball like him and the rain dance scenes amazing Maybe we can drop one into the YouTube video here without getting in copyright Trouble put in a little box and tilt it and zoom in on it and we'll probably get past the YouTube sensors But wouldn't it be amazing to see him do a spin out of that film? I think they were always thinking about having that child actor do another film And just putting it out there If somebody out there is an AI specialist, and they think that this is as intriguing as I think it is, I would love to back a music startup. I'm just thinking about music right now. I would love to back a music startup where I could say, I want to hear Mark Knopfler of Dire Straits cover. Wish You Were Here by Pink Floyd, I would like to hear Pink Floyd and Roger waters cover this Dylan track, tangled up in blue. This could be an amazing unlock for creativity, to be able an art to be able to do mashups. Now, some people might consider this sacrilegious or, you know, against some human purity test. But the way I look at it is we created the AI, we should get to benefit from it. And what an amazing startup that would be, if we could take people's voices and artwork and ip and reinterpret them even if it was a tool i mean if you came out with a tool that allowed somebody to put in a bunch of videos are a bunch of audio and then let the user you know take ownership of exporting that i pay that would take you out of the ip business. Or you could be in the IP business and create this technology, and then go to an estate and say, Hey, Elvis Presley estate, we would like to make these 10 tracks of the Elvis AI singing these 10 songs. Would that be interesting to you? Of course, you can have an impression is do it. But there's something about the AI being able to do this methodically and get better and better at it. And the revenue potential is obviously extraordinary. And you know, you see a little mini version of this in ways, which is not using AI, they're having somebody record 1000 words, and then stitching them together. That's why when you have ways, and you know, somebody, some character, like Cookie Monster, we have Cookie Monster on ours, the kids love it. When Cookie Monster says, make a left turn, you're approaching a railroad track, you know, everybody laughs. But that's somebody actually recording it. It's not AI. So we live in the future. And I love it. So give me some startup ideas, people. I got checks. I got money sitting here. I want to invest in some crazy. Let's go. over the past few years, everybody's been talking about no code. And one of the first no code apps was bubble. You've heard of bubble bubble empowers people to design and launch their own apps, marketplaces or tools without ever needing coding skills or pricey engineers bubble offers a digital editor and cloud hosting platform for as little as $29 a month users can build pretty much any complex web app from marketplaces to social networks to SAS and more. So why is bubble so great for founders? Because you can spend 10 times less on building out your MVP, your minimum viable product. I have so many people come to me and say, Hey, J Cal, give me money. I want to build this. And I'm like, have you built an MVP? And they're like, no, I don't have a developer. I'm like, well, use bubble, use no code. drag and drop elements in their visual editor, and you can quickly and easily build a powerful app. You can go from idea to a launchable product in a matter of days or weeks, not months or quarters or even years. And they handle all the annoying stuff like the deployment and hosting of your app. So you can focus on your product and your customers. Bubble has over 1 million users worldwide and they enable over 1 billion in business volume. Bubble is offering one month rate on any of their paid plans, ranging from their personal plan of $29 a month all the way to their production plan of $529 a month, but act fast because they're only offering this deal to the first 500 redemptions. Again, head to bubble.io slash twist, bubble.io slash twist, and snag one of those 500 coupons for your first month free. back to our never ending obsession with fraud, or I should say mine, I am obsessed with business frauds, Theranos, Madoff, perhaps Nikola, perhaps tether, you know, or people doing things that are not on the up and up. Well, there's a company called Lordstown Motors that might be a fraud. And it could be going to zero I'm using I know how to use the words now, as having done over 1000 different podcasts. I know how to frame this without getting myself in trouble. But just this morning, CNBC has reported that Lordstown Motors another pre revenue EV SPAC. Okay, so it's pre revenue. That's one thing. It's in a really hard space, electric vehicles, and it's a SPAC a way to get public quicker, maybe with less scrutiny, not in all cases, but you do have to buyer beware when you're looking at this category of companies going public, they tend to be early. They confirmed they're being investigated by the DOJ for its reporting of pre orders. Oh, like it's one thing to not even have customers but then to lie about pre orders. Oh, this is really gnarly. So two weeks ago, the Wall Street Journal reported the DOJ was inquiring with Lordstown, which CNBC confirmed. Okay, so we got real journalistic outlets, Wall Street Journal, CNBC confirming that the DOJ is looking now, they're inquiring that doesn't mean they're guilty, right? Just because somebody is looking into something doesn't mean that there is a crime. It just means there's a suspicion and there's enough of suspicion that the DOJ would take it seriously. And they have a large list of things they could look into. And they've chosen to look into this one major red flag. Lordstown Motors said in a filing on Thursday that it had received two subpoenas from the SEC for the production of documents and information including relating to the merger between Diamond Peak and legacy Lordstown and pre orders of vehicles. And we have been informed by the US Attorney's Office for the Southern District of New York that it is investigating this matter. And we hear about the Southern District of New York all the time. That's where Rudy Giuliani started his career before going absolutely bonkers. That's where Preet Bharara from the great cafe insider go to cafe comm and subscribe to his amazing podcast or stay tuned with Preet, which is a free one. Anyway, if the Southern District of New York is involved, that is a major red flag. they are serious, and they are known for having a very independent streak to them. So before we break down Lord's town, I want to remember Jason's law, Jason's law is something I came up with. And I codified it, I think in September of 2020. I've been talking about it for years. But this is my I called it originally my Theranos rule. If a startup becomes worth 1 billion before they launch their product, they are either going to fail or be complete fraud examples punch up let's workshop this. And I did in fact, punch it up in December 20. Remember Jason's law, if you invest in a company without a launch product and over a bill at over a billion dollar valuation, you will lose all your money, and it might turn out to be a fraud. So I've been workshopping this concept. Nikola ticker symbol NKLA is a private company as a private company, I said in this tweet would be worth about $100 million max. So I expected in this tweet to lose 95%. We had Trevor Milton on the pod episode number 1090. It is a classic episode, it will be one of the 10 best episodes of my career. Because my god, this person was delusional. And I think that was like, peak Trevor, and it all came apart shortly thereafter. So in March 2021, I made my third version of Jason's rule, if a private company reaches a $1 billion valuation before it launches a product, or has customers, it's probably going to fail. And it might actually be a fraud. So be careful retail investors, when you buy Fisker or Nikola, you're taking a big risk. And so the reason I refine this is, it's very rare for a private company to reach a billion dollar valuation before it launches a product or has customers. And I put that caveat in there, because you could have people pre ordering things like Virgin Galactic, which had a very successful launch this past weekend, congratulations to Richard Branson. And when you think about that, they did have a think 600 pre orders of 200k those people actually paid money. Or you have people pre ordering cars now whether it's Tesla or Ford. So I could see a situation in where which people pre order and give their money that those are not letters of intent. So keep that in mind. But It seems like I'm now reminding people of Jason's law every three to four months. So consider this your three to four month quarterly reminder and some very important things to keep in mind about these red flags that we just covered valuations that don't make logical sense. What would this company's valuation be? Let's take a SPAC in company be in the private market. Well, sometimes, you know, because it's been a private market valuation. In other words, Airbnb, before they went public had this private market valuation, now they're going public. Now, that's a company Airbnb, that we all have rented Airbnbs, or we know somebody, so they have a product in market and tons of customers and tons of revenue. So they don't fall under Jason's law. But as an example, you know, the the previous valuation, Nicola peaked at around $34 billion in June of 2020, with no revenue, and basically close to no product as far as anybody can tell. And I mentioned that as a private company, ventures investors would have probably invested at them around 100 million max, you put in 20 million, you get 20% of the company. that seems, you know, like a rich valuation, but you know, it's reasonable for a hardware company like that, that's capital intensive. But But that's a 340 x multiple from my valuation. And I am an expert on this. This is what I do for a living for 10 years, I've invested in over 300 early stage private market companies, I know what I'm talking about. And so now they're trading at around 5.5 billion, which is about 50 times too high. And so once again, If you can't see who's holding the bag, check your hands, it's probably you. So the people who bought Nikola at 34 billion thinking, Oh, well, this is a fraction of the valuation of Apple or Tesla or Amazon, you're literally comparing the most successful companies in the history of humanity against, you know, some deep bleep, the second half of that word, please get some dip, who's never accomplished anything in their life. be careful out there. And what are the insiders doing? This is another thing you have to look at are have they exited or are they cashing out? Most of the time the people who are running the best companies have inside information that leads them to not want to sell it. And 100% of the time the people running a company have inside information like literally in their brains are their plans and their hopes and fears and their assessment of is this a good stock to own? If those insiders are cashing out, it's a red flag. Now, if they're cashing out modestly, that can be reasonable if it's a person's first company, if they have to pay their taxes, because they got awarded some stock, there are some valid reasons that an executive has to sell some shares. But Trevor Milton sold like $70 million in shares before they went public or right as they were going public. And he tried to explain it on the podcast, and it made no sense. That's a big number 70 million if he sold 7 million you think okay, you sold 7 million, he's gonna buy a house, you pay your taxes, you got 4 million left, depending on what state you live in 5 million. You can buy a house for that, you know, for a CEO to buy a $4 million house, you know, they're not buying a $60 million jet or a $30 million jet and three houses. So that was a major red flag. Today, many small business owners are busier than ever, and because they're focused on managing and growing their businesses, they can't spend the time they need to on recruiting, and that's why LinkedIn Jobs has made it easier to find and hire the best candidates for free. We have had such a great experience finding two more producers for this week in startups, researchers to sort through all the deal flow I get, and it has been amazing. It's a great place for you to look for a job, and it's an even better place for you to post a job. So many talented people are sitting there, waiting to hear about your career options for them. And we use targeted screening questions to get our roles in front of the most qualified candidates with the experience, skills, and motivation we need. 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Remember sound familiar Nicola badger. Literally Trevor talked about his competing car to the cyber truck. It does make sense why people are very excited about this category. In fairness, the best selling vehicles in the United States were trucks 2020 data from car and driver. Number one Ford F Series 787,000 units sold the Chevy Silverado 586,000 units sold and Ram pickup 563,000 units sold. So those top three are selling close to 2 million. Just the top three pickup trucks. This is a big prize trucks are also the most profitable products in automakers lines. That's why so many startups are going after this. That's why Elon did the cyber truck. He knows if you're going to have a lineup of cars, that is a great one to have. there's a lot of people who love to use trucks both for work and for pleasure and as their personal vehicles. So much so that Ford who has the F one series didn't decide to take this sitting down, they unveiled their EV truck, the F 150 lightning they've got 100,000 pre orders. Cybertruck reportedly has a million reservations. And back in September 2020, Elon said they were well over a half million. So that number is probably correct that 1 million is according to a crowdsource tracker. And so I think it makes sense. So you look at this, you have Ford, who is the number one player, they've already got 100,000 1000 pre orders. And that has a 300 mile range, it's got tons of outlets, I mean, electric pickup trucks are going to be the dominant pickup trucks, it doesn't matter, you can say people are rednecks, or they're dumb, or they're laggards, when they see the performance that an EV can do, and they can start plugging in their tools and charging their drills and taking it on the road. And, you know, having a giant electrical source, it's like bringing a power plant with you into the woods or onto your site, you don't need to bring a generator with you anymore. That's going to be, I think, one of the most exciting things about this people who are doing work or, you know, taking their boats out, they're going to love these electric versions, Lordstown q1 revenue 2020 was zero. their net loss was 125 million, their market cap peaked around 5 billion in September 2020. They're now at 1.5 billion after the DOJ news, I would think this is going to zero or be sold for scrap. I could see the 5 billion going down to 50 million in scrap. In other words, you lose, you know, 90 99% of your value as an investor. And I think the equity holders could get wiped out completely because there could be debt and lawsuits, etc. They were founded in 2018 by somebody named Steve Burns, who was the former CEO of an electric vehicle manufacturing company workhorse group that I've never heard of. In November of 2019, Lordstown became the owner of a former GM plant in Lordstown, Ohio. After signing a sales agreement with the automaker, a lot of these automakers have done this. In fact, Elon's Fremont, I think was a former Toyota plant. So these plants trade hands, just like stadiums do or buildings do GM loaned Lordstown Motors 40 million in order to underwrite a substantial part of the plant purchase. So that already is a red flag. Okay, so GM wants to get this plant off their books, and they give this new company $40 million in order to do it or underwrites alone to do it. Major red flag feels like self dealing doesn't mean GM's in the wrong, but it doesn't come from a position of strength. And in total, GM invested about 75 million into Lordstown Motors and joined its board. So those would be to somebody watching the SPAC go public somebody thinking about buying into it. Oh, GM's involved. Well, are they really involved? And what is 75 million if they're taking this plan off their hands, you net out the 40 million? Okay, there's another 35 million sitting there. What exactly is going on here? Well, in March of 2020, according to the Ohio Business Journal Daily, We always like to give credit to the journalists who we mentioned here and who give us the data with these new stories that I do the analysis on. In March 2020, Lordstown Motors paid workhorse group $12 million for the licensing rights to the intellectual property of the workhorse w 15 pickup truck Wait a second. So the CEO's new company bought the rights from the old company. Okay, that's self dealing. It's weird. It's only for 12 million. Maybe you could explain it away or maybe it's a red flag, right? So these things start to pile up. It kind of reminds me of what we saw with WeWork and the self dealing there. Remember, Adam Newman was buying buildings and then leasing them back to WeWork or he claimed he owned the WeWork IP and domain name or the brand and he was leasing it back to the company. People who do this kind of self dealing are typically not visionary people. They're nickel and diming people who are trying to hustle other people. It is really, really bad form to do this. I bought mahalo.com inside calm on my own. And I sold them to the company that I run for the cost basis I bought them for. even though I bought them low, I think I bought inside calm for $60,000. That's a million dollar domain, I could have tried to sell it to my own company. And then my shareholders would be like, Oh, you profited from that? Why would I want to deal with that? Why would I want to deal with that? What you see is the opposite with baller CEOs with vision. They do what I do like an inside calm, I think I take a $1 a year salary, I haven't taken a salary in six years. I don't need the money from the salary. I'm trying to build a company and have it hit 10 million in revenue. And we're 30% of the way there. So we're getting there. Remember, workhorse group CEO was Steve Burns, and that's his previous company. So this is self dealing. And yeah, you know, you could sit it out. But anytime you have to explain yourself, and things go wrong, that's when there's a problem. Now, if we work went public and became worth $100 billion, know, the the Adam Neumann behavior would have been like, Okay, that was weird. But we all made money. So it's forgivable, right? So keep that in mind. When you do something that has the appearance of impropriety, like sometimes a founder will want to give themselves more shares in their own company. Well, if everybody makes a ton of money, it didn't feel that bad that the founder awarded themselves 5% more of the company and the board approved it because we all got rich. But if the company gets sold, and the founder gave themselves 50% more of the company or whatever it is, that's when you start to have problems. So be very careful as leaders out there who are listening. The appearance of impropriety is impropriety. That's what I learned early early in my career from Dave Johnson, who was my first boss at Sony Music. He was the general counsel, a great boss. And so as part of the business deal, workhorse group was given 10% equity stake in Lordstown. So then the Steve Burns still own Lordstown. I mean, it just becomes so much self dealing that you have to wonder what are these people thinking in August of 2020, Lordstown announced they were merging with the SPAC diamond peak holdings, their shares peaked at $29 to share a $5 billion market cap they officially listed as dollar sign ride. That's a great ticker symbol in October 2020. Fast forward to March 2021 short sellers Hindenburg research Hindenburg research the same people who covered Nicola. These are very serious. It's a small firm. I talked to the guy on the phone once I don't know much about them. But I can tell you when they get their hooks into something, you know, meat is on the menu. Like this. These guys know how to chum the water. These are the big these are the big sharks. They may be a small firm, but Man, they take a big bite out of companies when they release a report and they released a report the Lordstown Motors Mirage fake orders undisclosed production hurdles and a prototype Inferno. In the report, they claim that Lordstown had misled investors on both its demand and production capabilities. The company has consistently pointed to its book of 100,000 pre orders as proof of deep demand for its proposed EV truck. Our conversations with former employees, business partners and an extensive document review show the company's orders are largely fictitious, and used as a prop to raise capital and confer legitimacy. let that sink in. For example, I'm quoting again from the Hindenburg report, Lordstown recently announced a 14,000 truck deal from e squared energy supposedly representing 735 million in sales. e squared is based out of a small residential apartment in Texas that does not operate a vehicle fleet. What? I mean, literally, sometimes journalists just write these stories, and they never knock on the door or they never look into the company. And then somebody like Hindenburg research, even though they have the term research, they're actually investors. And I think in this case, they're shorting the company. Therefore, man, if they find any kind of fraud, they're going to put it out there. Now, there is a debate to be had here about using the technique of fear, uncertainty and doubt FUD to try to make a company lose value and short it. And sometimes it's legit, that you're actually finding fraud. And sometimes you're spreading fear and uncertainty and doubt. Ultimately, you as a retail investor, which I think a lot of us are here, we own shares in companies, some of us play the market, some of us buy long, some of us like to trade daily. you really need to look at the totality of what's happening and what milestones are completed. Because these are private companies, essentially, that are now going public. Well, what do I do to avoid this as a private company investor, I will look at the company, and I do diligence, and I look at the original contracts, and I talked to the customers. In this case, if I was doing my diligence on this company, we would say show us the contract with e squared. And Who signed the order show? Okay, whose signatures on the order? Great. Well, we'll talk to that customer and ask them, why did you order 14 instead of 140? Or 4000? Why 14,000? That simple question is going to get a really telling answer. And if you can't get that person on the phone, well, then you don't do the investment. So and this is what I tell my team when we do diligence, if the if the company takes a long time to get us the diligence and there are 345 red flags and they can't explain them quickly. boy, we're probably going to pass on that deal. So for people who are in a private company who are raising money, keep your diligence tight, never ever exaggerate. I talked about this in my book angel, where a company told me they had Facebook and Google as customers. And when we asked to see the contracts, they told us they had an oral agreement when I asked them to who the people were that they had the oral agreement with they said the person at Google they had to deal with, they met at a party and they don't remember their name. And I was like, Okay, you're committing securities fraud, you're literally telling us that certain things are true, getting us to buy shares, the SEC takes this seriously. In business, it's important to be memorable and sending gifts is a classy way to create that great memory. But gifting is tough, it can take forever, or you can send to the wrong location. And people never get it. It's never been scaled properly until now. SnackMagic is a stress-free, easy, and customizable way to delight employees or customers. SnackMagic uses software to help recipients build their own snack box. Giftees can choose from over 500 snacks and beverages, including diet and allergy-friendly options. All you need is the recipient's email. 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So basic diligence, the public who's buying, you know, $10,000 or $100,000 in shares in the company, or maybe, you know, a Robin Hood trader or somebody on a trade buying $1,000 as a flyer, they're certainly not going to take the time to do this kind of diligence. But here we go, Hindenburg does basic diligence. letters of intent and pipeline are words that people who don't have real businesses use. Let me say it again, letters of intent and pipeline are complete and utter when I am talking to a company or I invest in a company, and then they start putting in their board decks, or when they're raising money, their pipeline, I'm like, Okay, enough with the pipeline. I get it. There's a pipeline report. It's great internally to know. These are the 100 advertisers who might advertise on this week and startups. I don't care. I care about the signed contracts. I don't care about the pipeline. Oh, the pipelines growing. Great. nine times out of 10 pipeline, and people who are focused on that metric are people who can't close sales. I know people disagree with me on this issue, but get focused on actual real customers. The Hindenburg report also led to the SEC requesting information from Lordstown Motors regarding the short sales claims of misleading investors. So a great way to think about what Hindenburg does is the anti deal memo, here's why you shouldn't invest. And, you know, it's different than my business, which is, here's what could go right. This is like, you know, really, really great filter. And it's great that people like Hindenburg are out there. Now, we have other examples where people were spreading fear and uncertainty and doubt about maybe AMC, or GameStop, or even the Tesla Q movement, where you know you had one set of reality which is people taking deliveries of the model three or buying plaid and people using self driving and have this tesla q group saying. that, you know, there's all these Tesla's in remember all those drone videos of Tesla's in parking lots, and they're like, Oh my god, Tesla's has no sales. And then you go to the mall, and you see everybody parking Tesla's everywhere. And you're like, Wait a second, you just need to go on Twitter and say, I got my Tesla today and see all the people who are sharing their new Tesla, or go to the pickup line at school and see all the Model X's. I mean, it's crazy. So when you see the product in the real world, that's when I tend to think, you know, the the chances of it being a fraud are kind of gone if people are using the product. And I think this actually happened with a bunch of fear and certainty and doubt about a multi level marketing company called Herbalife. And you had two giant headphones. It's a really sordid story. But you should do a Google search on the Herbalife back and forth because it might have been a smarmy business. I hate that multi level marketing nonsense. but there were people who were selling and buying herbal life and so you could say i don't like that business and it's feel scammy or smarmy whatever the worst interpretation is of it there were people who had Herbalife vitamins on their shelves who were taking them. And there were there were orders being placed. So there's a range of what could happen here. And I think the true north is always the customers. Later in June, an independent investigation commission by the board found that pre order agreements were overstated in number and in seriousness in order to generate press. There it is. The board figured this out in June 2021. Both the CEO Steve Burns and CFO Julio Rodriguez resigned from their positions. This is sketchy stuff, folks. And these people could be going to jail. And every time we have a boom cycle, you have the world comms, the end runs the made offs. That's when these type of scams manifest themselves is in a boom market when people stop doing diligence and people get greedy because i got a lot of poker chips you ever see somebody, you know run the poker table or they're doing incredible blackjack and they just got tons of chips everywhere and then their play gets a little lucy goosey and maybe they start drinking and they feel invincible. that's kind of the market we're in right now people are starting to feel a bit invincible. And they're starting to splashy cashy just make bets without doing their own research buyer beware. And if you just compare that to Nicola both the founders left the company after the SPAC you had Trevor cashing out 70 million there's no word if Steve Burns has cashed out But at least two exec cashed out millions before reporting that disappointing q1 earnings. According to the Wall Street Journal, the head of Lordstown's propulsion unit sold 99.3% of his vested shares for more than 2.5 million. It's a small amount of money, but the percentage is meaningful. And Lordstown's President Rich Schmidt sold 39% of his vested shares over a two day period to pocket 4.6 million both exaggerated claims of pre orders as revenue both were producing an EV pickup truck and Cybertruck competitor. So our Nicola and Lordstown both frauds. This is sketchy stuff. And I would advise anybody who's a shareholder to get out now and not be the bag holder and put your money into Disney, Tesla, Uber, which I own shares in Robin Hood, which I own shares is going public. Airbnb, Microsoft, Google, Facebook, anybody, Amazon with a real product in the world that you use and love. If you use and love the product, man, how can you go wrong? Having a fraud like this? It's I'm trying to think of a situation in which I loved a product or service. And owning the shares resulted in a fraud. Is that even possible? Like, was there somebody who got their blood done by Theranos who was a shareholder? Who who then was, you know, tricked into buying shares? Okay, so let's wrap up here. Flag number one, crazy high valuation flag number two, no real customers. Flag number three, self dealing flag number four, cashing out executives. major flag number five Hindenburg investigation. And then flag number six up against Tesla and Ford. This is roadkill. Get out of the way, folks. Do not buy this stock. If you own the stock, I would admit defeat, I would lose 90 cents on the dollar 99 cents on the dollar all money has value take whatever remaining money you have. If it's 10 cents on the dollar and put it on something that could 10x from here. If you believe that's Coinbase, if you believe it's Robin Hood, if you believe it's Airbnb, whatever it is, all money has value. A chip in a chair, get that 10% that you have left and put it in something that doesn't have these kind of red flags. Now I know some of you like SPACs because you can buy a share for $10. You have to be very careful with SPACs. Some of them are very early stage companies that are very unproven. Other ones are later stage companies that have great customers and you may use their product. But I know that sometimes retail investors were interested in them because, well, they were priced at $10. And buying a $10 share is easier than buying a share that's in the hundreds or 1000s of dollars, whether it's Apple or Amazon, or whatever's trading, you know, at a higher amount, and you're just making small little bets. Well, you can now buy fractions of shares on services like Robin Hood and E trade. So I'd rather see you buy a fraction of a share of Apple than to buy some of these or if you do insist on buying these really look at them like buying lottery tickets or worse, like scratch offs, and then buy some actual real equities in companies where you've used and love the product. All right, everybody, we talked about this on Episode 40 of the all in podcast last night, where one of my besties got the Delta variant, we are now going to have a big giant debate about the reopening, which in California here started on June 15. I thought I would share some of my thoughts and maybe talk about some of these data points. I believe that if you are vaccinated, you are able to make your own decision of how much risk you want to take. But I also believe that businesses get to make their own decisions. And that even local communities can work on standards they want. And here we go. We have a bunch of people debating the risk assessment and the actual cost of another lockdown, whether this would be the third or fourth lockdown depends on which city you're in. But California, which just celebrated this reopening, and they were the last to reopen on June 15, due to the rising cases and the Delta variant in LA specifically, and how much more contagious it is, they've reinstated the indoor mask policy for all residents, not just fully vaccinated ones. So here we go again, if you go into a store in LA, you got to put your mask on and do a lot of this mask theater because maybe when you go into a restaurant, they're not shutting down in door dining. So you're going to walk to your table in a mask, but then take it off to eat or you're supposed to take it off in between bites. I'm going to be traveling on a commercial airline over the summer. And I was reading that you in this one airline, they said in between bites or sips, you can take your mask off. But during the entire meal, you can't take your mask off. So I I was on a flight and I was sipping my tea. And I noticed the person next to me had no mask on almost the whole flight. And he had a bottle of water in his hand the whole flight. And I was like, that's a hack. I get what you're doing. But obviously, he was vaccinated. And I actually did talk to him about him being vaccinated. And we actually talked about his hack. But I want to get him in trouble. So for the seven day period that ended in Wednesday, la is average was 1000 new cases a day. And on Thursday, la reported 1500 additional cases of COVID. So yeah, it's definitely ramping up but deaths are not hospitalizations will and 99% of people going into the hospital seems to be people who are unvaccinated. So what I think is the delta variant will be the motivating factor for people who have been dragging their feet or unsure if they want to get the vaccine. between December 7, and June 7, the unvaccinated accounted for 99.6% of LA counties coronavirus cases 98.7 of COVID-19 hospitalizations and 99.8% of deaths. In other words, and really that point 2% that were people who are vaccinated and died, I would love to see that number of cases, it might be dozens of cases. And if they died from COVID, or with COVID, or that really difficult statistic, which is you know, how many days of life did they lose? Because maybe this was a person who was, you know, a smoker who had compromised lungs, who was obese and had a bad liver, and they were going to die in the next 60 days. And instead, they died six days, you know, earlier. And so, you know, it's really hard with these statistics to actually understand or make policy. But the policy I've made is, I am not going to change my behavior, I'm fully vaccinated. And I'm willing to take a little bit of risk in regards to catching the delta variant, because I don't think that I'll get long haul COVID I hope not knock on wood, or I don't think I'm certainly going to die. So I've chosen to focus on my health, I'm eating healthier, I'm losing weight, I'm working out. And I had asthma when I was a kid. So I'm actually looking at this as an opportunity for myself to maybe work on other issues as a 50 year old man, I turned 50 this past year during COVID. So I want to work on my health and be stronger in case I do get something like this in the future. But Florida is taking a unique strategy. You know, Florida was, you know, didn't really shut down all that much. And they've taken keeping the place open. And it's really hard for us to know if these closures actually did anything. Obviously, masks do work. You'd have to be crazy to think masks don't work. But in which settings do they work? And now we have to start this whole process again. To what extent do masks work with the delta variant? What if the delta variant is so contagious that masks don't actually help it? We don't know. But Florida is the cruise capital of the world. Everybody knows that all the cruises go out there in Florida took a strategy of saying, Hey, listen, you cannot, as a cruise company require people to be vaccinated. So they actually did their own mandate, which is kind of like over the top. So what cruise ships decided to do was they decided to require people who were not vaccinated to pay for insurance. Here is a clip from my friend Seema Modi.

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This could save you 10s of 1000s of dollars depending on the size of your business and the volume you trade sign up today at pipe.com slash twist. Happy piping everybody. All right, next story, Amazon is expanding its educational benefits to include a bachelor's degree program. According to the Wall Street Journal, Amazon is offering a new education benefit to its employees that have worked for at least 90 days. The educational benefit could be a way to retain more hourly workers as Amazon has hired 400,000 employees during the pandemic alone and is looking to hire more in the coming months. According to the Wall Street Journal, article mentions that benefits include upfront payments for a bachelor's or associate degrees, high school diploma programs, GEDs, English as a second language certificates. So the devil's in the details on these. So let's see if we can get into those workers must continue to work for Amazon part or full time while taking classes, but part time staffers receive 50% of the college costs according to the Wall Street Journal. Is there a cap on that? Can they go to Harvard and pay $75,000 a year, there must be a cap. The Wall Street Journal notes that previously Amazon had covered quote, 90% of the cost of an associate degree or other certification program and didn't offer four year college degree. So this is an expansion. Robert Kelchin, a professor and head of the Department of Education, Leadership and Policy Studies at Knoxville tweeted about the potential eligible colleges for the program. It'd be very interesting to see which colleges become approved partners the size of Amazon makes this something to watch. So this is incredible. And I think this speaks to the fact that the free market works and what i mean by the free market works a lot of people have been doing some hand wringing about gig workers hourly workers. Well when you have a free market and it's booming and it's thriving. what happens eventually, because America is building products and services that reach the rest of the globe, we need more workers and we are not letting as many people into the country. So this is creating a labor shortage. Obviously, there's a labor shortage as well, because people got stimulus money. There's another issue. People got rich off NFTs. I don't think that's actually a really big one. I think some people have reconsidered their life choices. And one of those is maybe to live a more modest, low cost lifestyle, and maybe not need to make as much money, which then I think drives more people to the gig economy because they want to kind of shape how often they work. I wonder if people who are watching live how many of them are rethinking their career choices and how much free time they spend right because of COVID. And then people are retiring earlier. So because a lot of nurses, teachers, etc, are just saying, you know what, I was gonna retire in five years the pandemic, I might also just call it quits now and start enjoying my life. I have friends who died from COVID. I had to put my life on hold for a year and didn't go out of the house. I want to YOLO. So I'm just gonna retire early. All of those things have led to an environment where I think there's upwards of 10 million available jobs. This has led to, as you know, Amazon put their base wage at 15, which was double the federal minimum wage. And then you have all the ride sharing and delivery companies battling it out. And then you can't get retail workers. And then a lot of restaurants and cafes are shutting down now. a lot of them are shutting down. Because not because they don't have customers, the customers are coming back, but they can't find employees. So the free market is at work. And I think we're seeing what I think is a kind of great moment in time, where labor individuals will be able to command more for their work product or lower their burn rate and not need as much money. That's the ultimate way to have power in this dynamic with your employer. If you don't need to work if you're a trust fund kid, and your parents gave you you know, a $10 million trust fund, if you don't like what you do at work, you literally get up, tell the boss to go pound salt and make you a ham sandwich and you leave. But not everybody can do that. I certainly couldn't do it. I couldn't just leave. I had to think early in my career about where I would go. Well, as the gig economy has emerged, there are people who know if I quit this job, I can go drive for Uber, Lyft, DoorDash, Postmates, get a job at Amazon, whatever, get a $500 bonus $1,000 bonus for taking the job. And I have a safety net. And if I've lowered my burn rate, well, if I'm living, you know, at a lower cost outside of a major city, and I'm not commuting anymore, and the commuting was costing me 300 a month, and I was losing 60 hours a month, well, I can gain those 60 hours back. It's really interesting, I think what's happened. And I think it's good for society. I think we're seeing a lot of people having more agency over their lives and their careers. That's what the free market has done all of those additional jobs that were created in the gig economy. I know that the unions don't like it. And I know that people don't get benefits. But all of the gig economy companies got together and said, let's have a third way of doing this. You have full time employment where we tell you what shift you work, and you have no choice and you wear the logo target or whatever, and you have to have your hair cut a certain length, yada, yada. They control how you behave at work, you have no agency, you show up for your 6am shift, you work till 4pm, no choice, you take a half hour lunch when we tell you Well, that's not what the gig economy provides a gig economy as I turn on my app, and I work and if I work on Friday and Saturdays and make more money, and that's my hack. And then I take my weekend on Monday and Tuesday, and I make 50% more on the weekend. So I can take three days off and spend more time with my kids. That's the type of thing we want everybody thinking about. We want everybody looking at their lives, as if they're the CEO of their own life. Then you have agency, what the unions are doing is they want to collect dues, they want to gain power. And they want to force employees who have agency to then listen to them and be part of their tribe. And that kind of sucks. I'll be totally honest. I'm not saying employees shouldn't have power. But I think the true power comes from them being able to make their choices in life and to move from one employer to the other. So once you become a shift worker, you lose all your power, right? I mean, we can all agree on that when you're a shift worker, and you're dependent on one person for your revenue, you have lost all your power and all of your agency. And 70 80% of the drivers at Postmates and DoorDash and Instagram. Yeah, everybody wants to make more money, but none of them want to work shift work. So I really think these like unions are pushing for something that makes people into children who don't have agency over their lives and i think the gig economy and this vibrant competition where amazon is paying for people school. The driver companies are giving huge bonuses. I think that's creating a really vibrant market and we should bet on that. We should bet on that. Not shift work shift work is for suckers. That's my belief. I believe that is the raw deal because once they get you into that shift work and you got that manager grinding you down, and telling you when you have to work and then you can't see your kids and you don't get to set your schedule take two weeks off, you know, it's just, it's bad. That's my personal feeling. I wonder how you feel in the comments. Yeah, health insurance is a really interesting part of this. And this is why I think all of the country now the right and the left need to get together on that one issue. Let's give a basic health safety net to everybody and take healthcare out of the realm of employment. That is a dysfunctional part of our society. Make healthcare just like public education. If your bank charges outrageous fees, you need a bank account that's built for small business. 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Wow, think of the scale of that. And so Reuters reports property developer, China Evergrande Group plans to suspend interest payments due to loans to two banks on September 21. Financial intelligence provider our EDD reported on Wednesday citing four sources briefed by bankers stopping payments. Hmm. bloomberg reports shares briefly fell below their 2009 initial public offering price after a second credit rating downgrade in as many days boosted concern the developer will default on its debt these most recent credit rating downgrades came from fitch ratings one of the big three credit rating agencies snp global ratings and moody's have also made similar downgrade fetches current rating for evergrade is CC default imminent. Oh, wow, that is an ugly looking chart. Zoom in on that chart. Oh, my lord, that is gross. You do not want to be in that stock. Ouch. You know, debt is really dangerous for equity holders. Just to stop for a minute and just explain debt versus equity, you buy a share in a company. So let's say the company has, you know, for the argument sake had 1000 shares in you at 10, you own 1% of the company. Great, you own 1% of the company companies, you know, making a million dollars a year, you own 1% of it, you're getting a $10,000 dividend, all is great. Now the company's like, wow, we're doing so great, we make a million dollars a year, let's take out a $10 million loan to build a factory to do whatever. And then it doesn't work out. And then their interest payments are going up, they have to pay back the principal, you've all done this, maybe on a mortgage or a car payment. and they can't keep up with those payments. Well, then that company gets taken over by the creditors who gave them loans, you know, who comes after the creditors, the equity holders, the equity can get wiped out. That means it goes to zero super dangerous. This is why I tell startups do not pay venture debt, do not do debt instruments early in your life. If you have like a million dollar credit line, because you have $10 million in revenue, and you're profitable, and you've got 20 million in the bank, Yeah, that's different. But I sometimes see companies that are raising 1.5 million try to put 500,000 in venture debt on it, or some kind of debt device. And I'm like, why don't we just make it work with $1.5 million, I build a business plan that works with a million to 1,000,005, as opposed to trying to put this 500,000 on top of it, because then the next investor comes the next investor looks at all that debt and says, I'm not buying that. And that's what we're seeing here, who would buy this stock now who's going to buy the stock, if it has all this pro all these problems with debt, you're going to stay away from it because you have other opportunities to invest. So If you look here at the Moody's ratings, you know, you have triple a prime and then it has high grade and then upper medium grade and then you get into that junk, which looks like it's BA one BA two, I'm not familiar with all of this. But when you get to the C's, it does not look good. It's beyond highly speculative. Now here's the rub, you will find people tweeting about these two topics together. If you remember, we talked about tether on this podcast many times and how tether was no longer backed by dollars, they said they were back at one to one, it's a stable coin, you buy this cryptocurrency USD t, and it's backed by $1 in a bank account. And then they said, Oh, yeah, you know what, that's not true anymore. Like I think that 3% cash equivalents or something. And then they had this idea of commercial paper, what is commercial paper, it's loans to companies like Evergrande. Now, we don't know who tether was investing in, but people started asking them savvy people, maybe people who had inside information, do they have any commercial paper in China? And the really, I would say smarmy, just less than reputable team over a tether might be a way of saying it that would be generous these folks are really weird people and they seem to have a problem just saying what's the truth they seem to be truth challenge. probably not a great idea to have a truth challenge group of people and honesty, transparency, their transparency challenge, that's a great word. So you have the transparency challenge tether executives who won't tell you who the commercial papers with. And other people do report or their commercial papers with And the commercial paper, people are speculating is outside of the US. And they're speculating it's in China. And in fact, if we zoom in on this tweet, maybe we can zoom in on that a little bit. And I can read that tweet. And here it is from Bitfinex. I'll just read a series of tweets here. And this is from September 6, tether refuses to deny holding ever grand paper When people said they could be holding commercial paper issued by exchanges, they denied it. They're also likely holding it through a shell account proxy because what they're doing is illegal in China. Oh, that's interesting. Duck 14,001 says, I'm absolutely convinced that Evergrey paper makes up a not insignificant portion of Tether's backing. We should find out soonish. last beer standing ever great update this time a tether boy oh boy have things got an interesting caveat up front this is a theory that has been circulating in bits and pieces below i've tried to summarize the argument evidence but it's definitely worth reading so there's a series that was from july 22nd so there's a series of people speculating this again, pure speculation, right? I'm not saying that this is accurate. I'm saying this is speculation. Now when you see anonymous accounts speculating on Twitter, it could be FUD, fear, uncertainty and doubt designed to drive a stock price down. We saw that with the Tesla Q people. They were like, remember they were taking like pictures of Model threes like it with dust on them in parking lots. And but then you would see Model threes and Model Ys everywhere on the road like oh my god, they're Tesla is like putting Tesla's in, you know, garages because they can't sell them. And then everybody you know, who ordered a Tesla was complaining that their Tesla was back ordered and they had to wait three months. And you're trying to figure out the FUD where Tesla's are all over and you see them driving with your own eyes and you see this picture of 18 Tesla's in a garage and you're like, Hmm, I wonder what's going on here. Well, there are people from anonymous accounts spreading fear, uncertainty and doubt. And sometimes people use anonymous accounts, because maybe they're insiders, or maybe they have an axe to grind, because they're a previous insider, they got screwed by the company. Or they're just one of those unique people who pursues fraud. for the justification of doing it, or they've taken a short position against it. Anyway, we don't know here, who bitfinext is. We had bitfinext on the program, obviously, it was the first and only time we've had a anonymous person, but I thought it was worthy since they had become such a interesting account that was being talked about. So sometimes we'll talk about things here that have to do with anonymous accounts or fear, uncertainty and doubt and these kinds of things, speculation. But you notice I always tell you that right up front, and I'm very clear. That's because when I was a journalist, we were clear about these things. We try to inform you as much as possible. I'm not trying to manipulate you the audience. I'm trying to figure things out together to be candid and try to explain things to you. as best as I understand them so that you can then help me understand them better. You saw me do that on yesterday's show, when I was talking about these folks learning out their cryptocurrency and we learned a lot institutional owners buying cryptocurrency, okay, and they have their Bitcoin as collateral. So if the Bitcoin goes from 50 to 25, they get liquidated that pays down their debt, yada, yada, and they KYC they know their customer. Interesting. So this will be something very interesting to watch. tether is maybe the they're under investigation for wire fraud from previous banking shenanigans that they kind of admitted to like using bank accounts that were not meant for money transfer using for money transfer. So it's gonna be very interesting to see how this all plays out. What a great show. Thanks for all the comments. Now it's time for me to answer your questions. And I asked everybody today, to really think about me as a friend. I think that's my superpower in life. That's my friends tell me is that I'm like the best friend to them. And that makes me feel great. I always try to be as a as a general rule, the best friend I can be to my friends. I just think about them. And I think like, what are they struggling with? Sometimes I'll call a friend. And I'll just say, Hey, haven't talked to you in a while. I'm just calling to check in on you. How are you doing? say i'm great missing how you really don't what's going on me about how your kids are talking about how it's going with your wife or spouse has business you know and so let's do that here on the podcast. You're my friends, you listen to the podcast, we've been together doing this for over 10 years with many of the people in the audience. And we're doing this live. And I love interacting with you. It's given me a lot of energy. So I'm going to take some questions here. And I want you to just tell me candidly, you can use your initials or say make this anonymous. So when I talk if this makes it to the podcast, not just the live stream, we can take your name out. Okay, so we have Richard from YouTube. If you don't necessarily need the funding to continue building iterating on your MVP, and can bootstrap from your own funds is joining an accelerator worth giving up that six to 7%? Absolutely interesting question. So you really do want to bootstrap for as long as possible, because you're learning all that time without starting the clock of venture capital and jet fuel. What do I mean by well, venture investors, angel investors, they want to get a return on their capital. And once you start down that path, you have to because you've decided to have a partnership with investors, and you took their money, and you issued them shares in your company. you've now changed the dynamic, what you're working on as a project, you have to think about that partner, and how you and your behavior is impacting them. In other words, you have to be a fiduciary for all the stakeholders and shareholders in your company. stakeholders means people who don't necessarily own shares, your employees, maybe in some cases, your partners, the community that you build the product for you get the idea, just people you impact in general, your supply chain would come to mind. But for shareholders, you really do have a serious fiduciary responsibility. So if you want to change the product, if you want to fire your customers, if you want to make your product, which is, you know, you're charging $1,000 a month to 10 people, you want to make it for free, and you want to put off making money for a year, you know, if you have investors, you're gonna have to explain that to them, you'd have to send them a monthly update or a quarterly update, you're just on this fast track. So yes, if you can keep doing your MVP and learning and making progress, if you can do that indefinitely and own 100% of your company, never take money from investors. And that has happened in the world a handful of times. And I've seen what we call a Pegasus internally at our firm launch, which is launch.co our website, we probably should update that at some point. I'm thinking I just make it a notion page. So we just put copy up there in text launch. looks for pegasus is which is that can skip around a financing or two every time you do a financing is between ten and twenty five percent dilution let's put the number of fifteen you do that five times you get an idea of what happens to your holdings go down significantly. So we saw with calm calm, they raised money in the first round, when we put in 378,000, I believe. Sometimes you don't forget those numbers when it's a big win, put 378,000 when it was a $5 million company or so, then they let some friends in to invest at 20. And then the next round of funding was at 250. The next round, if that was 1.2 billion. And then I think after that, it was, you know, multiple billions. So when you look at that trajectory, they skipped multiple rounds of financing, which means the founders own a lot more of the company and my original six or 7% my 6% ownership or whatever was didn't get diluted all that much. So I still own four or 5% of that company. It's amazing. So you really do want to do that. Now, in terms of going to an accelerator, accelerators are great. If you go to the top three or four, launch accelerator, the one I run, Y Combinator and Techstars. Why those top three? Because those top three signal to investors, downstream investors, seed funds, etc, venture worthiness. You've passed the screening of David Cohen, Jason Kellock-Anister, Paul Graham, essentially. my program i think is not doing the screening now i do the screening in a cursory way my team meets all the companies and they say yes or no or these are the ones we want to accept is improving questions and then we accept them and then i come to a third of maybe the accelerator classes now. And then you have you know textiles around the world. So is it worth it it is worth it if you want to have that stamp in your passport and you want to meet in our case a thousand investors and you have that halo. A third time founder you know if you're mark pincus or evan williams or travis kalanick like what value would provide none right you already can raise those round so it's really for people who are getting started in the business. not as a young, but people were getting started in the business and maybe don't have all the connections. Okay, that was a great question. Dusty asked me on YouTube, how can someone deal with disappointment of not getting chances to pitch an idea? If you're a nobody, just keep pushing forward? You know, Dusty? I really like this question, because I was a nobody. And I felt like a nobody for a large portion of my career. And what I realized was, the more I created in the world, the more I went from being a nobody to people following me. There are people with ideas and people who talk and then there are people who create. And once I created Silicon Alley Reporter, and it was just a 16 page photocopy, my phone, my lunch schedule filled up. I had made something in the world. And I got addicted to it. When people when i handed them a sixteen page photocopy and they read it and it was good and it was interesting it was nineteen ninety six and they were reading about tech companies in new york in this place called silicon alley and there were two dozen tech companies there razorfish and voyager making cd roms and prodigy like wow this is exciting. And so who made this magazine i did. How'd you make the newsletter? I was like, well, I went to a photocopy store. I wrote the stories. I shot pictures on my 35 millimeter and I did page maker to print it out with Brian Alvey. And they were like, wow, that's incredible. You made this? They couldn't believe it. So don't worry about people pitching pitching people your ideas. Worry about your skills and what you create because there's so many people in the world and they're also busy that what we're all looking at is we're looking at the landscape and we're saying who's made something interesting. Right and so i listen to this podcast called red scare. two women in new york they are part of what's called the dirt bag left. And i like it because they're super candid they're somewhat intellectual they're a little edgy they're inappropriate a little howard sterny kind of but intellectual. And it reminds me of new york and the people i used to hang out with when i was younger living in new york and i noticed that the you know having listened to them for like two years or so. I catch probably every other episode and i was subscribe to them on patreon for a walk someone to support them they. I just watched their careers, because I also follow them on social media. And the woman Dasha, who is one of the two, I've watched her getting acting jobs and making her own films and documentaries. And it's like, she made a podcast, which has no production quality. I mean, it is like, they're, they're fumbling with the recorder. The sound is terrible, but they're funny, and they're interesting. And they read books, and they read articles, and they have a hot take on things. And it's, you know, they're entertaining. just by doing 100 episodes of their podcast, I've watched Asha's career. And I think you'll see her on secession this year, or one of those is either secession or billions. One of those two shows she's going to be on I don't think it's a session, I think it's billion started already. And oh, and by the way, now they're making $46,000 a month. So they're, they're making 20 grand each. doing a podcast. And you're either creating or you're waiting, you're creating or you're waiting. And what I like about the Red Scare story is not only are they making all this money from their podcast, which is, you know, all it took was a recorder and two people with an opinion. They're now all their other parts of their careers are also booming. What if my ideas are too big to make my own? Then do I work on how polish the pitch or the visuals for the concepts are dusty green again on YouTube follow up question. So dusty, I think what you want to do is iterate I wanted to start a cable channel and be a media mogul in my earlier years. But I started a 16 page photocopy, because that was the best I could afford. So I think what you have to do is maybe look yourself in the mirror and say, what's something I can do today at a very high quality level that proves to the world I'm capable of doing something. And that is a stepping stone towards the bigger picture. In the in the example with Red Scare, maybe Dasha wanted to make a movie but didn't have the money. Well, then she starts making 20k a month from doing this podcast. and has an audience who will now buy the first 10,000 tickets to her independent film, right? And because people listen to the podcast, and they know she can promote it, well, then maybe the other co host can get a book deal, you get the idea. So what you're doing in life is you're iterating. And you're proving to the world that you're a creator, not a waiter. And I don't mean a waiter serving drinks or food. I mean, a waiter, somebody sitting around waiting. So you right now, feel like a waiter dusty, and you feel like candidly, you're making excuses. I'm giving you permission to forget about the giant big picture for a minute, you can still keep it up there. It's not going anywhere. Put it on your wall, I'm going to own some giant media company just like I wanted to. Okay, but what can you do today? What's your 16 page photocopied newsletter? What's your Red Scarab podcast with, you know, $100 in donations on Patreon that grows to 46,000, right? That's what I would challenge you to think about. Oh, here we go. This is a great personal problem from ruffle duck. My problem is laziness. How do I get myself to work on my projects? Like my life depends on it. Well, I wonder if ruffle duck has like a trust fund or something. And, you know, does it need to fight to survive in the world? That is a great question. If you're lazy, it's probably there might be a root cause to it, like in your childhood or something, there could be like a psychological reason of why you're lazy. Or it could just be habit. And I think if you were to talk to a therapist or a coach, They might take different approaches towards this a therapist might be like tell me about your childhood what about it is the reason and then you know if you're talking to a behavioral psychologist or somebody who does cognitive behavioral therapy cbt i was a psychology major so i know a lot of the stuff and i've thought about it a lot working with entrepreneurs. you might just have bad habits, right. And so redoing your habits, just to set some goals for yourself every day, I'm going to do x, y, and z, and really get yourself into a routine where you just do a little bit of performance each day, find some meaningfulness in what you do. Those are two different approaches. I if I was you, I would maybe look at both of those. Maybe you have some fear from your childhood, or maybe people told you weren't good enough, which is what people told me. Now, if people tell you you're not good enough, that can go one or two ways you could actually believe it or you can use it as fire to say I will prove you wrong. right? Like, they say, Jake out, you're never going to be anything. You're just a kid from Brooklyn, you got a 71 three year average at Severan High School, you're going to become a cop. And, you know, and I said, Well, no, I'm gonna go to Fordham. And I'll just go at night, it will take me five years. And, you know, I'll try to make it work by being a waiter and fixing laser printers. I took that lack of belief people had. And I said, You know what, instead of internalizing it, and saying, I'm not, you know, good enough, or whatever, or they're right. I said, I'll prove them wrong. So I think that's where therapy and talking to somebody who's a therapist in a professional setting, and saying, Listen, I have, I'm lazy, why am I lazy. And then the other approach is to talk to a coach about it, and find a coaching service. And I think if you are motivated to do either or both of those, you might have a breakthrough. And then a very simple thing, I think, is habits. And you know everybody has laziness and laziness in different places you know i was lazy about my health habits and you know now that i've got the wealth checked off and i've got happiness checked off i'm really trying to hold myself accountable on the weight front i'm down from two thirteen down i was today i was one ninety two so i'm twenty one pounds off the peak and you i'm gonna be in the one eighty soon so i I feel sometimes I'm lazy. I got this really cool app. I know this is silly. And, you know, but it's been helpful for me. So maybe it'd be helpful for you. It's called streets. My friend Mark Suster, who lost a lot of weight, put me on to it. And I've been talking to the founder of the company. He's in Australia. And it's a nice lifestyle business. I don't know if this could become a bigger business. But you set goals for yourself. So I have in my goals, like standing a certain number of hours drinking water, doing push ups, climbing stairs, burning calories, eating a salad, which I haven't done eating the smoothie, which I've been drinking Muni, my friend, freeberg smoothie, working out flossing my teeth, taking my vitamins, actually recording my weight, which is something I wasn't doing, doing weight training. And I'm just trying to like set modest goals for myself, which streak does is it will lower the goals if you're not hitting them. So it's like, Oh, you're not hitting six glasses of water day, should we set it to five for next week and see if you hit that. So it's kind of really smart. Ah, here we go. Question from the demo night 789. So I like these, I like the ones that are like really personal and about your fears and about, you know, the stuff that maybe is less tactical in business. I mean, I do love tactical business questions. I'm a tactician, but I do like these ones that are more emotional in nature. how influential is social class and breaking into the corporate world consulting finance. Coming from lower working class background put one at a disadvantage. Certainly it does put you at a disadvantage I think I didn't know anybody at Stanford I didn't know anybody at MIT and I felt like I wasn't worthy, or, you know, maybe, maybe that's the wrong way. So now it's worthy. But I just I did have to go build those connections. And, you know, the what was interesting is, I found that people some group of people thought of me in my 20s. When I was in New York making Silicon Valley reporter, which was my first magazine, some people kind of resented me that I was a nobody, and I became powerful with the magazine. And then once I realized that, that those powerful people were resenting me, I leaned into it. leaned into it. So I would host events for 100 people. And I would specifically cap it at 100. I'd specifically leave people out. And I would invite other people to come. And then some famous person, but Oh, yeah, I'll definitely come to your 100 person dinner. I'm going to bring this person. I'm like, Yeah, I'm sorry, there's no plus ones. And I would say that to somebody who's worth $100 million. And they'd be like, Oh, okay, well, can I bring something like I'm really sorry, maybe next time, I'd love to meet them. But for now, the only the 100 people coming to my dinner are people I know. And I've got 50 people on the waiting list already, but certainly next time, and I'd love to meet them, you should introduce me to my email, I'll have a cup of coffee with them. So i was like once i realized that people look down on me a little bit or maybe dismissed me i was like oh well how can i change that i know i'll do the silicon alley one hundred. It's looking at was the name for new york's taxi in the nineties so i ranked a bit of ranked list as a nobody of the hundred most important people. in business and technology in New York, when I was 27 years old, that I was, you know, taking people my age now 50 year olds, and I was saying 17, they're 17, the most important. I mean, I was deranged. So I'm not exactly telling you to do this. But I realized early on, I owned a magazine and I picked who was on the cover. man, that would be powerful. And I could lord that over people. And then people would respect me. So I took like a little bit of a maniacal approach to, to getting power. Because I didn't have it. And I think it was a little dysfunctional. I think I because I didn't have power, because I didn't have status, I was like, I'm going to create and manufacture my own, I will show everybody. So back to the motivation question we started with, it was just a driver for me, you know, I see it clearly. Now, at the time, I just thought I was fighting for my life. to survive and be important in the world. And I think you should think about it that way as well. If, and it's less so today, people don't care about your diploma as much as your skills. And especially in this work from home post COVID world, you know, it used to be like, well, you know, who went to journalism school, okay, they're going to be a broadcaster. And then you look at some like youtube and podcasting who gets to be a broadcaster, the person who broadcasts every day, like my friend CP who's doing next fan TV like eating the best of my knowledge CP can tell me I don't think CP the franchise went to, like get a master's degree in communications and then was an intern at You know yes pn or something i don't think that's how he built his channel and i don't think that's how red scare about their channel or whoever else is killing it joe rogan you know podcasting is not like somebody, nbc said only put the joe rogan show on eleven p.m writing ask any gatekeeper to do it. you just do it, right. And it's about skill and showing up every day, really, and I hate to be like a motivational speaker here. But, you know, just from what I've learned in life, if you just do the work every day, that's why I put that sign behind me do the work. That's like a reminder to all of you. But more than anything, it's a reminder to me. That's why I show up here every day. People I literally had a friend of mine, they're like, J Cal, you can do the podcast once a week, you don't have to do a five days a week, you don't have to keep pushing yourself so hard. And I'm like, Yeah, it's just not who I am. I just want to keep doing it every day. I like doing work every day. Sorry. I like the result of it, too. I like the result that the audience is growing, and I get to hang out with you guys and get all these great questions. All right. I think we did enough questions. What is your standing amongst the besties? I am the least I have the lowest net worth of all the besties. I might have the lowest IQ of all four besties, but I am in a bar fight. The one you would want to have with you in a zombie apocalypse, I would be in charge and I would be the one who would survive the longest. And I would be the best friend who would jump in front of a punch for the other besties. You know, everybody's got their role in life. I think I'm the loyal one who will fight for their friends, and I'm definitely the funniest out of the four of us. That's for sure. For sure the funniest. All right. Talk to you soon, everybody. Bye-bye.

### Human: Get out of here with that garbage.### Assistant: such garbage. All right, listen, in a totally non related story, Nike just acquired an NFT studio pronounced artifact spelt r t f k t. But it's pronounced artifact. The terms haven't been disclosed. But in May, the firm had raised $8 million in a seed round at a $33 million valuation from Andreessen Horowitz. They were behind the NFT project clone x with famed Japanese artist Takashi Murakami, his most expensive piece sold for $13.5 million in 2008. So here are the clone x NFT avatars and compared to board apes and crypto punks crypto punks look like they were made by a computer and aren't finished. They look terrible. Sorry, board apes are kind of goofy and I would say these are, you know, pretty nice TechCrunch call clone x one of the most popular ft drops the past few months. And since it dropped three weeks ago, the project has already seen 84 million in transaction volume according to crypto tractor crypto slam. I don't know if you can trust any of this to be honest, I think a lot of this stuff is people painting the tape and flipping these things and insider trading. We've seen some evidence of that the average clone x NFT is selling for around 4.7 ETH in December or $18,000 for painting, I guess, of an individual. So if you like art, and you think this is worth $18,000, there you go. I don't know if in this case, you get to own the IP of these ones. I think that you know, the intellectual property, in other words, you can make it into a TV character, a comic book or a t shirt. But here's a chart from Yahoo Finance tracking the price and volume of clone x NFTs over the past two days. And when the news of the Nike acquisition broke volume and price both spike, according to the TechCrunch article, Artifact has collaborated with other crypto creators to design items like physical shoes that utilize imagery and other NFT projects, including crypto comps and board games. So I think you know what's happening here. I think Nike likes to be part of the avant garde. They like art. This is a convergence of art and commerce. And so I think what we'll see is when you buy your shoes, and we talked about this before on other episodes, The idea of pairing an NFT with your physical object is kind of interesting. It's almost like the label or the certificate that comes with it. So let's say you bought some really cool pair of sneakers, Yeezys, whatever, or whatever the Nike equivalent is, and you got the NFT with that. Well, you could kind of trade the NFT with the shoes, or maybe the shoes are kept in storage somewhere. If you're a collector of these shoes, and then you have the NFT, if you trade the NFT, the shoe gets transferred to a person. I think that's actually kind of interesting. I know people in the wine space who collect wine, you know, we're investors in underground cellar, people just leave their wine at underground cellar or other people who are in the wine market will buy in fractionally to a wine collection to a vintage, two cases of wine. And so if we all wanted to buy a million dollars in a certain vintage, we each you know, put in $10,000. And 100 of us do that. We corner the market on that one, but we don't want to take custodianship of it. You want somebody else to be the custodian to be the responsible party. So I could see that happening here. And I think people will start because there's so much money in the world. And there's so many affluent people, they're not buying shoes anymore, to walk places, they're buying shoes, as art as collectors as items of status. as things that bring you joy aesthetically, just like wine brings people joy. So this is completely, I think, legitimate purchase by Nike, to do something interesting, and extend their brand into this new digital world. I've never really got people spending huge amounts of money on art, I do understand that it has value to some people. And I you know, also with the wine thing, like, for me, like some crazy expensive wine that doesn't do it for me. But you know, maybe a really expensive house or expensive steak does do it for me. So I will spend money on a Kobe or Miyazaki beef. That's I seem like an idiot because I spent $200 on eight ounces of, you know, beef when I could have bought the whole cow or half a cow that wasn't from Japan and massaged and fed milk. cream and whatever else to make them super fat so. very interesting purchase and related news earlier in December Adidas announced a partnership with the board a yacht club. Adidas purchased a board a NFT and will create a character around the NFT. The NFT was purchased in September for 46 ETH, just over 156 K at the time. And so, you know, you're gonna see Nike create 1000 limited edition versions of the Jordan one or Air Force One or other legendary shoes that you're not going to get your hands on that are too hard. Or maybe, you know, you buy the NFTs and it gives you the ability to come to those drops they do in the physical real world. So instead of people lining up, you got to have an NFT in your wallet, and you show that in your, you take out some sort of wallet and QR code and they scan you and you get to go into the store, right? So the stores are open three days a week to one group of people four days a week to the public, right? And so this NFT apparel thing seems reasonable to me, I talked here about doing this with tickets. So if NFTs because they're one of one, because they're traceable, resellable, and they have rule sets in them, kind of the exciting part about this, I think it's silly, ridiculous when they start trading. for tons of money. And there's all this painting of the tape and all kinds of shenanigans that occur. If one of my friends was advising me, should I buy these things, I would say only if you don't like money or don't care about losing money. You'd be making a crazy lottery style bet to buy these board apes or crypto punks, whatever. I mean, these, this is like, this is a new avant garde. I mean, this isn't like, taking something like a dolly or a Picasso, or a Warhol or Basquiat. you know, those have some decades or centuries of trading that you can look back on. In fact, masterworks, I own does that for a living. If you're buying into this cohort of NFTs, realize you're buying in in the first year or two of this trend, it could just as easily be beanie babies, the board, a yacht club could go down in history as like the stupidest beanie baby thing ever. Or it could be Warhol, right? Who knows. And so buyer beware, if you're doing this, please be careful. And only invest money you can afford to lose. all around the world tech companies are innovating and driving returns for investors. Well, our crowd analyzes many of these companies, they search across the global private market, then they select the ones with the greatest growth potential. And finally, they bring them to you from personalized medicine to cybersecurity, to robotics, one of my favorites, and quantum computing, and so much more, whether it's in a state of the art lab, a startup garage or anywhere in between. Our crowd identifies innovators, so you can invest when growth potential is greatest. And we all know that's early. Our crowds accredited investors have already invested over $1 billion in growing tech companies, and many of their members have benefited from 46 IPOs or exits. And now you truly diversify your portfolio by investing early in innovative private market companies that are crowd join the fastest growing venture capital investment community at our crowd.com slash twist. Once again, that's our crowd.com slash twist. And you can sign up for free and start reading all those deal memos and you can read those deal memos and get super smart. And then a bet if you're so inclined. All right. Nike is a massive company. And they're able to make big bets. They are a $261 billion company with $44 billion in revenue and $5.7 billion in income. So this is a very big company that can make crazy bets, and they do not want to be on the other side of somebody else taking these NF t's. This is what they're thinking inside Nike when they make a purchase like this for, I'm going to guess they had to purchase it for 10 times what Andreessen paid. So I guess it's $300 million purchase, perhaps. And that would be something that would get the founders to sell because the founders own 60 70% of the company. You know, they sold it for 300 million. Wow, big payday. Or maybe more, who knows. But here's the thing. Nike's looking at this and saying, Hey, you have this giant company, this giant franchise, what if the board, a yacht club decides to partner with a sneaker company like they have, right Adidas, and start making board a yacht club sneakers, and those sneakers become the dope thing that people want. you just can't take that risk. And so super defensive play. So when you look at acquisitions, sometimes people are making a defensive play. And sometimes they have a thesis on how they're going to grow something 10x. as but one example, when I saw weblogs, Inc, to AOL, and they bought it for $30 million. Reportedly, we had only 100 or 200 k in previous revenue, we had maybe two or 300. And, you know, contracts for future revenue, we had basically no revenue. And they paid 100 times revenue or something like that. They look like idiots at the time. But what people didn't know was they were getting $50 per 1000 views in revenue per page on AOL because they were sold out of cars and gadgets and consumer electronics. And we had a gadget and Autoblog and joystick and video game times, they were getting $50 to $100 for their pages, we were getting like $5 because we were just starting our sales process. So they looked at our inventory and said we can 10x the inventory, therefore we're paying one 10th of the price. So that's what you don't see sometimes as the public when these purchases happen. And they also said we can drive 10 times as much traffic to Engadget, and to joystick, and to Autoblog, because we have this giant funnel of traffic. So that's when an acquisition becomes what's called a creative. It creates it grows some incredible value. And so should every apparel company have NFTs? Well, certainly, if it's a collectible type thing, and we think that NFTs become the new bridge into a brand, that's a really good idea. I'll give you another example. there are items inside of incredibly expensive stores where I might not be able to afford the Tiffany diamond necklace, but the Tiffany charm bracelet, right, I could afford, or I might not be able to afford at the Ford showroom. GT for GT. So there was this Ford GT. And I was like, gonna buy a Ford GT when I made a little bit of money after the webloxing sale. I saw it and they that is like a showroom object of art that brings everybody in. And then they wind up buying a Ford Taurus, or a Mustang or whatever is reasonable. There are other things that work the other way around. So instead of being super expensive and drawing you into buy something low, you can't afford to buy Chanel stuff. Or you can't afford to buy an Hermes bag for $4,000. But maybe you could buy the little wallet for 500 bucks, right? So they like to have items that kind of get you started on the brand in case you become rich later and let you participate in it. So there are these items that are like the entry point for people. And I think that NFTs could be that. So if you could not afford a Bugatti, you could buy a Bugatti NFT. If you could not afford a Chanel dress, you could buy a Chanel NFT and put it on your, you know, avatar on your Twitter page or share it somewhere as your avatar on Instagram. It's just a way for you to affiliate yourself a brand. So yes, I do think that these NFTs serve that purpose in the same way. I explained some of those entry level items do or sometimes people will just have like a Ferrari poster in their room, right? Or they'll have a Ferrari keychain. And by the way, there's also this concept of burning NFTs, which is also kind of interesting and weird. So the idea is you burn it to unlock an asset. So imagine you bought these NFTs and it was either a sweepstakes or 10,000 NFTs equal to pair of you know, elite Air Jordan signed by Michael Jordan himself. And, you know, they burn all the NFTs, but one and you keep it or you buy an NFT that lets you get one pair of shoes from Nike in the next 10 years, when you burn it, you get to pick from their collection, right. So there's all kinds of interesting things to do in the burning of NFTs. which are just different features in the smart contract, smart contract, just a rule set that's inside of the code of the NFT. And then another concept that I was talking to producer Nick about was, hey, what if you bought a pair of these elite Air Jordans, Michael Jordan had signed them, whatever, and you own them. But then every time you sell that NFT and the ownership in it, Nike makes another 10%. And hey, maybe Michael Jordan makes 10% or whoever it is. And 80% of the money, you know, you get back. So I bought them for $1,000 an hour with 10,000. Somebody buys them for 10, I get eight. Great. I feel pretty good. I'm 80 times my money. And then Michael Jordan gets 1000 bucks that he doesn't need like craps. And Nike gets 1000 bucks that they don't need to build a bigger headquarters or whatever it is. Then when it's burned, the shoes are delivered. So you might have something trade hands like an antique car or a case of wine, like I explained earlier, but at the burn point is when the object is delivered. This is super interesting as a concept. It could be done today, obviously, with contracts, but legal contracts are hard work and the lawyers and the amount of money the lawyer would have to spend would be greater than the ability to do that. What's interesting about this permissionless society, and these contracts, is that you can do this hopefully at a very low cost. Obviously, the gas fees on Ethereum are a disaster. Supposedly, they're going to fix those and Solana and other competitors are going to fix it. Once those gas fees get down to close to zero or very small numbers, and de minimis, it could be even more interesting. So as I've said many times in the program store of value, not very interesting to me, Bitcoin, I get some by some people are into it. If you're in some crazy country where you have runaway inflation, like 8% a month, you know, just theoretically speaking, I'm joking about America, obviously, but Bitcoin seems to be correlated with America and our futures when the stocks go down. Bitcoin is correlated. So store of value, not very interesting to me. Money transfer, there's so many better ways to transfer money than crypto. Crypto is terrible at it. Just on like a first principles basis, like the actual core technology sucks. It's just too expensive. it's great if you're trying to do it semi anonymously or get out of a country. So yeah, on the margins, if you were a dissident or dictator or a terrorist, yeah, it's pretty phenomenal for money transfer. But for legal people, there's much better ways for like Venmo or, you know, cash app or PayPal or whatever. Third, NFTs, kind of interesting, right? I've been saying that from the beginning that there's something here, this is kind of interesting. And you got a lot of creativity going into it. But like anything else, when money's involved, and anonymity, there's going to be scams. So again, beware. just because I like NFTs doesn't mean I think you should go crazy. And then finally dows, everybody knows, I got the Dow bug. I've been talking to people about it. The legal framework is still screwed. I can't do anything anywhere near the gray area, because I got LPS and I don't want to go to jail. And I care about my reputation. And I would never do anything as a quick money grab. I'm not saying people doing dows is a quick money grab or NFTs is a quick money grab. It's a quick money grab. In a lot of cases, it's a quick money grab. Like, I don't want to be associated with quick money grabs. I want to be associated with slowly making large amounts of money off of non consensus bets. But first to not interested in next to super interested in here we go. Crypto in the second decade is getting very real. But be careful out there, folks. If you're trying to nail an important project before the end of the year, you might need some extra help. Fiverr Business puts a world of expert freelancers at your fingertips so you can get any project across the finish line and be proud of the work. They have everything you need to seamlessly integrate your new team members into your workflow. We love Fiverr here at launch. We've used it many times, and I've told you this story before, but I was going to another country, Australia. I wanted to find all of the founders and investors and capital allocators and technologists and journalists there. My team was like Jay cow. We got to book tickets and speakers and sponsorships. We got a lot to do. They went on Fiverr. They hired researchers. Easy peasy lemon squeezy. Now we've got 1000s of names and in some cases emails that this researcher got for us, man, we started on third base, we had a full house the whole time. You know, we probably wouldn't have gotten to it in the event would have been half the success it was. So thanks Fiverr. Stop wasting time searching for talent, just leave it to Fiverr business. They have a team of dedicated business success managers that will help match you with the best talent for your team. No more endlessly guessing and interviews. Plus, you can save and share your favorite freelancers for future projects like we did with the researcher. We actually did use that researcher to research other podcasts and their advertisers so that we could come up with advertising targets. So find the freelancers you need to give your next project the boost it needs to finish strong. Right now you can sign up for Fiverr Business absolutely free for the first year. You're going to get that one year free and you're going to save 10% on your purchase of Fiverr Business with the promo code Jason. J-A-S-O-N. Just go to fiverr.com slash business. And don't forget the promo code Jason fi v r.com slash business use the promo code Jason. Okay, quick update from tether. Hashtag tether investigation. usdt is now the official currency for a shadow government in Myanmar. This is very complicated international stuff. But basically, what you need to know here is this isn't a good sign. In May of 2020, the Central Bank, they're decreed all digital currencies illegal. And they have a national currency called the kiat. And the government threaten to imprison anybody or find anybody who violated this rule, they want to keep control of their currency, totally reasonable. You may not agree with that if you're in crypto, but certainly a country that's in this kind of situation really does need to have control over security and the financial system. In February of 2021, Myanmar's military overthrew the country's ruling party. And after the military coup, an opposition government of supporters formed and the opposition, the opposition group calls themselves the NUG, National Unity Government. So quoting the Bloomberg article here, while they don't control territorial hold positions of power in Myanmar, group has declared war that has led to an escalation of battles between the military regime and local resistance groups. Obviously, this is a messy, complicated situations, but the NUG is now accepting tether as its legal currency for domestic use. Why? They want to make transactions easy and speed things up is what they're saying who knows what their covert reasons are. Maybe they have some funding coming this way. Maybe they have some sort of special deal. No other details were given. Interestingly, tether has minted 3 billion of new tokens over the past two weeks, according to crypto slate. Again, you know, as much as there's open metrics inside of crypto, for every aspect of the crypto ecosystem that is more open, like a blockchain, there are an equal number if not more shenanigans that can occur. and opaqueness in other areas, ie who is actually making these trades? Is it one person with 1000 accounts? Is it 1000 people with one account? Is it 500 people with two accounts? On average, who knows tethers total market cap is now the fourth largest in crypto 76.5 billion. Here's a chart of tethers market cap over the past three months. And you can check out the spike in growth since late November. you know, what could go wrong, what could go right, just another reason to be concerned about tether. And there are some lawsuits that I see have been filed. And they didn't show up for some of these hearings where people are trying to get a deeper our government's trying to get a deeper understanding of the stable coins stable coins are competing directly against the US dollar, let's be honest, and it's going to give a lot of power to the companies and the people that control it. it is going to compete in a way and destabilize the dollar. If these things get really big, if it's easier to transact in tethers, or Ethereum, or Bitcoin, or Solana, or, you know, even circles, USDC, any of these things become easier and more stable, right? The other things fluctuate. So people generally don't want to use them. If they want to know how much money is going to get there by the time they send it, and the transaction goes through, These stable coins represent a challenge to the sovereignty of countries much to the cheering of independent free thinkers who want less government much to the chagrin of people who believe in the power of central authority. The truth lies somewhere between the two people should be able to do what they want with their money. And they should have privacy, of course, and they should have sovereignty over their wealth. And then on the other side, you really don't want people to be able to anonymously fund terrorist activities or not pay their taxes or otherwise not contribute to society. So there, this is a very nuanced discussion, basic, long story short, if you're going to be creating your own currency, you better have a lot of safeguards in place. And tether doesn't. USDC does. I don't have a horse in the race. I own neither of them. I have no financial interest. But I do think that the stable coins should be absolutely regulated to the health. And when I say to the health, I mean, seriously regulated, like people are going to go to jail, if they screw it up audits, making sure there's dollar for dollar money in the bank that there's insurance, and that there's a limited number of people who can create them. I know that sounds like I'm being an okay boomer. But, you know, some things are very powerful, and there should be a process of getting them. kind of feel that way about guns. I know some people different opinions on this. I don't, I believe in sensible gun control, like maybe you can buy a certain number of guns with a certain capacity. And after that, you have to have insurance for guns, like everybody could have two guns and have no insurance for, you know, rifles, pistols, whatever, 10 rounds or less. But then once you get over that, and you have more than three guns, or whatever, maybe you have to get have insurance, right? Seems reasonable to me, or maybe you have to take a really thorough test. So this falls into the regulation that I think they should have. So be careful. My producers had a really good insight the other day, they found out that director Todd Phillips made a massive amount of money on the Hangover movies. And they brought this to me that he made 75 million according to reports on the first Hangover movie and 150 million overall on the trilogy and the people who were involved in the film got the biggest paydays of their lives apparently, and all because of equity. this is funny because i've played uh cards with and i have mutual friends uh in the la scene uh with todd phillips and he's a really fun sweet guy super talented i thought the film he did the joker uh with joaquin phoenix one of my favorite actors was a masterpiece i know some people didn't vibe with it for me it was just chef's kiss perfection and style and substance and what it had to say about society and the media and psychology and weird people. I thought it was a unique vision that built on cinema from the 70s that I love, like Taxi Driver and Scorsese and, you know, King of Comedy and just any number of great callbacks, wonderful film, just tremendous. And The Hangover was hilarious as well. So according to an article that they found on the internet from celebrity net worth, which has got to be like the most wrong site in the world based on what I read about myself, and other people on it, I think they kind of just pick a number. The first hangover film made 470 million worldwide became the highest grossing R rated comedy of all time. And it started the three film franchise that grossed 1.4 billion. But in 2007, what eventually became the hangover was originally a script called what happens in Vegas, according to the story and multiple studies passed on the script. Because of R rated comedies don't have a great track record at the box office. Obviously, Todd had a different vision here. He thought that adult fare would work at the box off. So the highest grossing R rated comedy was Beverly Hills Cop. I didn't actually realize Beverly Hills Cop was R rated, but did have some choice language. And that did 316 million But that was back in 1984 at the height of Eddie Murphy's popularity. They were also a little worried that it'd be hard to license that title from Las Vegas. Eventually, Phillips got the script, loved it, and decided to pursue it at all costs. He had to deal with Warner Brothers and convince the studio to greenlight The Hangover with a $35 million budget. Really tiny. He pitched the studio, the trio of Bradley Cooper, Zach Galifianakis, my Greek brother, and Ed Helms to star in the leading roles. All three actors were relatively unknown at that point and the studio wound up paying the three actors under 1 million combined for the movie. What? Warner Brothers was still hesitant to give an R rated comedy with no name actors essentially a $35 million budget. So Phillips made them an offer. He would forego a $6.5 million salary his salary in exchange for 16% of the film's gross their top line. The movie was released in June of 2009. It was a huge hit, hilarious. Phillips wound up making around 75 million off the first hangover according to this source windows of true and 150 in total for the trinity. One last thing. Lead actors also got taken care of eventually Cooper Helms and Galifianakis all signed $5 million salaries and 4% of the gross each of the next two movies. According to this back of the envelope, who knows if it's true each took home close to $30 million $28.4 million from just a second hangover movie. And this really goes to show you what ownership does. Very proud to announce that a number of members of my team who've been with me are going to be getting carry. And everybody who is on the podcasting team and who works for me at launch in the swing startups is also included in our carry pool. And we just sold some shares in a company can't say which And I last night, from my former chief of staff and now managing director Ashley sent me the waterfall. And so not only am I getting my carry as I do as a GP, my entire team is going to get a little tasty poo, we're gonna get their beaks wet. And the great part about that, I was talking to a friend of mine, was who is concerned that I work too hard. He said to me, you work so hard, Jay cow, let other people do some work and, you know, get back some of your time. And being able to have upside equity participation really makes people feel appreciated. And nothing is going to make me feel better than having uh this great funnel of my carry flowing in not just to me but to the rest of the team so they all get a little taste and hopefully i get to buy everybody on my team eventually a condo or a house and my god what a great legacy that'll be when i retire if i bought all their houses That is my intent. So for everybody on my team, I do appreciate the hard work and you make me look real good every day. And this Todd Phillips story is also heartwarming, because he took a bunch of actors who were making less than a million combined. And then they got to get a $30 million Leonardo DiCaprio level payday. That's George Clooney money, or Zach Galifianakis, life changing money. So if you're not getting equity or upside in the company you're at, you don't have equity participation. If we learned everything over the last couple years, equity participation changes you from being a wage slave, maybe a little bit of charge language there. But if you're just getting a wage, you're can pretty much define your trajectory. 6% raises, you're making 20 bucks an hour on your first job and just 6% a year for 20 years, figure out where that puts you an hour. And then at some point, it caps off. I'm writing about that in my new book, actually, as I talk about equity as the path to being self reliant. So fight for equity, get equity and earn the equity, right? So understand equity, fight for equity, and then earn your goddamn equity, put in the work, do the work, and make your boss really incentivize to give you equity. I am absolutely thrilled give equity to my teams because it keeps them around longer. And it's vested over time. So what happened here with the hangover was, if they did not get paid well, and didn't have this equity participation, the studio would not have got hangover two and three and had that money printing machine, what they did was they ensured the band would stay together and the band, in fact, stayed together. that trio did all three movies can't say that for jaws or other films it's really hard to keep the band together sometimes and so one of the great things about venture capital firms is everybody gets their carryover investing schedule so you can't just pop in hit a winner and then bounce. you gotta stick around for a couple years. I think most GPs, their agreements are seven years or 10 years basically the life of the fund. You leave early, you lose that percentage. If you stay for seven of the 10 years, you get 70%. Say for five out of 10 years, you get 50%. So you got to stick around. And that's good, sticking around, if you're appreciated, and you got equity participation, really smart move for people in their careers, because now you've moved from being just, you know, a person who has to make a wage and the only way to really be to make it as somebody getting a wage is to be what I call a virtuoso. If you hit that virtuoso category, Steph Curry, LeBron James, Todd Phillips as a director, Steven Spielberg as a director, George Clooney, the virtuosos do get paid incredibly well, we would all agree. But that's the top 2% of any field. other 98% it just goes downhill from there. And then once you get past the top 30%, if you're in the bottom two thirds, you're fungible. In other words, they can the seventh actor in the film probably doesn't make or break the film, they could put anybody in there. That's why they can pay them whatever the day rate is, if you catch my drift. So you either have to be a virtuoso, you got to have equity participation. So just let that sit in your mind as you work on your career. All right, Uber eats was advertised in space. Go Uber Uber eats is awesome. Uber one membership if you don't have it. I'm talking my book here, folks. I still got a lot of Uber shares. Uber one is like Amazon Prime I ordered from Walgreens the other day came in under an hour. It was unbelievable. I needed soap for a load of laundry and I ran out of soap and I ordered it and I had the soap before the next load went in. And I had it I did have it on and you know, heavy duty cycle, it was like a 64 minute cycle or something. But point being, I got the soap before the next load. I do my own laundry sometimes. Yes. I like doing laundry. Actually, I find it like cathartic for some reason. This Japanese e commerce billionaire, you saw who may Zawa, you saw who may Zawa, also known as MZ. He's a fashion, you know, internet billionaire out of Japan. He just went to the International Space Station and delivered an Uber Eats order. Let's play the 25 second clip, and I'll see you on the other side.

### Human: Thanks for listening to Cameron Titleman's Ask Me Anything. If you'd like to participate in weekly AMAs and discuss all aspects of startup life with Jason and our community of 25,000 founders, join us at thisweekinstartups.com slash slack. Thanks again to LinkedIn and Broker and Notion for making this possible.### Assistant: Okay. Yeah. So hi everyone. Just as a reminder, my name is Cameron Teitelman. I founded StartX, which is a Stanford affiliated startup accelerator and founder community. We've been around for about 10 years now. Started in 2009, 2010, 2009. Things are, the exact start dates are always fuzzy on things. And I've worked with probably around 700 companies to date. Companies have raised about $8 billion. Ones like Linebike, Branch Metrics, Snapchat, a bunch of biotech companies. I'm now founding a company that was a kind of built off of my insights around how people build professional relationships at StartX and in that community to help event organizers, run online conferences, trade shows, and professional networking events. Yeah, one of the big things a lot of our founders are asking, I'm hearing from a lot of people, is this question that Kevin asked, which is, are seed investors investing right now? And then what's happening for later stage also? So usually the fundraising timelines are focused around the end of the summer, the beginning about end of January, early February, and then this month in May. And so we advise our companies to usually fundraise around those times. And that's when we have our demo day. Although what we're seeing now with this crazy environment with COVID is that a lot of angels, particularly, and even somewhat bigger investors are actually sitting on big piles of cash. because they're not really sure what's going to happen to the economy. And so they are, they are actively deploying money, but they're not necessarily, they haven't, they, they didn't get rid of a lot of their cash in the first part of the year. So actually right now in the next couple of months is one of the best times to fundraise. Um, one, we see the economy kind of going back to these levels that are a bit nuts. Uh, from my perspective, I mean, you know, maybe this won't, won't age well, but, um, You know, people's portfolios are the Nasdaq, at least, is higher than it has been. It was higher than it was in March, the end of March. So yeah, I would say right now is a good time to fundraise. So James asked, at my university in the UK, there's little to no entrepreneurial culture. How can universities like this mimic the success of Stanford, et cetera, and create an environment that encourages building and innovation? So I was very lucky when I founded StartX in that there already was a very strong entrepreneurial culture at Stanford. And there's kind of this, if you think of building a product, there's a different layers of the technology stack. And building ecosystems is very similar, where the base of the ecosystem needs to be inspiring people to be interested in building companies, which I think there's a lot of online content that does that now. But the best way the university can do that is to engage an alum that has been successful to come back and give thought leadership talks. The kind of second layer above that is the Steve Blank type stuff, which is if you've never looked at Steve Blank's classes, take a look at that. A lot of that's around allowing students or people to do stuff like kind of like what Startup Weekend does, which is experiment and kind of play around with a startup idea by doing it. And the third layer on top of that is more intentional support for the people specifically that are very serious about building companies. And that's where kind of I came in and built StartX. As far as like entrepreneurial culture. Yeah, I mean, that's a that's a super hard one, but usually do it again through inspiration and role modeling. and then building support structures for people. James asked, you love the look of the StartX student residence program. Does the accelerator structure change for current students? And what are some of the pitfalls you have seen people make starting a company whilst finishing their degrees? Yeah, so we initially started for people right out of school. Actually, one of our first batches, the current CEO of StartX was in with his company while he was graduating. And we've evolved so that we're now supporting first time founders, second time founders, people like Sebastian Thrun's companies who founded Udacity and a bunch of amazing companies. So we kind of have those different tracks as well as the early stage companies in the accelerator that are pre-product market fit, the post-series A and growth stage companies. And so what we found is we were going up market and we didn't want to lose support for the earlier for the students. And so the key with any product development with startups as a product for founders is to make it specifically focused on your market. And so for students, the it's not a traditional accelerator, we mainly focus it on helping them get mentorship around focusing on the things that they need to focus on to create strong fundamentals in their company. And that directly ties to the common pitfalls companies have. So the number one reason startups fail is interpersonal team dynamics. And so making sure their initial team is set up correctly, you have conversations about equity, roles, around what happens in crazy scenarios. Like if someone wants to sell early and someone wants to go long and build a billion dollar company, How do you make those decisions? How do you set culture? Um, there's a lot of just basics and, um, having a foundation where you can repeatedly build trust within your founding team by having clarity around roles and decision-making as well as having a weekly feedback session with each other. So you surface any issues we have with each other. Those mechanics generally make for a strong founding team, which any seed investor is going to look for before actually working with you. The second thing we look for, which is again what we look for in the accelerator in general, but we help the students with, is making sure they're actually working on something that is a problem. And so getting them to actually focus on product market fit and even more like problem identification and talking to a lot of the potential customers to really understand if this is something that is a real pain point versus just something they think is a cool idea. And so, from my perspective, not having good team dynamics and not focusing on a real problem that you deeply care about are the main pitfalls for any founder, not just for students. Presh said, you dropped that. You're working on a startup now. Could you share more about that? What are you building and why? So, this kind of goes back to ecosystem building. So, accelerators that are very successful and are really more about very strong, intentional founder communities. And the programs that are going to persist long term are ones that are not only a just like a rebranding of an angel investor, but people that intentionally develop their community into a structured ecosystem that supports itself. So a lot of what StartX was about and is about is around helping coach a founder to identify what their biggest pain point is and what they need to focus on. and then helping them build a relationship with someone who can support them with that. Whether it's another entrepreneur, that's at the same stage, that later stage in them, an expert in the industry, an investor, and that both is related to getting them access to some insight, as well as getting them access to specific people, like potential hires, investors, customers. So my new company is a virtual events company, professional events. And really at StartX, we did about 17,000 matches with people between founders and people who can support them. And I personally ran about 1,000 events while I was there. And if any of you have run events before, pain in the ass, the logistics are just awful and making them a great experience. So what we're trying to do with this new company is say, we're gonna allow organizers to create virtual networking and professional events and conferences, trade shows, so that we can help any attendee build a relationship with someone who will help them move their business goals forward. And actually on that note, I'm actually running a fundraising talk on that later today. I think it's around like three, 3 p.m., which will include both kind of peer-to-peer networking as well as talks. So anyone in this channel is actually welcome to join. You can just go to nexusevents.io and sign up to the fundraising training. It's like fundraising basics. This is a training I do at orientation at StartX. And I've worked personally with about 500 companies on rounds. And we did about 700 investments within StartX, so we basically got to see a lot of the patterns of how do you structure a fundraise so that it's very systematic and effective, as well as a bunch of mistakes people make that they have to dig themselves out a hole with. So go ahead and feel free to request access to that event. I'll just cross-check that you were part of the Slack channel and then give you access. Ashley asked, how are you looking at accepting companies through the StartX COVID lens? Which companies, your portfolio or not, do you think are particularly well positioned for the post COVID environment? So I think there was a lot of startup tourism in the last 10 years. And it'll be easy to, I wouldn't say easy, but it'll be a good environment to funders right now. It won't be probably in a couple of months. And so I think our criteria that we use to select companies is recession proof because What we're looking at are people, individual founders who are extremely passionate. And what I mean by passion is intrinsically motivated. There's some internal reason why they want to solve this problem and they're going to fight through until they solve it. Whether that's a, you know, we had this one company called Six Dot, which is a braille labeler that helped, um, that helped, uh, you know, older people with arthritis that have these really horrible braille labels, um, that hurt their hands. It basically turned it into a QWERTY keyboard instead so that they can print out braille because they're blind. And Stevie Wonder used it, and it was a relatively small market with respect to venture, but from our purposes as a nonprofit, it was a huge success for us. And people needing to label things with braille or blind people, that is a need that is independent of the recession. And that being said, there will be a bunch of our companies who need to pivot And so that is another reason why we focus very heavily on strong founder dynamics and intrinsic motivation around a problem. And they may need to pivot to a slightly different problem or a slightly different solution to the problem given the current structure. So we have this company called Marco Polo, for instance, which is doing incredibly well. It's a video social app. Those companies are taking off and doing incredibly well, whereas our hardware companies are struggling. But then a lot of the hardware companies have like these virtual robots that they have like, and they basically, not virtual robots, they're robots in their manufacturing plants in China that they're kind of tuning into or logging into and having them do the prototyping. And it's just kind of crazy, this environment. So the companies that are positioned well are obviously the ones that are focused on online interaction and getting people essential services. You know, but it remains to be seen. So Jean asks, talking about mentorship, in what areas from your expertise do solo founders need the most help with? Yeah, so I'm a solo founder. And do you see differences in what help and mentorship is required based on certain factors like age, experience, formal education? Okay, so solo founders, The biggest risk with being a solo founder is that if someone's not in the same social status with you as a company, or within your company, like a co-founder, then people don't necessarily, people default aren't comfortable arguing with you. And that can create a very strong echo chamber where you're not actually getting real good information from the rest of your team. And so as a single co-founder, the mentorship you need if you're not good at this already, is to be able to listen very carefully and create an environment where people feel safe sharing when they disagree with you. I mean, one of the things I just saw is I did something that I kind of shut down one of my employees recently on something, and they basically gave me feedback that I really appreciate about, you know, like, hey, you shut me down on this, but didn't hear me out, and so that's great. I'm happy I've made an environment where they feel comfortable sharing that. And then I go back to my whole team, create a norm through saying, okay, this person gave me feedback. I agree with it and I appreciate it. And like, this is what I'm going to do based on that. And you can kind of create that cycle. So if you can get, um, so yeah, single founder is super tricky. And so you need to hire and you need to be able to delegate. You need to be able to build a good open culture. Um, as far as, uh, mentorship based on factors like Asian experience, um, I mean, this is more of a question of what skill level you have rather than your age. I tend to see maturity and skill is only somewhat correlated to age. So, you know, take that for what it's worth. Annette asked, will Stanford affiliate applicants get priority over referral applicants? So, no. The referral applicants, as long as they're referred by people within our community, are evaluated the same. For whatever reason, it's generally been about 10% of the class has been on Stanford. However, we do have some insight into how Stanford people were groomed culturally. And a lot of the special sauce at Stanford is that the administration spends a lot of time on developing a specific culture of, and this is gonna sound surprising, because there are a bunch of arrogant Stanford people out there, but those are usually the edge cases because we try to make a environment of humility where we're not, we don't think, you know, we have our, you know, we, yeah, I mean, we're trying to keep the West Coast vibes of like humility and more relaxed and we don't wanna, like elitist is a bad word for us. We don't want to, we respect people from all backgrounds. And a lot of that is that the people that are getting into Stanford, a lot of them are people from underprivileged backgrounds. There is kind of like the 30%, what's it called, the certain percent that are the legacy kids, who are still really smart, but they come from more affluent backgrounds. I was on a full scholarship, so I didn't. But I was very privileged in my upbringing, so I was kind of in the middle group. And then there's a lot from the underprivileged. And so you have a very strong diversity at Stanford from people coming out. So anyway, the intentional culture building helps us know that there's Stanford people gone through that. And so we just do extra reference checks for non-Stanford people. Because building a very strong culture of founders who are there not just to take, but to provide value to other founders is extremely important to us. Because in essence, we're not like a Y Combinator or these other programs who are kind of like a bunch of partners training you. We're about curating excellent individuals to support each other and then pulling out the best insights and sharing that. So we're much more of a distributed organization and distributed community than kind of a top down. Consumer applicants that are non-COVID related be considered during this time. Uh, yeah. I mean, again, like for us, honestly, the idea does not matter. It matters that the individual has good clarity of thought, good, um, uh, good team dynamics. They intrinsically, they care about what they're working on. They're not going to give up when things get hard. Um, and there's, there's some other kind of long tail things we look at. Um, I already talked about, So Henry, regarding building initial company culture, what are your thoughts in terms of building a flexible but sustainable culture, especially during times of COVID? I actually have no idea what that question means. Oh, I think I get what you're saying, which is you want to be able to evolve your culture over time, but also sustain it. And so the nuance here is that you need some core principles. And so in my companies, both in StartX and in, in my new company, Nexus Events, there's this core principle we have that works really well right now, which is execution over feedback. Because speed is extremely important in building your company. And so if someone on my team is asking for feedback or approval from someone else, it's more important we get that thing done than get it done perfectly. And so every employee and everyone on our team, every team member, is authorized to say, here's a deadline I need this feedback by. And if you don't hit that deadline, they get to move forward or make the decision. And that way, execution is always prioritized over feedback. You always try to get feedback, but then you go for execution. So that's an example of an operating principle that works really well early days. It's kind of like the move fast and break things thing that Facebook had, but I think a little more less destructive. And that worked really well for them, it worked really well for us. When we get bigger, those operating principles need to change, whereas one of our core cultural values is transparency, which is extremely important for remote companies, and that will never change. And so you kind of have to have the different set of what will change and what won't change and what you believe long-term is important as a foundation versus what is a set of operating principles that help you move quickly right now. Let's see what else we have here. Matt, seems like health tech is a significant focus on StartX. Do you take a different approach with those portfolio companies? Educate, manage, support them for the rest of the portfolio? So this is also very similar to, it's just product differentiation. So we have our core infrastructure of what do you need help with as a founder? We help people figure that out. Here are a bunch of peers, mentors, and experts that can help you on that. And so the program's actually 100% customized per individual and per company. And then we just plug in different mentors and support people and different content. And so we don't really have a curriculum. That being said, we have found our bio companies that require FDA approval, we have a six month program versus a 10 week program. And so that's a little bit different. Besides that, like an ecosystem of individuals that are focused around supporting your needs can really help anyone. And so I think for us, we have about 30 to 40% of our companies are medical, more as a function of the percentage of medical companies that Stanford creates than as a necessarily a focus of ours. We only, we built med as, and like we have like a hardware vertical and a enterprise vertical and a consumer vertical and a nonprofit vertical. We don't promote those as much because the main reason is that Medical people think that they're very different from everyone else. And so you need to have kind of a concentrated brand for them and specific resources. But for the medical side, it's more like we help them with FDA consulting and getting an SBIR grants. And right now, a lot of our companies, which are a lot of Stanford professors, companies are working together to actually share samples for COVID research. And like we actually had one of the first COVID tests in Connecticut from one of our founders, because someone from Stanford sent a sample to someone from Yale to get it started. So that's like super inspiring. I don't have a medical background, but I've learned a lot about that. So Laura said, given that the companies don't give up equity, there's no structured culture. How do you cultivate high engagement with your founders, companies and mentors? So to be clear, there's a very, very structured program. The point is, it's kind of like saying, oh, a university has a bunch of different classes and so it's not structured. It's like, no, they have a class structure where there's an hour lecture, there's a teacher and there's students and there's a structure. And so we just built a certain infrastructure around peer support and each other. mentorship programs, both advisory boards as individual mentors, a concierge system where people can request access to something and we deliver a resource back to them within 24 to 48 hours. And that could be a person for them to meet, an expert for them to talk to, a certain content, kind of like a Google for founders, if you say, but with very curated set of resources. And so the way we have created engagement is through building engaging products. And so our founders have problems and they look to us to solve those problems. And if we have a very low friction, high value way of solving that problem, then they'll engage in it. I never once, I really don't like these programs where, so, so actually for us, everything's optional. Everything, everything we do is optional. I don't necessarily agree with that for our first time founder program. Uh, and so that's kind of something we're, we're figuring out because sometimes there are things that founders don't know are useful. And so our perspective is we should be able to communicate the value of it and convince them to join it, rather than kind of holding their feet to the fire and saying, if you don't do this, like dah, dah, dah. I think it's lazy for programs who, and founders don't like that. Founders don't like being told what to do. They're rule breakers. And so like the programs that succeed the least are the ones that, except for ones that have a lot of power, like, you know, Paul Graham used to threaten founders if they didn't do certain things, which I never liked. Um, You can go back and look at the history there. But I don't like, and so when you have that much power, you can sure exert power over people to make them do things, which I think is a little messed up. But our approach is more like, let's build good products and market them well, and then create engagement. As far as equity, there's something called market norms, and something different called social norms. And these are in products. And so an example of this is there used to be this product which was a, like, parents helping each other with carpooling. And it was just parents signing up, and it was an app, and they could sign up for a certain amount of times, or it was a website or app, I don't know. They could sign up for times to pick up kids along the route, and it was very successful, but it wasn't monetizing. And so what happened is they ended up putting in monetization around, like, give a tip to the person who's doing it, and usage dropped off like 90% or something. It's because people were helping their neighbors and their community out of a social desire to add value to them. And when they felt like they were being, it was like their time was being valued at a dollar a ride. They're like, screw this, I want to do this. And so StartX, the thing that's special about StartX is we're very much focused, like the BJ Fogg types. I mean, I took all the psychology and classes at Stanford around creating engaging products and the guy who, created like did all this like Facebook and Zynga and all that, they're professors at Stanford. And you can have market norms where you're paying people for things and it's very transactional. But I strongly prefer to go with a social norm perspective. And so what we provide our mentors and our founders is a very rich and rewarding experience where we can both help them learn through teaching others, and make them feel like their time is being valued. So we have a huge amount of mentors we don't give any equity to, and the purpose of that is that we do a very good job at helping them feel like their time is being spent well. And that's a lot of what the StartX ethos is. It's kind of like a big commune of founders that have all opted in to support each other, and we're the logistics system. So talk about the collaboration between StartX and StartX Hospital and Clinics. How are grants assessed and awarded? Okay, so we have a strong relationship with both Stanford and Stanford Hospital. The hospital and Stanford, a lot of that is around us connecting our founders to the right people in the hospital. And we have kind of regular sessions with the leadership of the hospital to kind of address, figure out what do they need help with and what innovation are they looking to facilitate. And then a lot of it's around, a lot of what we do with our founders on the enterprise side is help them with enterprise sales. And so really what that means is you have to help founders figure out who the right person in the company is to talk to and then how to talk to them. And so that's really how we facilitate that. Jackie asked, we have a StartX Med COVID task force. Yep. Are we able to do that for other global solutions? Yeah, that's a great idea. I'll pass that along. I mean, definitely climate change is something we care, we know is a huge issue and we want to support. So, I mean, it's a cool idea and it has been really inspiring being on these weekly talks. We're having everyone from, you know, Bill and Melinda Gates Foundation to all the people involved, like the main people involved in funding COVID joining these weekly things with us. And so that's been inspiring. Yeah, as far as believing another pandemic is in the not-so-distant future, and we have global warming to contend with. Yeah, it seems like a good idea to create other task forces. I'm not sure what else I can say there. So Heidi wrote, building off of James' question on mimicking the success of StartX Med, how can other med schools around the country partner with you to develop satellite programs? Yeah. So the new CEO of StartX, uh, he actually was a, so he, he actually ran like, um, he had this company called wifi slam that got acquired by Apple. And so he's, uh, that was basically building automation and algorithms around, uh, your wifi indoors. So you're actually, your iPhone uses his software to do G to do a location more than GPS. Um, and what he's been spending a lot of time on is automating what we do in software. and kind of building repeatable systems. And so at some point, we would love to open that up and partner with other universities. But with any startup, you have to focus on your core first before you grow and kind of spread. And so I think just reach out info at startx.com. And I mean, he's probably he's usually willing to talk to the universities. What I'm also doing in parallel is I have this new company I'm working on, which StartX and Harvard uses as kind of their core community infrastructure. And a lot of that is about virtual events and virtual networking and content, which is the core of what these programs need to do, is they need to connect people so that founders can have help identifying what problem they need to focus on and connect them with a resource to support them on that. And really, the benefit of the university is you pull together a group of people who are all have a common affinity with each other, because they both went to the same school. And then they're just more willing to help each other. And so I would just say, you know, reach out to us. And ideally, we'll have both software and content in the future that will allow you to Actually, this is a great idea. I'm just going to start running a regular, like how to build a university accelerator online event. And I'll give talks on that and ask questions. I think that's a solution. Um, okay. War stories about running Nexus events during COVID and what you learned from it. So, um, I'm in a very, very lucky position where every trade show and conference in the world is basically shut down until like this opens back up. And so I think personally, um, I've been able to recruit and fundraise and get customers very easily. And so I'm very privileged in that perspective in this environment. And so I think our war stories are more that we're kind of taking off and getting a ton of usage and customers. And it's just kind of like being able to manage and not making sure you're sleeping and everything. I know a lot of companies in our portfolio are having to do layoffs and salary write-downs and that sort of thing. And so that's challenging. For us, it's always interesting, because as a founder, speed is the ultimate weapon. And this guy, Mike Cassidy, speaks at StartX and gives this talk. You should check him out. I'm going to have him on Nexus events to give a talk at some point. But the core with speed is really following the 80-20 principle. And what the 80-20 principle is, you all should look it up, is that generally as like a design principle, a life principle, 20% of the work gives 80% of the value. And so there'll be a lot of people you hire which are pushing you to make perfect products and make things like really good before you push it out. And you read Hoffman said this thing that always made sense to me, which is you should be embarrassed by what you release. And so my worst story, a part of the worst stories is that we had this one customer like last, I think it was two weeks ago, who every day we had to talk him off the cliff for canceling the event on our product. Cause he was like, he wasn't sure like, Oh, online event. Like, I'm not sure what people would be happy. And we just had to every day convince him to keep it going. And then when he ran the event, it was very successful. And yeah, he was very happy. So especially with these early adopters or with products that are really small or early stage, There's a lot of handholding you have to do with early customers to have them try, like work on your thing, like make sure they actually follow through on what you're working on. And let's see, do I have any other war stories? Well, I went from two people to 11 in three weeks. And so that was insane. And I think, Part of that, part of the tricky thing there is making sure the people you're hiring are right for the job and building a culture at the same time. And so, my ops person's gonna hate me for this, but I did this thing which I knew was a big mistake, but I didn't know for sure, which was I switched our task management system. Like, it was something that me and my one engineer was working with. We're, we're, we're had like a process around, we're trying to switch to JIRA. And I've learned this over and over again, that when you're rolling out new infrastructure to your team, you have to like set it all up and then do a hard switch over to it. So right now, we're still working off of a spreadsheet for engineering and JIRA for business. JIRA, just in case you all don't know, it's a project management tool. And that can create a lot of issues internally in a company. But one thing that is really nice is that I had a ton of experience at StartX with managing remote people because most of our staff are volunteers. And so there's a couple of things that I implemented early that have helped us avoid a lot of firefighting. And if you all don't do that, it's super important, which is one is weekly or biweekly one-on-ones where you check in on how your team is doing personally and how they're feeling. and unblocking them. Two is making sure there is a heartbeat in your company where you have a regular cadence around weekly or daily syncs. Three, which is something I still haven't done, which I need to do this weekend, which is OKRs, which is making sure you're setting monthly goals. And four, especially in this remote environment, is making sure your team members are building relationships with each other. And that's way easier to do in the office And so having regular, we actually, actually we're kind of using our product for this, which is cool. But having either first daily or bi-weekly or once a week sessions where you get together and have a very intentional hangout where you're talking about each other. Oh, embarrassed by what you release, there's a question mark. Yeah, so just to talk about that. I don't know about you all, but I'm kind of a perfectionist, and I always have to fight my perfectionist tendencies. Well, I think I'm much less of a perfectionist than a lot of people, because I'm OK releasing things that are not fully baked. But the point of releasing something that you're embarrassed by is the following. An MVP does not mean it's not an MVP. It still has to be functional. And I always love the Google Docs analogy, where Google Docs had such little functionality early on. It was really ugly, it was really clunky to use, but it did the one thing that people really care about really well, which is like the real-time collaboration. And so it didn't need all the other stuff to look pretty, to do all that. And founders have this huge mistake where they try to make things beautiful first and then release it, or kind of do this, like the Steve Jobs approach of making everything perfect first. But what you don't know is Steve Jobs did a massive amount of internal testing with really shitty things first. And so, Part of this is like really nailing the value prop that you're providing, but all the other stuff around, like, is the UX perfect? Is the UI, like the visuals, do they look really nice? Are there no bugs? Like, no, just let that happen. Like, get the product in customer's hand. And if you're not a little bit like, oh, like, ugh. they're gonna hate this part of it, then you're not releasing it early enough. I think that is all the questions, and just a quick reminder that I'm gonna be doing regular founder trainings on our site, probably weekly or biweekly, so go ahead and yeah, sign up to that.

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Very simple, very important to have cyber and DNO. So to instantly buy custom built insurance for startups, go to embroker.com slash twist, E-M-B-R-O-K-E-R.com slash twist. While you're there, you're gonna get an extra 10% off by using the offer code TWIST, T-W-I-S-T. Okay, let's get back to this amazing episode. Okay, congratulations to our friends at MailChimp. What an amazing company. We've used the product and amazing product. They were one of the first sponsors of this week in startups over 10 years ago. What a great company. What a great founding team. And one of you, Colin Devore, asked me, or Dev Devereux, Colin Devereux asked me to comment on it. And there's a lot of notable things about MailChimp. Now they've been acquired for $12 billion in cash in stock. And MailChimp will likely be used to beef up into its QuickBooks offering by adding email marketing features. QuickBooks, you know, is a suite of accounting software targeted at startups and SMBs, SMBs, small, medium sized businesses, and they have over 7 million customers worldwide. Intuit stock rose 2% on the news Monday afternoon. And into it currently has $156 billion market cap. They own a suite of products that includes TurboTax and credit karma in addition to QuickBooks. And they did almost 10 billion in revenue in 2021. And they're growing 25% year over year. And that's impressive for a company that's been around since 1983. MailChimp acquisition would also be the largest acquisition of a bootstrap startup ever. What's a bootstrap startup one that does not raise venture capital. When I started using MailChimp, I meet and I became an angel investor, I immediately asked Ben, can I raise money? He said, No, we're not raising money. I said, Oh, well, if you ever do, let me know. He says, we're never going to, he was absolutely clear from the beginning, they would never raise money. And it's 100% founder owned and incredibly profitable that company. and they would give their employees huge bonuses every year i think somewhere you know what i heard from employees was you know fifteen to twenty five percent a year cash bonuses to a group of employees who are very well paid so other major exits of bootstrapped companies you may remember minecraft getting bought for two point five billion assurance iq got bought for two point four billion According to the New York Times, MailChimp has 13 million total global users and 800,000 paid customers, half of which are outside the US. One of the notable things about MailChimp was they were one of the first companies in the web 2.0 phase to have personality, to have a character attached to them. And back in the 2000s, that was all the rage, you know, Reddit had their little alien and everybody had to have, you know, some, some little character associated with their brand MailChimp, obviously. I used to do these MailChimp ads where I go, MailChimp, their revenue, according to Forbes hit 800 million last year, that means they sold for 15 times, right 10 times, it would be 800 million would be 8 billion. And so then another 4 billion 12 billion 15 times, you know, their top line, it's pretty juicy. And if they were, let's just say they had a 25% margin, that would be 250 million. That means whatever number that is 50 times. The founders, obviously, as I mentioned, we're doing this, you know, profit sharing model instead of stock based compensation that reduced all the risk for all employees. So a lot of people are dunking on them. Oh my god, why didn't they have stock options, etc. Well, because the founders believed they would be able to attract talent by playing top top salaries, and giving huge bonuses, and great benefits. And all those employees took that deal. In other words, instead of making, you know, 200 to a million dollars, when the company was sold after working there for 15 years, you know, they received $25,000 a year or $50,000 a year guaranteed. And so that is capitalism at its finest. Those people could have gone to Google or Facebook and made more money or they could have gone to a failed company on stock options, which became worth nothing. They chose the middle road. I'd like to see more companies pursue this. And I'd like to see more bootstrap companies who don't raise venture capital, or maybe raise one round to become a Pegasus, like some companies that we've had, you remember, Jason Freed, friend of the pod, great guest on the pod from 37 signals had a controversial tweet on ownership and stock options back in February of 2020. I'll quote Jason Freed. giving out equity and startups benefits ownership way more than employees. It allows the owners to push employees harder and harder. Because quote, you've got skin in the game. Now you're an owner. No, you aren't owning less than 1% of anything is an ownership. A true and not true. I can tell you that owning 10 basis points or 25 basis points or 50 basis points in a unicorn, or one that becomes you know, worth a decacorn or 100 billion a centurion that could be a lot. And Paul Graham and I had some fun in the replies of his tweet. Yahoo gave me a lot of options when this program Yahoo gave me a lot of options when they bought our company. I made so much money from them that Yahoo got less work out of me. I quit after a year, leaving a huge amount of money on the table because I felt I already had enough. And I wrote I heard from a friend that a fraction of 1% of Uber was worth a lot of money. That's obviously I owned a fraction of 1% of Uber. Aside from all of this male chimp was not 100% remote before the pandemic, but now offers four different variants, shouldn't use the term variants, variations of employees, they could be 100% remote, no set desk, two days in the office, no set desk, three days in the office dedicated desk or fully in office dedicated desk. 76% of the staff chose to come to the office two days a week or less. So that's a really interesting aside. Congratulations to the team to the people who are haters who are dunking on them. know, like, you're just in the crowd in the Coliseum, like eat your bread and enjoy the circus. You're not even in the game. Nobody cares about your opinion. Additionally, I will say what a savvy move by MailChimp. You may have noticed companies like review bought by Twitter, and a company called substack offer, I believe completely free email. And I don't know if there's any limit on the number of emails they'll send for you. They want to make money if you charge and they take whatever 10 or 20% of whatever you charge for your subscriptions. That's the way the world's moving. I believe email sending will become a commodity. So MailChimp did have some headwinds. I don't think it would have you know, made MailChimp fall apart. But I was looking at it and saying, you know what, maybe I'll take some of my MailChimp list down, move them to review, because now if you go to twitter.com slash Jason, you can sign up for my review. So if my MailChimp is built into Twitter, and I'm a Twitter user, and I'm active there, I'm thinking about doing that. In fact, can somebody on the team take Jason's list, my personal list and just put it in review. And let's just let's have a conversation about that at the next staff meeting. Congratulations to the MailChimp team. I'll take a couple of questions. Rachel on a scale of one to 10. How manipulated was crypto today? I think crypto is at least 50% manipulated, at least maybe as much as 80%. What do I mean by manipulation? I think there are people who are creating fake trades. And pushing activity in order to get other people to join in. So as an example, take the board, a, you know, yacht club, what if we were the first, you know, you and five of the people listening here, we each owned 100 of these. What if we created a bunch of wallets, and we started trading them back and forth with each other. And we increase the price 5% each time. And we did that over 20 days. And they went from being worth 9000 to 175,000. Oh, wait, that's exactly what's just happened. We don't know if people are doing this kind of painting of the tape or flooding the market with transactions to trick new people that this is a vibrant market and to get them excited. But that could be what's going on. You see this acutely in three card Monte, if you've ever been to New York, and when I was in New York, I was fascinated with this. And I would watch it over and over again, first from afar, and then from like a short distance, and then right up front, I never played. they would have three cards, and they would move them around. And you'd have to guess which one was the queen. And you'd have confederates people who were in on it, who are betting. So you'd see two or three people betting. And then you'd walk up and you'd see them when you know, they bet 20, they went for you, they bet for you, they went 80. And they would be winning, and they went to 300 bucks, then you would get in there, you'd win. And then you'd win again. And then you'd bet again, and you'll lose. And then you put more money out and you lose. And then they would take all that money off you. It turns out, they were putting these Confederates around you to make you think that there was a lot going on here. Obviously, like NFTs are not worth what they're worth. There's no intrinsic value there. So the only value is in what the velocity of the trading is and what people put on it. Well, since you don't know, who's doing all these trades, and you don't know if there's a whole group of people manipulating the market, you're probably that sucker walking up to three car Monte, that doesn't mean that somebody can't win once a three car Monte and walk away. That doesn't mean you can't get in on it and be one of the Confederates and get paid by the person and start your own three car Monte scam. So I think it's a giant scam 60 70 80% of the time. And I think that there'll be a lot of people who could get hurt by it. there's another group of people who believe that this is like manifest destiny. If enough people buy into Bitcoin, if enough people buy into board apes, then it creates the market. And then, you know, it's never gonna go away, yada, yada, I am not one of those people. If you are buying into this, and you've made a ton of money, I suggest you clear out 25% of your position 50% of your position, just to have that idiot insurance, unless you're a complete gambler who likes to have 90% of their wealth in one thing. Okay, last question, how would you go about starting your career over if you're 25 today? Oh, my Lord, what a great question. Well, I had access to invest in a lot of companies. And for the first I don't know, from when I was 25, until I was 40, I wasn't investing in my friends companies, I should have just done that. I would be really rich if I had done that. And so investing in your friends, and placing more bets is what I would have done, I would have been more risk taking. But you know, when I started in my career, I was very conservative. And, you know, I didn't want to take as much risk, and I should have taken more risk and been more bold. So that is my piece of advice to my former self. Okay, so I'm gonna take another question here. Sex Pistols handle on YouTube asks, How do you decide if a co founders right for you? What about asking friends to be co founders? Okay, your friends are probably your best co founders, because you have a great relationship with them. And you just have to make everything clear with them. So the way to make things clear with them is to say, Hey, what happens if we do not agree? What happens if we break up? So an example of this might be You know, YouTube, when it started had three founders, it wasn't just Chad Hurley. And the other guy, there was a third one, Javid and Javid, I think did like two years and then left famously. And so he gave back half of his equity, which I guess you could argue was a mistake in hindsight. But you know, whatever, I mean, he still got rich. that was most fair to them. So this is part of basically doing a prenuptial agreement for startups, make sure you have those conversations, you have three co founders, okay, what if one of us quits? You know, in year one, what if we can't make a decision? How do we do that? Okay, there's three of us. And there's two board members, that's five. We'll have three common seats, we'll give one seat to the seed investors, one seat to the series A investors, there's five. If three people want to do something, that's the way we're going to go. And the CEO is going to make the final decision, you're going to be CEO, I'm gonna be product officer, you all default for business decisions to you all, you'll default defer to me for product decision, you just have that discussion, just like people who are going to get married might discuss like, what if we want to leave the city and live in the country? What if we want to have kids? What if I don't know, you know, pick the myriad of issues you might face in a marriage or a partnership, you really want to discuss those things up front, and you'll go a lot further. Peter Lang says, What does it feel like to be rich? What are your guilty luxury purchases? Hmm. I you know, when I first made a little bit of money, it was a major difference for me, because I was scared of running out of money for life and felt that pressure. When I first made a little bit of money, it actually just made me more bold, took the edge off. And now, I don't really think about it. I'll be totally honest, I don't really look at things all that often, I just focus on the process. And so I think in that way, it's freeing, it's becomes a clarifying moment for you, you become what we call in the industry post money, a person who's post money is past that milestone of needing money. It's a really obnoxious thing, I guess, from the outside, somebody might clip this and be like, Oh my god, post money. it's kind of like being healthy, right? Like if you're healthy, and you can run the marathon, and you're your ideal weight, and, you know, that's like one form of health. And then I think there's wealth, which is another form of health, and education, right, and relationships and mental health. all of those things, when you kind of check the box, it frees you to lower your anxiety about that issue. You know, and like, I'm anxious about my weight, like in the age of COVID. I'm like, I dropped the 20 pounds, I really need to get that other 10 pounds off. I'm 50 years old right now. So I'm actually working on that in my life. And you know what, no amount of money can solve that problem. For me, I still have to solve that problem through my own, you know, discipline and really working out and eating better, which I'm trying to do. So I But it does think I think in you know, I talked about wealth of the next book a whole lot and What I think it does is the pursuit of wealth, I think is noble, because it does allow you to make more change in the world. So people who complain about wealth disparity, the best thing they could do would be to start a business and then pay people a lot of money to work there. Like if you actually really care about wealth disparity, well, why not open a cafe and pay people amazingly, and give them health benefits. But you know what, some people have actually done that. that's a better way to make change in the world than to sit there on Twitter and, and, you know, dunk on people or complain about Bezos, like, look at all the good Bezos is doing created a lot of jobs, he's paying two or three times minimum wage. You know, you could come up with like, is he should anybody have that amount of wealth with somebody has to be the richest person in the world. And he gave 10 billion to climate change and his wife or his ex wife I mean, amazingly, she is giving away money faster than it is accumulating. And so I do think that wealth and the pursuit of wealth can be noble, depending on how you pursue it, obviously, if you're pursuing a life of crime, no. And if you do it at the expense of other people, obviously, no, or the environment, obviously, no. But I do see that people who acquire wealth, then are faced with a crisis of consciousness. where they look deeply and say, why am I on the planet? What am I here uniquely to do? And what can I do better than anybody else? And how can I pay it back? And I did think about that. And the way I thought I could pay it back, was by doing this podcast every day and inspiring you to become a founder, right? I literally thought about that. And then I thought, well, how can I pay it back? I did so well in journalism. Well, I can start Angel University and the Angel podcast and write the book Angel. So I could teach people how to become angel investors. And there are now 10s of 1000s of people who are angel investors because of me, how do I know that? Because they tell me if he joined my syndicate, when I started the syndicate.com was 900 members, the book came out. And now it's at 9000 members. So it's literally 10x in three years. And we're investing in, you know, some months 1012 companies. And that feels really good to then pay it forward to pay it back to not pull the ladder up behind you, but rather steady the ladder. And that's what I'm doing. I'm basically I look behind me at that ladder that I climbed up. And I'm holding it, I'm holding it nice and steady. And I'm giving you that encouragement to climb up that ladder. So start a company. build an MVP, learn how to be a product manager, go to founder dot university, we're starting that as a 12 week program shortly, and you're going to be able to apply, we're gonna have 50 people in it, we're going to teach you how to build your MVP, and then how to get into an accelerator. So founder dot university is coming. And that's going to be another, you know, steadying of the ladder that we're doing, we're throwing back 50 ladders down for founder university, we're literally going to charge this is my current plan for founder university. It's like a 1216 week program, things to be 12, we're going to charge people $700. I'm curious what you think of this, we're gonna charge them $700. And then we're either going to give them their money back if they complete the 12 weeks, or, and I have to look into the legality of this, I was going to take the 700 times 50 people and invest 35,000 in the winter. Is that right? 700 would be 35,000. Which idea do you like better? If you were to come to founder university for 12 weeks, and learn how to be a founder and to take your idea, maybe using no code or coding and make your MVP and get your first couple of customers and we teach you how to get into an accelerator that's going to be because we realized that was a ladder that people needed, which would you rather do get your $700 back at the end if you complete all 12 weeks, because I want people to have skin in the game and I don't need the 700 bucks or B, would you like me to or actually the way I could do it, that wouldn't be like gambling, because I do think some people might consider that gambling. I could personally just agree to invest 35k and the one who comes in and so we take the profit of 35k we invest in somebody option, Michael says option to FA says be Michael says be no money back. EqBell says on YouTube, either sign me up. Well, listen, if you're interested in this founder.university and our Charlie Cuddy is going to run the program. I literally hired an educator to work. I mean, he's incredible. I think he's charlie at launch.co. So if you want to email charlie at launch.co and get a jump on that. We haven't announced it officially yet. So I just thought I would float it here. But it's, it's gonna be a pretty cool program. It's gonna be 12 weeks, because I see everybody starting these programs and teaching people how to be founders. And I was like, Well, I think I know a little bit about that. So my plan is to have 50 people come in and then success for me would be 10 of them 20% getting accepted to YC tech stars launch accelerator, Daniel grosses pioneer labs, something like that, right? I think that's a really cool idea. If you could get your MVP out, get a couple of customers have some data and build a team, like those two or three things, and then be good enough to get the 100k check from an accelerator. That to me would be great success. Oh, thanks for reading the book, Angel. Yeah, if you haven't read Angel, go ahead and read it. And you know, people always ask me, Hey, what can you do? What can I do for you? If you really want to do me a favor, like, there's really only a handful of things you can do. One is to read the book or listen to the audio book and then pass it on to a friend after you're done or donate it to a library and then write a review. Because when you write a review of the book, it really helps. And then the second thing you could do that would be really helpful is to write a review of this podcast and subscribe and join the noti club. I'm going to start doing live events again, by the way, whenever this is over, and my plan is to use these live streams to find folks out. And one thing we're doing that I forgot to talk about was we're going to start twist meetups again. So the fans of this podcast, we're going to let them self organize like TEDx and make I don't want to say your own business, but your own project, where If three founders, a minimum of three, a maximum of seven will, and you have to be a founder, not somebody selling it to founders. So, you know, I love real estate folks and accountants and lawyers and they sponsor the podcast and they support it. But I don't want them to be the organizers of this. I want founders organizing meetups for founders and it's founders for founders to come to the twist meetup. You have to be a fan of the show. And a founder, I guess we'll let other people in as well. But free for founders. And yeah, you just get a cafe, you do breakfast, it could be five or 10 of you and just talk. And then we're going to make a notion page and Rachel is running that and she is Rachel at launch.co r a c h e l at launch.co. If you want to do your city, she's coordinating all that on slack. So if you go to this week in startups.com slash slack, or you email her, you can talk to her about it. But I think we're gonna do New York, London and Austin first. So we're gonna start with three cities, it's going to be a meetup, and we're going to coordinate it with notion and slack. So we're going to make a notion page at this week and startups.com slash meetups. I don't know if that's up and running yet. If it's not, we should set it up this week and startups.com slash meetups. And you know, so then people said, What do you do at the meetup? I think I wanted to start the meetups with just like, you know, your first meetup, the goal would be to have 10 founders have breakfast or lunch or dinner together, and everybody pays their own way. And then after that, maybe go to 50, or up to 50. And then after that, maybe up to 100 or 200. And then you could start adding programming. So maybe we'll give people a pathway where if they do the first one, they take a picture, they share it. And they, you know, mission one, that's a cool way to do it. Mission one is host a tent, you know, up to, you know, five to 10 people have breakfast mission to 25 to 50 people go have dim sum or pizza, or go to a bar. And then mission three will be 50 to 100 people and you have programming for the first time. So if you do the first two, you get to actually host programming. And so mission one, you host an up to 10 person breakfast or lunch, or dinner. mission two, you have to complete mission two mission two is you host a 25 to 50 person meetup where people just wear labels and it's a networking event. And then mission three 50 to 50 to 100 people and you do content and then you would earn the right to do content and then I will probably call in to the content one and you know, appear on a screen or something. So let's make Mission 1, 2, and 3, Rachel. I think that's a good idea. So thanks, everybody. How about some places in Europe and Stockholm? Absolutely. Well, Stockholm, my friend Tyler has his own meetup, so I wouldn't want to compete with that. So go to Tyler's. Or I guess if you want to have the breakfast, I don't think that competes with Tyler's. But just make sure you invite him and get his blessing. OK. When will you have a cameo on billions? You know, I almost was on the poker episode because Phil Helmuth was on the poker episode. And Brian Koppelman invited Phil to bring people from our poker game to play in that I think it was the first season, and I couldn't make it. But my friend Billy and Phil were on that episode. And I've talked to Brian Koppelman about maybe doing a cameo on it at some point, but he had Chris Saka. So probably don't need to have me on it. But boy, I would love to do a cameo in the Uber. So everybody clip this and send it to Brian. Give Jason a cameo as an Uber driver or obnoxious Uber even better. Imagine me as an obnoxious Uber passenger who just, you know, yells and screams at the Uber driver, that would be hilarious. Or I'm an Uber driver. What are your thoughts about magically, you know, I thought magically was a giant scam, because it broke my rule, which is any startup that is worth over a billion dollars before they release their product or have customers is going to be a scam, or it's going to fail massively one of the two. And they kind of fit in that But I was told when I said that on a previous episode that I would be concerned, it's a scam, or my gut tells me my spidey sense. Somebody told me, and I won't say who, but somebody who's an insider said, the new CEO, I don't know the woman's name, is the real deal, that the first product was kind of janky and not very good, and that the new product is really good, and that it's actually gonna surprise people how good it is. So I'm not gonna say how I know that. But you can be sure that sometimes we get inside information because some of you might be involved with the companies we cover. And if you have information on the companies we cover, right, everybody, thoughts on Tick Tock, it should be banned in the United States. We are crazy to allow China our competitor on the global stage, to have all this data, and they've proven that they're untrustworthy, that they're liars, and that they'll put people in jail with their information, they are proven to be untrustworthy, we should not allow them to have any apps or any products or services in the United States that collect data, just like they don't allow us to. So it should just be reciprocal. They're smart, we're stupid. A lot of our politicians are grifters who are in on the take, they're getting paid off by special interests who have interest in China, on both sides, Democratic, Republican, it doesn't matter what side you're on. These grifter politicians are selling out our kids. And I think that honestly, it's a bit of a psyops. I think China is doing psyops on us. Okay, listen, I gotta get back to work. So do y'all. Great to have you here. I'll see you all tomorrow. Bye bye.

### Human: Because, you know, journalism. Journalism. Oh, right. It's very exciting. Actually, I was totally like, yeah.### Assistant: Well, I mean, do we see a world where they're not going to be, you know, important companies? Okay, everybody, after the break, we're going to do episode two of the blueprint stick with us. Are you a small business owner? Did you know that visas online small business hub has tools, discounts and resources to help you run your business. So whether you're a business beginner, or an entrepreneurial expert, find the solutions, tools and tips you need to take your business to the next level. Plus, if you have a Visa Business Credit Card or Debit Card, you can get access to cardholder benefits like Visa Savings Edge, a savings program which can help you save on everyday business expenses like office essentials, travel and more. When you enroll your Visa Business Card in Visa Savings Edge, you'll have access to valuable offers, which can help you turn qualifying business purchases made with your enrolled Visa Business Card into savings for your business. Learn more at visa.com slash small business hub. Once again, that's visa.com slash small business hub, visa, a network working for everyone. All right, everybody, it's time for Episode Two of the blueprint. This is my series where I teach you how as a executive to maximize your career opportunities, basically how you can become successful. And it's not just based on what I've done in my career. It's based on me investing in 350 plus companies, interviewing 1000s of founders on this very podcast this week in startups and being friends with the most successful people in the world. So today's is a very simple one, which is when should you quit your job? This is a question I get all the time when people want to start companies or they feel like they're in a dead end, you want to quit your job when you're not learning anymore, or you have other opportunities. For me, that's the general framework. Are you getting more responsibilities and learning? And is your income going up? And what should your income go up every year? Well, that's a very personal question. And those two things you can look at as a matrix. If you're learning a ton, and your salary is going up a modest amount, that's fine. Because you're learning a ton, you're investing in yourself. So this is what working at a startup really on this matrix means. So if you were to make a matrix on one side was how much you're learning zero, or 1010 being you're learning everything you can't you can't believe how much you're learning, you're sitting next to Bob Iger, or Jeff Bezos, or whoever it is, and you're just a sponge learning everything and building your network. Great. That's a 10. most jobs, you're probably learning three, four, right, you're on a three or four setting, you know, every couple of weeks, you might run into some new software, or you might meet somebody interesting, or your boss gives you a new project, some places have incredible comp, like you're a salesperson. So let's say you're a sales executive, you're selling SAS software, you're not learning anything, you're a great sales executive, you're on like a one, a But you're on a 10 in terms of making money because the company's booming, you're selling Salesforce, you know, in the boom years or Oracle when it was growing or slack when it was going gangbusters, man, and just every year you make 20% more money, 30% more money, it's just you can't believe it because you build a book of business, okay? You put yourself on that matrix. If you're in the top right, you're growing money. Your salary is growing 789 10. And you're learning 789 10. You're not going anywhere. you're at Google during the boom years, you're at Facebook or Uber, working for Travis Larry, Sergei Zuck, and your your stock options are becoming worth more money, your salary is going up some amount or some combination of those two things, and you're learning, don't get off the rocket ship. Now, if you're at Facebook, and it's, you know, 2020, And the company's got headwinds, and you're not really learning anything, but they're paying extra money. Sure, you could stay for the bag, but I wouldn't do it because life is precious. And you have to make those decisions. So let's say you do make the decision, hey, you're quitting, let's say you've made that decision, your salary is going up, you know, whatever, three or 4% a year, you're not getting any carry share that's growing, you're not getting any equity that's growing. it's flatlined, and you're not learning, they pigeonholed you, you're good at one thing, they told you keep doing your thing, stay in your lane, it's time to leave, you've made that decision on the matrix, you're a three and a three. Okay, it's time to go, you want to do it correctly. Now there's a couple of things you just want to go through this checklist and make sure if you were thinking about developing a new product or service, you got to make sure and you should know this now that any IP that you make while working for another company, they can have a claim on especially if you use their equipment, or you do it during their time. And this has happened many times in history where somebody was working at Google and they didn't get an IP carve out. could be a podcast, this could be a piece of software, it could be a conference, you did that while you're working for another company, they could have a claim on it. So that's why you go to your boss and say, Hey, I'm doing a side hustle project on the weekends, I started a podcast, can I get an exemption from my IP assignment, that you don't own this, and then you have a really, you know, honest talk with your boss, if your boss is a jerk, they might be like, I don't want you doing that. And then you have to make a decision if you're gonna leave or not. Or the boss might be like, Hey, I would like that to be part of what we're doing here at insider law lunch. Or they might say, Yeah, we don't care. That's not competing with our business. So you have to make sure your IP is clean. If you're considering doing some IP stuff later, you also probably need to have runway and cash if you're going to step away and start a company. So these are two very important checkboxes. If you're quitting and starting a company, you may have kids in school, you may have a mortgage payment, you want to lower your burn rate to the lowest possible burn, if you're going to go start a company, or you're going to be entrepreneurial. How do you do that? Sell your house, rent a cheap place or own a place that you own outright, that's incredibly affordable. Have six months, 12 months of runway, if you got six months of runway, cut your burn in half and get to 12. I'm talking about your personal burn here. So some people they might be spending 15k a month because they got kids in school, they have three car leases, get rid of a couple car leases, buy an e bike, downgrade, you know, get rid of your car, own a Prius, whatever it's going to be to lower your cash burn during this period. If you have a spouse or a partner, make sure you have this conversation with them. Hey, I want to lower our personal burn rate, because my income from working at Google is going to go away. So we need to lower our cost structure. This is why moving to a really cheap place and having your team live 30 minutes outside of Austin or 30 minutes outside of, you know, Miami, you can still be in a great city, but you're 30 minutes out, you can still do your meetings in the city, but you have to commute, but you're gonna be working home anyway. So just think that through, hey, maybe go to Tulsa and get them free money, they're going to give you and you're babysitting, make sure you have the skills online already, that you're going to need in your startup. So if you're working, for me, let's say you're a producer here at this being starts, but you want to start a company, well, if you think you need to learn no code, like don't quit and then learn no code, take your Saturdays, your Saturdays are now five hours of doing no code, you can go out at night, you can sleep in in the morning, but 12 to five every Saturday, you're going to focus on teaching yourself that skill. When you do leave and you start your company, you have enough runway. This next one is very important to leaders. So if you're a leader of a company have employees, you should tell them this when they come in. don't burn bridges at your current employer. If you're in a senior position or a medium position, you want to go to your employer and say, Hey, I'm considering or I've made the decision that I want to start a company. I know that I'm a key employee here, I want to make sure that I don't leave you you know, with any problem. So I will, I've written a job spec of everything I'm responsible for, I have all my best practices written, and I will help you interview my replacement and find my replacement, it's probably going to take four or five, six weeks, if you want me to stay for two weeks, leave today or stay for six weeks, I'll do whatever you want. I really appreciate the opportunity to work here. When I get presented with that I feel so good about the person. And I feel no animosity towards them going and pursuing their dream. But when somebody says, I'm leaving today, which, you know, some of these millennials will just be like, today's my last day I'm out. That kind of bullshit. My God, you know, that is a way to burn bridges forever, because now, your boss has to scramble. And then everybody else gets inconvenienced. And it just sucks. And the more senior you are, the more this can hurt. Now, if you're a junior person, you can just say, Listen, I'm going to give two weeks notice, do you need a third or fourth, I can do that. And you just say to your current employer, because the current employer might be putting pressure on you, we need you to start in two weeks, you just say to that a current employer, listen, I'm going to give my current employer four weeks, because I know you would want that opportunity as well. I don't want to leave them in chaos. But I'll tell them I would prefer to leave in two weeks. But I'll give you up to four if you need it. And you know what any new employer who doesn't understand your rationale is somebody you don't want to go work for. So make sure a point number four, that you give enough warning, and you don't burn bridges know where you are in terms of the important stack of the company. If you're in a senior leadership position, you might give a couple of months, if you're just a manager or director level, you might give six weeks and hire the replacement. And what's great about doing that is and then if you're like, you know, rank and file, you've been there for a year, you know, low man on the totem pole, so to speak, you might say, Hey, I'd like to give two weeks notice, but I could give up to four, it's up to you. And it just makes you look gracious. And then finally, you should backstop your decision. Like I'm especially if you have a partner and kids and you're on a budget, I'm going to give it a shot. If I hit these milestones, great, I'll keep going. But if I don't hit them, in 12 months, 18 months, 24 months, it's probably more like 18 or 24 months, then I'm going to go back to work. So that's your five bullet points there just to make sure your transition goes smoothly for you, your kids, if you have them, and you're blessed with great kids, or even if you got some entitled, horrible kids, still got to take care of them. That's how it works. And it's your fault if they're entitled anyway. So keep that in mind. Those are your five bullet points, just in terms of when you're going to quit. All right, I want to do my freelancer versus full time test. This is how you can figure out if you're being properly compensated. freelancers exist in a marketplace, the marketplace is the person who hires a freelancer, let's say a designer, or they are a social media manager, that person can be hired full time with benefits with five weeks off a year between sick days and holidays and everything else. Or you can hire them freelance. If you're freelance, you get a lot of flexibility. If you're full time, you know, for the person who's buying the service, if you hire somebody full time, well, now you have to pay unemployment, you have to pay benefits, so you better need them. And you have to go through a full time hiring process, which is harder than hiring a freelancer. So the freelance market creates a dynamic pricing system. full time does, but it's a little bit slower, right? So let's take what you work every year as a full time employee, you're going to work 47 weeks a year, you're going to put in 4050 hours, let's just round it to 2000 hours a year, you know, maybe 2100 hours a year, something in that range, but 20% of that's going to be meetings and distractions, right? So maybe you're down to working 1600 actual hours, right? That's what you're actually doing the job you were hired to do. You have to be in meetings, you got to fill out TPS reports, you know, all the mishigana and wasted time that happens. Let's say you have a 70 k base salary. Now you're costing the company about 15 to 20% more people put a 10% to 20% multiplier on full time stuff. Why do they do that? benefits, obviously. So your maybe $70,000 salaries cost in the company 80,000, they divide that by 1600 hours, you get $50 per hour fully baked. That's what you cost your company. Great. That's how your boss might look at your work. And if you are a boss, and you hire somebody to be, let's say a social media manager, you're looking at it saying, Okay, a fully baked this cost me $50 an hour, plus this person's part of the culture, plus they're learning plus I have 100% of their time. And so I have this nice continuity, right? I have decided I have a, you know, startup company, and I'm or, you know, I have a retail company, I need those 1600 hours, because I want to put out content every frickin day. Because social media is what's going to drive what we're doing. That's how your boss is going to look at the cost. Now, if you were freelance, maybe you could sell your services for $60 an hour, maybe even 75 if you're really good at that. Now, if you try to charge 100 or 150, somebody might say, Well, I'll do that myself. I'm not paying somebody 100 bucks an hour to do a tick tock. I could just have my daughter or my son, or I'll just have the, you know, waiter or the bus boy, that one of the servers record me cooking food in my restaurant, because I'm paying them 35 bucks an hour. And so I'll just teach them how to do it, right. And that's what the freelance market does. At a certain point, if something is too expensive, you do it yourself. So if you were to hire somebody to clean your house or do your laundry, and they said, it's 200 bucks an hour, you're like, you know what, I'll clean my own bathroom for that amount. I don't make that much at work. And that's why the freelance market finds an equilibrium because of competition. That's what's great about capitalism. Okay, but let's say you choose to be a freelancer, and you think you can get 6075 an hour, well, now you have to prospect and get clients and you have to manage clients, let's say it takes 25 hours to get each of 10 clients, that would be realistic, you got to go pitch 10 people to get one to sign on. So you pitch each one, it takes two or three hours to pitch each one, and you get one out of 10. That means you're spending 250 hours a year finding and managing your customers, you may have to spend, let's say two hours a week running your small business, you got to check your email, you got to check your accounting, all that stuff. That's another 100 hours a year just to run your small business. So if you're working 2100 hours a year, as we said before, you're going to take as a freelancer, you're taking 350 hours off the top to manage all of your people. And then maybe that leaves you with 1700 billable hours a year, 1750, whatever it is, right. Now, if you can build that at $60 an hour, you got 105,000 potential billable hours, okay. But how many of those hours are you actually going to fill with client work? And this is where the rub comes in. Maybe you're going to fill 60% of them 70% of 80% who knows what your optimization is. Sometimes you're a great freelancer, you got too many customers, right, you're turning them down, which case that hundred five thousand dollar number might be true in year two or three of you as a freelancer, but now you got to pay your benefits. And you spend 10 $20,000 a year on that. And now you're back at 75k a year, almost exactly what you're getting paid to be a full time employee. So here's what you want to do, you need to run this test and see if realistically, you think your salary and what you can make as a freelancer is worth doing and worth going through all the pain and suffering of having to manage customers and clients. And And so, you know, if you have people begging you for your services, and it's, I would say three times more than your hourly rate, as I did the formula here, if it was three or four times the hourly rate, you might be able to make a go at being a freelancer, and have to deal with customers and them arguing with you about the bill and asking you to take two hours off, which by the way, is what lawyers do. And so lawyers who work and they bill out at, you know, the $800 an hour $2,000 2,000 hours a year, you know, it's seems like it's a lot of money, it could be but then sometimes you just want a you know, a job that's easier when you're in house counseling, you don't have to put in 24 hour 100 hours a year, etc. So for managers, know, you should do this regularly and look at should you hire people freelance? Or should you hire them full time? Because maybe you hire somebody full time, you don't need the 1600 hours of actual work they're going to do, they're filling up a full time slot, and maybe they're not competitive. So maybe you'd be better off having four of these social media managers, giving them each 400 hours a year of work, you know, and they each get whatever it is, six, seven hours a week of work with your company. And And then you drop the weakest one and give their hours to the top one, right, you can have a more dynamic competition, and more redundancy and more swings that bat in terms of, you know, how good they are. And this is why people will outsource their legal work, they might have somebody who does really great IP work, somebody else does great corporate work, somebody does litigation, and you use a mix of freelancers, depending on what you need at that time. And if you decide you don't need any freelancers for six months, you're not paying them, which is what happens with full time employees, you have to pay them no matter what happens. If market conditions go down, your only choice is to fire them pay severance and you don't have to deal with that basically, you know, a mini divorce. This is why I think it's important for you as the manager as well to run these. we are doing seven podcasts a week, six episodes of this week and startups and a seventh episode of all in and we're launching another watching two more podcasts, which will add two more a week, which will be nine. Now should I use freelancers? Oh my god, that's just not possible when you have this amount of content. In fact, I need like three or four full time people. But I do like to have freelancers in the mix. And if you have some freelancers in the mix, who will edit a podcast for $250 or whatever, that if somebody takes a week off, you can have them come in and do a little bit of work. So sometimes you want to, if somebody leaves your company, say, Hey, would you like to freelance for us sometimes. And that keeps them in the mix, you keep the relationship. And then you could also have one of my favorite things in the world, which I call boomerang employees. I've had many times a great salesperson, you know, a great video editor, whatever it is, they decide they want to go freelance. then they decide, you know what, I kind of liked working at the company and being part of the culture, and not being, you know, a ronin out there alone, you know, fighting battles. And so if somebody is great, and they leave your company, and they do that nice, smooth transition, when they tell you, Hey, J. Cal, I'll hire my replacement, I wrote everything down on this beautiful notion page, and I outlined it perfectly for you, this person, you hit the ground running, here's where the bodies are buried, here's the things that I'm worried about for you. Here are the things I'm doing that you could probably outsource or retire that I didn't need to be doing, or this person can probably take on this 25% of my role. And then you could just figure out maybe outsource this 75% of my role, that kind of thoughtful leaving of a company set you up for the boomerang. And it basically gives you this great safety net. hey, I'm leaving, I want to try something else. But I really loved working here. I really did a great transition out. And I would love to stay in touch. That's really the high order chef's kiss. That's the way to do it. And you know what, when I'm an investor, and something doesn't go well, I literally this week talked to three founders who had previously invested in and said, Hey, what's next? That's my playbook. Okay, so there it is. I try to keep these under 20 minutes, I try to keep them really tight. You really got two swings that bat here in terms of the freelancer test and you know how to leave your company. And we've recorded this live at youtube.com slash this weekend. And when I recorded it live, I got some questions from the audience. And I'll answer a couple of those Nima asks, How important is it to find a co founder before you leave the solo dolo route advisable question mark, if you have a great idea, having a co founder is awesome, because you can split the load and it's less lonely. But I would not wait for a co founder to show up. That's just me, I would rather see you start and then start hiring people or start doing meetings with people and then eventually find a founding team. So I really, really, really would like to see you just start and not wait. That's my best advice. A couple of people are asking me to recap when to quit points. So let me go through those really, really quick. If you've chosen to quit, these are your five bullet points. Number one, make sure you own any IP if you're stepping away to do another project, make sure you have the cash and runway personally, make sure you have your skills already dialed in, right, these are preparing so you don't have, you know, potholes, or you flip the car on the first turn out of the gate, you have to own your IP, make sure that's all taken care of, you don't want to have a downstream lawsuit to you want to make sure you have tons of runway so you can intelligently build Three, you want to have your skills dialed in. So make sure you do that skill work and sharpen your blade, you don't want to go into battle with a dull blade that you don't know how to use. Number four, make sure you give your employer and your teammates plenty of runway so you don't burn your bridges. So you could potentially become a boomerang employee or have them as a customer down the road. And finally, you know, maybe set a backstop, an ultimatum, maybe if you have a partner, you need to do this. Or maybe just to be intellectually honest yourself, if I can re if I get into an accelerator in the first 18 months, if I get an angel round, or I get 10 paying customers, then I'm going to keep going. If I don't, I'm going to shut this idea down and get back to work at a company where I can, you know, then build up my chip stack again, rinse and repeat, come up with another great idea on the weekends, refine my skills and then go back at it 18 months from now. So if you look at your life in these 18 month cycles, you work 18 months, you sharpen your skills, 24 months, maybe let's say 24 months sounds a little more realistic. 24 months, you work at a company, you build up your skills, you build up your chip stack, you have a great idea, you go decide to do it. You spend 24 months on it, it doesn't work, you didn't hit your milestones, you go back to work. Now you're more valuable, boom, you get a better salary, get more responsibility, sharpen your blade, then you take a second swing at it, this will give you the ability to kind of manage your own psychology and your own burnout, because the startup will be burnout. And here is a simple matrix. If you're learning and you're growing your salary, you know, if you look at the top right hand corner, man, you're learning a lot, and you're getting paid well, that blue zone, boom, perfect. Stay there. Don't go anywhere. the yellow zone, the top left quadrant quadrant, man, you're learning a lot and you got modest pay, stay there, it doesn't matter you're learning. If you're not learning, and you're not getting paid, well, your pay is not growing. Well, why are you there? The bottom left is obvious quit. The top left is obvious stay. And then the other two is really your station in life. The worst station is that red zone, modest pay, not learning the best place, great pay, learning a lot. That's your ideal situation. Now the green zone is hey, listen, you're not learning, but you're banking a ton of money. You're that sales exec or whatever, or you know, you're doing accounting, but you happen to be the accountant at Google, and you were the first ones who stock options are going up, secure the bag, right? Do it for your family, do it for you build your chip stack. You're not learning, that's fine. Do stuff on the weekend to learn to supplement to keep your yourself intellectually engaged. And then in the top left, this is a startup zone. you're not going to get paid a lot, but you're gonna learn a lot. I like people being in any of these three zones, depending on what your goals are. And then the amount of time, I think you stay in the yellow zone, two or three years, the green zone, two or three years, the blue zone 567 years. know, if you can get on a Google and stay there, man, when you get that second equity grant, you know, in your first four years, and that could be really a creative and you're learning to be amazing, you could have great position. So there it is. That's the learning versus compensation matrix. Okay, that's it for Episode Two of the blueprint. Stay tuned for part three next week, we're going to cover how to build and leverage your network, which is my speciality. Okay, that's it for Episode Two of the blueprint. Stay tuned for part three next week, we're going to cover how to build and leverage your network, which is my speciality. Okay, let's get to our startup of the day. Who's our startup of the day today?

### Human: Some obvious red flags, when a founder is really combative and defensive about their idea. Again, there's a fine line between confidence and self-assuredness and defensiveness. And it's important because you want the former, you don't want the latter, because it's an indication of how the founder is going to be once we actually start working together.### Assistant: That was Reddit co founder and friend of the podcast Alexis Ohanian. He just did a masterclass called building your startup and it's a must listen slash watch. If you're a business leader, you can learn so much on masterclass. There are amazing lessons from Bob Iger on leadership, Chris Voss on negotiations, and friend of the pod Kim Scott on radical candor. And I have a little J Cal cameo in that one. Hey, how about Gordon Ramsey on cooking? Serena Williams on tennis or Simone Biles on gymnastics. Legends of their craft are waiting for you at Masterclass to teach you whatever you want to learn and you will get inspired because you pay just once for an unlimited Masterclass subscription. It's a no-brainer. We just had awesome insights from Alexis in just 18 seconds. Imagine how much you're going to learn in 10 minutes. or even two hours. So here is your call to action. I highly recommend you check it out. Get unlimited access to every class and as a twist listener, you get 15% off an annual membership. Go to masterclass.com slash startups now. That's masterclass.com slash startups for 15% off masterclass. But let's look a little bit about why this is happening. Why is this happening right now? Well, Saudi Arabia is obviously on a charm offensive on a PR campaign to get business in Saudi Arabia that is outside of oil. They want to transform their economy. And they are evolving in terms of personal freedoms and human rights in the country. As I mentioned on the show yesterday, they are now allowing movies in Saudi, they never had movie theaters there, it was not allowed. And so we're seeing changes in the Middle East region, when it comes to human rights, when it comes to LGBTQ rights, when it comes to personal freedoms, what you can read, and perhaps even freedom of expression, although that is a highly charged issue. So let's look at numbers. Why are venture capitalists flocking to the Middle East right now, and I can tell you, a large amount of commerce is occurring now between the Middle East and the West. That is happening in the media industry, the movie industry, it's happening also in venture capital, private equity buyouts, it's across the board. And this is because, according to pitch book again, which is a database of venture capital data, it's considered one of the best. Their q4 us venture monitor saw a record high in total capital raised by us venture funds. This is 2022, the fourth quarter. But the number of funds that raised capital in 22 was down 40% from 2021 from 1270 to 769. So let's just pause here for a second. The number of venture capital firms raising money plummeted 40% from 2021 2022. Why did that happen? Well, it's hard for a first time fund manager to raise money. And so the money is obviously going to the existing call blue chip, you know, people who are on their 10th fund, their seventh fund, they're going to go first. And the LPS in America, the institutions in America, endowments like college endowments, they're not, um, they don't have on. They don't have never ending resources to fund venture capitalists, our pockets are deep, but they're not never ending. And so they are over indexed in venture funds, in all likelihood, their venture holdings are higher as a percentage of what they want to hold. So whether it's in a college endowment, a university endowment, or a retirement fund, they probably want to get through this ingestion, indigestion period where they've got all these markups on paper, but that TV, pi to DPI hasn't happened yet. In other words, the realized returns hasn't happened yet. So total capital raise was up 6% year over year 2021 to 2022. But the amount of funds was down 40%. Just keep that in your mind. That means all that funding and here's a chart of it was pouring into the larger funds. Okay, so if we look in 2022 83% of all LP dollars went to US VC funds of at least 250 million those are average size funds or better. So again, US VC funds were 250 million or larger us fun. Let me say it one more time here us VC funds that were over 250 million raised 83% of all the dollars in 2022. And 57% of all LP dollars went to funds that are at least 1 billion. Again, that's the power law. So the big checks went to the big funds that makes sense. So just to put a cap in this large, a large majority of LP dollars in 2022 went to institutional VC funds, not the up and comers, And it was even more drastic in 2022 than in years prior. And you can see the share of US VC fund value by size bucket. And it's, it's pretty meager, the dollars are going to the bigger funds. And that's like a flight to safety, I guess, you're going for reputation, total capital raised by first time VC funds was down 52% last year from 21.6 billion in 2021 to 10.3 billion in 2022. It got halved. Again, it makes sense when people were very frisky. It was a low zero interest rate environment. people started placing bets, and they couldn't get into the top funds, you can't get into Sequoia, you can't get into Andreessen Horowitz, you can't get into Excel or General Atlantic, a lot of the funds we see here, Planner Perkins, they're probably oversubscribed. So what do you do, you look for new fund managers, and actually new fund managers could do really well, because they have new energy. They're younger, typically, they have something to prove. So they're on top of their game, they might work a little harder. Now, of course, the existing legacy ones have reputation. So they get in some cases, first shot at the top entrepreneurs and deals. But both of these things can be true. total number of first time usvc funds that raise capital is down 59% from 340 in 2021 to 141. So again, the number of funds, the dollars, all of that is showing that new funds are not going to get dollars. So let's just get totally inside baseball here. The back channel I'm experiencing tons of GPS, general partners are understanding that the well is pause right now. for us institutional investors, retirement funds, universities, they're going to take a pause, they're going to let the typical eight or nine quarter workout process during a recession or a correction, it typically takes nine quarters, I believe, is the number and we're in four or five quarters into this, that's a five quarters now. So we probably have in all likelihood three or four more quarters a year of venture capital firms working out what's going on with their portfolios. And then you can start to see growth or interest. And maybe the institutional VCs here in the United States will want to look at funds again, maybe new funds existing funds, but they're taking a pause right now. And so all of these LPS and GPS, if they want to raise capital, they're going to go to the Middle East. And I've been there once I went to Qatar, Qatar, I've heard people pronounce it both ways here in the United States, they say Qatar and in Qatar, they say Qatar. So somebody can correct me if I'm wrong or explain to me why they pronounce it so many different ways. So it's pretty obvious what's happening here. Institutional US LPS, the pension funds and endowments, they've paused VC investment. GPS are looking for new places, the Middle East is looking for new opportunity. They see what's happening with oil. If you look at sustainable, you know, solar wind, and then even people embracing nuclear, the Middle East realizes oil will decline in value over some period in time, some period of time, China's building hundreds of nuclear reactors, and they're investing in solar more than any other country, the United States, Germany, everybody has woken up to this. And it's going to become a very rapid conversion from oil to, at least in the modern world, in the developed countries, oil and gas is going to deprecate maybe faster than people thought. And so that's a perfect position for the Saudis who are looking to transition to build these bridges and to get startups built in their country. There is nothing like a great whiteboarding session, right? Everybody loved that. Well, now you can brainstorm your ideas, collaborate on projects, and do more from anywhere in the world with Miro. Yes, Miro is an amazing tool for you to take your idea from inside your head and then put it out there for the world to see. When you think about Miro, think about zero to one, building a startup from scratch needs input from everybody. And Miro democratizes that collaboration and input process. It's so much more than a simple digital whiteboard, though. It's a collaboration tool that's asynchronous and powerful. Your team can start collaborating on planning, research, brainstorming, designing, and even feedback cycles from your users. Miro is zero to one, but faster. And here's the best part Miro has a community of power users and they're building 1000s of world class templates over at miro.com says mirror verse m i r o.com slash m i r o v r s e one that founders are going to love is the complete naming mega workshop. Yes, this is a incredible template for you if you're having a hard time picking a name for your startup, which everybody does. Let's face it. I mean, sometimes you get lucky. But 99 out of 100 times, you're going to need a little help, you're going to want to do a little brainstorming. So go ahead and try that. Here's what I want you to remember. Faster inputs equals faster outcomes. And velocity is how startups beat those big slow incumbents. So here's your call to action. Go sign up for Miro for free at Miro.com slash startups. That's M I r o.com slash startups to sign up for free. So this leaves us with the issue that is on everybody's mind. And I tweeted about this. Do founders care? That's really where this will. This is where the rubber will meet the road. Most of the time founders don't know who the LPs are in funds. And most of the time founders just need to get investment to keep their startups running and growing. So they don't ask a venture fund or your LPS. Are there any LPS that I might not be in sync with startup founders generally don't have the luxury of caring where the money came from. And so if somebody who was Russian, like Yuri Milner, who had money from a previous oligarch, and then he built up his chip stack, now he invests his own money, was a moment in time where people were wondering, Hey, is this a good idea? Should we be taking money from Yuri Milner, he made a series of incredible bets, Facebook being the best one. And then he started working out of his own returns. That seemed to have worked itself out. But would founders take money from a Russian investor today with the situation in Ukraine? Probably not. That probably would have an impact on their thinking. And certainly venture funds would not be able to take money from Russia today. China, similar situation, Saudi Arabia, perhaps another situation, perhaps slightly different. So the kingdom, I think, I think the kingdom has basically pulled a trump card to basically say, Hey, we're active. And here are our partners. And I asked very simple question, the kingdom has listed the venture capital firms, it's backing founders, do you care? 30.8%. And this is after 4000 votes. And I asked for founders only. So this is completely unscientific, but probably directionally correct. 51% said they do not care. So one out of two founders do not care where a venture capital firm has their backing from, they're just going to take the money. then maybe 18% Yes, 30%. So one in three founders, approximately, might make a decision to not take money from injuries and Horowitz as but one example on this list, because of the money taken from Saudi Arabia, is this actually true? When the money is actually presented? Would they not take it if it's the only money available and a founder is faced with, I could take money from injuries and Horowitz, and some percentage of it, I don't know, 10%, 5% comes from Saudi Arabia. And I philosophically don't agree with human rights situation over there. And I don't want to take the money with a if they had no choice not take the money in my experience, they're going to take the money and keep their company going. So what I would like to say is, you know, and I'm passionate about human rights, I worked at Amnesty International, it is a great passion for my entire life. I literally worked at Amnesty International is my dream job. And I worked there when I was maybe 21 years old, still in college during the human rights tours. And I built the first database of women's human rights violations around the world. And I sat there and watched four interns on the network, I built a little four computer network, building a database, and I built the database myself. They basically just typed in what were manila folders, and box after box of human rights violations that people on the ground know, in South America, in the Middle East and other places had poured their hearts and souls into these reports of human rights violations specifically against women. And it impacted me deeply as a human being watching that go from just literally a room full of boxes. Imagine know, a giant warehouse style room with hundreds of boxes, and then watching get converted into this database I built, and then doing searches on that database, it impacted me deeply as a human to have to do a search for a country. You know, where rape was used as a control tool of the government, or lashings, or torture, or murder. And, you know, it just seemed to me that as a country here in the United States, we should aspire towards having the best human rights record in the world. And we we fail to be sure. If you look at our justice system, it fails. If you look at the death penalty, that is against the Universal Declaration of Human Rights, and cruel and unusual punishment that we have in our justice system where people are kept in solitary confinement for 23 hours a day. All of these things are horrible, right? And waterboarding, which we did during one of our excursions in the Middle East, we make mistakes. But I would like to think that we aspire and that all countries aspire to treat their citizens with the highest level of human rights that can be attained. And I actually believe that prosperity here in the United States, the model in Silicon Valley that we touched upon is based not just on venture capital and entrepreneurship. It's those two things for sure. But you have another factor, which is basic personal freedoms, the autonomy and the confidence a human being has here in the United States in the West, that they can pursue their life without worrying about the government interfering. Now, again, not perfect here in the United States, the government can interfere, you could have a dirty cop, you could have a corrupt official, you could have bribery, all of those things can exist here in the United States and do we aspire and our legal system aspires to protect everybody, independent of who they love independent of their age, their ethnicity, or what they say and their personal freedoms and human rights, times venture capital times entrepreneurship is the prosperity that we have here in the United States. But we might forget about that human rights piece because we take it for granted. It's built into our system. It's in the Constitution. And if we as leaders here in Silicon Valley are going to export Silicon Valley around the world, I want to make a simple plea. Let's keep this variable in the formula intact. Let's keep it in mind. not going to judge anybody who does business in the Middle East, I'm not going to judge people who buy oil from the Middle East, I am going to keep an open mind to can we through engagement. And by the way, I'm not talking my book here, because I'm sure some people are thinking, Oh, you must have secured the bag. There is no bag secured here, to be sure. And my funds are small enough that I have the option of not raising money from the Middle East. But I also wouldn't want to leave out the possibility of having investors from the Middle East if they were in sync with my philosophy, and I wouldn't mind making money for somebody an institution in the Middle East that actually cared about human rights that cared and was in sync with my values. And so as we go on these excursions, whether it's Apple building phones in China, or venture capitalists securing bags in the Middle East, or companies launching the Middle East, obviously, Uber had cars running in the Middle East. And I'm sure many companies here in the United States have outposts their engagement will ultimately lead to change. And as hard as it is to engage, when things are out of sync, specifically the murder of Jamal Khashoggi comes to mind. We have to think deeply as a society, do we want to have a deeper relationship with Saudi Arabia, a deeper relationship with China, a deeper relationship with Russia? Or do we want to isolate those relationships? And which one will result in less human suffering? it's well above my pay grade to know what will happen here. And what the right decision is, I think it's a very personal decision that everybody needs to make. If Andreessen Horowitz has made the decision, they're all in on Saudi Arabia. If Tim Cook and Apple are all in on China, know, great, they have to live with those decisions. And there will be complications for them. Tim Cook has faced those complications every day. When somebody when there was a rash of suicides at Foxconn factories, Tim Cook had to address that publicly here in the United States. And he had to then put pressure on Foxconn and then work with the Chinese government, the CCP to say, Hey, can we make the conditions here in factories better for those workers? So then how does Tim Cook reconcile what's happening to the Uyghurs? What's happening in the factories where iPhones are built, and wanting to sell iPhones in China, which is a large portion of their revenue now. These are complicated issues, folks, there is no simple solution. But I want to talk honestly about them here on this podcast. And if I do go to Riyadh, if I do speak at that conference, I would like to speak openly about these issues. And so now I'm faced with, I've been invited to the conference. Could I say what I said on this podcast? In that conference? I don't know. Is it safe for me to travel there? These are like, serious issues. I've got children, etc. I don't want to wind up in a gulag. If I go to Saudi Arabia, and I speak my mind, can I speak my mind there? Can I talk about these issues? If what I would they would I be allowed to publish this episode? yesterday's episode in Saudi Arabia, I don't know. Somebody from Saudi Arabia, please from the kingdom. Let me know when I've stepped over the line. And what's acceptable in terms of dialogue. As we start this process of integrating Silicon Valley, and the kingdom and other countries in the Middle East. What are the rules here? What are the ground rules? Are we going to talk about it openly? Or is everybody going to pretend like you saw with Ben Horowitz and Marc Andreessen in their talk on Friday, just going to pretend that everything's awesome. Everything's great. And not talk about the difficult issues. Which is it? I will choose to talk honestly about these issues. And if it means I don't get to go to Riyadh, and I don't get to raise money from Saudi Arabia, I think I'll be okay. I think I'll still be wildly successful with LPs from other places. And I'm going to play the long game. Imagine this, you've got the greatest idea ever for a tech startup, and it's going to change the world. But you got a problem. You don't have the engineers you need to make this a reality. Why? It's hard to find engineers, right? 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Stop burning money, hire developers smarter, faster. Visit lemon.io slash twist. All right, let's move on to another issue here. The SEC has charged a 31 year old startup founder with four counts of fraud for allegedly creating over 4 million fake customer accounts to pass due diligence in $175 million acquisition by JP Morgan Chase of all possible buyers. The founder's name is Charlie GVC. and her startup is Frank. Frank was a consumer fintech app that helps students better navigate the student loan process seems like a reasonable idea. But today the SEC charged Charlie with one count of conspiracy to commit bank and wire fraud. That's a max sentence of 30 years. And one count of wire fraud, affecting a financial institution, again, 30 years in prison, I don't know if those are current, or if they would be consecutive one count of bank fraud. It's another 30 years. And one count of securities fraud. That's 20 years. Again, I don't know if these are concurrent or consecutive. But if you were to get that sentence, and it was even concurrent, Charlie's not getting out until she's in her 60s. So the world's gonna look pretty different. Charlie. She started the company in 2016 2017. And again, innocent until proven guilty, but it's not looking good. And this is the southern district of New York, which we've talked about many times. SDNY, they do not play. As we've seen. She was 24 to 25 years old when she started the company. This is just tragic. I wonder who was on the board here who was watching the shop? Who was advising this founder? a topic I talked about in my interview with Satya Patel from homebrew that's coming out in a couple days. She was featured Charlie on the Forbes 30 under 30 list. We need to make felons under 3030 felons under 30. If she gets convicted, and we can put a bunch of other people on that list. She raised $20 million from investors, including Apollo Global and check. And they valued the firm at 35 million in March of 2020. In September of 2021, JP Morgan Chase acquired Frank for 175 million. and she netted 45 million from the sale. So she owned about 25% of the company in 2022. JP Morgan sued Charlie claiming she provided a list of over 4 million fake customers in diligent in just today, April 4, the SEC charged her with four counts of fraud. According to pitch book, The board of directors had Mark Rowan from Apollo Global, and Michael Eisenberg from Alfie, A-L-E-P-H, a VC firm. I'm guessing some other internal Frank employees will get rounded up here or not. But this looks really bad. And this is why we train our founders in the launch accelerator. When they pitch their companies, we'll have a founder often say, here are our customers. and our pipeline and who's using our product, and they'll mix that all into one sentence. Okay, and then you'll see 20 logos and then it's up for the VC or investor or angel seed fund. Somebody who's going to join the company to look at those 20 logos on that page. And then say, Okay, this logo here is that I see have IBM as a customer is IBM on your target list. trialing the software or a paid customer and they say, Oh, they're trialing it. Okay, next one. Next one. And we say, Okay, founders, please, you can put here are paying customers on one side, and it's to two brands. Here are our trials, and it's 10 brands, 10 logos. And then here's who we have in our pipeline. These are our targets. And then people could say, Okay, pipeline means nothing. trialing the software means something, but not all that much. And paid means a heck of a lot. So let's start with paid and you can basically as an investor, throw those other two categories away, because they mean nothing like letters of nothing. I'm sorry, letters of intent. We have an internal term, we call them letters of nothing. LO ends. Letters of intent are what entrepreneurs who don't have the chutzpah to charge for their product do instead of being a product that people will actually pay for. Do not get caught up in letters of nothing and do not ever bend the truth because it could break you and your company. The allegations are just nuts. She's been sued twice by JP Morgan, and now the SEC. It's the same allegations at some point in 2021. Two major banks expressed interest in acquiring Frank. Frank CEO Charlie told JP Morgan that it had 4 million users in diligence they found out they asked for a list to verify Initially, they refuse saying she could not share a customer list due to privacy concerns. That's a red flag. Major red flag when a founder and I've had this happen. will not share a contract will not share a customer list will not give you a customer reference, red flag, red flag, major, major red flag, especially if you're putting hundreds of thousands or millions of dollars into a company. It makes absolutely no sense. There's so many ways to do this to avoid privacy concerns. You could just say, Hey, here is we've got our entire 4 million customer list. We're going to randomly sample give us 10 numbers, give us 100 numbers from one to 4 million. And we will take this list, we'll have our attorneys, a CPA firm or ourselves, pull those 100 names, we pull those 100 names, we then asked, we put their first name, last initial or just their first name. And then we put all the other account information that's not personally identifiable. And then during diligence, the person could email those folks or just look at their account activity and say of the 100 random, how many logged in this today, how many logged in this week, this month, how much money do they have on deposit, etc. And just do some basic math on the random cohort, right? It's a random cohort. Okay, so now according to the lawsuit, Charlie and the chief growth officer asked the head of engineering to create a fake customer list, but in the engineer refused. And he, you know, probably said to himself, like, Do I want to go to jail, which apparently Charlie and her chief growth officer never asked themselves. So Charlie approached, quote, a data science professor at a New York City area college to help. Hmm. Okay. Interesting to see who that is using data from existing accounts that data scientists created a list of 4.2 million fake accounts. I'm guessing they told us that data scientists they were doing some data science experiment, where they just needed 4 million dummy accounts to run some tests on. These included fake first and last names, addresses and dates of birth. I mean, this is crazy. They pay the dines the data science professor 18 grand for this list. And bingo $175 million acquisition. So that $18,000 customer list, give him a 10,000 x markup kind of reminds me of some investments I've made, except in those cases, they had real taxi rides in real accounts. So in reality, the JP Morgan lawsuit states that Frank had fewer than 300,000 actual customers. Jamie diamond says the acquisition was a huge mistake. But that JP Morgan needed to keep taking risks. Obviously, here's his quote, obviously, when you're getting up to bat 300 times a year, you will have errors. And we don't want our company to be terrified of errors and do nothing. Of course not. But there does need to be some reckoning in the due diligence group at JP Morgan. If you're gonna spend 175 million beans on something of shareholders, with shareholders money, better do your diligence. And if you better understand what red flags are. Let's end here with a 38 second clip of who I predict will be the next perp walk and person to serve 10 years, maybe she'll get to hang out with Sam Bankrun fraud and Elizabeth Holmes 38 seconds from Charlie.

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He mesmerized this audience of 120 or so capital allocators. He's the OG, invested in SpaceX, Tesla, Hotmail. This guy's been around for a long time. I'm not saying he's old, but he's got that wisdom. He's young at heart with the wisdom of Yoda. VC Yoda, Steve Jervison, uninterrupted for the next 30 minutes. For you, the loyal This Week in Startups audience, enjoy. Our next speaker is absolutely extraordinary. We're lucky to have him. It's a legend in the venture industry, original investor in Tesla, SpaceX. So next up, Steve Gerbertson.### Assistant: Well, I'm going to just try in a brief moment to give you an introduction to the way we invest in disruptive technologies, explain what we mean by that, the origin of where disruption comes from. I'll use space as one example, simply because SpaceX companies like that are very visible. Everyone thinks they know a bit about the business because it's very visceral. When they blow up, it's sort of failure to launch becomes visible. And it's maybe an iconic example of something that very few of us probably thought was a venture investable category in the 90s when it was all internet, semiconductors, and biotech, and that was pretty much it. And now it's cars, it's agriculture, it's energy, the entire economy is opening up to venture investment. That's because it's opening up to entrepreneurial disruption. And that's what I want to focus on in the beginning. Just one slide for background and context. These are the kinds of things we invest in. They're all over the map by design, because our filter really is that we try to invest in companies that are unlike anything we've seen before, yet adjacent to where we've been. So it's this ever set of expanding frontiers, now on more domains and sectors than ever before. But when we first invested in these companies, they didn't have a product or a prototype. And they were generally regarded as impossible ideas. When they succeed, like Tesla or SpaceX, you can see how they've reinvented entire industries, right? They're catalytic to change beyond just their direct sales or impact. And we're hoping that'll be the case with others to come, like communal fusion and energy space, or D-Wave and quantum computing, or even a tie in psychedelic medicine for mental health, and try to reinvent the industry that when you look back 20 years, companies that sort of led the tip of the spear of a major sea change. So that's what we look for. We don't all succeed, of course. In fact, we fail about half the time. But the filters that we use, I'll explain later in the talk, are ones where we try to look for that ability to find companies for which history books would be written about if they succeed. Companies that have an incredible trajectory looking at 50 or 100 years, not 5 or 10. And so we set up our fund to be a 15-year fund. I personally have never sold a share of anything I've invested in. There's some domains of long-term thinking that filter through to the filters we use in the front end that come from the way we structure our work. Okay, meaningful change. So I mentioned that we try to invest in things that are profoundly going to change the world for the better or provocatively are so audacious that history books will be written about them. And I think Tesla and SpaceX will fit into that moniker. I don't know about which others, but we're hoping they'll have that potential. But how can you even do this? What does it take to have meaningful change? And in every single case, it takes what we would call some form of disruption. It has to be a disruptive innovation or disruption in a market that's exogenous to the startup itself, right? Without that, the big keep getting bigger, new entrants don't have a chance, and it's just business as usual, right? So in autocracies like China, in the long run, I think you're gonna see less innovation because you have less new entrants, you have less disruption. When a culture or modality, be it the culture of a region or the culture of a people, doesn't welcome disruptive change, you have less change and you have less innovation. That's what progress is. Now, where does this come from? It's always led by new entrants. This is the only rule of business I believe is inviolate, meaning there is no counterexample in the history of the world. So let me be precise what I'm saying. Take any company that's a large, or let's say top three in their industry, they will never lead the charge to disrupt that industry. In recent years, that may have seemed strange, be like, well, what about Apple? What about Hewlett Packard? What about Google? And I would also say, no, Google's never going to reinvent search. or advertising in the search context until someone else like ChatGP does it to them and they play catch up. The same with Apple. They're innovative outside their core, but never in their core business. They haven't done anything laptops or servers for decades. Nothing you can point to as an innovation from Apple in what used to be their core business. So big companies can be innovative when they don't innovate in their core. But it is always a new entrant that will change an industry like the automotive industry or the aerospace industry that go decades without a new entrant, decades without any change that anyone can point to that's meaningful or disruptive. And then the Tesla's and SpaceX lead the change. Now, where does this come from? There are several on this list. I won't belabor them. A lot of these are one-offs. Every once in a while, an industry gets privatized. Every once in a while, it gets deregulated. That creates new opportunities. Sometimes there's financial shock. Ironically, big financial swings, black swan events in the economy are great for startups. There was no better time for Tesla to launch its competitive assault in the automotive industry than when all the automotive companies were struggling with debt defaults and the possibility of bankruptcy. Tesla picked up a factory for $42 million that cost a billion dollars of property and equipment that was used. Those kinds of opportunities are a form of disruption, but you can't necessarily bet on it as a venture investor or an angel investor. Then there's these weird ones, these new channels of distribution. And I would lump the internet mobility as examples of this. Basically an entirely new way to mediate interactions with customers, right? Just like Dell was a beneficiary of an entirely new way to ship computers to customers. The same is true for the internet and almost every consumer and business, business you can think of. And same, of course, for all the mobile apps that came. Now, the last one is the one I'm going to focus on. This is the one where I think is the reason we're in the room today, the reason that there are angel investors and venture investors year after year, decade after decade, despite the sporadic... I mean, no one, I don't think, is focusing on privatization as your investment thesis or deregulation, right? Like, good luck. We're going to look around the world for the next one, right? But every single year, you can count on Moore's Law. This exponential change in capabilities that, for whatever reason, humans have an impossible time projecting with their linear projection and intuition. Just like Sony lost the Walkman franchise to MP3 players and just didn't see it coming, how could they not have seen it coming? Every single time, people don't see it coming, whether it's chat GPT or other forms of innovation and disruption today. Quick question, how many people have seen or know of Ray Kurzweil's version of Moore's Law? This is the abstraction of Moore's Law that says the amount of computation that you can buy for a dollar. I only saw one hand, is that really the case? Wait, hold, keep them up so I can count. Okay, like Steve Martin, one, two, three, 10. Okay, 10 of you, wow, okay. So I will explain this slide because I've been updating it from when Kurzweil first published it in 2008. So what you're looking is years on the bottom, how much computation you can buy for a constant dollar, the inflation adjusted, which is what people buy. No one says, hey, Intel, give me a billion transistors. I'd like to buy some transistors, please. They say, I want a certain amount of computation. I want some storage. You could plot either, across many different technology stacks. So now this abstraction isn't specific to Intel. It isn't specific to anything Gordon Moore talked about. It isn't specific to the integrated circuit. It's like the analytical engine, the relay-based computer that cracked the Nazi Enigma code, vacuum tube-based computer that predicted Eisenhower's win, et cetera, discrete transistors. Those are different epochs in those gray bands. Well, what Kurzweil realizes, astoundingly, If you look at the best price performance computer of the day, it's as if they were on a curve without knowing it, right? It's like spooky. There are other computers below the line. This is the frontier of human capacity to compute. Compounding, uninterrupted, and I'll show you an update to the present day that covers a 10 billion billion X improvement in price performance computing. And it has nothing to do with Intel, has nothing to do with integrated circuit, has nothing to do with anything we're taught about smaller, better, faster, cheaper, that's unique somehow to the integrated circuit era. It's like kind of spooky, almost cosmological. Why has humanity's capacity to compute compounded independent of the economy, World War I, World War II, the Great Depression? You could sort of think metaphorically, innovation continues unabated. But this is the driver of everything you just heard about in AI being exciting, in all these industries converting into something new, like Tesla and SpaceX are fundamentally software companies. That is the basis of their competition. It's all driven by this. Now, I've updated this curve for the last, I guess, what it'd be 15 years. And what's kind of astounding is the sea change. Blue would be the traditional compute as we know it, you know, single processor CPU kind of architectures. Green is NVIDIA. So would it become obvious, in fact my mom realized this when I was selling a slide 13 years ago, that she should load up the boat with NVIDIA stock, becomes more and more painful, obvious as you go along, that Intel is no longer the harbinger of progress. There is no Intel product for the last 13 years that matters in terms of the frontier of computational capture. More recently, there are custom chips called ASICs that are specialized for AI that are vastly outperforming those NVIDIA chips. NVIDIA continues in green, as you can see, but the yellow, and even the weirdest one, this analog chip company called Mythic, it's even closer to the mimic of the human brain as an analog compute architecture that implements AI, even more cost, better price performance still. And this is astounding. Again, when you see a straight line and a curve like this, it's an exponential. Every tick mark on that y-axis is 100x, 100x, 100x. This is a slightly upticking term. So things like chat GPT sort of come out of nowhere and seem like magic. Almost everything in deep learning feels that way initially. Autonomous driving, even Siri in the first few moments, until it quickly became annoying. This is going to be our future on ever shorter timescales. You just heard in an earlier talk, gosh, we live in the most exciting 30-year period ever. But that sliding window just keeps going. The next 10 years will be much more progress than the past 30. The next 20 years will be more progress than the past 100 by this metric alone. And what happens as this goes up is the things that were not simulatable before, like landing a rocket on its legs, or combustion instability in a SpaceX engine, suddenly it can be computed in advance, and you can run many more experiments in the simulation domain than you can in physical life. Industries that weren't IT industries start to feel that way. Tesla can test billions of virtual miles of driving for the autopilot stack of software before people have driven billions of miles. That, in a sense, pace change puts the predecessors out of business. You can't compete with a software stack If you're doing a hardware iteration loop, the pace of progress is just that much higher. So, what industries have been disrupted by Moore's Law? The reason I belabored that curve was it drives almost everything, right? In almost every investment thesis you have, or phrased differently, think of any industry, construction, agriculture, you name it, energy, and say, what would be the basis of competition 20 years from now or 50 years from now? And the answer will almost always be how they process information. It won't be, oh, they had a monopoly on a certain mineral or a patent on a particular composition of matter, right? There are no patents at SpaceX, or at least there weren't until recently, and Tesla open sourced theirs. It's not like there's a thing other than the software stack and the rapid iteration of the learning loop that is the point of differentiation. So in the early days, 90s or so, computing, networking, telecom, kind of obvious, old school, Eye-opening for us, and I think a lot of people in the public markets, was like, whoa, what's going on in automotive and aerospace with SpaceX and Tesla? It was kind of a watershed moment. Might this happen to my business? You know, fill in the blank. And I think it will. I think eventually all industries. We may be wrong on timing, like five years too early or 10 years too early, as I've sometimes been. But eventually, all these sectors are in various positions of transforming. By transforming, I mean, was there a meaningful change you can point to the last 20 years? If not, might there be one coming? And in almost every case, there is. So let me use space as just one quick example. These are real photos, which is astounding in both cases. This isn't something just made up in chat GPT. And it really inspires the next generation of people in this sector. But how did this happen? How did SpaceX come out of nowhere in what is normally a capital-intensive business, and still is in some ways, to be so profoundly transformative? And might that be a template for others? So the first thing is, there are these things that just worked the first time, like these boosters landing back from the Falcon Heavy, in synchrony, as my wife and I saw that took that photo. It's like, holy, like that actually worked. Or flying the DM2 mission with the human astronauts for the first time. There are so many things that depend on the simulation stack. So at SpaceX, they build all their own software. I mean, everything, like even the equivalent of your Salesforce automation system and your SAP, you know, and, you know, sort of management system for manufacturing. They built the entire software stack. They built their own simulation tools. Instead of using CFD modeling tools, they built their own wavelet-based things to predict engine instability and to predict all flights. The point being, and the reason I'm belaboring this, is a lot of this stuff is moved to the software domain of rapid iterations. And they were thoughtful about using standard off-the-shelf electronics wherever possible, like the same FPGA control module for almost every control loop in a rocket. It's just different software for is that a landing leg controller or a stage separation controller? It's just all software, and so having a common hardware reference platform and just off-the-shelf electronics everywhere, nothing proprietary, allows for more rapid iteration cycles. The analogy I'd use is kind of like the phone in your pocket. You know the next one's going to look just like the one you currently have, physically. Then the one after that's going to look exactly the same. It's long ago been that the physical thing became a vessel for code and services. Same for your car. It's the software stack that matters. 20 years from now, you won't buy a car if you buy one at all or ride in one if you choose to ride in one as a service that has the worst autonomous driving stack. That will be the singular point of purchase. It'll be an AI purchase decision. It won't matter if that one's got a slightly better battery or slightly better motor. Those will all be commoditized to about the same price point, same componentry price for everyone. There's some dislocations. They don't last decades. 20 years from now, all you care about is a software stack. By the way, at SpaceX, everything they make is a fully autonomous vehicle. Every stage of the rocket, booster, upper stage, Dragon Space Capsule, both fairings, the boats that go out to sea to retrieve them, every one of those is a fully autonomous vehicle. Now, what impact has this had on market share? This is not to the present day. It's only 2015. I'll give you an update in a moment. Only focus on the dark blue. America used to have 100% market share in the 80s. Meaning, if you had a commercial, meaning a free market, not like launching Russian or Chinese military satellites. You're saying, I got a satellite. I could go anywhere. Who's going to launch it for me? It used to be United States. It went to 0% market share for three years in a row. Meaning, not even U.S. companies would choose a U.S. launch provider because they were not cost competitive. This was the years of cost plus contracting and monopoly consolidation in industry that made just one monopoly provider, fundamentally, with a couple of also RANDs in the U.S. Enter SpaceX. The change is dramatic. It's rapid. It transforms an industry. It wakes people up. Ministers in China said, we can't compete on price even if we had Western technology, because they thought this was an impossible price point of entry. Well, it went further. They now launch huge constellations of satellites at one go. It's a ride-share missions, and that's going to get better when these tugs take them to different orbits. But this basically addresses the huge swath of smaller satellites that there were 180 venture-backed startups to do small satellite launch vehicles, meaning rockets to just launch small satellites and just that, kind of like the Falcon 1 used to do. Well, now you can do several at a go at a much lower price, and that's had a pretty dramatic impact on small satellite launch. So this is not all satellites, it's just the little guys, right? The little Dove satellites, little 3U CubeSats and things of that sort. The market share has just been growing and it's up about 90% still in 2023 as well. Get a sense of the difference. When we invested in Planet Labs, it was kind of compelling. They really showed that you could use commercial off-the-shelf cell phone components, batteries, processors, camera modules, you name it, throw it into a tiny little dove, fly it closer to Earth than the huge Landsat and predecessor of everything, and be roughly 10,000 times cheaper. Not 10x, not 100x. entrepreneur tells you, I got a 10x improvement, I got 100x, and you're like, oh, sure you do. Right? How about 1000? How often do you see 1000x in reality? There's so many subcomponents in the aerospace sector, through 1000x, it'll make your head spin. Little, just a stupid little radio to connect to the International Space Station to communicate as you're approaching with the Dragon capsule was a $200,000 radio, a piece of crap analog technology from the 70s, still in use today. You could recreate the whole thing for like 50 bucks in a digital radio, which SpaceX did, of course. That's profound. Now, a next area in space, of course, is once you have lower access, kind of like fiber optics lowered the cost of access to the internet, and you have this flourishing of innovations and apps. Similarly, when you lower the cost of access to space, you can do all these huge constellations, fly thousands of satellites where you might've had a handful before. And this is pretty game-changing for communications, for positions, navigation, and timings, the equivalent of GPS and things of it for figuring out where stuff is, as well as imaging the Earth, not just with the visual bands that we have, but all kinds of new satellites are gonna be flying to specifically detect methane, for example, to find all methane leaks on Earth all the time. Like, whoa, that thing that's supposed to be flaring is actually just spewing methane into the air. Or this agricultural concern is completely out of control and be able to have feedback on the planet and planetary health. So there can be a lot going on with observing Earth, observing the climate, observing everything, communicating, broadband, direct-to-phones coming, right? So the next thing beyond these dishes is that you're gonna go directly to your handset for texting and email anywhere on Earth. without carriers being involved directly, meaning you can go direct, you can bypass your government, and doing so at price points that have never been seen before. That's going to bring the next three billion people online sooner than most market forecasters had seen. So anyone with a global investment premise in, let's say, the internet might like to think about what does it really mean to have a billion people, three billion people over the next three years, having access to broadband who don't today? What online education courses might they take? How might they want to be part of the global economy? Because they are decoupled from the global economy if they're not on the internet. That's like a binary switch for like, they're off doing their own thing and hunting sort of a subsistence farming kind of life to they're just as smart and capable and now they can learn with, let's say, the Khan Academy GPT education system that's personalized to them. to be contributing to the global conversation. So I think you're gonna see more, as a derivative effect, more entrepreneurship than ever before on planet Earth, by like a huge amount, just based on headcount. Summary of this, what happened in space? Cheaper access is kind of a disruption, SpaceX is disruption, created an opportunity for everyone, right? So from that seminal point, right, in 2009, when the Falcon 1 started flying, and then a bit later with the Falcon 1 and the Falcon 9, that's what opened up new space. That's why there's been 300 venture funds that have invested in space in the last five years. for the first time. That wouldn't have been a good idea in 2004, right? Timing would have been a bit off. So that is a catalytic moment. Doing everything in a simulation, right? Having a rapid iterative loop is in a sense the single most important factor for a long-term sustainable advantage. Commoditized hardware, like the piece dividends of the cell phone wars between all the different suppliers, is the thing that all these new robots new physical things are using. Even though I hate investing in hardware, I end up investing in things that are vessels for software that are off-the-shelf hardware, and it dematerialises value. One last point about SpaceX before I leave. It's important to have a dream, a vision, something that motivates the employees. This is, of course, making humanity a multi-planetary species for SpaceX. It's making all vehicles electric for Tesla. That gets people excited to come to work each day. It coordinates action as an organization scales. So like a thousand employees may be pulling in different directions if the goal is just maximize profitability. Well, like this quarter, this year, this decade, right? Those will trade off. Whereas a singular objective that everyone can understand coordinates action as you scale. And it's really an incredible thing to witness. Most of these are sketches, they're not reality. The bottom left is reality. That's headquarters at SpaceX. Every employee walks by this as they go into work each day, reminding them of the prize, Mars, Mars terraformed. And it is one of the things we look for too in these kinds of companies. where there's a dream on the horizon, let's say 50 years out, that you chain back to the present and say, therefore we need to invest heavily in reusable rockets because we got to get back from Mars. We got to shift our fuel source from kerosene to methane. Why? Because there's probably no kerosene on Mars and it's easier to make methane, simpler hydrocarbon. So those Mars based imperatives led SpaceX to invest billions of dollars in things that none of their competitors cared about. But most importantly, it led to a competitive advantage here and now. It wasn't just like asteroid mining going underground for 20 years and popping out maybe with a product. It was a better product and service today, terrestrially, with a dream simultaneously. So we hold every company to that almost impossible dual requirement. Big audacious change, but iterating with customers in the near term. We ask ourselves, what is that inevitable future? I'll say one last thing about forecasting or future ventures being our name. It is much easier to predict something looking out 500 years than five. Much easier. Not just because you won't be around to see if you're wrong or right. In forecasting, that's the best trick. You can ignore the transitions, the ways in which big companies will try to regulate around you or unfair business practices and say, 500 years, will we burn oil and gas in internal combustion engines? Of course not. Will we let humans drive cars around? Of course not. Every vehicle will be autonomous. Every vehicle will be electronic, electric. How could it not be, right? How could something not be sustainable? By definition, if it's not sustainable, it's not sustainable. It's like a tautology, right? And lastly, meat manufacturing. I'll just throw in a completely different one. We won't slaughter animals for food. It's impossible. You can't scale meat consumption the way humanity is wanting to scale it, meaning doubling by the year 2050 with the amount of land on earth alone, not to mention water use, methane, all the other stuff. So meat is one interesting one. I'll just show one visual. There's a bunch of companies, a couple here we invested in. It's going to be a taste of the future, if you will. I think we will shift dramatically as a people once we have alternatives that are as good. right, that are either cellular ag, meaning growing literally the same stuff that you eat today, or something that is a indistinguishable substitute like that mycelium-based steak on the right. The thing that makes this interesting is this organism grows from zero to harvest in 18 hours. So not only are you utilizing all that capital equipment on a daily cycle, you're also running a new experiment every day on taste, texture, and what have you. And so it is already cheaper than beef, it'll soon be cheaper than chicken, and hopefully it'll pave the way for a much more sustainable food system in the future. Last thing, why now? And this will be my last slide. Some of you might be wondering, should I be investing into a recession? Because it's not clear. The Bureau of Economic Statistics is always lagging by about a year, so we don't really know for N1 yet, but we might be heading into one. Some people think we are. For the last 13 years, I've been checking in every three or four years because it keeps changing. The Dow Jones Industrial Average Companies, who are they? And when did they start? And it turns out two-thirds of them, strangely, throughout this entire time period, two-thirds of them have been started in a recession. And you might ask yourself, why? Why are some of the best, built to last, ginormous companies started in recessions more often than not? Why the super majority of them? And there are a lot of things that go in their favor. You know, as an investor, you're getting real entrepreneurs, not the arbitrage-seeking opportunists who are going to come and go when times are tough. You know they really care about what they're doing if they're knowingly starting during a recession. Second is it's easier to build, of course, a team. It's easier to grow, frankly, most importantly, focusing on customers, not investors. So the opposite of this would be, let's say, some soft bank-fueled, completely, you know, dizzy, like, go chase the next money, get big, quick kinds of schemes, which, frankly, are really unhealthy for everyone involved, not just the companies that take that capital, but anyone in that sector, right? Imagine you were operating a WeWork-like business model responsibly. right? Life is pretty tough when there's WeWork next to you, right? It's taking all the air out of the room. I like the idea that if you have a time period where companies are focusing on iterating the learning loop with customers, not focusing on the next round of funding, you build companies that are built to last. That's what we look for, frankly, in any market environment, up, down, or sideways. It's not just, oh, let's focus on the next round. It's like, how are we going to iterate and learn from customers more quickly than anyone else?

### Human: Ian?### Assistant: Well, hi everyone. I'm happy to be here. My name is Dan Pupias, CEO and co-founder of Range. In past lives, I worked at Google and Medium. I'm excited to answer some of the questions. So I guess I'll just jump straight in. So Laura asks, interested in learning more about what made you want to build a company that focused on remote work? Do you find it personally challenging not to be in the same physical space with your team and the companies you work for? So we actually didn't start Range to be remote first or a remote work company. We were mostly interested in making it work better for everyone. And we did a lot of research into some of the challenges organizations face as they scale. And what we noticed was that remote companies are generally more intentional about how they set up their processes, and they also the problems that remote companies face are essentially amplified versions of the problems that you face in person. So what that meant was that as we started solving some of these problems for teams and how they communicate and collaborate, it resonated most with remote companies. So our early customer base was around 80% distributed. They were in multiple time zones. And then I think we did predict the the advent of remote work becoming more popular. And then obviously, the COVID situation has really pushed that to the forefront, and everyone's been accelerated into that, that mode of operation. And then from a personal point of view around the not not being in the same physical space, I actually don't find it challenging. I do like working in an office, I like having a desk, I like having a mini kitchen, and I like randomly bumping into people. But some of my best collaborative moments have been with people not in the same office as me. So back when I was in Gmail chat, I used to joke that I would collaborate with Michael, who was in Seattle, more effectively than people who were outside my office. So I actually think that the physical distance and the location isn't a factor. It's other factors. And being remote can amplify collaboration issues. All right, so next question from Nick. What advice would you give around developing and sticking to a product development roadmap as a first-time founder? What's a good way to establish and calibrate sprint lengths when looking at various aspects of the build? So one of my favorite quotes, which my team get really bored of me quoting is, planning is everything, the plan is nothing. So what that means is the act of planning is very useful because it's a way of orienting yourself and figuring out which direction you should go. But once things are in motion, that the plan can be a liability. So what I would say is sticking to a roadmap shouldn't necessarily be the goal. Solving customer problems is the goal. And you work out a roadmap, which is a hypothesis for how you solve those customer needs and getting alignment with the team. But especially with an early stage company, you have to be very agile and flexible about that roadmap. So you need to be able to take in your information and adapt the roadmap as necessary. So I would generally write it down. You do these planning exercises, share it with the team, write it in the doc, have a manifesto, whatever works for your team, and then review regularly is a starting point. It's pretty straightforward. In terms of calibrating sprint lengths, I think one important thing to think about here is that there's two cycles that don't necessarily need to be combined. these cadences of communication, which is, as a team, how do you come together, communicate, get aligned, and align on the North Star? And then the second cadence is a cadence of work, which is how do you do project planning and how do you do units of work? So in some companies, it's possible to have those be aligned. So you might do a two-week sprint on work and a two-week, and then you align the work sprint with your communication cadence. But in other companies, especially as you grow, different work streams have different natural cadences. So it might not make sense for an infrastructure team to do something every two weeks, but the R&D team probably is operating on one-week cycles or even shorter. But you still need to communicate across the company. So I would start with actually defining the cadence of communication, which is, when do you start planning? So at Range, we do a Monday morning briefing, and we have two-week sprints. We plan work for two weeks, and then we have a retro at the end with the whole company. I imagine that two weeks will stay constant for quite some time, but teams may start planning work in two or three cycles, as we call them. And then I think it's just being adaptive, like figuring out how you're sensing into the state of the team, how are you being productive, how are projects being completed, and then just being OK, dialing that up and down. Maybe you actually don't want to do two-week cycles for a while and you want to switch to six weeks. That's totally fine, but you just have to be intentional about it. Henry asks, what are best practices around building a tight mission-driven culture when working remotely, given people are not interacting face-to-face physically on a daily basis and focus may be impaired? Well, I think there's two realities, right? There's the reality of, are you building a remote company and setting out from the start to do that, or have you been thrown into it? So if you are building a remote company from scratch, then I think a lot of this comes down to hiring and onboarding and making sure that you're attracting people who understand the problems you're trying to solve, who resonate with the mission, and are intrinsically motivated by that. Unfortunately, a lot of people are now in this remote work situation where they haven't necessarily had to be able to build that foundation. So we're having to rapidly redirect teams. So I think some tactics here are to just think about these rituals and rhythms. And it goes back to the cadence of communication. You have to have this drumbeat where you're reinforcing why you're doing what you're doing and why it's important. And that has to ladder through the company. So there's always that, I'm not sure if it's real, but someone asking a machinist, a Tesla, a SpaceX company about what this bot is for, and this bot is to get a man to Mars. They understood that working on this small feature in a factory contributed to a big space program that would eventually get someone to Mars. I don't know if that's apocryphal or real, but it gives you kind of an idea. It doesn't matter if you're a DevOps engineer, a product engineer, someone working in IT or people operations, everyone should understand how their work ladders up to the company goal. And that can be done in a couple of ways. Some people use OKRs and objectives, and then they have the objectives ladder up. You could give Teams charters. So you have, say, the PeopleOps Teams charter might be to build the best company or build a world-class team, but it could also be tied to the company's mission. So I think it's just about having that drumbeat of reinforcing why you're doing what you're doing. doing it at the briefing, doing it at recaps, just keep repeating yourself. Kevin, have you received any downstream investor interest since the start of mass quarantine across the US? Do investors see this as an opportunity? Yes. I'm not sure how much I want to share here, but definitely, I think there's a lot of investors who are healthily skeptical of productivity and team software, especially in the HR space. And now they're suddenly realizing that there is a big opportunity here and the world has changed. And they're now trying to understand the market. So definitely had a lot of people doing outreach. So definitely an opportunity. It's accelerating a lot of trends that we already saw in the workplace. And if you think about what the operating system for work looks like in 5-10 years, it looks very different to the stack today. We need a new stack to build companies on top of. That's how you pronounce it. Can you share a little about where you want to be in 18 to 24 months with Range? How are you planning on scaling and what does your product roadmap look like? So I think, ultimately, my goal at Range is to help teams be more successful. So in 18 to 24 months, I'd love for our customers to look back and say, yes, Range really helped our teams navigate this really difficult time. Companies going through a lot of transitions, it's really difficult. And I do think that range can help them navigate that and build these foundations for good teamwork. So I'd love for people to be able to say that. That'd be a really good place to be. On the product side, currently, we've been focusing on the team as the unit of work. And it works pretty well for teams as a way of staying connected and knowing what's happening. What we're looking for over the next year or so is to deepen value for the individual, for the team, then for the organization. So on the individual level, We already integrate with all your tools, so I'm pretty excited about some of the stuff we're doing around attachments and integrations to really nail your personal workflow. So C-Range is a hub where all your work tools funnel into this place, and it just makes it much easier to plan and structure your day. On the team point, on the team value, we're looking at how we can help support these cadences, these rituals, and these rhythms. So when we look at the most high-performing teams, they have these really strong rhythms of the work. So we see an opportunity for Range to help build that cadence for different teams, so each team can find their own groove and integrate into different moments of collaboration. Then the organizational layer, we're starting to collect some really interesting data across these tools and these updates, and how can we provide intelligence and insights around the health and the functioning of the company? So individual team organizational value, essentially. Nick Presch, how did you meet Evan Williams? What's the story of you leaving Google for Medium? And what are some amazing insights and lessons you've learned from working with him? What makes him stand out as a founder? So I was looking around for what to do after leaving Google. I decided to leave, and a friend of mine who had previously worked on Blogger with Ev introduced us. And I didn't actually know Ev was doing anything post-Twitter, and agreed to meet him. And I met him at The Grove on Mission Street, Mission and Third, and he was wearing a suit. And that might not sound unusual, but he's a pretty casual guy in general. And the first thing he says is like, I don't normally wear suits. I was just meeting Obama. So it's just like this super casual drop of meeting. I guess at that point, it was like pre-President Obama. And we just started talking about what he wanted to do and what company he wanted to build. And it was just really interesting, really exciting. At that point, it was obvious cooperation. So it wasn't actually media. Media was just a word on a whiteboard that him and Biz had written up as one of the products we were exploring. When I joined, there was a V1 of Medium, and then I started working on the V2 of Medium pretty much straight away, and then that became the whole focus of the company. What amazing insights. I think Ev really taught me the power of storytelling. Obviously, it's deeply ingrained into the Medium culture and the platform and the product, but it's also a great way building alignment and getting people to be really loyal and mission focused. I think Medium has some of the most thoughtful, interesting people on the team. And even the alumni community is very aligned and close-knit. And I think a lot of that is to do with the cultural storytelling and the background to the mission. The other story or other lesson I learned from him was around what it means to to go with your gut. And so you often have these sort of sense of discomfort that something's not quite right. And that's like your gut telling you that something needs to be looked at. And I think what I learned from it is it wasn't about being impulsive and unintentional. It was about using that as a sensing signal. So you sense into things that your subconscious is aware of that your conscious isn't aware of, but you then have to go explore it. So you have to then go explore what your gut is telling you. It's kind of like an integration of the intentional and the unintentional subconscious. That was really cool. What makes him stand out as a founder? I mean, he's done it over and over, lots of experience, and very determined. James, really like the use of daily check-ins and achievement tracking within range to keep people on track. How can we encourage these actions in important areas outside of work where people aren't directly incentivized for us to do so? So one of the things we looked at with range was how to encourage a behavior that people may intellectually know is valuable, but doesn't stick. So that's essentially what a habit is. A habit is something that you do without having to think about it. So even the daily check-in or work planning is something that everyone knows makes them more productive. So I think HPR have a study on just checking in on what you're going to do with the day makes you 15% more productive, something like that. But a lot of people don't take that time at the beginning of the day because they just get caught up in the rush of work. So we looked at these behavior loops, and generally, when you think of a behavior loop, there's a cue, something that triggers the behavior, the thing that you actually want to happen, and then you have to have some form of reward, and that reward reinforces the behavior. For range, we looked into that habit loop. And we actually have multiple overlaying habit loops around the behavior, so multiple cues and multiple, essentially, rewards. So when you're looking at other areas, you have to think about similar things. So with fitness, what is the cue to exercise? And what is a cue that will be motivating? As someone who exercises fairly regularly, a notification is not necessarily going to be the right cue to make me want to go out on a run. But perhaps there's these other signals that you could provide as a cue, like my watch telling me that I'm now unproductive instead of productive. And then what is the reward on the other side? And I think what we've learned from social media and also some of the principles we applied to range is that there's a lot of value in social accountability in terms of the reward loop. So I think if you look at Strava and some of these social meditation apps, Having that social accountability is a great way of reinforcing that behavior loop. And then once it's habitual, it's a habit, so it's easy to continue. Charles, what do you look for in a co-founder? And what advice would you give to founders looking for one? Do they need to also... Do they need to? Oh, I guess, do they need to find a founder? And also, Marmite, love it or hate it? I'll start with the Marmite one. This is easy. I hate it. Also hate Vegemite for Australians. So in a co-founder, I think when we're starting range it was really important to have a good spread of both skills and abilities and behaviors. I think Braden, Jen and I really complement each other really nicely. There's very little overlap in our core disciplines. Braden's a designer, Jen comes from a people arts background and then From a behavioral perspective point of view, we all bring different perspectives to the table. So that's been really great. I think it could be pretty tricky if the founding team all comes from a similar background with similar focuses and similar skills. I think that can make you a bit blinkered and a bit blind to opportunities. So that's one thing is making sure that you have those perspectives. And then looking for a foundation of trust. You will have conflict, and conflict is good if you can handle it and process it effectively. I think what often happens is founding teams, they try and avoid that conflict, and that creates this seed of doubt and a seed of lack of commitment to each other that can eventually blow up into something, and it erodes the trust over time. So I worked with Braden in 2006, way back before we, and then we went our separate ways for a few years and Jen and I worked at Medium together. So we both had a track record of collaborating and working together, which made us feel like it would be a good foundation. And do you even need a co-founder? I personally wouldn't want to do this on my own. It's really, really difficult. And being able to lean on other people, if you're having a bad week or a bad month, someone else on the founding team can can step up and take a bit of the slack. So being able to ebb and flow between the three of us has been really valuable. It's amazing when all three of us are firing on the full capacity all the time, but in the current climate with impending doom at every corner, it's actually really difficult. So having three people has been really, really, really great there. Lizette, what should self-funding startups be thinking about right now and 24 to 36 months out? Yeah. I think this goes for anyone. Honestly, no one knows what the world is going to look like two, three years from now. And it's all reading tea leaves and making predictions. So I think the main thing is to think through various scenarios of what the world might look like, and what is your hypothesis for the world, and it has to come from you. And that might be based on some very optimistic recoveries, or it could be something, you know, more, more extreme, like, are we going into a 10 year depression? And what are the impacts of that on the world? And then you can start kind of like, laddering back from those from those scenarios. And you don't have to, they have to be true or accurate scenarios. It's the model for thinking through how that's going to affect both your company, your business, your employees, your customers. And that will help you at least spot some commonalities which you can move forward on. Just from a range perspective, we're not even trying to look that far into the future. We are looking into next year, but we're not trying to look too distant. We have ideas from the product roadmap and the business roadmap for 1st, 2nd, 3rd Horizons going out longer than that, but in terms of planning, We don't know if we're going to have an office in January. We shut down our office a month ago and we do imagine opening office again, but we don't know if that's going to be January 2021 or January 2022. So that's a decision that we don't even need to think about because there's no way we can get the information to make that decision. What we can look at is the effects on our customer base and the demand for our product and what that looks like. And then we can start building hypotheses around how that's going to play out over the next 6, 8, 12 weeks. and then maybe going a bit further. I think at this moment, we're in a very complex and potentially even chaotic situation, so it's really having these fast OODA loops. OODA is Observe, Orient, Decide, Act, and then just being very agile and flexible about how you make decisions and how you change direction. Any tips on joining a small tech team as a new leader, especially fully remote? A lot of this depends on your background. If you've come from a big company and you're a leader there, everything's going to look very different at a small company and you kind of have to reassess what the role of a leader is and rethink what your day-to-day job looks like. And I think one mistake people often make is that there's kind of like three levels to work. There's like, can you set the vision? Can you write the playbook? And then can you run the playbook? And in a big company you can get away with If you're a very senior leader, you can get away with just setting the vision and then not actually being able to write the playbook because you can delegate that to someone else. And what I've seen a bunch is that people come into companies or startups with these great, great backgrounds, and they can set the vision and then they can kind of like help people write the playbook, but then they can't run the playbook. And in a startup, everyone has to be, you know, getting their hands dirty and working on the ground. As a lead, you have to roll up your sleeves and act as an IC. So one way to think about this is you have multiple hats. So as an IC, you have your IC hat, then you have your lead hat. And what is the lead hat? Is it a coach? Is it a mentor? Is it a director? In a startup or a small team, it's much more of a mentor-coach role. So essentially, your mission and your goal is to set the environment for success. So it's how are you sensing into the team's needs? How are you helping them navigate the organization or the product needs or the roadmap and how are you helping them succeed at their goals? And that's the main question you should be asking. And that's the same whether you're in the same office as them or you're remote. The difference with remote is how are you doing the sensing? It's much harder to sense into the team when you're not in the office with them. So you have to think about what is your apparatus for sensing into the health and the success of the team. And it goes back to the cadence. What are your check-ins? What are the check-ins at the team level, at the individual level? how you're asking questions and reviewing them. We have a blog post around five questions you can ask yourself at the end of every week as a leader to make sure that work is balanced and effective. So you can check out range.co slash blog for that. But yeah, I think that's straight. But I think, basically, you can't be a director on a small team. It's more of a gardener. Your role as a leader is a gardener. You can't force the roses to grow. You can set the conditions for the roses to bloom. And that's how to think about your role as a leader. Amanda, how did Google change in the seven years you were there in terms of culture and product roadmap? What was it like when you joined and when you left? Oh, wow. Well, I joined in 2005, and it was around 3,000 people, I think. And then when I left, it was a lot bigger than that. But even at 3,000 people, there were huge areas of Google that I had very little knowledge of. So I worked on Gmail and in the apps world. I had a fair amount of visibility into, say, Google Docs and spreadsheets and groups, but not into ads and analytics. So Google already, at that point, had kind of sharded the company into different focus areas, which is the only way you can effectively scale is to create these subdivisions. But then in terms of the culture, I think... I mean, scale gets more difficult. The more people to coordinate, things get slower. And that definitely took its toll, many layers of management and reorgs happening more frequently. I think there was one year where I had three VPs. And for the most part, that didn't change day-to-day much, but it definitely changed priorities, which can feel a little bit like you're getting yanked around. So I still think Google is a great company. I think it's just inevitably it's grown a lot bigger and that's caused a lot of changes. In terms of the product roadmap, I think it depends on the team. I think this is another interesting thing about large organizations is that the variance within the company can often be as much or more than the variance between different companies. So a team at Google and a team at Amazon might actually look very similar, but Holistically, Amazon and Google look like completely different companies with completely different value systems. So a team on, say, an analytics org at Google might be very different than a team in the ads org or a team working on self-driving cars. And that goes to everything from culture to how they do product planning to how the leadership works. And that's just something you have to expect. So if you do join a big company or you are a big company, you can navigate the organization to figure out the spot that fits you best. Ian, how is being an industrial designer and software developer giving you insights for range and remote working? Are you a leader or a co-founder? Can you be both? So I have a master's in industrial design. I wouldn't say I'm an industrial designer. I was trying to kind of broaden my foundation. I was working in Sheffield in Northern England. So I was working in e-learning and kind of wanted to stretch out into other areas. So that's why I did my industrial design degree. And it's definitely gave me a lot of insight into the design process and user design thinking and sort of customer analysis. So that's been really great is thinking in building ranges, like how do you approach things from a needs first point of view? So what is the customer need that you're delivering and laddering that back through the whole organization? I wouldn't necessarily say that it's given me any insights into remote working. I did that degree back in the early 2000s. But I do generally think that when you think of an organization, you're designing a product, that the organization is the product. And in the same way that you look at customer needs or user needs, what are the needs of your team and your company? And it's a complex problem because there's multiple stakeholders. So what are the needs of individuals on the team? What are the needs of managers? like other stakeholders, and essentially building this network of dependencies or in the organization, you can sit down and map that and Simon Wadley, who has done some really interesting work around value chain mapping that you can apply to planning out the organization. So if you're interested in that more from an academic point of view, let's check out Simon Wadley's work. And then Are you a leader or a co-founder? Can you be both? I think you can definitely be both. I think everyone is a leader. Leading is about having an idea and taking action towards the idea, about influencing other people. So I encourage everyone in an organization to think of themselves as being a leader. Co-founder is not really a job. It's a title. So co-founder doesn't mean anything. It doesn't tell you anything about what I do or what value I provide. It just means that I was there when the company was incorporated. So you can definitely be both. And then as the company grows, um, Co-founder, it can be kind of like this, a moral compass that can anchor the organization, which can be valuable, but I think it can also be harmful because it can, it can imbue authority where authority doesn't necessarily need to be as the company grows. Uh, so that's something to be careful about. Um, so we prefer to talk about, um, what is your role versus like, what is your title and the role is a hat that you wear and the hat can be. taken off and given to someone else at different points in time. And as a small company, I do security. I do IT. I did a vendor assessment today. If we had an office, I'd take the trash out. I updated our address in 20 different SaaS products. There's a lot of work that I do that isn't CEO work, technically. But it's a hat I have to wear in the company. And everyone has to wear multiple hats. So that's how I think about that.

### Human: Season 3 of The Next Unicorns is brought to you by LinkedIn Jobs. A business is only as strong as its people, and every hire matters. Post your first job free at linkedin.com slash unicorn. Drada. Don't let requests for SOC 2 compliance reports slow down your business. Use Drada to stay ahead of the curve. Go to drada.com slash twist for 15% off. And Odoo is a fully customizable and fully integrated suite of business apps that lets you build and scale your stack as you build and scale your business. Your first app is free forever. And right now Odoo is offering $1,000 off your first implementation pack at odoo.com slash twist. That's odoo.com slash twist.### Assistant: In our first story, Google had a massive earnings beat for q2 2021. Yesterday, and YouTube grew revenue almost 100% year over year 80% year over year growth is just extraordinary for a large business. Let's break down how YouTube compares to Netflix, two seemingly very different businesses, but who line up kind of interestingly. So just to give you some background, you know, that alphabet is the parent company of Google, they named it alphabet, so that every letter of the alphabet could be a different unit. cynically, what most people think is they created alphabet, so that there would be no way for Larry and Sergei to get dragged to Washington DC or to the EU and face all kinds of different regulatory organizations. They wanted it to be a conglomerate, a holding company, and put somebody in charge of it. And so now poor Sundar has to contract in front of Congress. That's a cynical take. That everybody kind of knows is the truth is that the founders wanted to be lower profile and mission accomplished. You see Zuck getting dragged all over the world. And you see Bezos is no longer in the top spot. This is now the new technique for founders to put somebody else in the driver's seat, and maybe they get to not take as many arrows or be annoyed by being dragged around the world like Zuckerberg has been to face the music. So total q2 revenue 61.8 billion up 62% year over year. Now just let that sink in, you know, we've talked a lot about how in startups, we're looking for startups that grow 20% a month, and that are growing three x year over year, that's kind of when these things are starting out what you're looking for. When you hit scale, and you've got 10s of billions of dollars in revenue, understand that 62% growth on 10s of billions of dollars is a ton of revenue, so much so the first half revenue is 117 billion. And if you just double that, you know, you're getting to over 230 billion. And obviously, it's going to keep growing. So this is a footprint of revenue, unlike anything we've seen, you know, prior to with the exception of Apple and Microsoft, and Amazon, the net income was $18.5 billion. That's the profit. That's what they put in their bank account. And that's up 2.6 x year over year. In other words, they were massively profitable. So at this pace, they will put $73 billion into their bank account this year, that is a lot of cash with that money, they could buy Coinbase just with one year's profits, they could buy Airbnb, Uber, DoorDash, any number of assets, right? But in this country, now we have been putting the kibosh on M&A and looking at these companies that are getting so big, with a little bit of a tighter amount of scrutiny. And this is in the face of China anchoring their own companies, reversing them going public, pulling their apps out of the App Store, forcing high profile founders not to maybe give up their seat voluntarily, but maybe putting a gun to their head, man, who knows quite literally, perhaps, to get them to neuter their own companies. It's crazy when you think about it. So YouTube is a major driver here but Google search business and their third party ad network is what Google is Google is an ad business at its core. That's how they make their money and their ad revenue was 50 of that $61 billion. Now remember, q2 of 2020 was really hard hit by COVID and advertising dollars did dry up for a little bit people pause their ad buys everybody if you remember just a year ago, and a couple of months people were in a full scale panic what would happen to the economy a lot got frozen during that time. So The year over year growth could be a little inflated here. But retail was by far the largest contributor to the company's ad growth according to their chief business officer, Philip Schindler on Tuesday's earning call. Google's cloud is becoming, you know, almost 10% of their revenue 4.6 billion. That's really interesting. So Google's cloud computing platform, which goes up against Amazon Web Services. And they've also cut their losses for Google Cloud by 840 million year over year, they lost 1.4 billion in q2 of last year. And this quarter, they only lost 591 million when you say losses. Another way to frame that in your mind is investment. So they've been investing trying to catch up to Amazon Web Services and compete in cloud computing also with Microsoft Azure. Those are the top three players. And so you see them investing in that business. And it's apparently paying off. Despite all this, the most impressive business in q2 was YouTube, their ad revenue was 7 billion up 83% year over year. And this doesn't include subscription revenue, which Alphabet doesn't disclose for YouTube for some reason, but they are disclosing YouTube's revenue separately, which they didn't do for a long time. And when you look at it, it's pretty close to the 7 billion is pretty close to Netflix is q2 revenue, which was 7.3 billion. I think it's great for us to look at these two businesses. Netflix has 10 times less users than YouTube, they only have 210 million subscribers, compared to YouTube's 2 billion plus users who use the service every month. So one is 10% of the size of the other. they both have the same revenue and the revenue comes from different places. So if you look at where the content comes from, what what is the product will Netflix Netflix spends billions on premium content every year, we know that and they have to develop their own IP now because other IP holders are pulling their content off the platform. Remember, Netflix had all those Marvel deals for Daredevil and Punisher and all that kind of stuff that all got pulled, right. And all those series are now on Disney plus. Netflix spent close to 12 billion on content in 2020. And they're going to spend 17 billion in 2021. According to variety, YouTube has billions of users, obviously, and it's generally user generated content or professional generated content. But it's an open platform. YouTube is not a gatekeeper, anybody can upload anything they want to YouTube and they do write podcasts, YouTube creators, how to articles, But YouTube paid $30 billion to creators from 2018 through 2020. And that was from the 2021 yearly priority letter from Susan Wojcicki, who I'd love to have on the program. By the way, we should we should invite Susan to come on the program again. So if you look at the content business, one person has to spend a god awful amount of money, the other one just gives a percentage. It's kind of a jump ball there. It's two different things. I wouldn't give the edge to either company, you know, one of them owns 100% of the IP, in most cases, that's Netflix. And in YouTube's case, they don't own this IP. You know, anybody can take their content off or stop publishing it there, like we saw Joe Rogan do. So You might even give the edge to Netflix if they happen to figure out how to create a franchise like Star Wars or Marvel in the future, which they might, they might be able to do that orange is the new black is probably not it. But there might be others. So if you look at the strength of the revenue, and the quality of that revenue. Well, Netflix has subscription revenue, and that is usually more predictable than ad based revenue. However, Netflix did have a number of users unsubscribe or not renew in the last quarter, they lost about 400,000 folks. So YouTube's revenue could be fickle because advertising, you know, does go up and down based on the economy. However, when you hit scale, you have to ask yourself, who's the competitor here? Right? Who's the competitor to YouTube, a massively global business that has never existed before? And I would actually even though subscription revenue is delightful and predictable, I'd actually give the edge to YouTube here because I don't think they have a contemporary, there is no business out there that can reach as many people as quickly with video than YouTube. So if you're a TV advertiser, and you want to reach 100 million people, 500 million people, is there a network that can do that today? Can NBC do that? No. Can Disney do that? No, there is not a network who can do that, except for YouTube, you know, even the Super Bowl is, you know, maybe 100 million people might see your ad. You know, it's like once a year, that's kind of peak television by the peak by for YouTube could be global and a billion people, 2 billion people. I don't know if anybody's ever done an ad by but that would be something I would love to see is what's the largest single ad by in the history of YouTube versus television? And I'm sure the largest ad buys would be for a season of some hit show on TV. Maybe somebody buys out, you know, the Olympics and Super Bowl from NBC or whoever. If anybody knows that the largest ad buys, I would love to hear about that. You can mention us and we'll do it in another new show. In today's startup landscape, committing to security and compliance is vital for growth, and proof of your company's security posture has never been more important. As you scale, you might start to receive more SOC 2 requests from customers, and that's where Drada comes in. Drada is an advanced automation platform used by some of the world's leading chief information security officers, or CISOs. Drata will help you successfully meet requirements, support enterprise deal flow, and continually track compliance. Drata also helps customers easily prepare for and clear SOC 2 and other audits, so you can go from zero to audit-ready in a matter of weeks. Need more? Take it from Philip Martin, Chief Security Officer at Coinbase, and here's his quote. It became clear to me right away that Drata is an engineering powerhouse. The solution they've developed is well ahead of other market players. Their approach to deep native integrations provides users with the most advanced automation available. So check out Drada's five-star reviews on G2 and see why companies like ClearClose, Smart Recruiter, and the GoodFace project work with Drada for their compliance needs. twist listeners can get 15% off and waived implementation fees at rata.com slash twist dr at a.com slash twist. But if you look at YouTube's ad revenue growth at 83% year over year, and they have 2 billion people worldwide, and there's four or 5 billion people who are online. that number is going to double and then triple. So there'll be you know, you can be sure everybody on the planet will have access to YouTube very quickly. Not only will everybody have access to it, everybody with the exception of authoritarian communist countries is pretty close to having access to it. And when Starlink and other low earth orbit satellites come out from SpaceX and other places, you're going to see dramatically the number of broadband subscribers over a decade is just going to boom, we'll have another billion broadband subscribers. And that's going to be a wave that none of us anticipated. And that wave is going to be super, super impactful, because these are folks who maybe haven't even had, you know, stable electricity, running water, and all of a sudden, they're going to have high speed internet. And then they're gonna be able to see YouTube videos. I know this sounds really quaint or optimistic, but I'm an optimist. And imagine you're in a village, you know, in Africa, or in South America, or just somewhere on the globe where the internet hasn't gotten to yet could even be middle America could be rural Australia. And now you have access to all this education material, and you can work from home. And you learn how to do design and you put your ads up on Fiverr and you get some customers in the developed world. And the developing world is now transacting with the developed world through a broadband internet and they're acquiring skills. I mean, this is extraordinary. Netflix obviously has to localize content for each market. And if they do a series, you know, it's a series that comes out of Israel going to play in Japan is a Japanese Syrian, a series going to play for Irish, you know, audience. You know, sometimes you have those moments, but it's not that often a lot of times you have to localize the shows and you have your own version of Homeland, you know, which was a show from Israel then plays in the United States. It's it's not efficient in the way YouTube is. If YouTube if there's a video from Gordon Ramsay on how to make the perfect omelet that plays globally. So I give again, YouTube the edge. And if you look at competition, Well, you know, you have maybe Twitch owned by Amazon taking a piece of YouTube, but nobody has put proper competitor to YouTube. And that is really an opportunity. I don't understand why Facebook hasn't been able to, you know, buy Vimeo or any other video platform and really try to make a competitor. it's really kind of sad that nobody's been able to go up against YouTube. I guess Tick Tock to a certain extent, is getting a lot of crater videos. And I'm seeing how to videos Tick Tock feels like the only real viable, you know, global video competitor to YouTube. And we'll see if we're allowed to even have that United States because there's a possibility that China might say, you know what, we're not letting these companies get so big anymore. Maybe we won't even let Tick Tock in the United States forget about us banning them at this point. And It might be more likely that China bans tick tock in the United States. Disney plus has been a massive competitor massive headwind to Netflix. And you have Amazon Prime Video and HBO Max is getting really good. I'm watching two new shows over there White Lotus and just did the first episode of and I've been watching hacks. And I have to say, you know, on top of I may destroy you, I think was the other series from last year, that was fantastic. HBO Max is putting up some good content, like really good content. I don't know about Peacock or Paramount Plus. I think that's not for me. But between HBO Max, Amazon Prime, and Disney Plus, Netflix has a massive amount of competitors, not not even thinking of Apple TV, which once in a while comes up with a good show like Ted Lasso. So again, the edge to YouTube, there is nothing like it out there. And you have to wonder, if YouTube will spin out, I think if you if YouTube was its own independent company, doing 7 billion a quarter, you know, doing $30 billion a year, I think it would go for 30 to 50 times top line revenue. I know that sounds crazy. But at that growth rate as an independent company, people would make that bet 30 times $3900 billion. I think YouTube is a trillion dollar company as a standalone company. I know that sounds crazy. I know people are gonna say I'm nuts. But just think about if YouTube was its own business, and they could go after gaming and programming, and they already have YouTube music. I mean, there is no limit to what they could do with that franchise when you have 2 billion people using your product every month. Just think about the businesses you can start right off of it. It is incredible to think about that they could, if they did a crowdfunding, could go to a director like Quentin Tarantino, who, by the way, has been on a roadshow. He was on Brady's analysis podcast. He was just on Brian compliments. I haven't listened to that yet. And he was on Joe Rogan's and I listened to two of those. Brady's analysis conversation, which is behind a paywall, but was phenomenal. And Joe Rogan's, which is phenomenal. But you know, Quentin Tarantino kind of a hard director to back right, you needed to have somebody to back that kind of director. Imagine YouTube just said to their users, Quentin Tarantino is coming out with a new film, we want to put up $250 million to back his next film. And they go to their 2 billion users and say, Would you like to buy for 20 bucks the right to be a producer on this film. And, you know, you can have your name in the credits or something, or just, hey, you know, we're going to crowdfund it, you can pre buy it for $20. I think they would get $100 million out of the gate, out of the gate. And YouTube hasn't even been doing those experiments, because their ad business is so strong. So congratulations to YouTube, we got to get Susan Wojcicki on the program. I mean, I've talked to her before I've met her. Come on the program. I mean, let's talk about how amazing all this is. in our continuing coverage about tech coming back to work, and the pandemic eventually ending, which we're all hoping for. I am so frustrated about this Delta variant. My god, we could have had everybody back to work, we could have been opening up society and some percentage of you have opted out of getting the vaccine and have opted to get the Delta variant. There's new information out there for you. The Delta variant is massively more massively, massively more contagious. You're not going to avoid getting COVID. If you're not vaccinated, in all likelihood, you're either going to get vaccinated and maybe get a light case of the Delta variant, or you're definitely going to get Delta variant. That seems to be the case here. Please, please, if you're hearing my voice, Just think about do you want to have this argument about lockdowns and arguments about masks for the next year, or the next six months, all we have to do is get another 10% of the people hearing my voice, maybe 20% depending on the neighborhood or the town you live in. If just another 10 20% of y'all who have been holding out, get the vaccine, this is going to end and we can have parties and go to Vegas and go to concerts again and go to sporting arenas. Who the heck wants to be in a perpetual state of arguing over lockdowns and masks and Karen's fighting about master no mess. I don't care if you didn't take the vaccine before. I'm just asking you right now, if you're an anti vaxxer, or you've been avoiding it, just look at the new data and just take some fresh eyes and investigate it. Because now there's a billion people on the planet who've gotten these vaccines. If there was a problem with them, I think we would know by now, don't you think? And do you think the risk of the delta variant, which is highly contagious, and spreading like wildfire? what if that was spreading like wildfire, and it was three times as lethal? Well, that's a possibility, right? These things mutate. So take this as a public service announcement. And let's talk about going back to work because this now the delta variant has given everybody who doesn't want to go back to work, or anybody who doesn't want to go back and be a teacher the ability to say, you know what, I don't feel safe. I don't want to go back to work. Well, you know what, now this is escalating. People are going to be asked to wear vaccine buttons to prove they're vaccinated. They're going to start asking for vaccine cards when you go to restaurants and movie theaters and sporting events like they did at the Knicks game when I watched my Knicks go to the first round of playoffs for the first decade. They're going to be you're basically by not getting the vaccine and by extending this, we're just going to create even more chaos in society. And here we go. Sundar Pichai told employees in a note Wednesday that the Mountain View California based company would begin requiring anyone on its US campuses to be vaccinated in the coming weeks. He said Google will expand that requirement to other countries in future months. Google's planning on returning to work in mid October, they were going to do September And he mentioned on Twitter, and Google expects employees back in the office three days a week on average. So you're going to be required if you're working in certain jobs. If you're going to certain sporting events, you're going to be required to get this vaccine. And so I think maybe take a look into it. Take a deep look. And these companies I think are benefiting from work from home. So I don't think work from home is going away. I think it's going to be a very flexible environment for the next couple of years. And Google has joined Morgan Stanley, United Airlines, BlackRock and other companies who have either banned unvaccinated employees from their offices or required them to be vaccinated. And that's by course at work. We spoke about vaccine passports and private companies requiring vaccines in order to return back to work on all in Episode 40 and 41. And people were complaining about those two episodes. Hey, we're talking about this too much. Well, you know, if you're in business, or you're covering the markets, and or you're in politics, like, we need to end this pandemic and get it down to under 100 deaths a day under 10,000 cases a day. And guess what? We were at that level a month ago, in the beginning of July, we were below, you know, I think we're 11,000 cases on average 30 days ago, now we're back up to 50. We were at like some days 150 people dying United States, who knows how many of them are dying with COVID as opposed to dying from COVID. Who knows how many of them were, you know, end of life. So they weren't dying with the majority of their life ahead of them, they might have died a couple of years earlier, obviously still tragic, but we had this thing beat folks. And now we're going to have to get into a war with our employees and getting on planes and with each other. Are you masked? Are you vax? Let's stop this annoying thing and move back to solving bigger problems in the world like global warming, and making sure everybody has a great education and healthcare for everybody, please. reconsider if you have put off getting a vaccine or the second shot because the second shot I understand is critical. What's going to happen to unvaccinated employees? Well, in tech, we need employees and if you're unvaccinated, you're going to be working from home. If you're an exceptional employee, that's great. But if you don't come to the office in a company that's a hybrid company, I do think if you're not in the office with the locus of power and the top executives, you're probably going to be throttling your career advancement, and not intentionally, it's just going to be harder to advance. It doesn't mean you won't advance. But you can imagine if you're sitting next to Zuckerberg, or you're sitting next to Bezos, or whoever the new CEO of Amazon is, you know, you're gonna go further, if you're on the campus, you're just going to go further, faster. And with less effort, it's going to just be easier to go further in your career, because you'll have built those relationships. And when a new opportunity comes up, is the new opportunity, think about a manager, or a CEO of a big company, new opportunity comes out, we're going to do a our glasses VR glasses, we're starting a car division in Apple, are they going to give it to somebody who's working from, you know, some lake Lake Cuomo or something, you know, this person's on the Amalfi Coast on a different time zone, you're not putting that person in charge of it. Great, that person gets to live on the Amalfi Coast. Amazing. But they're not going to get to advance their career and have the most interesting work. So if you care about the most interesting work in the world, and you want to be in your locus power, and you don't want to have to get COVID and you want to stop arguing people, and you want to go to sporting events, and have musicians go on tour again, and we get to go to concerts, oh my lord, or a Broadway show. Let's just all get vaccinated. Not all of us just 10% more, please do it. Please reconsider. Okay. Let's get on to the interview. Too many small business owners are busier than ever. It is crazy out there. Things are growing like gangbusters, but since they're focused on managing and growing their businesses, they can't always spend the time they need to on recruiting the most important part of running your company. That's why LinkedIn Jobs has made it easier to find and hire the best candidates for free. You can get started by posting your job for free. to reach LinkedIn's network of 740 million professionals. Fill out targeted screening questions to get your role in front of the most qualified candidates with the experience, skills, and motivation you need. Then it's easy to filter and prioritize the top candidates you'd like to interview. So easy using LinkedIn's software. We love LinkedIn jobs here at launch and in 2021, we've hired a second producer, a curriculum designer and a few more researchers all through LinkedIn jobs. We love it. It's easy. Your job is going to get in front of the right person. And you might find that game changer that unicorn that will change everything at your company. And boy, is it amazing? You know, in that feeling when you find somebody who's a really great contributor, when you can have that feeling right now, because every week nearly 40 million job seekers visit LinkedIn post your first job for free at linkedin.com slash unicorn. That's right. your first job is free linkedin.com slash unicorn u n i c o r n you know how to play unicorn that's linkedin.com slash unicorn to post your first job for free terms and conditions apply because they're giving you something for free okay everybody as you know i've been critical of cryptocurrency over the years. I've been enthralled by Bitcoin and some projects, but I've also been concerned about ICOs and speculation manipulation. But there was one area that I always thought was after a store of value and money transfer, the most compelling use case for cryptocurrencies. The one case where I thought a blockchain and immutable blockchain was more than just buzzwords. And that was NFTs, non fungible tokens, the ability to craft something digitally, and own it and have it be one of one or one of 100, or, you know, whatever denomination you're going to create. is a brilliant idea. And that idea has captured people's imagination. And we've been talking about a lot on the program. And we're very lucky today to have Devin Finzer on the program. He is with OpenSea. If you're in the NFT space, you know it because it's a marketplace for NFTs. Welcome to the program, Devin.

### Human: About their local communities our comms people hate best of next door I think I will admit Even though I don't like the fact that there are more followers of best of next door than there are of at next door itself I do find it humorous.### Assistant: You are a complete liar. You created this yourself. You have a burner phone in your pocket right now Okay, let's be honest. I have three fake parody accounts for Jason and none of them have gained any traction. I keep trying. Every two or three years I create a parody account and the same thing happens. I can't parody myself because I'm such a parody. Alright, funny moments there from my interview. I stand by it. I think it's one of the funniest accounts ever. And yeah, the verge even picked up Nirav's answer in an article headlined outgoing next door CEO not amused by at best of next door. Our comms people hate at best of next door. it aside and Rob has replaced the CEO by Sarah Fryer. In late 2018. She was previously the CFO at Square for almost seven years. And if you go back to the best of next door Twitter account, their pin tweet is still that article from way back in 2018. So here are some of the recent tweets from that account next door is Twitter for old people. burgers I don't understand they make vegan meat it seems like a scam to me I have to cancel my Costco membership literally a post on next door with a picture of burger parties made from plants perplexing folks and then best of next door great great dunk here was dollar sign Karen not available as their ticker symbol hilarious and then another great one if you're on our YouTube channel you'll see these videos we'll cut them in if you're just listening to audio I'll describe it for you the man in the picture is 68 for a size reference I don't have exact measurements $20 for the rug pick up and chop chop Anyway, they just the guy lays down on the floor next to the rug is if you're going to roll a body in it and throw it into a Yeah, a ditch or something is very weird. Anyway, back to this back. And by the way, if you don't know what next door is, essentially imagine a Google group for every zip code, you invite your neighbors and then you can get into next door and complain about each other complain about somebody driving too fast, sell, you know, your old tennis rackets, yada, yada. But it is actually quite nice when you're at its best, it's great for coordinating and getting to know your neighbors. At its worst, people are like, Oh my god, there's somebody who looks different than us walking around the neighborhood. And you get some Karen taking a picture of somebody who they think doesn't belong in the neighborhood and all kinds of Yeah. unfortunate kind of post because people are confused because they think that they're in a semi private. Environment when you think next door because you have to have a postcard sent to your house with a little code on it in order to get into your neighborhood. And that can make it appear to people that they're not going to be screenshotted. And those won't be sent to another location, which is semi true. But of course, people find out ways to sneak in or people rat out other people for saying inappropriate things inside of their next door. So that's how it works. That's why it's powerful. And that's why advertisers like it. If you want to advertise your real estate services to, you know, people in Palo Alto or Atherton, you know, you can imagine what the rates would be for advertising to a community with an average home that price of $5 million. So they're going to generate $686 million in proceeds by doing the SPAC that's going to value my 4.3 billion a fraction of say, you know, the value of the trillion dollar Facebook empire, but, you know, a portion of the value of, say, a Twitter, or maybe a Snapchat. So they're on their way to just 70 million of those funds will come from a pipe. If you don't know what that is, it's a private investment in a public entity. So when institutions or accredited investors buy stock directly from a public company below the market price, this allows the company to raise money quickly, The pipe investors include T Rowe price dragging your tiger global and some others. Major pre SPAC investors, of course, benchmark and Bill Gurley, clown or Perkins, john door bond capital, Mary Meeker, and you know, it's a pretty amazing group of folks. The SPAC is notable because it's coastal ventures. And because they were not listed as private prior investors in next year, maybe they were, but it doesn't seem like it. And when venture firms like Khosla or Learhipo are now popping up their own specs, most people said, Oh, they're going to use it for their own portfolio companies. Now it turns out, you know, we're starting to see them do other people's portfolio companies. And this makes sense. Because we're always trying to make up for mistakes when you're in the venture space, or you've got a seed fund, you miss an investment, but you know, you were close on it. So you try to get in the later round. So it might be that you know, coastless saw benchmark and Kleiner and bond and Greylock get in on next door. And they always just had that regret. So now they get to take the company public and make some money off of a company they learned about at 4.3 billion that'll be double their last private market valuation, which was 2.1 billion in their 2019 Series H, when which they raised 170 million 2020 revenue 123 million 2021 expected revenue 178 million that would be a 44% increase. That's a you know, nice growth. It's not like early stage growth where people are doubling or tripling. as the number gets bigger, the percentage slows down 178 million in 2021 revenue would put next door at 24 times their price to sales. In other words, 24 times the number 178 puts them at the $4.3 billion valuation or if you divide the $4.3 billion valuation by 24, you come up with a number 120 78 or so. So That's a I think probably aggressive, but not overly aggressive in terms of valuation. They have 60 million verified users. And remember, you have to sign up with an actual piece of mail to your address to verify. So their users are very, very, very valuable. They have 27 million weekly active users. But they're a little generous in their weekly active users calculation. They claim that over 50% of users remain monthly active users after two years on the platform. So that's pretty good retention. But I think again, a little generous here on how they count the daily active users in the mouse from the investor presentation. They count dows as unique members who have started a session or opened a content email. Some people would give them credit for opening an email. Why not? Other people would say it's a little sketchy to count those emails because they're not really logging into the service. Maybe they're just casually looking at it, but it counts as an impression. I would need to see that a percentage of people they're counting as daily active users, or weekly active users. and what percentage of them were opening the email. In other words, if it was 50% of their active users are engaged by email, that's a little sketchy to make that the number. So that's a red flag there. So you know, if you're if you're reading an email newsletter, I get it, that's the totality of the product. But if I get an email from Twitter, like, hey, here's what you missed, or I get an email from Etsy, you know, hey, here are some things you know, that you might be interested in, but I don't visit the site. Does that really count as using the site? Hmm. You know if you're saying user you mean using it's kinda like me saying in a way like a banner ad or a billboard for google that wasn't actually me using google like to see them be a little more up front about that how does this compare to other social companies. Well, Snapchat defines their daily active users as a registered Snapchat user who opens the app at least once during a 24 hour period. So that's pretty clean, right? Twitter is the most upfront, they only count monetizable DAOs, Twitter users who logged in or were otherwise authenticated and access Twitter on a given day through twitter.com or Twitter applications that are able to show ads. So their Twitter is trying to be super intellectually honest. Snapchat feels pretty honest. And then Facebook, their DAOs are a registered Facebook user who logged in and visited Facebook through our website or a mobile device or took an action to share content or activity with his or her Facebook, you just say their Facebook friends or connections via third party website that is integrated with Facebook on a given day. In other words, if I was in, if I was on LinkedIn, and I shared a post to Facebook, that's a behavior that I didn't go to Facebook, but I did take the action of posting and creating content on Facebook. That seems fair to me, actually, and next door, obviously super generous with themselves with the Dow Wow, and now counts daily active user weekly active user monthly active user if you've never heard of those. So after two years, greater than 50% of the audience remains engaged is their product for product market fit slide in their investor deck. And I buy that. I think that's pretty good. If people sign up that they're coming back two years later, it makes total sense. And according to the investor deck next doors, daily active users and average revenue per daily active user are both much lower than Snapchat and Twitter's I think next door has have a has had a hard time figuring out how to monetize the platform because they're up against Facebook and Google and other large ad networks. However, the company pitches this as a positive calling it significant monetization potential. In other words, our revenue per user is low, we have room to grow Snapchat $18 annual revenue per user Twitter is at $59 per annual revenue per daily active user. Nextdoor has 12 million daily active users, and they count $10 in annual revenue per DAO. This could be because they're just not good at selling ads, and they haven't built an ad platform. Twitter, you know, notoriously was bad at ads, and they really didn't have a great product. So it takes time, but a verified daily audience with significant monetization, monetization potential is how they frame this in their slide. And sure, I buy it to a certain extent. Tech French's Alex Wilhelm, friend of the pod summarize their pitch to investors. As such, the company is saying that its service is unique, and that its users are sticky, that its product gets better with more usage, that it has several ways to make money from each user that some of these methods are obvious, and could be easy to attack and that it has not reached its full potential in revenue from international markets. So it generates 50 million business recommendations from neighbors. It's nice. I'm sure you help those much more. And Nextdoor monetizes by selling advertising for small businesses who promote their services and products. In users feed, local businesses are notoriously hard. There's like so many of them, they small spend small dollar amounts. So this is I think, Nextdoor's challenge, what they're best at getting you local advertisers. Local advertising is a tough business. It's a grinded out business. You know, even from the days of the yellow pages to now, being it's much better to be able to get you know, Nike or Ford to buy some huge campaign across all of YouTube or Facebook, right. And I think next door probably has a harder time with that. They also have a Craigslist competitor where you can buy and sell and give stuff away on next door next door CEO Sarah Fryer told the New York Times why they decided to do a SPAC she said it made the most sense for next door because it allowed them to be more closely involved in counsel by a smaller more targeted group of investors not sure exactly what that means can kind of infer maybe it's just faster and easier. And it gave a better sense of certainty about how much money they would raise rather than the riskiness that could come with a traditional IPO process. So you hear that often good luck to next door. It's a great product. And I think they do have a lot of upside potential. How much time and money do you spend integrating a bunch of different software products together? Let me guess, way too much. Well, Odoo is here to help. Odoo is a suite of business apps that runs your entire company on one platform. They'll streamline your workflow to bring all that information together. Plus, Odoo's integrations eliminate repetitive tasks and data entry. If you only need two or three apps to optimize your workflow, that's all you're going to pay for. Odoo won't stick you with the bill for apps you don't use. And Odoo has an app for every business need. They offer 30 main apps that are updated regularly and over 16,000 apps from their active open source community. You can keep your books tight with their financial software. You can add their sales and CRM apps to help provide a clear and organized view of how you're doing as a team. And here's your simple call to action. Your first app is free, forever. And right now, Odoo is offering $1,000 credit on your first implementation pack. That's not a joke. $1,000 off. Go to odoo.com slash twist to check it out. odoo.com slash twist. All right, next up speaker Nancy Pelosi seems to be yolo in call options and so is her husband. So should politicians be able to trade options unusual wells, which is some sort of subscription service that sells insights into strange stock market activity, including reporting large option trades across stocks and crypto reported that Nancy Pelosi bought millions of dollars worth of call options on Apple and Amazon in late May. So in their tweet, they say on 521, Nancy Pelosi played Amazon and Apple call options, she bought 50 calls of strikes 3000 plus 100, respectively. The worst things and this is quoting unusual as the worst things about these transactions is that they were done in May and June, but disclosed in July incredible when elected officials are using highly leveraged options on maybe private information. And now the Pentagon cancels their Jedi contract, which benefits Amazon directly. someone always knows. So they unusual Wells described the current stock situation in Congress, numerous house members also trade options. This means they're using leverage positions on leveraged information. In other words, they might know something during their job and you know, buying options is obviously using this kind of leverage to get a better return. Zero hedge also covered Pelosi and her husband, Paul Pelosi, who runs a real estate investment firm in San Francisco called financial leasing services. They gave some examples of what they consider sketchy trades Pelosi bought Amazon calls on May 21, when it closed at 3259. Fast forward six weeks, and great news for Amazon after the Pentagon pulled the rug out from Microsoft's $10 billion Jedi cloud computing deal opening the door for Bezos. And the trade is looking great today. Amazon is trading at $3,696. And those calls are itm in the money. So Paul Pelosi in March exercised 1.95 million worth of Microsoft call options less than two weeks before the text all worth secured a $22 billion contract to supply the US Army combat troops with augmented reality headsets. In January, he purchased up to a million of Tesla calls before the Biden administration delivered his plans to provide incentives to promote the shift away from traditional automobiles and toward electric vehicle. So politicians are clearly using some intelligence that may or may not be available to the public. Obviously, you get pretty smart, you have inside information, you may have quasi public information, you know, maybe lightly traded in information, which wouldn't make it exclusively insider. And we remember back in February 2020, you might remember this headline just as COVID was starting to spread outside of China, North Carolina, Senator Richard Burr, sold six figures worth of stock. This was just days after he co wrote an opinion piece on Fox touting how well prepared the US was for COVID on February 7. So there's a lot of the shenanigans going on. And, you know, this is why maybe a lot of people in crypto like Binance or Bitfinex. And they like the sort of, you know, Wild West of crypto, because maybe they think that the markets here in the United States that are supposedly regulated are really rigged. So Congress gets to write laws, and they get to trade options. You know, should this be allowed, obviously, business journalists are not allowed to trade stocks, some of them choose not to trade stocks only to have index funds, ETFs. And that mitigates a lot of this, right? If you're just own the index, you're fine. I don't actively buy and sell stocks. As a general rule, I basically have a lot of my companies go public or sometimes venture funds I'm in will distribute to me stock I got Facebook stock at some point and then wind up selling it. Because a fund I was in had a company that was bought by Facebook, And we got cash and Facebook stock. So instead of them selling the stock, a venture fund will just distribute that stock to their LPS. You know, the question really here is what should we do about this? The on one side of the argument should people who are in politics not be able to play the stock market and be limited in how they make money? That seems unfair to some people. And then obviously the appearance of this even if they weren't trading on inside information, even if they were just really well educated about these companies and got to see the future because of their day jobs a little bit more clearly, because they're in the thick of it. And there are around smart people who are advising them, there should be some way to balance these two options. people not being able to participate in equities, and people being able to just go crazy buying options and put calls and shorting stocks, etc. Between those two very unfair extremes, unfair to not be able to trade stocks unfair to be able to short stuff and by putting calls and do crazy stuff. How about something simple, like maybe once a year, they can set their trades, those trades are public, they're reviewed, And we all get to see them. So if they did own Amazon, and they did want to liquidate it, maybe once a year, there's a 30 day period in which they are allowed to set in their trades. And they can set their trades to either occur on that day, or, you know, in five trades over the next 12 months, or in four trades over the next 12 months. In other words, automated trading that would make it a lot easier, you can do it twice a year, something that doesn't make it look so unfortunate, the timing, you ever read a news story in a magazine or a newspaper. And they're talking really complimentary about Oh, this Peloton is amazing. And then you see an ad on the next page for Peloton. What is your mind immediately do your mind immediately says, Oh, they got paid for that it might be that Peloton is doing so well that they can afford ads. And if they're doing so well that they can afford ads, they obviously have product market fit with their product and that might get rewarded because people can't shut up about the product. And it gets covered in the news because they're doing so well. In other words, great companies are going to advertise, therefore, are they paying things off? No. But when you see the stories next to each other, it does create that problem. Apple is known for buying a lot of ads. Obviously, the Wall Street Journal and New York Times are going to cover Apple, it's the one of the five most important companies in the world. So does this mean one is cause or correlation? And when things are happening too close together in proximity or time, the mind immediately goes to causation, not correlation. When things are just occurring in the abstract, oh, they bought 100 ads in the New York Times, and they were covered 300 times during the year. Okay, yeah, it's just they're correlated ones. this is a place where successful people advertise and this is a successful company that's worthy of being covered. Your mind can kind of separate them. And so that's what's happening here. It's very hard for our minds to be able to separate these two things. But congratulations to Nancy Pelosi on her new billion dollar hedge fund. Pretty hilarious. That was a tweet from exec some Nancy Pelosi is launching a $1 billion hedge fund aiming to make concentrated bets on large cap tech stocks. She cites her proprietary research method of having inside information as a key differentiator to a competitors. I mean, it's dark, but it is true that a lot of folks who, you know, are in politics came from the hedge fund world or go back to the venture hedge fund world, or Wall Street. For a reason, you learn a lot about how the world works. and allows you to make really informed bets. So okay, let's get to the interview. And we'll see you all on the other side. Bye. Are you launching a new product developing a new prototype, maybe you're rolling out a new campaign user testing lets you see, hear and talk to your customers to understand how they experience your brand products and services. Put yourself in the customer's shoes with real time video feedback. The user testing human insight platform allows you to target your exact audience Ask them any question or give them a task to perform. How interesting is that? It's a tech platform that connects brands with their target audiences in order to get feedback on any experience. Testers can get paid 10 bucks for their time. These users aren't doing this to get rich. No. They're doing it because they really want to help make your products and services better. So watch, listen, and observe their reactions so that you can connect the dots and keep improving your product and service. You'll get feedback within hours and strengthen the relationship with your coveted customers. User testing is used by startups and the world's most innovative brands from Alltrails, Grammarly, to Microsoft and Capital One. Here's a testimonial. Chubbies is a men's casual apparel brand that gained valuable insights by asking some of their customers to explain why they love chubby shorts. They also asked for new product suggestions to guide their product roadmap. Think about how brilliant that is. It builds fiber between you and your customers because they feel heard. And we all want to be heard in this life. Experience what your customer experiences by using user testing. Request your free trial at usertesting.com slash twist. Usertesting.com slash twist. And get the fast human decisions you need to make more informed business decisions at scale. All right, next up on the program, Alex Lieberman is with us. You know him because he's the co-founder of the Morning Brew. which is an email newsletter for millennials who were into the stock market long before Stonks, long before the AMC short squeeze, long before Robinhood. Alex had started a newsletter for people on Wall Street who were young. It got to two or three million subscribers, and then got bought by my pal Henry Blodgett for I think 75 million bucks. And now it is continuing to crush it over at Axel Springer. which is Insiders Pairing Company, a German media conglomerate. Welcome to the program, Austin.

### Human: is a system from OpenAI that can take text, like a koala dunking a basketball, and turn it into an image that never existed before. It can also create new variations of pre-existing images. Through deep learning, DALI understands the relationship between text and images. DALI can edit this image of a monkey doing something new, like paying its taxes while wearing a funny hat. DALI shows how imaginative humans and clever systems can work together to make new things, amplifying our creative potential.### Assistant: Yeah, I mean, so what's the point of all of this? Well, this kind of passes, you know, a the uncanny valley test of like, did a human do this? Or was it done by a machine, right? You're always trying to figure that out. You know, who did this work? When I saw that solar image, I immediately thought an illustrator was given this assignment to make this for Ryan, who had this idea and just wanted a visual and he paid somebody 500 bucks to make it. So in that way, it did work. What else could you use this for? Well, obviously, if you were making a screenplay or a comic book, now somebody with absolutely no artistic talent could say, I would like to have a comic book in which Batman is fighting Wolverine. And it's like, well, those are two different Marvel universes. Yeah, that's the whole point. Like Marvel is not going to be able to do that. DC is not going to be able to do that. So you think about fan fiction, which is an entirely interesting category out there. Twilight, the movie series was actually fan fiction. I forgot what it was based on. Oh, no, I'm sorry. I think 50 shades of gray was fan fiction based on Twilight. Somebody fact check me on that. But all these crazy fan fiction people, they kind of cut their teeth with other people's characters and IP. And then they obviously don't publish that because it would be illegal to do that. But here, a young person can be like, I want to see Batman fight Wolverine. It's kind of actually a dope concept. I wonder if they ever did that crossover. Now you got this whole series, it's made by somebody. And then instead of, you know, writing a script and hiring an artist and taking six months, you can do this in six hours, six days, whatever it is. And that's a bright, interesting new future. So creative tools that allow people to be superhuman, dare I say, like the email client that we're investors in, shout out to superhuman.com and Rahul, those tools just move humanity forward. So what's really great about this is that image of the shipping container that could raise a seed round. Now, many founders don't have the 500 bucks or 1000 bucks to get that image made. But I can tell you if you sat there and just iterated on this one concept, okay, well, we have a solar paneled one, and it says, Okay, how about if these, I would like to have 17 of these two abroad and then one at the front and the one at the front is the cabin for people to sit in to monitor it. And they're able I want to make a video of this because eventually able to do this in video, I would like to have the shipping containers break apart when they get, you know, 500 miles off of the California coast. And two of them are going to go to San Diego, three of them are going to Long Beach, two of them are going to go to the Central Coast and the rest are going to go up to Long Beach. wow, what an amazing video that would be, because then you would be adding to this creative concept that it's not just a solar powered shipping container flying to see that there's, they're able to connect to each other to get efficiencies, and they're able to separate to go to different ports, which a ship obviously can't do just lots of creative ideas. And you could imagine, you know, we say a picture is worth 1000 words, well, a video is worth a million, and that'll be the next card to drop is We obviously have deep fakes, but you could literally say, I want to see Wolverine as played by Russell Crowe. And I would see like to see the Batman played by Ethan Hawke. You know, these are two people who were rumored to play those parts. Wow, how great would that be? Or Hey, show me the I want to watch the entire Nolan series of Batman films, but I want them to be with Ethan Hawke as Batman, or somebody else, right? You pick the character. That's a pretty crazy idea. Or I'd like to see Daniel Craig in Moonraker that the original James Bond film, these things are all going to happen in our lifetime, like literally, Amazon is going to be able to take the entire James Bond series. And you'll be able to pick the James Bond movie and then pick the actor in it. So we're having this whole debate should, you know, does James Bond need to be a white English guy? You know, could it be a woman? Could it be a person of color? Yeah, sure. You pick you start the movie and you say, I want Idris Elba. I want a woman to play it. I want who played GI Jane. What's the actress's name? Who was awesome in GI Jane. I hate to make a reference to GI Jane was the first one that came to my mind. Demi Moore. Demi Morris, James Bond. Sure. Let's go. So really exciting stuff. We certainly do live in the future. efficiency is one of the main components in startup success. Everybody knows this, you got to be efficient. That's what Coda is all about. Coda is the all in one doc for teams, text and tables live together in the same document. And this helps any team collaborate more efficiently, especially remote ones. They've got 1000s of templates to work with that Coda. Or you can repurpose templates published by some of the best innovators out there for yourself. Coda works out of the box, and it's completely customizable so you can create a wiki or a knowledge hub for your team. You can onboard new hires quickly and adapt fast to any major or minor changes in your business. Here's how we use it at This Week in Startups. My guy Presh made an upvoting system on Coda so that you, the audience of This Week in Startups, can ask questions and request topics to be covered on this very program. You can see this at thisweekinstartups.com slash questions. And if you go there, you can submit a question or a topic, and our producers might include you in the show. You can vote things up and down. How amazing and awesome is that? Coda has an amazing program for startups I want to tell you about. They're here to optimize and support your docs, and they're going to give you $1,000 credit right now. Yeah, you heard that right. $1,000 credit at coda.io slash twist, c-o-d-a.io slash t-w-i-s-t. All right, moving right along as we do the solo dolo, a former fast employee Gary Darna ran swag at fast and he tweeted today about fast shutting down I'm saddened by the outcome at fast if you don't know they spent over $100 million to make 600,000 in revenue is a complete debacle. And, you know, what made it particularly easy to dunk on is the founder who's Dom who's been on the show was more than willing to give everybody advice. And you know, was a super marketer, maybe too much marketing. And he said, you know, he was this person, Gary, obviously ran the swag there. And he said, if you've heard of us, it may have been through our 60,000 hoodies sold. I ran our store and need to find what's next who wants me to make their company swag. And I quote tweeted him and I and I just said they had a dedicated swag person at best before product market fit. That's like signing autographs for people before you're famous. So a little mini dunk for me, but I did it for a reason. I'm making the point about startups like you really need to focus if you're making the swag before you've actually become a brand. That's a problem, like it shows a lack of focus, or it shows maybe a little delusion. But that does seem like a very good idea for larger brands. In fact, Elon has sold surfboards and flamethrowers and other things and Apple, obviously, you know, people would buy, you know, a napkin, people would literally buy napkins with the Apple logo on them, and they would pay five times as much literally, if I made napkins, just a napkin. If I made that with the Apple logo, you could sell it with a 90% margin, as opposed to the 2% margin. It's paper towels from Apple, literally would go for 50 bucks. And in fact, they do right, they, they actually sell a polishing kit, right? So but somebody hired this kid, because if you don't know the history of this, they sold a $5 hoodie. And they sold 10s of 1000s of these. And everybody is running around with fast hoodies and socks and other apparel. who have no idea what the company does, but they they were able to tap into something. So congratulations to him on actually doing something interesting. And if you've got a company at scale, like I don't know if you're I don't know, stripe. Maybe stripe should hire this kid or yeah, if you're ryan breslau from bolt, the ultimate troll would be to hire, uh, gary and have him make her swag for bolt So let me just get a shout out one more time. His twitter handle is gary g-a-r-y obviously Darna d-a-r-n-a somebody go hire gary darna seems like a smart kid Uh, he might be 50 years old, but he seems like a smart kid to me little quick CNN plus review, I was able to subscribe to it. I thought, hey, this is an interesting idea. You know, people subscribing to a news program. And I watched a couple of shows, Jake Tapper's book club, you know, his magazine style show, I love Jake Tapper, but it was way overproduced. And it would have been much better if it was less edited and glossy. I don't think people are going to pay for magazine style shows. It's like, CNN is kind of generic enough. And then this is I would say weaker content than the other book clubs in podcasting. So it feels like they took the magazine style show whoever did the art direction for CNN plus probably should be you know, sunset, I don't want to say fired, I'm gonna be fired here. But it was the wrong editorial direction to go for magazine style shows, because magazine style shows are what you watch when you have over the air television, and you don't want to go deep. They're just generic, made for the lowest common denominator. And I would rather see Jay Jay, Jake taper, who I like a lot. I love JT, I would much rather see him go deeper and do 90 minutes on a book. And, you know, as opposed to this very short, magazine style show, the you know, magazine style show, like Anthony Bourdain's is one in a million of those shows, because he's so fascinating himself. And he did the artistic direction for that show. He was the one who really made it interesting. And they did something different in that show. And his ability to write his own monologues was just second to none. And I think they looked at Bourdain's show and just said, How do we make 10 more of those, and none of them are good. They're all just overproduced and very lightweight. And it feels like the hosts are kind of going through the motions, and they're not putting enough work into them. So that show was kind of weak. And then they have a live component, which they've obviously copied, you know, YouTube, like we're doing here. And you kind of queue up and ask questions. And it was interesting, this interview club, and I'll pull up the interface here. But it wasn't live chat. So you lost the I don't know, dare I say the riskiness of having a live chat for having a filter chat. Now I understand that CNN and they don't want somebody to screen grab somebody saying something racist or insane or insulting and shaking up the host. But if you want to make it interactive, then you have to take the good with the bad. And if you're going to make interactive, but you put a queue where some person has to screen the tweets, or the questions coming in, you fail. So this shows that they don't understand how to do live, but it's easily fixed. They should just be the question should come up and then the mod should be able to take them down afterwards. Just copy what YouTube does YouTube has mods, you can designate people as mods. And if somebody says something inappropriate, people don't see it by default, it's just like put in a smaller font. And then you have to click to show it to everybody. And the mods kind of watch things that have certain keywords in them, you know, if you put the F word in there or something, I watched Professor Galloway show again, it's a magazine style show. I know people think I have an axe to grind with him. I don't I just think his predictions are hilarious. And I honestly thought his predictions were kind of a put on. And that it was kind of an act, you know, like a little over the top. But apparently, he's pretty sensitive to this stuff. But it's not good, because it's overproduced. The one thing he did do that's good is actually because he can think on his feet, his man on the street work where he's like interviewing people at South by Southwest was interesting. But it's the it's not as good as when he's with Kara Swisher on pivot So again, CNN plus is like, we're going to make a magazine style show that is nowhere near as interesting as the free podcast you're getting. And it's quicker and faster and, you know, kind of cheesily produced. then they expect people to pay for it. That's just not going to happen. What they need to do is if you're going to have interesting choices, like Professor Galloway, or somebody like, you know, Jake taper doing something interesting, you want to let them go for it. You want to let them go for 90 minutes, 120 minutes, 75 minutes, did you learn nothing from Joe Rogan or podcasting, or interactive shows on Twitter? The best part about it, which I didn't think I would enjoy as so much in a news app was that there were no commercials. So you know what the actual best move here is, instead of CNN plus being like a bunch of new shows that are just not as good as Anthony Bourdain's magazine style show and no magazine shows that we're going to touch that and very few will be that interesting. I mean, I haven't watched the Stanley Tucci stuff yet, but I have a feeling that's going to be very good. Again, some transcendent talent going to foreign places pretty interesting for people. not having ads is the big win. So why don't they make CNN plus CNN without ads. So it's CNN minus the ads. That's really the name of this. It's CNN minus, when you don't have ads, your consumption goes up. That's why I pay for YouTube. And it's absolutely fantastic. If you don't pay for YouTube's ad free service, it's awesome. I pay for Hulu's ad free service, I pay for the NBA is still they try to insert some ads once in a while. I love Chris Wallace. And I was watching him live, but his show doesn't use interactive interface. So I have a feeling Chris Wallace doesn't want to deal with the machine gonna and craziness of a live audience. Therefore, they gave him a pass. So he doesn't have to take the interactivity. And then Anderson Cooper did something on parenting. And it was very one on one. He was, you know, kind of talking about basic parenting techniques. which, again, is just not worth paying for. But Anderson Cooper talking to people about his children is incredibly compelling, because you can see it's authentic, and he cares deeply. So that was a that was kind of hitting a note. I think for the producers, they're well done. Anderson Cooper showing something personal, really compelling because you see him in a different context. what I would say is this is closer to Quibi and will probably go away than it is to YouTube or, you know, HBO Max, but it's easily fixable. I don't know if it's easily fixable, but it's fixable. You need to make shows that are more authentic, go a little bit longer, you don't need to fit into this magazine format, it's goofy, and it's not worth paying for it. What people want is something more authentic, akin to what you're seeing on podcasting, the roadmap is there, look at the live shows on YouTube, look at podcasting, and do that. That would be much more interesting to people. It's what we do here at this being startups is what we do at all in. It's what Joe Rogan does, authenticity, not polish. And I'll just say this about polish. I'm watching the Anderson Cooper show. And they're recording this in a park. And I'm like, these people idiots like this is frickin CNN. And I'm hearing wind noise. I'm hearing kids screaming in the background. I'm hearing horns going off because it's obviously somewhere in New York. And so I'm like, these people and then I was like, Wait a second, that's actually kind of cool. actually enjoyed it more, because I was like, Oh, they really went to a park. And they really had to deal with this stuff. So authenticity is what sells. And I think maybe letting the oddball characters in the CNN family kind of go even a little bit more authentic and a little bit more raw is more interesting. That's why the you know, I'm giving Professor Galloway a pat on the back. He's really good with the man on the street stuff. And that's an actual skill. You need to be able to think on your feet, you need to be a little bit fearless. And when he's interacting with the public, it's kind of like his predictions are horrible. Obviously, it's we all make fun of them, because they're so stupid. And they're wrong 90% of the time, and the anti portfolio that he's actually very good with people. So I would just take prof G, have him do everything, man on the streets, you know, vox pop, I think they call that and then Anderson, maybe interacting with his kids and maybe even a little more raw and a little more deep about these issues, talk to people about challenges with parenting. And then Jake taper, have them go deeper into the books, like, if you're going to do a book review, do a book and make it three hours and go through every chapter of the book and really go deep. So you're competing with something, you know, you're really servicing an audience that's a niche audience that's willing to pay you money. So I give it like a C plus maybe, I think if they, you know, really evolved this quickly that it maybe could be worth paying for. But I don't know if any news product as a ad free subscription service is going to work, but it's kind of bold of them to try to be honest, I would just take CNN and just take the ads off and let me watch CNN with no ads. That would be a magical experience. Hiring well is one of the most important things a startup can do to increase their chances of having outlier success. So if your current hiring strategies aren't working well, Rocket can help you. Rocket is trusted by companies like Tinder, NerdWallet, and Carta because it was started by former tech founders who understand how to hire at scale. Rocket was built by founders for founders, and they use machine learning to supercharge their team of 60 recruiters to help you close hires quickly and at a high quality level. they'll help you hire from freelance to executives and this is a white glove service folks. They're going to save you time, they're going to help you meet better candidates, and they're going to lower the number of hiring mistakes. Rocket is currently helping a well-funded early stage API company called Rudder, R-U-T-T-E-R, and they're helping them hire across engineering, product, marketing, and sales, and it's going great. Rudder's founder had this to say, couldn't recommend a better early stage recruiting partner to work with. Here's your call to action. Getrocket.com slash twist and use the promo code twist for 20% off your first placement. Zero dollars required up front, so there's no risk. That's getrocket.com slash twist. And remember to use the promo code twist to save 20% off. Okay, everybody, we've got a great interview coming up. Dune analytics CEO and founder Frederick Haga is with us. Dune is a crypto analytics company that lets users analyze blockchain based activity. Why is that important? Well, if you want to see a fraud is going on, or you want to see a trend, you can look at all of the trades because trades are put on the blockchain typically, and you can make your own dashboard, you can do it for free with our tool, and then other people can see the dashboard you made. Now, if you want to do private dashboards, where you're analyzing all this stuff, you got to pay them a fee. So Frederick joined Molly and I from Norway, and we spoke about the entire space, what metrics he uses to evaluate different projects, and which two projects in crypto have actually released a product that has impressed Frederick, based on their usage. It's a really interesting interview. And you know, I'm a crypto skeptic. And this is a tool that lets you be an informed crypto speculator, and cynic, and, you know, skeptic, because you can actually find the fraud. And then if you can find the fraud and eliminate that, well, you're going to probably going to be able to find the real projects, which exist, but they're sadly one out of 50.

### Human: Thanks for having me. Hello, everyone.### Assistant: Okay, I want to talk to you about a question I get asked all the time, how do you balance your product vision with all the customer feedback you're going to be getting? This is part of our founding university, by the way, which is becoming a multi month course. The founding universities typically has two days, an intensive program, five, six hours a day. we're not gonna make a twelve week course and you can read about that founder dot university figuring out what we're gonna charge for it if we're gonna charge for it but we're looking for fifty founders to join this program founders you maybe are thinking about a building a product have an idea. but they haven't even gotten started. So this is before you come to an accelerator incubator, you come to Foundry University, it teaches you how to build an MVP, maybe even get a customer or two, and then be able to apply to an incubator or accelerator. So this would come before the launch accelerator or Techstars, or Y Combinator. And so we're just trying to build a product that can help people in the world. And again, we're in the laboratory with it. But I wanted to talk about some of the coursework that we're building for it. So You've heard me say this before about the startup flywheel. you build a team, you build a product, you delight customers. And then you repeat that process. Hopefully you make a little bit of money delighting those customers, which allows you to put more resources into your team. And that results in a better product or a faster cadence. In other words, you release more product and test more product because you have more people and more resources to do so when you only have two people working on a startup that co founders, and they're building everything. How many different tests can you run? How many different products can you trial? So let's talk about balancing here, building your product based on your vision. while implementing all that customer feedback. There are two wildly different camps on this and many different versions in between. To be totally honest, you have people like Steve Jobs who just want to build their product vision. And then you have obsessive people like Eric Ries and the lean startup who are just looking at customer feedback to define what the product is. And I'm talking about your product vision. versus what the customer actually wants. And a lot of times we as founders have a vision of what we want in a product. And it could be narcissistic, and it could be based on what we personally want to use in the world. And sometimes it could just be what we assume the customer wants, and the customer tells us they want something else. And the customers can be wrong too, by the way. Sometimes the customers will tell you they want something and then never use it, right? Because just the act of asking somebody what they want, could make them think I got to give them an answer. I can't just tell them I'm satisfied with the product as it is. And sometimes people are actually not aware of what they are doing when they're using a product. They're not actually looking at their metrics when you got your iPhone as an example. And it started telling you what you were using most often. And you looked at it, and you're like, Oh, my God, I'm playing but jeweled for nine hours a week. And, oh, I'm doing Twitter for seven hours a week. And I'm actually doing my email and slack for one hour each. You know, some people got a rude awakening of how they were using their phone, because they weren't actually measuring it, they just had an idea of what they were doing. And maybe they even projected into that their aspirations. So I talked about delighting your customer and you can check out that episode on episode 945 of this week in startups. So let's just start with what it means to delight a customer. It's important to understand this because you do need to understand your customers. If you're going to ask them for money, and you want them to be loyal to your product, and not churn from it, you want to basically get to know them. So you can create a super group, just a group of your the top five or 10% of your customers. And you can measure this by how much money they spend with you, or how often they use the product. Both of these are valid, you probably want to take a mix of them, right? So you might have people who spend a lot of money. If this was a casual game, I mentioned bejeweled before one of those threes or, you know, games. Well, you can look at how often they play, you can look at how much money they spend, what are you optimizing for? Are you optimizing for people who use your product a lot of your optimizing for the whales who spend a lot, you're probably doing a combination of both because both are good customers. Now you take this feedback from them if they want to give it, but you also have to ask them for feedback. So the people who send you feedback, that can be hit or miss. They could want some custom software, or they could point out when there's problems and use the feedback for customer support. It could be a problem with their phone or the memory on their computer. So you have to take all that into account, but asking for feedback is a great way to do this. these customers in the top five or 10%, they're going to understand your product. And they might understand it better than people who work at your company. Because the customers are using it every day, they've probably searched every nook and cranny of it when you're working in your company, even as the CEO, when's the last time the CEO of the company went through the signup flow, you've already signed up, you probably forgot there even is a signup flow. And then you look at it with fresh eyes. And you're like, Oh my god, this is a disaster. So the other thing to note here is casual users might have a lot of opinions, but they're not your ideal customer, right? So somebody who uses Uber Eats, you know, twice a year, because they love to cook. And they love to go to restaurants. And they use Uber Eats and Postmates and DoorDash twice a year. you really care about that person, and they start complaining, Oh, well, you don't have this Michelin star restaurant. And oh, you should have separated the sauce from the dish, and it would have come out better. And this wasn't the right temperature. That's not the customer for Uber Eats or DoorDash. The person who orders Uber Eats and DoorDash five times a week, even if they're spending less per order, that's your actual real customer, isn't it? So you want that ideal customer profile, you want to define that and you want the users who have a lot of skin in the game. a person who rarely uses your product and wants to give you their opinion. Well, that opinion, it's kind of like somebody giving you an opinion about your movie, and they only saw the trailer. Do you really care about that person's opinion? Or do you care about the person who's watched the movie twice, and who's bought the comic books and and really cares about your franchise, right? You want that person? Alright, so I think talking to customers, I don't have to tell you as founders that that's important. How you do it is critically important. And most people will do a survey. surveys are fine, they do give you some information, but they don't give you the complete vision of the user. And so founders really need to get to know who their users are, in order to understand what they need, and why they pay for your product. And if you're meeting those needs, and how they're actually using the product and service. Now, collecting qualitative data is not easy in surveys, right? So regular data, quantitative data, how would you rate this product on a scale of one to 10? That's super easy. It's just a piece of data. qualitative means you did an actual interview with them. And you met with them and you watch them use the product that's called the listening lab. Or you actually interviewed them and talk to them about it. And maybe you ask them the same question three or four times in order to get three or four swings at the answer. And then you can make a super cut of that video or audio and play it to your team and really start talking to folks because when you do qualitative stuff, with a highly qualified with a highly qualified customer, you might get insights that you wouldn't see in a quantitative SurveyMonkey or Typeforum or your classic NPS score. Startups need a central hub for their information and work more than ever, especially because of this crazy world of remote work. And that's where Notion comes in. It's one place for notes, docs, projects, and everyday work that goes well beyond a wiki. When we went fully remote in March of 2020, Notion became our internal knowledge bank. It is amazing. Let's play the video here. Here is just one of my producers going through our pod notes page on Notion, where they highlight the top lessons from every single episode, so that we can share with our founders and with you the audience. We also do all of the production of This Week in Startups, all of our investment tracking, all of our legal work, all of our best practices, we put it all on Notion. because if we capture that information as we scale our company, then people can just go to a page and read what you'll find is the conversations move from filling people in about the basics to high level strategy discussion. It is transformative in an organization, everybody from engineering to sales can work together seamlessly. And they've integrated 500 apps already including Google and Slack hundreds of 1000s of teams worldwide are already delighting their employees with notion you need to join the party notion has a worldwide community of millions. of people creating templates and tutorials. So the product is constantly improving. Go to notion.so and use the promo code twist to get $250 off your annual plan. That's multiple months free for you and your growing team notion.so and use the promo code twist during your checkout process to get $250 off. If you look at delighting customers, we had superhuman CEO Raul Vora on the program. He's obsessed with this. And he references sean ellis is leading indicator of initial product market fit since startups fail i think this is where i got this idea from my soon since so many startups spell. I am when they do fail people like oh my god you took the product the way it's turning off and then all of a sudden they show their love for an offer to pay for it. this happens all the time just like when they cancel a tv show people like oh my god you're canceling that show and it's like well you guys weren't talking about it we didn't know you liked it and then somebody comes along and saves the show right and gives him another season on another network it's kind of like that right he asks how would you feel if you could not no longer use the product how would you feel if you no longer use the product If greater than 40% of users say very disappointed in their responses, you have product market fit according to Sean Ellis and amplified by role at superhuman. So he texts he takes it a step further role and he asked users for questions in a survey, how would you feel if you could no longer use superhuman? Very disappointed, somewhat disappointed, not disappointed? What type of people do you think would most benefit from superhuman? In other words, you define the ideal customer profile as a customer. What is the main benefit you receive from superhuman? Main being singular and how do we improve superhuman for you? Just an open box to allow you to get feedback and superhuman can then segment and analyze the surveys better. This allows them to implement the features that matter most to the users they want to fall in love with the product. If you said I wouldn't be disappointed, or I'd be somewhat disappointed if superhuman went away, are you the ideal customer? Is your feedback important? Well, the person who's very disappointed, they might be so loyal to the product, because it's fast, and it lets you use quick keys, that their advice on which quick keys to add next and which features might be more important than the people who are not disappointed, they might say something like, well, if it was free, I'd like it like, okay, is that really valid feedback? And then he tries to track users over time. And this is a great recipe from role for building features that delight customers. which obviously superhuman has done they will send these updates to you in email constantly with the new features they're launching and they really are power user features which then leads people to misunderstand those superhuman i don't get it why is superhuman so loved by its users well they are really over servicing their power users this ideal customer profile so again everybody's feedback is, you know, fine to collect, but who's do you actually implement is at the core of understanding product market fit. And you're not almost any product that has ever been made is made for a specific subset of users. And then other users become more advanced over time. So the Tesla that came out originally was for people who are super passionate about electric cars. And it had a lot of limitations like range, etc. and expense. But then over time, you can slowly make that product available to more people, you don't have to obsess about it from the start. Let's keep talking about this product vision, because in season two of scaling your startup, we leaned hard into product development. And I had FitBod, which is an exercise apps, Alan Chen on the program with Craig Zingerlein of Growth University to talk about what are the most important growth metrics that you're looking at And we had another episode with Jesse from FitBot and Raul from SuperHuman. That was episode five. That's twist episode 1214. And we'll have this on the show notes because you can go really deep on these. These founders talked about their streams of product development while building a high growth startup. And so There's core feature development. This is like the main features of your app experimental based feature development. Okay, just what we say it is here an experiment, see if people like it. And then there is the importance of product led growth, which is, hey, if a startup doesn't grow, then why does it exist? It probably will not exist for long. So let's start with the core feature development. So These are features that your product cannot exist without. So if you're zoom, you cannot exist without video conferencing. If you're a travel booking website, you have to have payment processing. I mean, how else are people going to book their room? And if you're a social app, you kind of have to have a feed, right? Where does people where do people consume the updates from the people they're following? So this is where startups can overbuild, they start building all the features that aren't the core features, because the core features done. And they're like, Okay, if we build some shiny new object, that'll get more people to adopt our product. It actually turns out that Facebook and Twitter and YouTube learn something completely different. What they learned were the new features were not as important as making the core feature work better. So what is a core feature of YouTube? Uploading videos, sharing videos, watching videos, and then recommending videos. If you look at those core set of videos, anybody who produces for YouTube knows it's really easy to upload a video, even to do a live stream is dead simple now. and to watch a video on YouTube couldn't possibly be easier and faster. You've probably all had this experience. You are traveling or you're in another country or you're in an area with really low reception. You go try to watch Hulu or Netflix or some website with a video embedded on it and it's really slow. And then you go use YouTube, and it magically works. And you're like, how is that possible? Well, YouTube realizes that the faster they make downloading a video, the faster they start a video, the faster they make scrubbing through a video, which is when you move the little dot at the bottom for the timeline, and you can see the thumbnails, all of those add up to increased consumption. Adding another feature may not increase consumption. Why? Because only 5% of people may use that feature. like playback speed. I've been using playback speed on YouTube, I found out about it a year or two, you can go in there and you can just like on a podcast player, make it 1.5. How many people do you think actually do that 5% of users 10% possible? Now, would you work on that feature in the beginning? Or would you work on making YouTube videos, just lightning fast, and fast to upload and fast to play? Of course, you're going to work on making it fast to play and then What about what video plays next? If they get that right, and you're listening to an amazing interview with Quentin Tarantino, like I was, and they kept showing me Quentin Tarantino fighting with a photographer. And finally, I gave in and clicked on it because I was like, what is this about? Why do they keep recommending this? And it's Quentin Tarantino kicking a paparazzi at Sundance who was giving him a hard time while he was getting a Starbucks. And I was like, all right, at least I got that out of my queue. But they relentlessly, relentlessly hit me with Quentin Tarantino clips. And you know what, I didn't realize that listening to Quentin Tarantino talk about film is so compelling. And now I've listened to like five interviews in two months. That's the type of feature that can drive a business to great heights, but it's very hard for a founder to stay focused just on making that feature better. But that's what Facebook did as well. Their feed, TikTok is the I think the ultimate now example of this, where all they seem to care about is making sure you get a highly entertaining video next. And don't be afraid to delete unused features. That's another thing that people generally don't do a good job of. Why should you delete features people aren't using? Well, they're a distraction because they keep people from the primary features. And they become cruft for your team to maintain. So the second you realize, listen, less than 5% of people are using this feature, and they use it less than 5% of the time. If you made an x y axis, what percentage of people use this feature? And how often do they use it? If it's something really really low on both of those accounts, you can probably deprecate it and nobody will fight you. And you'll find out if you give people a 30 day warning that you're getting rid of a feature, they'll tell you if you're wrong or not. Charles Hudson gave the following feedback at Foundry University number 18. And it's just so notable and true that we pulled it out here. The number one thing I end up talking to people about is how can we do fewer things but do them faster and better. Two key observations there. faster and better, do less, but do it faster and do it better. If we were looking at a startup like Airbnb, they needed to make the check in process faster and better. And most of you didn't use Airbnb in the early days, but you had to request that you wanted to stay somewhere, the person looked at your profile, they didn't have instant booking and they didn't have super hosts. And the host didn't have their inventory in there. It was kind of like a back and forth. And people found that really frustrating, because if you needed to book a place, oh my goodness, I want to book that place and move on. I don't want to have to book that place and wait and see and if I do have to wait and see on Airbnb, I'm just going to go to another service. So that led to Airbnb creating super hosts. Alright, that's part one of me talking about product market fit. I'm going to do a part two to this one as well. But let's get to my interview with actor and investor now. Adrian. don't you wish you could hire a ringer to help scale your startup and get your marketing tight? Well, with marketer hire now you can market or hire gives you access to expert freelancers on demand with no long term contracts or risk. You can hire experienced specialists across the most valuable marketing disciplines make paid social paid search growth, SEO content, and even fractional CMOs chief marketing officers. Again, there's no long term contracts, and you can cancel at any time. If it's your first time working with freelance talent, you'll start with a no risk trial. You only hire what you need so you can stay on budget with hourly part time and full time agreements. Every freelancer on marketer hire goes through a rigorous vetting process with their industry experts and freelancers from marketer hire have been hired by over 1500 companies including top brands like Netflix, all birds and lambda school which we're a little investor in. So get $500 off your first hire. That's pretty generous at marketerhire.com slash twist again marketerhire.com slash twist for $500 off. You can also get started with a consultation call where they'll advise you on who to hire based on your needs and goals. That's five hundy one, two, three, four, five hundy right now. marketerhire.com slash twist m a r k e t e r hire.com slash twist. Alright, everybody got a real treat for you actor virtuoso Adrian Grenier is here. You may or may not know he also is an entrepreneur, music producer, documentary film producer and now capital allocator. Welcome to the program, Adrian.

### Human: Yeah, what happened? I'm sorry, but what happened? How did September... I literally just like was looking through email and I saw one from August 31st that I had not responded to and I was like, whoa, whoa, whoa, what has happened? How did this... What's today's date? Two weeks have occurred already? September 14th.### Assistant: Okay, everybody, it's episode 10 of of the blueprint. What an amazing seriousness has turned out to be we just did it as a little idea because Well, people ask me for career advice all the time. And it gets a little repetitive. And being able to do this series means I can send people to this week and startups.com slash the blueprint and let them get a little bit of career advice. Again, it's not just from my career, some of it is. It's also from investing in startups and watching other folks on their career journeys and being friends with folks who I've seen become very successful. I want to just have a discussion about money and wealth, very uncomfortable topic. And people want to get rich. People want to have financial security. That's amazing. There's a bunch of studies out there. A lot of them say in the modern world in the Western world, if you make over 70 $80,000 a year, the pressure for money goes way down, you don't have this existential crisis, oh my god, I'm going to run out of money. Now, if you live in San Francisco, that's going to seem like a joke. If you live in Nashville, it's going to ring true, right? There's different places in the world with different costs of living. I recognize that I think I read a crazy statistic that New York apartments were up to $4,000 or $5,000 a month each. So obviously, that this general rule of the 70 $80,000 a year salary does not apply. But there is a baseline depending on where you live, where you feel comfortable, and the stress goes down. Now, if you're an ambitious person, the stress never goes away, it's never going to be enough, you're never going to be content. This series is not meant to be your therapy. I don't know what trauma you got. I don't know what drives you. I'm just trying to give you some facts in terms of how to become successful in your career. there is a little hierarchy of how money is made in the world. And I've really given this thought over time, because I'm actually writing a book about money. That'll be my second book coming out in 2023. Hopefully, I get it done. And one of the things people want to know is how does money come into my bank account? And you just have to think through first principles about this. How does money get into your bank account? That's a question everybody wants to know. Well, there's a pretty obvious one, you can get a salary. That is kind of like the first level of making money, you could make an hourly salary could drive Uber, you could work at Starbucks, you could get a job out of school, whatever it is, a salary, you do work, you get paid. Okay, great, pretty straightforward. And you can optimize for your salary. But there's kind of some limits here, right? There's caps, people are only going to spend a certain amount on a person's salary. If we were talking about a sales executive, you know, some incredible sales executive in SAS has an amazing book of business, they work at Salesforce or NetSuite or wherever. It's incredible $150,000 base salary, they're making 150,000 in commissions, it's incredible. $300,000 are you the VP of engineering and you're at a startup that's raised at series B and you're getting $200,000 $250,000. Congratulations, you're starting to hit that upper bound of salaries, you can even see the upper bound of salaries, you look at public companies and see what they compensate the top five or six people. And you'll see a salary line. But then there's the commission line, which comes next, or bonus commission bonus, you know, similar, but different a bonus kind of goes with salary, consider your salary plus bonus, a lot of places if they're doing well, if they're profitable, we'll give two weeks of salary as a bonus at the end of the year, two weeks of salary out of 50, you double it to get the percentages. you could count on two, four, 5% of your salary. So you make 100 grand, you get a 5k bonus, it's nice, takes the edge off Christmas, maybe you get to go on a little vacation. The second way is commission. So you got your salary now comes commissions. Talk about that sales executive before. What that means is somebody says, Okay, you still a million dollars, we'll give you 5% of that you make 50k. And of course, if you want to work twice as hard, and are you're two times more efficient than the average salesperson, you can get to 2 million. in sales and make $100,000 in commissions. So that's nice when you get a commission for something, right? It uncaps your ability to make money in one way. But if you're a good founder, or you're a good manager, you're going to reset the commission structure every year. You're gonna say, hey, last year, you did 2 million in sales, this year, your target's 3 million. Last year, we paid your 5% on the 2 million made 100k this year, we're going to go for three, we're going to give you 4% on the first million 5% on the next million and 7% on the third million, right, they, they kind of create incentive structure for you. So the commissions will be looked at. And if somebody starts making too much in commissions, the boss or the owner of the business or whoever's in charge, if it's a big company might say, you know what, this person is crushing it too much, we're going to get rid of them, we're going to cut them. And we're going to have three you know, young guns come in and reset the salary structure. And you see that on a TV show, like this new one industry, where somebody's got this book of business, they've been printing money for the company for too long. And they're just like, you know, these young people can do it for less money. So again, salary and commissions, you can make money, but there's going to be some ceilings and people might tweak it. Because if you demand too much salary, somebody might just say, Listen, I can hire two people for that cost. I can hire three people for that cost. See, you can't push people too hard, or else they will replace you, which you would expect them to. So we talked about that earlier in this series, the blueprint in terms of just testing your market. And the way to test the market is to just look at consulting revenue, which is the third level here of seven that I've identified in terms of making money. If you have other ones that are missing here, Jason at Calacanis calm, love to hear your feedback if they don't fit into one of these seven buckets. consulting revenue is just say, Hey, pay me 100 bucks an hour. And I will do UX design for you. And then you sell out your time, you sell out your 2000 hours, you want to work a year at $100 each, you make $200,000, you were working in a 75 k position, 100 k position, 125 k position, you went consulting, yeah, there's more expenses, you have to do your own taxes, you have to withhold you have to pay for your benefits, you have to find customers, there's all this other nonsense and stress that comes with it. That would be abstracted from working in an organization. But you could uncap your where you can do the next sort of level up and uncapping your pricing. So if you become somebody who's known is a genius in UX, and you did this incredible UX design for Robin Hood, maybe somebody will pay you 500 bucks an hour, and they'll hire you for 100 hours, and you have a $50,000 job that you can do in three weeks. And you're like, wow, this is incredible, but you earned it, right? You made Robin Hood and calm. You've done two of the great apps of all time in terms of UX design, I happen to be investors in both of those. Top of mind came to me. So that's where consulting revenue can start to also you can see what the market will bear. If you charge too much, you say I want 5000 an hour. Well, you better be making you know, Steve Jobs's logo for next, right? And he famously spent 50 or 100,000 on that logo was worth it. And that was a long time ago, the equivalent of spending 500,000 now probably or 250. But he felt it was worth it. He Steve Jobs got the money. Why not? Okay, fourth on the list stock options. We all know what these are. You work at a startup, you get some options, you got lottery tickets, they were priced in some 409 a at 10 cents each company went to $1 while you were there. Then they got their series B, they went to $5. All of a sudden they went public at $20. You're sitting on 10 cent options. The stock's trading at $20 and 10 cents, let's say, for ease of math, you made a $20 profit for each share you got, and they gave you, I don't know, 10,000 shares, right? So you made 200 grand, fantastic stock options. And also in commissions in stock options, you would put carry out a venture firm, you could debate that. But they're kind of different than commissions, because those are capped at a certain percentage, stock options and carry would be number four. So if you can, if you're lucky enough, my lord to get carry in a venture firm, or to get stock options, and they work out, there's like the most accessible lottery ticket uncapped. This is now when you're starting to get into an uncapped place, right? The thing becomes Uber, Apple, Tesla, whatever it is, my lord, that's when true wealth can come into your bank account. Salary and commission, you can get wealthy. Consulting revenue, yeah, you can get wealthy. Stock options and carry, okay, now we're talking about uncapped. So one, two, three, kind of capped, four, now we're uncapped. We're in the uncapped category of wealth creation. Number five, creating IP and getting royalties for it. Okay, what does this mean? Okay, you wrote a book, you're Stephen King, you created this incredible series of characters. And you made the book Cujo or Carrie or whatever it happens to be it and somebody wants to license it, they want to option it. Okay, you wrote the book. some publisher has the rights to the book for 20 years. Somebody else wants the paperback, they get the rights to that somebody wants to make it into a comic book, you sell the rights to that. Okay, now somebody wants to make a TV show, you sell it, somebody wants to make a movie, you sell it. And that's why there are people who collect IP and want to own 100% of it like Disney did shout out Bob Iger, Marvel, Pixar, Star Wars, they own all of it. They don't have to pay a licensing fee. But previous to that, when Marvel was independent, or George Lucas was independent, ching ching ching ching ching. Every time somebody wants to use a Marvel character, they cash at the register, boom, give us some money. Every time you want to do something for Star Wars, you want to do a Christmas special, you want to do a new action figure, you want to do something at McDonald's, yes, I will take a royalty, I will sell you license you my IP. And what do you need to create that and have that uncapped upside where you can keep monetizing your IP well you need to be creative as heck you need to be a virtual so you need to be so good at what you do that you can get that money in and that people want your IP so much it's a very rare it's very rarefied air. of the, you know, million people who are going to hear this video, I would say maybe 5% of you are going to be able to do this, you're that talented enough, that's not a dig to anybody else. It's just that IP is a bit of a race, right. And so if you're watching Star Wars, you can't be watching Star Trek. And if you're watching Star Trek and Star Wars, you can't be watching Game of Thrones, there's a certain limited number of hours and consumption. And that's why, you know, the hundredth thousandth horror novel makes no money. The 10,000th makes maybe a little bit of trickle, and the top 1000 make 90% of the revenue and the top 10, or top five may make, you know, 50% of the revenue. This is a power law type situation, just like venture capital. So if you're Michael Crichton, and you create a Jurassic Park, my lord, that IP giveth forever, which is why Universal wanted it so badly. And I think they own it. Are you a small business owner? Did you know that Visa's online small business hub has tools, discounts, and resources to help you run your business? So whether you're a business beginner or an entrepreneurial expert, find the solutions, tools, and tips you need to help take your business to the next level. Plus, if you have a Visa Business Credit Card or Debit Card, you can get access to cardholder benefits like Visa Savings Edge, a savings program which can help you save on everyday business expenses like office essentials, travel, and more. When you enroll your Visa Business Card in Visa Savings Edge, you'll have access to valuable offers which can help turn qualifying business purchases made with your enrolled Visa Business Card into savings for your business. Learn more at visa.com slash small business hub. Once again, that's visa.com slash small business hub visa, a network working for everyone. Okay, now we get to number six. This is, again, a very niche thing, but it also has relatively uncapped upside if you're a dealmaker, and you can buy a company like a private equity person can, or a banker, or somebody who's a dealmaker, like Michael Ovitz at CIA, shout out talking about Jurassic Park, he was able to broker deals. And when he brokered those deals, he was able to capture some commission, he was able to capture some IP, some licensing for all time to come. So those dealmakers, they don't exist in the world that often. But when they do, they can get paid forever. In fact, I think CIA wound up having some kickers and I read this in one of the books for Jurassic Park itself. Another example of IP created by Michael Crichton, exploited by Spielberg in the form of the movie, and then exploited in the theme parks and sequel series, my kids watch an animated series. Now there's Legos, you get the idea. Well, somebody broker that deal. And that was Michael Ovitz. He got Spielberg, he got Michael Crichton, he got universal, he got them all together. And those people can as orchestrating those deals, one plus one equals three, and they get a major fee. Finally, at the pinnacle of wealth creation is the founder. founder says this deserves to exist in the world. I am going to start this week and startups all in podcast inside.com com.com Uber, I want to manifest a new thing in the world. 99 times out of 100. It does not work. the one time when it does, if it does provide value, oh my lord, the person who founded and created it, they get a special amount of credit and uncapped upside, ie Michael Crichton, George Lucas, we can do it in entertainment, we can do it with McDonald's that we can go watch the movie The Founder. And you can see it's a great performance by Michael Keaton, by the way, and a great song, boom like that by Mark Knopfler of Dire Straits fame, one of his great solo tracks, boom like that. if you watch the founder, you'll see there were founders of McDonald's. But this other broker guy came in Ray Kroc. He said, I'll license the brand from you give me the McDonald's name. And then he went out and licensed it. He owned it. They kept the two original stores, he paid them a small royalty, then he bought them out and owned all of it. And like Disney now owning Marvel and owning all the characters, I think they've they've swept them all up except for Spider Man. They get to exploit them for all time Ray Kroc did that he was the broker dealer and number six who came in and then did became the founder. In fact, his autobiography is the founder. That's how it works, folks. Now, if you want to jump the line, you can just start a company that works for some people. What I suggest is you look at this list of seven, the big seven, and you start working your way down the numbers. Yeah, you get a salary. That's nothing wrong with that. That's how I started. get some commissions, I had some commission revenue. In my in my life, I was never sales executive, but we had some commission structures for landing new clients at some companies I was in. I was a consultant, I did do consulting with people, and I got paid hourly. And then I never had stock options, because I started creating stuff. And so I very quickly, you know, got to creating IP and magazines and stuff like that. I never broker deals, although venture capitals could be considered in that area of brokering deals, dealmaker, some way capital allocator, and getting a commission a carry for that. So you can when I say number six is brokering deals and commissions, venture capital falls into that. And of course, founders. Those last 3567 are where generational wealth is created. The first three, that's not going to be generational wealth, that's going to be a great lifestyle for you a great wealth for you. You know, when you start making over 100,000 a year, you start getting to 150,000 a year as a young person in today's dollars 2022 is when this was recorded, you're going to be in good shape, you'd be really good shape, you put 10k away a year invest. Amazing if you can get to that level. it's really hard to get there. Most of your contemporaries, unless you're some rich kid listening to this from a trust fund, a lot of your contemporaries are never even going to get to that level where you know, they get through that one through four, even they're making money, they get a great salary, maybe they can get great consulting revenue, and they get some, you know, some stock options. very rare to even get to that fourth level if you can get to the fourth level of this stack you then you're starting to create generational wealth you may leave something for your kids stock options and carry that's when it starts to kick in. And it's really great if you can do that without having to take the risk of being number seven the founder because now you're putting it all on the line and you're gonna suffer your pain and stress not everybody's built for it. So four is like a really great sweet spot. And then after that, when you're in that sweet spot, and you get ahead, can make it dangerous, put a little cash in your account, and then you can do anything. So I hope this is helpful for you. This is the wealth creation stack one through seven. And this is the final episode of the blueprint go to this week and startups.com slash the blueprint. to watch all 10 episodes. And I'm going to do it again next year. I think I'll do it in q2 or q3 of next year. And if you have any ideas for topics you'd like me to cover about your career about being a better executive, would love to hear it. Jason at Calacanis calm CC producers at this week and start calm so we can put it on the list of topics you want to hear me cover and I'll see you next time. Bye bye. It is Wednesday, Molly. We have made it to the halfway mark. Second Wednesday of the month. It is the second Wednesday of the month. Oh, so we're almost to the halfway mark of the halfway mark.

### Human: All right. And that's it. For the new segment. Next up is the blueprint. Oh, am I doing great. Yep. Jason's gonna cover part four. I cannot wait to listen to having a bias for action.### Assistant: Hey, everybody, it's time for part four of my 10 part miniseries we're calling the blueprint. What is the blueprint? Well, it's how to have a great career. That's all it is. It's just career advice for you. If you're listening to this podcast this week in startups, you are probably want to be an entrepreneur capital allocator, and you probably want to be successful in your career. So So this is not just based on like what I learned in my career, my career has gone. Okay. I also have been recording this week and started for 1500 episodes. I've done conferences, I was a journalist. And a lot of my friends are way more successful than me. In fact, my friends tend to be some of the most successful people on the planet. Therefore, I've watched firsthand how people become successful. And this part for today might wind up being the most important one you ever hear. In fact, this could be this can be the 10 minutes of your life that changes everything for you. Because there is a segment of people who need to hear this. Now in part one, we did branding yourself with a breakout skill, critically important part two, we did when to quit your job. Part three, I did building and leveraging a network that one got a lot a lot of great feedback. But today, I'm going to talk to you about creating versus waiting, also known as having a bias for action. And really, we'll title this episode the benefits of a bias for action. I think that's really what this is about. Now, you've probably heard this term a bias for action. This is having an emphasis on the need to take action. Now you can daydream about your life and having a better job. I did that when I was on the train going into Manhattan, thinking about my career. But the people who actually take action and create something in the world are the ones who generate massive wealth, change the world and become legendary, right? So let's get right into it. The framework I want to talk to you about was codified by Amazon wasn't origin, it didn't originate with Amazon. But Amazon is some of the most thoughtful individuals in terms of thinking about thinking. This is called cognitive, or meta, right cognitive, like cognition thinking. So there are cognitive frameworks, cognitive biases, the way people look at the world and the way they think. really does matter. Now, I'm not talking about manifesting or some, you know, alternative nonsense like that. What I'm talking about is the principle of taking action. Now, you've heard about Amazon's 16 leadership principles, these are the things that they will reflect on when they're having a discussion or a debate, where they're trying to make a decision, customer obsession, ownership, invest and simplify, learn and be curious, hire and develop the best. You can read about these things. But you know, buried in there is a bias for action. And they describe it as speed matters in business. And sometimes people will not say a bias for action when they describe this, they'll just say product velocity, speed matters. You'll hear these terms amongst the entrepreneur and capital allocator class. Why do you keep hearing this? Well, because we see it every day, we see the companies that are frozen, and don't make decisions and don't take action die. And the people who are stagnant and don't make decisions, they die. And what you realize is people have inherently a bias to do nothing, they have a bias to freeze. There's many theories on why this is, you know, you see a predator, you don't make a decision or making no decision is better than making a decision. We'll get into that in a minute. But in business and in your career, you need to understand that speed matters and that many decisions and actions are actually reversible, and don't need extensive study. Now there are some like what college am I going to go to? Okay, this seems like oh my god, this is the craziest decision. Or what career should I pick? The truth is, some people will spend so much time thinking about what career they'll never actually start a career, they'll never actually take a job. So they'll sit there making lattes, while they try different, you know, night courses, or they read books, but they never actually go take a job, it would be better to just go take the sales job. go take the product management job, the PR job, whatever job it is, and just get a feel for what those are. And if you love them, keep going. And if not, you can reverse them. And you want to really create value by calculated risk taking the risks that you take are the ones that create the value. So just keep that in your mind as we talk about this. So Amazon breaks down these three points to create buy in, right? So when they explain the why they give factual insights, Speed matters in business. Okay, great. Then they try to teach a lesson or educate you. Many actions are reversible, you don't need extensive study. And then finally, Amazon creates a value a principle we value calculated risk taking. So that's how they will explain this to you, right? Speed matters. Okay, I got it. Many decisions are reversible. You don't need to study it. You don't overthink it. Great. Okay, that makes sense as well. And then they create a value inside their company. So when you're working on your company or self, you should have some value system. And you might have heard Michael Jordan say, Hey, you miss 100% of shots you don't take, or I miss more shots than anybody in the history of the NBA, yada, yada, that's calculated risk taking thinking. The BFA bias fraction is related to other cognitive biases. The status quo bias is, has existed for a long time. And it basically says, new ideas. are not that much different than existing ones, people would feel safer to just very modestly increment what happened previously, I saw this firsthand, when newspapers were looking at the internet, you know what they did, they took the design of a newspaper, and they put it on websites, I kid you not. And so they would show you a front page, and you would move your mouse around with a magnifying glass to read it. And then in a story, you would say continued on page 26, you click it, and it would make a motion animation of the newspaper flipping twenty six pages like will you could have just let people stroll to the end of the story you don't need to use a job. right? That's this status quo bias. When people made the first cars, you know, with a an ice engine, they looked exactly like the ones with horses, they just got rid of the horses, and people were sitting on the hoods of the cars. And you're like, wait, this makes no sense. Again, this incrementalism, the status quo bias, people will stick to what they already know, they don't want to make a radical change. But the businesses that really break out, really do make radical changes. As opposed to this incrementalism, which equals a slow death, it's also the sunken cost fallacy. Now, if you have been doing something over and over again, for a long time, like your startup, you know, is invested in this tech project, or this certain customer base, or you invested in a stock, where you're investing in private companies, and you keep doing bridge rounds, you will look at the money you've put into this and the time, the effort, and you won't want to make a change. Because you've got the sunken cost, where somebody else will come along and say, Well, I don't have a sunken cost, I'm just going to start a new company with this better idea. And often, These two when they're combined together create this real lock in inside an organization. And inside a person who's trying to build a career. I'm a journalist, I can't be an investor. I'm a journalist, I can't be an entrepreneur. When I looked at I was like, Well, I'm, I'm an IT person. Why can't I be a journalist? I know about this tech. And am I a journalist now? Why can't I be an investor or a company creator? I didn't actually have this sunken cost fallacy or the status quo bias. I was just thinking I could do anything. Why not? Why not me was what I always asked myself. Somebody has to figure this out. Why not me. And you have to break these cognitive biases that get cemented over time. There's also the confirmation bias. Okay, and the confirmation bias is that you seek out facts that confirm your existing belief. So you're like, well, this is how newspapers have always worked. That's why they have to work this way on the web. This is how e commerce always worked. This is how transportation always work. This is how trading stocks always work. Of course, you have to pay a fee. We can't have free trades. And then somebody will break the mold. And then they will go much further in their careers and their companies, their products will be more innovative. And you can always again back to Amazon's point, you can always reverse bad decisions. there's very few decisions that have the risk of ruin. If your decision is, I want to climb mountains, like Alex Honnold without a rope, okay, that's a stupid decision, all due respect to Alex and his tremendous talent. It's still a stupid decision. Because we can be sitting here just as easily and never even know the name Alex Honnold because he could have died the first time he tried to climb a mountain without a rope because he put his hand on some bird poop and slipped off. like that's how bad that decision was because of the risk of ruin. Now, there's also a theory called norm theory, what norm theory states, and this was actually a paper by Daniel Kahneman in the 80s. And this is where a lot of this got started, is that making no decision sometimes is the optimal decision. And they did a study of goalies, it turned out a lot of goalies would be best served sitting in the middle of the goal, and not jumping either way until the ball got struck. But they would try to figure out which way the ball was going to go. When the person was running to the ball to kick it, and they would jump a certain direction. They had this bias towards action. Now, why did they have that? Well, it turns out if you do nothing, sometimes that's an optimal theory. But other times, you may not like living with the results of what your behavior was. So if you did nothing, and the ball went past you, everybody's gonna look at you and go, hey, schmuck, you did nothing, right? You just sat there and did nothing. So goalies just pick the direction they kind of jumped out, they made their best guess at it. Statistically, that was a bias that people had to get over. But then there's other times where people do not take a chance. And this is where startups are different. They didn't take a product chance, they didn't take a chance to go after a new customer to change the name of their company to change their business model to go from business to business to consumer or consumer to business to business, they didn't make a change. Because they thought, okay, if I make that change, and it's audacious, and I fail, can I live with everybody laughing at me, essentially? Can I live with the stigma of having made this change? And you know what? Yeah, you grow up in Brooklyn. And you say, Hey, I want to start my own magazine, you know, people laughed at me. I said, I want it to be a black belt. I wanted to run a marathon. I had people laughing at people, my own family laughing at me. Like, you will get this from the people around you. And it can put into your brain this risk taking a version where you say you don't want, if I take that risk, and I fail, and I'm gonna look really bad, it's better, I just stay in my lane, I'll do x, whatever the safe thing to do is. And so being just aware that norm theory exists, could change your entire way of going out in the world. And the way I would look at this is, if you're an attorney, and you decided to be a venture capitalist, I've talked to attorneys who want to be venture capitalists. If it doesn't work, do you think you're going to still need startup lawyers in the world to be able to get another job? They're like, absolutely. Well, then why wouldn't you try? And they're like, I'm not sure if I'll, you know, they don't even actually know why they're not trying. But the real reason is, they're afraid they're gonna fail. And no gamble, no future. This bias for action comes from the Marine Corps, they develop a bias for action. And they define it as a combination of willingness to take initiative, act boldly and accept risk. This is long before Amazon, you know, made this part of their operating philosophy. And the value of this cannot be overstated in wartime, the 20s. And I'm just going to read you a little bit about this. The 27th commandant of the Marine Corps General Robert H. Barrow spoke to a group of soon to be commissioned officers and emphasized individual audacity as the key to future success. He defined audacity as boldness of thought and action, which often contradicts established wisdom, we must cultivate the audacity to conceive bold strikes, and the guts to carry them out. The more opportunity that can be provided to develop a bias for action, and the less barriers to bold thoughts and action, the more success successful officers we will breed. Therefore, developing our habit of thought is just as important as developing our technical proficiency. In other words, the Marines train people who are on the ground to make these decisions in real time and make audacious ones and have a bias for action because it wins wars. Full stop, and the people who get frozen like that goalie in that situation, not moving might be the better one. So I'm sure there are situations where the Marines sitting tight might be the right decision. But a bias towards action and making bold decisions is what typically wins wars, not sitting back and doing nothing. And that's why in startups, we look for that. That's why people like Reed Hoffman have said, like, if you're not embarrassed by your first version, and you waited too long to release it, you really have to get the ball moving. And what a bias reaction does is it also will bring more people to rally behind you. People want to see people with a bias towards action succeed in the world, they're attracted to it. not nothing attractive about somebody who just sits there and you know, does year 910 1112 1315 20 of this career where they're not growing. Nobody's really like, you know, throwing parties or writing stories about that person, they're writing stories, and they're backing more importantly, giving money to and going to work for people who take those bold actions, right? And they, the bold actions win the wars, whether it's in startups or in actual real life. And this is where the second framework comes in. This is where you can really apply it if you're at a startup is product velocity. We meet a lot of people with ideas. I meet too many people with ideas, the ideas mean zero, they do not change the world. And I a great idea can change the world if somebody executes on it. you need to actually build or create something. So you have to stop waiting. And you just have to build something. And if you're in a position to quit your current job and go build something, or you want to do it on your weekend, watch blueprint one and two, if you aren't sure, but I talked about like, you know, sort of frameworks for when you should actually quit or how to quit or how to move on to your next idea while you still have your existing job if you need to make money. But really, one of the key metrics my team evaluates when we're looking at investing in something is how has the product changed since we first met this entrepreneur? What's changed? And so you know, if you've got investors using a test flight app, if they see you sending an email with new features, and they see the app getting updated, and in the notes, you explain what's being updated, it becomes addicting to people, the change log becomes how people make their decision to invest. The people who investors invest in are people who are iterating on that same product over and over and over again, and getting in front of as many customers as possible and pushing that rock up the hill. Sure, you want to gather feedback, that's fine. But remember, there's another statement we say all the time done is better than perfect, or don't let perfection be the enemy of progress. The speed is much better than perfect when it comes to the competition to build great companies. you want to build, you want to talk to customers, you want to iterate. Of course, if you make too many features, you can delete old ones, right? That's they can become a distraction, they can become what's called technical debt in our industry. You have to keep up with them. So don't be afraid to kill something that's not working. That is also a biased action, a biased action saying this isn't working, we're gonna stop it a bias to action, you know, hey, we're gonna go do this. That's basically a philosophy you want to have a body in motion stays in motion, as Newton said, startup in motion stays in motion, you need to build a culture of constantly building stuff and innovating. If you listen to this podcast, this we can start up you see I'm constantly trying new ideas like the blueprint, like VC Sunday School, like J trading, I want to try different things, see what sticks what connects with an audience. All in podcast was but one example of that, you know, the conferences we've started remote demo day, I'm constantly trying new ideas. Some sticks, some don't, we can deprecate others, and we can build others up and double down on them. I hope this has been helpful for you. And think about, you know, what risks are taken and what biases you have. And maybe what's keeping you from taking that big leap or that jump or going after a bold idea or canceling your last idea, shutting it down and moving on to the next big idea. A bias towards action is absolutely essential if you want to have an epic life and you want to do great things in the world. So I hope this has been helpful. If you have a friend who maybe is a little stagnant, you can send them this clip. Maybe it helps them shake something loose and go on and be the best version of themselves. All right. Thanks for tuning into the Blueprint.

### Human: What do you want to do?### Assistant: It's based in Philly and it's in person. It is based in Philly, it is not in person. So we got rid of that about three years ago. So it's hybrid location for this particular cycle during COVID-19 on it is completely virtual. But typically, it's hybrid location, we we don't do you know, you don't have to be physically present, you're with us part of the time, but not all of the time. And I can get and it's a 12 week program, a 16 week program, what's the duration of the program, program, each cycle is about 14 weeks. and some number of those weeks they come to Philly and spend a day or two or 10 days. How does that work? Great question, I'll just run you through at a high level what the program looks like. So 14-week program, they spend the first week with us in Philly. We bring all the companies in, it's great, because we want to get to know them, we want them to know each other, we do a bunch of social things, but it's a lot, it's very heavily programmed. They spend a lot of time with the different managing directors and that type of thing. They then go back to where they're from, wherever they're in the world. Most of our companies are US companies, we have some European, a lot of Israeli companies that come into Dreamit, a lot of West Coast, Silicon Valley, LA companies come into Dreamit. We go for about four weeks from there and they go through a whole process and then the next phase we do and we get back together and that's all over Zoom. We're doing intensive coaching and mentoring over Zoom every single week with all the startups. From there they go back home. About four weeks later, we get back together and we do something called customer sprints. And that came from we work with all these, you know, very technical founders in the different verticals we work in. And they would talk about, well, I'm busy doing a dev sprint, we'd say, well, how about do a customer sprint. So then the dream, the startups get back together, we travel with them, a lot of times we go to New York, we go to Boston, Philly, sometimes down to Tampa. And for two weeks, On the road, we meet with customers in their offices face-to-face. You're a secure tech company, you're meeting with a CISO, chief information security company, chief information security officer. You're a health tech company, you're meeting with a VP of innovation or the chief medical officer. So we go and we do those customer sprints, we're back together again, and it's all about building their pipeline, building their customer base and getting exposure to great customers. Typically, they meet with about 20 customers over a two-week period face-to-face. They then go back to wherever they're from, we work with them remotely, coaching, mentoring. And then the end of Dreamit, about four or five years ago, we killed our demo day, we found it was a pretty much a waste of time, because we found most demo days are, you know, yay, startups, look at what our community has done. We're not about building community, we're about building startups, community is a second order of fact. So we then do a two-week bi-coastal investor roadshow. We email all the investors we know, say, here's the companies that have gone through Dreamit. Here's 20, 22 companies that have gone through Dreamit. Who do you want to meet with? We do a very bespoke investor sprint, is what we call it, on the West Coast. We go to the Bay Area, a week on the East Coast, usually New York, Boston, and DC for our security companies. And it's all about helping them get their next round of funding. And what's the standard deal for Dreamit? So what do you get? What do they get? Sure, so what do we get? What do they get in that standard deal? And what does that look like? So companies that come into Dreamit, just to focus, I think it's a lot like Launch, by the way, you know, it's very Goldilocks. It's a great way. I love your expression on that, the Goldilocks kind of company. So companies to get into Dreamit, just to add that, right, we're looking for companies that have product, have a little bit of revenue or have traction, they have solid customer trials going on, or they have revenue, a lot of companies come into Dreamit, they're already doing half a million to a million dollars a year coming up on a million dollars a year of ARR. across our three verticals, health tech, secure tech, and urban tech. So that's the stage we're looking at. They're pre-series A. So sometimes they've raised their friends and family or a seed round, but they're definitely pre-series A. So that's what we're looking for. The offer that we make to those companies is we look for a small amount of advisor equity in whatever their last round was. We're not setting valuation, and I can get into that. And then we look for an investment right. We look for about a half a million dollar investment right. So we have the opportunity to invest up to a half a million dollars in the company after they've gone through Dreamit. So different from other accelerators and other models and at the end of the day we think of Dreamit as a venture firm. We're a venture firm with almost like a pre-investment program. And you look at a lot of venture firms that have like a platform team. So our platform executes before we invest. So they go through this process with us. We get this investment right, and we're looking to take that investment right. But we don't set valuation. So we're not writing a check for $120,000 for 6% of your company, kind of an arbitrary valuation. And a lot of accelerators will say, well, don't think of it as a valuation event. It's a valuation event. So we float, right? We're not setting valuation. So whatever that lead investor comes in, we're going to decide if we're going to take our investment right. At the end of the day, dream it as a VC fund. We want to deploy our funds and invest in as many startups as possible to go through. And then what those companies, that's what we get out of it. We get that investment right. And so what is the you get a 1% of the company as a consultant or something? You said there was a consulting or fee or something? No, it's it's it's we think of almost like an advisory fee. So it really it usually comes in at around about $150,000 convertible security. We're not writing a check for it. It's it we're basically getting a small amount of equity in the company. Got it. So the company was worth 10 million, you would get that 1.5% in lieu of cash just for running the program. Correct. Exactly right. So it's that one. It's that. Yeah. And then after you make that decision with the 500k, how often do you actually do that half the time, two thirds, one third? Great question. So about 50% of our companies raise within six months of getting out of dream it so about half raise. And within those about 80 to 85% of them will write a check. The times that we won't write a check just quickly, if the valuation runs away from us, they have a huge strategic investor. We're more of a financial investor and the valuation gets way run up or it's not a real lead. Sometimes we won't, but at the end of the day, we want to write checks. Our job is to deploy funds and invest in the best of the best. So you want to see them get a lead. If they can't get a lead investor, you're not going to just be the lead in that case. Correct. We don't leave we don't set valuation. It's one of the things that's really we think unique about dream in our model. Again, we're not setting valuation, we're coming in at whatever that fair market value that FMV is. Fantastic. And then in terms of what they get out of it, obviously, they're meeting those customers, you set up those meetings, and they're meeting all of those founders, all those investors. So you're basically acting as an investment bank in terms of doing the introductions or another investor, and as a de facto business development person setting up all those business development meetings. I would, it's a lot of business development, it's a lot like investment banking, but the other thing we do, and I think you do it too, and you talk to a lot of people on your shows about it, which is great. We beat the shit out of them. Our job is to find the best of the best and make them better. And we have companies that go through Dreamit that have been through other programs. A lot of our companies are two or three years old, they have five to 10 people, and they'll sit down with us in the first week and say, the questions that you guys ask, when you do deep dives and we go through their deck and go through their pitch and go through their strategy, they'll say, no one, has ever asked me questions like this. I've been working on my company for two or three years. No one has asked me questions. You're so insightful and so fast. And we'll say, well, there's a lot more like this coming. And they're like, that's great. And it's like, well, then we're gonna get along really, really well. So it's not just the getting them in front of customers and getting in front of investors, but pressure testing and seeing through the model and really getting them ready. So when they go on that investor sprint, like a lot of investors will come back to us and say, We don't know what you do with your companies, but my God, they're so tight. Everything's well thought through, it makes sense. So there's a lot more, the coaching and the mentoring, and by the way, all the mentoring at Dreamit, 95% of that is Dreamit team members. So Dreamit, we're still small, we're about 16 people, but we don't have this whole field of mentors and this big mentor network around the world, because to us, I think, if I remember, your background's in psychology, right? That's diffusion of responsibility. Who has responsibility for that startup? Who has to make sure they get over the line? We do. That's our job. We take it seriously. So we have full-time people at Dreamit that are seasoned entrepreneurs, that are exited entrepreneurs, that are full-time staff members with deep domain expertise working with these startups. So again, it's not just the business development, working with customers is critically important, working with investors, but it's that process of thinking it through and getting them ready for that. All right, when we get back from this quick break, I want you to go through the portfolio of graduates. Tell me which ones objectively have hit the biggest highs in terms of revenue, valuation, and raising money when we get back on This Week in Startups, our Power of Accelerator series, episode one. I want to take a moment and tell you about the importance of insurance for your startup. And I am an expert at this because I've been doing it for 30 years. I had a magazine, I had a search engine, I had a blogging company, I have been sent legal letters every year. Anybody who's successful in business is going to need insurance because they're going to have things come up. Let me just go through the top four types of insurance with your cyber insurance. Imagine you get hacked your entire customer role maybe their credit cards if you didn't hash them properly, maybe it's an inside job and really important stuff gets leaked, you need to have cyber insurance to cover you. There's DNO insurance, that's directors and officers, that's like your top employees, officers. And if you do something stupid you're going to get sued and you want to make sure that your officers, the top employees of the company, And your directors, people who are on the board, have insurance and they're covered. In fact, people, you can't get great directors and you can't get great officers for your company if you don't have this. E&O insurance stands for errors and omissions. Really important to have, especially in editorial and other services. And any big customer you have using your product is going to want you to have E&O if you're going to close a deal with them. And then finally, this EPL, Employment Practices Liability, that covers harassment and wrongful termination, and you see these things come up all the time. And listen, you might be the greatest boss in the world, but if somebody else feels like they've been wronged, they're gonna sue you, and there's plenty of attorneys out there who wanna sue you, especially if you're a venture-backed company. And you might have somebody in your organization, it may not be you, it might be somebody else in your organization does something really stupid and harasses somebody, and then you're on the hook for it. So you wanna get that EPL, you wanna get that ENO, you wanna get the DNO, and you wanna get that cyber insurance. And in brokers technology, is going to get it for you and it's going to save you time and money prices are up to 20% lower and you're going to get better coverage you go sign up and get a quote and you purchase within just wait for it 10 minutes so what's your excuse now here's the thing you don't have to call a traditional broker insurance company and deal with large, low incumbents and sign up taking days, if not weeks, and a process that's just simply not transparent with opaque pricing. They make it quick, they make it easy and they make it better to instantly buy custom built insurance for startups go to in broker.com slash twist in broker.com slash twist that's em broker br ok er.com slash twist and get an extra 10% off by using the offer code angel 10. All right, welcome back to the Power of Accelerators, our special series, a 10-part series. This is episode one with Steve Barsh. He's S. Barsh on the Twitter, B-A-R-S-H. Dream Adventures, you can go visit them at dreamit.com, and they've been doing this since 2008, and you've been a managing partner there since 2015, correct, Steve? Yeah, about five years. I was there early on. I left to go do another startup, and then I came back. I was there in 2009 and then came back. So tell me, what are the top companies to come out of Dreamit so far? And what heights have they hit in terms of, you heard me earlier, traction, fundraising, valuation, revenue, the things that would be the real metrics people would qualify these companies against? Okay, so I think some interesting companies that come out of Dreamit. Level Up came out of Dreamit in 2007. It was acquired last year by Grubhub. There's a great company, Houseparty, which was Meerkat, came out of Dreamit. It was acquired by Epic Games. SeekGeek came out of Dreamit back when I was running it in 2008, 2009. By the way, it's interesting. So SeekGeek went through Dreamit. It came in, as I'm trying to remember, it was a blogging authoring platform when it first came in. We spent a lot of time beating them up in a really big way. focused on what are your one or two key assumptions and how do you de-risk those assumptions? And halfway through the program they said, you know, we've tried to de-risk our most critical assumptions and we've decided we're wrong and we wanted your permission to shut it down and do something else. And we're like, you don't need our permission. It's your company, not ours.

### Human: It's just electric.### Assistant: It's time to wrap it up. But I think for me, listen, it's something I would love to experiment with. I've yet to find a financier that's ready to back me in that pursuit, but hope springs eternal. And, you know, for now, I'm still making films. But, you know, I think I do think the television, especially the limited series, is a very valid form. I've loved some of them a great deal. True Detective season one, you know, great other things I've seen, you know, like this Queen's Gambit that are extremely powerful. So I think the form, you know, the form can shift and move. And I think, you know, ultimately, finding the story is the hard part. You know, so I got to keep working on that. Bye. what about this next generation's you and I are Gen X, there's millennials and then Gen Z. And one of the complaints I think people had about Gen X was that we were short attention span because of MTV. Now you have smartphones in this next generation. And I don't know if you have this experience, but when a movie is bad, you kind of have that device in your pocket and you're kind of want to look at it. One of the reasons I like to go into the movies was I had the discipline in a movie to never take my phone out, I would never do that. But I find when I'm at home, if a movie is kind of hitting, or when a series is hitting a low point, I might look at my phone, and then all of a sudden, I miss something amazing. And I'm like, I have to have some kind of a discipline here. What do you have this experience? And what do you think this constant distraction is doing to people being able to just enjoy a piece of art for two hours and let their brain kind of absorb it and give into it? Well, you know, one of my heroes, Quentin Tarantino, and I was lucky to meet him and Eli Roth, they were two of the people I met when I first moved to Hollywood, I was a nobody, and I met them at a Mexican restaurant. And they were nice enough to give me their phone number, we stayed in touch all these years. So But about eight years ago, 10 years ago, I was at a party with Quentin. And something came up about a movie. And I said, I said, Oh, yeah, yeah, I heard that was a piece of trash. And he got all really upset with me. And he was like, I'm sorry, what did you just say? I'm like, Oh, yeah, that movie. Yeah, I heard that was trash. And he goes, Did you see it? I said, No, I just heard about he said, he said, How? Could you dare to speak about another artist's work that way if you haven't seen it and evaluated it yourself? And I was like crushed. I was like, oh my, and I like went, I remember I was with my friend Richard Kelly, the director, and I went off and I'm walking with some premier and I'm walking around. I'm like, oh my God, Quentin just said I'm garbage. So Rich called me on my cell phone and he's like, where'd you go? I'm like, I'm in the corner crying. I was like, you know, and he's like, get back here. We're going up to Quentin's house. So, we went up there and then, you know, Quentin had a bottle of Cristal and he's pouring out shots of Cristal. And, you know, I had the courage to now go back up to him and I said, listen, I thought about what you said and, you know, you're right. I'm not going to do that anymore. And he was like, I know. He's like, I knew you knew. I was just, I didn't mean to be too hard. I just want to push you to really think about these things. You're an artist, you know, that's what you got to do. And so I, you know, you know, many years later, he's been very kind to me, but it always stuck in my head, you know, you've really got to give the attention to a to a work and evaluate it and not evaluate. I another horrible thing, sometimes I'll be watching a movie and check the Rotten Tomatoes score. And it's like, that's ridiculous. you know, sit down, make your own judgment, watch the work in its entirety, pay attention. And that's that's the experience. If you're going to have the true experience, you got to really take it in. And then you can call it a piece of trash if you want, or call it whatever you want, you know, or say it was a great thing, you know, but but I think the that that's what was sort of beautiful about the theatrical movie experience is it really caused you to focus. And there's something about all of the electronic distraction that can be tough. I don't know about you, like I have a remarkable tablet, you know, or I'll read on a Kindle sometimes if I don't have a book available. I love that it doesn't have a text message or an alert. It's not sucking my attention away from it. You know, even Quentin on his set, There's if you go to visit his set, I went to visit once a ton of time in Hollywood. He has a thing at the front called Checkpoint Charlie, where you got to go and check your cell phone in there's a man his whole job is just to sit and take everybody's phones and it extends to Leonardo DiCaprio just as much as it does to the caterer. And so because you know, Quentin's point of view is like, hey, we're here to make a movie. We're not here to check our text messages. You know, we have to treat this art form seriously and give it the attention that it deserves. Now, that's not for everybody. But you know, for us purists, let us obsess about it a little while longer before you take that away from us as well, please. Yeah, it just seems like we have this incredible art form. And I think we don't appreciate it right now. And we'll only appreciate it when we've only got Marvel films to choose from. And, you know, Star Wars, Star Wars spin offs. And really, there's so many other high quality things that we could be consuming and I'm hoping thaters come back in a big way. So, it's been a full hour with Nick Jurecki, filmmaker, continued success. Thanks for letting me be part of it. Just as a little disclaimer to everybody who's wondering, I don't invest in movies. Please do not ask me to invest in movies. Nick and I have been friends for a long time. I'll always back every movie he does, but please do not send me scripts. I don't know what I'm doing. I don't invest in movies. I do donate to mix. But hopefully we'll see maybe we'll get a return or not. And but it's an important film. And it's a really great film. Congratulations. You know, me. I love thrillers. It's my favorite genre. It happens to be your favorite one to make. And this is, you know, as good or better than arbitrage. You're really the cinematography and some of the shots are amazing. I'm guessing you were using drones for some of these shots or copters. Yeah. drones, drones, technology has really come a long way. It was amazing. Some of the shots you had of and I was one shot where one of the drug runners is like on a sled going, you know, and you're kind of doing that, I guess they call it a tracking shot when they're running, and you're kind of going at the same pace. And I was like, I wonder if that's a drone shot. That's actually a device called the cable cam. which is an extremely expensive thing that probably consumed your entire investment. But you put it on a string between two trees, and then it's an automated device with motion capture and control and all that. So it goes at this perfectly fluid, smooth thing. So when you see the kid running, yeah, we got a cable between two trees and a big giant 35 millimeter camera on there tracking him. 35 millimeter camera, are these still the Giants like huge devices? Or have they also gone through some revolution of becoming smaller? And no, not really, they're still big boys. They weigh a couple hundred pounds. So they make tons of noise. They make lots of noise. They have what's called a blimp on them, you know, in order to try to, you know, cut down that sound, but you end up having to take out a lot of that in the post production with just Oh, yes. And you still insist on doing that you don't really think these 4k 8k red cameras, whatever, can do what film does? Well, what I love about film, you know, I've never gone off it. It, it has a certain beauty, inherent beauty and softness, you take it out of the box, you turn it on, and you don't really need to do very much else than light. You know, so it has, it has beautiful fall off. You know, this was a film about faces a lot. We shot an anamorphic aspect 235. And so the way the light plays on a face in film, the way it goes from light to dark, the deep, rich blacks that you can get the grain and the kind of analog life that it brings. Those are not qualities that I've yet seen appropriately simulated in the digital experience. So I would be more than happy to move to a digital camera if it could achieve what the 35 millimeter camera can achieve. Can you make it look that way in post production if you want to spend months inside a color room, perhaps, but there's a reason Tarantino, Christopher Nolan, many of the great filmmakers and Thomas Anderson. And by the way, half of the nominated films of the hundreds of films that were made, you know, last year, more than half were shot on 35 millimeter. So there's probably a reason for that. I'd say also a thing that's wonderful about it. It's alive. So when you call the actors together, and you say action, they know that film is going through the camera, you're burning film, it isn't cheap. So they bring their a game and it focuses everyone together. That's fascinating. So people's performance goes up knowing that you're burning 1000s of dollars every time you say action, versus on digital when they're like, Oh, well, you just tape over it. Yeah, there's a casualness to digital. And that can work, by the way, if I was shooting a documentary, I'd never shoot it on film, you'd go insane. You know, you can't believe how the Maysles brothers did it in the past. But I think, you know, with the with the theatrical movie, I'm going to hold on to 35 a little bit longer. It really is the best image resolution. Well, that's IMAX. I mean, that's Nolan, I would love to shoot on that. Maybe if maybe you could sell some of your Uber shares and welcome to me. You know, I'll go get an IMAX camera. But those are incredibly expensive, right? That more than doubles the cost of it. Yeah, it's like not nothing about it is cheap. But then again, you know, if you're making a film, like Christopher Nolan goes out and makes 10 and for $200 million, you know, what 2% of it was spent on the film. So that's not the that's not that's not the big budget here. You know, Since we're wrapping up here, and I really respect your opinion on film, give me your top two from PTA, QT, and a third director that you love. So you're both your top two Paul Thomas Anderson, and you can work out one or two, but your top two and then your top two Quentin Tarantino, you can work out your order. that you just love to watch that you think are the best pieces of film they've ever made? Judge them however you want. Okay, well, I would have to go with Paul Thomas Anderson. I would say you know, my top of course is there will be blood. Okay, because how can you not love Daniel Day Lewis saying why don't I own this? I drink your milkshake. So great. I just thought of you and I, we could be somewhere staring at something and go, why don't I own this? And then of course, I just watched again, What a Delight with my brilliant friend, Heather Graham, Boogie Nights. Incredible. I mean, such a classic, incredible filmmaking, this, you know, imitating the style of Scorsese, but bringing it into his own new dimension and great writing and what, you know, you can tell he loves his actors and it brings such richness and pathos to everything. With QT, I mean, I love for some reason, I love Jackie Brown. That's my favorite. Yes, you always have underappreciated in its time, I think its reputation grew. But you know, the the boldness of casting Pam Greer, you know, in that time, a over 35 African American woman as the lead, wonderful supporting turns Robert Forrester, De Niro, Bridget Fonda at one of her best. I mean, cinematography and just so much fun. So adult, so interesting. I mean, Quentin, you got to say Pulp Fiction. There's no way that film revolutionized cinema, ushered independent film into the mainstream right in the 90s, just as I was entering film school. You know, it was a triumph. If only he had directed True Romance. He wrote it. He wrote it. But listen, ably directed by Tony Scott, a great movie. I would say the third director I might pick, interestingly, would be Catherine Bigelow. And, you know, was married to James Cameron, although that's not what defines her. But films I love from her. I love The Hurt Locker, of course, who didn't? Amazing. strange days. And and for me, it's a toss up between near dark and strange days. I mean, near dark, one of the great vampire films, I think her first film, and just so much tension. And then strange days I watch once every couple years. I mean, it's so good, brilliant visions of, you know, technology that doesn't exist allows you to experience other people's memories, emotions. So so we realize the big scale and the the end of the world, the white millennia. you know, and Ray finds what a performance Angela Bassett, I mean, that's Angela Bassett kills it in that film. So for me on the pole, Thomas Anderson, I just watched Magnolia again, because Bredesen Ellis was talking about it. And I was absolutely floored at how amazing the performances were, again, Philip Seymour Hoffman, just extraordinary. And then when you see Tom Cruise trying to compete with Philip Simmerhoff, and we're just trying to keep pace with him. Just incredible. But so my order for Paul Thomas Anderson, I every time I see the master, or there will be blood, it becomes my number one. Yeah. Yeah. And I think the master is just such a sneaky film, that when you see it three or four times, it opens up. And you start to realize the top three performances there. Amy Adams has a very, you know, small, much smaller role than obviously the two men in it. But she's extraordinary. I think it may be her best performance. And then you look at the other two, when film with Seymour Hoffman is on camera with Joaquin Phoenix, I mean,

### Human: But with a larger 5.4 inch display that lets you see so much more. With its compact size, the iPhone 12 mini has the exact same features as iPhone 12. All right, great. You're just choosing between two great sizes.### Assistant: Okay, great. So not much there. And then the only other thing they really did is they're including LiDAR in this. And so most people are gonna ask, hey, what's the story with LiDAR? Uh, this is really their way of getting LIDAR into their products because they have AR coming, right? And so it's just another way for them to know the distance between your phone and objects. And so Snapchat and filters and these kinds of things will be more accurate and they'll be able to build models of the world. But what's really great about this is this is going to drive down the price of LIDAR sensors because whatever you put in the iPhone, the price of that, whatever component you put in an iPhone or a smartphone, The volume in which these things are produced will definitely lower the cost of all this. The one thing I thought was very cool. is something that, you know, Steve Jobs showed us, you know, decades ago, which is MagSafe. So everybody remembers MagSafe, that little plug you would put into your laptop, and then if somebody walked by and kicked the cable, it would just come off, because it wasn't attached, and then they replaced it with USB-C for some reason, and then now MagSafe doesn't exist anymore. Well, now they're bringing MagSafe back. Okay, so MagSafe existed on laptops. They took it out of the laptops and put USB-C on it. And now they're bringing MagSafe back and they put it on the phones. So you know all those aftermarket magnets you put on the back of your phones and then you snap it onto something? They've basically included that in the iPhone. I do actually think that's the one thing that could potentially tip me over into wanting this device is that I like having the wallet with my credit cards on the back. And now you can snap little devices onto the back. Or if you were using it in a car, I assume they'll have car chargers, you know, from third party manufacturers, you just snap your iPhone on there. But I like to have a case. And so these things generally don't work with the case, but maybe I'll get the case on it. And let's roll the video here of the MagSafe components. And here is the MagSafe accessories, which will also charge the phone, obviously. The displays are now way past any just noticeable difference. There's no way for people to even see the difference in these displays. So that's kind of we've reached peak smartphone. When we get back from this quick break, I'm going to tell you what this means for Apple, the company, and exactly how lost they are. And if Apple has a stock is going to go down because of the slowing sales of iPhones, because of this mediocrity when we get back on this week in startups. This emergency podcast is brought to you by our friends at digital ocean, which just released their app platform. It's a new platform as a service solution to build modern cloud native apps with app platform. You can build deploy and scale apps and static websites quickly and easily. It's really simple. You just point your GitHub repository and let the app platform do all the heavy lifting. Since DigitalOcean runs that platform on their own infrastructure, your costs will be significantly lower than with other products. No big pricing jumps as you scale. It's built on top of DigitalOcean's Kubernetes. You probably know what that is if you're a developer, which provides a smoother migration path so you can take more control of your infrastructure setup. There are three basic tiers here. The starter, which is free and great for basic sites. There's basic, which is better for prototyping apps. And there's professional, which works best for production apps. Here's your call to action. Just go to do.co slash twist. That's do as a digital ocean dot co slash twist. Great job, digital ocean. And let's get back to this amazing podcast. All right, welcome back to an emergency pod. Apple released the iPhone 12 and I'm literally, I think I'm going to skip it. I don't feel the need to upgrade. I think I'm going to wait for iPhone 13. I wonder if they will come up with the 13 since it's an unlucky number. I wonder if the, what their plan there is, uh, if they're going to skip it or not. But this is a bigger issue for Apple. The most innovative product they've come out with since the iPhone and the iPad is AirPods. And AirPods are wonderful and amazing devices. I think the watch is, you know, it's done okay. I'm not a super fan of the watch. And so you have to wonder, with Apple having declining iPhone sales, the number of units shipping has been going down year over year over year. because there's really not that much different about these phones. And I have to say, I keep a Pixel 4 around, I always get an Android phone, and the Pixel 5, those phones are as good or better, typically, and they're certainly better value for money than the iPhone. And so while I am still a fan of Apple's phone, and it is still my default phone, I don't feel the loyalty to Apple I used to feel I stopped buying their computers. I went to Chrome. And I started using Windows again. And I love my Dell windows. And those machines are for the same pricing in a machine that's like 50% or 100% more powerful when I buy a Dell. And really, I have you have to wonder now what is the future of Apple if the most innovative things they do are around cost savings and logistics in terms of what we just saw with making the boxes smaller, like that's the announcement, or like colors, like the different colors of the iPhone is something that Steve Jobs did with the iPod. For those of you who are generation C, iPod was a device like an iPhone that only did one thing, play music, and it wasn't connected to the internet. The iPod mini had all the different colors, like we get it, and the original iMac came in all the different fruity colors, like we get it. multiple colors gives you more options and it's interesting but really what we're starting to see is apple feels like they're running out of steam so there really is two theories right now as to what's happening at apple either they see themselves the end of the line for desktop computing in the end of the line for the smartphone and they just think you know what we need to focus 100% on the AR glasses, which are obviously being worked on for a long time now. And those could come out in a year or two, maybe. And that those would be the big paradigm shift. You'll put on your AR glasses, you'll see your smart screen in front of you, and you'll put in AirPods, and you'll listen, you have your watch, and you have your phone. Now you have four computing devices on you, a watch, AirPods, AR glasses, and your phone. And you could remove one of those from you know the package to the phone and you just go out with your glasses on and your watch and maybe your airpods or maybe like the bows glasses i have i have the bow sound glasses the glasses will probably play sound already and have syria in them so you will need your airpods so imagine putting on their air glasses and their speakers playing music or you're talking to Siri, or you may have noticed in the latest update, Siri will read you your messages when your AirPods are in. That's the future. You get a message, you've got your AR glasses on, boom. So that's probably why Apple, that would be the most pro discussion you could come up with. The most pro hypotheses is that they realize, eh, desktop computing, meh, you know, that you saw the terrible Mac Pro tower they made for like developers and video editors and it was $5,000 and $10,000 is ridiculous pricing. They're probably just milking everything to make massive profits. And then the big innovation will be the glasses. We'll see that's a big bet. But they didn't buy Peloton. when they could have and they still could. They didn't buy Tesla when it was 70 billion like I told them to. So here we go. The boldest thing they've bought is beats for 2 billion. It's pathetic. They should have bought absolutely should have bought Tesla. They should buy Peloton now they won't. They had too much pride but Pelotons would be amazing if that was an Apple brand like Peloton by Apple by that company now. and have all those haven't integrated with the watch have it run mac os or ios on the peloton devices right now runs android perfect path to victory there by before google does google's buying fitbit why not by peloton And they could buy something like Slack and get into business software. Or they could buy something like Zoom and get into the business space. They don't want to, I guess. They want to be consumer. I understand that decision. But boy, just Apple needs to think of something that really is transcendent. And this is not it. And these kind of like cutting margin here and all these margin plays, to me, it reeks of desperation. You can see that in the cable, the cable they're putting in the iPhone 12 is a USB C to lightning. It doesn't take a genius. And I know this might seem cynical, they didn't do a USB to lightning. Because that's what those 2 billion charges the woman on the roof was talking about. Everybody's got one of those the traditional USB charger. No, they did USBC. So now you got to go buy that $20 charger because people don't have a USBC plug, you know, in cable, because you'd have to have the female USBC laying around people don't have that laying around. So I hate to be cynical here, but they took that out. And then they're charging you $19 for it. And it only costs $9 to make one of those for them or maybe $2. So this is just Apple at its worst, milking their customers for every last dollar to make massive, you know, margin and God bless Tim Cook, he was a great steward for the company, I think, in a transition. But Tim Cook, I know it's a, he's had a great run in terms of the stock, I know they have a ton of cash. But this will catch up with them eventually, if they do not innovate, and they do not have great products. resting on your laurels is a recipe for disaster for this company. They need to come out with an innovative product. And this incremental, uninspiring product to me, it's just lame. And I think people are starting to become hip to the fact that Windows pretty good Chrome operating system. Excellent. These things are so much cheaper that even people who aren't price sensitive are, they might be value conscious, right? So you can be price sensitive, you can only afford an Android can only afford a Chromebook only avoid only afford an Android. But then there are value conscious people and businesses are value conscious, I got a value conscious, they might want to buy 100 computers, you know what, Buying the Dell XPS 13 or buying Chromebooks. The Pixel Go is a really great Chromebook from the folks over at Google. These things are better value. You could buy three computers for the price of one, two computers for the price of one. People are going to start to become hip to this. And there's no allegiance to the iOS operating system. There's no allegiance to the Mac OSI operating system anymore. There's very few things that you can only do on a Mac. In fact, I don't I'm I have a hard time even thinking about what you can only do on a Mac. So Tim Cook, time to go. And that's not meant in a you know that I don't think he's done a great job. Obviously, stock is what he is playing for. He is goosing the stock. But I think man, they really need to get some people in there who can build innovative products. I will say I was wrong about Apple TV, or Apple Plus, whatever they're calling it their Netflix competitor. I seen two shows off of that. The movie Greyhound with Tom Hanks, war movie, I love a good war movie. Love Tom Hanks. I thought that was a great film, or good somewhere between good and great. I recommend it. And then Ted Lasso. is absolutely fantastic. And I thought Apple would shut down Apple Plus, but I think they might find a niche for themselves in producing family friendly content. nothing too racy, they're not going to do like a suicide squad or, you know, that kind of stuff where, you know, if you have kids, you might not want them to watch, you know, too vulgar or whatever. And you're trying to, you know, use some common sense. And speaking of which I use common sense media, great website for doing this, you really probably are going to love having Apple produce shows like Ted Lasso that are family fair. So I take it back. I know there's a lot of competition in this space. But you know, HBO Max, Netflix, Disney Plus, and Apple plus TV, whatever they call it, they're all doing great content. So we might have as an industry underestimated the appetite for great content on a global basis. And that's why I think Disney is refocusing the entire company around this, and they're gonna have that Obi Wan series, Mandalorian is coming back, Disney plus gonna crush it. Okay, this has been an emergency podcast. Apple, I don't know what to tell you. You know, come out with something more inspiring. I'm just bored. So there you have it, folks. iPhone 12. I think it's lame. Worst iPhone ever. Worst release ever. Apple F minus. F minus. Come back. Try again with something more innovative. I'm sorry. And, you know, the speakers and all that kind of stuff. Still lame. Nobody cares. Like Sonos is better. You know, just really the fact that they they also just They really didn't make a good they maybe they're probably too late to get into the music system for your home and speakers, but they're smart speakers are also just overpriced and lame. So it's a lame day for Apple stock is down on the margins at the taping of this. And and God, what are you gonna do with all that money, Apple, you're gonna just sit here and make increment just poorly incrementally better iPhones, be bold, take a new product line, do something new and innovative, try going into a new vertical and do something exciting. For once, Apple, really, seriously, the last exciting thing were AirPods. I'm sorry, that's it. Everything else since AirPods has been lame and incremental. And before that, it was the iPad. Apple Watch was a dud for me. All right, we'll see you all next time on This Week in Stars. Bye-bye.

### Human: You know, we've we've had banking hiccups in the past, we've just, um, We've always been able to route around it or deal with it, open up new accounts or what have you, shift to a different corporate entity. There have been lots of cat and mouse tricks that everybody in the Bitcoin industry has to avail themselves of.### Assistant: All right, listen, the first 20 seconds tell you everything you need to know about these characters. I mean, oh, my Lord, we've always been able to route around and deal with a cat and mouse tricks. There they are on record saying they're doing this shell game to get around regulations. And I think that's a lot of people in crypto, they believe that if they can route around regulations, they're going to do it. We start with ICOs. we just had on the program on Friday, that Andreessen Horowitz company that has a class action suit, you're going to see this over and over again, where people are trying to reinterpret the laws or route around them. And then they claim that they're the victims and okay, maybe, but I don't buy it quote from Bloomberg. In recent months, and then in parentheses, federal prosecutors sent letters to individuals alerting parentheses again, tell their executives, that they are targets of the investigation. The notices signal that a decision on whether to bring a case could be made soon with senior justice department officials ultimately determining whether changes charges are warranted. Okay, this means they're going to do it. I mean, honestly, when when you see this level of investigation, I think nine times out of 10, they don't take on these cases is my understanding. I listened to pre bars podcast and you know, he gives you a really good insight baseball about this. I also listened to the lawfare podcast. Generally, these kind of prosecutors do not go after targets, unless they really feel confident that they're going to bring charges. And certainly this information doesn't get leaked, unless I think there's a really strong chance that there's going to be charges now who leaked it. It might be people from the DOJ, it could be lawyers, who maybe didn't get paid in between, it could be a paralegal, it could be somebody who's friend of a friend, who knows, you know, who's involved in this, who's routing them out, it could be that in exchange, you know, that tether works with got a bunch of got interviewed, got a bunch of document requests, and they then leaked it to Bloomberg, because they don't want to be on the hook. Maybe they're doing some CYA, you get the idea. when these things come apart, it's every man rat woman for themselves. Everybody's racing for the exits trying to get some cheese and eat cheese on their on their co conspirators. If that's in fact the case here, we don't know that yet. There's a very interesting claim made in the Bloomberg article, it doesn't have an attribution. But this is the quote, the tokens importance to the market is clear. tethers in circulation are worth about 62 billion, and they underpin more than half of all Bitcoin trades. So that's interesting. Obviously, we know tether is super, super popular. But you know, this all happened the day after Bitcoin's price spike yesterday, and it went up from like 34 to 40k. Yeah, you know, and then these kind of jumps are not unprecedented for Bitcoin, but they are certainly not common. you know, this, this level of a jump, this is a big jump here, talking about, you know, jumping six $7,000 in a couple of hours or a day. And there's a bunch of theories around this jump. One was, you know, there was a Sunday night rumor that Amazon was going to be announcing Bitcoin payments and that they might create their own cryptocurrency. Well, Amazon actually denied these rumors today, also denying that they would launch an Amazon coin in 2022, but said it will continue to explore crypto according to a spokesperson, you know, if they were in fact working on a secret project to have Amazon coin, which doesn't seem unfathomable, or if they wanted to hold some Bitcoin or let people pay in it. I don't see why they wouldn't do that. Or, you know, maybe as an experimental project, but it's certainly if they were working on it in earnest with a major project, you probably know about that already, because they would have been hiring people. And when they interview people, typically the way these stories like the Apple car story, it's very hard to hire 100 engineers for a project and not find out about it the way Steve Jobs figured out that Google was going to launch Chrome, the Chrome browser was they were interviewing Safari team members, the Safari browser, obviously by Apple. So when you start recruiting in earnest for a project, that's when this stuff leaks, because people who get interviewed, don't sign NDAs, they might use a you know, handshake agreement to not talk about it, but they'll leak it if they get some currency out of it. Sure, some people will leak it. And that's how a lot of big projects like AR at Apple as well. The reason people know there's a lot going on with AR and cars and previously the watches because they they were hiring tons of people to work on wearables, and to work on cars and to work on self driving, and mobility. But according to an article by Coindesk, speculating on Bitcoin Sunday run up, here's the quote, experts say a short squeeze of heavily leveraged traders may have added to upper pressure on prices. Okay, So we've been hearing about this. This is called defy, decentralized finance, people are taking their crypto holdings, and they're getting levered against them. What does that mean? They're getting a loan, just like high net worth individuals might be able to have, they had $100 million in Facebook shares, they might be able to borrow 50% of that as a loan. And banks typically provide this to rich folks. Now it's coming down to anybody with crypto, you can borrow against your crypto, but if the price changes radically, either way, if you're shorting it, if you're long at whatever, you make it liquidated. So supposedly, a lot of people got liquidated. So the prevailing theory amongst pro Bitcoin people, I think, is the rumors of Amazon, which would be in the category of Tesla, buying a bunch of Bitcoin, just an incredible, incredible checkbox, you know, to get Amazon on board the Bitcoin train. But that turned out to be false. And I think it's false, because we're not hearing any jobs being posted about this, or, you know, a bunch of people being recruited. So I doubt it that, you know, Amazon's any more inquisitive than any other company. But it caused enough of a price increase, that little Amazon, you know, maybe got some people off the fence, which then created the short squeeze, if that makes sense. But the pro Bitcoin crowd is also I think, downplaying the tether DOJ probe. I could see the tether DOJ pro being leaked yesterday amongst people who are insiders, like let's say exchanges. And then if you are on these exchanges, especially offshore ones that use a tether, if you saw people cashing in their tether for Bitcoin, which would be the smart thing to do, if you think tether is going to collapse, or they might get arrested, etc. And it all gets frozen. Well, you would want to not have your money frozen, because it could be frozen for five or 10 years, just like when poker sites assets got seized, you know, you're you're just out of luck for years, you eventually were able to claim that you had some assets in there, but you had to jump through hoops. So any person hearing my voice right now who owns tether, and who's been listening for the last month must be trying to get out of tether and move their tether into Bitcoin or Ethereum, you do not get the stability or supposed stability of a stablecoin. But you do have something that you can download and put into your own wallet, put in cold storage and get off of these crazy, you know, exchanges that could also get seized. tether could get shut down. And these exchanges can get seized and everybody could lose everything where people can abscond with your money. So you got to get your coins into a wallet into cold storage off of these services, unless it's maybe Coinbase or something that runs in the West and you feel a little bit more secure in So I think that is, you know, what we're looking at here is maybe some of that, and it could be a combination of all of these things. Short Squeeze, Amazon rumors, DOJ rumors or tether, tether people move into Bitcoin, and you get this super storm. Dennis, vino Korov, hopefully I'm pronouncing your name correct. Dennis is the head of research at Synergia Capital Synergia Capital. He said that tether news is less of a market negative because it is an investigation into executives and alleged practices. He said that that's not as concerning as an investigation of what tether is stablecoin. I don't exactly understand his analysis there. But sure, whatever. It's all bad news. I mean, if, if you're any objective person looking at this from the outside, oh my god, what an issue this is turning out to be. I mean, people are gonna look back at this moment in time, whether tether is on the up and up or not, or fugazi or fraud or just loosey goosey with the rules or maybe bending rules until they break whatever they're doing over there. This is terrible for the industry. It is a just terrible black eye. If you're in the crypto space, you should be absolutely ashamed to share the crypto space with tether. You should absolutely get off of tether as quick as possible. You should not be associated with something with this much heat on it, right? This is like somebody involved in a heist who then goes and buys a Cadillac and buys a fur coat. You guys ever see Goodfellas where everybody shows up and they've all spent their money from the big heist at JFK or whatever it was. Like, that's not what you do. You're bringing heat to the entire space. Tether is bringing so much heat and scrutiny to this space that you don't want Tether on your squad. If you're in the crypto space, cut them loose. These, these guys are going to sink the entire space, get your dollars out of tether and put them into, you know, cash fiat, Bitcoin, buy Bitcoin, sell your Bitcoin, whatever it is, the last place any dollar should sit is in tether at this point, until such time as they're audited. And then they claim they're going to get audited, and it's not going to be years, it's going to be months. who's doing the audit, you know, we're going to play this cat and mouse with them, just like we did with Elizabeth Holmes for a year or two, where she's going to go to this conference, she's going to show up the machines gonna cure cancer, everybody's going to know, you know, with this pinprick, you know, 300 different measurements of the blood, and she just kept stalling and stalling and stalling until the whole thing collapsed. Is that what's happening here? Sure feels like it. Maybe it's not. But it feels like it. And if it feels like it, and you don't clean it up, you're the problem, tether, your CEO, your CFO, and in fact, your GC and your CTO, which I don't think actually have ever seen the commercial paper, I'm going to go out on a limb here and make a crazy prediction, the CTO, and the GC, the general counsel who are on CNBC, I don't think they know what's going on. I think they might be in an information vacuum. That's why they're going on CNBC in public because they have plausible deniability. How can they incriminate themselves? If they go, Oh, yeah, we have Chinese paper, The GC could say, Well, I just knew we had international paper, I never saw the paper, that was the CFO's job. And the CEO could say, Well, I don't know the CFO, I don't know where the CFO is. I'm, you know, I'm on some island somewhere. And that's what a lot of these crypto people are winding up doing. There's a reason why they're moving to weird jurisdictions and getting out of dodge. I think there's a lot of dirty stuff that went on here. And I think the postmortem on the crypto space is going to be Wow, promising technology, tons of grifters, tons of scams. And then the promising technology coming out the other side and changing the world. But we're in that middle piece right now, where it's just filled with scam artists, charlatans, and weirdos. And hopefully, this all ends and we can all move forward. If you're in the crypto space, distance yourself from tether is my best advice. If you own any tethers, liquidate them immediately. Get Bitcoin, get cash by Disney, you know, buy a company you love, Google, buy a house you love, buy a second home, whatever it is, you know, just my best advice is to be diversified, have a great portfolio and not play stupid games that are going to have a stupid outcome here. All right, we'll see you all next time. If you have any information on the tether investigation, feel free to DM. TWI startups and talk to our three researchers and producers, Rachel, Justin and Nick. And please put hashtag tether investigation and please share this video or audio file with your friends and on Twitter and social media so more people can know what's going on here. And we'll see as this unfolds and we'll keep you up to date. Thanks for tuning in. Bye bye.

### Human: I mean, basically, it's sort of like the the opposite of an IPO. And like in an IPO, you like you file your s one, and you go through however, like six months or whatever of review. And then once it's done, then you do your deal, and you raise your money and you become public. With a SPAC, you actually like you do your deal, and you raise your money, and then you file, and you go through that process. And so it, you know, crypto SPACs, which is a genre, there's like EB toll SPACs and everything else, right? Crypto SPACs are taking around, you know, typically like five or six months. So, you know, we had sort of said end of this year, early next year, but it's sort of just going through the kind of registration process, basically.### Assistant: So this is critically important. Right now I have a three monitor setup to beautiful dells turned horizontal. That's why you see me look on the left, I look at slack over here, I'm looking at restreaming your comments. And then here's my teleprompter with a camera Sony digital SLR. And then over here is like one of those nice little thin, you know, laptop monitors. And, you know, the ability to have this Mac can only support two monitors. So I had to get an extra box and some software called display link manager in order to manage a third monitor. So a lot of people have been complaining about this, why can't I have to respond my Mac. And it was because of some issues with the chips and the video processing to do high res monitors. Apparently, now they fix those. And they've brought back all the jacks, which are you know, amazing. So they're claiming this m one max 16 inch MacBook Pro has up to 21 hours of battery life while watching videos and up to 14 hours while browsing the web. directionally corrected my experience when I was in Italy, and I went to the beach to write the book for a week. I'll give an update on that at some point. It's going really well publisher loves the book agent loves the book concept looks like we're gonna deal in the next two weeks and then pick a date so i'm gonna go my same publisher i think i just love harper collins business i don't even know if i'm gonna auction it out again this time i think i'll just go with the. If they make a reasonable offer i go with the folks who did the last book because they were great to work with. And when I went to the beach, and I was typing and doing stuff, yeah, it would last all day, basically. And if your monitor is a little bit brighter, it might last half as long. So I think they, they do take into this, bringing the battery down to 60 or 70%. When they make those, it's not full, not full brightness of your monitor. If you don't have business insurance, you've failed one of the first steps in being a great entrepreneur. Startups should look no further than Embroker. E-M-B-R-O-K-E-R. Embroker's technology saves you time and money. Prices are up to 20% lower, and you're going to get better coverage than incumbents, and you go from sign-up to quote and purchase in just 10 minutes. When you work with a broker instead of business insurance incumbents, you're not dealing with these large, slow corporations. And the signup takes just days, not weeks. The process is completely transparent. There is no opaque pricing. And I'm going to quickly explain two crucial types of insurance you need. Cyber insurance. What does it cover? It covers hacks. They happen all the time. And you need to have coverage for that. plus D and O insurance. This is for your directors, people on your board and officers, the top five or six people at the company. If somebody does something dumb and you get sued, you need to protect the directors and officers because they're responsible. And even if you don't do something dumb and somebody still wants to sue you, because people can sue you for any reason. They could be wrong. You could be right. It doesn't matter. You need to have the insurance online so you can protect yourself. So instantly buy custom built insurance for startups. Go to in broker.com slash twist e m e r o k e r.com slash twist. And while you're there, get an extra 10% off by using the offer code twist. Okay, let's get back to this amazing program. And the new MacBooks are also being equipped with a 1080 p HD webcam for the first time ever, which is double the resolution was recent webcams, which to me seems like how is this taking so long? Like they should have a 4k monitor on these? What are they doing? This is something that all Mac should have, they should lead. And there's other companies that are leading and you can buy third party cameras. That's what I do when I'm doing the show on the road. I'll bring I have like a zoom camera or something. And then I just bought another little camera. So I've been testing a bunch of these different cameras. Sometimes I've even brought a digital SLR with me and a road kit. It's a lot of work to set that up. But sometimes worth it. If I go somewhere for a week, like if I go to Tahoe for the week, I'll bring my road kit. If I'm just going for two days, I'll bring my laptop and headset So how much are these going to cost? They're going to be ridiculous. I mean, if you really want to go for it with a 16 inch MacBook Pro, you're looking at three, three grand or so. And then if you want to put a lot of memory in it, like 64 gigs of memory, which you know, is reasonable for a video editor, 32 gigs, also reasonable video editor 16 gigs for me the minimum you need on any laptop to use a you know, a multi monitor setup with a lot of tabs open. And then you can put two terabytes of storage in this one terabyte of SSD storage, four terabytes or up to eight terabytes and the max is $6,000. Now that seems crazy. But you know, if you're a developer, and this machine is going to last you two years, three years, you're going to trade it in for half as much. know, the way I look at this is what is your computing costs per day. So I keep my computers for typically two years. And then I will give them to somebody who doesn't need as much of a power computer, or I'll trade them in, I do my phone every year or every other year. And I just take the total cost of the device. So here's $6,000. And, you know, 700 days, right? 365 times two 730 days, you're looking at whatever that is eight, nine bucks a day. Okay, that's a lot of money, but you're going to give the computer back and you're gonna get a $3,000 trade and let's say 50% trade in So now you're down to four bucks a day, I think that's the way to look at these devices four bucks a day, if you're getting paid 2030 4050 $60 an hour, whatever creative gets paid $100 an hour, $500, who knows, if you're high end, isn't it worth it. And so that's what I would encourage you to do is just take your number of work days number of days you use a computer, if you only use it five days a week, fine, you know, then it's 500 days into $3,000 or $5,000. And I think a cup of coffee is pretty good price to pay for your phone. And maybe, you know, two cups of coffee, or one cup of fills is one cup of blue bottle is probably the right price. So I'm definitely gonna buy it. I'm definitely gonna buy the maximum one, not with storage and memory, but I'll buy the 16 inch and see how it goes. And I'll let you know what I think I'm going to order it probably today. And I'll do the 32 gigs and one terabyte. I really don't need that much storage. What I do is I have a one terabyte external if I ever needed and I've never needed it. So I'm not storing giant video files, but congratulations to Apple on listening to their customers and giving their customers what they want. Here's another great idea for Apple. Your customers would also like a tower where they can change everything and change them in the MacBook Pro. They would also like more monitors. So just listen to your customers. I mean, and I don't know, I'm guessing the the new iPhone 14 next year, or the year after. is gonna have the headphone jack back. Is that what you're gonna do to us? So congratulations to Mac on listening to their customers takes it does take a little bit of courage to say we were wrong. We're going to give you reports back. We were wrong about the keyboard. We were wrong about the touch bar. We're just going to give you what you want. So yeah, you could buy a bottle of Pappy van Winkle from Saks for four or five or six grand or you could buy a laptop, I've always my whole career invested in technology, much to my chagrin of the amount of electronics I have sitting around, but man, if you can make yourself 1% more effective with a device, and you can buy six or seven devices and become six or 7% more effective, that's really worth it. That's really worth it. Man, it is so frustrating for me as the tech support person in the house, when my wife doesn't upgrade her phone, because I'm responsible for tech support. And I'm just by the newest one with the most memory, but the fastest chip with the biggest screen. And let's just 90% of the problems you're going to have are going to be solved. So great job to Apple. Congratulations and give us the new Mac Mini. I think Mac Minis are one of the one of the great sleeper sleeper hits over there at Mac. If you've ever had a Mac Mini, it's just a great device. And you can put them under like I have right now. This desk is a desk that goes up and down. Standing desk and I'm standing to standing desk. Yeah, the ones that go up and down. I got the little controls over here. And my Mac mini is bolted in a little tray underneath that all the cables are nice cable managed. And it's just a great aesthetic, right? I love it. All right. Next up on the program is the much questioned and the interview that many people bought would never happen. I knew what happened and just take a little time people are busy. But Jeremy Allaire from circle is on the program, you're gonna love this interview. As I predicted, he would be super upfront as I predicted, he's doing everything by the books. As I predicted, I think USDC is going to become the winner in the stablecoin business. And that tether as we've seen with their fines, they now have another second major bigger fine that they've gotten from the government here in the United States. I think tether is going to get absolutely run over by USDC. So I don't have a horse in the race. I don't own either of them. And I don't have investments in either. Enjoy the interview. In today's startup landscape, committing to security and compliance is vital for growth, and proof of your company's security posture has never been more important. As you scale, you might start to receive more SOC 2 requests from customers, and that's where Drada comes in. Drada is an advanced automation platform used by some of the world's leading chief information security officers, or CISOs. Drada will help you successfully meet requirements, support enterprise deal flow, and continually track compliance. Drada also helps customers easily prepare for and clear SOC 2 and other audits, so you can go from zero to audit-ready in a matter of weeks. Need more? Take it from Philip Martin, Chief Security Officer at Coinbase, and here's his quote. It became clear to me right away that Drada is an engineering powerhouse. The solution they've developed is well ahead of other market players. Their approach to deep, native integrations provides users with the most advanced automation available. So check out Drada's five-star reviews on G2 and see why companies like Clearco, Smart Recruiter, and The Good Face Project work with Drada for their compliance needs. Twist listeners can get 15% off and waived implementation fees at drada.com slash twist, D-R-A-T-A dot com slash twist. All right, next up on the program is serial entrepreneur Jeremy Allaire. I've met Jeremy God, when did I meet Jeremy probably in the cold fusion days, definitely caught up with him when he was doing break over just over a decade. And he, of course, was the CTO of macro media. Back in the 2001 to 2003 era. He's been working in the tech industry for over two decades, like myself. And he's currently running a company called circle. You can visit them at circle.com. They've got a collection of businesses which we'll get into today. And they raised $711 million pre SPAC. And in July of 2021, They announced that they would be spanking a deal that put the value of circle at 4.5 billion. And they raised 450 million in a pipe, yada, yada, yada. And I'm not sure when the SPAC actually goes out. Is that like, is there? So welcome to the program, Jeremy, is there like, when you do a spank like this, is there a specific date when it comes out?

### Human: It's crazy.### Assistant: poor Jonah Peretti and the team over there, like, they poured, you know, over a decade into building BuzzFeed getting to $360 million in revenue, and they're worth five or 600 million, which with 100 million in cash, they have means the business is worth one times revenue or 1.4 times revenue. And then Trump starts a SPAC does nothing puts up the worst white paper I've ever seen the worst pitch deck in the history of pitch decks, literally something that should be on SNL. I mean, and it's worth over 2 billion, and they've got hundreds of millions in cash, and they had a more successful IPO than BuzzFeed. What is happening in the world? This is peak NFT and peak SPAC. Both of these examples are examples of peaks. One of the ways to know you're at a peak is to look for the grift. So here's a lesson for everybody. Consider this a micro lesson for you. Shout out Scott Adams on his micro lessons. Here's a micro lesson. when people who have nothing to do with the technology, then go all in to secure the bag, and there's no there, they're kind of a peaky moment. We saw it with ICOs, right? Paris Hilton, and the Kardashians, everybody's ICOing, ICO this, ICO that, and then you saw some of them get fines. Some celebrities got fines, and then the ICO thing went away. And whoever bought ICOs was left holding the bag, I think, in large part. correct me if I'm wrong. There were 1000s of these ICOs. And I think none of them were money making. Correct me if I'm wrong. Is there a money making one file coin ICO? Maybe? I don't know. But I think almost universally the ICOs were became worth zero. Now when I say hey, listen, NFTs can become worth like close to zero 99% of the money spent could go to go away and there'd be 1% people say I'm crazy. But it's not exactly what happened with ICOs. And correct me if I'm wrong. 90 x percent of the revenue is gone. It's a grift. They took the money they ran NFTs, like the same thing 90% of the money spent on NFTs is gone forever. 10% may stick around 1% may stick around who knows. So be careful out there. All right, listen, have Apple's new privacy updates impacted your attribution for paid ads? I bet it has. Well, there's good news. The folks at Disruptive Advertising can help you. They manage over $250 million a year in advertising spend. That means they're experts. That means they get to see all these changes and they get to solve problems before anybody else has even figured out those problems exist. They're trusted by hundreds of brands like Adobe and Scott's Miracle Grow. So if your Google and Facebook ads are not scaling like they used to, you got to reach out to disruptive, they're going to look to help you scale your spend profitably. And how are they going to do that by diversifying your ad strategy on less popular platforms. And listen, every platform takes like a year to master. Well, they've mastered them all already. That's their job. It's all they do focus the marketing consultants focus on end to end tracking across your CRM, marketing automations and your e commerce platforms. So they're thinking holistically about your whole marketing stack. And And what disruptive really focuses on is contribution margin profitability and close deals. You don't want to just spend your money and give you a high five. No, you're looking at your actual business metrics that matter. contribution margin, your profitability, what deals you're closing with those leads, and they want to reach startups and midsize companies and help you grow. And obviously they work with the big companies already. So How about this? How about I get you $1,000 off your first month of service at disruptive advertising.com slash twist, disruptive advertising.com slash twist to get $1,000 off the great crew over there. I met the founder. They really love the show. They love helping startups. So go ahead and give them a shot. Right and then report back to me. Tell me how you did. All right. Let's get back to the program. This is a sign of the peak. But let's be honest, the Trump's pal in comparison in their grift. pal to previous presidents and families. According to the Financial Times, Penguin Random House paid $65 million for the global rights to two books written by Barack and Michelle Obama. And according to CNN Business, the payout for their Netflix deal was in the high eight figures. I'm guessing they got stock. I heard it was like, yeah, I heard this is like another 50 or something million dollar deal. This is a point of complete, complete randomness. And it's incredible how these two things are absolutely not correlated. They're correlated, but clearly not caused. Netflix socks went on a 40x wreck. in the Obama era going from 1.4 billion to 58 billion. It's obviously at 260 billion today. And Obama did a huge deal with them. These two things are obviously in no way related. And of course, over that decade, what was the number one issue for Netflix? Anybody remember what the number one existential crisis for Netflix was? Net neutrality, net neutrality, would they have to pay for all the bandwidth they were using on other people's servers? I wonder Wonder what the Obama administration's position on net neutrality was. Gotta look it up. I voted for Obama. Okay. So I'm just saying. Presidents, and their families are the grifters of the griftiest class. You can go back to the Clintons doing crazy speaking gigs. But yeah, maybe double click on that and take a look for me. All right. In other incredible news, and congratulations to the founders of Reddit, they just confidentially filed to go public for 16 years. It's been over 16 years, hasn't it? When 1.3 billion in funding, the announcement came last night. Steve Huffman has been running the company and Alexis Ohanian was there for a little bit. had a little bit of a disaster. I put Ellen pow in charge for like a year or two, and the thing just almost imploded from what I read. But they put it back in the hands of the founder, which is always the best idea. The S one is not available for us to review yet, because this is a confidential filing. So you know, they're filing, but they don't put all the data in there yet. According to the verge, the company has been considering the IPO for some time, we know that rumors have been out there. It's Reddit is probably the 20th most traffic site in the world. According to Alexa and similar web and other places. Here's an image of the chart with companies near them. BK is the Russian Facebook. But you know, they're obviously in a great area. In August, Reddit raised a $700 million Series F at a $10 billion valuation. And they're making hundreds of million in revenue. The round was led by Fidelity, according to PitchBook. which you know, public investors dipping down and doing those late stage ones pretty normal 100 million in ad revenue for q2 of 2021. So that's $400 million run rate 52 million DAOs. And so if we were to compare that to the revenue of BuzzFeed, pretty similar BuzzFeed worth 600 million, this company probably going to go out and be worth 20 times that I would guess now why, why would this be worth 20 times? Well, BuzzFeed hires a bunch of journalists to get their traffic, and Reddit hires zero. So the community driven network and community means lower costs, higher number of users, they have $52 million. I don't know what BuzzFeed has to be honest, but I think it's nowhere near that. And they have over 100,000 active subreddits. Those are like groups by verticals. And that was the big win, I would say in the history of Reddit. The two things they got right were subreddits and never changing the interface and just not being put under pressure. Kevin Rose put under a lot of pressure by venture capitalists to change the interface. Condé Nast had bought Reddit, so they didn't invest in it. So as a function of that ridiculous sale of like $6, $10 million to Condé Nast. I think they sold for $6 million or $10 million to Condé Nast. It was like a fire sale. It was crazy. Maybe it was more. Maybe it was $20 or $30. Anyway, Condé Nast got it for a fraction of a percentage of what it is worth today. And they apparently didn't really invest in it. So therefore, the interface didn't change. When the interface doesn't change, users can just use the product eBay, Amazon, Craigslist come to mind. And when you don't change the interface, users can just keep using it SEO can keep growing. And so over 100,000 actor says yeah, Connie Ness paid this, this is what things were like $10 million for Reddit in 2006. I had sold weblogs, Inc, for 30 million. And it was just sort of the nature of the time period, it was very small acquisitions, Reddit was considered kind of a sideshow. I wouldn't say joke, it was just considered like a silly message board. But a silly message board, when the community is truly cherished and valued. I think that's the genius of Alexis Ohanian and Steve, I think those two are product geniuses and community geniuses. I really do mean that sincerely. I'm not just saying that, like, they were able to really focus and understand their community. and then everything else worked out. Because if those conversations are baking constantly and people are submitting tens of thousands, hundreds of thousands of stories a day, and some number of them get discussions under it, all that content is free, just like chorus content is free stock overflows, content is free. And this is user generated content, UGC was all the rage in web 2.0. And so, you know, Reddit is now worth 1000 times what content has paid for it to have 450 million in yearly ad revenue, according to sources and 1400 employees, that means they're making $320,000 per employee. If you did that stat with BuzzFeed, I'm going to almost guarantee it's much less, but I could be wrong. We'll see. The point is, generally speaking, that user generated content means lower costs. I wonder what all these employees are working on. That's the crazy thing. And so giving a little credit for some growth on 100 million a quarter run rate, let's just say it's 450. At a $10 billion valuation, they're 22 times if they're growing at 20% a year, seems reasonable to me. I bet you they're also under monetized, which basically means they're probably not making as much per page view as BuzzFeed or, let's say, Jim Bancroft's box properties. And so the media business is really hard, you have to deal with a bunch of journalists and content creators. which is brutal. Because if you self select to be a journalist or a content creator, you are by definition opinionated by definition, a debater great with words. In other words, you're a management nightmare. Writers are the most difficult people to manage in the world journalists You see this, because what's the big existential crisis for all of those publications? It's the unions and the unionization and the employees walking out, and then making crazy demands, yada, yada, yada. That's what Fankoff and Peretti and all those people are struggling through. Even the New York Times is like, wire cutters walking out, everybody's walking out. It's literally like managing journalists, trust me, I did this. And now I have analysts that inside and managing those folks, it is like managing like the members of the Dungeons and Dragons, theater, and debate club. Like imagine 100 people who were in all three of those clubs, they played Dungeons and Dragons, they were in the theater club, and in the debate club, and now you have to manage them.

### Human: Every startup needs to ensure they own their intellectual property. And that all starts with filing your trademarks. The trademark is the trade name that you're gonna use and that you don't want other people infringing on. And this has been my life for decades, building different media properties in Gadget. Somebody tried to rip that off and doing Gadget in another country. If you don't know where to start, I have a great solution for you that I've started using. It is the easiest way for you to protect your IP. It's called Brainbase File. Brain Base File, a clean, simple and automated trademark filing platform that gives anyone the ability to protect their best ideas. No need to spend thousands of dollars on a law firm to file your trademarks for you like I've done in the past. Now you can do everything yourself in a few easy steps. Brain Base File gives you goods and services recommendations using AI, our artificial intelligence. So you can avoid the back and forth office actions with the US Patent and Trademark Office and eliminate all the human error. They also offer full transparency into the USPTO process with step by step notifications and real time updates on your trademarks approval. So here's the call to action. This is an amazing one. No one likes dealing with trademarks, but brain based file makes it easy. So you don't need to procrastinate any longer. Just head to brainbase.com slash file F I L E to learn more and file your first trademark for $199. I can't believe that price. It makes me want to go do all this cleanup. So simple, so elegant. It's the literally the product I've been waiting for head to brainbase.com slash file.### Assistant: Hi, everybody. Super happy to be here with you today. My name is Lil Roberts, and I'm CEO and founder of Zendu, a fintech company doing online bookkeeping and accounting, early mover in the space through technology. Happy to be here today. We're going to talk about your financial health as you're scaling your startup. And as we all know that it is tough and that we are all building the plane as we're flying, right? You know, we're out there and that applies also to just regular businesses, but especially with startups, we're building the plane as we're flying. And so today we're going to talk about six steps to healthy financials, and we're going to kind of debunk all the different pieces of it so that you can determine what you need when. So first one is we're gonna get started with the right structure. So the right structure has two pieces to it. It has an entity type, which is really your legal protection. So when you think about whether you're going to be an LLC or C Corp, a lot of startups Will start out as an LLC will start out as a multi-member LLC because you're in a trip left right family friends and feel fools want to write off all the expenses in the early days right so they're almost getting back through tax savings their investment but as you go out for the institutional investors and you start to go west or wherever you find the money in the US. They're gonna want you to be a c-corporation and the reason being is there's a lot of legal protection for the company and for the investors when you're a c-corporation because you're bound by Delaware law or Wyoming or Nevada and it gives the investors a lot of rights. So entity type legal protection is what that's for. The second piece to it is the tax type of your entity. And that's where the money comes in, right? So you can be an LLC and you can be taxed as a C corp. And what that means is that you still have the legal liability side of the LLC and some of the flexibility, but your tax structure is a C corp, which means that you're going to be taxed on the exit of the business versus being an LLC tax type, like a 1065 or an 1120 S or a schedule C, where you're going to just pass those tax savings and take advantage of them right then and there that year. Key takeaway here. Is that the wrong text type and you're burning money right if you have the wrong text type you could be losing out on tax savings that you can't recover from at a later date. Also on the legal side of it the key takeaway is you don't want to go through if you know that you're gonna go out for institutional investors and there is some great benefits to have an institutional investors for your scaling startup. And they're going to want you to be in the C-Corp. And if you do it later on, it usually costs a lot more money than if you would have left the shoreline as a C-Corp when you started out. So as we get into the second one, the revenue business model. So there's so many different business models out there. But when we think about scaling startups, they really fall into mostly four categories. There's the SaaS category, whether it's pure tech or tech-enabled like Zendu. There's the product category, marketplace, and e-com. And we're going to break it down into each one, some of the accounting tips for them. So revenue business model sass right software as a service or service as a software the big takeaway here is deferred revenue right if you look at companies like jump cloud calm slack and send you as a service as a software. When we have subscription plans for our customers, typically there's monthly plans and then there may be quarterly plans and annual plans. And if you are booking revenue that's coming in where the customer's paying you, say 12 grand for the year, and they're paying it in the month of March as deferred revenue, you should be recognizing that as one 12th each month. Now, what happens is, is it's a timing situation for deferred revenue model. You don't want to necessarily start out day one because it adds a lot of complexity to accounting. And we'll get into that in the next couple of slides. physical product business model. Uh, the complexity here is going to be your inventory, right? Because you're going to have raw materials, companies like Peloton and Ness, Sonos and H-Sleep. H-Sleep's amazing. I have one based on Jason's recommendation and it's absolutely incredible. So there they have raw materials and then they have finished product. So they're gonna have working process that they need to account for on the accounting side of it. You should be accounting for it because that is an asset that should go on your balance sheet. And then you have the complexity also of how much inventory you have. And at a certain size, you're going to be taxed on your inventory. And that is when your businesses get much larger, that that will happen that you're accounting for that on your balance sheet. Marketplace businesses, Airbnb, Uber, Etsy, Amazon, Seller Central is a marketplace, Rakuten. So this business is a little bit unique, right? Because there's a commission. It's what's your take or what's your rake. So as an example, say you're booking a million dollars a month. On gross revenue right so you are your software is a platform that is sitting in the middle so it has customers on one side and it has the people providing the product or service on the other side and you're acting as a technology middle man in between. So you may be collecting and booking a million dollars a month, but if your take is 20%, then really your revenue is $200,000 a month and your expenses are going against your revenue. And this is really important because if you're looking at your profit and loss and you're booking that million dollars as that's your company revenue, then your expenses are going to be a much smaller percentage and it's not really accurate to what your true business model is. So marketplace, typically cash businesses, because you're going to get the revenue at the time that the product or services is being exchanged. Econ businesses fastest growing business model right now. And the pandemic certainly helped it for the conversion to more people being going through purchasing product through a digital mechanism. The challenges here on the accounting side is going to be cash flow, right? You have to go ahead and put 50% debt deposit on your goods before they go across the ocean. If you're buying them, you know, in Europe, if you're buying them in China, and then you have to put the other fifty percent down before you ever get the product before you ever sell it so you need to account for that through your accounting so you have an idea of what's happening how much money is in process what kind of cash flow challenges you may have and then the other piece with the ecom side. Is sales tax. A lot of controversy over it. Amazon has made it a lot easier for their resellers in recent times where they're collecting the sales tax. On Shopify stores, they'll collect it for you, but they're not paying it or recording it. So you're going to be responsible for that. Zappos, Watchbox, Pod.com, all types of e-com businesses. So again, sales tax, cash flow challenges. Another responsibility or an add-on expense for you with e-com businesses, if you're an e-com startup, is the tech stack. So to have additional detailed visibility, you're going to need additional tech stack that are other costs for you. And those are things like A2X that will track refunds to the detail level for you through your Amazon or through your Shopify store. tax jar or Avalara to capture sales tax and file sales tax. So to give you an idea of expenses in this, so sales tax, if you're selling in 20 locations of Amazon and you have Nexus in 40 states because of the volume of sales that you have, each state has a different number that once you reach that for sales tax, they want you to report on, you would have to do 40 filings a month. And that could be $30 per filing. So just the mechanism to file could be $1,200 besides the sales tax that you owe. So imagine if you're a startup only doing, you know, a million dollars and you're selling across a lot of states and your product is not that expensive, you're going to be collecting sales tax and filing sales tax, and it could cost you more a month than what you may owe. in the sales tax. Trade Gecko, another great add-on app for capturing inventory, and then Zapier, which we all know, right, for middleware to sync up. So now that you have your business model, you know what business model category you fall into and you've dealt with your legal entity and your tax type, now we move into number three, which is cash via accrual V modified accrual, right? Which is just somewhere in the middle of the two. So how do you know which one's right for you? So it comes down to a couple of questions that will inform you on what may be right for you. So business model, we just covered. Complexity, we covered some of the areas that your business could have some complexity in the accounting side of it for you. timing timing is all about you know what's your revenue and if your revenue is early day and you want to do a cruel counting you're gonna be paying a lot of money and spending a lot of time and i love what ben said earlier about founders need to be involved on the accounting side of the business crucial crucial you know we do online bookkeeping and accounting and tax returns but For the startups that we work with and we work with small businesses all over America and in 12 other countries, it's important that the founders stay involved with their finances. Super important because that's where you're going to save the money. Those founders that did that are the ones that made it through the pandemic by being able to conserve and keep their cash in the bank so they can deploy it now as the world's opening up. So cash versus accrual. Cash is all about the time that the expense happened, right? When the money came in or when the expense happened, that's cash basis, right? When it leaves the bank is on a cash basis. Accrual, on the other hand, true full accrual, is about accounting for the period that the expense or income actually occurred, not when it was received. So if somebody paid you 12 grand, for an annual subscription, and you got that in March, you are going to take one twelfth of that, and that is accrual. That is what part of accrual accounting is, along with prepaids and along with inventory. Modified accrual is when you're keeping track of some of it, but not all of it. Maybe you're booking your inventory number every month. Maybe you're booking your prepays, but maybe you're not taking the revenue that's coming in and putting it across a deferred revenue model and doing journal entries. So it comes down to when the right time for you is, is when it makes sense for your business model and for the additional time and effort because accrual accounting costs a lot more than cash accounting does, right? And then there's also tax benefits. Lots of times people like to stay in a cash basis as long as they can, because they're going to get the write-offs right then and there instead of in the future. So the key takeaway here is that the size of your business, right, is going to determine it. That's going to help you with the timing and the effort that you want to put forth for that to do accrual. And one of the key things here is that when your business reaches, you may be cash for a long time, when your business reaches 20, 25, 30 million, you need to be talking to your advisors and you need to find out is your business, is it mandatory that you have to be in accrual? And if so, to convert from cash to accrual is about changing a lot of the systems and processes that you're doing inside your business to capture it and that you'll have to make that conversion because otherwise, if your business is a mandatory accrual based business, the IRS can come knocking and none of us want that, right?

### Human: No.### Assistant: Is Airbnb going away? No. Google, Facebook, Instagram. Are these things going away? Amazon, Netflix. One of the things that happens in startup land is when you get escape velocity, you have now made it to orbit. If you make it out of the Earth's atmosphere, the chances of you coming back down to Earth are very slim. You have made it to orbit. And that's what Robinhood, Comm, Facebook, Instagram, Tesla, these companies made it to orbit. it's very hard for them to come back down to earth in fact yahoo and aol it's taken them 10 years to come back down to earth and they still got bought for a couple of billion dollars so even when things are going poorly you know for like companies that are clearly in the rearview mirror like aol and yahoo It takes decades. They still have a billion people using their services. Very hard when you get escape velocity. The old guard TD Ameritrade $130 billion market cap. E trade owned by Morgan Stanley $150 billion market Charles Schwab $130 billion market cap. Fidelity $13 billion market cap. So Robinhood is the the Charles Schwab, it is the E trade or Ameritrade for this next generation. And it's a better product and it's easier to use. They obviously make money from this order flow payment for order flow, which people are opting into kind of like advertising where you give a little bit to get something for free. But There's a $5 optional membership to Robin Hood gold, gold payment for order flow makes up 40 to 55% of Robin Hood's revenue, according to business of apps. So if you split the difference, we'll call it 50%. You got 331 million payment for order flow in q1 of 2021. According to securities filing, And if that's half of total revenue, that would put their revenue at 662 million for the quarter, you times that by four, you got about a $2.6 billion run rate. That's if it doesn't grow in 2021. And or maybe it slows down, who knows. But it's fine to just take four quarters and times it by four and let's call it 2.6 billion. If you had a $40 billion market cap, that would be a 15 times revenue, which is pretty reasonable in this market. So I think 30 to 50 billion is where this will wind up and I could see trading double and it could be a 60 to $100 billion company out of the gate. And if you're going to buy stocks, obviously do your research. My belief is you should buy stocks that you're willing to hold for 10 years. If you're willing to buy the stock now, you should be willing to hold it for 10 years. That's my personal philosophy. I've been an Uber shareholder for I guess 11 or 12 years, 12 years now, maybe I like to hold things for the long term. If I love the company, I love the management team. And that's the case here. I think there'll be a great singularity. I think Robinhood, Coinbase, Wealthfront, all these services are going to provide everything eventually. I don't have any inside information, but if they're doing crypto and stocks and managing your cash, You know, I wouldn't be surprised someday if Robinhood gave mortgages or Robinhood had bank accounts and checking accounts and all this other stuff. You could see all that being one singular service. And I think I mean, I'm talking my own book here. I think Robinhood will be a trillion dollar company in the next decade. That's my personal belief. I'm long the company and have been since I met the founders. In other amazing news, Squarespace, my friend Anthony Castellanos company, Squarespace did the direct listing on the New York Stock Exchange, you can see the founder Anthony on episode 112, not 1012. But 112. That was over 10 years ago back in January of 2011. And he's gonna come back on the pot soon. We know one person who was super excited about this direct listing, right, three ways to go public. Basically, you do a traditional direct listing or a SPAC direct listing, all the shares go out at once at this one price. And everybody can freely trade it. And you don't have people flipping the shares or insiders not going along. which my good friend Bill Gurley, who you can follow on Twitter at B Gurley, his tweet, another direct listing tomorrow. Great to see so many courageous and intelligent founders look after the interest of their employees and shareholders smarter and more elegant approach. Sure beats giving away equity for free. Say no to 30 times oversubscribe. And what he's talking about there is what he's been preaching, which is the people who get screwed when the banks oversubscribe these deals, and then have this first day pop are the employees of the company who have to hold typically for six months, the investors in the company have to hold for six months plus, and who don't flip their shares. And The company sold shares at $30, let's say, and then it triples or doubles. Well, they would have gotten twice as much or three times as much money, it would have been more capital efficient. The traditional IPO seems to be waning. And I think we will see more people taking this, this brave approach, like Spotify did or the SPAC approach, you can follow the ticker sq SP, I love Squarespace, it's an amazing site, and amazing service. And I've watched them grow and add services to it. They started just as beautiful websites. Then they added e commerce functionality, SEO functionality, you've heard me read the ads here on this week in startups for close to a decade, they've been a great partner of this podcast, they assigned what's called a reference price of $50 a share, which puts them at a $6.8 billion market cap. They recently raised 300 million at $10 billion valuation. So this valuation is a little bit lower, but there's usually conditions in there, if it does go back, that the investors in that previous one get extra shares, who knows if that's the case. A lot of investors like Tiger Global, Dragoneer, Excel, General Atlantic, T. Rowe Price and Fidelity dip down into that private funding. And we covered Tiger Global's aggressive strategy with Everett Randall on episode 1207. You know, he wrote that great blog post, one of those young guns who we like having on the podcast. 2020 revenue, 621 million. 28%. That's a high growth company from 485 million in 2019. And it's a software company, and it's a subscription company. So it only gets better. That's why subscription companies do great, whether it's consumer subscription, like calm and FitBot and Steezy, a musician tone base, or it's SAS, like Slack, or Salesforce, or Zendesk subscription businesses are amazing businesses, because every month you start with somewhere between 90% and 110% of what you had last month, whether you have high turn, or you have land and expand happening. So 94% of their revenue is subscription based and they're they added 700,000 new subscriptions in 2020. That's phenomenal. Like is it Netflix or Spotify? Of course not. This is a business service, but it is doing amazing Squarespace was profitable in 2020 recording about 30 million profits. which is crazy, like, why are they profitable, they should be in growth mode. But you know, that's a pretty healthy sign of management can make a profitable, that's a big debate, should you be money losing and growing really fast? Or should you be profitable, they chose profitability, that's fine. But their valuation would put them at 10.9 times the $6.8 billion valuation of their revenue to their multiple. So that's, again, pretty reasonable in today's market. Squarespace, you know, had a tiny loss of 10 million in q1. I think people would like to see them invest probably more. And this is the craziness of being a founder of a public company, you'd have one group of people saying, why are you profitable? Take an Amazon or Uber or whatever like approach Tesla to build, build, build for the future and get to scale and see how much market you can capture. while other people are like be boring and you know, show profits and you know, be a money printing machine. Both of these models work and typically they work at different points in time. Squarespace 2021 run rate 750 million pretty great. You have some other competitors like Wix, which is at a $1.2 billion run rate, and they have a $12 billion market cap Shopify, obviously, a $3.9 billion run rate. So there's a great cohort here. Go Daddy obviously does domain names. I think they started long before. Squarespace, but Squarespace is in the domain name business. You have Weebly, which is owned by Square now, and they had 625,000 paid subscribers at the 2018 acquisition. So web publishing is a great business. And it's a great cohort. Congratulations to the team. It's crowded, but it's a fantastic, fantastic market. And one has to wonder, when does WordPress go out automatic owns WordPress, Tumblr, and their last public valuation was 3 billion, which is probably, you know, grown now by four or five times that we had met Mullenweg on Angel season four or five. And so I think he talked about possibly spinning out and doing SPACs when I pressed him on it. So I wouldn't be surprised if we see a WordPress or some of their other products spinning out and going public. So congratulations to the team over there. Hey, everybody, I just wanted to put a little end note here, a button, a cap at the end of the podcast and let you know that I love talking about what's in the news and giving you my opinion. And you've responded that you really enjoy when I talk about the news, I get that all the time. So we've hired another producer here at This Week in Startups. And I've decided that every day at 10am, I am going to spend some time in front of the camera talking about the top two or three news stories every day. The podcast is now four days a week or so. And obviously on Fridays, I do the all in podcast. So I'm a five day a week podcaster. So check your podcast reader and your downloads because I'm going to comment on the top three news stories for news stories every day going forward. going to try to get to five days a week. And thanks to all the sponsors and partners who are making that possible for us, you can show your love by clicking on their links. And when you buy their services using the twist code or whatever it is, and thanking them on Twitter, that's super helpful for us. And if you made it to the end of the episode, here we are in the second data second decade of this week in startups. And I named it this week in startups, so I could do it once a week. And now it's basically becoming a daily show. So we're not going to change the name. But Like, you know, some people who do the daily at the New York Times or Ben Shapiro or Scott Adams, those people doing a daily news show. I'm committing to doing that pretty much till the end of this year and see how it goes. If you like it, please tweet it, please retweet us, tell your friends about the show. We're still going to do interviews. So the format of the show will likely be some news up top, followed by an interview, or some other content like ask Jason, etc. But we're always going to start with that news and chop it up between us. Okay, thanks for tuning in. Love you guys.

### Human: And you were anointed basically, if Sequoia invested in you that was like, okay, seal of approval. This is a legit company.### Assistant: We came up, you know, obviously, I know Joe told the founding story. But I'll tell a little bit of the There's a founding story, and then there's Jason's story of all the rejection. The first time we came up with the idea, it was October 2007. It was for a design conference that was coming to San Francisco. There was an after party at the Fairmont Hotel. We went to the Fairmont Hotel. The first person I told about the idea, he looks at me with a straight face. He said, Brian. I said, yes. He goes, I hope that's not the only idea you're working on. That's what he said to me. And this is like a design luminaire in our industry. And that was kind of the general sentiment. I remember in January, February 2000, 2008, Joe and I were living in San Francisco, an apartment, and we had a roommate named Phil. And Phil worked for this company called Justin.tv. Justin.tv was a precursor to Twitch, and it was funded by this program called Y Combinator. Now, I didn't know anything about Y Combinator. I didn't know anything about Silicon Valley. I didn't even know what angels were. Somebody once told me there are these people called angels, and I said, oh my God, this person believes in angels. So I was really naive. I didn't know anything about Silicon Valley. I was a designer by training. And Michael said, I can introduce you to these angel investors. And so Michael introduced us to like 10 to 20 angel investors. Now, at the time, Jason, we were trying to raise $150,000 at a $1.5 million post money valuation. So for $150,000, you could own 10% of Airbnb. And the majority of them didn't even reply to the email. I actually ended up publishing a bunch of the rejection emails. But many people said like, this isn't a good idea. Many people said like travel, we're not like excited about travel. I remember one investor said, we love everything but you and your idea. In other words, we don't, I'm like, well, everything else is good. I, unfortunately I was like, so I thought to myself, wait, what else is there? There's me, there's the idea. Yeah, I guess there's the name, but they don't, they didn't like the name either. So, and what they meant by they liked everything but us and the idea was, It was three founders, one software engineer and two designers. And they thought, well, you have like two too many designers in your founding team, you know, like people just associated designers as like non technical and therefore like maybe not adding value. And I think they I always felt like Joe and I our ability as being designers was actually part of the secret sauce of urban because it was not a pure technology problem. And also people said this is crazy. Strangers never say they're strangers. So basically, no investors will invest in this company. Everyone rejects us. It's now the like fall 2008. We had just provided housing for the Democratic and Republican National Conventions, you know, Barack Obama, John McCain were running for president, with the airbeds weren't working, we were renting out airbeds, they weren't selling. So we thought let's go with breakfast, we're air bed and breakfast. And so Joe and I ended up creating this collectible breakfast cereal, these boxes of Cheerios, we called Obama-Os, the breakfast of change. And then we bought Captain Crunch. And we read that John McCain was a captain of the Navy, and we called it Captain McCain's, a maverick in every bite. And it seemed kind of crazy. We made these cereal boxes and we actually printed and like made $30,000 worth of cereal boxes that we sold. And you know, those baseball card binders that kids put those binders with kids, but we used to put credit cards in them. In other words, we funded this company tens of thousands of credit card debt. We use the cereal boxes to get us out of debt, but now it's like October 2008. We've been working on this idea for like a year. At some point, my mom said, are you a cereal company? And I, I technically, I think we were, I didn't want to admit it. I guess we were serial entrepreneurs, but not the right kind of serial entrepreneurs. And, um, And I remember I was with, out of desperation, Joe and I went to dinner with Michael Seibel. And Michael Seibel, he had co-founders Justin Kahn, Emmett Shear, and Kyle Voigt. Emmett runs Twitch, Kyle Voigt runs Cruise. And we went to like a Thai restaurant in San Francisco. And it was like towards the end of the year. And we're like brainstorming what to do. We were kind of screwed. We're like, everyone said no to us. We have no traction. We're selling collectible breakfast cereal. Everyone thinks this idea is no good. No one wants to fund like two designers and an engineer. What do we do? And then Justin says, I have an idea. Why don't you apply to Y Combinator? And it's like, and we're like, but we already, we already launched. Why would we apply to Y Combinator? And they're like, because you're dying. You have no like growth. And And so we go on the Y Combinator website and we realize that the deadline was the night before. In other words, it had just expired. We couldn't wait for another batch. Oh, by the way, Jason, the financial crisis you remember had just happened. I remember one investor, I'm not going to lie, one investor told me, he said, the economy is so bad, we won't even invest in good companies. You think we're going to invest in Airbed and Breakfast, an unproven concept, people staying with each other? Oh, and one other story is that Joe and I went to University Avenue. We met an investor, who I won't name, He orders a strawberry smoothie. He then sits down, drinking the strawberry smoothie. He never picked his head up. At my first interaction with an investor, I'm like, maybe this is what they all do. He goes, uh-huh, uh-huh, uh-huh, uh-huh, uh-huh. And then within 10 minutes, he like leaves. And I thought like he had to park his car. We haven't seen him since though. That's hilarious. So at this point, at this point, we're like these bad news bears of Silicon Valley, we were like rejects. And Justin Conn, we're at dinner, and they're like, Oh my god, you're totally gonna die now. Because like, you can't get into Y Combinator. And then Justin Conn says, I'm going to email Paul Graham." And he ends up emailing Paul Graham and he goes, is this deadline definitely, definitely over? And Paul Graham says, I will extend it to midnight tonight. It says like 9pm, okay? Yeah. But they have to apply by midnight. Now, Joe and I are in San Francisco. We have a co-founder named Nate who's an engineer. He's in Boston. Now, it's like midnight and Nate kind of doesn't sleep past, I think he went to bed. So, I told Joe, I said, okay, well, divide and conquer. I will fill out the application and you will convince Nate, you're going to wake his ass up in Boston and convince him to do what I come if we get in. So, he calls Nate. Apparently, he goes, Nate's in. I'm like, great. we fill out the application, we submit it. Then a week later or whatever, we get an interview. And then we tell Nate, and I think Nate's like, wait, what? What did I agree to? I agreed to like move to San Francisco. So You know that movie 8 Mile where like Eminem, he's like, you got like one shot. This was kind of it. This is like our one shot, right? So we like prepared for this interview like crazy. And we were warned, this is going to be like a 15 minute interview. And they're going to ask you four questions at the same time. And you better know every answer. And Justin and Michael and Emmett said like, just know your numbers inside and out. So we basically did like rehearsals. We almost recreated like NYPD Blue or like, like we throw a phone book in each other's faces. Like we just like, we were just like, we better get this right. So, we go to Y Combinator, we go to the interview, it's exactly what I expected. It's Paul, it's Jessica, it's Trevor Brackwell, and it's, I think, Robert Morris. And they're all like, basically, they all ask us questions at the same time. Like, all four of them. And I was like, totally bewildered. And the first question Paul Graham asked me is, people are actually doing this? And I said, yes. His second question was, what's wrong with them? And the interview at that point went downhill from there. Midway through the interview, he basically tried to get us to create Stripe. He's like, you should create this like payments company or like an online bank or something. And we're like, that seems like a really good idea. But like, we have an idea. And we're about to leave the interview. It doesn't seem like it's going well. And Joe takes out a box of ObamaOs. And he hands it to Paul Graham, and Paul Graham's like, looks like he just got a novelty gift. He's like, all right, thank you. And we go, what's the story? He goes, this is how we funded the company. And he goes, what do you mean? He said, well, we told him a story how we like made the cereal boxes. And then the way we sold the cereal boxes, we mailed them to reporters and they put them in their newsroom desk and everyone buy them. And he said something like, I guess if you can convince people to pay $40 for a $4 box of cereal, then maybe you can convince at least some people to stay in each other's homes. And he ended up admitting us to Y Combinator. And I guess we've never looked back since. I also want to give credit to Jessica because I think Jessica thought, I remember Paul and Jessica said later they thought we were like cockroaches, and I think they mean it in a good way, that it was like an investment nuclear winter, and in a nuclear holocaust the only thing that survives are cockroaches, and the only thing that would survive an investment nuclear winter would be the founders of Airbnb. We said we won't die no matter what happens, and so they basically funded us because we seem resilient, unkillable, and like, even if the fundraising market was dried up, we would just go on. So, it was definitely not a story to glory in the beginning. And I like to remind founders of this, because then when we got product market fit three months later, we got funded by Sequoia. And so, in a three month period, we went from like, kind of like this untouchable company to Sequoia. And if you were a part of Sequoia, so you'll remember 2009, I would say it was like, it's I don't know, it's like going to like an Ivy League school or something like it meant something was a real seal of approval. And it was crazy.

### Human: Womp womp.### Assistant: Alright, I'm going to do a quick rundown on what is happening with the semiconductor economy because of course, the US has made this big push with the CHIPS Act to reshore semiconductor manufacturing, and, you know, foundry building and really creating resilience in this specific part of the economy. And there is only one minor issue with this effort. And that is that we don't have enough engineers, apparently, to build semiconductors. In fact, The estimates are that the US chip reshoring push is going to need 50,000 new engineers over the next five years. Now, obviously we have a widespread STEM sort of shortage, right, across the board in the United States. And now there's this kind of need for these specifically trained engineers in this area around manufacturing. So as a result, this act, as we know, let's just recap, is designed to boost competitiveness, innovation, and national security in the United States. and increase domestic semiconductor manufacturing. The CHIPS Act did allocate $200 million for worker training, which is great. Companies like Intel and the National Science Foundation have increased training. And now, Purdue, and I suspect that Purdue will not be the last, Purdue is one of the country's biggest engineering schools, and it's specifically expanding its semiconductor education, aiming to graduate 1,000 semiconductor engineers annually as soon as possible. This is, however, a big jump. First of all, it would be $1,000 a year. We need $50,000. I'm not trying to be a downer. This is great that this is happening at Purdue, but For scale, according to the Washington Post, Purdue currently graduates about 150 semiconductor engineers per year. And imagine how this happened. It's a pretty straightforward march, actually, even when you look at, you know, you can kind of compare it to venture capital and the tech industry writ large. It all went software and it all went apps. And so even students who are in STEM fields, and there are a shortage of those students, are primarily pursuing coding. And so now we're trying to shift to a different type of engineering. In some cases, it's going to be physical, they will literally be chip manufacturing, it may be a different type of engineering and coding that, you know, people aren't doing now. So it's a big overhaul in terms of curriculum and training. Purdue invited semiconductor experts to join a new advisory board to make recommendations on that curriculum and training. The Washington Post also reported that Defense Department officials went to Purdue to talk about workforce training, because again, this is seen as increasingly a national security initiative. According to salary.com, the average semiconductor engineer salary is $114,155. I would love to see actually how that compares to software engineers. And if that's going to go up, I would imagine that it is as this becomes a bigger and bigger push for the United States. It also I think, you know, we talk a lot on this show about the ways in which immigration reform is totally necessary to fill gaps across the economy, whether it's doctors, nurses, vets, semiconductor engineers. And I suspect that we will start to incentivize immigrants with new visas. We have some existing tech visa programs that yes, everybody agrees are flawed in various ways. But I would not be surprised if there are expanded visas for people who want to work in this industry. And then it's going to take a bit, you know, we've had decades now, right, at least one solid decade of learn to code as a mantra within the US economy that if you get into tech, this is a great way to make a great living. learn to painstakingly build and fabricate tiny little semiconductors is going to be a different, it's going to be a different kind of pitch. And it'll be interesting to see how we work to incentivize these incoming students and workers to do this kind of, in some cases, like I'm saying, physical engineering, and I have to be completely transparent here. I don't know that much about what goes into semiconductor engineering, I know that it's incredibly painstaking. And you have to work in like a clean room, you know, like those Intel commercials, and also in full transparency, one of our one of our producers said that it sounded kind of boring. But hopefully it is not boring to everybody. Nevertheless, there's going to need to be a PR push. Thank you. Producer Brian, the new guy looked up the average base salary in the United States for software engineers. That is 121,806 with usually additional cash bonuses of about 14,000. So total software engineer compensation $136,260. And in order to begin a career as a semiconductor engineer, you have to at least procure a bachelor's degree in material science and engineering, or applied physics with emphasis, emphasis in fields like computer science and electrical engineering. So pretty different path forward. I mean, I think it sounds kind of cool. And I hope that other people do too. But it is going to, it's going to get interesting really fast. And of course, this push to increase workers is coming, as Washington is imposing new export controls on the industry. Now, semiconductors made with US tech for AI for high performance computing and supercomputers can only be sold to China, if you get this very hard to obtain export license. US citizens and entities are now barred from working with Chinese chip producers except with specific approval. And this prompted the Chinese chip maker YMTC to ask American employees in quote, core tech positions to leave, because it now has to comply with these new US export controls. So disruption is hard, changing the path that our economy has been on for the last few decades of globalization is incredibly difficult. And I don't want to say we have the cart before the horse because both the cart and the horse have to get somewhere quickly. We have to do this on shoring push. I don't think anybody disputes that it's necessary. And given what we've seen in China and the Biden administration sort of hardening stance toward China, there's no evidence that we're on the wrong trajectory, but it is going to take a dramatic increase in workers to get us there. And I applaud Purdue for jumping on this immediately and making it a competitive advantage for that school. I hope that other schools will do the same thing very soon. All right, let's keep up with some international news here. I just get to I get to do all the international news by myself. India has fined Google $113 million and ordered the company to permit third party payments in the Play Store. So this is a big deal. because this is a huge market and potentially because it could set a precedent for other platforms even in the US who knows but here's the news as we have it so far the competition commission of india has slapped google with this 113 million dollar fine for abusing its dominant position of the play store The CCI ruled that developers are allowed to use a third-party payments processing service for in-app purchases or for purchasing apps. The case was opened toward the end of 2020. It said that Google's in-app purchase policy constituted an imposition of unfair condition. So this Indian antitrust watchdog has directed Google to introduce a series of changes to the Play Store policies within three months, including The following, Google shall not impose any anti-steering provisions on app developers and shall not restrict them from communicating with their users to promote their apps and offerings in any manner, non-interference basically. Google shall not restrict end users in any manner from accessing and using within apps the features and services offered by app developers, aka Google will just get out of the way and let you use the app the way you want to use it, including how you pay for stuff, presumably. And then finally, Google shall not impose any condition, including price-related conditions, on app developers, which is unfair, unreasonable, discriminatory, or disproportionate to the services provided to the app developers. Google also has to be transparent in communicating with the app developers about the services provided and the corresponding fees that will be charged and publish in an unambiguous manner, the payment policy and criteria for applicability of any fees. Google, of course, like many companies, has poured billions of dollars into the South Asian market over the past few decades. It's aggressively trying to find major untapped regions. Many companies, of course, are seeking access to the Indian market. It is gigantic. and a little less problematic than the Chinese market, although I think what they're finding is that the Indian market is not pushover, let's just say like Indian regulators pushed back hard against Facebook when it attempted to introduce that Facebook's Facebook basics, service internet basics, it was basically, they would offer free internet access within India in exchange, you know, for users using an app that Facebook had effectively programmed with its own pre chosen websites, including, I believe, its own service. And you see their antitrust regulators pushing back pretty hard companies coming in and kind of trying to do business as usual. I'm very curious to see the extent to which India may become a parallel to the EU a little bit in terms of regulation. This is, by the way, Google's second antitrust fine by this commission, the Competition Commission of India, in under a week. Google was fined $161.9 million for other anti-competitive practices. This was an investigation that started three and a half years ago, after a statement was released saying Google was requiring device manufacturers to pre install its entire Google mobile suite, and mandating prominent placement of those apps, India, not having it. Alright, speaking of app stores, and app store rules, Apple is cracking down on NFT functionality and social post boosts with new rules in its app store. So I think on a recent crypto roundtable, we talked about the fact that Apple is now enabling, in some ways, the NFT ecosystem. However, Apple has issued new rules with its software update in iOS 16.1. By the way, if you're like me and you've been waiting to install iOS 16, you now can. I always wait for the .1 update because I have been burned before. Anyway, with the 16.1 update for iPhone and iPad, as well as macOS Ventura, the App Store introduced some new rules, including limiting features that are unlocked through NFTs. It also mandates apps to, ironically, use Apple's payment method to purchase boosts for posts on social medias. First of all, we'll get to what that means in a second, but second, Did they roll this out in India? Because I'll be very curious to see how they respond to that. What social boosts are social media boosts? These are normally boosts that you'd be able to purchase inside an app, right? Like, do you want to boost this post on Instagram, for example? Now, those have to be processed in the App Store, presumably meaning that Apple will get its 30% cut of all of those transactions. This would only apply to apps that offer in-app tools for promoting your posts. It would not apply to back-end sponsoring through an ads manager because presumably that's less app based. And then when it comes to NFTs, Apple is really cracking down on payments being processed outside its ecosystem. Until now, NFTs may have been used as a workaround to Apple's App Store fees. We even talked about that on the Crypto Roundtable, that it could be like a little bit of a Trojan horse where you would offer an NFT for free, and then that NFT itself could be used as your ticket or your kind of purchasing opportunity outside of the ecosystem, a little bit of a hack. That will not be allowed anymore. I blame ourselves. I think it must have been because we talked about it on the Crypto Roundtable and now Apple has shut that loophole right down. It said that apps are allowed to list, mint, transfer, and let users view their own NFTs. However, the ownership of NFTs should not unlock any more features within the app.

### Human: Yeah, it is. It is wild. It is wild. There's a lot of development there.### Assistant: Um, not complaining. Yeah. Yeah. Shout out to Brooklyn. All right. Uh, thanks for coming on the show and we'll talk to you soon. Thanks so much, Jason. Take care. Cheers. Yeah. I see you in Williamsburg. We'll have some barbecue when I'm in New York. Love to. All right. All right, everybody. Well, there you have it. Our first live guest on the show. This is kind of an interesting thing that's happening here that you're all witnessing, which is, I think now if I can keep doing the show at 10 o'clock and keep getting to bed at a reasonable hour, people would just know I'm going to be on a 10 like CNBC. And I could just say, Hey, come on the show. And we send them a link. This could be like a really interesting turn of events here. So let's do questions. And that will wrap up with some ask Jason. So if you have an ask Jason question, I'm going to take three of them. This question is from Kevin Lunn. He asks for startups that are attempting to create a paradigm shift that requires a significant upfront course to produce an MVP. Do you have any advice and securing significant investing? Okay, So I would need a little more information, Kevin, if you want to give us a little background of what you're talking about, but I'll come up with a hypothetical one here. A hypothetical one is your you want to create an electric car company or a supersonic jet like boom, or Tesla or Nikola, whoever. So if you want to be able to raise a large amount of money to build something, and I'm going to say large, that the MVP is going to cost $10 million. So the MVP for boom to build like a little micro version, like a small, non human version of a sonic jet, let's just say it costs 10 million, because they did build a small scale one that I think was functional. I'm not sure or to build the atom. I think that was the precursor to the aerial atom was the precursor to to the Tesla Roadster number 16 of which is sitting right in my garage here. That one probably cost, let's call it 500,000. So we'll put those two there. How do you get the credibility to do that? Well, it's two different scales 500,000, you can find a crazy angel investor who believes in you and thinks you're credible enough to build it. And they gifted and really what they're doing is they're investing in you and your ability to invest. Now, if it gets to 10 million, or even 100 million to develop a drug, which you didn't bring up here, or let's say a medical device, and it's gonna cost 25 million. In order to fund that, what would you be looking for as an investor, you'd be looking at the team, you'd be looking at the plan. And you'd probably talk to a bunch of people to say is this even technically feasible. So you do some kind of study on that. That's what investors would do. So let's take varanus as an example, a blood testing machine that takes a little drop of your blood and runs 200 different tests. Well, when people who were going to invest in varanus heard that pitch, they're like, wow, that's audacious. Awesome. That would change everything. If you could just give a drop of blood or a little tiny micro vial of blood. You remember that little picture of Elizabeth Holmes like this? If you give a micro vial of blood and get 200 tests, but I could change the world, right? You could do this every month and get all that data. And then, you know, instead of doing it every two years and taking out eight vials to get 50 different tests done, this could change the world. And when they talked to people who were in the blood testing space, who were building blood testing machines, and had PhDs in that they said it's not possible. It was the physics do not allow you to run 200 tests on a tiny droplet of blood and like this little micro vial. So that's why serious investors didn't invest in Elizabeth Holmes and Theranos. They got all these other weird investors, who were not Silicon Valley investors, and they invested. So you would be doing some kind of deep diligence on that technology. And you would be looking at the team. So I would keep your expectation low if you have no background and you haven't built out your team. Now, if your team worked at Tesla on batteries, and another person or a team worked at Waymo on self driving, and another person worked on electric bicycles, and you were going to build some new type of car and ATV, let's say you want to make the world's first electric ATV type of go cart or whatever. Well, if you had three people who worked at Tesla and Toyota and Waymo, okay, now you've got like a bench. And you're saying like, here's my bench. So you'd be selling your ability to group that talent together is not your God given right, you are not entitled to get funded. by the venture community. They have a range of companies they can invest in, and you are but one option, and you must beat out the other options in order to get their money. So that is how I would look at that if I was you, and just really have that candid discussion with yourself is do I deserve this money? And I'm the Am I the best bet for that person? Does that make sense? I hope it does. Alright, so we'll take two more questions. Michael on YouTube says, Do you think any of these crypto projects have actual users? Great question. I think this is the big issue is that many of the crypto projects are based on speculation, and based on people gaming the system, and there's no actual use case. That's probably why the SEC believes most of them are securities because there's nobody using them. There's no utility to them. Now, when you look at NFTs, people are collecting them, people collect art in the real world. So NFTs feels to me, like these are assets, like alternative assets, like art, art generally doesn't appreciate from like zero to $200,000 per, you know, animated gif, like the board, a yacht club has. So that's a little strange. And that kind of is would be like if you bought a baseball card six months ago for 25 cents, and it became worth 200,000. Usually, that's a journey that happens over 2030 40 years. And it's the you know, the fact that there aren't many of those in production that makes them valuable and people's ability to connect them. So the I would say the answer to your question is, I think most of these crypto projects have been based upon speculation, and based upon manipulation, and not utilization. And so that is scary. And that's why there's so much greed and so much market manipulation and why we're having this discussion about regulators coming in. I think the regulators are scared to death, that this all collapses. And when I brought up earlier in the program with Matt, what would happen if there was a contagion and the Bitcoin network went down? which is like, okay, boomer, Bitcoin can't go down. It's like Bitcoin hasn't gone down. But everything does go down at some point. So Bitcoin will go down at some point, right? And Bitcoin will get hacked at some point. I mean, it's a miracle that it hasn't been. And it's only been edge cases where it's been hacked. But as the amount of money in Bitcoin goes up, and the number of participant goes up, it becomes a bigger target. So people used to say this about the Mac and iOS, like, they just Windows was the bigger target, all the hackers went there. And then all the elite people went to iOS and iOS is now the target and people have figured out ways to, you know, hack and spoof people's iOS devices, as we saw in the recent hacks with that Israeli company that was giving people a way to exploit iOS devices. So Just because it hasn't happened doesn't mean it won't happen. And just because it's unlikely doesn't mean or it's improbable doesn't mean it won't happen. Something that's very improbable, you know, to happen today, you know, for it to happen over the next 10,000 days, it might go from improbable to happen on this day today, one time, But at 10,000 spins of the wheel, it might be very, very common, right? So you have to look at the arc of time. And I think that's what's got the SEC spooked here is that they're really scared that a lot of people are watching these returns and getting FOMO And the crypto space is pretty toxic in certain subsections of it, like the Bitcoin toxicity movement, where they're like, Hey, have fun being poor. Okay, boomer, you don't get it. Well, that's kind of how they get you to join, you know, an MLM program or a cult. So that's what's happening, I believe, with regulation right now. Let's take a final question. Okay, Richard will ask for your launch accelerator. Is there an MRR target for consumer SAS or just a Dow threshold? Great question. So to translate into plain English, we have the launch accelerator, we give people $100,000 for 6% of their companies, we work with them for 16 weeks, we introduce them to 1000 investors, and then most typically will co invest in the company down the road, when they raise their seed round or their series A, if they're making progress. And, you know, it's not guaranteed, but it happens, I would say four out of five times that we wind up investing more money, because we have the syndicate.com, which is the world's largest collection of angel investors in a single syndicate 9000 of them, I believe right now. So for a consumer SaaS company, we're actually if the product is really good, we started to dip down to investing in companies. If there's two or three builders on the founder team will even invest pre revenue and before the products launch. So we've done that two or three times. Now we will take a risk. This is new for us. But we've decided we will go a little bit earlier. If Let's say you have three founders, once a designer UX person and to our developers, if we see an actual team of coders and developers, and designers, we will invest if we see three people who are three idea people, and business people, idea and business people using air quotes here. Well, they're not, they're gonna have to hire a team that's going to cost millions of dollars. And why would we invest in that when we could invest in companies that have a little more traction. So that's basically where we sit. So it would depend Richard, if you're a builder, if you're an So if you're an actual coder, and you build iOS apps, and you've got a designer who works with you, and then you've got a data scientist who works with you, and the three of you want to come to the accelerator, and you built an interesting prototype, and we know you have product velocity. So we know the products going to be improving, even if you don't raise a million dollars to give to a development shop. That's what we like to see. So a great question. Hey, everybody, thanks for joining us. I'll talk to you soon. Bye bye.

### Human: Yeah. Yes. And so that's a reference to Theranos. You say that if a startup becomes worth one billion dollars before they launch their product, they're either going to fail or become a fraud. And of course, this follows Trevor Milton's response to activist short seller Hindenburg, which accused the company, Nikola, of being the latter. OK, break it down for us. What is Nikola here then? So I had a 12 billion dollar valuation I should add, much more than one.### Assistant: All right, so I had Trevor on my podcast. And he was very honest. And he spent, you know, like, I think, an hour and a half on the pod talking very specifically about their plans. And, you know, there's a possibility that he'll hit some of these targets. I don't believe that companies should go public before they have product market fit. We've seen this a couple of times recently. Quibi, they were over a billion dollars before they had their product launch. Obviously, Theranos comes to mind. Magically, the AR company in Florida has had CEO turnover and their product is still waiting. It is a red flag for us in the Valley. It doesn't mean it might not work out. It might work out. you know, retail investors need to know when they buy into something like Nikola, is that they're paying a price that's 100 times what private company investors like myself pay for companies that have the same level of product market fit. And that means, you know, I'm not sure how you get a return on investing in an $11 billion company, that's probably arguably worth, you know, a couple 100 million, you know, to 300 million would probably be what it would be as a private company. So this new SPAC, revolution that we have, I would just caution people to really look at who the promoter is. If it's Chamath, who I obviously have a long-term relationship with in business, we've done a lot of deals together and we're good friends. Someone like that is going to put out a certain type of product. And given how easy these facts are, we're going to see a lot of inventory that might be questionable. So only invest what you can afford to lose, folks. Yeah. And so I think that's prophetic. If I do say so myself, like, you're investing at 100 times what the private markets would value this company at entry price matters. If you're trying to get a return on investment ROI return on investment, and you want to beat the market, if you're paying 100 times the value of the company, that's a lot you got to catch up to. And so I really think you have to look at and study the valuation of these companies before you make an investment. I was just having a discussion in a chat room with a founder who wanted you know, maybe 11 or 12 times their top line revenue in this next round. And I said, listen, 10 times revenue feels like a cap to me, based on this, you know, where the company's at. I don't know if I want to syndicate a deal that's 11, 12, 13 times, you know, the last three months revenue on, you know, average run rate for the year. So I do think you have to think these things through. And I do think these SPACs will allow things to go public earlier, which is the whole point, you want to get more inventory out there. But boy, be careful, folks, be careful and don't invest any money in these type of deals that you can't afford to lose. Now, if you invest in Disney or Amazon, or Google or Facebook, do I think you have a Netflix? Do you think that those companies are not going to suddenly lose product market fit? I don't think so. It would take a long time for Netflix to lose all its subscribers. I mean, literally, they could just do oranges, the new black, uh you know for another 10 seasons and they'd have some baseline of users uh you know disney could just destroy the star wars franchise and put out a marvel movie with robert downey jr you know once a year uh for the next decade or two and still have some level of product market fit so you really need to be careful uh when investing at the entry price and think about your downside just overall i think the signs were there when i did the interview I wasn't trying to pin anybody to the wall in this interview. I knew for sure that the truth would come out about the company. And I knew there were a lot of red flags. So I just thought, let's let the founder talk. And a lot of people were like, you were too easy on him. Or I was savvy enough to know that if you have somebody on, you should let them talk. Let the Mustang run. Let the dogs run. Let him run. Let's see where he takes us. And so I think this interview, you know, the Hindenburg people watch the interview, and they had a couple of good laughs at it, I understand. And I'm guessing some moments of my interview will wind up in this DOJ case or SEC case, and people will refer to it. Because and you need to understand this as a founder, and they give this advice to founders all the time. Understand that when you make claims, while your company is raising money, you're not just raising money in the abstract, you're doing a transaction. That transaction is you're raising that money in exchange for equity. Another word for equity, the form in which that equity takes place as stocks. And if you sell stock, and you don't tell the truth, and if you don't disclose anything material, well, guess what? That's securities fraud. And there's a group of people in the Securities Exchange Commission, which take it pretty darn seriously. And those are some principled people, I can tell you that because anybody who worked at the SEC could make 5, 10, 20 times their salary, working in private practice, whether in a law firm or a hedge fund or starting their own company. And so they're really those people in general. And I don't know all of them. But when I see people who take public service jobs, whether they're in the southern district of New York, or they're at the SEC, they are principled individuals. And so here is my assessment of Trevor. I think that he was an entrepreneur who got above his skis. The SPAC opportunity was there for him. He took that opportunity. The people running the SPAC maybe should have given this a little more vetting, but they probably wanted to capture the magic and ride the coattails of Tesla. And so you have an industry leading company like Tesla and then everybody from Rivian and, you know, that other dipshit Fisker with the terrible cars that everybody hates Fisker trying to ride Elon's coattails, you know, those people trying to ride Elon's coattails, by the way, you know, Elon suffered to make that company work, he almost went bankrupt personally, almost almost killed his entire career. And, you know, trying to just draft off of Tesla success is not a successful strategy. And here is my final take on it. Nicola is going to not exist within 24 months. The stock is going to go to 10% of whatever it is, and they're going to sell the assets for 10 cents on the dollar will be disbanded. And I bet that everybody involved in this shenanigan is going to be embroiled in lawsuits for a decade. Just like Theranos. just like Bernie Madoff. Now, is it going to be criminal charges? Is it going to be going to jail like Bernie Madoff did? Was it going to be just penalties and fines? We'll find out. We don't know how much of this we're bending the truth versus outright fraud. But my advice to everybody, every founder who can hear my voice right now, every investor who can hear my voice right now is just do things right. Capitalism is already set up In a way capitalism is already rigged. It's rigged to benefit people who are bold and who make great products. You don't need to rig it any more than that basic concept. You just need to wake up every day and make your product 10% better, 5% better, 1% better. Just wake up every day and make your product slightly better and capitalism will take care of itself. The value of your company will take care of itself. You don't need to be an $11 billion company, a $20 billion company out of the gate. it's fine to be a ten million dollar company or twenty million dollar company or two million dollar company you know just enjoy the ride make great products and don't. Try to bend reality in any way and i'm constantly on spinning. Projections, numbers, people who are founders or investors just spinning, spinning, spinning. And spinning is dangerous. You don't want to pretend you're at 30,000 feet when you're really at 1,000 because you'll run into the side of a mountain. have to understand where you're at in life, you have to understand who you are. And this is a case of people thinking that there's something they're not. If these were if this was an $11 billion company, you'd have a billion dollars in revenue. It's pretty much that simple, right? You'd have 500 million, a billion dollars in revenue, you'd have a product. And there wouldn't be this very easy, you know, assessment for people to make from, you know, Hindenburg research, they wouldn't be able to take this thing apart if they were just more humble, and they had a smaller valuation. If this was a $300 million company, and there was a $50 million crater, it wouldn't be a big deal. But you know, we're talking about hundreds of millions, if not billions of dollars at stake here. My ultimate prediction is it will go could put to zero. It's possible it gets sold for parts. But man, once a company has this level of negativity around it, and it starts circling the drain like this, it's very hard, very hard to stop the death spiral. They're losing altitude, and they're gaining speed, and they've lost control of the ship. that means this plane is going to crash. And when it does, there'll be no survivors. So for those of you who are investors, I saw some people on the Reddit board were talking about they put their entire life savings into this. That is not how you invest. The way you invest is by having diversification. And if you're trying to invest in companies that don't have products in market, you're just putting yourself at a huge disadvantage. When you could have used Disney Plus, you could have used Netscape, Netflix, and actually tried the product and made your decision based on trying a product. With that, thanks to producer Nick for setting everything up today. Hey, thanks for Trevor for coming on the pod. And You know, in terms of the other things that might come out in the next week, which I didn't get into, because I don't know any of the allegations around Trevor on his in his personal life. I'm not saying that those are not important. they're breaking, literally in the hours in which I am doing this podcast, literally, there are tweets breaking right now about Trevor Milton's personal life that are gnarly. But I don't know any of the people involved, I can't verify it. But I can tell you that I was told from somebody on the inside, that there are journalists who are super qualified for investigating and vetting the stuff who will have information for the community by Friday of this week. So I think by Friday, there'll be enough stories on whatever happened in Trevor's personal life for us to know definitively, or as definitively as one can in a he said, they said, situation, I'll leave it at that. Thanks for tuning in and we'll see you all next time on this week in service. Bye. Bye

### Human: You know, almost as tough as your last thing.### Assistant: Welcome to this week in startups. We have an amazing show for you today. We have the CEO of the aura ring. If you don't know the aura ring, they're selling hundreds of 1000s of these products. It's making millions and millions of dollars and the aura ring tracks your sleep and your readiness kind of like a Fitbit, but probably a little more dope. It's an independent company and we have the CEO on the show today. But before we get to that, I thought I would check in with the insanity coming out of Facebook yet again. Here we go again. If you don't know, attorney generals from 44 states have urged Facebook not to launch a kids only, which means 13 years old and under version of Instagram. And in a letter sent to Mark Zuckerberg on May 10, attorneys from these 44 states urge the Facebook CEO to abandon plans to launch a version of Instagram for kids under 13. The letter was submitted by the National Association of Attorneys General's after BuzzFeed News first reported in March that Facebook was planning to launch Instagram for kids. In the letter, pretty straightforward, Facebook has historically failed to protect the welfare of children on its platforms, I would argue, and adults, we'll get into that. The attorneys general have an interest in protecting our youngest citizens and Facebook's plans to create a platform where kids under the age of 13 are encouraged to share content online is contrary to that. interest. It appears that Facebook is not responding to a need but instead creating one as this platform appeals primarily to children who otherwise do not or would not have an Instagram account. Facebook's response, a Facebook spokesperson said the company has just started exploring a version of Instagram for kids and said the company is committed committing today not to show ads in the product. quote, we agree that any experience we develop must prioritize their safety and privacy. And we will consult with experts in child development, child safety and mental health, and privacy advocates to inform it. The spokesperson said we also look forward to working with legislatures and regulators, including the nation's attorneys general. Google actually owns a service YouTube for kids. And there are ways for children to lie about their age and access the main site. I actually use the YouTube for kids in our household. It is incredibly well groomed. I haven't seen anything even close to being crazy. It's a whitelisted app. Yet in 2019, YouTube reached $170 million settlement with the FTC and New York Attorney General over claims it illegally earned money from collecting the personal information of kids without parental consent, allegedly violating COPA. If you don't know COPA, that's the Children's Online Privacy Protection Act. Following the settlement, YouTube said in a blog post that it will limit data collection on videos aimed at children regardless of the age of the user, which makes total sense. And you know, the situation here is do you trust Instagram and Facebook? The answer to that is no, you should not trust this company. They have been caught with their hand in the cookie jar over and over and over again. So it's a it's a company you simply cannot trust. And there's a long list of fines that they've gotten, that are absolutely horrendous Cambridge Analytica, another scandal, the list goes on and on their groups products, which outed gay people who were added to groups without their permission. Facebook has the worst track record of protecting privacy, and in general thinking about their users. And this will become an app for grooming children, you know that child predators will get on the app. It is a recipe for disaster. And children should not be on social media. In fact, anybody who uses any form of social media will tell you that it is a negative more than a positive in many instances in their lives, whether it's Instagram, Facebook, Twitter, clubhouse, etc. These are really gnarly places that can cause anxiety, feelings of inadequacy. And I would say we'll look at this historically in 10 or 20 years, like the jewel. This is the jewel, releasing pineapple, pina colada, blueberry cheesecake, whatever flavors those horrible individuals launch targeted at children. This is the exact same thing, arguably worse, because kids, I guarantee you, will be targeted on this platform and attacked. And I guarantee you, they will commit suicide. I know it sounds like I'm being hysterical. But the statistics are the statistics, adults and teens are killing themselves are committing acts of self harm are becoming. Just tragically obsessed with their bodies the point of eating disorders you as a parent. need only look at your own usage of social media, and the detrimental impact it's had on your life, on our society, on our public discourse, to know that subjecting your children and our children to social media at a young age is insane. And it's abuse. Now, I know, again, you're gonna say this is hysterical, but For somebody to do this, like Zuckerberg, it is only in his self interest. He's thinking, how do I prepare these users for a lifetime on social media? And we as parents should be thinking, how do we prepare our children for a life off of social media, this grand experiment has gone horribly wrong. Facebook cannot even control the policing of Nazism, white supremacy, Holocaust deniers on their platform. Why on earth would we trust them with our children's attention? The attorneys general, in this case, are 100% right. Don't trust Zuck. A retired FBI assistant director and NBC national security contributor, Frank Figlazzi, I think I got it right. He said Instagram for kids. We can't even keep extremism off social media for adults. Why don't we just open a Las Vegas casino for children and call it a day? He's not wrong. And the Massachusetts Attorney General, Maura Healy, Facebook has repeatedly failed to protect the health and well being of children on its platform. Instagram for kids is a shameful attempt to exploit and profit off vulnerable people. I'm leading a letter to Mark Zuckerberg with 44 AGs to demand they abandon this plan. Marianne Williamson you may remember as the crystal lady from the democratic debates i mean absolutely my favorite i'm a huge marianne williamson fan. This would be up there with one of the worst ideas in the world she is not wrong. Facebook had its messenger kids since December 2027. Parents set up the accounts and have a suite of controls they claim they don't collect data, no search visibility. And why would you trust Facebook in 2019, the FTC imposed a $5 billion penalty and sweeping new privacy restrictions on Facebook, the largest fine for privacy ever, that alone of all the things we've discussed should negate them from being able to do this, let alone common sense. In 2017, the European Commission fined Facebook 110 million for providing incorrect or misleading information during the commission's 2014 investigation under the EU merger regulation of Facebook's acquisition of WhatsApp in 2016. Cambridge Analytica scandal resulted in another huge find in 2009. They got fined 9.5 million for speaking app program and I think there was double to 20 and they're under a 20 year bought it. I'm searching for the most charitable take here. And I can't find it. You know, to claim that kids are signing up and therefore we should make for Facebook anyway and make this that is not that is not a logical statement. That's like saying some kids got, you know, paid some adult to buy them beer or cigarettes, and therefore we should let them smoke cigarettes. Sorry, wrong. The least charitable take the science is clear. social social media has a detrimental impact on people's mental health certainly that affects children teens massively i am not letting my daughters on the social media anytime maybe when they're sixteen i think might be a reasonable time seventeen. But i don't care if i'm the last parent to all my kids on to this zuckerberg great disgrace. You should be ashamed of yourself. And you need to go meditate in the woods and take a deep, deep look at yourself. You have behaved horribly in your running of Facebook. And this is amongst the worst ideas I've ever heard in the technology industry. And it's an even horrible idea for you, Zack. That's how bad it is. Okay, stick with us. Are you launching a new product? Developing a new prototype? Maybe you're rolling out a new campaign? User testing lets you see, hear, and talk to your customers to understand how they experience your brand, products, and services. Put yourself in the customer's shoes with real-time video feedback. The user testing human insight platform allows you to target your exact audience and them any question or give them a task to perform. How interesting is that? It's a tech platform that connects brands with their target audiences in order to get feedback on any experience. Testers can get paid 10 bucks for their time. These users aren't doing this to get rich. No, They're doing it because they really want to help make your products and services better. So watch, listen, and observe their reactions so that you can connect the dots and keep improving your product and service. You'll get feedback within hours and strengthen the relationship with your coveted customers. User testing is used by startups and the world's most innovative brands from Alltrails, Grammarly, to Microsoft and Capital One. Here's a testimonial. Chubbies is a men's casual apparel brand that gained valuable insights by asking some of their customers to explain why they love chubby shorts. They also asked for new product suggestions to guide their product roadmap. Think about how brilliant that is. It builds fiber between you and your customers because they feel heard, and we all want to be heard in this life. Experience what your customer experiences by using user testing. Request your free trial at usertesting.com slash twist, usertesting.com slash twist, and get the fast human decisions you need to make more informed business decisions at scale. hey everybody welcome back to this week in startups my guest today makes this ring i'm wearing no we are not changing the name of the show to this week in jewelry this is the fabulous aura ring that i am holding in my hand just a miracle of hardware and sensors it's incredibly light It's incredibly cheap, or I shouldn't say cheap, affordable in price. It's well constructed and it is something that basically disappears when you wear it. So why would one wear a smart ring? Well, the ring lets you know how your body is doing. And instead of just giving you what my Fitbit or your Apple Watch might get you, the software is designed to give you an idea of your readiness and your restfulness and how prepared you are to take on the world. I started using these years ago. The first version, I'll be totally honest, was pretty bad. The latest version that somebody, one of the advertisers who was recently bought ads on the program, sent me it as a Christmas gift. And I said, wow, I forgot about aura. And I put it on and I've had an amazing experience. It is a fan fricking tastic product. And the CEO of aura is with us today. His name is Harpreet Singh Rai. Did I get it right, Harpreet? You got it right. You got it right. Thank God.

### Human: Yeah, they lost.### Assistant: Okay, we got a breaking live news. It looks like the Constitution Dow lost community we did not win the bid for the copy of the US Constitution. Well, this wasn't the outcome we hope for. We still made history tonight with the Constitution. This is the largest crowd fund for physical object that we are aware of crypto or fiat. We are so incredibly grateful to have done this together with with you all and are still in shock that we even got this far Sotheby's has never worked with a Dow community before we broke records for the most money crowdfunded in less than 72 hours. That's the most amazing thing about this. We've educated the entire cohort of people around the world from museum curators to our tour and our directors to our grandmothers asking us what is is when they read about us in the news about the possibilities of web three and on the flip this is really written poorly. And on the flip side, many of you have learned about what it means to steward an asset like the US Constitution across museums and collections or watch an art auction for the first time. We had 17,437 donors with a median donation size of $206. Wow, that's like some Bernie Sanders strategy. They're really small donations. A significant percentage of these donations came from wallets that were initialized for the first time. In other words, people specifically bought crypto to do this, which is really cool. You will be able to get a refund of your pro rata amount effectively minus gas fees through juice box Please expect more details about this tomorrow. Our team has not slept for the past week. And we're giving people the night to get some rest before we're back at it tomorrow am each one of you were a part of this. We want to also thank our partners in this work, Almeda research, and almond FTX us juice box morning brew and syndicate Dow. So these are really interesting times. I back to the legality of this. The legality of this is pretty clear. If you're going to do something like this, you need to have accredited investors only. If you do accredited investors, there are limitations on that my understanding is 250 people up to 10 million or 99 you can go above it. In other words, like a venture fund. And if you were to do this the way they wanted to do it, they were saying you have governance, you can vote, but you don't own it. But we're buying it and you're owning it. So the messaging was not clear. But that's great. Because since they didn't win it, this doesn't have to be reversed. There doesn't need to be an SEC investigation into this if they broke secure as well. Because everybody's gonna just get their money back minus gas fees. And the gas fees are probably somewhere in the neighborhood of 15%. I saw when people were doing these because Ethereum, I guess is very busy. And time on the blockchain costs money. I mean, I don't know why a theorem is so expensive. Still, I think that's why so long is doing so well. But a theorem does have a plan to make things much cheaper. So continuing on here, what an amazing moment in time to see this many people come together. And I think in order to contextualize this, what I what I've been thinking about is what else can we do? Because if you can put $40 million together, you know this quickly, what is the possibility if instead of 17,017 million people got involved? Well, there could be 1000 x, you know, what we just saw, we can see a billion dollars show up for a cause. And if that seems crazy to you, just remember, this all reminds me of living and live it raised $127 million. We had this incredible concert, all of this money was raised to feed Africa and to help people starving in Africa. If something trends like this through social media, and you really can just move money freely without having to worry about governments getting involved in regulations. We could see crazy things happen. Now we could also see crazy amounts of fraud, who knows people could have gone with the money. But maybe people should be able to do what they want with their own money is something I've always said, so I don't want to be hypocritical here. If the donation size was 200, and somebody committed a crime here, then you have the legal system to come after them. Okay, SOC 2 compliance is critically important. Why? If you don't have SOC 2 tight, you're going to lose major customers. You just can't close them. It's that simple. And guess what? Vanta, V-A-N-T-A, is going to give you $1,000 off your SOC 2 compliance. Invanta's compliance software makes it easy to get and to renew your SOC 2. They continually test against technical and non-technical SOC 2 requirements. They partner with over two dozen audit firms who have been trained to file SOC 2 reports directly within Invanta. and on average Vanta customers are SOC 2 compliant in just two of four weeks, compared to three to five months without Vanta. Take it from Kitty Hawk CEO John Hegranes. He heard me read Vanta's ad and emailed me about how much he loves Vanta. I'm kidding you not. John told me that Vanta was essential in helping Kitty Hawk get SOC 2 compliant so they could target larger customers. If you haven't heard of SOC 2, you will when you get to those big customers. So, unlock the big sales and give your employees time to work on more business-critical assignments, like your product, like sales. and is giving twist listeners a $1,000 discount on their subscription at banta.com slash twist. Once again, vanta.com slash twist for $1,000 off va and ta.com slash twist. So what this says to me is we need to really think about the accreditation laws in the United States. People want to place bets people want to do fun projects like this. Why are we stopping them exactly? Because we want to protect them. Well, there's other ways to protect them. Maybe we'd say hey, if you want to form a DAO, the max you can accept from anybody who's not accredited is $500, which by the way, equity crowdfunding has rules like this. But even those rules make it so people don't want to do equity crowdfunding. So I think it's time we just take accreditation rules. And we say anybody can invest their money in whatever they want to do. under two circumstances, it's under a $500 bet. And number two, or any amount if they have to have a driver's license, or a gun license, basically a license that says they know how to invest. So there should be a test for financial literacy, that you get a driver's license or a gun license or a motorcycle license. equivalent doesn't have to be an easy test. But it could be online, it could be in person, who knows who gives it out, we have series seven, and some of those tests for Wall Street, just a simple test that people take, right? Take the simple test. And you got the simple test, you can do what you want with your money. It would be very cool if when people went to Vegas, they could take a gambling test before they played. we don't require people to do that. So doing this would be much more than people do when they go to Vegas. What are some ideas that you have for ideas of what you could do a Dow for, you know, there are the possibilities to me seem endless. But if you think about what GoFundMe does, it's basically like GoFundMe, except it's global. And you don't need a banking partner. And so one of the problems with these equity crowdfunding sites, or in the cannabis space, when people are buying and selling cannabis is that the payment processors become the chokehold with online gambling and wagering, nobody would support the poker sites back in the day. And so how did you get your money into a poker site, you had to use these illicit sites in Canada, or, you know, Paraguay or Costa Rica, and you would route your money and you take pay huge fees. If salon fees were lower, and people could do this with low fees, this could really change the world. So it's a shame they didn't win it. I'm actually think they dodged a bullet because I think this would be one of those cases where the SEC would come down on them pretty hard. Hey, did you know who you took money from? And did they think that they had ownership? And then we have to ask ourselves if people are buying this, and they don't get ownership in it? Well, who actually owns it? Dow owns it? Well, the Dow is not a legal concept. LLC is a legal concept. So who owns the LLC? Okay, we can have a certain number of members in an LLC. Who exactly are the members? Is it this? I don't know if you have 17,000 members in an LLC. I don't believe you can there's an upper cap, and it's much lower for an LLC. So the structure we have of corporations in America today is very different than dows. dows are like writing code, you can do whatever you want. Well, that's the tension we're having here, we have an old paradigm, this is what a hotel is, this is what a taxicab commission is, this is what a corporation is. And then we have over here innovation. This is Airbnb. Okay, it's people staying on my couch. It's not a hotel. Okay, there's my extra bedroom. It's my my ADU in my backyard. Oh, I'm giving somebody a ride in my car. Oh, that's illegal. Is it? Okay, well, where's the law that says it's illegal? Well, there isn't a law in the books, because it's something new. Nobody ever thought about it before. We saw Airbnb, we saw Uber and Lyft fight these laws, or non existent laws and regulations. Quite effectively, it was a little bit of a back and forth. It was a little messy. but ultimately made society better. I believe Dallas will make society better. Therefore, people who push the envelope, like the Constitution down, people did, I believe, pretty clear they did, they are actually in a way, taking the hour arrows and bending the rules. And in this case, I don't think for personal profit, whereas an Airbnb and Uber, it was for a corporate profit incentive, which is fine. Corporations are designed to make a profit and employ people. That's nothing wrong with that. But here it was like a nonprofit, trying to push the envelope on securities law and who could participate. I love it. And I think we need to figure this out. All right, here's our first clip 26 seconds, bro, going to 30 million right off the top coming in hot. I'll see on the other side of this 26 second clip.

### Human: Sure. Yeah. So when I came up with the idea for Divi was really based on a couple of things, personal experience, and then understanding the market. From the market side, let's start with that. I saw that we had just made it out of the global financial crisis. He looked at the rates of homeownership, they were at all time lows. And I thought, You know, people can't get mortgages. There has to be another option that we can offer them. And so I wanted to figure out a way in which people could buy into the equity of homes without taking on a massive amount of risk from a credit lending perspective. And so making them into a renter, letting them buy into the equity, sharing in the appreciation seemed to be a good idea as a way to start. And then more on the personal side, my parents, myself, I couldn't get a mortgage. My dad, when he had immigrated to the U.S., couldn't get a mortgage. Him and my mom had actually Just got married, just got pregnant, and they were looking for a house, couldn't find one. And then ultimately, they found a lovely woman who was willing to give them cellar financing on a home. And that house became my family's sole source of savings and wealth. And eventually, my dad had a credit score, refinanced that house with a mortgage, and was able to take cash out and use that to pay for me and my three siblings to go to college. And I always just thought that in Silicon Valley, CEOs had to be like Elon Musk, like visionary, like we're going to Mars, like big picture and not me. To me, I was a worker bee. Like I did my models. I was very organized. I was diligent. I prepared for like my slides for every meeting. I did not think that was the stuff of a CEO. I thought I had to be a bigger picture thinker. And what's actually amazing is having founded Dippy now, I realized that there's a lot of different types of CEOs at different points in time. person who I was for the last three years and founding Divi is not the person I'm going to be for the next three years. And there is no right or wrong, but more of the right fit for the company at a particular time.### Assistant: Okay, here's a question from my mom, apparently, what are some of the unlocks for 2023 that could help founders? for example, mobile phone adoption, the 2008 2009 experience 2009. And now that is not actually my mom was somebody in the chat room claim to be mom. Great, great question. I think the why now of 2023 is going to be AI and machine learning. Now that was the why now a number of years ago, but it's actually now coming to fruition. And So why is that happening? Well, it used to take a lot of people and there weren't a lot of a lot of open source projects or software to build on. And there wasn't a big talent pool. So the number of people who could actually write code and who understand artificial intelligence and machine learning was very small. In fact, it was dozens than hundreds. And now it's 1000s to 10s of 1000s of people understand how to use this software. And it's pretty easy to learn. So you can just go to MIT and watch their machine learning AI courses or Stanford, they're all up there in public, all the tools are out there. So I believe that the next year or two in startup land is going to be developers and founders you know, playing with AI tools, computer vision, machine learning, and they're not going to do projects like well, let me see if I can beat chess, but they might do projects that are, hey, let me see if I can tell you which company your salesperson should call next to sell SAS software to. right? Or I'm going to tell you which story you should write next as a journalist. Or I'm going to find you who I think the great next chef is going to be by or influencer by analyzing what's going on a tick tock, right? different ways to train AI to solve problems that were being done brute force, or maybe with, you know, some some rudimentary tools. And that's going to be very exciting. Because if people can solve problems, instead of in five hours, and do it in five minutes, like we're seeing just when people use Dolly to make a beautiful image or a beautiful logo. And maybe that logo took, you know, used to take 10 weeks. I use this example a lot, because logos used to cost 5 $10,000 for a startup. then you could hire somebody, you know, maybe offshore, working from home for 50 to $500 to do a logo. Now a founder, any civilian is going to be able to open up and somebody should make this I would fund it. If somebody made a an AI toolkit just to make logos and come up with brand names, people would pay hundreds of dollars for that software just to have it here and say, Hey, I want to come up with a name of a new product. I want you to check that it's available, check the domain check for competing products, check the trademark registry, copyrights, whatever. I want you to come up with a new word that's kind of like a mix between Nike and Prego tomato sauce and whatever. And it just gives you some ideas, right. So these kind of ideas, I think are to come out of the woodwork. And they're going to surprise us as to how delightful and fun they are. I would love to see somebody create a dolly version of a screenplay writing software where it just gave you ideas on what should happen in your screenplay or character ideas. What if there was one that wrote jokes and comedians could say, Hey, I want to write a joke. about, you know, my friend Chamath, and I want it to be about a sweater. And I want it to be about his time in Italy. And it's Oh, yeah, I got it. Boom. I've listened to every episode of all in here's all the Chamath quotes. Here's some jokes for you. Here's some stems of jokes that you can work off. All right. I think all that's coming. So great question. Alright, let's take another question. This one's from Jack, Jake, how what are the qualities that most attract you to founders and people in general? Okay, so for founders, pretty obvious. I like people can build products. I like people who can hire amazing talent and inspire them to build great products. And I like founders who are obsessed and hardworking, and just put in the time to make great products to delight customers. So they have to have a founder, the founder has to have a certain obsession with not only product and team, but also an obsession with the customers. And that tends to lead to success. Now, in terms of people, I like people who are fun, and who are loyal, and who are kind and who are generous. And now that doesn't mean everybody in my life, you know, is off the charts. And that I maintain friendships, acquaintances, business relationships, and of course, you know, even friendships with people who maybe are flawed in those regards. But that's the standard I try to hold myself up to, I like to be the most loyal friend anybody's ever had. I like to be the most generous friend. And you know what, it's worked out for me, you know, sometimes I do get burned, I'm generous to somebody, I give them a lot of time, a lot of energy, and it doesn't reciprocate. But by having this philosophy in life that I'm always going to be the best friend out of all my besties, I'm going to be the most loyal, hardworking for them and really think about them and try to be, you know, a really, really strong friend to them. What has happened to me is over time, I've just developed wonderful, deep friendships with people that are meaningful. And I always feel like I never feel like I'm imposing upon anybody or using anybody. And I do feel like sometimes people are trying to use me and it's okay. I have this other group of friends who are my real friends. And then I've got acquaintances and people who use me in, you know, our transactional and that's okay, too. I just put them in the transactional bucket as opposed to the Hey, these are my good friends who I want to hang with and just, you know, watch an episode of South Park or go, you know, make a steak and have a glass of wine, right? It's just different buckets of people. And I think it's important to define who you are, and how much of a good friend you are, and then, you know, try to pair yourself with people who reciprocate in that way. Alright, here's a question from Bob G, the OG Bob G, why do you think many companies fail to integrate acquisitions effectively into the core business? What are the most successful acquisitions in your opinion? Well, I mean, it's obvious what happens, the company gets acquired, and then the acquiring company tries to tinker and screw with it. And then they drive the founders out. and it goes sideways. Now there's a balance here. Sometimes the founders might not be bringing it or they're not as ambitious as they need to be. You'd have to ask yourself, well, why did I buy it? Of course, most people consider YouTube, Instagram, WhatsApp amongst the most amazing acquisitions of all time. I also think PowerPoint was acquired by Microsoft. And so these have really been a creative to those giant companies. And if you look at Instagram, you look at YouTube, double click by Google comes to mind, those were all done in a way to not screw them up, but also to integrate them intelligently. So PowerPoint did become part of the office suite, Apple made the greatest acquisition of all times, in my mind, I think if you look at all these, the $400 million acquisition of Steve Jobs, you know, they they said they bought next, they bought Steve Jobs, right. So that was a $400 million signing bonus of the greatest CEO and greatest product creator in the history of mankind, in my mind. And so well done. I mean, Adobe bought Photoshop for 35 million. I mean, they're buying Figma for 20 billion, they bought Photoshop at 35 million in 1995. And they've milked that ever since. Instagram, I mean, Facebook tried to screw that up. They tinkered with it and screw with it. But they still have shepherded it to over a billion people. For me, if I look through all of those, putting aside Steve Jobs, which I consider recruitment, I would say that YouTube, if YouTube was an independent company right now, I think it would be on the way to a trillion dollars. I think it's a little bit limited inside of Google, in terms of ambition and the value creation. I think if it was unlocked, they would be acquiring a Netflix or acquiring, they would have acquired the James Bond rights, they would have acquired the NFL, they would have been more aggressive as a company, whereas, you know, with Google alphabet as the parent, you got two layers of, you know, ambition there. And I think they should spin it out. I think Google should spin it out for their shareholders. They won't, but boy, would that be an amazing thing? Yeah, I think every I think they would, they would double the value of Google by spinning out YouTube eventually within like five years or something, I think would be unbelievably accretive to shareholders. Great question.

### Human: Yeah, it's a super annoying trend right now.### Assistant: Hey, everybody, welcome to this week and startups. I'm your host, Jason Kelley canis. And today a special treat on the pod, we're going to talk about movie distribution, and the addiction problems we're having in the country with fentanyl and opioids with the director Nicholas directly. He has a new film out called crisis. And you may have seen his previous film arbitrage, or some of the documentaries he's done. Welcome to the program, Nick directly. Thank you very much, Jason. Pleasure to be here. I thought we were going to maybe talk about your opioid dependence. Exactly. Well, in San Francisco, I mean, it's, it's interesting that your film is coming out now you probably were working on a three years ago, I guess four years ago. Yeah, there is a delay. Yeah. And now you're you look at what's happening with fentanyl in this country. It has become a super crises to, you know, reflect the name of your film. This is a huge crisis in America. What made you want to do this film? What was the genesis of it? And I guess how's the early reaction been? I watched the film and full disclosure, I'm a part of a group that put a tiny bit of money up to help the film get realized and super proud of the end product. By the way, the film is just a great film on a cinema basis, but also makes you really think about how we got ourselves into these problems. But tell us a little bit about the origin story of crisis. First of all, thank you very much. I'm glad to hear you enjoyed the film. I started the project. You know, it's about 10 years in the making. Because I had a good friend that I lost to opioids quite a while back. And this was before much was known about the issue. And you know, he's a very bright young man passed away at 29. And he had gotten, you know, it was a bit of a drug experimenter, just recreational, whatever. But you know, then he ultimately found his way to opioids. And what happens, I think, in a lot of cases is people get into it, you know, it's a monkey that can sneak up very quick. And everybody's brain chemistry is different. But some people are really impacted by it. And so it took hold of him. And, you know, he he was well to do, but it's really can be quite expensive if you're, you know, if you go doctor shopping, and then at a certain point, you can't do that anymore. And you have to buy it from the street, something we examine in the film. And, and so I think he had a habit costing three, four or $500 a day, you know, and you can burn through a lot of money fast with a problem like that. And so ultimately, what happens what happened in case of him, you know, people turn to heroin, because it's cheaper, now they turn to fentanyl. And so that took hold of him. And you know, it led to him passing on too early. So, you know, it registered with me, but people didn't understand it. And they weren't talking about it. And there was more of a culture then of blame the addict, you you know, people didn't understand these drugs and how they work and how they have changed the mind. They reprogram the human body, in the case of some people. And so then this topic got more and more known as the problem became widespread. So I had finished arbitrage and You know, what I really like is look, first and foremost, I'm an entertainer, I'm a storyteller. And I'm trying to make movies that people will enjoy. Give them I like the thriller genre. So give them some thrills, twists and turns and a good story, all that. But I think at the same time, what I like to do is take a look at something in society that maybe feels a little bit off whack to me. So in arbitrage, we did the financial crisis, and we had the character of a billionaire, a hedge fund manager, and you know, the corruption that he ultimately got involved in. and how it affected him, his family and all these other people. Here I said, Okay, well, look, the opioid issue is something that's touched people. I know it touched another woman in my life just a few years ago, she's still around, but I had seen that it could really interfere with people's lives. And I thought, well, this is something that has not been explored cinematically at all. There's been no movies on the topic. And, and, you know, now I think you're seeing a few my friend Barry Levinson's got a TV show coming up later this year, that's going to touch on it as well. But You know, it started for me with that personal thing, and then it went into research. And so I started work with some reporters at the Los Angeles Times who had broken some wonderful stories about the pharmaceutical companies, what they may or may not have known about the drugs. And I I also, like you, have investments in certain things. I have investment in a biotech company. So the woman who runs that, a brilliant scientist, Dr. Imer Leahy, she really educated me about how drugs are tested and animal testing with mice and, you know, the different phases that you go through in FDA. So I started putting together a story with all this information. Then the LA Times people gave me this wonderful undercover cop, Steve Opferman. He's retired now, but he was head of the LA Prescription Narcotics Task Force. And so he went around and busted people making illicit fentanyl and running pill presses. And so he showed me this whole world. He took me to the pill places, took me to the doctor clinics. He had busted some crazy doctors who got whacked out on their own product. He said one guy he busted, he was writing scripts as the DEA came in the door and shoving things in his pocket. He was totally whacked out. And he'd go, You know, what I like to, as a filmmaker, say, I don't believe there's any villains, you know, maybe the occasional despot aside. But, you know, usually the things we see in society are a result of some type of incentive for bad behavior. And then greed gets the better of us. I think it was Balzac who said, behind every great fortune lies a great crime. And so I like this idea of taking a look at societies we did in arbitrage with the hedge funds, and saying, well, maybe incentives happened here for people to cut the rules. And that led to the housing crisis, you know, with the collusion of the ratings agencies or whatever. Here, what happened that these drugs got so massively prescribed? Did they influence doctors? Did they have conferences where they encouraged over prescribing? Did they maybe not acknowledge some of the health risks that were known about the potential for dependence with these drugs? And I thought, isn't this a kind of wonderful terrain to take a look around? Because when I make a film, yes, I want to entertain you. But you know, I hope to push people to consider some larger issues. And I think that's the power of film that it can do, right? Well, I mean, and just to give people the proper context here, it is a great film, it is a great piece of cinema, you're a great director. And if you look at the cast, you pull together, This is not like you are preaching to people hey don't take drugs or we have to arrest these people you're exploring it. And still making it entertaining gary oldman plays a doctor in the film who's doing research an incredible performance i think. You know, one of the best since Tinker Taylor, was that the other film he did that I really enjoyed? Like he really brings it, you can tell he cares. Arnie Hammer, who's obviously had some controversies right now, but he's also fantastic in this. Evangeline Lilly plays a great mom. Greg Kinnear, Michelle Rodriguez. I mean, it is a really great cast from top to bottom. You even put yourself in this one, right? Is it Armie or Arnie? It's Armie with an M, right? I always get that wrong. And you put yourself in this one as well. But how do you balance in a movie like this, not being preachy, while still getting a message across when you because you wrote the screenplay as well. When you're writing that screenplay, how do you how do you make it so you're not like talking down to the audience or hitting the chalkboard, like a teacher saying here, you understand that this is bad? Well, I think, you know, we see that sometimes in films that maybe aren't as effective. a sense of, hey, watch this movie, and you got to eat your vegetables. You know, who wants to do that?

### Human: Thank you, Jason. Super excited to be here.### Assistant: Attention, everybody. This is an emergency podcast. Two Apple engineers with thousands of patents have left Apple to create an iPhone killer, and we know what it is. Humane today on the emergency podcast. Stick with us. OK, the billion or trillion or zero dollar question, depending on how the startups go. Hardware is hard, but it does seem like a fascinating device and I'm excited about it. I'll be totally honest. I will be the first to buy it. What are they making? Well, I got a lot of DMs and I got a lot of people, you know, sharing information with me. And so somebody said they're building a contextual recall memory device, an AI cloud wearable camera with an app store. They want to put a camera in every human and then reconstruct 3D environments or just fetch images and videos to you It has a search engine where you could ask while walking on the street, what building is that? And they'll answer it. Okay, this is a very interesting. So that must have been something they talked about in their demos, et cetera. And that's something I was just using with my Louvre event, my Louvre example. But yes, you're walking by a house, you could say, is that house for sale? Or how many square feet is that house? Or looking at a building in a city, hey, tell me about that building in front of me. It says, oh, that's a flat iron building was built in this year, et cetera. These are the companies inside of it. They're first time founders with huge experience. Hope this helps. Big fan of the podcast. Learned so much from you. Thanks, Jason. And then another insider told me, imagine a thin iWatch that you clip to your lapel. So this is the accurate information, I believe. A thin, you know, maybe the size of a cookie, but, you know, square with curved edges. And it will serve as something between Snapchat, Spectacles, Google Glass, and an iWatch. So that means they're probably going to build glasses. It has a laser that can project a UI onto your hand for interactions like dialing a phone number. So this is, now we know what this is. You put this little square on your lapel, it clips on or it magnets on, and then you put your hand out and you say, make a phone call. And it projects the phone call, or you say, call an Uber. And now it projects onto your hand with its lasers, a UI that says, would you like Uber X, Uber, whatever. And you just press a button on your hand. Boom, boom, boom. No need to take out your phone. No need to look at your watch. No need to break your discussion with another person. Um, and the thesis is they want to have people more immersed in the real world, which is what their website says. So that checks out. And the patent seems to explain that as well. They're, um, basically former Apple execs who want to former Apple execs who want to break phone addiction. So that's going to be their marketing. I believe is, Hey, phone addiction is bad. Use our addiction. Use our phone. That doesn't require you to look at the black mirror. And then on Twitter, somebody posted a leak. And it's been deleted, but somebody sent us this image that was tweeted. So if you're watching us on YouTube, or you're watching the video view of the show and the Apple's iPad, you'll see this. Or you can just go to our youtube.com slash this weekend, or you can type humane this weekend startups and it should come up. You'll be able to find our video pretty quickly. And here's the lead prototype. So let me zoom in section by section. Cloud connected site enabled AI platform with server side app ecosystem. And so here you go, that looks like that little square looks just like an Apple Watch. The hardware according to this is 180 field view camera with optical image stabilizer makes sense sounds like a GoPro. LTE and GPS, of course, that makes sense. An accelerometer, that makes sense. LiDAR and time of flight sensor, that's expensive and doesn't make sense. But okay, I guess they want to make that 3D version of the world. photo voltaic surface to sustain battery inductive charging, which means you could probably just snap it off on the magnet, it's gonna be a magnet clip that makes sense and just drop it somewhere to charge it, you're probably gonna have to charge it a whole, a whole bunch. There is a word here hydro phobic. Tending to repel or fail to mix with water or suffering from hydrophobia So I guess it is going to be that's a fancy way of saying waterproof the mounts tension clasp Interlocking pin back or magnetic and they show that here so a clasp would be like a pen right like that little clasp on the back of a pen The interlocking pin back would be like a lapel pin. And magnetic is obviously like when you get those really crummy name badges with the magnets and they fall off five minutes after you use them. Hopefully they use something stronger. In terms of what they say in this leak, the camera captures moments you didn't think to capture, moments you want to recall. You can mark them by tapping record and those moments will be queued to be processed on the server. So you'll recall them in a different styles. This is just like William Gibson had like this little machine called God's Machine or something that will record your whole life. Or this is basically live casting, which means these things are going to be banned in bars or you're going to get punched in the face like people with Google Glass did. A bunch of dipshit like tech people went to bars with Google Glass and got in fights. And it's like, if you walk up to people with your Google Glass on, you're taunting people. It's like walking up to somebody like a paparazzi with a camera in their face. It's just obnoxious. So I predict these things will be banned. Humane will be banned from gyms, restaurants, clubs, and bars. So that's going to be a non-starter. And I had a friend Adeo from, my friend Adeo from the Founders Institute, many of you know him, he's been on the pod, friend of the pod, friend of mine for a long time. And he showed up with one of these stupid life casting things. And I'm talking to him and I said, is that a camera? He's like, yeah, I said, don't worry about it. I'm like, What the f**k? Oh, sorry. What the beep are you doing? Beep that out, please. What the beep are you doing? Like, we're sitting here having a conversation, like, and you're recording me? He's like, oh, it's just recording, like, a little bit. I said, I don't care what it's recording. Take that stupid thing off. And I just left the table. I was just, I was so mortified for a day over doing something so stupid, like wearing that stupid camera to a dinner. And it's just uncouth. So I do believe Humane will be banned in workplaces. It'll be banned in conference rooms. So if you wear it, be prepared to get in fights, is what I'm saying. So this could be a non-starter for this device, I do believe. Just like people, when you go to concerts or parties now, they put a sticker over your front and back phone. And if you take your phone out, you don't have the sticker on, they throw you out. I don't know if you've been to parties like that, but I think it's kind of cool. I love the idea of collecting phones before you go into a party and making everybody more present. But anyway, I tweeted somewhat, you know, simply, I'm looking for the best fifth grade teacher I can find. If you help me find that teacher, I'll give you a $2,000 Uber Eats card, you know, that kind of stuff does work when you do that. And I wound up on TMZ. Oh, daily mail. And San Francisco Chronicle as a rich guy who is stealing a teacher from the public school system, even though we were committed to hiring a teacher who was not currently employed, which was in the tweet storm, but people don't want to read that. But one thing that happened that was interesting is, about 100 people said, Do you know Chris Bennett from wonderschool.com? Because he is doing that exact thing. And I said, Yeah, I I've heard of wonderschool.com. Let's get Chris Bennett on the podcast. So here he is Chris Bennett, the CEO and co founder of wonderschool.com. Welcome to the pod.

### Human: Hi, Jason. My name is Anurag Kumar. I'm one of the partners and co-founders of Inflect Digital. We are a growth marketing firm specializing with startups, helping them scale growth and so our team's all ex-Facebook. But the question I have for you today is because we end up working with a lot of venture capitalists and so and a lot of the feedback that we get is that they are wary of investing in single founder teams per se, right? They want to see like a group of founders and so coming together. Is that a consideration for you? Are you open to investing in single founder teams? And if so, what kind of traction do they have to have? And are there certain verticals that you just won't touch if it's a single founder? And so I'd love to hear your feedback.### Assistant: Thanks. Great question. You're asking specifically about me. Here's what I care about. I care about making money, being successful and dunking on everybody in the world because I got to a startup before they did. To me, that's delightful. I love that. I'm kidding, but not. So let me give you a little history on the single versus dual versus, you know, three or four or five founders. And I'll give you some examples because everybody loves a good example. I met a gentleman named Raul. He had like five co-founders for a really brilliant little app. And he got to the point where this little app called Reportive was gaining steam. And LinkedIn came along and said, we want to buy your company. Now, I don't even know the other four founders of I literally couldn't tell you the other four founders of report of because it's been 10 years, the company only existed for a couple of years before they sold to LinkedIn. And they sold for what would be the equivalent of like, for me as an investor, getting a single, getting on base, like because I got hit on the head with the ball. i put twenty five fifty k and i got back like a hundy you know it's four x i mean fifty seventy five grand it's not gonna change my life i know it sounds obnoxious but that to me that's the worst possible situation but there was a great thing is five co-founders of you lose to you got three spares That was something that Paul Graham realized early on with Y Combinator. Y Combinator had a massive influence on the startup ecosystem. I give Paul Graham so much credit. I know people find him polarizing. The Overton window now is so tight that Paul Graham's tweets trigger people. I mean, that's a whole nother episode. He's a brilliant person who has made such an amazing impact on the technology industry. He's done more for the tech industry in the last 20 years, I think. Definitely top 10, maybe five. Putting that aside, he realized when he was giving people money, in the early days, he had no money. I think he gave 8k per founder. If you had a two-founder team like Reddit, he would give them 16k. If you had three people, he would give you 24k. If you had one person, he'd give you 8k. You can look it up. It was something in that broad strokes. The idea was, You're going to work on it for three or four months. You're going to have 3K each. It was ramen. He called it ramen funding. I'll pay for your ramen and part of your rent. You guys work for three or four months. If it works and it works out great. If it doesn't work, it doesn't work. So that's why you have this addiction to the multi-founder approach. I don't care because there are maniacal people who are exceptional founders who are so good that for them to have a co founder would only slow them down. What co founder in the world is going to be able to keep up with Mark Zuckerberg? Come on. What founder in the world what co founders gonna be able to keep up with Elon Musk? know, like Steve Jobs had was that was actually a true co founder, because he needed a technical person at that time. And so in some cases, it's just much better for the to have to not have co founders, when it is it is good, because it creates redundancy, it is bad, because sometimes it creates conflict and, you know, problems, the, The number one killer of these multi-founder companies is infighting between the founders. You don't see that typically in a solo founder. But with a solo founder, if the solo founder, you know, loses their mind, jumps the fence, now you got a problem because who's going to run the company? So I don't over-optimize for this. I think it's stupid to over optimize for it. I'm not saying Paul Graham's stupid for doing it. He had a reason to do it. It was like a mechanical, technical reason, and he was doing 100 startups. It makes total sense there. What I'm trying to say here is, there's so many more important things to think about with a startup. How good is the idea? How good is the execution of that idea? In other words, how good is the product? How much do the customers love that product? Will the customers be absolutely distraught if the product goes away? If Tesla went away tomorrow, I don't know what car I drive. I go back to driving a Corvette. I mean, I would be heartbroken if I couldn't drive my Tesla, right? And a lot of people feel that way about their iPhones or their Uber or their Postmates or their Airbnb. That's how good the product has to be. So focus on that. I don't care. You want to be one. The only problem I do have is when there's like five, because then who's in charge and then how much equity is left? So then that becomes a math problem. solo founder gets diluted 20% 20% 20% 20% Okay, somewhere along the line, they own 20% of the company when it goes public, right? Or something in that range. You get five co-founders, okay. VCs come in and take 30%, they give 10% to the employees, five co-founders have 12% each, then they get diluted 20%. So they're down to 10%, they're down to 7%. And when you start getting founders into the low single digits, you know what they start thinking? If I start over and I'm a solo founder, I can have 85% of this bleep in company. And I seen it happen. And it's a real bummer. So you got to top off those founders. I have a little secret for that. Because I'm usually early in and I'm the early advocate. I'll just say to the latest stage founders, the latest stage investors, listen, this founder is at I don't know. In one case, it was like, I don't know, 11%. I'm like, this kid's killing himself. He's got 11% of the company. The company had to raise money. It was a pretty hard situation. He doesn't have a co-founder, but I want to give this founder five points over five years. People were like, oh my Lord. I'm like, well, he's almost fully vested. You want to run the company and we'll put the five points and we'll tie it to something like performance or whatever. And I got everybody to do it. Then I was in another situation, happened to be a female founder. She was down below 20%. I think it wasn't as acute as the 10% situation. I think she was at like 15. She wants to do the top off. She says, I want 10% more. I went on 25%. She had just taken a couple million dollars. I'm blurring some of the details here so it's not identifiable. And I said, okay, I support you. But there's two other board members you have to win over with this thing. And so she said, well, you talk to the board member. I talked to the board member. He's hardcore. He's like, no, no. Um, hit your numbers for a year and then make a request. You still have, uh, 18 months left on your vest. When this investment, when you're through this vesting schedule and you've hit this millions of dollars in revenue, then I think you can make that request. And I was like, okay, for me, I'm like, I just want to lock the founder in. I don't want them looking over their shoulder. So great question. I gave you a little more information than you asked for. Uh, but no, Jason at calacanis.com doesn't care if you're solo or two or three. And my point about the Raul story is lo and behold, he started another company called superhuman. There are other partners there, but he's running the show basically. Um, and I think he's kind of a solo founder. Um, although there might be some folks who consider themselves like on the founding team. So there's a lot of like, um, nuance to this as well. The way you know who the founder is, is there somebody who owns 30 or 40% of the company, that's like a solo founder. And if there's two or three of them, you know, typically 10 or 20% each, which can be a lot of money if you stick around.

### Human: Thanks for listening to Dan Pupias' Ask Me Anything. If you'd like to participate in weekly AMAs and discuss all aspects of startup life with Jason and our community of 25,000 founders, join us at thisweekinstartups.com slash slack. Thanks again to Dell, Silicon Valley Bank, and Klaviyo for making this possible.### Assistant: I'd really like to know, what are people expecting from a question about culture? What are they expecting others to give them? For me, if you don't know what culture you want, you simply don't know what you want or where you're going. So culture, my definition of culture is it's the collective behaviors within a group of people, and it's how you interact with each other. It's what you recognize and what you reward. And you definitely can't dictate or direct culture, but you can kind of nurture it and guide it. and encourage certain behaviors. So when we talk about building culture, that's really what we mean. It's about setting these behaviors and these processes, about recognizing intentionally what you want to have in your collective group. So I do think that the best companies have very intentional cultures. They think about the values and about the principles of which they operate with each other and how they behave. But it is somewhat of an emergent organism. It goes back to the gardening metaphor. So in terms of the team question, I'm going to guess that this is around Rangers' culture-building questions. So the way we think about the team-building questions in Rangers is that in modern workplaces, whether you're remote or not, there's often not many opportunities to connect on an emotional level. What we've learned from all the research is that psychological safety is the end point, but what are the precursors to psychological safety? So psychological safety is built on trust. It's built on belonging, which is built on trust, which is built on emotional vulnerability. And that's being able to be open about yourself, be open about your risks, your fears, and not worry about reprisal or judgment from your team. So what we do in the team building questions in these icebreakers is essentially encourage a moment of micro-vulnerability every day. It's like you show your team something about you, which might seem really silly, like, what's your favorite food? But it's actually this powerful habit which then makes you more open to the rest of the team. So when you're going into these other collaborative or exercises or doing the rest of your work, you've got that, you're slightly one leveled up. And the important thing for us is also it's integrated into the work stream. So there's this phenomenon where You have these team-building exercises where you go off-site, and then you come back to the office, and you go back to your work. And you leave all the team-building stuff on the team-building off-site, and you go back to your old behaviors. So it's very important to integrate these team-building moments into the work stream. Otherwise, you essentially have these two separate cultures. You have the culture of socializing outside work, and then you have the culture within the office or within the virtual office, which is how you behave to each other on a day-to-day basis. And I think I had realizations around that where I'd be out with happy hours with people and talking and being really happy, and then I'd get frustrated with them over a code review or a doc and probably treated them not super kindly and fairly. So we need to remind each other that we're human, we're on the same side, we have a common goal, and that has to be deeply integrated into all the work processes. Sanford, how do you split up your day starting a remote company? Do you have days when you do certain work? I'll talk abstractly about this to begin with, rather than just me. I think this depends on your energy levels and how you like to work. I've coached people through this exercise, and there's essentially two extremes, which as a programmer nerd, I call vertical or horizontal sharding. But what I mean by that is that some people prefer to have a day of focus time. So if you're doing a day on coding, you say, Wednesday is my coding day, and I'm just going to block that out and do coding. Other people prefer to have horizontal blocks of time. In the morning, they do some coding work. In the afternoon, they may do investor meetings or one-on-ones, whatever, but it's essentially breaking down your day. I think it depends on your energy levels, how introverted, extroverted you are, and the nature of the work at any given moment. For me, I follow much more of a GTD methodology. to get things done. And by that, I mean, if something is going to take me less than five minutes, I will just do it to get it off my plate and out of my mind. So that might make it seem like I'm interrupt-driven, but really what it means is I don't want to store things in my mental cognitive space for longer than necessary. So I do sketch out my day in the morning. I use Range, of course, to sketch out my day. It has meetings. I have coding tasks I want to get done. But then through the day, I essentially pull things off that list in a pretty random way based on how inspired I'm feeling or how motivated I'm feeling to do different types of work. And then I set myself deadlines if necessary. But I think one thing about starting any type of company, whether it be remote or not, is that there's just a lot to do and a lot is urgent. And that means that you may lay plans and have grand schemes for what you're going to do for over a two-week basis, but then on Tuesday, everything goes to shit, and then you have to reassess that. So you just have to get good rolling with the punches and enjoy the roller coaster. Jason asks, what do we lose by being remote, and how do we get back if we stay remote? So the biggest thing you lose by going remote is these chaotic interactions that happen in the workplace. So if you've looked at Pixar and what they did there when they were designing the offices is they designed the offices to create these random chaotic interactions in common spaces. So they architected where the offices and the toilets were and where the kitchens were, so people would run into each other. And those interactions are both used for transmitting information and sharing data, but also renewing belonging cues. And the belonging cues is, again, what goes back to psychological safety and trust. So when you don't have those common spaces and those common interactions, you lose a lot of those informal ad hoc interactions which actually build the fabric and the foundation for healthy teamwork. So when we go remote, you have to think very intentionally about how you build that fabric. And it's more difficult, but it can actually be, if done well, can be more effective and also more inclusive, which is an unexpected benefit of some of these remote operations. Again, it goes back to the cadence and charting out your week or your weeks or your month and thinking about the interactions that the team has. And some of these interactions have to be about work, about information, like what information you're sharing, how you're sharing context, how you're making decisions. Some of it is about building connections. So how do you remind each other that you're all humans and that you all actually like each other? And the way we've structured our week is we, like I said, we start the week with a briefing. It's in all hands. We have an agenda that we run through every week. Everyone does a check-in where they get to say how their weekend was and how they showed up. We review objectives and we get aligned on the week. We talk about any big successes. And then we move into our team meetings. And the team meetings are an opportunity for the teams to kind of like renew their belonging and alignment. And then throughout the week, we sprinkle kind of social activities. So virtual happy hours or We're doing team-building games. But you can't do just those things. If you do just the virtual happy hours and just the team games, it's not integrated into the work, and then it feels sterile, and it feels separate. So you have to think about every meeting or every opportunity, how are you addressing the cultural needs, the information needs, and the alignment needs. It's difficult, but if you look at companies like Zapier Envision, they've done a really great job at building that foundation. You said you met Evan Williams at the Grove. What's your go-to meal? My favorite breakfast burrito is SF. Probably one of the egg dishes, I guess. I don't have a very good memory for food. It's very utilitarian. It's calories. Also happy to follow up on Twitter on the Twist Slack group, if anyone wants to hit me up with questions, happy to talk about this. I'm a complete nerd about organizational management stuff.

### Human: Listen, if you want to be an entrepreneur or start a side project, Squarespace is an amazing place for you to start. Squarespace is the platform where you can build or sell anything. You all know about it. I've talked about Squarespace forever, but there's so many great features that they've been adding year after year. That's why we use them here at launch for all our websites, remotedemoday.com. You can see one of our latest websites and Here are some of the features that you need to know about because Squarespace has not only the tools to make a beautiful, well-designed site that's responsive on mobile and iPads, it also has e-commerce built in. And they do inventory management APIs, advanced analytics, in addition to those beautiful templates, plus they now have something called member areas. What are those? These let you generate revenue through exclusive members only content. For example, you can sell a subscription to a cooking class or custom recipes or your photographs, whatever it is, If you can think of it, you can build it on Squarespace and you don't have to give 15% of your top line to those other platforms, which is really greedy. That's way too high of a take. They also have appointment scheduling now. So you can add online booking to your Squarespace website, head to squarespace.com slash twist for a free trial, all of that in one simple platform. And when you're ready, you can use the offer code twist to save 10% off your first purchase of a website or domain. We love you Squarespace. Thanks so much for being the longest running partner here at this week in startups. That means a lot to me.### Assistant: All right, let's follow up on our favorite new media company. Twice in one week, we're talking about Semaphore. We obviously talked about Semaphore in terms of whether how much that company and this is, of course, the new media company that was founded by Justin Smith and Ben Smith. So the former executive editor of Bloomberg and the former executive editor of BuzzFeed, I think was his title. had taken, it turns out, some money from Sam Bankman Freed. We don't know how much. There was some scandal about that that we talked about earlier in the week. Well, also, there has been some interesting bubbling up about some of the other ways that Semaphore was doing business. Bill Spindle, who had been the climate and energy editor at Semaphore, has left after saying that his tenure was, quote, marred by an over-dependence on Chevron advertising for months. This is a very interesting story because Semaphore just launched. It's a digital media company that is, quote, based on journalistic transparency, launched in October, literally a few months ago by former New York Times media reporter Ben Smith and former Bloomberg Media CEO Justin Smith. They raised that $25 million in private capital, including some unknown amount that we talked about from SBF. They have currently said they're not going to return the money. And then there's been this kind of question about now. where their additional funding and advertising has come from. So Bill Spindle, just by way of biography, formerly worked at the Wall Street Journal, he covered climate and energy issues through an independent newsletter. He blamed his extremely quick departure on this Chevron advertising. He said that, you know, Semaphore essentially took on Chevron as its primary advertiser for climate and energy reporting. This is whole other interesting topic that Spindle has said he's going to continue to write about, which is fossil fuel advertising, the kind of effort to maybe greenwash their businesses by advertising on climate content. So what Spindle said is that he always had these concerns about Chevron appearing as an advertiser on his actual work. He didn't really want people to open his climate newsletter and then see a bunch of ads for Chevron. So he claims that Semaphore acknowledged his concerns, removed Chevron advertisements from his emailed climate newsletter, but then didn't ever remove the ads from the stories. Now, a Semaphore spokesperson told The Wrap that they parted ways with Bill because of quote, issues unrelated to any advertising partnerships. The spokesperson also said the company, quote, adheres to robust ad acceptability guidelines that we stand by and that are industry standard. We did not remove advertising due to editorial requests and have a number of rotating sponsors on the climate newsletter. On Twitter, Bill Spindle posted a thread about his departure saying, quote, I'm not saying they or Chevron improperly influenced the climate coverage. I could call it as I saw it. What concerned me was my belief that it was not appropriate to have Chevron advertising on the same page as stories on climate coverage, particularly as the dominant advertiser. Chevron often appeared as the sole advertiser, he wrote. Despite my expressed discomfort and concerns, the ads remained. Weeks before our parting of ways last week, I told Semaphore leadership I saw no easy path forward as long as fossil fuel ads were in the climate stories and newsletter. So Semaphore seems to be saying that there are rotating ads. They're not necessarily denying that there were Chevron ads on this content. This is interesting for a couple of reasons. One is journalism writ large. I guess I'm not a journalist anymore, so I can just say it. I feel like it's been a long time since you could say, as a journalist, I am so precious about my work that I don't want these ads to appear here. I remember when I started at CNET, we would have conversations about whether like a Samsung ad could appear on a review of a Samsung phone and that that could give people the wrong impression. And I know that there are still a lot of journalists who have these concerns about advertising. For years and years, like the hosts of a program would never read the ads the way, you know, that we do or like if you listen to Pivot or, you know, I think Marketplace, like you don't read ads, but there's some creep in that direction. So this feels like a couple things happening at once. One, a very old school journalistic approach to content and that being influenced by kind of the drift toward advertorial towards sponsored content. And I could imagine, particularly if you're a climate reporter, you really don't want to give the impression that your news is being sponsored by Chevron. However, as somebody who has now become a dirty capitalist, like the thing about journalism is you have to get the money somewhere. And so I'm also sympathetic to the editors of Semaphore, who at some point were saying, like, look, if you want this content to exist, we only have one sponsor here. They're saying they have more than one, but you know, we've got a sponsor willing to pay a lot of money. It happens to be Chevron. Do great work. We're not telling you what to report. I'm not sure I have like a final opinion here, nor do I need to. I think it's a tough situation to be in. but it seems to say something more about Semaphore potentially, you know, which is an organization that also said it was going to be committed to like really, really, really high standards of journalism and telling the truth. And then in one of their launch events, like immediately interviewed Tucker Carlson, who has used more than once as a legal defense against being sued, uh, the argument that he is an entertainer and not a journalist. So I think that between this and maybe the SBF thing and some of the early editorial decisions, it's possible that your more high-minded journalist types aren't feeling like this is the right place for them, which is kind of interesting. All right, quick crypto story that I'm just going to tee up because we do have Sonny and Vinny coming back for a crypto roundtable, which it feels like it's been forever, even though it's just been the regular two weeks. But interesting news about a company called Nexo, which is, I think, potentially like one of the last U.S. crypto lenders still standing or at least major lenders. And Nexo is evidently planning to phase out US operations. It had already off-boarded some clients in New York and Vermont. It will now suspend access to new users in Indiana, Kentucky, Maryland, Oklahoma, a couple other states, and said, our decision comes after more than 18 months of good faith dialogue with US state and federal regulators, which has come to a dead end. Nexo lent on a high yield crypto interest product called Earn, which we assume is the main target of scrutiny because investors are questioning balance sheet transparency, the health of crypto exchanges overall, how you can possibly get these high returns. You remember Jason has more than once ask this question of like, if you're promising 18% yield, in this case, earn was promising up to 12% APY, which is more than the average S&P 500 return of seven to 8%. Where is that money coming from? So I'm of two minds here, which is on the one hand, we talked yesterday about the incentive to be a good actor in the crypto space at this point, when regulators seem to potentially be slowing things down. But at the same time, these are actually questions that we really want regulators to ask. So we will talk about that more on the Crypto Roundtable with Sunny and Vinny on Thursday. But at this point, it feels like this whole industry is coming apart. Or maybe the generous interpretation is that all these kind of poison flowers are dying. And you're or you're seeing like a really big forest fire, but then you're going to get new growth and green shoots of projects that are based on real fundamentals, which I think is what this whole industry is hoping for, as some of this stuff gets washed out. And I Listen, I don't know for sure that NEXO is sketchy, but I can say that if you can't come to an agreement with regulators who are starting to ask really real questions and your solution to that is to go overseas instead, you know, maybe, maybe this is part of the forest fire and we'll be hoping for the green shoots. All right, that's it for the news today. Up next, we have a great segment of Ask Jason with questions from our founder, university founders. And then I'm coming back to talk to Rachel about a wild social story. To wrap up the show, there are a lot of social media alternatives popping up and going away quickly. And this is one in the latter case. Enjoy.

### Human: All right. Great job, Lil. Great job, Ben. Ben, let me ask you up front. What were their moments during this pandemic when you thought this is just too much trouble and it's worth maybe I just have to wrap things up and shut the company down. And then I guess on a personal basis, what kept you going? And I suppose getting control of the numbers and knowing you could land the plane safely was part of that.### Assistant: We covered the first couple of areas about just really foundational structure now let's talk about monthly financials and look i know it's not exciting to talk about math and accounting and although i'm the CEO and founder of zendu i'm not a CPA or an accountant i've been in small business my whole life and i think it's crucial just like ben was talking about earlier that you have to know your numbers and you have to have visibility to your numbers Right everybody wants to know how they performed and how they're doing and so the purpose of your monthly financials is just that it is twelve months a year so there are twelve opportunities that you're gonna lock in the you know how your expenses your money we pay rent. on a monthly basis, right? We pay payroll two times a month for a monthly amount of payroll. So you need to track your revenue and track your other expenses. If you have SAS subscriptions, they're on a monthly basis. So you want to track that to see is there profitability or the path of profitability. So the benefit of your monthly financials, which are your profit and loss statement, your balance sheet, and the cash flow is just that it's a, it's going to give you the results. So profit and loss is capturing all of your expenses for the month and all your different revenue streams for the month into one or two pages that you can look at and that will tell you, are you profitable or are you not profitable? And you should look at that both in dollars and in percentages to see what you need to do to adjust for your business. Balance sheet is more of a, of a longterm look. Your balance sheet doesn't change that much monthly, and it may not change at all monthly. If you're a cash based business, um, your balance sheet though, is where you're going to capture your fixed assets. You're going to capture inventory numbers. You're going to capture other things. that are more of a long time i set liability and then cash flow. Is that all about knowing your burn right are you positive are you negative cash flow how much money do you need to keep in the bank that's gonna allow you to sleep comfortably at night and allow you to get where you're headed with the business. So purpose of your monthly financials, it's your scorecard, it's your monthly checkup, it's a temperature check. It is the heartbeat of your business. Absolutely, you need to have monthly financials. We believe that you should do your monthly financials from day one. Some businesses, you know, will just kind of do it ad hoc and then try to catch up later on. It's really important to get into a great habit and routine of doing your financials monthly. It gives you the opportunity to adjust the flight plan. And also when it's time to go out for, for investing, it gives you credibility and investability because the, the investors are going to see that, you know, you're crossing the T's dotting the I's and that you're just staying current and that you have great system process and structure in your business. So number five, budget and forecasting. So budget's crucial to know on your runway. How much money do you have? Are you going to be able to get that plane in the air and keep it in the air, right? So you need to know, do you have to have enough money to do that? And it's really, it's forward thinking. So monthly financials are reporting backwards. It's a look back, rear view mirror. And then budget forecasting is educated assumptions on future performance. You're taking the past and saying, we're going to get better. And in getting better, this is what we believe we're going to do. And this is how much money we believe that we need to do that. And then number six, the last piece here is the financial team, right? So the, the encompassing umbrella is accounting. And so if you think about what goes under accounting for your business, what do you need? And what's the timing of that? There are four key pieces. So there's bookkeeping, payroll, CPA, and CFO, and we're going to break each one down. So on the bookkeeping side, we highly recommend that you outsource it. It is something that you don't need to have on your plate. It is economical enough to have an expert do it that's going to maximize your tax savings and that understands that tool. The tool would be either Xero or QuickBooks. That is your profit loss in your general ledger so outsource it cloud base weekly bookkeeping right we do weekly bookkeeping and then monthly reconciliation that's what you want from whoever is doing your bookkeeping so payroll. So we recommend that you use a cloud-based company, because cloud-based, the world is digital, so we all should be using cloud-based partners. And we recommend that you pay twice a month and that you look for a company that also has HR benefits that you can grow into. Because as businesses scale, typically around 20, 25 employees, that's the time that you're going to need some help on the HR side. So always look for somebody that could give you a hand with that. CPA. So CPA is crucial to your financial team, right? It is somebody that's going to give you strategy on tax savings. They're going to talk to you about tax planning and compliance. And compliance is a very key area, not only for you and your business, but also for your investors, because they want to know that who they're trusting their money with is making sure that they're keeping the business compliant and that everything is as it should be with the IRS. So you have to file taxes annually. And a lot of people, this is an area that when we talk to a lot of startup founders, that this is the area that's confusing for them. They're like, well, you know, how do I know which tax return to file? When do I file it? And the government makes it a little confusing, right? Because typically for most businesses, your tax period is the calendar year, January to December 31st. But then depending on what tax type you are, C-Corp LLC will determine do you file by March 15th or by April 15th, or if you're a C-Corp that you choose a different fiscal period, then it could be June 15th or it could be April, it could be September. So that gets a little cloudy. And then along with the federal for your tax returns, most states, all but seven states, require you to file a state return. And a lot of companies and CPAs will charge you extra for those. So if you are operating and you have team members in three states, your tax return will cover federal and one state. And then you need to make sure that you communicate to them that you have team members in other states, so then that they can file those other state returns. So a CPA is somebody that you want to talk to throughout the year. and they're very much different than the CFO. CFO, the last person on your team, is somebody who is looking forward, right? CPA is working with your financials that are the look back, rear view mirror, and doing the reporting and filing taxes. CFO, their job, forward looking. Budget and forecasting, board reporting, and the timing of when you need a CFO. There's a lot of great articles out there, and the timing used to be Series B, Series C, have a full-time CFO on. There's a lot of fractional CFOs now, and a lot of people are saying that when you raise a big Series A around, add you know seven million ten million twelve million dollars time to bring in a cfo because they're gonna help you on the forward side of how you can tighten up expenses where their savings their job is to look for all of the patterns of what's happening and help you adjust for that before you get to reporting and say wow we burn too much money and that's the job of the cfo. So in summary, if you have a really strong accounting structure, it's blue skies, you're going to sleep well at night, you're going to understand your financials, and it's really understanding your financials is the oxygen to scaling your business. Thank you, thank you, Launch, Jackie, Jason, super honored to be on with everyone today and have an opportunity to talk about financials and your financial health, lilrobertszendu.com. My email's here in case you'd like to reach out with any questions. So thanks so much, honored to be with you today.

### Human: Yeah. And the twin is in jail. I'm like, what is going on here? I mean, literally the movie was such a mess. I had to like read the recaps to understand what happened. That's when you know. something. I mean, David Chase didn't direct it. So I think that was the main problem. Okay, vertical takeoff and landing Vito company, Joby Aviation is making moves. Over the past month, they announced an upcoming air taxi service in South Korea. And they asked the FCC for permission to test air flight taxis in the Bay Area. As I predicted, and they broke a VTOL speed record. Let's zoom out and break down what's going on here. As you know, they went out via a SPAC. The SPAC has not done very well. Their stock has been decimated. It's down 70% over the last year like most other SPACs and tech stocks. As I've said many times in this program, SPACs are an innovative and interesting way to get access to the public markets. However, what we've seen is exactly what I've said. day traders, people flipping stocks are the antithesis of what you want in a venture backed company. When people are trying to figure out product market fit, do you want people day trading? Or do you want them betting on the stock and waiting 10 years like I do for a living? Well, if I had to day trade Uber, and Robin Hood and calm from, you know, years two through 10, I probably would not have done really well with those investments. But the fact that I had to be locked up and wait five to 10 years to have any kind of liquidity was a gift, in most cases on Robin Hood questionable, but I think it will wind up being a gift we bought in when it was a very nascent company. So Joby stock is way down. It's now worth 3 billion after being worth about 10 billion at this time. Last year, 3 billion. So a fine market cap for a private company like Joby, I think it would probably be worth five to seven as a private company. I don't know their last private market evaluation because people would then of course be holding for a five to 10 year window. However, partially due to the recent announcement stock is a little bit of momentum. It's up 30% over the past five days to five bucks or so. Q3 earnings in September, Joby is still pre revenue. As again, you know, when companies become worth a billion dollars and their pre revenue, and their pre product market fit. Remember, Jason's law could be a scam or it probably could fail. So you know, Joby has got a lot to prove. I think in this case, Joby's a bet I would want to make at $3 billion. I'm a buyer of the stock, I'll be honest, knowing what I know. even though they lost 185 million in the first nine months of 2021. That's what these companies do, they lose money, and then they print it. Because it's speculative technology. They currently have 1.5 billion in total assets, and they have something like six years of runway based on their burn. Joby announced in January, they hit 205 miles per hour during a test flight of their s4 aircraft. which they claim to be the fastest record ever. Next stop is doing it at 10,000 feet in July, the s4 also surpassed the estimated range of 150 miles by covering 154.6. This was on a single charge during a 77 minute flight from San Francisco to Lake Tahoe. That's an amazing feat. And that's exactly the kind of routes we're going to be talking about people taking you want to go from the bay to Tahoe the bay to Reno the bay to Napa Napa you know, to Reno, all that kind of stuff is a really interesting use of these. And I predicted going over mountains and going over water is going to be the first use cases here. Because if these things fall out of the sky, the chances of it falling out of the sky into the water and the people surviving is great. And the chances of it falling out of the sky into the water and landing on somebody is low, right? That's a really great use of this job. He claims it's 100 times quieter than a helicopter. I think that's actually true wingspan of almost 40 feet and a weight of 4400 pounds, this person can carry a pilot and up to four passengers, which I think is the perfect mission. In January, Joe, we secured a $40 million contract with the Air Force for its agility prime program. that aircraft is expected to begin flying latest month and will be put into service as part of Joby's agility prime contract with the US Air Force. You can imagine why the Air Force is interested in these things. Maybe going from, you know, battleship to battleship or short runs with special forces nice and quiet, you don't have to use a Blackhawk. Really a lot of great uses for these. Joby also filed documents with the FCC, which asked for permission to test out air flight taxis in the Bay Area. I predicted this, I didn't have inside information, but I think it's kind of obvious. One of them is between the Golden Gate Bridge and Alcatraz Island, the other is south of the Golden Gate, the Bay Bridge, which is in Almeda. If you don't know the Bay Area, there's a bay separates the Golden Gate Bridge separates the north from the south, the San Francisco City from Napa and those areas and the Golden Gate Bridge, you see constantly helicopters flying in and around it doing all kinds of tours. Imagine something like that, where you go from the bay, and you fly out and see the Golden Gate Bridge and go around Alcatraz. What a great route that is. South of the bridge, if you go east, and then a little bit south, you get the Bay Ridge that connects San Francisco, with the East Bay that includes Oakland and Berkeley. What's great about that area, we have SFO there, you have the Oakland airport as well. And those two airports could have taxi service between them. So if you were coming internationally and needed to do a puddle jumper from the South Bay, that could be very compelling. Or maybe people from the East Bay who are commuting into work or to go to a Warriors game at the Chase Center could take something from the Oakland airport, right to say Chase Center or to the baseball, where the Giants play. These are all really interesting routes. Again, you're over water. And so it's got a tourism thing and a practical, you know, sort of effect, where you could use it for commuting eventually. And these are going to be done publicly. And according to Joby, I think, they're going to do these to get more media coverage. And they're going to provide our taxis in South Korea as well. Not sure where but there's plenty of places with water. I think the next place also is Australia to do these because again, a Bay, New York perfect, you want places with good weather. And probably Bay areas, the plan is to begin with one or two routes in Seoul. And they want to get up to 10 air taxi terminals by the end of the decade, all of which would connect to local buses, subways and other forms of mobility. So again, this is like connecting people, they get off the subway, they go to the airport, they get out of the airport, they get to the subway or buses. These are the future in my mind of transportation. I think that these are going to be here long before self driving sort of hits critical mass. I know that might be controversial statement. But these things are going to be the game changer of all game changers in terms of transportation. I think they're going to be extraordinarily safe when compared to helicopters, which is a pretty low benchmark. And then the question is, are these safer than driving in cars. And so I think there is a chance within 10 to 20 years, we'll look at the statistics for flying in a veto, and the statistics for driving in the ground, and the vetoes will be safer by miles traveled than cars. Why? Because it's going to be a shorter trip, you're going to be able to go 200 miles an hour, which means in a car, you're going to be going 50 to 75 miles an hour. If you do it on a per mile basis, it is possible that just like in commercial aircrafts, it's safer in the air than in the ground, because of how fast you're going on a per mile basis. So I'm really excited about this future. Thanks for tuning in. Next up, Molly is going to talk about buy now and pay later, a space with a lot of challenges. And I wonder if this space could be maybe incentivizing people who shouldn't be paying later and who should be buying now with cash. Maybe they're getting ahead of their skis. We'll hear more from Molly in the next segment. Stick with us. If you listen to this week in startups often, you've heard me talk about Odoo's suite of business apps a lot. Well, they are going to give you your first app free forever and $1,000 off your first implementation pack at odoo.com slash twist. Here is why Odoo is great for startups. Their suite of business apps helps run your entire company on one platform. And they'll streamline workflows by bringing all your information together. This eliminates annoying repetitive tasks, like entering data across multiple platforms plus If you only need two or three apps to optimize your workflow, that's all you're going to pay for. Odoo won't charge you for apps you don't use. Odoo offers over 30 main apps and over 16,000 apps from their open source community. Their apps include bookkeeping, sales, CRM, website builders, and more. So again, your first app is free forever. But Odoo is also offering you $1,000 credit on your first implementation pack, which you can get at odoo.com slash twist. That's odoo.com slash twist to get that $1,000 right now.### Assistant: Alright, so we're tag teaming the news today because look, sometimes you're just on different schedules. So we each get to bring a story or two that we're obsessed with. I have actually been fascinated by the kind of disruption of banking and payments for a long time. And back in 2019, I actually wrote an article for Wired about neobanks, you know, neobanks, of course, being this kind of fancy skin on top of banking services. Chime is, of course, I think the one that you know the best, and there are a couple others. But what I wrote is that the future of banking is your bro. That was the headline, the byline or the tagline was our present financial ruin is being turned into a business model. I'm just going to do that thing where I quote from my own article here. The latest wave of tech based financial startups have a new angle on the banking sector. They'll assume that everyone is out of money, and then try to monetize their brokenness. Because the thing that makes these neobanks so attractive is they're really convenient. They're these all digital mobile alternatives to big banks, they're a lot friendlier, you don't have to like go in to a bank and they emphasize customer service, but they also offer things like what I called a neo payday loan. They'll cash your paycheck up to two days before you actually get paid. They offer free checking accounts, which people like. They also let companies go 50 or a hundred bucks into the red before they start charging overdraft fees. So as you can see, it's kind of based on the reality, and this is true. that at least at the time, according to the statistics I cited then in 2019, 78% of Americans live paycheck to paycheck. Poll data now cites between 50 and 63% of Americans living paycheck to paycheck. Stimmies, am I right? But the pandemic did help people a little bit in this regard. What we, I guess, have to see is how long that lasts. However, student loan obligations, still pretty big $1.5 trillion. As of March 2021, this number has increased by $100 billion. So $1.6 trillion. So you can sort of see what I'm getting at. As of March 2021, the average credit card debt was $6,000. You're in this situation where banking services are coming along saying, we know you're in financial pain. Let's help you out. But here was my conclusion to the article, quote, again, I know it's weird. I'm quoting myself, but like I wrote it a long time ago, so I can't remember what it said. A second problem is more serious. Ultimately, no amount of friendly design, accessible features and overdraft protections will solve the underlying problems that made these services necessary in the first place. No neobank can erase the student loan debt or the 40 year stagnation in wages or the unexpected medical expenses or the crippling reality of America's existential brokenness. The neobanks have promised that they'll ease your pain, but that's just morphine for the real condition. When it comes to the actual sickness, you're still on your own. All right. So that was then. And in the intervening years, another aspect of neobanking has gotten bigger and bigger in the consumer finance space. And that's a BNPL or buy now, pay later. There are a couple large competitors here. The U.S. based Affirm is probably the best known. It went public in January 2021. Former PayPal executive Max Levchin is the founder and CEO. And Affirm peaked at an almost $50 billion market cap in November 2021, $168 a share. Since November, not so good. That stock has dropped 75% to $43 a share. Its market cap is now just $12 billion. And then since last week, it's gotten even worse. The firm's stock has dropped almost 50% from $79 a share to $43 a share after a not great earnings report, which we will get to in a minute. The other big players are Australia-based Afterpay, which I think might be the most dystopian company name I've heard in a really long time. Afterpay. Afterpay was acquired by Square or Block. for $29 billion in August 21. People are seeing a lot of money in this space. Sweden-based Klarna is still private, but raised at a $45 billion valuation in June of last year. And then PayPal has a fast-growing buy now, pay later division too. This is a highly capitalized space, which does make you wonder where investors are thinking that all of this money is going to come from. Investors do love consumer finance. It just makes money. And the thing that it makes money on a lot of the times is fees, including potentially late fees. All right, back to Affirm and the way this business is going and why this stock has been dropping so fast. In its Q2 report, Affirm said that gross merchandise volume, or GMV, the total value of all merchandise sold on Affirm was $4.5 billion. That was up 115% year over year. That seems good. revenues of $361 million up 70% 77% year over year. Great, right revenues minus transaction costs of $183.6 million up 93% year over year, GMB revenue and revenues minus transaction costs were all up massively year over year. But our favorite analyst and friend of the pod Alex Wilhelm of TechCrunch tells us the problem in one simple chart. So Alex points out that a firm's revenue as a percentage of GMB has been trending down since Q4 2020. So a decreasing revenue as a percentage of GMB, I think Alex would say, means that it's sort of like not good earnings. You know, we talked about Tesla's earnings and he said they were high quality. This means that a firm so far is somewhat low quality because rising sales volume is resulting in less revenue over time. The company is getting less efficient as it scales. Obviously, the best companies take advantage of economies of scale, right? And they get more efficient. That does not seem to be the case, at least based on this trend. So far, a firm also reported a net loss of $159 million in Q2, which was six times higher than its net loss in the same quarter last year. So here's where Alex makes his major point, which is that a firm on a net basis is very unprofitable and their revenue growth as a percentage of total GMB is slowing down. The more they do, the less they make on a percentage basis. And those two factors obviously combining are what likely led to this sell-off last week. Now, Back in November, 2021, Affirm got investors excited all over again because it announced a major partnership with Amazon saying it would be the go-to buy now pay later solution on the platform. This was shortly after the stock hit an all-time high, but this again might be an area where Affirm is accepting worse economics in order to drive growth because Amazon is not going to do some kind of incredibly profitable sharing situation. with a firm. If a firm starts making a ton of money and taking a cut off of every single Amazon purchase on the platform, you have to assume that what Amazon is going to do is probably build its own version of that. And Amazon itself, by the way, wasn't even profitable last quarter outside of AWS. So moving into retail at that volume is one, a copycat risk, and two, not guaranteed to produce profits, especially if a firm's customers keep ending up being basically more expensive. CNBC asked Max Levchin about the economics of the deal with Amazon. Max declined to comment. And it sort of seems like as the revenue diversifies, what a firm is going to do is go after smaller payments from less affluent customers. So it made a ton of sense, for example, when you were buying a Peloton and that was a $2,500 purchase. You were like, yeah, you know what? Regardless of my income status, it's just more comfortable and nicer to spread those payments out over some period of time, especially at 0% interest. But here's Max Lebchin talking about how the company is going to start taking on more risk to drive growth.

### Human: I'm very confident that any reasonable person looking at the circumstances in which we took that decision and looking at our existing policies will agree, given the, in my view, sort of crystal clear link between the words of the former President Trump and the actions of people on the Capitol, we felt it really was, whilst it's a controversial decision because he was the President of the United States, it actually wasn't a particularly complicated one to take, given it was so obvious to us that that was contrary to the longstanding policies we had in place.### Assistant: What is Facebook's oversight board? That's what you're asking right now. Well, you might have missed the news about this. It was announced a couple of years ago, back in November of 2018. Mark Zuckerberg first mentioned the idea of an independent oversight board. That probably means it was brewing for a couple of years. And here's what he said. This is the quote from a November 2018 post, I've increasingly come to believe that Facebook should not make so many important decisions about free expression and safety on our own. In the next year, we're planning to create a new way for people to appeal content decisions to an independent body whose decisions would be transparent and binding. The purpose of this body would be to uphold the principle of giving people a voice while also recognizing the reality of keeping people safe. I mean, talk about dramatic foreshadowing here. This is exactly the ultimate test case, the ultimate stress test for Mark Zuckerberg's new Supreme Court and him saying that it would be transparent and binding and it would occur outside of Facebook is really what makes this a pretty I have to say interesting next step from I was gonna almost even say impressive, and I'll get into my analysis of it in a minute. But we should get through this a little bit. Facebook announced the funding in December of 2019, an initial commitment of $130 million to launch its new oversight board, which is designed as a way for users to appeal the social giants content decisions. The purpose of this board to be clear is not to make decisions in real time. There's still a safety group at Facebook dealing with less stuff. This is for appeals. you've been banned or the contents been taken down or the accounts been taken down and you want to appeal it? Do you appeal it to Facebook and Zuckerberg makes the decision kind of uncomfortable. Here's a third party that's funded by them and how third party is a company or a nonprofit or an NGO, whatever this is being funded by Zuckerberg himself, I guess that's a really good criticism and concern. So what is the oversight board? The oversight board according to the Associated Press is Facebook's panel intended to rule on thorny content issues such as when post constitute hate speech, or the decision to ban a world leader was the right one or not. That's what the Associated Press describes this as from the AP, it is empowered to make binding rulings, that is rulings that can't be overturned by a CEO, Mark Zuckerberg, or the board of Facebook, etc. So is it actually going to be legally binding? I could see if Zuckerberg didn't like this, he could just just say, we're not going to listen to the oversight board again. So that's, you know, the interesting, he would lose some credibility. But I mean, he doesn't have much credibility in my mind to begin with. I mean, he's double crossed so many people have made so many horrible decisions. and has the largest fines ever handed out to a corporation ever with the exception of maybe Exxon or BP oil. He's got some of the record fines there. So I don't think he has a problem changing his mind. It does have 20 members. The first one members were chosen by Facebook. And Facebook also pays the members the board members salaries, according to the Associated Press, also from the oversight boards website, their stated purpose, the purpose of this board is to promote free expression by making principled independent decisions regarding content on Facebook and Instagram, and by issuing recommendations on the relevant Facebook company content policy. So there is going to be some sort of loopback if they figure out something about hate speech, or you know, something from hate speech in another country might be different than in France might be different than the US might be different than Australia, they can adapt and change those. So I think this is a way for them to say, Hey, look, going forward, if the board, the oversight board, see some trends, they can go influence how Facebook does their day to day decision making. Alright, so just some timeline about this board. The website is oversightboard.com. The board trust was formed in October of 2019. It began operation in October of 2020, which is yes, that's right, only a couple of months ago, and they've received over 20,000 appeals as of December 1. And the cases that have actually been evaluated equals six, that means point oh 3% of appeals make it to review for those of you who are slow at math, and who knows, maybe more of them will be eventually reviewed. But I think this is going to be one of these situations where they're going to take the most important cases, perhaps the ones with the most followers or the ones that are most covered by the press, who knows what vector they will define importance as, but obviously, Trump's going to go to the front of the line. Some of the examples that the oversight board is reviewing, according to an axios article, one of them is Facebook removed a user's post where they were quoting via violent rhetoric from former Malaysian Prime Minister Mahathir Mohammed, but the user says the post was intended to spread awareness of the horrible words. So that's an interesting one. If you quote somebody, if you quote Hitler, if you quote somebody who says something horrible, are you responsible for it or not? And if a journalist quotes something in that context, That's fine. The New York Times could quote, you know, a despot or a murderer or serial killer, that doesn't mean that you're endorsing it. But if those horrible words are put on Facebook with no context, they could actually be amplified. And it could be amplified by people who are white supremacists or whoever arguing about different treatments of churches and mosques in Armenia and Azerbaijan. That's a fascinating one. And in each of these first two, you you have different types of governments, and they might take these different arguments, they might assess these different arguments in the local context. And it might be very different than what we're used to here in America, a user in Brazil posted photos depicting breast cancer to raise awareness, but Facebook took them down because female nipples were showing. And this is something we all know on Instagram, the free the nipple trend that's been happening every couple of months, it trends on social media. because Instagram was taking down pictures of people breastfeeding, etc. A quote from Nazi propaganda minister just Joseph Goebbels appeared in a post by a US user who says he intended to underscore a slide toward fascism in America, Facebook removed the post under dangerous individuals and organizations policy IE is this person quoting and saying, I hope we do not reach a level where you know, this Jersey, Joseph Goebbels, po, you know, quote is reality, etc. And how do you know what the intent of the person is? And I think that's what this board will try to do is figure out the intent, and maybe how to contextualize these things. And the only case that was referred to the board by Facebook itself rather than users involves removal of COVID-19 misinformation, which misinformation is in the eye of the beholder, because we had our own government and the World Health Organization giving us mix signals on of course mass wearing and you know many times governments have been involved in conspiracies governments have lied government agencies have done propaganda that is not true and so now we're asking facebook to sort all that out for us it's and also science changes over time what might be incorrect science and considered a conspiracy theory might be a cover up, you know, to another person. So if this had been the case, from the movie, The Insider, a great film with Russell Crowe, would that person investigating big tobacco be silenced because they were spreading popping propaganda that cigarettes were dangerous at that time, that these are the kind of things that make this actually a really difficult way or a difficult process. And you know, of course, you're probably wondering how are these board members paid? I want to jump to that because I think it's super important to the amount they're being paid is undisclosed as of yet, but they did put 130 million into this and they have a huge staff from what I understand here is Aspen Institute's executive director, Vivian Schiller, who was asking a board member of the oversight board, Michael McConnell, if members of the board are being paid and how much Here's the 18 second clip.

### Human: And you know, the other big thing is that the way we also grow and I think it's, you know, the way we get a lot of customers is that we have very strong word of mouth and people like tell others about us. And I mean, all of that contributes our business model kind of makes sense. It makes sense for us to be able to, to offer it at a very good price.### Assistant: All right, everybody, here's your CTA the old call to action twist listeners 20% off any plan for your first six months. Just sign up at open phone.com slash twist. And if you got an existing number, no problem to put it right over open phone.com slash twist o p e n p h o n e.com slash twist today for 20% off later in that first season in 2019. We had expand CEO and co founder Tim Junio on the show now Tim joined the show on Episode 992. In October of 2019. Expanse is a cybersecurity startup basically was founded in 2013. They provide it and security teams with visibility into basically internet attack services. What does that mean? You got a bunch of stuff connected to the internet could be your employees, computers, laptops, phones, servers, it could be your door, it could be your door key card readers, it could be cameras, any of that stuff. And you need to use software to figure out if you're being attacked. And the software that comes native into each of these platforms may not do a great job. So there's a whole business in looking at the surface area of attacks for any corporation. And as you add IoT devices, Internet of Things to your company, or you give your employees more devices, iPads, whatever, That's how these break ins happen. That's why sometimes a company as we saw with Twitter, lost a bunch of corporate information, they got hacked, and it caused a lot of problems for them. It's typically they're not using enough software to reduce the surface area of attacks or minimize the surface area attacks or even find out about them in time to stop them. At the time expanse had recently raised a $70 million series C at a $500 million valuation. And just over a year after joining the pockets, Tim sold his company to Palo Alto networks, and they paid around 800 million in the form of cash stock and what's called equity awards. you're probably asking what's an equity award? Well, you want to keep people around, right? We saw this with Figma just getting bought by Adobe, when you buy a company, you don't want people leaving because they have all that cash, and they just want to go buy a house in Kauai and chill, you want them at the company working and you want to make sure that acquisition is successful. So they will put the golden handcuffs on you in the form of equity awards, the equity awards could be based on time, that could be based on performance, that could be based on revenue. any number of things. And usually it's a combination. So they'll say, Hey, listen, the management team's got to stick around, we're going to vest your, you know, we're gonna give you these equity awards over the next four years. And if revenue hits these targets, you get, you know, double. So a great way to keep people engaged. didn't quite hit unicorn status. But I'm going to say close enough. They probably sold close to the top of the market. He can't time these things as founders, can you? There's an expression we have in here in Silicon Valley, great companies are bought, they're not sold. So what happened here is they were probably on a tear. Palo Alto networks looked at it said, Hey, this company's got 50 million, 40 million, whatever it had in revenue, 80 million. We have a thesis that we could 10x that revenue. Let's take it out before they go public. Let's take it out for other people find out about it. But And so for the people who invested at $500 million valuations, who did that series C, it's kind of a bummer, right? Because they barely doubled their money, unless in the documents, there was a minimum return for them. And I suspect there was depends on the terms depend on the investor, but they can put in the documents, hey, we get a minimum of twice our money back. So let's talk about what that means. They put in 70 million at this $500 million valuation, you know, and that gets them a certain percentage of the company, you know, 12 13%, whatever it is. So they have that percentage. Now they sell the company for 800 million. Okay, that's like 60% more than they invested. So you would think they're 70 million would be worth 60% more, roughly just over 100 million. Well, they could put in the documents will invest a 70 million, but we get a liquidation preference, we get participating preferred some note in the document, it can be structured a couple of different ways. But we want at least twice our money back. If that happened, then 140 million double the 70 million would come off the top of the 800 million. And then people would split it after that, or they might get 70 million off the top, there'd be 730 left. And then they would get their whatever 13 or 14%, depending on the equity and how much the employees got. So this happens, it's part of the game in Silicon Valley as investors, sometimes you have a quick sale. And that investor who put the 70 million and they probably didn't have the right to stop the sale. So this is where something called protective provisions comes in for companies. And for venture capitalists, when we invest in companies, we get preferred shares, and then the board has to vote, are we going to do this and you might have a blocker. So this investor obviously did not have a blocker. or they had a ratchet where they got the full ratchet, I mean, they got double their money. And so they didn't need the blocker. And these are the late stage nuances of dealmaking. Sometimes a founder really wants to get a high valuation, they give them the high valuation, they give her the high valuation, they give the team the high valuation, but they say, Hey, listen, you get the high valuation, but we want at least double our money back, knowing that something like this could happen. And this is going to have a dramatic impact on the market now, because not for this company, but because you had all these high valuations in 2021, that might be down 60 7080%. There's no hope for them to get back above that there would be no hope for them to get above the hurdle. This creates a very dysfunctional case. And some of those documents from what I understand, from people who are deep in the game, did not have protective provisions, not this company, I'm just talking about the industry writ large. There's a lot of companies that had many offers, late stage companies, and they just told people, we're not going to give you those terms. And so depending on how hot the market is, some late stage VCs may in fact, waive those rights, who knows, maybe in this case, they wanted to deal so much, they waive the right, and then they got dragged along, and they only made 50 60% on their money. which, you know, it's good work if you can get it. I mean, if you think about it, they made that 50% in one year, so they didn't have to wait five or 10 years. So they didn't make it to unicorn status. Sorry, but good enough in my book. Congratulations to the team. According to LinkedIn, Tim's an SVP of product at Palo Alto networks. I give them four years. It's typically what happens in these acquisitions. You get the golden handcuffs for four years, they make you vest some shares. And when you're ready to do your next startup, Tim called Jake out, save me a tiny little slice. You know, I always tell people if you order pizza, I love it, you know, get two pies and save save your boy Jake Alice slice, maybe two, you know, take a pepperoni, whatever it is. I'll take a half a slice if I'm being honest in a founder like Tim's companies. He's a killer. So we had a great talk about conversations around the threats from Russia and China for American companies. Check out this amazing clip.

### Human: Yeah. And the prioritization gets lost. What I like about, hey, here's what I can keep in my brain. Yes, that also parallels what a customer can keep in their brain. It can only handle so many new features at a certain velocity. And if you give them 20 things, they're going to remember to me exactly.### Assistant: Yeah, it's a great question. I would say I spend almost all my time on product marketing and hiring those three things and product and marketing. I also combine like like a lot of companies. They think of marketing is like advertising and product as product development. We actually have a function. We took it from Apple product marketing where we tie. We basically try to make sure product and marketing are joint the hip. Think of product as the chefs, marketers the waiters. And a lot of companies, the waiters can't go in the kitchen, they get yelled at. So we really try to make them integrated. So here's how we run the company. The entire company is a functional organization. So we have an engineering group, a product marketing group, a design group, ops, legal, HR. So most every other company is divisional or subdivisional. The entire company is on one single roadmap. So I mean, yeah, there's accounting systems that maybe aren't, but basically anything you ever see is on one roadmap. Most companies have separate roadmaps. And then we do these release cycles. And we basically do a giant release in May and a giant release in November. So basically, the idea is that we try to basically take the best of software development, and the best in hardware development, and put it onto one practice. And the reason why is I found that the way people develop software, which is great for 10 people where you basically democratize data, you decentralize and anyone can ship anything. And it feels very empowering and it feels it can go really fast. That's great until you're like thousands of people. And then everyone is basically a free free for all. They're all hitting the payments platform. There's no cohesive roadmap. As you subdivide the company, ideas get smaller. You don't even know what to market. And then you can't keep track of everything. Then there's like no accountability. And so, and then the lack of accountability becomes politics and bureaucracy, all these weird stuff. So, when the pandemic occurred, out of basically Jason's survival, we lost 80% of our business in eight weeks. And Joe and I and Nate, we were like, what the hell do we do? And we were like staring into the abyss. I mean, you might remember people were making predictions like, is this the end of Airbnb? Will Airbnb exist? And one of the people I was talking to a lot back then was Johnny I. He now works with me. But he told me the stories of Steve Jobs going back to Apple. And when Steve Jobs went back to Apple, you know, they were like 90 days from bankruptcy. And I'm like, well, that seems kind of like, you know, Airbnb is in a very precarious situation. And Johnny Ives said, you know, you can cut, but you can't cut your way to the growth. Steve, you have to build product. You need to stay in the product. And I hired a guy named Hiroki Asai from Apple. He was also instrumental. And so I totally changed how I ran the company. So what I used to do is I was very hands off. I democratized data. I was very much reactive. I thought my job was like strategy and capital allocation. And here's the weird thing. The less hands-on I was, the more I got sucked into problems. And by the time I got sucked into a problem, it was like 10 times as much work. So then I decided, I'm going to do something different. We're going to be totally integrated, one roadmap. I'm going to do very few things. And I'm going to be involved in every single detail. And Airbnb is not going to do anything more than I can personally focus on. And that became the governor. And this is what Steve said at Apple. He said, well, we want to do more things than I can focus on. Now, this sounds like it would slow us down. And initially, it did slow us down because I would review everything. So, I had these things called CEO reviews. And every single project in the company, I had a program management function. And I would review everything either every week, every two weeks, every four weeks, or every quarter. And then we'd track the progress. And then, you know, then everything would ship on a single deadline. Initially, people hated this. No one wanted to collaborate. People didn't want to have imposed deadlines on them. They were wondering, why are you meddling? Like, why are you reviewing all the work? But eventually it created a culture. And I was trying to teach a sense of quality. I was trying to be like the editor or the orchestra conductor. And eventually what ended up happening was, we were able to start shipping faster. And in the last three years, we've shipped 340 upgrades and innovations. And we obsess. I mean, a lot of companies, they're just trying to grow, and they look at their dashboard. They have these sub-teams looking at growth. They're doing A-B tests. And I don't like that process, the process of just chasing growth. Because first of all, you're not really solving customer problems. And if you're over-relying on an A-B testing, and you choose B, Do you know why B worked? Because if you don't know why B worked, you're stuck with B and you can never redesign B because you don't even know why B was better than A. And so we decided if you're going to do ERF experimentation, you better know why B worked better than A. We're going to be qualitative and quantitatively driven. And so what I do is I spend most of my time just reviewing work and hiring people. So I review all these different things. And I don't really spend a lot of time on corporate matters anymore. And the reason why is because once we designed the company, like, it became very efficient. We also don't have a lot of employees. We have like 5300 employees. And we did three and a half billion dollars in free cash flow last year. So you can just think about that. For every dollar, we do 40 42% of 42 cents in free cash flow, which I believe is higher than Google or Apple. Now, obviously, we're not nearly as profitable at absolute dollars, but it's very efficient. So, we try to be like the Navy SEALs. We're on the Navy. It's a small, lean, elite group. It's super intense. It's kind of day and night, to be honest. But I'm honest about it. And when people come to join, I probably try to talk people out of joining more talking them in. I'm kind of like, are you crazy? Like, why do you want to put up with all this? And it really tries to set a mindset that when you come here, this is a really intense place, but hopefully it's going to be really gratifying. And we're really connected, the top 30, 40 people in the company. And I think of it as like one shared consciousness. Does that make sense? So it's one shared consciousness. I don't push decision making down. I pull it in. I don't make the decisions on my own. There's like a group of us, a concentric circle that like kind of just are in constant conversation. I don't do strategy reviews. I do this thing called living with a strategy. Instead of doing like a three hour, that's like what boards do. They get like a deep dive. I talk about it every week until we resolve it. So, every week we'll have like, what are we going to do about this topic? What are we going to do about this topic? Until the answer reveals itself. And I think this way of working is trial and error. I tried all the other ways of working and they didn't work. And I think this like bottoms up, like giving tons of people a lot of discretion. It does work when you're small. When you get big, it becomes a free for all. And I think a lot of big companies are paying the price.

### Human: They actually found I actually did find one before the virus. But I think now you can see the world coming together in a way that should be very good, very good for everybody. So I think that's the key is to find### Assistant: The opportunities where you can improve Just such a great guest and He's just he's crushed it. He moved to Miami Congratulations to Miami on like literally it's like LeBron just like LeBron going to the heat. I'm gonna say that's the equivalent I think Keith were boy instantly makes Miami the number two or number three in Tech city after the bay area i mean new york and l.a. Obviously have done strongly so i actually know what i'll just say of the emerging class of you know new york is pretty and boston seattle those are pretty well established i think miami is gonna quickly become super relevant because keith were boys there I'm going to give you a little lightning round of other episodes I personally love. Thank you so much to the audience for tuning in and giving me such great feedback. I also want to thank my team, Nick and Jackie, JB, just everybody on the team who've been so good at producing this show. The guests have been extraordinary. Just working backwards in 2020, I loved having Dave Portnoy from Barstool Sports on. That guy's my kind of old school media entrepreneur. He's sharp elbowed. He wants to get in fights. He's going to defend his position. The stories about Call Her Daddy and him and his 20-year overnight success and battles was just, to me, inspiring. Brad Feld coming on, a lot of heartfelt moments. Really, really loved having him on. And Darius, obviously, if I wet my beak there, that's, we talked about, is gonna be a big one. Episode 1143 with Cortland, he was a surprise, like, just really incredibly insightful, and I love the folks who are focusing on the builders like him, and Daniel Gross, who was also on, I don't remember what episode number, but Daniel Gross was another surprise guest. I put Daniel and Courtland right in the same strata for me of people really focused on the builders in the world, those first year builders. Pioneer App and Indie Hackers, two places you definitely got to spend some time with. From my own portfolio, I really loved having Andrew Farah from Density. That's been incredible for me. I think the best collab of the year is probably me and the boys from acquired.fm. You all love that. My old school friend coming on, best old school friend who I haven't talked to in a while was Jamie Siminoff from Ring. We had to get through some PR nonsense because, hey, listen, he's a big hotshot now over at Amazon, but man, he was amazing. Then if we go down the list, I really, really enjoyed having, in terms of legends, I always like to show some respect to the people whose shoulders we're standing on. We had Dave Weiner on and Bruce Trickell. They shared different episodes. Boy, if you want to know how we all get to do what we do, understanding what Bruce Trickell did for this industry and understanding what Dave Weiner did is absolutely critical. In terms of the mentor award of the year for me, SurveyMonkey CEO Zandalori, who has been personally a great mentor and friend to me, loved having that on. Desktop Metal was my beak moment, I think, among a lot of beak-wetting moments after the Darius one, because Desktop Metal getting to go public through a SPAC, really personally meaningful to me. And so many, many more moments I could comment on. We obviously had the Trevor Milton episode. I heard in 1090 that episode's going to live in infamy. I have to thank Alex over at TechCrunch for being on the pod so many times. By the way, Pioneer founder Daniel Gross was on 1079 and Pomp came on 1078. That was a good run we had. I think the run of 76, 77, 78, 79, and 80 was just a killer run. I just want to go point this out. I think this is my best streak. This is when I really had the hot hand. I had Sonny Ma drawn from Ford X on episode 1076. Then I had the alchemy founder Rory Sutherland, and we had great chemistry, two hours and 20 minutes. Then I had Pomp on, and I did two hours and 16 minutes. That shows you those were really... I'm in my zone there in 77, 78. It's like a Clay Thompson, 12 three-pointers. You remember that third quarter he did where he just lights out? Then I got Daniel Gross and Arlen on, and Arlen and I Also a lot of back and forth. She is just a force of nature I look at Arlen as like kind of my career times five like she is just I told her personally and I'll say it here publicly You know she when I was in year one her year one is like my year three Her year three and her year five is gonna be like my year ten. I mean she is just on an accelerated accelerated path of What a year it's been. I just want to thank everybody who made the show possible, my entire team. It's a good time to thank everybody who's on my team. Also the investment team, Jackie, Presh, Laura, Heidi, Maureen, amazing. Ashley in the syndicate, extraordinary. Matt, who keeps the lights on. So many people for me to thank. But really, oh, and by the way, Loved having my boy, George Zachary, on the gist. He is that silent legend here in Silicon Valley, and that was a great one for me personally to finally have him on the pod. Actually, no, it may have been a second time, but it was a decade ago. Best year ever on all counts. Wealthfront CEO Andy Ratcliffe coming on was amazing. Dan Rose was amazing, formerly of Facebook and now putting a billion dollars to work with KOTU Capital. I mean, this is the show you can count on to have not only the most powerful players in the industry, but really the emerging folks. And it is my pleasure, and I mean this sincerely, to do this show for you, the fans of the show. The fact that you write reviews, you share the show with people, you tell me that you go walk your dog, you get on your Peloton when you were commuting, you share the love with me. And I cannot tell you how great it feels when I am out in public and I haven't been, you know, because of the pandemic in a long time, but walking the streets of San Francisco or going to a conference and you guys just screaming at me, love the show, or I go through an airport and you say, Sokka, or you say the Travis episode, or you just yell at me, you know, J Cow, what's up? I mean, it is extraordinary. When you walk into the bathroom with me and take the urinal next to me and pitch me your startup, that's weird. I'm not gonna lie it's a weird moment but deep down I'm kind of flattered so you're in a way and ladies I'm sorry that the guys get that unique advantage but buy me a cup of coffee, say hi to me. If you see me in public, please ask for a selfie because there is nothing I love more than the fans of this show. And I will do this until I can stand no more. I am going to be a sad, decrepit old man breaking down, trying to form sentences for you in 30 or 40 years if Peter Thiel's blood transfusion doesn't work. I don't think he's gonna get that done though, I'll be totally honest. And even after that, I'm uploading all this into my AI avatar, and I will have an AI bot that will continue the show when I'm long gone. And Marc Andreessen and Ben Hurwitz will still not be on the show in 30 or 40 years. Thank you so much for a great year, everybody, and we'll see you in 2021. It's going to get better. Bye bye.

### Human: Okay, so how much did that inform then the thought like, you know, it'll be way easier here is water.### Assistant: 100%. Yeah. So when I left, once I was only in back in Philadelphia to do the brandy. And then once I was like, okay, now I'm not going to be a part of this anymore. A buddy of mine had an age, a small startup marketing agency in Chattanooga, Tennessee called Humana. And he was like, hey, do you want to come down and kind of help me run the agency as a creative director? And I was like, oh, that's interesting. I never thought about Tennessee, but it was interesting. And they were doing some cool stuff. So I moved down to Tennessee. And then we started doing some of the first funny, irreverent marketing for like the organic industry. So we had this brand called Organic Valley. They're like a massive… Yeah, yeah. Yeah, yeah, yeah. Whole Foods, massive, I think, multi-billion dollar brand. They were launching the first organic protein shake. Now, all of their other marketing was very like sunsets over family farms. And it's like, our farmers, they care more than anybody else. But they knew that with a protein shake, they're talking to a very different audience. It's like gym rats, like dudes trying to get big. So they knew they had to take a different approach. So they worked with some other agency for most of the other stuff. It kind of came to us as like this one-off sort of thing, because we had built a little bit of a reputation of making internet videos for brands that would get tons of views. So we created this campaign called Save the Bros, where it's like, if bros keep drinking these chemically protein shakes, they're going to go extinct. Then who's going to bring the beer pong table? We made this really funny, heartfelt PSA, and it ended up going totally viral on the internet. All these news outlets picked it up. It was mostly because nobody had ever seen organic marketed in this really cheeky, irreverent way. And that was a big aha moment for me as, oh, right, how come healthy things that I care about and a lot of people I know, even in the world of punk rock and metal and alternative culture, lots of people care about this stuff. It's not some niche tree hugger thing that maybe it was 20 years ago. And then that's when I knew that I was going to create some other company. Once I had the taste of the brandy, I was like, yes, I'm an entrepreneur. Nothing was more rewarding than building something on my own versus just being a service for other companies. I knew it was going to create some other thing. And then yes, I was like, okay, what is the easiest thing to create where I'm not worried about ingredient sourcing or crazy permits or anything like that, but it needs to be healthy. And it needs to be something that I legitimately am a consumer of. And I would drink a lot of water and a lot of my friends drink water. So, water just kind of naturally became the thing and then I just slowly started building this concept of canned water to make it feel more like a bad thing you're not supposed to have like a beer or a soda or an energy drink. Like most people never associate you're holding a freezing cold can of something totally healthy, like doesn't really happen, right? So then yeah, over the next few years, I just kind of was working. random agency jobs and things like that, moved back to Southern California and was working for agencies. I was just building Liquid Death as a side project and just refining the name and the branding and the approach. And then finally, once I landed on what it would be, I knew that Nobody was going to write me a check for the idea of liquid debt because it sounded absolutely crazy. It was never going to work. Yeah, liquid debt. It looks like beer. You're just going to confuse people. They're not going to buy it. Folks said, retailers will never put that on the shelf. They're too conservative. So I, using my design background, we created a 3D render of a can that looked real. And we created a Facebook page, no Instagram, no Twitter, just a Facebook page. I came up with a funny idea for like a video commercial for it that we went and shot for 1500 bucks. And then we put the video on Facebook, we made a couple of funny social posts with the product that looked real. And we put maybe a few grand in paid media behind some of the posts over the course of maybe four months. And the video had 3 million views. The page had 80,000 followers, which was more than Awkwafina on Facebook at the time. And we had hundreds of messages and comments from people being like, this is the coolest thing ever. Where do you get this? Or is this real?" We had a guy that owned three 7-Elevens being like, hey, I own three 7-Elevens in Michigan. How do I get this in my stores? Wow. We had a huge distributor in New York be like, we're one of the biggest non-ALC distributors. Can we talk to a salesperson? So then I use all that traction to then go raise an actual small round of funding to produce real products. And then once we had real product, then this funny internet thing that almost seemed like a fake joke, where a lot of people thought it was fake. Now, when it was real, it was a whole different thing. And then that's when we got connected with our first institutional investor, Science Inc, that was behind Dollar Shave Club and all that. And then we launched it on the internet. late January, early February 2019. And we had to launch on the internet because there was no retailer that would touch this to start with. So it was Amazon... How do you know about 7-Eleven? Well, yeah, he was into it, but it's like, you're gonna make a few hundred bucks selling three 7-Eleven stores. So we launched on Amazon and our website, And then it was like the first month we were selling, we spent $2,000 on marketing and we did $100,000 in sales. That's insane. And then it just kept going. And then the media caught wind of it, kind of went viral, then it shot up even more. And then towards the end of the first year, we had a ton of buzz. We were selling a ton of product online. And then Whole Foods was kind of the first retail hand raiser, actually, that reached out and were like, Hey, this is super interesting to us because we really do care about sustainability. And you guys have the death of plastic. a message, but you're doing it in a way that doesn't sound like anybody else. So they took us full national out of the gate. But we literally our load in date for Whole Foods was March 15, 2020, the week the lockdown started. right. So our first year in retail was really, you know, one where people weren't even allowed in stores, or it was it was limited. So really, like last year was really like our first like real year in retail where people were in stores, we had a few more retailers. And then now ever since the retail explosion happened. And now it's just flying off shelves everywhere we launch it and outperforming everyone's expectations. Because a lot of these buyers, they're not the most culturally marketing savvy people. They're like, liquid death. I don't know. Are people going to protest in the parking lot? They're always just very risk averse. And then almost without fail, everyone we've launched with, they're like, it's one of the most successful new beverage launches they've ever done. Now they're all believers and love it. And it just took time.

### Human: Quibi is dead.### Assistant: They burned through. 1.4 billion dollars in 30 months. That's 47 million a month. We're gonna break down what went wrong, and we're gonna do an autopsy, a post-mortem, and it is not pretty, folks. Stick with us. This is obviously a bit of a disaster and we should take a moment to think about what went wrong and to think about what could have gone right and how the lessons here of how it could have worked. If you want to create original content that are 10 minutes or less, and you could watch them during lunch or an Uber ride, does that exist in the world? Where does that exist? So let's take a moment and pause and just first principles. Where does a 10 minute episode exist? Where does that exist? Podcasts? No, podcasts are long form. I mean, a short podcast is 20 or 30 minutes, certainly not five or 10 minutes. And what about television? Well, the shortest television show we watch or we binge is the 30 minute sitcom, which is has typically been 22 minutes with commercial breaks. In the age of streaming, there's no commercial breaks, typically, so they go 30 minutes. So that doesn't count. So where does this mythical five to 10 minute show exists, short films at the Sundance Film Festival, which nobody sees. And that is a non starter, right? Those short films are like student projects. So I don't think they were going for student projects. So they were trying to create a new media type. And the only place that really exists is those YouTube videos, right? People doing short vlogs. But that was not this. So they took the vlog format from YouTube, which does work, and they applied it to high production value. Now, if you're going to start up a high production value show, like The Walking Dead, or, you know, pick Ted Lasso, whatever it is, Orange is the New Black, things that have worked before, People don't want to stop watching after 10 minutes. They want to go 30 minutes. You really can't tell that narrative in 5 or 10 minutes. And in fact, The Walking Dead did these like silly shorts. Everybody tries these silly shorts as like little things in between shows. They've never worked. They didn't work back in the day for, you know, pop.com or other web 1.0 companies, the spot. There were all these kind of ideas around this. So that to me, when I first heard the idea, I just thought, well, that doesn't work. People don't want that. And they never actually tested, I believe, that this is something that people actually wanted. So out of the gate, the product seems that it's new. And therefore, you'd want to test this concept, just like people tested vlogs, they tried to see if vlogs would work, they tried to see if vlogs would be a thing. And they did it in a very low cost way. People looked in the camera, lonely girl, 13, whatever. They looked in the camera, they talked about their day, iJustine, they cut it short, and it costs 500 bucks total to produce. Let's pause for a second and think about the amount of money put into each of these Quibi shows. Well, according to some data we found online, and I don't know if this is exactly correct, but it it certainly was correct at some point in time that 175 shows, and the Wikipedia page, in fact, shows dozens of shows, something like 8500 of these 10 minute episodes were produced 175 shows divided into a 1.4 billion equals 8 million 8 million is not a lot of money for an entire series. In fact, Famous shows have gotten up to 8 million per episode, right? Like a Game of Thrones or Friends or something where they're paying everybody a lot of money. It can get expensive like that per episode, but this is for the entire series. So you say, okay, maybe that makes sense, but these are 10 minute shows. So then you look at the 8500 episodes divided into 1.4 billion, and you're getting a baked in cost of, you know, $164,000 per episode. If you compare that to a television show, that seems like a bargain bargain. But in fact, if these were 10 minute episodes, or five minute episodes, you would times that by three or four and get to a real number of an actual episode being 500,000 750,000. What the correct way to look at this is, I think looking at it versus a podcast episode or looking at it versus a vlog. There's no vlog in the world that cost more than a couple of thousand dollars even when this kid who's a david dobrik whatever gives away a tesla. mean, he could give away for the amount Quibi made these episodes, they could literally give away a car, a $60,000 car for each one, and still spend 100,000 on the production of it. Now, I know they spent money on marketing, and there's overhead and paying for Meg Whitman as CEO, and office space and all these different things that companies spend money on legal infrastructure. But the truth is, in today's world, we invest in companies and the way those companies compete with the big companies, they don't have cost structure. They have low cost structure because they're posting on YouTube, they're posting on TikTok, they're building apps with three, four developers per app. You don't need a lot of money. The modern day company doesn't need a ton of employees. And in fact, this company had a lot of employees given the revenue footprint, 300 employees, a lot of people. And so this money clearly could have been deployed in a more intelligent fashion, but they went for it. And I think this is the cardinal sin. You're creating a new format, but you didn't test it. it didn't exist before. So they basically threw a Hail Mary pass and they believed that they could spend this much money on a show, and that it would generate a massive amount of consumer interest, it would become addicting, when this format has only worked one other time in history for something very unique and specialized, which is not the Sundance Film Festival shorts, which are delightful, not the shorts at the beginning of a Pixar film, which are also delightful. Those are very delightful. Those are amazing. And And I would say the Sundance ones are variably delightful. Most of them are bad. Some of them are delightful. In fact, the movie and the series Saw, I believe, came from a short at the Sundance Film Festival. So the way Sundance worked was you would put up your short film there. There would be financers in the audience. And then you would take your short and say, hey, I won best short at Sundance. Can I get the money to take this 15-minute one you know, Saw, horror film, you know, contraption short film and make it into six of them and have an arc about, you know, they have to get through six of these crazy trials and we'll tell the full story of whoever the horror film Saw's main character is, who's on the tricycle, I can't remember. It was a goofy thing anyway. So they basically came up with a format, who knows who made that decision, it was Katzenberg or whoever, but they should have tested this format over and over and over again. Welcome back to This Week in Stars. My guest is inventor Jamie Siminoff of Ring.com. I've absolutely demolished Jamie's early career when he was in the trough of despair, which every entrepreneur must go through. Correct, Jamie?

### Human: You're obviously one of the best community builders that I know and whose communities I'm a part of. And I would love you to explain to our young audience. First off, can you tell us how many people are in the Slack? And then I would like you to tell me, how did you even get started in community building? This is my first time building community at This Week in Startups. I do a lot over on the Slack if anybody wants to join, thisweekinstartups.com.slack. But it is really difficult and so time consuming. I was talking to my boss on our weekly stand up and I'm like, Community building can be a full-time job with how many messages come in and having to facilitate conversation and to kind of keep that spark going. How did you start that? How did you find out that this was your talent?### Assistant: Yeah, it's so it's, it's funny, I think some of the best things in life come to us when we're not even looking for them. And that was the case with Gen Z VCs. As of this morning, we're actually 12,000 members strong. I started the community. Thank you. It's really exciting. And I started, I started the community a year ago, basically to the day like it I sort of made the community public on November 17 of 2020. But what's interesting, and I think why Gen Z VCs has worked so well, it's by no means the first community for young people in venture or young people in VC. There are plenty that have come before us and really paved the way. But I think why Gen Z VCs was so special in the way that it started was because it happened so organically. It wasn't like I woke up one morning, I was like, wow, I need to start a community. This will help my career a lot. It was like, I was literally solving a problem and a pain point for my friends. And it emerged out of this article, like, I was so a year ago, I was two months into my job at LearHippo, I didn't have any friends in venture, I knew like maybe five people that I can count on one hand, all of whom were, you know, they lived in San Francisco, I didn't really know them super well. But my job as a young person in venture is to like, Be the boots. Be the young person. Boots on the ground, meeting people, going to events. And that just wasn't happening because it was COVID. I was living at my parents' house on Long Island. And I wasn't meeting people. But one thing that was pretty unique is I was trying to find my own voice. I was writing about edtech at the time. I'm doing a bunch of research on edtech. But really quickly, at Lyric Hippo, because we invest in so many Gen Z companies, we see a lot of Gen Z brands and Gen Z consumer products. And Very quickly, I found that I had a very unique perspective just as a Gen Z consumer in those conversations where we'd meet with a company and they'd be like, Oh, Megan, you're the target customer. Why don't you take a meeting and let us know what you think? And I was like, Wow, people actually really value my perspective because I understand these companies in a way that I can relate to founders in a different way because I am who they're building for. And so I just had this idea one morning. It was like 2am, I remember, and I woke up. And this is like all my best ideas come to me when I should be sleeping, where I just wake up. I wake up out of bed and I'm just like, I have an idea. And for that, I was like, there have to be other Gen Z investors that are thinking and doing the exact same thing that I am. But I don't know any of them. How do I find them? I want to just pick... I just want to meet them and understand what are they looking at? What are they thinking about? What are they struggling with? And that's what I did. I literally tweeted about it, I think, a few days later. I was like, Hey, Gen Z investors investing in Gen Z companies, who are you? I want to meet you. What are your favorite companies, favorite trends? I'd love to compile maybe an article of our stories and share the Gen Z perspective on these spaces. And the tweet blew up. And again, a year ago, when I started LearHippo, I had 50 followers on Twitter. I had no online brand presence. I had no community. I had never written any articles. I was starting from square one, got my job through cold email. I didn't have a network. It was like... In every sense, I think I was an outsider in venture. And I think that perspective gave me... It's helped me create this, I think, really unique environment where it's like, no one is an outsider in venture anymore. In Gen Z VCs, you're not an outsider. Your unique perspective makes you different and valuable. No matter what school you went to, no matter what your parents did, it's like you create your own destiny and you create your own destiny by helping one another. And with Gen Z VCs, it was basically the same. I just tweeted. I was like, Hey, I want to make friends. Who's out there doing Gen Z investing? I want to meet you. And that's literally how it started. I did calls with 71 investors who commented on that tweet from all over the world. Beijing, Stockholm, London, Africa, just Gen Z investors. And it blew up. It was because for the first time, A, people didn't even know Gen Z-ers were old enough to be doing investing. So that was a surprise. People were like, what? Gen Z-ers are investing? That's crazy. Gen Z-ers were starting their own funds. Gen Z-ers were creating funds in college that they were investing out of and starting as early as high school, in some cases. And also, the third piece, I think, is like, People are always curious about what the next generation is doing and thinking, because we are the kingmakers of platforms. The pace of technology and innovation, I think, has never been faster. And also just the way that Gen Z, the next generation, interacts with technology, it informs a lot of investment decisions around culture, company building, literally everything. And so the article blew up. I started the community on the back heels of that, where almost every single person I spoke to through that article had the same thing. They were like, I also don't know anyone. I started like a month ago. I also have no friends. I want to meet all the people you're meeting." And I was like, well, great. I'll put together a Slack group for us, organize a Zoom call, just to like... Because I knew everyone, but everyone didn't know each other. And it was really a great exercise in the importance of curation in early community building. Because Very quickly, this group of 30 people that signed up for the Slack community... Again, I wasn't even calling it a community at that point. It was just a Slack group that my friends could chat in. They had such positive experiences in that first week where I set up that zoom call, and they made like immediate friends. Like that pain point for Gen Z VCs and why it exists was literally friendship. It's like connection with other people doing the same thing as you, but like in totally different areas of the world, different focus areas, or sometimes the same focus areas that you never would have met otherwise. And that's what they shared with their friends. That's why we had like this organic growth and viral moment where like, when I opened up the community, I was like, look, There are 30 of us. It's fun. Come join, come hang." And we went from 30 to 1000 in 4 days. And then Business Insider picked us up. And then we went... Had 3000 a month later. And then it became the movement that it is. Tons of initiatives and identity. People have like GenZBC and their Twitter bios all over the world. That's a term that I created a year ago. It's wild in every sense. But again, I think it's like, it all started from this community being built around this authentic problem and pain point for people versus starting a community just to start a community.

### Human: And if it doesn't work out, they will replace the developer right away.### Assistant: There's nothing to lose. There's no downside here. They test and interview every developer to eliminate the risk of a failed project. And guess what? When you hire in a European time zone, you can have developers working basically 24 seven, you can go faster than your competitors, and you're probably going to beat them. Launch portfolio founder drew fabricant said lemon.io was a game changer for his startup scout. Well, Drew was under the gun to hire a developer with a very specific skill set and lemon.io delivered a great candidate. And they were a pleasure to work with. Not only did Drew find exactly what he was looking for, but lemon.io also delivered them a second engineer just as fast. So if you could use a full time or part time developer to run your projects faster, go to lemon.io slash twist. That's lemon.io slash twist. And you'll receive a 15% discount for the first four weeks of work with a developer. What a nice offer. Thanks lemon.io. At the end of the day, when I was an LP and various funds, what I learned was what cash they put in what cash they take out. I know this takes 10 years or so sometimes it takes 15 to get everything cleaned up. Sometimes they get majority of the money comes in year seven or eight, because it is a parallel business with the top companies and top returns returning the bulk of the money. So if I put in $1, did I get two, three, four, five back? Just cash on cash. That's all I look at. Yeah. Take out all your fees, take out your, yeah, yeah. Multiple on invested capital. Yeah, I think that's the most intellectually honest at the end of the day. It takes a long time, And it's hard, you know, Tomas was talking about this, like, and he just put it in the top, he put something in his letter this year, he did his annual letter, and he just put his returns there. And, you know, it's like, you might have five, a five x fund on paper, and you've returned, you know, one times their capital, you know, they put in $1, and you gave him back $1. Okay, so now everything's profit from here. Great. Now we have to figure out the five x that's remaining, how do we collect that? How do we get those shares in private companies, public or sold, or secondary to get that money? And that's where liquidating your investments and being able to realize your gains is a big part of what we do. How do you realize gains, right? And it's really hard, because if you sell something in secondary, uh you sell something to another investor in a private company before it goes public and it 10x is well you just you miss that upswing if it goes down 80 you miss the opportunity to cash in at a peak and i think there was some crazy moment where like fred wilson and zingo's famous story fred wilson had invested in zingo mark pinkus's company the farmville company very early and that company uh wound up doing really well. And before the IPO, I think they sold their shares or some of their shares to Kleiner, which wanted to buy them. And maybe they bought them at twice what 50% or twice what the IPO wound up going out because they didn't know the IPO price yet. So Kleiner, another venture firm, then puts the money and they're locked up. And I think famously Zynga collapsed after the IPO went down to like $1 or $2 a share. It was a disaster. So all those people who made that trade right before the IPO looked really smart. In fact, the people who sold Uber shares like I did to Masa and to some other people, that price was much higher than the current stock market price. Now, it doesn't mean in another five years, you'll look stupid. But at some point, you will look stupid, right? Yeah, everybody looks stupid at some point. How do you pick the peak of a stock? You know, this is why like, I have always taken the approach of if I have the opportunity and I'm, you know, I've made 20 50 100 times my money. Sure, I'll sell 10 or 20% of my position. Yeah. And then if that happens again, sure, I'll sell 10 or 20% of my position. And then when it goes public, I'll have 60 to 80% of my original position, but I'll have taken what I like to call it insurance against, you know, anything else. And because we're an early stage fund, you know, why not give our LPS a little return, which then would build their confidence in us to do the next one. So when you chip off a little bit, and you're like, I thought this was a good trade, we happen to make one of these trades at one sandwich company where we sold 20% of our position. And it returned the entire second and the return the entire second fund we did. and it wasn't expected. But now that funds in the black, and the market is corrected. And because SAS has compressed, maybe now I'm at half of where I was. know, with that, that company is got half the value was so if I sold 20% of that value, man, it's almost like I got a free ride there, right? Yeah, I did. So that's where time to money is like another complicated thing. This is all very interesting and important. What's most important is meeting a lot of great founders, placing small bets, working your ass off to make sure that company successful and getting to know them. And when you find a winner, plowing more money into it. So when we talked about inputs and outputs on Friday show, when I was talking about like, hey, not to how not to get laid off as an individual, the input is how many great companies you meet with the output is how many bets you place on promising companies, and how many bets you place on winning companies. And perhaps that second thing, of all those three things determines your outcome. So meeting with a lot of companies important, placing a lot of bets and great companies important, but doubling, quadrupling 10 xing down the amount of money that goes into the winner. I think when you actually get to the end of the returns, what I'm starting to learn is that's actually the most important part. because if you don't go from 2% ownership to 15, well, now you've got this like nice to a $3 million win. But if you do go from two to 15, now you got this $15 million win. I'm talking about like, for some investors, it can be like a dramatically different outcome. And you probably saw it, because you saw the revenue going up, you got all these good news. And you didn't place more bets. It's like having aces and the flop comes down ace, you know, nine, two, and it's three different. There's no straight, right? there's no straight there's no flush and you got top set you probably want to get more money in that hand and maybe somebody hit a pair of nines maybe somebody hit their set of twos or their set of nines you're gonna get all the money in or maybe somebody is a dope and they have 10 jack and they want to chase a straight or something well actually in that case ace two you do have a straight on the board uh with ace two you know the person could have three four and they're going for a five so Yeah, all kinds of weird sh** can happen.

### Human: We're really excited. We think we have a good thing going. Um, and we think families and we've seen it, we have more demand than we're able to handle. And so we're staffing up and it's wonderful to see a company grow, uh, from a strong foundation. And I think when you do something that has, you know, is, is mission positive, You do end up making a business out of it and I think it's really funny from an investor's standpoint and this is why they see such a huge opportunity because most people will turn you down because they don't understand financial aid and as an investor, they've never needed to take out financial aid for themselves or for their children.### Assistant: Okay. Um, would I be able to detect this with my incredible reading skills? Maybe not. I would love to know what her parents did and how they raised her. always look towards that. It does seem like these grifters come from a certain background. But this is a weird one, because this is not the type of crime. And again, it's all alleged right now. But if it's true, or some portion of it's true, this isn't what I perceive happened at their nose, where they got in over their head. And then they started breaking rules, and it just got worse and worse. Or maybe what happened in Madoff, where he started breaking the rules, and then the cover up just became so huge that it became, you know, uncontrollable in terms of in Madoff's case, like the new investors are paying off the sins of the lack of performance from 20 years ago. This to me seems like just outright premeditated fraud to secure the bag. 999 founders out of 100,000 would never do anything like this in my mind. But I would say, a third of founders will bend the truth early in their careers, they'll be optimistic 100% of founders should be optimistic. And that's where the lesson is here for founders. There's optimism, you're allowed to be 100% optimistic. There is setting audacious targets, perhaps even absurd targets, totally allowed. better back them up. And you might want to say, Hey, I understand this is outrageous, but I'm going to go for it. And then there's bending the truth, breaking the law, And anything when you start bending the truth, and you start calling a user, a customer, user doesn't pay customer does, you start saying somebody who's on a trial has a contract value of 5 million. And then you start saying, Oh, the contract value of all of these people who are on trials is, you know, $50 million. And you start spinning some yarn I would check yourself and understand that infestors understand full well. that three Uber rides that occurred last night from SFO to the city could quickly grow to 30 300 and then 3000. And that that, you know, $10 that Uber made on those 3000 rides could grow to $20. And that could be $60,000 activity. We've seen things have market pull. And we've seen exponential growth over and over and over again. Therefore, you don't need to lie. all you need to do is tell us about 2345 customers who are over the moon about your product. And that's all she needs to do. She should have just taken credit for the 300,000. And she should have taken the top 3000 of those studied that 1% who were obsessed with her product, and then found more of those users and converted the other 297,000 into massively passionate customers or found more of the passionate customers or tweak the product to have more appeal. And then she would not have had to make up 4 million bogus accounts. Allegedly, she could have just found 4 million customers out there. It's not that hard, folks, you can get to 300,000 customers. And maybe even if 10% of those were really passionate ones, you can get there. You don't need to cheat. The American system is set up for you to fail, and then get a second shot, a third shot. So just embrace the failure. And don't lie. Don't bend the truth. Just own the reality. And that's what great entrepreneurs do. Great leaders define reality, and they accept reality. And they make a plan to make that reality better. And to exploit the reality to their success and their goals. That's the name of the game. Except reality. and then build products and services that exploit the reality that exists today. Oh, it's hard to get a cab in Brooklyn. Oh, spending $25,000 on trading fees means I'm not going to trade shares. I'm not gonna trade one share of Uber or Airbnb. Great. What if we figured out a way to make trading free? Oh, I can't find a place to go do meditation near me because I live in the suburbs and there's no meditation. I don't want to drive two hours meditation because that's going to give me more agita and stress to drive two hours back and forth from meditation. Oh, I have this calm app is helping me with my equanimity. Just accept reality. And then, you know, exploit that reality to your own personal success and success success of your company. That's allowed. It's allowed for you to delight customers. It's allowed for you to make a better product. It's allowed for you to study customers. It's allowed for you to use marketing techniques to get people to try your product. It's allowed for you to be bombastic and proud and audacious in your goals so that people believe you and invest in you and join your company, but you're not allowed to lie. You're not allowed to cheat. If you do, Sam bank run fraud, Elizabeth Holmes, and now Charlie, perhaps. Again, innocent until proven guilty. But when the SDNY goes after you, I think they only pursue cases when they're 99%. I'll just say this very seriously. SDNY has a lot of cases they can go after. this is an SDNY case, which I believe it is, they are 99 point x percent sure they're going to win the case. They would not bring it unless they had the person dead to rights. In what I've heard, listening pre bars podcast, stay tuned with breed. All right. And according to Forbes, her father worked at a hedge fund. Mother's a life coach and a former teacher. Brother's chief digital officer at Popeyes. And she was admitted to the Wharton School at Penn. And she graduated in three years, study finance and law. Fate loves irony, does it not? I always see this. And I hate to be cynical. But what is it with Ivy League kids from privilege? committing these crimes? Is there some entitlement? And or they want to impress their mommy and daddies with their success? So they bend the rules? Or did they see mommy and daddy break the rules? Somebody who's a psychologist, or if there's a study on this of what crimes, like white collar crime seems to have as a precursor, an Ivy League degree, and some really successful parents. Hmm, I guess we have to study that. I was going to be a forensic. I was going to be a forensic psychologist, I was gonna go to john jay and take criminal psychology, and then go into the FBI and be a profiler, or an agent. That was kind of my dream job when I was at Fordham University. Maybe, maybe I could catch more of these white collar crimes. Elizabeth Holmes, SPF. And now Charlie. They all had Ivy League pedigrees. Now, Adam Newman, That's how you know he's innocent, right? He came from, did he come from nothing? He just grew up on a commune, right? Like I think shout out to Adam Newman. He's just a hustler. The kid didn't even wear shoes until he was 16. I think Adam Newman is just a hustler. And I think it's easy because he's peculiar to throw rocks at him. And because he does weird stuff and runs a company, like it's a party. Interesting. All right, everybody, we'll see you next time on this week at startups.

### Human: I think Warner Bros. Disney had something like $50 billion in long-term debt.### Assistant: they have a lot of debt from this merger, and they will slowly pay it down from profits. But it's good to have a little bit of debt and invest in the brands. That's my belief. But it's definitely something. And Michael Burry, it's his third largest holding, I believe. So that's the guy from the big short. And that's another there I have is like, follow the winners. Michael Burry, I think bought his shares at like $25. So he's sunk. So Jay Kyle got in at 16. Michael Burry got a 25. Now this thing's trading at 14. I think I might just buy more. I might buy more. Because I think there'll be three or four winners in this space. Netflix, I might have missed my opportunity there. But with Warner Brothers discovery, man, I think that's going to become a juggernaut. I think that could be huge. That's a J trading. Now if you want to check it out, J trading calm. I my next theory is that SPACs are so derided and hated at this point. And people have so little faith in, you know, the collection of SPACs that came out, and I gave people a warning about them, that like you're, you're investing like a venture investor, if you're investing in these companies, and the YOLO craziness where everybody was like, I don't need to understand the revenue, I don't need to understand the growth, I don't need to understand product market fit, that all went out the door. And that to me, and nobody's looking in this pile, there's a big pile of SPACs. somewhere in there, I believe is a 10 or 20 x, I want to find the 10 or 20 x in the SPAC pile. So here's what I want you to do. This is your homework. For j traders out there, I need you to look at the price to sales ratios, I need you to look at the earnings, I need you to look at growth, I need you to look at management, I need you to look at the product, we're looking for a management team that is hardcore, We're looking for, you know, like Amazon hardcore, like Tesla hardcore management team, like we're going to win Zaslav, you know, I'm looking for Slutman level management, wartime CEOs, I need assassins, killers, samurai. So number one, in the smack pile, I'm looking for three things. Number one, killer. killers running the company. Number two, a product that is transcendent that people love that they won't shut up about. Okay, product, product, product. Okay, and then We want to see growth, we want to see some sign of life here that that product market fit and that killer team is actually resulting in the cash register ringing. That's my three criteria. You're the J trading army, you're my J traders, I need you to get out there and then give me some ideas. I'm looking for ideas. Okay, I need your ideas. Is it open door? Is it Joby? Is it desktop metal? There's something in the SPAC stack that's going to go 10x or 20x there must be right and nobody's looking there. So if nobody's looking there, and everybody's buying Amazon, and now they're buying stitch fix because me and Bill Gurley are in it. We got to go find the next name. We got to go find the next name. I need you to slide into my DMS or email Jason at calacanis calm producers at this week and startups calm and get me the next big win. I think it may be open doors on that shortlist everybody keep I know it's down 40% or so in the last six months. But people keep telling me to check out open door. Hmm. And don't IPOF me. Don't talk to me about Chamath's facts. Chamath's my guy. We're besties. But please, please, I am not responsible for Chamath. Chamath is not responsible for JCal. We're friends. Don't come to me and ask me what IPOF is. I don't know what IPOF is. Okay, and if you reply to me and say some conspiracy there about IPO F, I will snap block you on Twitter, because I don't have time to be speculating and then somebody is going to think that I know something I don't. I'm not trading Chamath SPACs. I'm not trading IPO F please make your own investment decisions not investment advice j trading calm. All right, next up on the program is Alex Skrill. He is the CEO of NutriSense of which I'm an investor and they've been crushing it and we break down why the company has done so well. And why continuous glucose monitoring could be the secret. to weight loss and health and getting rid of the obesity problem in America. Why does your glucose spike? Well, I use this continuous monitoring device. I use nitro sense I fell in love with it. I invested in the company. And this is a great interview. So stick with us. All right, Molly, next on the program is an entrepreneur that we invested in. His name is Alex grill. And he's from NutriSense is a SaaS platform that I wanted to try because you know, I struggling with my weight. And I was trying to understand what was going in in my chemistry, and NutriSense lets customers track their glucose levels. And it also combines it with a coach, which is exactly what I was looking for. The company was formed in 2019. And we actually had them at the first remote demo day, which was in December of 2020. We started that program remote demo day for people who are listening remote demo day.com. just as a way to meet founders during the pandemic. And then we wound up investing from our third fund and our syndicate invested a bit of money. And we've been delighted with the results since then the company has over 8000 paying customers back in q1 of 2021. They did 484,000. And this year in q1, they did 1.7 million plus so four times revenue. And we've talked about this as you become an investor, Molly, you're looking to see if your companies can, you know, double triple revenue. And when you got a company that's doing something in that range, or better in this case, that's really, really great. And the product works because it's not just giving your blood glucose level. They're also tracking sleep and diet, and you can put in the food that you're eating. And then all of a sudden, the coach was like, Hey, what did you eat? What was the spike? And it turned out for me, Molly cereal, was the killer and the order in which I was eating food. So then I switched to eating vegetables, then protein, and then maybe having any dessert, sugar, flour, carbs. Man, did that change the profile of my glucose spiking, and it really helped me with my weight loss. So, welcome to the program, Alex.

### Human: Yeah. At what point did the community and the content become the capital? Um, like when did you start the fund and and was it people just saying like hey, you're you're you're rolling here You're crushing it start investing for us.### Assistant: Yeah. Well, um, so as the show's played out and we've done hundreds of episodes at this point, there's one of the things that's unique about MCJ, or maybe it's not unique, but it's just different than a lot of others that I've come across is that climate touches everything. And so it's not, it isn't a sector. It's every sector and no sector at the same time. I mean, we need to rewire our entire global economy. Right. And, um, And what that means is that you have sector specialists in mobility, you have sector specialists in deep tech, or in insurance, or in AI, or in web three, or, or fintech, or things like that, like you could build a climate company in any of those categories, plus, you know, 1000 others. And so we are super broad, right? Not just innovation, but, or, you know, not just one type of innovation, but lots of types of innovation, and not just innovation, but policy, activism, advocacy, you know, government, elected officials, democracy, science, um, you know, we had on the chief of staff for cop, uh, I think it was cop 26 recently. Um, and so suit, you know, we've had like the head of the solar geoengineering lab at Harvard and we've had, you know, like I haven't yet, but I had one point I'd love to have, have on the head of the coal miner labor union. Right. So it's like, we really want to hear from the perspectives that don't often get heard from, but that really matter in the transition. Um, and because of that, we have a listenership who, it's not just newcomers like me, it's also people who've maybe been working on it for a long time, but in one piece of it, right. And, and because it's such a systems problem, all these other pieces matter. And they, you know, they're booked, they're booked, just going deep in whatever their pieces, meaning this holistic view is really important. And so that's where the content comes in is on educating, and it's not focused on the listeners, it's just focused on me selfishly, following my own intellectual curiosity, and trying to learn, but it enables listeners to go on that journey with me. Which I think if you're in the right frame of mind, where you're hungry for that, you really appreciate. If you're not in the right frame of mind, you find it boring and dry, and you'd rather go listen to Joe Rogan or something. But then those people who are serious, they don't, it's like learning is like the gateway drug. Right. And so once they start learning, they're like, okay, you know, I'm like a hundred episodes in, but I keep hearing about this community of people that are binging on the show. And those people are getting together in real life. And those people are forming ventures together. And those people are joining each other's companies. And those people are challenging each other's assumptions and they have book clubs and study groups. And they, they do, you know, small bite-sized collaboration and they do deal, they go on and build generational firms together. Like, I think I'm ready to take that next step and find my people because wherever it is I am in my you know big cpg firm or at my traditional tech firm or wherever I am like I'm kind of an outlier because I'm super concerned about this and can't stop thinking about it but like you know I'm kind of more ready to act then it seems like the people to my left and to my right are, and how can I find more people like me? So that's the roots of the community. And as the community has grown, it's interesting because we have all the guests on the show, we have all the members in the community, we have the 60-something companies worth of portfolio founders, in fact, and then we have over 300 individual LPs who are largely people who've been handpicked, who happen to have some means, but they're you know, it's a, they're a good fit for us. The same reason we're a good fit for them. It's like, they want to get closer to the action. They want to learn. They want to inform what to do with their capital and with their time. And, uh, they want to help and they think there's money to be made. Right. So it's kind of all those things. Um, so it's not, it's not like, uh, pitching fund to funds or, or things like that. Um, and, and what that means is that there's this really great virtuous cycle. It's like a flywheel where we'll have a guest on the show, we'll publish the episode, a bunch of members will get in touch, and several of them will get hired by that company, and others will become customers of that company. And then that founder is like, man, you guys are so helpful. I want to be in business with you. I'm about to do a round. I'd love a little check from you guys to get in business together and then we get in business with them and then given where we sit and everyone we know and what we see and touch, we can be helpful on the people side with customers and hires and media and non-dilutive financing opportunities. you know, follow on funding opportunities and just people. And, and then, you know, they're like, you know, they'll tell their cohorts in YC, for example, like, man, MCG has been so helpful, like, you got to work with them if you're a climate company, and then we'll get deal flow. And then those founders, you know, when they go through series B and get some, you know, secondary and have some dry powder, they'll become LPs. And so it just, And then several of their team will then become members, right? And so the cycle continues. I mean, in a way, we're not a fund that happens to do content and community. We have these three legs of the stool. We have a media arm, we have a membership arm, and we have a capital arm, but each is kind of an MVP. And directionally, we think there's an expansion path for each independently. We think that over time, the whole should equal and increasingly greater total than the, you know, the sum of its parts. But we also think there's other legs of the stool we can add over time. And it's all kind of in service of, well, building a generational firm and having profits because profits can drive more impact. But at the end of the day, it's impact that drives us. We know, though, if we set a bunch of money on fire, then we're not going to stay in business, let alone grow. And so if we want to grow our impact, we need to grow the profits that we're, you know, delivering to our stakeholders over time.

### Human: It is super heartwarming. Jason's like, I just want to talk about the cars and the electric bikes. I'm like, dude, old people are getting friends. It's heartwarming. Good job. Good job. And shout out to Papa. Right. Shout out. Shout out to Papa. Up next on the show, because you think it's over, but it's not. It's not. Another edition of everyone's other favorite J trades in the blueprint just like hits. You're just the hit maker.### Assistant: There you go. This Week in Climate and VC Sunday School. Killing it. All right, everybody, welcome back to the blueprint. This is episode six, part six of a 10 part quick hit miniseries. Can you believe we're now past the halfway mark? Amazing. I want to get right into it today. I want to talk about how to get ahead of trends. how to master future mediums. I get asked this all the time. How did you get in early on Twitter, twitter.com says Jason, how'd you get in early on zines in the 90s? How'd you get in early on the internet itself? How'd you get in early on blogging and sell weblogs Inc. Before most people even knew what blogs were. How'd you get in early on angel investing and syndicates? How'd you get in early on podcasting? I get this question all the time. And so I'm going to give you a couple frameworks here, just different ways to frame how you look at the world, right? So framing is critically important. If you look up behavioral psychology, organizational psychology, you'll find something called framing. It's a school of thought. It's a technique, how you look at the world, right? So we I like to talk to people how they frame things. When you first look at something, and you spot something very early, let's say it's Tick Tock, your friend tells you about it, Uber, DoorDash, Airbnb, Twitter, podcasting, pick a trend could be net NFTs, right? blockchain, Bitcoin, it's very easy to look at something. And humans take a very pessimistic view early on. We're scared creatures. Why are we scared creatures? Why do we take a pessimistic view at the new? Well, we take a pessimistic view at the new for a reason. When you meet something new in nature, and you're like, wow, look at that big furry thing. And then it shows you these giant fangs. You're like, oh, that's a mountain lion, the people who would run up and be like, Oh, there's something new, let's give it a hug would get eaten, or they would be like, let's try this piece of fruit, and it would be poisonous, right? So we're conservative, being conservative in nature in DNA, avoiding new things. really does make you live longer. New thing might be a river that you come across, somebody jumps in the river, they try to swim across it, alligator gets him, the tide gets a boom, they just get pulled by the rush of the river and go off 1000 foot waterfall, you get the idea. So you have to retrain yourself. to be an early adopter. And there's this, of course, chart that you see all the time early adopters on one side laggers on the other and the and the majority, right. And there's like the faster majority and the slow majority of people when they adopt technology or trends. I like to, as an individual, look at these new trends, and instead of being scared of them, I like to be curious about them, right? And I like to look at them and say to myself, what if they work, right? And so you want to anticipate that these things that look like they're not going to work are going to become something big, and usually takes three, four or five tries for something to actually stick. That's one thing I've learned in technology. you know, we had things like six degrees of separation in the 90s. Then you had friends are in my space, you had all these attempts at social networking, and it eventually got to my space Friendster and then this knockoff company called Facebook that just knocked off what Friendster was doing. If you look at the original designs, it looks pretty similar. But Friendster couldn't be kept up and running and MySpace let people design their own pages like GeoCities did before that, which was another community and GeoCities and MySpace look sloppy and wasn't organized. So it was hard to get adoption. Long story short, those things basically were the precursors to what eventually became social networking. So if you were early to my space, but were cynical about Friendster and Facebook, you might have missed being an influencer or really leveraging social media and building companies in that space like Instagram, or now even Tick Tock. If you take the time between when Tick Tock showed up, and when six degrees was around, it's it's over 20 years, actually, or, you know, when my space was around, you're talking about the 2005 or 2006 era of social networking to now, you know, it's coming on 20 years. And then you have tick tock show up. So things can still show up later on, that become big. What I do when I see these things is I assume they're going to work, I assume Twitter was going to work. And I just totally engaged it. I was the number two user on Twitter at one point in time, I kid you not in the first year, it was Robert's global myself. And then this Senator Barack Obama, who was running for president, it was in the primaries, and was wowing everybody in the primaries. And he also had nothing to lose. And so he early adopted. So you want to anticipate that changes are coming, you want to look at the early projects and have a very open mind. Now you'd be like, Oh, J. Cal, you've been so not open minded to crypto. No, not true. I had Bitcoin and I wrote a story about Bitcoin when it was under $1. I was concerned about all the frauds going on. But, you know, with all those frauds going on, that was different than me looking at the fundamental core technology and saying, Hey, there's something interesting here, I still think there's some interesting things as in terms of more internet from it. So assume things are gonna work, you know, you don't want to give up on these new platforms, you want to be curious and investigate them. I did this a number of times I told you about Twitter, I also did it with blogging. And I did it with podcasting. When I started in podcasting, it was literally an iPod. And before I did, you know, you would you would basically upload your mp3 file, and then it would use a piece of software, which called the pod catcher at the time, which would take a download on your desktop of an mp3 and put it into an album, it would hack the iPod, and create an album called podcasting. And it would just put a file there, there were no RSS feeds, you know, with all the fancy episode numbers and everything back then, the standard was very, very janky. But Dave Weiner created that standard RSS in the 90s. Then they included audio links in it, then the Apple iTunes Store began supporting it. And that's where you see that famous clip of me asking Steve Jobs about Apple support of podcasting. We'll play that clip right now.

### Human: I think I think that point about normalizing failure is critically important among both allocators and founders. But it's also important to realize that taking money and deploying money is a huge responsibility. So how you fail, right, is really important. And over the last five years, I saw people raise an ungodly amount of money. Right. And they were taking money off the table. They had never turned a profit. They were taking fifty million dollars off the table. You would see them on Instagram all over the place partying. They thought partying and cocktail parties was a proxy for working hard. And those founders, when they torch that money, Right? Because at the end of the day, that money comes from children's hospitals, from university endowments, from government pensions that are paying for teachers and firefighters and police officers. If they torch that money that I'm representing as a fiduciary and they do it irresponsibly, I'm not going to be there the next time, J. Cal. I'm going to be there every time when they grind it out. By the way, the other piece of that is you don't have to grind it out to the bitter end. I see founders overstay their welcome sometimes. If you raised $30 million, I did at my last company called Room 77. It was a hotel search engine. Rich Barton was on my board, the founder of Expedia and the founder of Zillow. And I said to Rich, Rich, we haven't cracked the code. We've got 30 million bucks in the bank. We haven't cracked the code on how to win over the consumer. The competitive landscape has changed against us. Google has now introduced this six pack, like there's no way to compete against them. And I think I can sell the business to Google. And I can make sure that I get this 30 million back to the people who entrusted me with it, given that the facts have changed. And I said, that's what I think we should do. And that's exactly what we did. We sold the business to Google, it became Google Hotel Finder, and we returned capital to the investors. You know, and Some people may have said, you didn't go for it, you should have been more bold, etc. But I do think there is that line as a founder, knowing when you've really tried everything, you know, and responsibly landing the plane in a way that allows you to do the next thing. You know, so it's a I agree that I'm anxious to back them again. But unfortunately, I have seen a lot of behavior over the course of the last several years that I wouldn't put in the category of responsible or backable.### Assistant: I think it's really well said. And there are distinct differences in stages. You have to realize that I went to a hotel called the Amman hotel. You stayed at one of these. Very nice. I mean, but like compared to what a normal hotel, it's kind of mind blowing. And I stayed at it when I was in Tokyo, when they translated my book. And I was on book tour. And I was just taken by this service level that I had never seen before. And, you know, I've been everywhere in the world, I just never seen anything like it. And I designed my firm around the philosophy of never underestimate anyone, but also of realizing that we are in the service business. And that's, I think, what people forget, when you're a capital allocator, you're really a partner, and you're a service to these founders. And so I told everybody on my team, if a founder emails us or calls us, I don't care if you're in the movies. I don't care if you're on vacation. I don't care if it's Sunday or Saturday, you can walk out of the movie theater and call the founder on the phone if they texted you and there's something wrong. The movie, whatever Marvel movie you're in, it'll be on Disney plus in a couple of weeks. leave the theater. And when they tell you all my disturbing you say, No, I always have time for you. And when there's a hard discussion, call them on the phone or text them and say is now a good time to talk. So I had to retrain my team. I said stop booking phone calls. get the founders cell phone number, have it in your phone, text them, when they email you, and they say there's a problem, or there's an issue where they have a question, I want you to text them and say is now a good time for a call? Or should we set something up? And they say nine times I think yeah, I have everybody's phone number, I will call founders randomly. And I'll just call them and say, Hey, it's Jake out, just want to check in on you. How's the business going? They're like, nobody ever does that. And I stole that. Because Doug Leoni at Sequoia, when I was a founder, would randomly call me. And I would have a heart attack. Doug Leoni, like the most legendary venture capitalists like in history. And I'd see it on my phone. I'm like, breathe. Do I answer on the first ring? Or do I wait for the third? And I just decided answer as quick as possible, because it's not the only answer. Mr. Leonie, how can I be of service? He's like, Oh, I was talking to somebody about you. And I was wondering, how do you get good domain names? I noticed you buy great domain names. And I'm like, Well, I have a strategy for that. I knew you did. Would you talk to my Brian, he's with this bread and bed and breakfast thing we're investing in. And he has questions about buying the domain name. Is it what domain name is it? Is it air? Or BNB, it's or maybe they want Airbnb. I don't know. It was like, sure. He's like, Okay, hold on a second. And hi, it's Brian. Doug's hands on the phone. Again, this is a conversation I had 10 years ago with the Airbnb founders. And I think it's you have to really decide that you're going to be of service and then be relentless about it. Having a theme or a thesis, that's all good. Having a culture, a philosophy. Remember, you're in a competition to be the most helpful you can be. And when people fail, that's when they need you the most. So I actually give a pre-speech to founders. And I will say to them, hey, we're putting this money in. And I just want to let you know, when we put this million dollars in or this half million dollars, seven, eight, nine times out of 10, the company is going to fail statistically. Now, I think you're going to be in the 10% or I wouldn't make the investment. But there'll be a time when you feel so sick to your stomach, that you will be embarrassed to tell your team how bad things are. And you'll be scared to death to tell your investors and the board because you'll be afraid they'll fire you. And you'll be afraid your employees will quit. I said, that's when you call me. Because I've seen it all. call me, because all of these companies are about to flip over be distant disrupted, whether it's Facebook or Tesla, or, you know, any company, even the smallest one, they could all have a near death experience. And one Saturday, a founder called me. And I said, Hey, how you doing? I'm gonna make up a name john. And he said, I'm not good. And I said, Okay, tell me everything. And he said, I'm in the bathroom, my kids are in the car, my wife's in the car, I'm supposed to go to the farmer's market, the company is going to fail. My CTO just quit. I said, Okay, where are you exactly? And he said, I'm in the shower, I just vomited. I just puked because I I'm gonna fail. I said, if you fail, at this company, I will back your next company because you take it so seriously. And you're so hardworking. Yeah, go hang out with your family. And then if you're around later, let's talk. Enjoy your family. Let's have brunch tomorrow. If this one, we shut it down. And or we sell it, then you can just take a year off. And I'll back the next one. Sure enough, that's exactly what wound up happening. But, you know, founders, there's a lot of shame in failure. And if you are going to make this region work, you have to be able to preemptively let everybody know We understand that failure is part of the process. You cannot have Uber, you cannot have snowflake, you cannot have Tesla, you are not doing the job correctly. If 7080 or 90% of the companies succeed, you want 90% to fail. And you want the founders to wrap it up, take the tax loss, and then get back up and start again and do the next one. But that's counter to how our minds work. And the power law, you know, the 8020, the Pareto principle, defines capital allocators career. In every fund, there'll be one or two names, sometimes three that make up 98% of returns, right? And no investor knows which one that is until year five or six of the fund. So you have to come to it with incredible humility.

### Human: All right.### Assistant: that's why media brands just have a hard time. And they generally try to stay small, you know, 100% to 500 person staff, and then kind of nested such a brilliant job, okay, we'll give Graydon Carter vanity fair on one floor and Anna Wintour gets Vogue on one floor, different cultures, little micro ecosystems, 100 to 500 people to have their own PNL. Because once you get to the New York Times scale, or Vox's scale, now you're seeing what's happening. The unions are like, oh, we got to get the wire cutter people, we got to combine them with this group of people, the curb people, the New York mag union. And you have, I think Vox has like seven unions inside of Vox. These businesses are challenged Vox is actually pretty profitable, actually, Jim bankers knows what he's doing. And that's probably a smart plan. Because if you're not profitable, I think people are going to put you in a bucket, like it'll never be profitable. And it's just a bad business model. So smart move on bankers part to focus on profitability. I think that's going to make box actually maybe live up to their valuation in the private markets, maybe why Peretti and BuzzFeed isn't, I think if BuzzFeed show they can be profitable, you know, have a 30%, 20, 30% margin, their fate will change. There's really only the hard part about community is being patient. That's the hard part about building community. It's just a slow burn. I call it like hot coals marketing. You know, you have to just build up a base of like hot coals. And then when you put a log on a bunch of hot coals, it goes on fire. If you put three logs in a fire pit, throw some like money on top of it, lighter fluid, and you light it on fire, you're just gonna get a charred group of three logs. So you have to be patient for the first five or 10 years to just build a community that likes to see each other. And when they're not in the community, they're kind of bummed. And they're like, I miss my community. I got to go back and check which is how I am with next fan TV, or the This Week in Startups community. The other thing is like slack and discord. That's a little bit too fast. For most people in their passions. In other words, if you go to a discord, like you're not going to scroll up for the last 24 hours and look at that conversation and try to read it like it's a transcript or spinographer did it. you kind of prefer the lightness and the ease of using a algorithmically based subreddit, right? This is kind of a brilliant model. And so moderation is a slight problem people making bad reddits, obviously, there's a ton of porn reddits. And there were a ton of hate reddits, they got rid of all the hate, I think they still have all the adult content, which I think Tumblr had adult content to Twitter's got a lot of adult content. These companies have done a really good job of turning that off by default. And then having the people who are making the adult content flag it. So if you're not flagging it, they'll flag it for you, I think is what happens. And so a lot of these are offshore. So there's 1400 employees, I wouldn't be surprised if 500 of them are in the Philippines and Manila getting paid one to $3 an hour us, which is a great salary over there translates really well to a middle class income from what I understand. And they're just trained, you know, like, this is porn. If it's born, just label it born. And so while that will come out, maybe it's, you know, 20 or 30% adult content, I'm sorry, I should probably use that word on some of these sites, Twitter, etc. But you don't see it. It's kind of hidden. And they may, they probably can't monetize it either. So it's kind of like a growth hack. But So those are the only issues, Reddit, great, great community, great, great site. Congratulations to Alexis Ohanian, Steve Huffman and the entire team. Both have been on the pod a couple times. Both great entrepreneurs, a lot of respect for both of them in their careers. And let's go on to my interview with scroll founder, former CEO of chartbeat. And now one of the great product people at Twitter, Tony Kepp. If you want to make the jump in 2022 and start your own online business or blog, well, Squarespace is the answer. And I encourage you to be an entrepreneur, to chart your own path. And Squarespace is the foundation of you taking that journey. It's the first step to put out your idea in the world. And you, a company of one that is put in under an hour, will look as good as companies that have a million or 100,000 employees. It's the truth. Squarespace is the answer for making beautiful websites that are highly functional. with built in marketing tools and analytics. You don't just get publishing content. Obviously, that's where they started publishing beautiful content on beautiful templates. But you get to promote your business, announce events or projects. And you can sell products and services. Now they have beautiful templates. I want to just make sure that's clear. world class designers, they pay them make beautiful templates, and they have a ton of them. Plus they added that powerful e commerce functionality years ago. So you can sell, sell, sell, and everything's optimized for mobile, you got built in SEO, so you don't have to hire some consultant rips you off and disappears. Plus you get free and secure hosting, not to worry about getting hacked and then hiring a sysadmin all that wasted money. It's all abstracted. into one simple low price at my favorite website builder Squarespace. I've been using it for a decade free and secure hosting plus at 24 seven award winning customer support. They know if you're building a business and yeah, you know, listen, you got a question. If they answer your questions, you're gonna stick with their platform over the other ones. That's why they've invested so much in their customer support. Go to squarespace.com such as please just start your free trial. when you're ready to launch, use the offer code twist DW I see and you'll save 10% off your first purchase or website or domain. And that's how easy it is you get your domain name over there too. So go ahead and go to squarespace.com slash twist. They are amongst the longest running supporters of this week in startups, which means you my loyal audience should support them. Anybody in your family, any of your friends, any of your projects at work, just go use squarespace.com slash twist. Okay, great job, team.

### Human: Yes, 100%. I mean, I love this, because it is one of the things that you always say that like not to sound like a cultist, but I think about a lot is don't at least never underestimate everyone. And I've already had the experience of thinking that a meeting was going to be kind of a dud going into it and then being like, Oh, that was amazing. And then also this question of sort of like, how to evaluate because sometimes maybe it's not the business that they're pitching, even it's the person like there's a million ways I think to decide who to meet with and why.### Assistant: Alright, so let's start with Yeah. where you are in terms of your career as an investor. If you have an empty calendar, and you're trying to get deal flow, there is very little downside, especially in the age of the introductory zoom meeting, being a 20 to 30 minute experience at max of being, you know, very open to taking a meeting with founders. And if you do choose to make take the meeting, be gracious, be thoughtful, listen intently, and just say to yourself, I've committed to a 30 minute slot. I told him it's a 20 minute meeting, if we go over fine, I can always tell them at minute 29, I have to go I have another meeting, and you're framing it. So everybody has the right expectation. This is an introductory meeting, it's going to be 20 minutes, you show me this is what I do introductory meeting, show me what you're working on for 10 minutes, I'm going to ask you questions, you can ask me questions for the following 10 minutes. It's a nice little format And there is an overriding concept here. You want to make sure that the expectation is set before the meeting. And two, you want to be you don't want to waste the founders time. So even if you have time to waste, it's your one you got an open calendar. and you're going to do it, you don't want to waste our time. So it's important for you to have a list of the hard nose, where you want to invest. As one example, I do not invest in countries where I don't speak the language. Embarrassingly, I speak one language, English, I cannot with a company that operates in Japanese, or Chinese, or whatever language it is, French, German, I can't evaluate the product. I make my decisions by using products. So it is not a xenophobic thing. It is a practical reality of I can't have a translator on staff to translate a Japanese app for me and give feedback. It's just crazy. And what that means is I can't compete with the Japanese investors who understand Japanese culture. So if I don't understand the culture, I don't speak the language, I'm not going to invest. And if I don't have boots on the ground on the continent, you know, where I'm not there on a regular basis, it's also hard. So I will not I will tell people that now if they say, Hey, listen, we're based in Japan. And we've got, you know, a million users, but we just did that. And I speak English fluently. And here's our English version of our product. And we're coming to America. Okay, that's completely different. And it has to be a Delaware C Corp for us to invest for any number of legal issues. So I will tell somebody if I was interested. Okay, great. We can do this. But just know I'm probably not going to invest because I don't speak the language. And you're not in a Delaware LLC, do you still want to take the meeting because I don't want to waste your time now for me as a celebrity in this industry at this time in my career, everybody wants to take a meeting with me. So I don't have to deal with that. But that is just one rubric or caveat to take a bunch of meetings is just letting people know now there's a second vector to put this against which is the stage. if it's a late stage company, and this is their pre IPO round, and your check size is 100k as an angel, or 500k as a seed fund, they may not want your money. So that's where just doing a basic amount of research and looking at the online databases or doing a search for the funding history or asking them the funding history or looking in their document for the funding history. it might be out of your window of messing, and you can be upfront with them. Hey, I'd love to meet you. Let's say you do want to take the meeting, you're fascinated, you're into solar. And you say, I'd love to take the meeting with you. You seem really interesting, but I my check size is 250. And you're raising 250 million. And I'm a 250 check. Do would you want me in the round, even if I could get to the valuation? And you can just have that candid discussion over email before you go. So those are two important caveats. I think other than that, I like the idea of meeting a lot of people because never underestimate anybody. Somebody has a terrible idea, but it's executed. Somebody has a bad idea executed. Well, I actually kind of like to meet them. So one of my little secrets, somebody's like, I'm going to make the travel planning app, where a group of people can do their plans in an app, as opposed to using a Google Sheet, or an Excel spreadsheet, or a chat thread message. I get pitched that idea every six months. Nobody's ever figured it out. If somebody does, God bless. I don't think it's gonna work, because people don't do that activity too often, they're not willing to pay for it, the existing tools they have work, yada, yada. People don't want to download a decade after that. But I might take it if it was executed brilliantly. And literally, somebody just had one of these, like, this is a place for you to share your favorite restaurants and hotels with other people. And I'm like, like, Facebook or Twitter, or my blog, or group chat. So I was like, Okay, whatever. But I did like meeting them. And my team met with them as well, because I can tell them, here's why I'm not investing. This is my concern. And they might, it might incept in them, wait a second, I always give them the speech. You know, you can spend 100 hours a week on this as the founder, you're going to be obsessed with it for 10 years. And nobody's ever made it work. And it's a small market. If you don't see traction after 18 months of doing it, you might want to pivot, you might learn something along the way. As you bang your head against the wall, like the other 1000 people have tried this idea. I hope you are the thousandth and one who figures it out. But in the case you're not, maybe you find an alternate path. You know, like I think Christopher Columbus was trying to go to India when he discovered the new world. Is that right? Or is that think it might have been right. Some people have gone off course and found things that are better than where they were. Yes. Yeah. Anyway, that's as much as I can tell you. That's my answer. Any follow up questions or thoughts?

### Human: Yeah, 100%. I mean, I years ago, I was like, I want to write a book called scale about how scale actually ruins everything, right? Like, you just I mean, growth, unchecked growth is cancer. Yeah. And it kills you. And you have these companies that have had just such growth and you have a decline. We've talked about this a whole bunch of decline in managing as a skill set. Yeah. And and like a respect for what managing even means. And then no training and you know and even now it's so interesting like that's the class that everybody's like oh you just got to get rid of managing and it's like okay well you can do that if you're only ever going to be 30 people. or maybe 20. But at some point, actually, you really do have to care about managing because then if you don't, then what happens is you get Andrew Bosworth writing about your 18,000 person division, he's talking about reality labs, and saying, every week, I see, he said, we've solved too many problems by adding headcounts. This is according to an internal memo obtained by the verge. Um, but adding headcount also adds overhead and overhead makes everything slower. Every week I see documents with a hundred plus editors. He wrote to the roughly 18,000 people in reality labs, a meeting with 50 plus people that took a month to schedule. Sometimes there is even a pre-meeting with its own document. I believe the current situation is untenable. He wrote, and that's why Carmack apparently left too. It was just like, we can't get anything done. Hmm.### Assistant: So this is the proof positive that A players can get very frustrated with bloat. And when I was at AOL, you know, coming in as an entrepreneur, and a player, by estimation, to a company that was filled with, I'm not gonna say not a players, I'll just say lifers, you know, they had been at AOL for over 10 years. Yeah, they had gotten very comfortable, they had very, the pay packages, the scale of going from a director to a vice president to a senior vice president, it was juicy. And I could see somebody who know, with a family and kids, and, you know, maybe didn't want to take risk, or, you know, wasn't as risk inclined at that point in their life, you know, somebody who's 40 years old with three kids in private school, you're like, yeah, yeah. And a mortgage, you're like, if I get to that next rung, and it kicks in this, it kicks in that it was pretty great. You know, they were maxing out pension, not pensions, maxing out 401ks, all that stuff. And I remember one time I came into Jim Pankoff's office, who now runs Vox. And he was like, one of my first days, and I just dropped by his office to say hi happened to be in the building. And he's, you know, this little portico window kind of situation, I just kind of waved at him. He waved me, he waves me and I come in. He's on mute. And he starts talking to me. And I'm like, I'm sorry, I didn't mean to interrupt your call. He's like, it's a standing call. I'm like, what do you mean? It's a standing call. You know, like, we just have this call every week, I can talk to you. So he's talking to me while he's on a conference call. And he's multitasking, just put turns the volume down. And I realized that that's what everybody was doing. They were filling their calendars. So time boxing, but with meetings. And we just saw Shopify last week. Toby said, Hey, no more meetings, right. So I have a theory about management. I don't think there's like one management style that necessarily works. I think management is a process. And that the process of exploring different management techniques and even changing them is and having them be variable and dynamic leads to increased performance. In other words, I don't think you lock into one management philosophy, and then that's the winner. I think you can try different management styles, you can try different things, it makes it exciting for a players to try different things. So as but one example, Amazon has the leader, right? I forgot what they call it in the book working backwards. But there's like, there has to be a person in charge, right of every project. Some people like pods, where you have like three or four projects going on, and a group of five or six people will manage one project. Now, what is the benefit of each? The benefit of one person in charge is obvious, like single person responsible, no matter what happens, you could fire blame that person reward that person, and they got the heat on them, right, the single threaded leader, you know, you know, Bezos knows, hey, if I'm gonna go choose somebody out, because, you know, the Kindle feature, you know, that I use last night sucks, he can go find that person, right, three years ago, or conversely, if somebody crushes it at audible, he can go find that person and give them a raise or say, give them more resource, hey, do more of that. Okay, that's single threaded leader. Then it turns out, when you have a pod, we have integration. So then the other big complaint inside companies, Molly is, hey, slack and Salesforce aren't integrated. And, you know, they don't talk to each other, it's two different cultures, or YouTube is distinct, or Instagram doesn't work with Facebook, right? So how do you manage those kind of issues? I literally just did this this morning for the first time. Here at launch, we have programs, founder university, the launch accelerator, we have remote demo day, Angel University, And then we have a new project we're doing and we're talking about yet, but it's a new accelerator and a really exciting vertical that we're launching. That'll be like a fun experiment. So it's five of them. And I had one person in charge of every single one. And then I said, You know, it'd be interesting. These things are overlapping so much. I'm going to have Jackie run a call every morning a stand up for the programs team. And then let's see if we can integrate them more. And we had the first call today was like, Oh, you know what? Just one little discovery. customer interviews and customer research is something that our founders keep asking about customers customer research, that's when you talk to your customer, you do some analysis of what their needs are. And it turns out like some of our companies do that really well. And some of our companies, whether they're in the founder, university accelerator, or even their $10 million companies don't have that function at all. So I was like, can we find out in our portfolio of 350 companies or 300, historically 350, maybe 200 or so active, who's great at this, get those four people together, create an afternoon where the four of them talk, invite all of the founder university, all the accelerator, all the portfolio companies to that, then can we make a couple of blog posts and founder university podcast out of it. And then every single program, we should have that integrated. And we just did the same thing with accounting, because so many people are not good at accounting. And we see that kill companies. And so we said, Okay, let's have accounting for founder university planning for accelerator. And let's do some accounting in the founder university pockets. So it's just another way of saying management is about changing it up, in my mind, keeping it fresh. thinking about how we could all be better. Sometimes time boxing is a good thing. Sometimes outcome management is a good thing, right? Just what's the outcome we're looking for? But also, like, sometimes it's good to everybody look at their calendar and say, Hey, how are you spending your time? Right? Now, that doesn't mean you want to do that forever. Do I want to look at everybody's time boxing forever and their calendar forever? No. But I might want to do it for a couple of months or two quarters, and get everybody really charged up about efficiency. And then maybe that goes down. And then maybe we talk about outputs, right?

### Human: Colossal.### Assistant: It was a big smoking crater in the ground had raised several million dollars of venture capital, um, from prominent, you know, uh, angel investors really who wrote massive checks. Uh, it didn't go to really traditional finance. because it was bringing power to people in the most low income, you know, emerging economies like, you know, Bangladesh, Uganda. This is where we were trying to bring, you know, this laptop into the world and, you know, pardon the kind of twists and turns, but the notion was that Potenko failed because its business model was actually terrible. It was hitched to this one laptop per child initiative, a nonprofit that was very well-intentioned. It had massive donors and backers handing out laptops for free to the world's kids. And the notion was that, okay, this is an education initiative. We're going to educate billions of kids around the planet when they don't have schoolhouses and teachers and books. the internet and mesh networking and this clever little device would actually just change their lives. Great concept, but in fact, nobody there was asking for it. This was somebody in an ivory tower kind of saying, hey, I've got this technology, I've got a hammer looking for nails. And what we found on the ground as we were doing this user research and, you know, I kind of came from the Stanford Design School with a design thinking approach, looking and observing and talking with folks, we realized Billions of people around the world are living at the base of the pyramid, but they're solving their own problems with their own solutions. And they were using $10, $15 Nokia kind of candy bar phones that were, you know, really garbage to us at that time, but they were using it to do really innovative things like call a buddy and say, hey, what's the price of coffee that you're getting at this market versus that market or, you know, what fish do they have coming into this, you know, you know, this, this trading post or that port. And so actually, the aha was, people don't need laptops, they're not asking for these. they're actually using cell phones. And so we built Phoenix after Patanko failed because that company relied on the success of the laptops to sell human power generators. We realized the need was actually people want cell phones. They're actually buying them with their own hard-earned money. It wasn't some charity handing out cell phones. or in this case, laptops, they were finding these, buying them and multi-billion dollar telecoms were entering into these markets, Kenya, Uganda, Tanzania, Bangladesh to install like 3G, now 4G, soon 5G networks where people only earn like a couple dollars a day. It's really super surprising and that there's in fact a fortune to be made at the base of the pyramid where you can help people do well while doing good. And so they were using these tiny little cell phones as tools initially for business. So just in the same way, technology adoption, you know, the first know, computers were massive and they were used by businesses. The first fax machines and then laptops and now cell phones, it was business people that adopted them. So, not surprisingly, folks in Africa were buying cell phones, but they had no way of charging them. The same problem with the laptop. And so, we observed these entrepreneurs who would dig a car battery out of an old broken down truck and then charge it up somehow at like the local community center where there was a generator or power, haul it back to their village and then open up a little micro power company charging 25 cents to charge up somebody's cell phone. It was like super inspiring and entrepreneurial and that was the spark for Phoenix. The notion was that this is helping people rise out of poverty. It's rising from the ashes of this previous startup and it's about rebirth and renewal that that mythical Phoenix, the firebird, exists across lots of cultures from, you know, ancient Mesopotamia to China to Africa. It was just this beautiful story about rebirth and renewal. So, as a renewable energy company, we actually started by talking to people, observing what they were doing, solving their own needs and could we give them a better solution and that was in a way a better car battery. And so, we designed actually a smart battery system that we called the ReadySet that could actually charge from virtually anything. From that human power generator, we built a little bicycle pedal generator that could attach to any bike. Also, there were solar panels, little wind turbines, micro water wheels, and if you had the grid power, you could use it as backup. But it was designed first and foremost to be able to charge cell phones, which was really novel at the time. There were tons and tons of meaningful charities and even some startups and for-profits that were distributing solar lamps and lanterns because that was really the call it the western view of, okay, poor people, they need light, it'll help them, you know, study and, you know, kids can get an education, they can read. That's really great. But that's not what they were asking for. They wanted to power their cell phones. And so, Phoenix actually got started when the folks at Google approached us and said, you know what, we've got this secret project called the Android phone. It's a thousand dollars now, it's not even available in the US. Wow. Cool origin story. So amazing. They had engineers bringing duffel bags of brand new Android phones, the G1 Android phone with a little sliding screen. They were working with local nonprofits, microfinance institutions, and the great thing is the local telecom, MTN, a big South African telecom carrier in Uganda, to pilot smartphones with farmers and entrepreneurs to see, hey, how might you use this phone? What are you going to do with it? And so, they were looking at farming, you know, kind of tips and tricks. How do I deal with this pest on my tomato plant? Oh, I got this weird fungus on my, you know, coffee plantation. And so, they were doing that but they were also watching World Cup soccer and like, you know, sports betting and all sorts of things that, you know, people do on phones. And so, far be it for us to say, no, you can't do that. They're furthering their businesses but they needed a way to power these phones because they were literally blowing up, you know, thousand-dollar Android phones from car batteries and diesel generators. Yeah, so we got that start was the spark by talking with folks. And in fact, a really interesting partnership with Google, the Grameen Foundation that pioneered microfinance in Bangladesh, the Grameen Foundation brought the capital to help actually finance these phones, and then our power solution for these small stakeholder farmers and entrepreneurs. It wasn't a handout, it was actually built to be this sustainable model.

### Human: I mean, look, David and I, you're preaching to the choir here. I think one thing that, or at least I'll speak for myself, in a way grateful for is having our eyes open to the way in which our country and our whole system has been broken for a very long time. Awful, the way that it's coming to light, but As hard as it is to watch and as hard as to talk about I mean, these are these are murders.### Assistant: Yes, yes, I think this could actually work. So now, I want to flip the conversation to get back to China. And the fact that Tencent, and we sort of dabbled in their involvement in so many companies. And when we get back, as predicted, as I predicted, working for the communists is not a great idea for any American. And literally a couple of months after I said Kevin Mayer has lost his mind and is a traitor to America for going to work for this Chinese company, he has resigned. But he may not have resigned because of his realization that working for communists isn't the best look. He may have resigned because he was going to be excluded from the discussions about the acquisition that is inevitably, I believe, going to occur when we get back Uh, we're going to get both, uh, Ben and David's opinion on the crazy hot potato that is tick tock on this weekend. Sorry. Do you love sleek, modern furniture? I do. My whole house is filled with it, my office. And I was always looking for this beautiful table and chairs for my dining room, my living room, my office, the outdoor stuff. And I was amazed that when I looked at this one website, their prices were great. So I ordered some products and it turned out the build quality was phenomenal. and my wife was like this is gorgeous where'd you get it modloft modloft modloft modloft it looks incredible it's built incredible and it's at a fair price they allow risk-free trials at your home and they'll deliver in days not months because i am dj in stock when my wife wants to get something i'm like dj in stock wiki wiki wiki Is it in stock or not? Because I don't want to shop unless it's in stock. Period. End of story. I want instant gratification. And that's what I get with Modloff. These spectacular pieces have won international design awards over and over and over again. And they're going to give you a free interior design consultation to fit your style. They have exceptional customer service. I can tell you that. If you don't like something, they just take it back. No problem. Easy breezy. See why founders, venture capitalists, pro athletes, and top recording artists alike, including your boy J-Cal, I fit in a couple of those categories, pro athlete not being one of them. Choose Modloft. And I want you to just go to Modloft, M-O-D-L-O-F-T dot com slash twist. Modloft dot com slash twist and get 15% off and free shipping. So thanks again, Modloft. I just, I'm a customer for life, period, end of story. Modloft dot com slash twist. M-O-D-L-O-F-T dot com slash twist. Go there right now and get that 15% off, that significant And free shipping also significant. Just everything looks better, makes you feel better. You know, I love good design. Speaking of good design, let's get back to the rest of this podcast. All right, listen, we're ripping through a lot of important information at a very difficult time. And I just want to take this moment to say I know many people are suffering from the pandemic and the economic aftermath that we're in the middle of and to those people I am very sorry for what you're going through and suffering through and I hope as Americans we can all do our best to vote for people who we believe are qualified for whatever side of the aisle is but I hope you all vote and I hope you vote up and down for people who are qualified to deal with a crisis and I'm going to leave it at that and then To our black brothers and sisters who are suffering under unfair policing again This is not what this podcast is about, but I feel obligated to say It's just devastating to see what's happened and we stand with you and I am putting a lot of thought and time and effort into finding more black women black men and and people of color to invest money in. And I'm very proud to say that our team, especially Jackie on my team, has a program called Founder.University that we taped, that we did this week for 10 hours. And we had 260 black and brown founders, female founders, LBGTQ, and We found three or four, we always find three or four great investments. And I am working my ass off to work with my team to make this a top priority to bring not just you know, I can't affect policing. I know that. I mean, I can vote, but I'm not going to be able to change these these these murders that are happening on the street. But the thing that's in my wheelhouse is investing in founders of color. If you're a founder of color, if you're a woman, And you want to spend time with me and my team, we are available to you, whether you've just got an idea, we've got a prototype. And we're going to do it and we're going to do it for free. And we're going to give you every piece of advice and support we can, that is our promise to you. And we do it through something called founder.university, which we're hosting six times a year. for women of color, Latinx, I think is the preferred term now, LGBTQ, anybody who's underestimated and underrepresented, we want to work with you. And I just want to put that out there. And my good friend Arlen Hamilton, friend of the pod, has started her own backstage syndicate. I implore you, if you're a limited partner in what I do, that you go sign up for what she's doing. And I've been mentoring her on how to run a syndicate. She's done two deals already, both oversubscribed. And I think she's a great human being, and I think she's a force of nature. And yeah, maybe she swings a couple of elbows here or there, but I swing twice as many and I get half the criticism. So go support her as well if you are an accredited investor. And we need to change this situation because it's goddamn unacceptable. I'm going to leave it at that. I don't know if David or Ben, I don't want to put you on the spot, but you know, I don't know what, how you're dealing with this, but I, I really am having, you know, a very hard time getting to sleep at night. Uh, and, and I consider myself one of those people who never, who could just power through anything, but it's very hard for me to deal with what I'm seeing, you know, it's just, it's heartbreaking.

### Human: Well, I'm very excited to because I'm like, Okay, all right, because I did get I got excited in the founder way. And now I need to know that I also got excited in the fundamentals way, which is that they have had a pilot with several hundred paying customers that was successful. They have customer retention numbers and they could tell me their margins, which is that they in fact were profitable on their orders, like to the tune of one to 2% with a path to greater margin.### Assistant: Correct. And so for us, we want and also, we also want to build and we want to build a relationship with that founder, because if you made it through the accelerator, and that company fails, which most startups do fail. And when I say fail, I mean, fail to return money to investors. They would be great learning experiences, we can invest in that founder, second company. And in fact, Travis, when I invested in him, that was his third company. When i invested in role for super human that was the second time i invested in i invested in report of. It's got sold to linkedin we tripled our money twenty five k when i was investing then turned into seventy five or maybe a hundred. So i got back my original twenty five plus seventy five k and i was kind of bummed about that like hitting a single with somebody like role i know it sounds obnoxious to you know triple your money. in five years and be upset about it. But I just always felt like he was 100 x founder, yet co founders, then. So I said, you know, that's fine. We, you know, we hit a single, just please let me be the first investor next company, he came to me with superhuman. And famously, I gave him, you know, 500, I think, just based on his idea, which was to take on Gmail. So that's when you place a bet on a founder with no traction, because you go, okay, I know this founder, I bet on them before. So I would like to own we I think we own 2% of superhuman. And so owning 2% of a company that's going to be worth billions. That'll be a great return for our investors, right? I can make that bet. Okay, if you listen to this week in startups, often, you've heard me talk about Oh, deuce incredibly powerful suite of business apps a lot. Well, they're going to give you your first app free forever, and $1,000 off your first implementation pack at od.com slash twist, that's od o.com slash twist. And here's why Odoo is so great for startups. Their suite of business apps helps you run your entire company on one platform, I kid you're not. And they'll streamline your workflows, by bringing all your information together. This eliminates annoying, repetitive tasks like entering data across multiple platforms, which we all have to deal with and we all hate. Plus, if you only need two or three apps to optimize your workflow, that's all you're going to pay for. Odoo won't charge you for apps you don't use. And Odoo offers over 30 main apps today, with over 16,000 apps from their open source community. Their apps include bookkeeping, sales, CRM, website builders, and more. You're going to love it. Again, here's your call to action. Your first app is free forever. And Odoo is offering $1,000 credit on your first implementation pack. So go to odoo.com slash twist for $1,000 off that's odoo.com slash twist. So now what we want to do is really, you're trying to get a good price or a reasonable price for reasonable traction. And that's where that green line starts to make sense. And if you're below the green line in this chart, you're probably getting a little extra value or more swings at bat and the further above it you go, probably you're taking a little more risk. And I tell all of the new angels I work with, do not invest pre product market fit do not invest until the product is being used by say 10 customers 20 customers. Why? Most startups die before they get to their first paying customer. Most startups die before they get to paying customer number one. The ability to get one customer to take out their credit card and pay is colossal. And you have to make sure that's a real customer. So when you actually do your little investigation, you talk to a founder, they'll say, yeah, we're at six customers. I'm like, tell me who are the six customers and they're sometimes taken back. What do you mean? Like, walk me through each of the six customers. Six, you must know him. Yeah, you got to know him. If you don't, that's a red flag. But walk me through the six. How did you acquire each one? Which ones are your friends? Which ones are your last? And I give them permission. like, wink, wink, I know how this works. So which ones are your friends, family, previous colleagues, and then which ones did you get organically or through marketing? And they're like, Oh, yeah, so the first three are my frat brothers. And you're like, great, good job. You got and that's totally valid. You got your frat brothers to try it at their company. He's got to try it. Yeah, they put it on your corporate card. How did you acquire them? But then you go to the fourth customer, like, yeah, the fourth one, we we cold emailed, and they signed up after one email. And the fifth and the sixth, we met a trade show. Okay, Now that you've understood there are three people you know that really made an honest decision to pay for this you can actually double tap on those three tell me about those three. How long have you been paying to pay for one month three months six months and are they actually using the product where their engagement statistics okay so they bought slack. And they're the sixth customer for slack, the first three refract brothers, the sixth one was somebody you met at Rachel, how many messages they send a day? And how has that increased over time, you can actually have a very nuanced discussion about the engagement. And then if you feel okay, it's only three customers, they're making $400 a month, I can play suspect. Famously, when I invested in calm, they had $10,000 in revenue, I think total to date. And they were charging $10 for the app. So they had sold 1000 people on paying $10 for meditation. And for me, that was like, great, if you can sell 1000, you can sell a million. And here we are, a company's worth, you know, billions of dollars, and we own five or 6% of it. Yeah. And that's one of our biggest positions ever. So that's how I think about, you know, the early stage. So you met with a company without talking about who the company is, where would they fall on this matrix?

### Human: Thank you, Jason. Our truly appreciate this. kind of weird and surreal to be talking to you right now, because you don't know this. Okay. But This Week in Startups has been around for a long time. And when I started my first company in 2010, I didn't really start to learn about the industry and really pick up things until 2012. And I found this little YouTube show called This Week in Startups. And the amount of things I learned watching some of those episodes, like I have to credit part of my journey too. So Oh, well, thank you for that. And thank you for all the stuff that all the content you put out and all the education because you know It's a black guy in baltimore. Like there were so many places for me to go to find that information back then Yeah, so thank you.### Assistant: Oh, here's an interesting observation from one of our folks in the chat room. They were just basically saying, doing proper predictions while Prof G is the reverse J Cal. Hey, here's a great idea. If somebody as a superfan wants to do a supercut of my incredible predictions, and then supercut them, with Prophecy's terrible ones, that would be pretty hilarious. I'm not saying that I would like send you like a thousand dollars in ETH or Bitcoin from an anonymous wallet in the Philippines if you did that. I'm not saying an anonymous wallet in the Philippines wouldn't send you a thousand dollars in ETH if it did. Alright, so we're doing season six of angel. It's its own feed. And we also publish it here on this week in startups. It's just basically I've been interviewing investors, I hopefully you can get in on this too. Maybe you do one of the interviews or two of them. We do them together. But, you know, for the last couple of seasons, I've been coming up with themes, the theme for this year, Molly, or the season, season six of 10 episodes is first time fund managers. So you got your first fund. Typically, those are 10 to 20 million. I want to talk to first time fund managers, because there's so many first time fund managers now, because it's so easy to raise a fund, rolling funds on angel list. know, popping up a fund on a shore, which we're investors in. I think Carta has tools to pop up funds. My friend Adeo is doing a VC lab where people are learning how to be venture capitalists. Everybody's learning how to be VCs like yourself, Molly. So this season, season six will be first time fund managers and we're starting with Mac the VC. So anyway, enjoy this interview kicking off season six of Angel. These days, it can be hard to find and hire the right candidate for your small business. Don't I know it? Constantly trying to hire talent and that's why LinkedIn jobs makes it so much easier. You can find the people you want fast and now free. When you create a free job post on LinkedIn, it takes just minutes and you can create and reach the world's largest professional network of over 770 million members. Wow, they're growing fast over there. You can use screening questions to get your role in front of only the most qualified candidates. I love screening questions. And you can utilize simple tools on LinkedIn jobs to quickly filter and prioritize who you want to interview and hire. Very important to prioritize. Sometimes you get too many people who want the same job, right? And this is why small businesses rate LinkedIn jobs number one in delivering quality hires versus their leading competitors. We love it. We find great people there. We trust the service and it's so easy keeps us nice and organized. I mean, we've literally hired dozens of people using LinkedIn. LinkedIn jobs will help you find the candidates you want to talk to and they're going to do it faster because speed is what it's all about for startups. You know that did you know that every week nearly 40 million job seekers visit LinkedIn? I bet you didn't know that. 40 million people. Somewhere in there is the next superstar who's going to take your company to the next level. So here's what I want you to do. I want you to post your first free job. That's right. The first job posting is free at linkedin.com slash angel a n g e l. That's right, linkedin.com slash angel to post your first job for free. Terms and conditions do apply because they're giving you something for free. Hey everybody, I'm super excited. It's season six of Angel. Can you believe it's been six seasons since I wrote the book Angel? We started this special series, special podcast as part of this week in startups. so that you could learn from other investors, what their theses are, how they invest, why they invest their best practices, you know, and just basically figure out maybe some strategies for being better investors. Now, if you're a founder, and you're listening to this, You get to understand how the other people involved in the startup community, the people on the other side of the table, are thinking about their job and their role. So, congratulations on being sneaky and sneaking in here and understanding how to get that money and secure the bag. You know, we started this in 2017, as I mentioned, to compliment the book Angel. And we've started to theme the seasons. You may remember, and I think we started the themes around season four. Seasons four theme was the three comic club. So basically, people with under a billion dollars in management, so we had Dan Rose from CO2 or Sarah Cannon from Index, Sarah Talvo from Benchmark, just people with massive exits or massive funds. Season five, we did super angels and we had on angel investors who had done 50 investments or more. Mark Cuban gotham gal joanne wilson elad gil basically people placed a lot of bats season six i realize you know there is a huge trend many more people are starting funds and so we thought we go with first time funds as the seasons theme basically new fund managers. some of them had a little experience before of course but they've generally speaking the theme will be people who have raised a first fund and they're you know under a new moniker they got a new brand name and they're deploying capital and hopefully building a brand that last for decades to come as investors so. Our first guest will be none other than mac conwell you know him as mac the vc on the twitter is very popular. Interact with a ton of people and his fund is called rare breed vc. It's a two time founder and he started raising a fund in september of twenty. Twenty and he has been doing for us over at inside the inside business podcast with liam gill, uh, 36 episodes in and we're changing it up a little bit, bringing some more of the analysts in. Uh, but he's been in my orbit and this is the first time we're sitting down and talking together. He's closed 10 million, uh, in October of 2021 deployed 4.9 million since January of 2021. And their check sizes are very similar to my first fund 100k to 250. And we'll get into some of the great companies in his portfolio in a moment. But for now, welcome, finally, Mac, the VC.

### Human: Hey, I'm doing well, Jason.### Assistant: Hey, everybody. Hey, everybody. Welcome to This Week in Startups. It's your boy, J. Cal here. In the summer of pandemic, it's 2020. And we're taping this on, I think, July 27th. We'll probably release it in the first week of August when you're listening to this. And it's a bit crazy. And one of the things that's been really interesting is that our accelerator, the launch accelerator, where we invite seven companies, we give 100k each, and they would come to San Francisco for 12 weeks and meet all the investment community here had to switch gears. And we had to go 100% remote. Now, just like colleges, you have good and bad things with remote learning. The good thing with remote learning is you don't have to commute. uh... the bad thing is you're not in the room so you don't get that high touch experience uh... the certain people do well in remote situations for learning others might not different learning styles but for an accelerator some magical things happened we had two three times the number of investors show up every week because we weren't limited to just investors in the bay area we were able to run the program without having to have a physical space, which we would beg, borrow and steal and rent in order to host it. Sometimes we'd host it at neighborly, sometimes we'd host it at Fenwick and West, a law firm here who was gracious enough to host us. Originally IBM used to host it for us. So we had all these great friends who would host for us and allow us to use their spaces. And I was actually in the process of securing a 10,000 square foot space and i was looking in november december and january at spaces and ready to pull the trigger and then the pandemic happened thank god i didn't because i'd be sitting on that space and nobody can get on plane so what we found was two, three times the number of qualified companies started applying for the accelerator when we went fully remote, we extended the program for weeks, and we got three or four times the number of investors coming and the companies who are coming, we're closing funding faster. And that really is the goal of an accelerator. Like most people are like, what do you get an accelerator? Most people would say advice. Well, that's kind of a commodity. It's you got medium, you got this podcast, you got books. I mean, there's a lot of information out there clever people can find it. So advice, introductions, that's valid. anointing, that's super valid. You know, when you go through a sorting process, be it Techstars, launch accelerator, or Y Combinator, the investment community knows, well, those teams are pretty smart. And they sorted this big influx of applications down to the 1% 2% that they were going to select. And so that anointing does count to downstream investors, they look at it and go, Hmm, if Jason and his team sorted this down, and they put money in, they got skin in the game, they don't want to have egg on their face, they don't want to pick companies that are weak, they want to pick the strongest companies, obviously, they're trying to get a return on their dollar, and they don't want their name associated with anything weak, they're going to work hard. So We worked really hard in the accelerator. Long story short, we're doing them every month. Now. They're going great. They're going better than we were in person. And we're having more companies who can participate because not fit our face and not everybody could get on a plane. Some people were located in Australia, or other countries, other people had families or commitments that meant they couldn't make the trip or they simply didn't want to. And who can blame them? San Francisco is a mess. But We have a very interesting approach in our accelerator. One of the things we do is every week we say to the investors who come, tell us your number three, your number two, and your number one startup in the mind of an investor and take us through why you picked that number one company. Now this creates a little bit of tension but it's a healthy tension in that nobody wants to get no votes and people really want to get votes and they want to win because people are competitive or you wouldn't be a founder to begin with. Third place gets you half a point, second place gets you a point, the first place vote gets you two points. And so it's very dramatic when we go around the horn and fifteen investors give their three, two, and one and typically you know uh... everybody gets votes but there become some winners. And today, we're going to talk to the launch accelerators. 17th class, which I believe started in person, then for three to three weeks, and then went remote. So they were the transition class, we're gonna talk to the top three vote getters, because we look at that, and we chart it over the 12 to 14 weeks, now 16 weeks, we do the accelerator, so people can see who's got the most cumulative points. Does that correlate with success in the future? We're going to find out over time, but it doesn't exactly correlate with fundraising. We've seen people who are number three or four be the top fundraising company. We've seen people who are number one or number two be the lowest in terms of revenue or towards the bottom in terms of revenue. So it really is, not a perfect metric, but it does allow us to say to the investors, Hey, I want you to really think about which one of these are the most fundable first up in this cohort number three in terms of scoring and not that that means anything of seven is Erin Carpenter, and she's with a company called nude bar and you de B, A, R, R, E, and they're in the direct to consumer space, which we find a very interesting category, challenging, but we look for companies in D to C that are very strong in terms of the founder and product fit. In other words, the founder really, really cares deeply about the product. Now that's true in all startups. But we also look for a product that's very unique, and an audience that maybe is either underserviced or is super passionate about the product. So welcome to the pod, Erin Carpenter from Nude Bar. How are you?

### Human: Yeah, so basically, all banks, not just the ones that we're talking about, hold these two types of assets. And I'm not an expert here, so maybe I'll let Vinny or yourself chime in, Jacob, but hold to maturity HTM securities and available for sale. Available for sale is stuff that they generally can sell pretty quickly. HTM is the long-term stuff, 10 years out, mortgage-backed securities or even treasuries. And so what we can see here is that as interest rates went up, those long-term assets became, their immediate value, time value money became lower. And so those have not been marked to market. And this is what triggered the Silicon Valley bank problem, is that when they came out and said, hey, we need to sell some of these, and then they had to mark to market, I think like a $1.8 billion loss, people started tripping out because that created holes in their balance sheet. And I think this $620 billion is much bigger than Silicon Valley Bank or First Republic or anyone else. Exactly. And this clarity is still not given to any one of us. So I'll kind of throw it back there. Maybe even to you, J-Kel, first. What do you think? Because you've got startups. And when you see this, how is this going to be absorbed and how is this going to impact us?### Assistant: Cast AI audits and optimizes your cloud cost and performance for you, which the cloud companies don't do automatically, right? You have to do it. You have to take control of this. And Cast AI is going to help you do that. They eliminate the stuff you're paying for, but that you don't use. And they search for less expensive hosting options within your cloud provider. And then you begin saving immediately. Listen to this on average cast a customer save over 60% on their cloud spend, you know how out of hand the bills can get right? The pricing uncertainty can really hurt your business, you get the surprise bills, but you can solve that right now with cast a high. Imagine what you can do putting that capital back into your business, right? Everybody's in austerity mode, everybody's in optimization mode and Cast AI is going to do that. It's priced for a tiny portion of what you save. So before you go and sign any multi-year cloud contracts or make any drastic personnel decisions, check out what Cast AI can do for you. So here's your call to action. Cast AI will give you a free cloud cost audit, which you can save and a personal consultation. Visit cast.ai slash twist to get started. That's cast.ai slash TWIST. for a free cloud cost audit today. And we met with the founders last week and they are really excited to help founders and listeners to this week and startups save on their cloud bills. So give them a call. Go visit cast.ai slash twist. It's a great question. And two people are like really concerned about my disclosures. I have accounts at Silicon Valley Bank, First Republic, and probably four other bank accounts. I think we probably have six, and we've always had it that way. I was trained early on in my career by one of my operations mentors, Elliot Cook, that like bank failures do happen, or like just money can become unavailable for whatever reason, a bank account could get locked for some reason, who knows. always just kept our money, whether it was the magazine, Silicon Airport in the day weblog saying just on and on, we just always kept in four banks, three banks, some amount of redundancy, literally in case an employee went rogue there on either side, it could be a bank employee, it could be us could be a mistake, right. So if you have things in three places, that's always been my best practice. And I do that personally, I do it professionally. And so and then I did do two mortgages with Silicon Valley Bank, which is the most wonderful experience ever. They come to your house that white glove in my case, because, you know, I have a podcast, maybe perhaps, or Twitter followers. know, 510 years ago, they used to sponsor our events. And you know, they sent like six people to the house, eight people to the house, and we had wine and congratulations at the new house is all very charming. And like, I think kind of how banking should work when you buy a house and you're like this white glove service. And it was quite charming and wonderful. I still have on this office I'm sitting in here, which we're in the process of selling a tiny de minimis mortgage from Silicon Valley Bank. But what made it nice was, at some point, somebody told me in Silicon Valley, you know, like, instead of going through, like, going to the offices and having to wait in some big bank's office, Silicon Valley Bank, Comerica, First Republic, they'll just come to you, you'll have a nice conversation, have coffee, you have a banker. And it was like, wow. you could email them, you could text them, you had their phone number. And this kind of relationship was like, wow, this is wonderful. And so that being lost, I'm really, but and I don't have any short or long positions. But I am thinking about J trading and buying some of these bank stocks this week, because, wow, okay, I do think that like some of these buying them, buying 620 billion of losses. Well, I do think like you have to do this selectively, right. But I do think some of those, you know, the I think the ultimate thing that has to happen here. Very simple. government is just saying, instead of saying we have this like $25 billion loan facility, they should just say, because of the raise in these interest rates, and because these are our devices, right? These are government backed devices, treasuries. And so they could just say, you know what, we are going to create this facility, it is covered no matter what, all 620 billion is covered. it's covered, and it will be a recourse back to anybody who uses the facility. So it's not a cost to taxpayers or anything. If you choose to do this, we're going to bill you back over time, we've set up a 20 year window here. And we'll have this facility. So if people do need to trade out of them, they're gonna have to do it, they're gonna apply, it'll be public that they're applying to do it, we'll backstop it in the government, but that bank or that entity will owe us it'll be senior debt to them and whatever. So the, you know, it's, there's some recourse to it. And so I think they did a great first step. Hey, all your deposits will be safe. That stopped the bank run. And people were like, Oh, Silicon Valley is trying to cause a bank run. That was the allegation we're trying to say, we're actually reporting on one that happened and it's now over Silicon Valley bank. And we're the silver gate one, which I was not aware of like, Oh my God, that one is actually happening. And I didn't even know about it. And then first Republic, whether that was a bank run or not, or just people concerned, rightfully, wrongfully, whatever it is, you know, today, we have two ratings firms that cut First Republic's credit rating to junk on the risk that depositors could pull their funds from the bank. So cause and effect know, I, I think when this is the thing about social media today, and these bank runs, you have no choice, but to say what you're seeing, right? Where do you hide the fact that people are lining up outside a bank?

### Human: Yep. Don't be the sitter.### Assistant: Well, the hitter. Yeah, I think I think we have to look at is take a self assessment. what value are you providing for your company? What projects are you responsible for? Not that you work on, but you're responsible for. And what I encourage you to do is take the things that you're busy with email and slack, you know, meetings. And then maybe unless you're in sales, and like you're closing deals, those meetings are obviously an input. But the things that are not inputs into an output. So an input, if you're a salesperson is finding leads, and then taking meetings, the output would be closing deals, right, which is money in the register. If you were a producer on a podcast, the input might be finding guests that come on the podcast that increase the ratings, the output, right, you get a better you find a better guest has an output. Now in both of those cases, being on email, and checking Slack might be necessary to get those functions done. But you have to have a candid look and say, how many hours did I put into the sales calls and the lead gen as a salesperson or in this hypothetical producer position? How many great guests did I get this week? And then what did they do to the ratings? And these are the kind of things where you actually look at your inputs and outputs. That's how you're going to be judged by your boss. So people have in their mind, Molly, I'm busy, I work 10 hours. Okay, that's valid. I know that's how you feel. But at a time like this, people are looking at more of an input output here. Yep. And if you were going to look at a 12 person sales team, you would say, here's a 12 salespeople, we need to get rid of three. give me a list of their cells, and then give me a list of their renewals. And they will literally because I've been involved in these discussions as a board member, and as a CEO, and as an investor and a confidant of people, they'll go through it. And they'll be like, Hey, this person is like the number nine person on the list. And we're getting rid of, you know, 910 1112. So we're gonna get rid of three, we got 12 people on this hypothetical sales list. The last three, last four, it turns out number 11. It's just an incredible culture fit. Everybody loves them. They help each other out. But 910 1112 they all are underperforming 20 to 25%. But you know what number 11 is really positive and hardworking and ask for help. And number nine is, you know, doing better, they've, you know, they sell 5% more, the real pain in the ass, and they're negative, and they're a drag. So it's not a popularity contest. To be clear, people are not going to make these choices on popularity. In almost all cases, there could be some edge cases where it's like, hey, that's my guy. you know, I went to college with him. And there could be a little insider trading favoritism that goes on. But by and large, it's going to be input output, who's got the best output, we're keeping them. But on the margin, now you're down to that 25% that are going. If all things being equal, they're going to pick the person who is the most enthusiastic who asked for help, and they see professional development happening with that person. So you have to then ask yourself, what's my output for this company? What am I actually accomplishing? So this company is Google search. And how am I increasing the number of searches? How am I increasing the search quality? How am I increasing the number of ads? You know, whatever it is, how am I making the servers faster the output? And then how is my output in relation to everybody else? And so there's a there's a trick here, which is increase your output. Or not very good at your job. Be realistic and say hey to your boss preemptively. I see my output is in the bottom 25%. I want to be in the top 25%. Can I get five minutes with you? You know, today, tomorrow, this morning, anytime. to just tell me one or two things you can just do by email, that would make me get into the top 25? Is it do I need to find more leads? Do I need to work harder? Do I need to come in on Saturdays? Just give me whatever piece of advice you can give me because I actually realize that I'm new here. I you know, other people have had a time to build up their book of business. What do I got to do? Just tell me. But what people do at a time like this, I think it's time to put their head down. Right, classic mistake, right, your heads down. You have no relationship with the person making this decision for layoffs, you're gonna, you're gonna, you're gonna, they're gonna make it easier to cut you, as opposed to the person that says, I don't want to get cut, I want to be on the team. what do I got to do if I got to run laps, I got to do 1000 free throws. I know my free throw shooting isn't the best on the team. I'll be in the gym every day throwing at that I do 1000 free throws if that's what you tell me I need to do to be on this team. So so be that person be that person who is realistic about their output and then says how do I become elite that is super, super engaging for a manager who if you have empathy for them is having a really hard day. not as hard as you getting laid off. But boy, does it suck? No one wants to do it. Yeah, nobody wants to do it. So anyway, there's my framework. I don't know what you think of this framework, but poke a hole in it or tell me what you think. I'm trying to be super candid with the people who are on the other end of this, having been on the other end of it briefly when I was young, and then having 25 years experience running companies that do layoffs.

### Human: So what do you mean by that confound us the most?### Assistant: What does that mean? If you were to when Airbnb and Uber started pitching people, the first thing people said about Airbnb was you're gonna stay on, I'm gonna stay on your couch. So you're like, but what if you're a serial killer? And they were like, Oh, yeah, yeah, no, because you have a rating system. I'm like, Oh, really? serial killers are not going to game the rating system? Like do not know nothing about Did you ever see Silence of the Lambs? Hannibal Lecter, he's very charming, he would get five stars. And so people couldn't understand Uber. And when I pitched it to people, I brought about 20 angels together in a room like this. And I had Travis pitch them, three of us invested and 18 didn't I see those same 18 people. I know all of them. And they come up every time. Oh, my God. Five million, five million dollar valuation. You told me to invest and I didn't. And the thing is, it was an illogical idea that people would get in a random person's car. And many people at that point in Silicon Valley did not want to be in the hardware business. And they said, We don't want to be in that business. And one VC, I'll never forget, he said, Jay cow, I will take the whole round, just convince Travis and Garrett to not create a marketplace, have them make software and sell it to cab companies. And I looked at the person, I was like, wow, this person is incredibly successful. And so stupid, like, the cab companies are the problem in this, we have to remove the cab companies, and then lower the prices and make it more accessible. And I said to them, because I didn't, I was coming up in my career, I didn't want to insult him. I said, Well, that's a great idea. Yeah, totally talked to Travis. And then I thought about it. And I was like, I'm never gonna tell Travis this, because it's so embarrassing for this person. And so over time, I stopped worrying about my ability to understand the customers in the product. My job is to support the founder and to look for that product velocity, look for incredible product design, and an obsession to every little detail. I had one of the early Teslas. And I was driving with Elon in the car. And we were on the highway and was making a whistling noise. And I kid you not, he started raising in the window up and down on the Model X pushing the glass. And then he said, just pull over over here. And I was going to my house, I pulled over, got out, took a picture of it and getting on the phone. Like he was literally in the car doing product stuff about this gap in the window. And that's real obsession. Yeah. And if you don't have that, what it means for you as a founder is that either you're not cut out to be a founder, she quit, or you haven't found the right idea that you're passionate enough about. But if you don't bring that level of passion, that should tell you, you're doing the wrong idea. Yeah, move on to the next idea. Or you should go find somebody who has that level of obsession work for them. And just be incredibly skilled at helping them realize a dream. Or you can work You know, I don't know what the equivalent of the postal service here is. But you know, you can work at the post office or something or at Starbucks where you don't need to have that obsession. Yeah, but it requires unbelievable sacrifice, your sanity, your relationships, you have to be willing to sacrifice it is a dogged competition. Lest you think everybody is going to succeed, I can tell you, 80 or 90% of you who start companies will fail, and it will be brutal. And you will feel sick in your stomach. And all you have to do is get up and do it three or four times and you will be successful. But be prepared because Uber was Travis's third company. He got sued for a quarter trillion dollars in the first one. scour, he created Napster, but for movies, he got sued for $250 billion by the movie industry when he was 22. Then he did Red Swoosh, which was like a CDN, but he was too early and he sold it and it was like a $20 million sale. And then he did Uber, you have to be prepared for pain and suffering and obsession and sacrifice. And what happened for the last five years was there were a group of people who were playing the role of founder. They wanted all of the accoutrement, they wanted to be famous, they wanted to say they were a founder, they wanted to have the pitch deck, they wanted to raise the money, they wanted to watch their valuation go up. But they were actors. Yeah. And now it's time for the real deal. Because if you want to raise money now, you better have a great product. The benchmark has gone up 10x 100x to get 10% of the valuation. 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### Human: I think that the reward is, for me, at least now getting to pivot into a really active role in this business, this developing business story and getting to write checks that can enable businesses and companies to flourish and jobs to be created. I am of the opinion after 22 years in journalism that you don't actually get credit for the work that you do. And so it doesn't really matter. Like, it's great that I got there early. Maybe I'll get, you know, more speaking gigs out of it. But now is now. And, you know, for a long time, I would go into conversations thinking, these people must know about my body of work. They must know about Buzz Out Loud from back in the day or the How We Survive podcast series, which is like the best journalism work I ever did. They don't. I just assume that they don't. Maybe there is a universe in which I will become the Karis Wisher of climate tech, and I hope that's the case and I'm going to work hard at it. But the safest assumption you should have as a person who's trying to build a new thing is that no one knows what you did before. All they know is what you're telling them now and the plan that you're bringing them. And that plan has to say, here's how we both benefit. that plan can never be, you know, here's what will make me awesome. It's like, we will both win, we will both make money here.### Assistant: I'll tell you what it did do for you. It did build credibility, and that you had enthusiasm for it. So you were credibly enthusiastic about it. And so for me as a decision maker on the other side saying, Hey, know, should we give this person a shot? And should we try to partner with them? It was like, well, they're credible, and they're passionate about it. And if the world notices that you have credibility about something, and that you're passionate about it, well, that eliminates a lot of the risk for the world engaging with you. And I did a similar thing at in a similar time period where I just said, this angel investing thing that I did as a Sequoia scout, It's fascinating to me. And I just said to myself, what if more people did this, because I did this open angel forum, and 10 angels would come or start at five, and then it went to 10, and then went to 15. And I was like, what if we actually back a company that becomes big, and we did Uber, thumbtack, style seed, and, you know, a dozen others that became unicorns or otherwise big companies. And so what I did in my mind, and it was quite deliberate, I will say is I said, What if this was bigger than it is today? What if more people participated in it? And I said to myself, I wonder if someday I can have 1000 people in my angel syndicate, because there's 150 people in it. And I had gone from five to 10 to 15 people coming live, and I had moved open angel to five or six cities, we're doing it in Boulder, New York, Boston, DC, LA and San Francisco. And I put people in charge of each one. Chris Sacco was famously running San Francisco with Kevin Rose, and my friend Brian Alvey was running New York when he lived there. And then all of a sudden, I had six or seven cities with 10 or 15 people, and it got to 100. I had the emails of 100 angel investors, I just thought to myself, What if I added a zero? What if that happened? And what if we hit an actual deal that became a unicorn? And holy cow, both of those things happened. But then what I didn't realize was I didn't actually hit a zero. I actually hit two zeros. And in the case of Uber, three zeros, because listen, we went from 100 angels to 1000. And now we have over 10,000 angels on the syndicate. Uber went from a billion to 10. And you know, kind of trajectory is probably 100 billion. And so one of the things people I think underestimate is scale. Things can scale. Yeah, to levels you don't anticipate. So this little podcast on climate, know, five part series, four part series, whatever it is, and it's seen a million people listen to it. Well, then here you are this week in startups, okay, now we got, you know, whatever, six months of these 30 episodes of you interviewing climate people, okay, it will be we'll add a zero to that, and it'll be 300. And then maybe there'll be, you know, how many people are in the climate syndicate now to 300? Yeah. it'll be two or 3000. Yeah, exactly. And then it might be 30. It's a snowball. Yes. And you you really have to take a moment to just envision that and be delusional for a second. Yeah. And I did that inside of our company a couple of times. And I said, Well, what if this week in startups was every day, you know, like, it's once a week, but what if it eventually got to twice a week, you know, 100 episodes a year, and then here we are doing six episodes a week. And so I encourage people to, you take whatever they think the scale of something is, and then just 10 exit or add a zero or 100 exit. And just think what it would do at that level. And what is now happening with our syndicate is, you know, we could do 100 million deployed a year. And then actually, if you look at it, well, maybe if we had three or four times the number of people here, it could be a billion dollars deployed a year. And so I've been just trying to, in my own mind, expand the aperture, and just allow myself to think about that. And I did think, well, what if I was the best angel investor in history? And okay, we're kind of top 10, or whatever we are five, who knows. And then I said, Well, what if I was the best investor ever in Silicon Valley, because I got 20 years to work on it, you might as well take a chance and say, what if I was the most influential best person, and when they write the power law book to we just had the parallel author on what a great interview. Thanks for doing with me. Well, they're gonna have to write about somebody in the next book, right, there'll be another book 20 years from now. And when they put those two sets together, we now have 1970 to 2040. That's 70 years of venture, somebody will define the next 20 years. I just said to myself, well, why not me? Yeah, has to be somebody. And so I encourage people who are listening, just like you did. Why are you? Why not you being the number one investor in climate? Why not you having the largest syndicate? Why not you being the voice of that? Well, somebody has to be. And if you shoot for the number one, and you shoot for that, and you try to manifest it, well, at least you have a target. And if you shoot for the, you know, if you shoot for the stars, and you get the moon, it's pretty good deal. So I think that's the subject here of the blueprint. And any further thoughts on this delusional manifestation, and really trying to create, create new things in the world and skating to where the puck's going.

### Human: OK, hold on. Hold on. I'm going to put a final nail in this coffin, then we're going to go to alpha fold. There's a great quote by Warren Buffett, which is, if you know what you're doing, the best thing you can do is be as concentrated as possible. Nobody ever got rich in their seventh best idea. and I think that that basically sums it up, but you have to be in a position to have the ability to have that kind of portfolio allocation and I think that's hard. Freeberg, explain AlphaFold, please.### Assistant: Okay, let's explain give me two minutes on I'll explain proteins and then the importance of proteins in an alpha fold so The numbers to remember are four three and twenty there are four nucleic acids that make up your DNA We all learned this in high school biology sets of three a CT and G combinations Define an amino acid there are 20 amino acids and And a protein is a string of amino acids. So in your body, in every cell, there are these organelles. They make proteins by reading the DNA, taking a copy of it, and turning it into amino acid chains. And that's what we kind of call proteins. But what's interesting is when you make a chain of amino acids, so there's 20 of them that you could put in each point in the chain, it doesn't come out as a long chain. What happens is those amino acids, the whole thing collapses and it turns into a very specific shape. And the shape of that protein is what defines its function. So pretty much every biological function across all life, is undertaken by proteins doing something. Some proteins, like hemoglobin in our red blood cells, has a very specific little pocket where oxygen molecules stick into the pocket, and then it moves the oxygen from your lungs to your cells. It's a pretty amazing protein to exist, and it specifically is shaped to do that exact function. There are other proteins that can, for example, rip apart other molecules, break a molecular bond, There are other proteins, for example, that can take nitrogen out of the atmosphere and put it into plant cells that the plants can then use to grow. There's an incredible set of potential on the nanoscale of what you can do with proteins, and we see that in life, and we're just shocked and awed and amazed by it every day. But in order to figure out how to create proteins that do specific things, you have to know how do those amino acids turn into the shape that the protein ultimately takes, and that's what's called protein folding. And so the hard thing is, and why is this important? It's important because we can easily read DNA, and therefore we can figure out what amino acid sequence is being made to define that protein. But what we don't know really well is what is the shape of that protein, and therefore how does it undertake the function that we see it taking in biology. And if you think about the reverse of this, the reverse of this, if you have a function you want to undertake in biology, you can design a protein to do that function for you. For example, bind to a specific point on a cancer cell or take carbon out of the atmosphere or pretty much anything else your mind can kind of imagine on the nanoscale proteins can be designed to do. the challenge is how do you write the code, which is the DNA to make the protein that does that thing? Well, we don't know how the code turns into the shape. And that's what folding the folding problem is. So the folding problem, there's a data set. And the data set is what's the three dimensional shape of a protein? And then what's the DNA code that defines the amino acid sequence that makes that protein? And how do you figure out how to predict the shape of the protein from the amino acid sequence, it has been an impossibility. And again, if you think about this chain of amino acids, they each have little, you know, electrical spaces, and the way that they bind to each other, it's very complicated, you can't just deterministically define it. You know, we don't have that level of understanding on a quantum scale. So what AlphaFold has done is they have now been able to predict from a sequence of amino acids, what the protein shape will ultimately become by learning from a database of hundreds of thousands of structural protein shapes that have been defined through really, really, really difficult scanning microscopes and other techniques to really try and scan a protein on a microscopic scale. And then looking at the DNA sequence and figuring out, okay, what's the relationship? And the accuracy of their predictive model now is within the range of error of the microscopes that are being used to actually scan and measure those proteins. So that's incredible. Because now, theoretically, you could come up with a design for a protein. And you could actually build that protein by writing the amino acid sequence. And that protein can do any number of things you want to do. And this has been a difficult problem that's been intractable by humanity. And we've been challenged by it for decades. for this machine learning breakthrough to kind of be realized in literally less than three years. I mean, these guys were at a score of 40 last year, and this year they're at like nearly 90, which is incredible. And so now, you know, we can now predict what the shape will be from the DNA sequence. And this is gonna unlock this ability. Everyone's now gonna take their model, if they license it or whatever they do with it, or people are gonna go learn using the same techniques that DeepMind used. But it just means that it's possible. And then scientists will go away and they'll say, you know what, I want to do this particular thing on a microscopic scale. Let me design in three-dimensional space a protein to do that thing. Okay, now let me go figure out how to make that protein by writing the DNA code, which is really easy if you can use this algorithm to solve that for you. And it is literally dollars and pennies to make proteins. We can write DNA on a computer. We can get printed DNA sent to us in 48 hours in a FedEx envelope for a DNA printing facility. We can put it in a microbe, and we can get that microbe to make the protein for us in a day. The lab costs, any high school biology class can do this now. So by being able to actually figure out what DNA to write based on the objective function of what do we want the protein to do, it's going to unlock this universe of things we can do in medicine, in environmental science, we can do things like break apart PET plastics, we can do things like fixing nitrogen from the atmosphere and getting rid of fertilizer plants, we can create all sorts of new food solutions, health solutions, environmental solutions.

### Human: And if people want to check these out, they can go to just J trading.com I bought the domain name J trading.### Assistant: For sure. Yeah, I think that is a reasonable thing to say we're putting these tools out here. They can't really do too much harm right now. Play with them. Everybody has access to them. And we have a dialogue about it. I think what Sam is saying is actually true. And I think they need to cite sources say where they got the data from. And I think they need to get permission for the data they put into these algorithms. I think they're going to get sued. If they haven't already had, they probably have a gazillion lawsuits like queued up. I think there has to be a massive amount of lawsuits here as well. to say, did you use the Wikipedia without permission and without credit because Wikipedia requires, even though you can use the Wikipedia data set, you need to cite it, I think. So they're fine with you using a commercially, but they want a citation. I believe that's their creative commons license. And then i think the same is true for open source if you use open source there's a you know you're allowed to use open source but you have to reciprocate by giving back your changes and i think you have to uh do a citation and then there's images and stuff like that that they're just whole sale stealing or people's articles that they're stealing websites without permission and i think all of that has to be worked out so i think they are in the ask for forgiveness, not permission, which is a tradition in Silicon Valley, whether it's Uber or Lyft going into a market or DoorDash, or, you know, name the company that kind of puts product out there and then says, let's see what happens. And we'll monitor it. I don't disagree with him on that. I do think they need to get ahead of citations. And other people are doing citations. To me that matters a lot as a content creator. But And I think as a society, we're going to get to the point, Rachel, where we actually say that if you produce content on the internet, and it's produced by in part by a language model, you're going to have to say this was done by a language model. I think disclosure of this is computer generated versus what's real, just like in a documentary. They tell you, hey, this isn't actually people's voices. This is a simulation, right? This is a reenactment rather. So the reason they do the reenactment is so they don't get sued on the back end. So if something's a reenactment, and they're having characters do voiceover based on conversations that, you know, may or may not actually be accurately transcribed, they say this is a reenactment based partially on facts. This is based on a true story, but not actually the true story. That analogy should come to article. So BuzzFeed is going to do their listicles, it should say right at the top, This is produced with chat GPT for and this human this actual here's the byline of the human. This is the byline of the human who edited what the chat GPT for made and you should link to who you should link to the original chat GPT for citation. Here's what chat GPT for gave me and here's what chat. Here's where chat GPT for got it from that would be a nice um regulate yourself so you can either be regulated by the government and the law or you can kind of preemptively regulate yourself that would be a nice way to regulate yourself i think and avoid that i made a bunch of trades jay trading's back let's see it okay i see it some of the screenshots were shared in our producer chat and they're pretty you you kind of went off i went off uh yesterday and just while we're on the show i made a trade so As everybody knows, I've been trading just trying to see if I can become a world class public market investor. So I just took a little bit of money, put it into and you go to j trading.com to see these trades, but I bought 350 shares of Microsoft based on chat GPT. I think that they're doing an incredible job executing and putting this into products and they have product velocity. And I think these products matter. I'm going to make people more efficient, which is great for society. So I bought some shares of Microsoft about $94,000 worth I also bought $100,000 thousand shares of Google. alphabet, because I think that they're going to come out with a series of product that will be better than chat GPT for I'll predict that that their models will be better. I think that they have been conservative because they don't want to get sued back to move fast break things. Microsoft is moving fast and breaking things because they're behind Google's conservative because they maybe are winning more, but now they have to change their position. So Microsoft and Google, I believe will be the two biggest winners in AI. I also think Tesla will be as well. But I don't trade Tesla shares because I'm friends with the owner. And that could lead to damage. Everybody's asked me that question. Why don't you trade Tesla? It's like, well, if you're good friends with the owner, that could cause problems. Like people would assume that I'm trading on some information that I'm not so I just rather not trade it. Although my heart would say that they're probably going to be in the top three AI companies in the world, especially with a robot. So I'm kind of bummed that I don't trade it. But you know, That's why. And then here's my third trade, uh, Amazon. I just bought another 500 shares of Amazon. Uh, Amazon has been like one of my worst trades to date. But I saw Andy Jassy is laying off 9000 people. So this is my standard. If the founder, or I'm sorry, if the CEO or founder is laying people off, that means they want the stock price to go up. Therefore, it's a good trade. And this is a cynical, cynical trade. I'm not proud of it. But I I bought Facebook at 94 when Zuckerberg announced his first layoff. And I think that one worked out really well. It might be my best J trade, I think.

### Human: at Mollywood, at Jason.### Assistant: It's alpha beta. It's an A-B test. A-B testing today. And so follow Molly on Twitter, twitter.com slash Mollywood, and I'm at Jason. And let us know which one you like better. All right, we'll talk soon. Bye-bye. Bye-bye. Enjoy the show. Am I live or no? You are live. Oh, sorry. Man, I'm waking up, everybody. Wake up, J-Cal. Get in the game. Oh, let's get that café du monde. chicory iced coffee, go ahead and pull up the chicker, pull up the cafe do more for the notice. Something we obviously need to talk about. Cafe Dumont is yeah, Cafe Dumont is the place in New Orleans where they have I say New Orleans to be pretentious. There's a great skit on sat net live, where this couple just keep saying gnarlyns over and over again, but they keep making it more gnarlyns, gnarlyns, and they just ham it up. And for some reason, I find that- So have you gotten the beignets here? I have, it was 20 years ago. So when we start the This Week in Startups live tour, This Week in Startups meet the startups, I think, maybe we'll call it meet the startups or something, as opposed to meet our fund. But when we do This Week in Startups live, the format is going to be, I think like 25 or 50 startups will present what they're working on for three minutes each. There'll be a demo pit with like 50 startups, each having a roundtable. You know, you come at like, I think noon, Um, we start the program, uh, you know, 12 to maybe five, we have companies present five to six. We have a little networking six to seven 30. Molly and I do a little show, interview somebody, and then we have a little party afterwards. So you can come for like a whole day, 12 to 9, and you know, meet a bunch of people, network, co-work, you know, take out your laptop and work with folks. So that's my idea. But I think it would be very cool to go to New Orleans, Atlanta, Nashville, some of these, you know, non obvious smaller cities, you know, when compared to Austin, Miami, New York, LA will obviously hit those. But it'd be nice to kind of do some of those areas, because I know there's like great startup communities in those areas. And it'd be nice to meet folks. And it would, I'm basing this all on food, and what I feel like eating and cities I haven't been to, because I have a new philosophy after COVID. And getting out of all this, I'm like, What would be absolutely enjoyable for me? And enjoyable for me would be getting beignets with y'all at Café Du Monde and drinking that delicious chicory coffee. Chicory, if you don't know, is bark. And so if you, but show the Amazon, you know, orange can of chicory coffee that you can buy. Then maybe they have it on their page there. It comes in cans, which I like. I like a can of ground coffee. You know, when it's like vacuum sealed, it's like old school, like Maxwell House. I don't know, I just, there it is. And so if you look at that can on the left there, That orange can, happens to be orange, my favorite color. That's the Cafe Du Monde with the chicory in it. Now, here's what you do. You put about eight scoops of that in some nice, clean, filtered water. If you got like, you know, a Brita or, you know, I have like an NSYNC fancy one now at my house. I used to be part of Team Brita. Now I got the NSYNC one, you know. And it's delightful. But you get you need to have that nice clean water, you know, not like a lot of flavoring in it. And then you let the water sit with like, I don't know, eight scoops of six scoops, 10 scoops, whatever your jam is, tablespoons. I think it's like a tablespoon per cup is what most people say. Or a teaspoon is a table. Maybe it's a tablespoon per cup. Anyway, you just let it sit in there. You basically can't do it wrong. Because if you make it too strong, you just water it down and you have concentrate. So if you put 10 scoops in, like I've been experimenting with six, eight and 10 scoops. When I put 10 scoops in, this stuff comes out like dark, like black, black, black, can't see through it. When I do six, it comes out, it looks like a, you know, a really dark iced tea. So somewhere between a six and 10 scoops, but you'll figure that out. And you let it sit overnight. You give it a couple stirs, you let it sit overnight. And then the next day, you just pour it out and oh my Lord, is this delicious iced cold brew coffee. Molly, you ready to come on? And it's so cheap and affordable. And then you don't have to Molly, spend all this money on blue bottle, pull up the blue bottle on good eggs in the carton. This is like eight ounces. And if you go to good eggs, blue bottle chicory coffee, And they're charging four or $5 for a little, I think it's, what is it a quart a pint? What's smaller quarter a pint? A pint is less than a quarter. It's four pints in a quart, or two pints in a quart. Pints in a quart, correct. Two pints in a quart. So there's a pint, this is what happens when you get further and further from your elementary education. You don't remember pints, gallons, quarts, half gallons. But you know, I'm paying, what does that say? The four bucks and change?

### Human: On episode 1150, Pitch CEO Christian Reber describes his focus on design and working with Metalab's Andrew Wilkinson.### Assistant: No, I love running marathons, but 50 miler was too much. But I had a near-death experience. My dog died. I ended up with a kidney stone. I had surgery. A bunch of shit happened. And along this period of time, a couple of people in the entrepreneurial world committed suicide. And there was this if you sort of track back and look around in 2013, there was sort of a flurry of articles, suddenly about mental health and entrepreneurship. And Jerry and I were in a bunch of them because I was very open about my depressive episode. And as I was open about it, many entrepreneurs reached out to me. Less investors, but many entrepreneurs, lots of ones whose names you'd recognize. And in a lot of cases, I was the first person that they'd reached out to, or they'd say, you're the first person other than my therapist, or other than my wife, or my husband, or I haven't talked to anybody about it. I'm afraid to talk to anyone about it. And through these conversations, what I realized was a couple of things. One was the stigma associated with mental health was really pernicious, and was a real problem in our industry. And for anyone that wants a quick hit sort of experience with this, not in our industry, but in a powerful way, should watch the HBO documentary, The Weight of Gold. which getting Brett Rapkin did. I got connected to it by Jeremy Bloom, who's CEO of Integrate, which were investors in Jeremy was a Olympic skier. Michael Phelps is the narrator. And it talks about the stigma of mental health in professional sports. But the parallels with entrepreneurship are profound. And so I started thinking about this a lot going back six or seven years ago, and had as one of my own internal things to help eliminate the stigma associated with mental health. And that led to another thing. And that's the answer to your question, which is, Jerry had been a Buddhist for many years. And I was always interested in Buddhism, intellectually, not as a religion. And, you know, there's interesting debate about whether Buddhism is actually a religion or not. But not really as a spiritual practice, more as a philosophy. And about three years ago, I started to really dig deeper into that and learn and understand it. And one of the powerful things that comes out of that philosophy is sort of the essence of suffering and the notion of attachments. And I had been talking about the idea of non-attachment for a number of years. My therapist that I go to is professionally trained, but also a Buddhist. And I didn't really realize that, you know, by using that phrase non-attachment, I was linking to a very powerful construct. And the construct is this, and it goes back to your question, like when you have failure, you want less of it, right? You wanna get away from the failure. You wanna have success. When you have success though, you want then to have more of it. The success only lasts for a little while, and then you want more of it. You become attached. And the negative reaction that many of us have, especially in the Western world is detachment. I don't give a shit, or I'm not gonna let that bother me, or you sort of push away from it. And the pushing away from it is the similar behavior to the attachment. And the real trick is this non attachment. It's not whatever is going to happen is going to happen. But you accept that it's going to happen. And instead of seeking more good or pushing away from the bad, you focus on trying to do whatever you want to do and can do sort of in the moment and in the context of all of it. Now, I'm not trying to be a Buddhist philosopher here. I'm sure I'm butchering the essence of it for anybody that's listening. Buddhist capitalist. Yeah, Buddhist capitalist. For anybody who's listening, I'm sure I'm butchering the essence of it. But sort of in that for me, over the last six or seven years, a lot of what I have tried to learn and understand and adopt and become of is this notion of non attachment. You know, do I enjoy things that are successful? Of course, do I dislike things that are not successful? Of course, right. But I try not to be attached to those experiences, but rather exist in this experience I'm having. And I'll just end with having just clicked over to 55, right? Like, you know, at 55, you still might be able to make the argument that you're not quite at midlife yet that you might live to be 101. When you're 55, it's pretty hard to say you're not at solidly at life. Right. And all of a sudden you're like, holy shit, like, you know, this is a finite phenomena. And, you know, especially in the year of COVID, I mean, I've had a few friends die, you know, there's plenty of health issues in and around my direct world. Several people who are really close to me who are in their 80s, one died this year, one is very ill, you know, on and on, right? So you start to have this recognition of, yeah, this thing's pretty finite. And all of a sudden, this notion of striving, which again comes back to this Buddhist essence, like striving for what, striving for more? And Jerry has this magnificent book. I'm sure you, I think the podcast you did with him around the book was, was powerful. I don't know if you talked about this in the book, but he has a section where we're sitting outside one day, just talking and a couple of years ago while he was working on the book. And I said to him, I think I'm just fucking done striving. Yeah. Like I'm just done. Like, yeah, sure. I'm sure some more things will happen that are good. I'm sure there'll be more things that happen that fail, but whatever.

### Human: And mRNA, I mean, as much as we've managed to screw up the magic of the technology that created these coronavirus vaccines, we're very close to a universal coronavirus vaccine. because this mRNA technology is phenomenal. And it could eventually be, you know, there are viruses that cause cancer, like, we really are on the verge of an incredible rate. They're literally working toward a cure for HIV that could be here very soon. Like, if we live on the precipice of a### Assistant: phenomenal biotech optimistic folks. I mean, we're sitting here in a recession layoffs, Ukraine, China, Taiwan, China, us, there's so many things for you to have anxiety about the reason I created the we live in the future segment, and I'm so obsessed with us doing it, you know, 123 times a week, Mm hmm. It's because when you watch this show, I want people to be I want their I want people's optimism, Molly to match reality. And I feel like right now our optimism is that like a 10? I'm sorry, optimism is that a two and our reality is a 10? Yeah. And if I could get people to a six or seven in their optimism, I think we would all you know, come to our daily lives with a little more enthusiasm. All right. It's been a great show. And we'll see you next time. Bye bye. Bye bye. If you are a founder of a pre-Series A company, you haven't raised that Series A yet, which is really hard. Well, we wanted to invite you to Founder University. This is a two-day intensive course. It takes place on June 13th and 14th. It's remote. It's free. We limit the number of people who can come. We ask you to apply. And this virtual workshop is free for founders and helps you understand how to fundraise and pitch, how to hire great people, how to build a world-class product, how to execute on yourselves in marketing and some growth techniques as well. The launch team and I have been doing this for a long time. It has been amazing for us to get to know founders. And that's why we do it. Of course, we want to help folks as many as possible. That's part of our mandate. But really, our mandate at launch here at This Week in Startups and you know, the syndicate, which is where we invest, we meet and invest in companies is we want to back builders. And so we use these events as a way to get to know you. And if you're building something, and we see you're credibly building something interesting in the world, well, then we want to invest in you. So truth be told, every time we do found a university, half dozen of those people, we wind up funding in the next year or so. So it's a great way for us to spend time with entrepreneurs. We're gonna be joined by a lot of experts, my friend Becky DeGraw, who's my attorney from Wilson Sassini, will be speaking at the event. FitBots co-founder Jesse will be speaking, Marlowe CEO Mary Fox will be speaking. So we get a bunch of our portfolio companies who have been crushing it and who have learned a lot and we've seen that they are qualified builders. We have them come speak at the event. So you see how we do things here at this week in startups and launch and syndicate we like to create a flywheel. We invest in people who come out of Foundry University. Some number of them really crush it and become world-class companies. And it's not guaranteed. You have to do the work, folks. The ones who do, then we have them speak at a later Foundry University. So a lot of the great companies we've met came to a Foundry University. They got to know us. They learned something. It was worth their time. And that's really what we do with the agenda. We try to make it worth your time to take two days off work, essentially. Now, it's remote, so you can consider it your weekend, even though it's taking place around the week. um you consider it professional development and if you learn one or two important things about running a company fundraising growth hiring well those one or two things will pay for those two days i am absolutely certain of it now you have to apply again so you can register at founder.university yes it's a great domain so go to founder.university and sign up we also have a course called angel.university if you want to invest in the companies and you think the philosophy i've explained here about how i invest in companies and i'm invested in over 300 of them If you think this is an interesting way to meet startups early, help them, and invest in them, well, you can read my deal memos as we invest in new companies, and you can join us on that adventure. And I do this through a course called Angel University that has raised close to $200,000 for charity, and you can sign up for Angel University at angel.university. We do it four times a year. Great program. And it's just me and my partner, Mike Savino, talking about how we pick companies, how we evaluate them, how we diligence them, how we source them. Like Foundry University is a source of investment and deal flow for us. And that three or four hour course, actually, I think it's more like four or five hours, is well worth your time. All the proceeds from Angel University go to charity. And again, over 175,000, I think, at this point, has gone to charity. We're very proud of that work. And Founder University is free. But you do have to apply and we do pick people who have built a little bit of something. So we're looking for you to have some skin in the game. We have a Founder University 12-week program, which you can also see at founder.university. We'll be starting our third cohort shortly. And you can apply for that program if you have not started building or your very early stages haven't incorporated yet, you're nowhere near the Series A, you're kind of in the solo or co founder situation and you're just starting to build, maybe, maybe you've incorporated, maybe you have it. And that's a 12 week course. And that's another great one that we do. So please join us founder.university. And if you want to invest in these great companies, angel.university

### Human: Yeah, I mean, I think you've raised a couple really interesting points. One, I think is important to emphasize, which is diversification is a way to protect yourself. And so people who even may have opportunities to invest, need to think about the diversification of their whole portfolio, including where you work. So sometimes you'll get opportunities to invest in the company you work in. But you have to remember, you don't want to have all your eggs, including your career and your investments, necessarily in the same basket. So Great point. Good things to think about. You also want to think about how much money you can afford to lose. I'm not giving anyone investment advice. I'm not recommending any kind of investments to anyone. But you do want to think about how much you can afford to lose. You always want to ask a lot of questions of whoever is asking you for that money. So I think your idea of a test is one that others have thought of, and I have had some initial inquiries about that. I do urge people to come in and talk to the SEC. The SEC has opened the door for people to come in with ideas like this. The notion of having some sort of capped investment amount is not something entirely foreign. That is what we do in the crowdfunding space. There are limitations on the amount that people can put in. Again, as a person who comes to this with the idea that people should be able to invest their money as they choose, I get very uncomfortable when we're trying to micromanage people's finances. But I can see that I have to work with colleagues who are maybe more conservative than I am in that regard, and they would like to put some brakes in place. So I can see that kind of thing being attractive to people. And that gives you a little chance to practice maybe investing small amounts. I would say even if the government doesn't tell you that that's how you should approach things, it's a really good idea to be cautious in how you approach things. Don't jump in with... Don't empty out your bank account and jump in with both feet to invest in something. unless you're really sure what you're doing, you really need to be careful. And there are a lot of people out there who are just waiting eagerly to steal your money. So that brings me to the final concern that I would have about your proposal, which I think we will see something like a test develop at some point. But you have to be careful if you're going to be the consumer of one of those tests, then you've got to make sure that the person who's selling you that test is not just trying to sell you on an investment opportunity, which means that she wants to run away with your money. So you've got to do your due diligence. A part of what I believe in is certainly freedom to invest as you want. But with that comes responsibility. Ask a lot of questions if your gut is telling you you don't trust this person, then you've got to run the other direction. And so, I think that's part of the course material that would need to be covered, which is careful. Be aware of some of the red flags for what a scam could be. But with that said, I think I would welcome you, Jason, to come in to the SEC with the idea that you're thinking about. Come in and talk to our Division of Corporation Finance, which is the the part of the SEC that is thinking about how maybe we could further expand this definition and share your ideas. And I welcome anyone who's listening who has other ideas to do the same thing. I think it's only collectively that we can really approach this problem. And I think it's right for you to point out that We need to think about this as a country. It's not just us, the regulators, trying to figure out what the right answer is here. We need to draw on the wisdom of everyone out there, people who have been in the investing world, and who know the kinds of information that people need to know before they invest.### Assistant: When we get back from this final break, I want to give you my proposal. I'm not going to hold you to it. So I'm not looking for you to approve this while we're talking on my podcast. But I just want to fly it up the flagpole and see if anybody salutes when we get back on this week in startups. If you're the founder of a startup, the IRS owes you some serious cash. I know it sounds crazy. The IRS owes me and my startup cash. Well, there's one thing that is stopping you from getting this cash. What do we all hate most? We hate paperwork. Well, that's where Mainstreet comes in. They are experts at getting you the biggest possible slice of the billions of dollars. the IRS sets aside each year to encourage and support startups. It takes only 20 minutes and they will take all the data from your payroll system and they will save a startup on average $51,000 in just the first month plus They're going to keep fighting for you. Once they've onboarded you, they're going to qualify you against hundreds of tax credits every month, and they're going to do that for free. Sandbox VR got back $82,000. Italic, another great startup, got back $124,000. And Lofty AI started using Mainstreet just three months ago, and they've been getting back $3,200 per month. Money is precious and it's fuel when you're starting a company and our friends at MainStreet.us slash twist are gonna help you get that money. MainStreet.us slash twist for more details and to get priority onboarding because they know if you're listening to this podcast, you're legit. Get that 25% off for life. So MainStreet.us slash twist. Okay, let's get back to this amazing episode. Welcome back to This Week in Stars. We're having a really honest and candid and insightful discussion about the fairness of being able to invest in private companies. And private companies stay private for a long time. I was the third or fourth investor in a taxi company called Uber. which you may have on your phone. And it worked out okay for me, but it was an 11-year journey before I was able... Or maybe we had some private... Yeah, we did have some private opportunity to sell to Masayoshi-san of SoftBank in year nine. But this was a long period of time. And I certainly got lucky on that. But I wrote a book with a publisher called HarperCollins Business, the number one business publisher in the world. I've taught a four-hour course 20 times. And I did both of these things because I felt like I learned something about angel investing after the first 100 investments. And now I'm at 250, doing 75 a year. And I have the largest syndicate in the world for accredited investors. It's called thesyndicate.com. It's got 5,500 members. And we do 40, 50 deals a year of 500K. I know what I'm doing. I am a good angel investor. If I wanted to create a test, just like the test to get a firearm in this country, there's a 20 question test when you're a Californian, if you would like to acquire a handgun or a rifle that you have to take, that's to acquire a gun. If I made a test that was, you know, 50 questions, and that requires you to read a, you know, book that took five or 10 hours, and take a course that you know, require four or five hours, Would something in that realm be something the SEC would consider? That's part one. And then part two, when I run my syndicate, when I share a deal with people, and I have skin in the game, I'm putting a certain amount of money, and then I have an allocation, I tell people, please put in the minimum amount, which I set at $2,000. Other people who share deals when they do an LLC and an SPV, they say, hey, Minimum's 10K, minimum's 20K. I purposely set it at the lowest possible amount, 2K, which is really the lowest you can do to make transaction fees and blue sky fees and setting up the LLC worth it, right? The fees associated with setting up these things. Would it not be a potential path after the great one that you've already accomplished to say, hey, take a course like this, a five hour course, a 10 hour course, pass a 25 or 50 question quiz. And then you'll be allowed to make 10 investments capped at $2,000 each in year one. And then after that, you can do, you know, whatever it is, you know, an unlimited amount. But in other words, a reasonable amount of education in the five to 10 hour range, and then a cap on you have to go slow, and you have to hit diversification. With some private company investing, if you invest in one company, the chances of you hitting the outlier is next to impossible. That's like splitting the arrow, William Tell style or whatever. It's just not going to happen. But if you hit 20, 30, 40 investments, yes, the chances of you hitting an outlier that make up for all the failures does happen. Are you talking to anybody about that yet? Because that's really the secret reason I wanted to have you on the pod was to open up this next piece of the dialogue. I know you've worked really hard to get to here, But I'm looking at the 95% of people who contact me and say, hey, teach me how to do this. And I say, you know what, I cannot teach you how to do it, you can read the book, you can listen to my podcast. But I don't want to get myself in the crosshairs of the SEC, where I start teaching non accredited people how to do this. What do you think of this general concept

### Human: It's so interesting, too. And they make it harder. By the way, this Monday energy is amazing. This Monday, actually, energy is my jam.### Assistant: listen i have booked so many work trips in my day i gotta meet lps i gotta do sales i gotta meet founders all that great stuff and it's always a major headache think about all the time you're wasting especially when you have a team and people gotta do their receipts they gotta get the approved vendors there's reconciliations it's Absolutely exhausting, and it creates a lot of drama and tension inside your organization, doesn't it? You know what? I want you to try TripActions because it's the only all-in-one travel and corporate card that's an expense management solution as well. TripActions was built to help you scale without travel and expenses being a pain point. They've made it super easy to book within your team's policies. 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What I learned very quickly is that this game that we do every day investing in serves, it's about relationships, network and advantages, and conflicts. Yeah, no conflict, no interest. What does this mean? If people who are taking some moral high ground are saying, well, like, wouldn't it be more fair if like, nobody knew the companies and nobody had access to them before demo day? Like, sure. Sure. You know, it'd also be really fair if everybody made the same salary in society. Yeah, teachers, doctors, CEOs, cops, teachers, everybody makes the same salary, right? And then nobody can every year, everybody's salary goes up 6%. And the more years you work, the more you get. And everybody has to come in at nine or leave at five. Like that's not how a capitalist society works. A capitalist society works by you finding an edge and exploiting the edge. Welcome to reality people. It's about edge. And if you're not getting an edge, then you're getting cut. Period, full stop. I'm always thinking, how do I sharpen this blade? How do I get another blade? How do I put a pistol in my back pocket? How do I put a brass knuckles in my pocket? How do I put a an extra knife in my ankle? I got weapons everywhere under this desk. I got a shotgun. I got a bat by the door. You know, I'm gonna find a way to win. And guess what, that's what you're up against. You're coming into this industry, everybody's got an edge. Everybody's looking to knife everybody to get that equity. And the earlier you get in, the more work it is and the more risk you take. And all these lazy VCs, you know what they want to do? They want to go to the market. And they want to have all the apples sorted. You know, you ever see like a, in Japan where like they sell a perfect pair for six bucks, and it's like in a little case and it's got a box around it and some cellophane wrap. You ever see that? Pictures online? That's what VCs want to do. They want somebody to hand them the perfect pair. They don't pay six, seven bucks for it. They want to overpay. You know what they don't want to do? They don't want to go out and prune the pear trees. They don't want to dig up the stumps and plant another one. They don't want to put fertilizer and get their hands in the They don't want to do that. don't want to be out there on a cold fall afternoon picking those apples and picking those pears, preparing them for market. They don't want to do any of that. They don't want to fight the bugs. They don't want to fight the crows. You just want to go to the market and just, oh, I just want to take that pair and they know they want to go off to Italy or Aspen. So if you don't want to do any work, you want to put your hands in the dirt, then you're paying seven bucks for the pair. Now us we do it by the bushel. We put a lot of work and we get seven pairs in that bushel. And we walk out with seven pairs for the price of one. right? Now that means some of them might be dented or bruised or imperfect, and we got to work with them to try to make something out of this, right? It's a little more raw. What combinators got the orchard? These idiots in Silicon Valley allowed Paul Graham to take over the entire orchard. They let him and they never came and said like, I think that's our orchard. He was just like, Oh, you guys don't want to do any of this work. I'll just Okay, I'll work the orchard. I'll plant all these trees. I'll make sure they're pruned. So you know, the NVC seem to be fine with it. They raise a bigger fund. And they pay a higher price. And they get the apples a little more polished, a little more, you know, refined.

### Human: Yeah. And this is where constraint comes in. If you want to make great art, as you learned as an artist at RISD, like, if you give some artist, you know, 1000 canvases and buckets and buckets of paint and a million brushes, like they're, where do you begin? Right? And how do you prioritize?### Assistant: It's both an art and a science. I think that analyzing it as a science and then prioritization is probably more of an art, I can explain. So let's take, let's start with analyzing. The first thing we do is we try to just take all the inputs. So what are the inputs we get? Inputs are customer service calls. Inputs are social media posts. Inputs are we do like tens of thousands of like, we do listening sessions with guests and hosts. And then inputs are like basically user behavior, right? You can like see what people are clicking. You can see retention. You can see when somebody churns. And then if there's a party, we don't handle it right. They churn, they don't come back. And then we see people in their network don't list and you can start to measure that. So those are your inputs. Those inputs, you basically now have like an organization of like maybe millions of issues, and you can bucket them to like say 100, 200 types of things. The next thing you do is you look at the frequency and the severity. So severity might be like a safety issue. Very infrequent, but when it happens, it's really serious. A frequent issue is like, I'm upset with a refund. Not as severe, but very frequent. That happens all the time. And then you then you start to look at relationships like You know, we notice a lot of hosts are complaining about pricing being confusing. A lot of guests are complaining that hosts are charging too high fees. And then we start to realize, wait a second, if we make it easier for hosts to price and they understand what guests are actually paying, they might actually do a better job pricing and guests won't complain as much. So you start to find like connections. So this is where that's the science part. Now the art part. Now it's actually picking stuff. Because you have a list, you have some matrix like severity, frequency, this and that. But the real ability is the art form of a group of us, 10 or 20 of us, deeply understand the issue so well. We live the product, we use the product, I host, I've read thousands of things. You just take thousands of inputs, You put them in your head, and then you just go through, and you can't paint by numbers. You can't be purely algorithmic is what I would say. That's why that's the art. You could, but I think it's never as good as your intuition. But your intuitions form all these data points. And the intuition might be like, You know, it also might involve like engineering capability, like this is going to be a really heavy lift. So, we have like t-shirt sizes, a small lift, medium lift, large lift, extra large lift. So, we'll prioritize high severity, high frequency, like low engineering lifts, for example, would be a great candidate. Quick wins. Quick wins. Yeah. That with high payoff. There might be a big lift, but we need to do it to launch this feature later. So, basically, There's like hundreds of inputs you see how like you're like weighing all these in your head and i think there is this i think developing a product. The best products i feel like are a group of people that are deeply involved and they can hold a thousand contradictory things in their head and they can make all those different tradeoffs. We call that intuition, but I don't know if I love that because it makes it seem like it's arbitrary and not systematic. It actually is very deep and it can actually be very technical. And so that's what we do and I audit all the prioritization and I personally decide on the final prioritization of every single project and the company that a customer will ever see. I don't decide, I mean, the final decision, I make the final call. And I only make a call if I'm informed. And I only am informed if my team understands. And so I make sure that I know the details, my directs know the details, and their directs directs know the details. I also have a rule that if I have a direct report in a meeting, they can never call their direct to answer a question. If that's the case, they don't know the details and their scope is too big. So, I mean, within reason. So that's kind of how I do it. And then we update it twice a year. So we have this thing called a roadmap review. We bring in like top 70 or so product people in the company or people weighing on the roadmap. We spend a couple days together, we debate everything on the roadmap, we adjust it, and then we roll it out. And then we have an extremely robust program management function. Most companies ask product management to basically be their program managers. We separate product management with program management. And we have a very small product management function. It's very small. We have product marketers. Product marketers are senior product managers. So we have no outbound people. You have to know inbound and outbound. The junior product managers don't need to do outbound. But then most of what people call product management, we call program management. And they're the ones keeping the whole thing on the trains because everything has to fit together. And they're doing really rigorous reporting every week about where we are at the project. So it's all integrated. And the net result is, Jason, is I can literally know the performance of an individual engineer I've never met on a week-to-week basis. Because imagine if we're all designing a car, I know how good the tire team is doing when I see the car assembled every week and I see, hey, there's something wrong with the tire. But when they're like a hundred different products, I don't have time to evaluate a hundred different things.

### Human: Ironically, I think that could do to some I think that gets you to this new thing, this serviceable, obtainable market. I like having founders, this is my note to you, because I think I've now seen this twice, but definitely once. I like this TamSamSom thing because it tells me who you think you can really get immediately. But it also gives me the larger universe of possibility. Yes, I'm into it. TamSamSom, do it.### Assistant: So you can look at what is reality today. So and how are people solving the problem today. So if somebody says, you know, we are going to do a scooter company, like bird, or a lime, Okay, and they say, yeah, the number of trips is, you know, all the Ubers and Lyfts and cab rides that are under a mile, you can reasonably do any 20 block journey on these devices. So anything under a mile, which is 60% of the rides. And I said, Okay, however, how many days a year is it rainy or cold? many rainy or cold days are there? Okay, that's 20%. So you take out 20% for that number. So let's just say the number of rides was a million in this category in, you know, Los Angeles. Okay, so we take out now we're down to 800,000. Okay. And let's say people of a certain age are not interested in this. Okay, what percentage? Oh, they're half the rides. And now we're down to 400,000. Okay. And let's say people who are, you know, maybe have a certain body type. They don't want to be on it or business people. maybe if you were obese, you wouldn't want to be on one of these things. Or have a disability. Or a disability, sure. Literally can't. Literally, okay, sure. So maybe that's 5% literally can't. And then maybe obese is a third of the country. And don't, you know, care to be doing physical activity, ride a city bike, or do a lime scooter. It's just too physically stressing for a person. They don't want to show up sweating or whatever. Alright, so now whatever we just off the top of our heads, we narrowed a million down to 200,000. Right? That's where the intellectual honesty of the exercise comes in. What an entrepreneur would like to do is show you in some cases and intellectually dishonest or an intellectually lazy, more likely or a radically optimistic or desperate founder. Any of those could apply to be desperate, could be hopeful, could be delusional, could be whatever. Yeah, I could be sloppy. sloppy, lazy would probably be the largest category. They're not thinking these things through because they're doing one company and we are evaluating 15,000 per year as a company. So we have a different level of rigor. And it's important to realize that, right, we're going to be more rigorous than they are. And that's our job. So if you're a founder listening to this, you got to be rigorous, you got to put yourself on the other side of the table, that whole steel manning idea, where you do the other person's job, like do our job. do you buy the number and what can you take out of the tam even a bottom up Tim. So what I like to do is say, who have you sold the product to? Okay, we make enterprise software for dentists. You just track all their patients. Great. many dental offices are the United States is 30,000. Great. Okay. Now, how many? How many of those have you sold into now? We have 20. Tell me about those 20. Oh, yeah, they're all dental offices that have four or five dentists in them and have over this number of patients. Okay. So it doesn't work for a single or a double dentist? Why? Like, yeah, they kind of they don't need it because they've only got 250 customers. They keep them in a Google Excel or whatever. Like it's just it's easier for them to just do it manually. They have the folders right behind them that you see when you go there. Okay, great. Of the 30,000 dentist office, how many are solo? Oh, half are solo. So okay, now we're talking about 15,000. So I'm looking at who's already using the product. Why they say yes. So this is where go to market and the idea customer profile come into play. You'd explain the TAM. Now you explain the idea of customer profile, and we can figure that out. It'd be like Salesforce saying, hey, we sell CRM and sales. How many salespeople are there in the United States? Oh, there's 25 million. Okay, how many of them work behind a desk at a computer? Oh, well, 5 million. Well, who are the other 20,000? Oh, they're used car salesmen. They're on a lot. Oh, they're salespeople at retail. So they just got the 25 million salespeople and they never looked at what Gartner group or whatever group made that number did that report. They included retail in that report. They included car salesmen, they included, you know, people selling door to door encyclopedias, whatever the number is. Okay, so it's really 5 million. Okay, of those, how many of them sell more than $500,000 a year in product, because if you sell under 500,000 a year in product, you're not spending, you know, $5,000 installing this, maintaining it, etc. So you can really start to look at totally, where did this number come from? That's why I prefer bottom up, bottom up is okay, you sell to dentists, and you sell specifically to author to author Dantas, how many author Dantas are there in the United States? Great. What cities are they in? Great. And then what was the ideal customer profile? What's your go to market plan? And all of a sudden, you can eliminate groups, etc.

### Human: And here's that up and down this the creative stack. And all of a sudden, you have changed the industry and everybody wants to work for you.### Assistant: The only other people, Todd Phillips, You know, my guy, Todd Phillips, who I play cards with, sometimes really smart guy, he had he bet on himself with the hangover, Mickey, he put it may have put his own money into Joker, or he gave his fees away. And he, you know, he got a lot of money for Joker. So he's he's figured this out, too. And so yeah, get Todd Phillips and just secure the bag with him. Here's two other ideas. guys might have seen the Saudis created their own golf league, they backed up the Brinks truck, they got a sick plane. And they're like, Yeah, we're gonna, you know, whatever, human rights wash, I don't know what the word for human rights wash, but we're gonna, you know, Yeah. Yeah. It's just like, we're going to, we're going to wash our human rights abuses, uh, by getting all the golfers you love and giving them tens of millions of dollars when they're kind of on the tail end of their careers, but it's going to be fun to watch. And these golfers are having the time of their life because they gave them a jet. That's like been retrofitted with a cocktail lounge and poker tables and all this other craziness. This is a crazy idea. If I'm running Netflix right now, I'm going to put $20 billion aside. And I'm going to start two leagues. One is going to be an esports league. I'm going to start the Netflix eSports League. And I'm going to put up serious frickin prize money. And I'm going to have the live on Netflix, and ad supported. And I'm going to get all these young people to watch Starcraft, you know, League of Legends, whatever your jam is on there. And I'm going to put serious prizes like a million dollars a week, $50 million a year, and that the end another $50 million a year, and I'm going to get all of those crazy video game people to be on Netflix gaming. or Netflix eSports. And then I'm going to allow anybody who's whitelisted and approved in the eGaming to stream live. And I'm going to go stick it right to Twitch, because now I'm an ad supported business. Yep. So I'm going to earmark $10 billion for that. Number two, I'm gonna take the other 10 billion. And I'm going to look at the NBA. Right? NBA is as good as it gets. And NBA goes from, you know, the urban market, to middle america and people who like the pacers to urban markets where people like the knicks and the lakers and then all the rich people who want to be sidelined in their courtside seats it transcends all categories i'm going to take out all the spots stops and i'm going to create a league for nba players now we have that big three league or whatever that you maybe you buy that or maybe you start your own tournament And it's in the summer. And it's an open tournament. And anybody can play in it. And it's got a serious purse. Like you show up with five, you show up with a team of seven, or eight people, you can only play eight people do something really innovative. It's you know, x number of minutes, it's got gambling built into it wagering built into it. And boom, you just pay those people like some serious amount of money to come. And You put them up, you do a six week tournament or four week tournament. It's really exciting. And, um, you know, all these players who are retired or maybe out of the league can play in it, or I don't know if the NBA players would be allowed to play in it or not. Um, but you could get all the global players and you just may, it would be amazing. I think we get huge, huge. Yeah, July Madness. Let's go. I love it. Yeah. I mean, it might be soccer might be the better one to do. I don't know what would be better. But I mean, soccer is so global. But earmark those two things, and then put wagering in. So, this is the kind of bold bets a founder can make. What I'm talking about are founder bold bets, not wonks. These wonks are killing Netflix. The accounting department needs to shut the frick up. You have nothing to say anymore. Enough with the bean counters, whatever MBA is presenting nonsense to how they can optimize the revenue and squeak out a little bit here. Stop squeaking out and do the march to a billion. That's the race. The march to a billion subs. And forget about this, like optimizing for this quarter, optimize for 2032. That's what I want to see long bets, because that's I want to 10x my money, I want to 5x my money, I want to beat the market, I don't want to just eat this out, you know, enough with these nerd bean counters. they're not invited to the meetings anymore. That's it. They got us into this mess. I don't want them in the meetings. I want five creative people in the meetings with big ideas that you asked me what I would buy would bet on Netflix big ideas is why I wouldn't bet and they don't have big ideas. They got small ideas. The other thing I want to talk about potential J trade. Um, so I'm fate I would be fading I'm fading the I'm I'm fading the Netflix trade. I might even be short Netflix. I don't know how to short stocks, really. I've never done that in my life.

### Human: Yeah, and I got in touch with that founder because there's a really clever idea and he's in San Francisco and he's a solo founder. It's really interesting. How do people get to the top of the leaderboard? What would those 24,000 points, what would be the driver to get there and then what happens if you hit the top 10?### Assistant: Yeah, so I mean, it's fairly similar to a game in the sense that there are many quests you can go on and all of them kind of add up to different number of points. Predominantly, the large driver of your score is the community and the expert rating on your feedback, on your progress, sorry. So every single week you're submitting a progress update to the system, to the whole network of other players about kind of what you did that week. And then interestingly, you get points for voting on other people's progress reports. So it's quite interesting. And we have a very interesting mechanic on the inside where this isn't kind of like your standard voting UI. You get shown two progress updates from two different players. So one can be from Shun, who's building Remote Hour, and he'll tell you a little bit about he managed to get 20, 30 users this week. The other person will say, well, I got only one person, but they're paying me maybe a little bit more money. And then the user is asked, which is more impressive, position A or position B? And here's something interesting. here's something interesting. So they pick, say, A over B. We ask them then to give obviously positive feedback to A, why did you think this progress was more impressive? But then constructive feedback to the person they thought was less impressive. And we were very scared before we launched this feature because, as you know, it's the internet. Who's nice to strangers on the internet, right? That doesn't happen. But But this turned out to be one of like our big product learnings maybe of 2019 was the feature does incredibly well and people take the time to write incredibly detailed constructive feedback on why this wasn't as interesting as the other one. And it beckons this interesting psychological question, which is what is going on? Why are people nice to each other here? And I think the simple answer is because we're not really well known. See, my view is Part of the problem that the internet has today is that the eternal of September effect has kicked in on steroids. There's a ton of people on the internet. And most people are pretty normal. They're not outsiders. And most normal people over time kind of devolve into the crazy activity we see on Twitter. It used to be the case that strangers work very nice to each other on the internet, you know, back when it was IRC, you know, in 1998, or use net or PHP BB. Yeah. And what we've managed to do in Pioneer, one of the reasons why I think it's special isn't just the kind of nice software and yellow colors, is we've carved out a little bit of space online that's a little bit dislodged from everything else. And we're in this interesting position where We get a lot of free positive selection pressure for it. We're not going to get the series A, founder from Stanford or whatever. We shouldn't. We're not a great place for them and our deals don't make economic sense for them. But we will get to take the first real bet on someone. We have a pioneer named Arcelon. He's building a company called LiveDox. It's basically the new quip, you know, it's a Google Docs competitor. He, you know, came to us from the UAE, literally, and he would have moments where it was a real blessing of Zoom. The guy would be calling in and he'd be in Kashmir suddenly, and there'd be no, like, heating, and so he'd have 10 blankets on. Now he's in San Francisco and raced around from General Catalyst for his startup, all because kind of Pioneer took a bet on him. Yeah. Another founder by the name of Shepo from South Africa building a search engine for software code. I saw that one actually, yeah. It went through now as a YC founder. And so we get a lot of free selection from folks that wouldn't make sense for any other place. And I think a lot of it is working for that reason. The interesting twist for us is I think as Pioneer becomes more successful, selection will get harder, because I think we're actually going to start attracting more and more normal people. Ah, right. And so there's this interesting flywheel effect. You know, if you read a lot about the early days of Harvard, it was actually fairly similar. If you think about it just as a concept for a moment, 19th century, are you really going to go to like this new continent no one's been to and go study there? No. No, it seems super weird. So you get a lot of frontiersmen. Exactly. Go to Oxford. So you get a lot of frontiersmen. And frontiersmen are always the ones that create nonlinear change in our world. And so at that point, the community goes from frontier to famous. And when it's famous, a lot of normal people want to do it. And normal people are great. Normal people run our banks, make our taxes run on time, run our military. But they don't create this type of nonlinear change that Einstein and Ramanujan are famous for. Those are always outsiders. And if you're not careful, you end up bringing a lot of kind of normal people into your network. And I think long term, that's the thing we'll have to think about. But for now, you know, it seems to be working. We funded, gosh, about 140 folks around the world in about 40 different countries. 140 in how many months? In Or years, two years? Yeah, the ramp is interesting. The ramp is probably a year and a half because it took us a while to get our act together.

### Human: Was that wasn't there? Was that part of the deal with dig back in the day that you could build up like some karma? And then you could get more, the more points you got from upvoting or commenting or something, then you could start to become a, am I making this up? Was there something like that?### Assistant: I think people had tried those as like batting down the hatches moments. So if the site was getting too much spam, they would just hit a button where only people who had been on the site for more than six months could post, right? So when you would get these like farms and stuff like that. What I did on inside.com, which is very much a beta product, if you go to inside.com slash new, maybe you can pull it up here for people who are watching. This was the approach I took. So if you go to inside.com slash new, what we find is almost everybody who comes to a social news site, which is like Reddit hacker news dig, what you'll see is the first thing they do is they start submitting press releases. And And so see, this one says low quality score. Source love it. So we actually publicly put why it was rejected. So we kind of train folks. And then if you look at there, there's a comment there. And if you click that headline, you would go to the story and you can see the guy Frank veto from bold capital did this and I just wrote him back. So there's a comment there. And I wrote to him, hey, listen, we're not doing press releases right now. We may do a press release thing in the future. Now if you go back a page, you'll see most people just keeps going down see self promotional people come they try to use the site for self promotion. So scroll down a little bit more. And so you can kind of shape people's behavior by putting that self promotional, then they get a note, hey, it was self promotional, put something that's not about you. And then what will happen is, maybe one out of three will become incredible contributors to the site. They're like, Oh, okay, I thought I could send my own stuff. And then they realize like, Oh, somebody else could submit my stuff. So I can ask a friend to submit, but I don't have to submit my own. And you kind of just change the incentive. And so I think that's active real names and active moderation of new moderation to people, then what happens is if we accept them, and we move them from new to the main site, if you get to five accepted stories, we're going to let you just post to the main site. So you kind of kind of earn and if you just do that really well with the first cohort of people, maybe you can set a tone, I think but communities take active management. That's what I've learned is like, and there's no active management on Twitter. There's just Yeah, this is anonymous, anonymous names just causes chaos. Yep. Agreed. Well, speaking of ramifications, and I want to go to our startup of the day, because I'm super excited about it. But I think this Alex Jones story is really worth talking about. And the reason I would like to talk about it, because I think it's really a great example of the law and policing of content, both working. So, Alex Jones, for those of you who don't know, and many of you might actually not know because he's been one of the folks who's been deplatformed, I think rightfully so, because this person is horrific. He might be funny or entertaining at times. Obviously, people are not all one thing. But this is from Reuters in the fall of 2021. He was found liable for damages in a trio of lawsuits last year filed after he falsely claimed that the 2012 Sandy Hook School massacre was a hoax. Each of the plaintiffs turned on the settlement offer in court documents. The so called offer is a transparent and desperate attempt by Alex Jones to escape a public wrecking under oath with his deceitful profit driven campaign against the plaintiffs. The memory of the loved ones lost Sandy Hook. And he was deleted off of YouTube in 2018. Now, if you're YouTube, there's no world in which you want Alex Jones doing conspiracy theories about parents losing their children's at Sandy Hook and calling it a false flag. I mean, this is not why you created the platform. Is it freedom of speech to do conspiracy theories, I guess there's a way to do them. We're like, what if this happened, right? But you know, YouTube gets to make a decision about this. And then the law gets to make a decision about this law takes a long time, right? But there are laws about what you can say and what you can't. Alex Jones is suffering from that because saying these things causes massive emotional damage to these people and judges are finding that correct. And he is going to be bankrupted, but that might be a five to 10 year process and not everybody can afford the fees to do it. And then the platform also you know, what was it four years before all these judgments came down or 2018? Yeah, so three, four years before it came down, they did the right thing by deplatforming him for at least the right thing for YouTube and the business they want to run and not have advertisers near insane. But Alex Jones has still been publishing on his website, the web is still open, he can still do his website if you want to Google him find him. So I don't know, I just thought this was like, a good example of both things can work with an extreme person. And sometimes the law has to handle something. and the platform maybe doesn't have the, you know, doesn't need to get involved, right? If I'm like, I think Nancy Pelosi, Donald Trump, whoever's an idiot, I would never vote for them. Like the law doesn't need to get involved in that. Right. But there is speech does have legal issues that come up. Yeah, absolutely.

### Human: It's already the most blasphemous segment ever. We're just gonna lean in. Okay, so a couple things have been coming up over and over. Obviously, a lot of those things are related to valuation, and what you like to call clearing market in these conditions. And one of them that we've been talking about a lot lately is, of course, valuation, and the idea of reconsidering valuation. And we've talked a lot about how valuation is set by the market, but also that it can be estimated as a function of multiples. And you had a really good explanation for this internally that I think our audience will really benefit from and I would too. Not that I wasn't listening, because I was, but I want to hear it again.### Assistant: Oh, we're gonna go through it one more time. So, we have a Tuesday investor call. Most firms do it on Monday, we do it on Tuesday, I like everybody to be a little more prepared. So give them that extra Monday, you know, and Monday morning, or Tuesday morning to get their ducks in a row. Monday morning is a little intense. Firms that do that sometimes people are up on Sunday night having to do work instead of watching HBO shows. I try to take it easy on my millennial staff, because I know the Gen Z staff, I know they're living their best lives on the weekend. So, If you are meeting with a company and they have free term sheets, Well, the valuation for the company has been set, it's somewhere between the high and the low number of those, you know, top and bottom term sheets and all likely, and in some cases, maybe they go get a fourth to beat those three. So you kind of have a range, don't you? And you as the, you know, latest investor, don't have too much work to do other than make the decision, do you want to be in this company, and then the valuation is going to probably be plus or minus 10% of that collection of numbers. the market has established the price. And again, these are private market companies, not public market companies, public market companies have shares that trade, you know, typically five days a week. So, you know, every minute, the the value of the company is being evaluated for better or worse, it can be hyped, it could be undervalued, it can be anywhere in between, but you do have, you know, a free freely trading marketing shares, as opposed to private companies, we actually have to negotiate the share of sales, the sale of shares. So If you were looking at a multiple, there are a couple of conditions and boundaries we need to talk about. So one of the boundaries in the early stages, they're going to dilute 20%. And they're going to need a certain amount of money to achieve a certain number of goals to reach the next milestone in our industry. So let's talk about a company that's a SaaS company with 100,000 a year in revenue. And they've already gone through an accelerator. So they raised money, like 100, 150 k at about a $2 million valuation. And then they did, let's say, I don't know, they raised $600,000 at a $6 million valuation, they did a small round just to add a developer and a sales executive and a product manager for a year or so. So they diluted 10% there. So now they diluted the company's six or 7% in the 7% in the accelerator stage 10% in the seed stage. And now they want to do a pre Series A as they're calling it these days. So or some people might call it a seed extension or C plus. And they value the company at 10 million 100 times their annual revenue. So you take so how do you get to that annual revenue? Well, if you took last month and you times it by 12, right, you would be taking what's called the run rate this month times 12 months. So you're taking the latest month and times into 12, some people might calculate the run rate, take the average of the last three months. So if that was, let's say 4060 and 80k, that'd be 180. Okay, you take the average of 180 at 60. You know, and then you times that by 12, you get to whatever 700 or so. So there's different ways to calculate that some people like in public markets, sometimes we'll look at the forward looking revenue. So they'll say, okay, they're growing 20%. They're at 50%. This month, they'll be at 60. Next month, we'll be at 72. The month after that, whatever it is, you know, they start working through that scenario, they build a spreadsheet, and they give them credit for 20% growth month over month, into the next year, calculate the next year's revenue. and the valuation based on that. So you divide the valuation by that amount of revenue, is it the previous 12 months? Well, that's intellectually pretty easy to do 12 real numbers. So you know, you're doing this deal in January, you just take last year's January through December. And that's your take that and divide it into 10 million. So if it was 100k previous revenue, you divide in there, it's 100x. Now, if you do forward, and the company anticipates it's going to go 5x in revenue, know, in 20, you know, going forward 12 months, we divide that 500k into 10 million, it's 20 times pause on that for a second, if the last 12 months were 100k in revenue, it would be 100k multiple. And if in our meeting, somebody said, it's a 37 multiple or something. And I said, trailing 12 months revenue, forward, or current month times 12 run rate, how did you calculate it? And so I think that calculated on run rate, which is a pretty intellectually honest one to do. another bound condition, if this month, they signed somebody got them to sign a three year deal and took the three years and booked it in an accounting basis all in this month, even though they're going to deliver the service over 36 months, that would be intellectually dishonest. So you have to also dig into that, right?

### Human: Yeah. I'm watching my team interview founders to for investment. I'm looking at due diligence. And I'm looking at my own behavior. And it seems like one out of three tasks. Yeah, I can offload. Yeah. And so I'm like, this is like this year 30% more efficient, which means headcount stays the same. But we just added a third more people like this is unbelievable.### Assistant: Yeah, so let me, if you may indulge, Jason, I'll zoom out and just give you my mental model, and you can tell me if this maps to yours. So you have the base of the foundation, the base models, which are basically the large language models. So of course, GPT-4 is probably the preeminent base model. Google has some base models. Anthropic has a base model. Microsoft Research has their own base model. So you have three to five big base models. I think of those base models as, if it's a highway, They're the highway. They're like the infrastructure. And, you know, in another generation, by the way, that probably would have been dealt by the government, right? It's almost like the Manhattan Project. These large language models are going to be eventually about $100 billion supercomputers running these models. So they're going to be like massive. These are giant infrastructures. And we're not going to do that. We don't do infrastructure. Airbnb, we think of ourselves as designing the cars on the highway. So, on top of the base model, you have the tuning of the model. And the tuning of the model is going to be as good as your sensibility and your customer data. And if you and I both ask ChatGPT a question, we mostly get the same answer. And we mostly get the same answer because it doesn't know who you or I am. And that's great for some questions. Like, what was the like, you know, like, how far is the moon from the sun or whatever, like, there's one right answer. But if you ask, like, where should I travel, your answer and my answer are probably different. And so some problems are search problems. Some problems are kind of matching and personalization preferences problems. And so what we want to do, is we want to be one of the best companies for AI personalization. So we want to develop really good tuned models. To do that, we have to change our business. And actually, one of the questions that Johnny Ive told me when we brought him on the team, is he said, you need to switch from beyond, you need to go beyond where and when. Right now you ask, where are you going? And when are you going? And we need to shift to who and what, who are you and what do you want? And that's really the vision. And so what we want to do is we want to build these robust profiles, I want to start to learn Jason, who you are, build really good rich customer information. And then I can understand and personalize, like, where do you want to go? And also, what do you want in your life? Like you looking for inspiration, just get out like a, you know, what do you what are you looking for? Do you like want to get healthy? Do you, you know, and you start to learn about people. And then we're also pretty good interfaces, and the application layer. And I think that Airbnb, that's where we're really, really going to focus. We're going to focus on the tuning of the models, the most personalized AI interface, and then really good application interfaces. Now, I think as far as interface, I don't think they're all going to be just text-based. For example, we were working on the OpenAI plugin. We were one of the first partners that was working with OpenAI. And at the last second, I pulled the plug on the plugin. because I just didn't like the interface. I didn't think that was the right way to interface with travel. I told Sam, I said, long text outputs are low bandwidth, and then you give me another text output with widgets at the bottom. I said, I want something much more multimodal, more visual, richer. And if you're gonna give us access to GPT-4, why don't we put it in our app? So we pulled the plug on the plugin, and we think eventually, I think our real vision is, Airbnb, at the largest sense, isn't even a product or service. I hope it's more like a travel community. What we're really building is a travel community. And then the role we have, the app in the travel community, is eventually we're like the ultimate like AI concierge, right? We're like the ultimate host. Charles Eames, one of the greatest in our 20th century, said, the role of the designer is that of a thoughtful host, anticipating needs of the guests. So, that's what we should do. We understand who are you? What do you want? Where do you want to go? And maybe we could even go beyond travel if we get there, right? And the part of that means you have to trust us. to give us your personal information. It means we have to be a marriage of art and science. It means we have to understand a lot about like human psychology and know what you want. It's not just a technical problem. We have to design unique AI interfaces that are probably richer than just text inputs because, you know, like you want to see and feel things, right? And I think it's much more immersive. So, that's where I think it goes. That's like the long-term vision. in the interim, and that's probably long-term as in three to five years. I mean, that's not even that long-term. In the next year, what we're going to do is three things. One, engineer productivity or productivity. I mean, I think engineers can be 30% more productive in the next three to six months. It's exactly the number I get.

### Human: Yeah. How now as you're thinking about investing, I wonder, you know, having spent so much time immersed in all of the aspects of this problem, and there are many, did you distill that to a thesis in terms of investing?### Assistant: Yeah, I wanted to get a holistic view before I went deep anywhere. And because I was deepest in tech already coming in, I avoided it. But as I started coming back around to it, because kind of the overall frame was starting to become clear, Then I said, Okay, now let me dig into tech. And so I started talking to founders. And, and then I said, I want to get closer to the action and understand what's happening in these companies, because I don't know anything about these domains. And so I took a portion of my personal assets and essentially earmarked it the way that you would earmark to go back to grad school or something, like tuition. It wasn't about financial investment. It was about learning. And I just wrote intentionally small checks and tried to get into companies where there were teams that felt compelling, that were in areas that felt like big levers for decarbonization, that had ideas that intuitively made sense to my untrained ears, and had some smart institutional capital either in there or coming alongside. And I just started writing these little checks, I did probably, I think, 1215 of those. And some of those started raising follow on started putting together some SPVs to take bigger allocations and subsequent rounds. And the other thing is that my small checks for learning started growing, I started writing some real personal checks. And And that wasn't because I had some big liquidity event or something, it was because I was starting to get my bearings and see what conviction felt like. And in some of these cases, I might have done a 25 instead of a 10, but if I had the capital, I would have done a 250 or a 500, but I didn't, and I wasn't going to get it. And so it started feeling like I was cutting into bone, not having a bigger piggy bank. There was a subset of the member community that is ultra liquid. And increasingly, you know, but maybe they're booked, maybe they're a CTO at a at at one of the big, you know, pillar technology companies, and they've already decided that they want climate to be the next phase of their career. But they're booked, like as a senior executive at this publicly traded company. And like, you know, the type of capital to commit to, you know, an emerging manager like this is, I mean, a rounding error for them, but they can get closer to the action. And for me, it's quite meaningful. So those conversations started coming inbound. And it's funny, because I started thinking about raising a traditional fund, but I was concerned because I'd been learning in public across everything else. And the SEC rules about general solicitation and clamming up and not being able to talk about it when you're raising like that really bugged me. Not about fundraising, but about just like, I don't want to be muzzled about anything. And that was one concern. Another concern was, if I wanted the fund to be of any size, I probably needed at least one or two institutional anchors. And I at least at that time talking to institutional peas when I was kind of like cowboy in the wild west felt like um the analogy that I've said before when asked about this is like ben affleck from goodwill hunting where he he's got the suit on with his like greased down hair and his like white sweat socks and he's like totally fish out of water. Like, that's me talking to these, like, you know, pension funds. I was sitting there in, like, my, you know, running, running outfit, you know, just, you know, just not, not wanting to play that game. And it was when I was trying to navigate that, that was right around the time that Angelus was coming out with the rolling fund structure. And going back to the runkeeper days, we built one of the first apps in the app store in 2008, like literally they're right at launch and, and felt our way in the dark. And there were some downsides of being that early, but that was also really exciting. And we kind of thrived when, you know, in that mode where it's early and fluid and fast changing and fortune favors the bold. And like, I don't know, I kinda, I like that phase. And, Rolling funds are in the same spot, right, where we built one of the first rolling funds. Now we have one of the biggest and we have a second rolling fund that we added, which is, you know, writes bigger, more, much fewer, bigger, more concentrated checks and primarily, but not exclusively, select follow-ons from the core fund portfolio. But we, yeah, we've been kind of riding that wave and it's worked really well because it's been an easy entry point to get a bunch of, as we get new members, they come in and it's almost like, It's like at a car wash when you have a basic car wash and you can upgrade to like the wheel wax or the interior cleaning It's like you can be a member right or you can be a member and become an lp, right? Um, uh, and it it's been really great. So, uh so far but um Yeah, but I would still I would call it an MVP. I think longer term, you know, we want to start growing up these pillars and, and each will will have to think about how to take the magic of what's been working and scale it a lot. And then what are the elements that we need to retain? And then what are the elements that we need to, you know, blow up and rethink as it relates to structure, resourcing model, etc.

### Human: I mean, I lost one, two, three, four or five.### Assistant: I mean, if it's if it's not in the first three paragraphs, it's eight. All right. If it's in the eighth paragraph, it's a complete fail. That is so dumb on whoever the editor at BuzzFeed is like, you guys need to have a meeting about this. This is two very stupid decisions. One, she should not be allowed to write the story. She had to hand it off. Number two, Molly's correct, it should be up top where you should put a second journalist on it and then just disclose this in the top. But what a horrible editorial decision, I think. I mean, look, maybe it's really bad. But it's just the appearance of impropriety. is something you have to always avoid in journalism, finance, whatever, you just never want to be in this position. This is why like anytime I'm talking about Lyft or DoorDash, you know, I'd say, Oh, yeah, listen, I still own some shares of Uber, if I'm talking about, you know, Robin Hood, I still own some shares of Robin Hood, like, you know, specifically, I don't own shares of Palantir. And I sold my Facebook shares, which I think was an okay, seems like an okay trade. Now, when I sold them in the 110 $120 range, I think, I had Facebook shares through a company they bought that I was a shareholder in. I just didn't want to hold Facebook because I felt bad about it. If you're a startup, having a disorganized team is going to kill your business. You need everybody to be on the same page. And as an investor, I see this all the time, you must adopt a right first culture, especially in this remote world, and use great structure in a beautiful CODA page. one doc to rule them all works right out of the box. It's totally customizable, encoded your text and tables, they live together on the same doc, which means all your valuable data, the objectives, the KPIs, the strategies are all in one place, nothing gets lost, and your team is literally on the same page. Some great ways that we use coda product roadmaps, absolutely important. remote onboarding, super important and taking meeting notes and Coda has a ton of templates for almost anything you can imagine. In fact, we put our 100 point checklist on Coda. So just go to this week in startups.com slash sc, you can make a copy of this, you can do the checklist yourself with your internal team, you can expand it, you can make it a 200 point checklist, you could make three sub checklists underneath some of the important items. So join the productivity revolution and sign up for kota head to kota.io slash twist to sign up and get $1,000 in startup credits. How great is that? But anyway, let's go on to the second story here. Because at the same time, this is dropping. Yeah, we find out in the New York Times story that the Chinese government is investing massively in surveillance. There is no doubt in my mind that whatever we know is but 10 2030% of what's going on. I think you would agree with that premise if we have Okay. And if you've ever seen or know about the Stasi, or you've seen the movie, the lives of others highly recommend this should be a weekend movie you will love. Absolutely fantastic. When you see the level authoritarian governments go to spy on their own citizens, because that is the only way to maintain control, you will have revolutions and rebels and all kinds of stuff will emerge. Information and squashing things early is sadly the best technique. This New York Times investigation tracked down over 100,000 Chinese governments are FPS, you don't run RFP is that's a request for proposal is a document that says, Hey, here's what we're looking to buy. So when we did the conference in Miami, we put out an RFP, we're looking for conference producers, I'm sorry, event producers to do three different themed parties, here's what we're looking for, here's what we want to pay, here's how many people are going, this is our budget, whatever it is. And then people can, you know, you basically send them the RFP. So they don't have to ask you 20 questions, you're giving them the 20 answers. Okay. these documents were directly from the government themselves. This is the government putting out publicly on their websites what they wanted, because I guess in China, like the United States, you put these RFPs out publicly, so you everybody gets a chance to bid on them. So theoretically, the government gets the best price. So a group that watches Chinese behavior collect these before they were taken down and got them to the New York Times, I guess, and the requests were stunning. The government wanted camera installations in apartment buildings, hotel lobbies, malls with facial recognition technology and the ability to match or social user social media accounts with your phone and with these photos. So an example was all of mainland China's regions use these phone trackers to map citizens activity daily. If we allow tick tock in the United States, I can assure you the government knows where any senator, any FBI agent, CIA agent, law authority, Department of Justice attorney, or any child of a president, or vice president or Secretary of State where they are. Now, if you know where the child of a Secretary of State is, you probably or a Navy SEAL, let's say, you're going to know where the Navy SEAL is. And Navy SEALs are a pretty big asset and hits were put out on Navy SEALs.

### Human: What makes a launch a successful incubator accelerator? What makes you a very special seed investor?### Assistant: Yeah, I was delighted when I got into investing, because of how lazy the venture capitalists were. These people take months off a year, they make one bet every six months. And they think they're better than the founders largely and smarter. And i came into it as a founder and formally a journalist and i just looked at it and i said well what made me win in those other areas was you know how hard i worked and i realized the more founders i met with. And listen to and ask questions to the smarter i got and then i started a podcast called this we can start ups that was once a week. And then it became twice a week. And then it became three, four, five, and then six days a week. And I said, I'm going to stop going to lunch. And I'm just going to talk to founders on this podcast every day. And I took that philosophy and built out an 18 person investment company. We have 15,000 people reach out to us. And I start at the top of my inbox. And I reply to whoever emailed me in the last five minutes first. So at least some number of people get this crazy experience, like, Oh, my God, is that really you, Jay cow? And I'm Yeah, of course, it's me. And I will write back to them. You know, hey, that's a really interesting idea. I hope you pursue it. And then it turned out that there were a lot of people who wanted to be founders, but they didn't know how to start. And there was Y Combinator tech stars and my firm launch accelerator. We all do the same thing. We have $100,000 to people $125,000 for six or 7%. And we spent 12 or 16 weeks with them, helping them, you know, really try to get product market fit and raise money. But I realized there was a step before that where people were thinking about building a company, but they needed to get excited. And they needed to have, you know, a little bit of a push. And we started something called founder university, we've now had 900 people go through that program, and it's a 12 week course. And it was going to be free. But then when it was free, we'd have people would just quit. So i came up with an idea i said it's five hundred dollars to come it's twelve weeks and if each week you fill out a form and tell us your progress on your startup which takes five minutes will give you back the five hundred and we twelve ninety four percent of people complete the program now. Stripe is not happy because we're charging 100,000 and charging back 100,000. So to the Colson brothers, I'm sorry about that. But the funny thing about it is, we realized that a lot of these people didn't have a rich aunt or uncle, they weren't independently wealthy. And we said, How can we help you? And they said, Well, we just need some money to get our servers and to, you know, incorporate. So I just told my team when the weekly reports come in, Look at whoever has the most product traction. And every week, just give like four or five of them $25,000 and a note at a million dollar valuation. And we'll be their rich aunt or uncle who puts them in business. We've done like 30 of those. And so now I'm scaling that up, and then scaling up the accelerator. And we have a philosophy internally, which is never underestimate anyone. Because, my Lord, I have seen so many awkward people, products, people who couldn't pitch people who shook, or they had dirty shoes, or they were sweating or body odor, just not ready for primetime entrepreneurs who then became billionaires. I see it all the time. Yeah, where you start is not where you finish. And everybody, anybody here ever was anybody here ever a teenager? Anybody ever teenager? Like, was it awkward? Like, every first time founder I meet, it's awkward for them. They don't know what a cap table is. They don't know what a convertible note is. So don't write them off right away. And people write people off far too quickly. Oh, you didn't go to Stanford. I was at a great I had a great benefit. My dad was a bartender, my mom was a nurse. And then I came into Silicon Valley, I started a magazine. And when I started my magazine in the 90s, all of a sudden, I realized Oh, these people are desperate for attention and to be on the cover of my magazine. Oh, I have total control over them. I can just pick who's on the cover of the magazine. And then I realized, wait a second, where else is power located? The power to write the first check is incredibly powerful. And the power to introduce that person to 10 other people and say, I wrote them a 25 k check, why don't you do it? And the first check is the hardest. The next nine are easy. And so that's why I made it, you know, my life's mission to be that first check. And right now, I'm on track to do 100 this year, and next year will be 200. I'm going to work for 10 more years. If I hit those 2000 if I can be the first check into 2000 companies, which is my new goal for the next 10 years. I'll become the greatest investor in the history of angel investors in Silicon Valley because nobody's ever done it. There's only one other person who's done it, Y Combinator.

### Human: And then finally, I want to ask you back to the fund and Voyager's fund one announcement. This is sort of speaking of this idea of tracking and quantifying. The announcement said across its portfolio Voyager as a target of sequestering or averting the emissions of 500 million tons of carbon dioxide equivalent during the lifetime of fund one. How trackable is that? And how much is it a thing in the back of your mind? I mean, you're relatively new, but you know, in every meeting.### Assistant: That's very kind of you. Yeah, I had fun with that because it was a sort of an aha moment that I was looking for and like who's going to make this easier, not more complicated. And when I say that, it's not just easier in terms of like it's easy to engage with, but like that there's a sort of long chain of things behind it that have already been made easy. And by that, I mean that when I wrote it up, I said, okay, if you're a Swiss-based trading firm, you are definitely going to be able to get into the carbon markets because it's another esoteric, opaque, over-the-counter kind of thing that you're like, great, this is how I make money. It could be cocoa beans, or it could be oil, whatever it is. It's going to be something that has asymmetries to it, opacity, and where my own calculations and capabilities are going to give me some kind of an edge. Also, it's not very big. That's fine. You can get in that market and play. But if you are a small to medium enterprise and you've been given this new mandate that you want to do some kind of carbon offsetting, do you really want your purchasing manager to have to go learn again, like how to be on chain, to go sit through all kinds of different ratings and verification standards and learn all of these different things to serve what at first is a very thin layer of a purpose? And so I was thinking like, this is actually great because I can picture this meeting already. The boss's boss says, we need to buy some carbon offsets. And you, in purchasing, is like, OK, what am I supposed to do with this? Am I going to take a month and figure this out? I don't have McKinsey and Bain money to have them tell me what to do. And I'm not a trading firm. And then the answer, I'm going to use Salesforce, is sort of elegant because Salesforce is already a payable for all of these companies. It's already an approved vendor. There are little elements in there that, especially for smaller companies, you will appreciate that you don't have to go through all these new processes to do things. It's already there. Yeah, I think that's actually great because it expands this addressable market beyond the specialists. It does have some sort of, it does create some natural cohorts of like, if Salesforce says that these are the standards that we support, then those kind of attract some things around them with their own specific gravity. You can debate about whether or not that's good. I've sat through many methodological and verification discussions and everybody says theirs is the best. or they say that it's the best for X. Over time, we'll see if those don't sort of go kind of Pareto optimal and collapse into like the thing that works not perfectly for everything, but it works well enough for most things that it goes forward. And so I think that things like this are great. Do they sort of potentially close a venture window for the new carbon marketplace that everybody's going to operate in? Potentially. but they also create a much bigger addressable market for all of the other things that flow into it. If I'm a developer, my goal right now might be I want to get my asset positioned so that it's visible in the Salesforce marketplace. That's a simple, like one sentence pitch that you can make to yourself and that will have probably a handbook style set of steps that you need to do to get to that point. And I think that that's actually really good. You kick the innovation layer somewhere else. And I think that that's actually very, very healthy. One of the big challenges for these markets right now is that everything is in play. the assets that you are going to develop are in play, the way that you measure them is in play, the way that you transact them, warehouse them, the way that you securitize them, all of these things are in play at once. And that's tough. That's actually very difficult to do because if you're At any level of those things, you're dependent upon other people's own innovations that may not be running aligned with yours. So if you can marketplace these things, I think that that's actually great. You want it to become as normal as possible from a climate perspective so that it becomes as big as possible. Now, these markets themselves, I mean, there's so many potential things that can be done. I do think that we will have a lot of shaking out in the long term about what counts as good. It was sort of a rank ordering of like one company that says, I bought I bought offsets from an old clean development mechanism, hydro dam in Southeast Asia that's been running for 20 years, is different from I'm funding geologic storage of atmospherically removed carbon dioxide. So I think that we're starting to see this qualitative aspect come in and not just quantitative. And you can also see this in the prices that companies use. The range of prices that people pay for offsets is anywhere between like a few dollars to many hundreds of dollars a ton. And that's not because the market is inefficient. It's because there are many, many markets within it right now. And I think they'll, they'll shake out in the same way that related to that is that company internal prices for carbon range from like a dollar, which is essentially not really a price at all to, if I recall correctly, $677 per ton of carbon, which is incredibly high price. That's way beyond what most economic modeling would say, but definitely is a price that would help, you know, force some behavioral change.

### Human: I mean, I would say that's the other thing is there's companies, there's still plenty of money. So a little bit more in the numbers department q1 in 2022 saw $33.6 billion in exit value from IPOs, SPACs, acquisitions, etc. That was down 82.5% from q4. That was a really big drop. However, the total amount of capital invested in angel and seed deals in q1 was up 4% over q4. to $5 billion. The total number of deals went down about 14.5%. And the total amount of capital invested in early stage deals in Q1 was down 28% from Q4. But despite all of that, in Q1, US VC funds raised a combined $73.8 billion. Just in Q1, And that is already more than half of 2021 total of $131.5 billion. So it's not a moribund industry, it's more like the dynamics seem to be changing. And maybe, as we've been talking about, like, maybe it won't be like the housing market where there's a super hot bidding war, and you have to like close, you know, your funding round on a company in a day and a half, and it'll like return to some### Assistant: Yeah, take a breath already happened. We see that, you know, the time to evaluate a company is moving closer to realistic, as opposed to, hey, you have to put your money in, you're not going to be able to do any diligence, we're oversubscribed, etc. And then these crazy large rounds, which people were doing at a pretty high clip, putting 100 million in companies going to go public, you know, valuations are absurd. therefore, you really don't need to do as much diligence, you just write the check, and it'll all work itself out, I think maybe a little more discipline is coming to the market. And so people are just not going to suspend disbelief, they're going to be a little more rigorous. And that means if you're a founder, you're going to just need to make sure you have as much runway as possible and your next round will be harder to close than your last two or three rounds in all likelihood, on average. And you know, that's probably healthy for everybody. And if you did raise a mega round, and your valuation was 50 or 75 or 100 times your revenue. Yeah, you might need to fill into that valuation and you may need to take your time doing it. So some interesting changes here. The thing I've noticed about this industry is great companies can be born any year. And great investors just have a process, they refine their process. And you can adapt it to market conditions. But I think it's important to have a really thoughtful process. For how you like to invest, we have a very thoughtful one that we're, we're even refining more. So in a down market, it's a great chance to refine your process and think about what's working, what's worked in the past, and what still applies, because sometimes what you did 10 years ago, just doesn't apply now and other things, they apply even more. And that's the art of investing. And cycles come cycles go, I think you just got to keep investing through the cycles. When you see it's a hot cycle, we passed on a lot of deals for valuation, and we took advantage of selling. So the last couple years, we were selling, you know, 10 or 20% of some winning positions. We got pretty lucky to sell some of those pretty high, we missed other ones. You know, it's not a perfect science, but in a hot market, taking some chips off the table, locking in some wins always a good idea. When the market's down, I think, like it is now, or it's confusing, really working with your startups, figuring out which ones are the strongest, doubling down on the strongest, and maybe the ones that are in the middle of the pack, maybe having some mentoring, some, you know, heart to hearts about, hey, this could be headwinds and be more difficult for you. And then for the people who are struggling, you got to have a really sober discussion. Listen, if you don't have if you can't clear market, you've been racing money for six months, you got three months of revenue, you got three months of runway, you're not going to get to break even in that amount of time. Okay, it's time to think about layoffs. It's time to think about shutting the company down and or selling it and having an orderly process, right. And there's no shame in that most startups are going to fail, what happens during headwinds like this is the ones that are going to fail, they'll fail, like in groups, a large amount of pruning at a time. It's almost like you have a boom, bust cycle in a lake, imagine a lake that has too many fish, then there's not enough algae, the big fish eat the smaller fish, they steal their employees, employees start leaving the small companies because they know there's only a certain amount of runway left. And the ecosystem kind of goes through a boom bust cycle, classic boom bust cycle, too many fish in the pond, big fish eat the small fish. Now you got, you know, less fish in the pond, oh, spring has sprung. Now there's, you know, more vibrant thing, more babies are made, you get the idea. Startups need a central hub to store information and collaborate on work now more than ever. That's because we're all living in this crazy remote world. Everybody wants to put all the information in one place. And that one place is now notion, documents, projects, all that stuff. It kind of goes in the same place on what you can consider a wiki. When we went fully remote in March of 2020 notion became our internal knowledge bank. We even use it for external purposes. You know, like when we did this series on this week and startups called the startup checklist. Well, we just put it at this week and startups.com slash checklist. And That is all hosted on Notion. On Notion, every team from engineering to sales can work together seamlessly and they have 500 integrated apps including things like Google and Slack. Collaborate in real time and tailor workflows to your needs. Hundreds of thousands of teams worldwide are already delighting their employees with Notion. Notion is now a worldwide community of millions and they're creating templates and tutorials so the product is continually improving. Just go to Notion.so. and use the promo code twist, and you will get $250 off their annual team plan. That could be a couple of months for free. So it's pretty great for a growing startup like yours. That's notion.so and use that promo code twist during checkout for $250 off.

### Human: So let's talk about let's talk about AI. You know that you've both said that this is probably the most significant value creation opportunity of our lifetime. So deconstruct that for us. And obviously, listen, you have a room here and you're in, you're in the UAE. How do we look at this potentially for our founders for our economies for our societies? Is there's an opportunity for us to go build $100 billion companies from here from Abu Dhabi?### Assistant: The follow up is, well, what impact is AI going to have? And so when we were watching this AI thing happen, I just told the people at our companies, make your default homepage, chat, GPT, or Bard or PO from Cora, whatever, whichever one you want the sandbox or playground if you're a developer, and just take make a list of everything you do every day, and try doing it in chat GPT or one of these other services. And what we quickly found was 10 20 30% of everybody's job could be done in these tools already, or some approximation of them, some people was as high as 50. So what we're going to see, I predict in Silicon Valley is smaller teams are going to get more done. And so then you worry, Oh, my God, are we going to lose all the jobs in the world? Well, no, unless you think that the number of problems that we have to solve as a species humanity, that we're almost done with it how many people think that we're almost done solving all the problems in our lives raise your hand if you think we're almost done exactly there's so much more left to do so if let's just assume and i just had brian chesky from airbnb, aaron levy from box, and read Hoffman, who just started a new AI company from LinkedIn on the podcast this weekend startups in the same three days, I interviewed them on the same days. And I asked them the same question, what percentage are people you know, by the end of this year 2023? How much more efficient are they going to be with the tools at the pace we're going? And have you ever seen a pace like this uniformly, they said, it depends on the position, but I think 2030 or 40%. All three or four of us have the same answer because we're all using it every day now in addition to that people are hiring freezes if you're a young person who's working from home you never spent any time with the founders of the CEO of the company the leadership. You are in a very dangerous place right now because you can take your ten person team. If you can get 30% more efficient, that means you have a 13 person team at the end of the year. Next year, maybe you get 40% you know, more efficient, I get another three or four people without adding to headcount. So what's going to happen in Silicon Valley and for capital allocators is what I think about because that's my job now. We can fund companies for a much lower number. And when I started in the industry, you would raise $3 million and you'd spend two years, sometimes as little as a year buying servers, racking them, putting them in a co-location facility, getting an office space, and your product would come out in month 18. Because of cloud computing, and because of the development of software, three people have a product up and running, you know, in a hackathon in a weekend and have 10 customers. That's gonna go even faster. And roadmaps will get done quicker, which means the long tail of software is gonna really be viable. You know, somebody might have a very niche product, I'm in three people get a twenty five million dollars in revenue. Where to start seeing companies i will tell you right now in the next five years will be many stories of three people one two three three. Really talented by people using chat gpt. and other technologies, and they will make $10 or $20 or $30 million, $10 million in revenue per employee. The great companies make $500 to $1.5 million right now. That's going to 10x. And that's what's got me excited about investing right now. stop using your personal phone for your startup in 2023. You have to stop doing this. It's such a common mistake that founders make open phone has totally rethought every detail of what a business phone should look like in 2023. And it's so affordable, you have no excuse. They make it super easy to get a business phone number for everybody on your team. It works through a beautiful web app on your phone or your desktop. And I can tell you it's amazing because our sales team and our ops teams use it daily. Recently found so much values in open phone for our angels summit communications. Open phone is the number one rated business phone on g2 for customer satisfaction. And twist listeners are gonna love it. Brian Jagger. He's the co founder of startup called athlete. He tweeted the following I'm literally cash flow positive from listening to this week and startups for listener deals. And he explains that he previously got open phone money from this incredible discount that they give to this week and startup founders. And he says, I'm not paid to say that I don't know, Jason, pure, honest feedback and appreciation. And you know what, I love to hear this, because there's so many people who listen to this podcast, we're founders, and you need to use these tools. But hey, listen, you might be cash constrained, or you might want to put that cash into your product, open phone is already affordable. had a starting price of only $13 per user per month. But twist listeners can get 20% off any plan for your first six months that open phone.com slash twist. And if you have existing numbers with another service, no problem open phone will port them over at no extra cost. So had to open phone.com slash twist to start your free trial and get 20% off.

### Human: I went to bed sooner. I didn't kind of get stuck in that thing. Yeah. So, so I kind of magically found either, either I got to sleep a little bit longer or better, or I just, I kind of found an extra hour, hour and a half a day that I wasn't like this, you know, staring at my phone.### Assistant: Here's the thing with like getting rid of screen time. I find with my kids. So when we're, uh, at the ski house and we're, you know, having ski days, I say, listen, screens happen, uh, after dinner. Uh, and if you, if you're out on the mountain, you get in a little bit early, we'll make an exception and you go to the movie there and watch a movie or use your devices a little bit. But basically, what I find is like, if no device, then activities, but then an interesting thing happens as well. My theory on why these kids are getting so weird and adults, let's face it, we've all got friends who are getting weird, they can't make eye contact anymore, they get socially awkward, they don't know how to communicate, then you have incels and just weird kids. Credit to Sherry Turkle on this, but there's just like, thought that like, hey, because we're connecting with so many people all day long, whether it's on social networks, and email and slack, that we're like hyper connected, but you're not getting face to face time with people, you're not hearing their voice. And so the social connections are not real. But we feel like we're being socially connected. In fact, we feel like we're overly socially connected. What happens in boredom, my theory is, that you become more introspective, you're in your own mind, you start thinking about yourself, and you also become more interested um an inquisitive like that um ted lasso speech when he plays darts you ever see that speech when you know what i'm talking about or not have you heard this he gives a speech it's a really great speech where the guy challenges him to darts and uh and he basically just the guy was never interested enough in him to ask him if he'd ever played darts before and then if he had been a little bit more inquisitive or interesting um he would have known that his dad would take him to the bar every sunday afternoon to play darts since he was like 12 years old um and then he hits like three bullseyes in a row and it's just like epic but you weren't interested enough you weren't inquisitive enough and you will become more interested in other people when you're in person you will become more interested when your device is put in thing that's why i love a game i play with my friends when we go to dinner which is stack the phones stack the phones yep and then whoever picks it up first have you played this game has to no dinner but i you stack your phones at dinner Yeah, I try this at your next dinner everybody and you can reach for it anytime I assume right you're allowed to go for it whoever goes for it first pays for dinner. It's brilliant And then the other good thing is I you know Got some famous friends and go to parties where they collect the phones on the way in No phone parties where they put your phone in a bag Also amazing. Uh, so if you ever, uh, have a party ask everybody to put their phones at the front. Hey, listen, if you're a parent and you need to check on your kids, just go out to the driveway and you do this. So a lot of the parties I've been going to, um, where there might be celebrities at it or other high profile people, they might just be like, Hey, click the phones. And I think, I think this is like, really great that you're taking your time to do this, whether it succeeds or fails, we'll see in the market. I think it's guaranteed to have a level of success with bookworms. But I think you want to go a little further than that. So okay, listen, if you're running a sales team, you got a design agency at a media business, you know, the hassle of one pagers, right? They never format correctly on mobile, you can't track them properly. It's a complete mess. I have worked in the media business for many years, three decades. In fact, I'm getting old. and nobody had figured this out until now. You have to check out Issue. It's issuu.com. Issue is the all-in-one platform for you to create and distribute beautiful digital content. It's not just one-pagers. Those are important, of course, but you can create marketing materials, magazines, catalogs, portfolios, and so much more. Beautiful, evocative collateral to help you sell your product or service, but it also comes with amazing analytics that you can just pop up on a dashboard And you're going to track the weeds, the total time spent, device breakdown, are they watching on their iPad, their phone. It also works seamlessly with tools like Canva, Dropbox, MailChimp and InDesign. Having a trackable magazine, if you want to level up your marketing needs, you need to use issue. So get started for free or get 50% off an annual premium plan at issue.com slash podcast and use the promo code twist. That's I s s u u.com slash podcast and use that promo code twist of the no essential for your free starter account, or 50% off an annual premium plan. How's the beta testing on what's the feedback been to people who've read a book or two on it? Right? So how many people have read two or three books on it? A few dozen at this point. Do you do listening labs with them or how do you get information from them?

### Human: Listen, if you run software on AWS, GCP, or Azure, you know how crazy the bills can get. The pricing and uncertainty can make you really anxious, right? You get that sticker shock. But there is a way to lower your bills. And the best way to do that is Cast.ai. They audit and optimize your cloud cost and your performance. Major cloud providers don't do this. Why would they want your bill to be high? They don't want you looking at the bill. They want you paying the bill. cast AI wants to discover what could be reduced in your cloud bill, right? So they're on your side, and they're going to eliminate the stuff that you pay for, but you don't use that happens all the time. So people spool stuff up, they forget to turn it off. And they also search for less expensive hosting options within your cloud provider, right? And then you start saving immediately. So on average, cast AI customers save over 60% on their cloud spend. So if you do this right now, you could be spending 60% less. And just think of what that will do over the next 30 months and how much runway you're going to add to your startup. That's all capital going back into your business, right? That's going to your team members, it's going to your marketing, it's going to acquiring customers. And that's going to get you closer to your next round of funding. Every dollar counts in this funding environment. You know that. So before you go and sign any multi year cloud contracts, or make any drastic personnel decisions, just stop for a moment and check out what past AI can do for you. They're going to give you a personal free cloud cost audit and you get a personal consultation. It's free. So why wouldn't you take it? cast.ai slash twist to get started, visit cast.ai slash TW IST and get your free cloud cost audit today.### Assistant: Okay, so first question is, you've got this prompt, you wrote out the prompt, you're saying, you know, the best thing about AI is or something. that has to turn into a bunch of numbers that represent the intensities of firing of a collection of neurons. And so there's a certain amount of... Well, there's this whole idea of embeddings. These are ways to turn words into numbers. And the idea is that if you have a good embedding, then words that are similar in meaning will correspond to collections of numbers that are nearby. So, you know, something like, I don't know, elephant and rhinoceros might have a sequence of, well, it might be, let's say a thousand numbers that the thousand numbers that represent elephant are fairly similar to the thousand numbers that represent rhinoceros, but they're completely different from the thousand numbers that represent, you know, Jupiter or something like that. And so, the first thing is you've got to grind the words up, turn them into numbers. Then those numbers are used to determine kind of the intensities of this first layer of neurons. And then you go through a sequence of layers. So, for chat GPT, I think it's a few hundred, maybe 400 layers. So what's happening is the data from the thing that the initial numbers are... They go into the first layer, neurons, then they go through these weights, they will get multiplied, things fire, you go to the next layer, go to the next layer, and so on. And when you've gone through those, I think it's about 400 layers, you get to another collection of numbers. and that other collection of numbers, then gives you essentially the probabilities for a set of possible words that might follow. And then you have to decide, well, which word are you going to pick? Are you going to pick the word that was most probable according to the statistics of the web, so to speak? You're going to pick the word that was second most probable or whatever. And one of the kind of... There are many pieces of slightly black magic that go into making one of these systems really work well. There's sort of the, if you always pick the most probable word, then at least for writing like English essays, that tends to be, it seems rather monotonous. Sometimes it just repeats itself, all kinds of bad things like that. But as soon as you pick, sometimes the not top probability word and the sort of a parameter, the temperature parameter that determines kind of which, how far down the ranking words you'll pick, that seems to lead to a more lively result. I should mention one other thing that's a critical piece of what's worked in something like ChatGPT is this idea of transformers. And so the question is, when you have the words that it's already written, What do you do with those words? How do you feed them into the neural net? And the question is, the one thing you kind of know about those words is they're in a sequence. They're not just, oh, they're just different words in different places. And so what happens is the neural net kind of learns, it knows, given that we're going to add the next word, it says, well, the word three back has this level of importance, the one five back has this level of importance, and so on. And then it combines in a very bizarre way, it combines multiple different patterns of how it pays attention to previous words, and does the whole thing multiple times. And out of all of this comes the results from once. Now, one question is, okay, so that's the setup of how, given that you are feeding in a prompt, you're feeding in text, how it will determine what text to write next. Next question is, well, you've got this whole neural net, and it's got all these weights. And in chatGBT, it right now has 175 billion weights. How do you determine those weights? Any collection of weights will have the property that you can feed words in, and some words will come out. Problem is, if those weights are picked at random, the words that come out will just be complete nonsense. The question is, how do we pick weights so that the thing conforms to the statistics of the web? And so that's this process of neural net training. And essentially, what you do is you say, well, here's some text from the web. And we know what the next word is, but the neural net doesn't know what the next word is. So have the neural net guess what the next word is. And then it might get it right, it might get it wrong, but typically, it will start off getting it wrong. And then you say, okay, how would you have to change the weights in the neural net to make the word that comes out be closer to right than the one that actually came out? And so you iteratively do this. That's the training process. It's just tweaking all those weights there's a mechanism called backpropagation that helps you make it not be an absurdly mathematically difficult problem to figure out how to tweak the weights so that you'll actually get the thing that... So you're training it on... You've got a piece of text, you're masking out the words at the end of the text, you're trying to training it so that the weights are such that the words that are at the end of the text will be the ones that when you took the mask off will really be the ones that were there.

### Human: Well, it's kind of like the American way, though, to blame somebody else and sue them for the thing that you caused. So that's what's so interesting here is like, you've got this natural tendency and all this, you know, this sort of like, Ambulance chasing law industry waiting for the opportunity to blame someone else for a thing that happened to you. So then when it ends up being something really big and explodey, well, I mean, I agree. We'll see, right? It's like part of the process of normalizing it is going to be knowing that something like this will happen and how will we deal when it does.### Assistant: related news, Kanye West is trying to buy one of the five other seats on the exactly Kanye West is going to be like shining a laser at it as it takes off. Like, I mean, mental illness plus social medias are such a bad combination. I've said it before, but like this, I don't want to get into like the blow by blows, but this weekend was like my entire Twitter feed was an Instagram was Kanye West and skeet fighting. Just crazy. It's kind of sad to watch people, especially because when it involves parenting, that's like the heartbreaking part. It's like, can somebody who's friends with this individual pull them aside and say, like, just stop talking about your kids on social media. This is like, this is like therapy questions, like couples therapy mediation stuff. Don't put it there. But I I'm excited to do the transportation one. And then Let's see the cost here. Virgin 150 k deposit 450 k total price. They had 100 tickets sold 15 million Wow, sales from deposits. That's a good start. And you know, this is going to quickly go down. So if it's 450, you think of it like getting the first Tesla Roadster was 160. I think And now they're down to 60. So I would say this goes down by a third in 10 years. So if it goes down by a third, you know, lower goes down by two thirds, rather, it's one third the price, I think you can see people doing this for 100k. Yeah, or less. And I think that's when it becomes like, people will crowdfunded or they'll be giving it away on the zboarding zoo, go to space, we're gonna have a space race brought to you by I mean, it will literally be I think, yeah, there'll be sponsors doing this and all kinds of interesting stuff. When you're scaling your startup quickly, hiring engineers can slow you down like nothing else. We all know that. Well, here's some good news for you. Lemon.io will find you the perfect candidate within, wait for it, 48 hours, I kid you not. And what is Lemon.io, you ask? They're a marketplace of engineers from Europe, where some of the greatest engineers in the world are based, and they'll match you with a candidate again within just 48 hours. That's two days for those of you doing the math at home. And if it doesn't work out, they're going to replace the developer right away. So there is no risk for you, the founder of a startup. And they test and interview every developer to eliminate the risk of a failed project. So we got a testimonial from Launch Portfolio founder, Drew Fabricant, and he told us that Lemon was a game changer for his startup, Scout, which is a lead gen platform. They do great stuff. They were under the gun. They needed to hire a developer with a very specific skillset as soon as possible. And Lemon delivered. And they were a pleasure to work with, according to my pal, Drew. So not only did they find exactly what they were looking for, but lemon also delivered them a second engineer really fast. What a great story. So here's your call to action. If you could use a full time or part time developer to run your projects faster, I want you to go to lemon.io slash twist, again, lemon.io slash twist, and you're going to receive a 15% discount for the first four weeks of work with a developer. What a great deal. Okay, let's go on to this New York Times story, which I thought was super interesting. The New York Times has launched a telegram channel for people who don't know. telegram is exceptional at groups, it seems. And when a lot of the alt right was kicked off of Twitter, they started their own groups. So people like Milo Yiannopoulos, who, but 15 years ago was like a normal journalist working, I think, at the Guardian or the Times of London, and he kind of went off the alt right deep end, he got banned from Twitter. I think Alex Jones, Trump, all of them set up shop on telegram, So you'd have like really big groups, but New York Times, Brazilian Bureau Chief jack Nick gas, I hope I'm pronouncing that correct said this is important. The New York Times just launched a telegram channel. And for now it will broadcast our reporting about the war in Ukraine, it'll hopefully be a powerful new source of free reliable information for many people. You can follow it here. For those who don't know the short URL system for effort telegram rather is t.me. So it's t.me slash New York Times. And you just add the group It also works really well on your desktop. So what's really neat about this is if they wanted to, you could have replies in here, it could be two way they could, you know, you can have all kinds of different permutations of groups as you do on the web. But this will be a little bit censorship resistant, I think. And you can also access it through the tour browser. If you don't know what that is, or brave tour is an anonymous relay system that theoretically can't be tracked, but it might have been made by the FBI. and the CIA, they might have actually built it. So take it for what it's worth. It's hard to say, but they do seem to catch a lot of predators on there and crazy people.

### Human: So I was impressed by the some calculation we've talked on this show before. And you've talked a lot about this idea of bottom up Tam like Tam is often presented in a way that's not honest, like you're saying or not intellectually honest, right? It's hopeful. It's like, well, yeah, okay, but you're not gonna you're not going to sell this EV charger to every house in America, that's just not going to happen. It's going to be houses that have, you know, can potentially install it, don't have a Tesla, like whatever, right? You start to you start to slice and dice. And then you think about how many people are actually going to buy that and you get to a more realistic TAM. So I liked this idea of the SOM, because it feels intellectually honest. But does it then risk thinking too small? like missing the potential for the Airbnb breakout or Uber breakout, you know, it's like a double now it's a double edged sword.### Assistant: Perfect. So, let's take two quintessential companies that exceeded their predictable TAM. Airbnb and Uber. In the early days of Airbnb, they would look at a city like Paris, they'd say, how many hotel rooms are there? How many nights do people stay in Paris in December? You can get that information. You'd say, okay, the TAM for Airbnb in Paris is those hotel rooms or those hotel nights. And when you look at a company like Uber, you'd say, Okay, well, how many cabs are in the city easily obtainable? How many livery cars, also known as black cars, also known as car services are available in that city, seemed like a very good way to say, Okay, well, then what is the serviceable available market to Uber or Airbnb? Okay, well, people who stay in five star hotels for business travel are not staying in an Airbnb. And people who like, you know, who like having a rent a car, because they have a family and have a bunch of luggage, and they want to be able to travel when they get to the airport, they're going to do a rent a car, they're not going to do ubers everywhere, because they're going to the Grand Canyon, there's no ubers available there. So we'll take those out, right. So, and already there, you started to see examples of wait a second, that wasn't a cab, you just went over into rent a cars, wait, Oh, so some renter car people might actually do ubers. Instead, you said that one going to the Grand Canyon wouldn't, because they need the flexibility having the car with them, and there's no ubers available. But maybe the person who is just spending 48 hours in San Francisco or 72 hours in Manhattan, they'll actually just use uber, they're not going to rent a car, people go to a major city, they don't rent a car. completely impractical. That's the first thing they tell you when you come to San Francisco, don't rent a car. 50 bucks to park every night, 75 bucks to park every night, and you can't park it anywhere you go. Anyway, it's you will sit in the garage for three days and use rack up this huge bill. Now in LA, it might be different. So that's where the total addressable market sometimes exceeds it, then exceeds what your expectation was. Now, sometimes people pick a tan that's too broad, So if you were to look at Uber Eats, and Postmates and DoorDash, you have the problem of, okay, all food, if you took all food that is eaten in the United States, supermarkets, fast food restaurants, delivery restaurants, grocery stores, fast casual convenience stores, you put all that together, that's not actually the market for DoorDash. DoorDash is not going to replace people going to restaurants, it's not going to replace people cooking at home. It's not going to replace fast food restaurants, we know that. So you have to have some intellectual honesty. And what I think they're trying to do here with TamSamSom, and I actually haven't seen this in a deck. So interesting that it's happening is because I think so many people didn't buy the Tam. Right. The case of Uber going up against rent a cars and public transportation and car ownership was not obvious. The only person who really saw that early was Bill Gurley. That's why he was able to make that investment and had the confidence. He said, I think the TAM is different than cabs. Yeah, I think the TAM includes these other things. So I'll stop there for a second. 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### Human: On episode 1146, recent Launch Accelerator graduate Pablo Stanley details his top learnings from the program.### Assistant: Okay, everybody, it is an exciting day. If you are a slack shareholder, or it might be disappointing, because people thought slack was going to be this independent company that grew forever, and maybe became worth hundreds of millions of dollars. But it seems the company with the headwinds of Microsoft teams constantly blowing them back, and the inability to grow really fast. They seem to have put themselves in a position to be forced to be acquired by a larger company. It's kind of a bummer, you know, I think that the company couldn't keep growing and then use its public stock to acquire other companies. And it does seem like there was some sort of a product roadblock inside the company where they just couldn't get new features out couldn't get new competitive products in market to get people excited, they just did a good job of being solid, right. And there was no real competitor, except for Microsoft Teams to come out of this hip chat gave up and wind up selling to them. So you have to wonder, is there going to be a new chat enterprise software that emerges now that Salesforce has bought this, I think you're going to see another round of people looking and saying, Hmm, maybe now is a good time to launch a competitor. Now you'd say, why would that be? Very simple. When these big companies acquire them, they get a bunch of indigestion, right? We talked about that, like, can they acquire this without squashing it? Can they acquire it and accelerate its growth as opposed to slow it down? Who's going to run it? Do you have somebody great? Is Stuart going to stay with the company? Or is Salesforce going to run it? That's all those are all the questions that are going to come up and be the second order questions if in fact, this deal goes through but either way, Congratulations to all the investors. For me, it would be disappointing if for example, Uber were to sell as I'm still a shareholder in Uber, if they were to sell, you know, to Google or to, you know, Amazon, I would feel good in a way but you know, because it would be the end of the journey and it would be an exit. But I would also be kind of bummed that they didn't keep that independent spirit alive and become a trillion dollar company eventually, or become you know, a $500 billion company, you really as an investor want to see them become independent concerns that exist forever, like Amazon and Facebook and Google have, and Tesla has Tesla could have been taken out at 50 billion 75 billion by Apple or Google, but now at 500 billion, or whatever their market cap is, they're going to be a strong independent company for some time to come. So great job. It's opportunistic, right? You have these, the stock market is on a tear, but Slack's stock has not gone up and appreciated the way other companies have. So when they have that funny money and you've got a lot of equity, that's why probably half of this is cash is because the people who are selling their shares in Slack, if that report is in fact correct, they would like to cash in some chips and get cash, but they probably won't have the upside of maybe owning it. Now, if Salesforce stock goes up 10%, like Amazon did after Whole Foods, it went up, not 10%, but the value of Whole Foods. Theoretically, on paper, Benioff could get this for free, if the market cap goes up $25 billion, because people believe that Salesforce is a bigger player, and that this is a creative and that this is going to be a catalyst for Salesforce's existing products. And that Salesforce's existing team is going to be a catalyst to drive more people to use slack and adopt it because it's more trusted in the large enterprises. I wouldn't be surprised if Salesforce goes up 10 billion $20 billion in the month after this acquisition, if it in fact occurs, because that'd be a great sign that it was, you know, a great acquisition and the market believed in. So we'll see. It's a bittersweet, bittersweet, if true, for the shareholders, I'm sure they would have rather seen it become a large independent company. And if you just think about like, if you're a Slack user, they have built-in audio and video that hasn't changed. And it's kind of buried in the product. And it hasn't changed in a year or two. I haven't seen any new features. And I always thought to myself, why are people even using Zoom if they're using Slack? Because when you're in a Slack room, you just click. start a call, and you don't have to install another piece of software, you don't have to leave that piece of software, you can use the same chat room, as opposed to firing up a second chat room. And I just think Slack didn't do a great job of marketing these products to existing users. I never got an upsell inside of Slack, like, hey, would you like to set up a call? Or, you know, can you make a channel that is a reoccurring a weekly meeting. So let's say you had a weekly Wednesday staff meeting, could you make a room that was also the call and have it be a calendar item, you know, sort of thing. It just didn't seem like the product vision, it almost like it topped out, right. And they didn't have somebody there making bold visionary bets.

### Human: And I think, you know, I'll let I know, Jay cow is talking about this on the pod, what I would say is, First, every wave of dislocation, starting with the Industrial Revolution, right, moving from hunter-gatherer to agrarian, agrarian to Industrial Revolution, Industrial Revolution to Information Age, we've always panicked about what's going to happen to jobs. But to Jason's point, there's so much left to do. The bigger thing is the nature of the jobs to be done. post World War Two, we had a lot of people who had to rebuild the planet in a very industrial manufacturing intensive way, most of those jobs will disappear. And so we're going to have different types of jobs. Jacob, why don't you roll with it from there?### Assistant: The good news, I think is if you embrace this technology, in the first inning, baseball metaphor, kind of like this is year one of the App Store is how to think about it, you're not too late, just because you don't work in open AI, and you haven't been doing this for five years. This is kind of like Steve Jobs holds up the first iPhone. And then six months later, he released the App Store. That's kind of where we're at right now. So your timing is perfect if you use it. But I remember when I came into the industry, and I used to do network engineering, and I would set up computers and networks for companies in it, there were some boomers who didn't want a PC on their desk. And they said, Oh, give it to my secretary. Okay, well, your secretary has one. But you can have one too. And we have this Microsoft Office and you can do all these spreadsheets and documents and the like, it email and just print it out for me. Those people refuse to move on with the paradigm. And there's a saying in psychology about paradigms, paradigms don't die, people do. So there'll be a group of people who do not embrace this technology, and they will die. And then all that will be left is people who do embrace it. The amazing thing is two or three of the hardest jobs in the world where we are the most constrained are data science, and developers and coders. With this new technology. Does anybody here speak English? Raise your hand if you speak English. Anybody? Okay, everybody. Great. Congratulations. You're all developers. You just don't know yet. In the coming months, I didn't say years, I said months, you will be talking to a computer and it will be writing code for you. And you will be a developer. It's now but how many people here are not developers and are writing coding chat GPT? Okay, well, actually more than I suspected. So that's kind of the mind blowing part. The idea of coding and programming in something other than English will seem silly. in a couple of years. Of course, you would just talk to the computer and tell it in English what you want. Why would you write code? Just like the idea that when I was coming up in the industry, we would open the computer up And we would put in a network interface card, a NIC card, and we would put an extra memory chip. So we take out the hard drive and put a new bigger one. And when you filled it up, like all of that got extracted away. And it departments didn't have to do that. It was in the cloud, you had more memory than you needed. And it all just worked. And then data science, like I was, I have the chat GPT feature. Now, I don't know if anybody else's in the plugins or whatever, but you can upload a CSV file, any spreadsheet or whatever. And then you just tell it, tell me about this file. And it's like, well, it has these columns. And those are zip codes and the houses of prices and how many rooms they are when it was sold. And then you say, what trends Can you tell me about this? And it analyzes it and tells you the trends. And then you say, Can you put those in graphs, and it puts it in graphs. And I was giving a talk to one of the Rosewood hotel groups, like the one over here, they had 150 executives, this is just last week, and I was showing them some of this stuff. And I said, Is anybody here on the management team, the data scientists, and they all point, they're like, Justin's the data scientist. And I showed it to Justin. And I looked at it, I said, How many of these requests you have from other people in the room? He's like months. I was like, they could all do it themselves now. And everyone's like, Oh, poor Justin. I said, No. Now, Justin does not have to have an annoying conversation with you about the most basic data stuff. You can come to him with your questions that are now the questions he's asking. And he can have a really high level discussion with you about your data. We don't know what these things are going to be able to teach us when we put them on these huge data sets, as Brad was saying before, data is the new oil. You guys have some experience with it while right and data like the metaphor, it's like massive amounts of value. We're going to talk about that. Yeah. And I think just being able to set up these auto GPT is in the auto GPT is really mind blowing. You say to the GPT, you're a salesperson, you're selling this product, go ahead and every day look for new customers and send them a welcome email and ask them to book a demo. And you're going to set this persona loose, and you're just going to watch it work. And then say, if people tell you, they're not interested, don't try to sell that person and ask them if they know somebody else in the organization who that you should talk to. And it's going to just learn every day how to sell. And then the salesperson is going to have like five salespeople working for them, but they're all going to be digital, it's going to get weird.

### Human: I'm just not so I'm honestly like, I'm having this really weird feeling where I'm just not sold on the red scare that is tech talk when I know that it benefits companies that are frankly, just as harmful.### Assistant: Okay, from what we can tell so far, when it comes to user, let me help you become scared. Let me let me pull you back from. Yeah, this space that you've gone to because I understand why you're there. Yeah, this is a dangerous space. Because Facebook has been a bad actor. And I have been super critical of the firm as have you, as has anybody who's just objectively looked at their behavior. And so we look at their behavior, they collect too much information, they have been laissez faire with it, they have done horrible things. Cambridge Analytica was that the name of that scandal? I mean, all these different scandals have piled up over the years. So yes, you're correct in not trusting Facebook, but understand the CIA, FBI, Republican Party, etc. As much as they've tried to get their keys to the kingdom, they had to use third party tools to get that information. They got caught with significant blowback to Facebook, congressional hearings or legislation, the EU stomping on them, Apple, then reducing their ability to track their customer base. In other words, their bad behavior resulted in the entire climate of anti tech and specifically anti social media here in the US and all that regulation. Yeah. Now let's go to China. they have unfettered access to all the state, just like they have DDS data, just like they have Alibaba's data, just like they remove the CEO of Alibaba, just like they D listed. So when you look at what our government is doing, our government is investigating and holding Facebook and others feet to the fire, as is the EU to an even stronger degree. China is not is doing the opposite. They're taking over the companies. They're downloading the data sets, they're incorporating them into their giant mass surveillance. And you need only look at how they treat their own people. whether it's the Uyghurs, or the tracking of anybody who might support any kind of dissent in that country, people who sell books that they don't like in Hong Kong, you know, being sent to the mainland to be re educated, which means starved, tortured, raped and beaten. All of those re education things that are occurring, all of that activity, it stands in stark contrast to what happens to bad behavior here in the US. should we be stronger? Should we get control of these companies? Sure, there's arguments to be made? Are we doing it retroactively? Of course we are. That's how you know, the justice system works. You're innocent until proven guilty and getting proven guilty takes, you know, years, if not decades in corporate America. It's imperfect, the system, but we have an existential risk here. before we get to the ad. It makes our team so happy to see our partners celebrate big wins. And I'm thrilled to hear about this huge funding round for our amazing partner. Oh, do really great stuff from Julian the team there, especially in this crazier venture market. So congratulations. And speaking of the market right now, being capital efficient is more important than ever. You know that if you're an entrepreneur, and one easy way for you to cut costs is to run all of your SaaS apps on one platform. So check out Odoo suite of business apps. Using Odoo means you don't have to have a bunch of different SaaS subscriptions, everything you need is already on Odoo right now. All you have to do is turn it on when you're ready. And They only charge you for the apps you use. Odoo has over 40 main apps and over 16,000 apps from their open source community. All of this will streamline your business. No more issues transferring data back and forth. And you'll have one customer support contact across all of your apps, not 20. And here's the best part. Your first app is free forever. And Odoo is offering you $1,000 in credit on your first implementation pack. So go to odoo.com slash twist for $1,000 off that's odoo.com slash twist. If the Chinese government and there's a New York Times story that dropped today about all the different provinces and we'll get into that and what the granularity at which they are tracking their own citizens. They're tracking what apps are on their phone. They're tracking their faces, they're connecting their faces to the apps are connecting what they wear, they connecting where they go all into a database that the police have unfettered access to and the police and obviously everybody in the government. they're doing that to their own people, the second they had the chance to do it to their greatest adversary, the United States, they would do it. And all is fair in spying, they will get all of this data from a senator's son or daughter, a senator's husband or wife or cousin, and they will get the compromise, they will compromise anybody at any time to achieve their goals. And that's why we need to immediately ban tick tock from the United States, until such time as they reciprocate and Twitter and Facebook are allowed to be in their country, period, full stop. That is my belief. And that is what you should believe to Molly. As much as you hate Facebook, you must come around to my way of thinking this is a country I cannot give people the benefit of the doubt. These are sadistic maniac actors. You should look at them no differently than Mohammed bin Salim in Saudi Arabia who chopped up journalists.

### Human: Right. which just and then Omicron is so contagious that the second you pull your mask down to like take some eat some food on a plane, but whoopie got it. Yeah, you're done.### Assistant: And we're done. All right. Listen, it's been a lot of show. Anyway, we got it. We'll see you all tomorrow. It's gonna be a big week. Stick with us. If you are a founder of a pre Series A company, you haven't raised that Series A yet, which is really hard. Well, We wanted to invite you to Founder University. This is a two-day intensive course. It takes place on June 13th and 14th. It's remote. It's free. We limit the number of people who can come. We ask you to apply. And this virtual workshop is free for founders and helps you understand how to fundraise and pitch, how to hire great people, how to build a world-class product, how to execute on yourselves in marketing and some growth techniques as well. The launch team and I have been doing this for a long time. It has been amazing for us to get to know founders. And that's why we do it. Of course, we want to help folks as many as possible. That's part of our mandate. But really, our mandate at launch here at This Week in Startups and you know, the syndicate, which is where we invest, we meet and invest in companies is we want to back builders. And so we use these events as a way to get to know you. And if you're building something and we see you're credibly building something interesting in the world, well, then we want to invest in you. So truth be told, every time we do found a university, a half dozen of those people, we wind up funding in the next year or so. So it's a great way for us to spend time with entrepreneurs. We're going to be joined by a lot of experts. My friend Becky DeGraw, who's my attorney from Wilson Sonsini, will be speaking at the event. FitBots co-founder Jesse will be speaking. Marlowe CEO Mary Fox will be speaking. So we get a bunch of our portfolio companies who have been crushing it and who have learned a lot. And we've seen that they are qualified builders, we have them come speak at the event. So you see how we do things here at this week in startups and launch and syndicate. We like to create a flywheel. We invest in people who come out of Foundry University, some number of them really crush it and become world class companies. And it's not guaranteed, you have to do the work folks, the ones who do, then we have them speak at a later Foundry University. So a lot of the great companies we've met came to a Foundry University, they got to know us, they learned something, it was worth their time. And that's really what we do with the agenda. We try to make it worth your time to take two days off work, essentially. Now, it's remote. So you can consider it your weekend, even though it's taking place around the week. you consider it professional development. And if you learn one or two important things about running a company, fundraising, growth, hiring, well, those one or two things will pay for those two days. I am absolutely certain of it. Now you have to apply again, so you can register at founder.university. Yes, it's a great domain name. So go to founder.university and sign up. We also have a course called angel.university. If you want to invest in the companies and you think the philosophy I've explained here about how I invest in companies, and I've invested in over 300 of them, If you think this is an interesting way to meet startups early, help them, and invest in them, well, you can read my deal memos as we invest in new companies, and you can join us on that adventure. And I do this through a course called Angel University that has raised close to $200,000 for charity, and you can sign up for Angel University at angel.university. We do it four times a year. Great program. And it's just me and my partner, Mike Savino, talking about how we pick companies, how we evaluate them, how we diligence them, how we source them, like Foundry University is a source of investment and deal flow for us. And that three or four hour course, actually, I think it's more like four or five hours, is well worth your time. All the proceeds from Angel University go to charity. And again, over 175,000, I think at this point, has gone to charity. I'm very proud of that work. And Foundry University is free. But you do have to apply and we do pick people who have built a little bit of something. So we're looking for you to have some skin in the game. We have a Founder University 12-week program, which you can also see at founder.university. We'll be starting our third cohort shortly, and you can apply for that program if you have not started building or your very early stages haven't incorporated yet, you're nowhere near the Series A, you're kind of in the solo or co-founder situation, and you're just starting to build, maybe you've incorporated, maybe you haven't, and that's a 12-week course, and that's another great one that we do. So please join us, founder.university, and if you want to invest in these great companies, angel.university.

### Human: I mean, I think the short answer is you you don't even if everything is going up into the right and everything is marked up and you've had like I had a billion dollar exit 12 months after I started. That meant nothing. There was not an indication that I was good or smart or knew what I was doing. And even now, I look at my portfolio and the meat of the portfolio is a number of companies where I have large ownership stakes and they've become very large businesses. But this still not cashed out. They haven't gone public yet. We haven't, um, we haven't taken them to the level where they turn into real money. So even eight years into it, I'm like, I'm, it's pretty clear that I'm on the right trajectory. I like on the trajectory level, I'm very good at it, but until I return, you know, five plus X to my, to my, um, by 10 X to my, my LPs, um, um, I don't know. We'll see.### Assistant: here's what I would look at, Eric, just to give you some signals. Now the J curve, we'll bring it up here. You start investing, you put this money to work, pull up the J curve, the J cal curve again, you have management fees, you're deploying capital, there's not enough time for the rounds to go up. So you see here, the initial commitment is, you know, the bar, and you have management fees, you're investing, you know, you sometimes business is shut down. So you take those losses early. that means your portfolio by definition is under water. If you were to invest in, let's he says he's invested in. He's been at it three years, he's putting that we don't have the total number that Eric has invested, but I'm going to just say let's say Eric's invested in 10 companies. So that's enough to have a little diversification. I would rather see you at 20. Let's say, so let's put the number at 20. Yeah. got plenty, that means you got a good chance here, you got stuff spread around. And let's say you're only investing in companies that have products in market. And let's say half of them have revenue half don't, but this they have to have them have products market. Okay, let's say you get to your two or three here where you're at, maybe three or four of the companies, and let's say you put, you know, five k into each. So 20 times 500k. All right, you have four companies that went out of business, they shut down, they had seed funding, it's year three, they couldn't raise another round, they couldn't they raise the bridge, then they went out of business. So you have negative 20, you can write those companies off. Now, let's say three of the companies have raised up rounds, and the other ones are still deploying and have some revenue, but they haven't raised their next round. very hard to know what's going on here. You do know for sure that you have negative 20. So you're down to 80k of live investments, the top three have raised up round. So on paper, they doubled in value. So the 15 of those turned into 30. So you're plus 15. So you're at 95 on paper. Yeah. How do you know? Well, here's how you know. Um, you don't. But you can look for signals of, you know, is the revenue in those top companies growing? Zack said before, I have 700 million in revenue for my investments. Zack is looking at his companies and just saying, what's the revenue of the companies, not the valuations, the revenue. So there's a proxy, you know, just start looking at the revenue of the actual companies and know about power loss. When this J curve here has that big spike towards the end, that's representing one to three companies out of your Yeah, probably two companies out of your 20. So that's what you need to know is focus on the winners. And what does the revenue look like to do a callback? Zack said earlier, Hey, I like to plow more money into a company. And I said, Well, what's the the metric for that? And he said, three x year over year revenue growth. So that's what I would be looking for. You got any three extras in there. Somebody had 200k this year, they have 600k this year, they had 600k last year, they got 1.7 million this year, that would be the early signs of winning. But truth is, you don't. This is why VCs don't get fired. But in their second or third funds, when the chickens come home to roost in year 10. It's great question. And Eric replied, he had 35 companies about 60k total. So you'll know you'll know just stick with it. And the more you can invest in like Zach and I like to do have companies that have launched products and revenue, the less zeros you're going to see. So that would be a healthier portfolio. Now some people love to invest pre product market fit. I have some friends who do that. God bless him, the world needs him. But my best advice when you're starting out is to play, you know, play the poker, play good cards in position was the best advice I ever got any Duke was like, why are you playing a 10 suited under the gun? Like, are you really going to defend this position? When you get a raise and a re raise, you're probably going to toss these cards. So you just wasted that blind. So just think that through play better cards, play less cards play in position. That's what we're talking about here. Anything to add to that? That is great. Let's take another question from our amazing audience. What's the best question we got right now? Zeb asks, as a founder, when should you provide prorata to angels and when not? Okay, so this is not from our side of the table. This is in the founders. I like the way you phrased the question, Zeb. As a founder, should you give prorata to angels or not?

### Human: Alright, so let's get to today's business. You had shown at a poker game, myself, Chamath and a couple of besties this project, I guess, when you were in the industrial design phase. What is it today that you're announcing and taking out of stuff?### Assistant: Well, if you wouldn't mind, let me just take a step back and talk about some, like one of our kind of core beliefs at the production board and how that led to this opportunity. So, you know, when you look at, um, uh you know how humans make and consume things we um we've built a system of industry right and so we take um all these uh um these things that were old technology and and you know we've talked about this on our all-in pod like growing animals to make meat The way we do that today is we take fertilizer, we mine it from, we mine potash in Canada, we put it in the corn belt in the US, put it on the ground, we grow corn, we take that corn, we feed it to cows in Texas, we kill the cows, we move them to New York steakhouses. The whole system is super inefficient. We use technology that's been around for 10,000 years, growing plants, feeding animals, making meat, and delivering it. And that whole system takes about 30 times as much energy as it actually produces in food. And this is true in many of the things that humans make and manufacturing and production is really kind of the mainstay of consumerism, right? Like every year, humans are only happy if they have more this year than they had last year. That's a fundamental fact of human psychology. And so every year, we see consumption go up. And as a result, we see production go up and GDP goes up. You know, gross global product goes up. And the way that we've scaled up our production to meet all of humans needs for more food, for more cars, for more entertainment, for more computers, for more bedding, for more housing, is we've taken old tech and scaled it up and centralized it and made repeatable processes out of it. And that was really kind of the framework of the first and second industrial revolution. We centralized manufacturing, we put all these capabilities in one place to repeat a process over and over again, and to make a product repeatedly and scale it up and distribute it. And that system is what's largely led to climate change. It's largely led to extraordinary carbon emissions. And we use CO2 to move stuff around. We use CO2 to make stuff. And it's all about getting the cost down through centralization and distribution of produced products. And so a big thesis for us, and the reason we're called the production board, is how do you rethink the whole systems of production that humans use to make the stuff that we consume? And this can range from stuff like we've talked about in the all in pod, biomanufacturing. We have several big projects in biomanufacturing, where you can use biological organisms to make things. And you can use the biological organisms to make things locally. Also, 3D printing, right? We've talked a little bit about this. But a big part of what we're going to talk about today is really the beverage industry. I'll tell you a little story. The story is I went to dinner and some scientist I went to dinner with was telling me, hey, there's this really cool research, you should check it out. This guy took a glass of wine, and a glass of wine is 87% water, 12% ethanol, which is alcohol, and less than 1% is all the compounds that make up flavor, color, odor and mouthfeel. And there's about 500 of those compounds. And that's what makes the interesting flavor of a red wine. And the guy took all the compounds out and started adding them back one at a time. And he was able to recreate the red wine using just 27 of those compounds. And then he did it again with another red wine, and then with a white wine, and then other beverages, and basically showed that you could recreate most beverages or all beverages really, with a reduced number of compounds. And so we read all this research at the production board. And I started speaking with my team and Our team started running an R&D cycle. And the R&D cycle was, hey, can we recreate beverages using a simplified set of compounds? And doing so, can we reduce the compounds to make all beverages to a fixed number? Can we just use 70 or 80 compounds to make wine, beer, coffee, tea, juice, soda? And you know, the answer is yes, yes, you can. Now, why is that interesting? Because any beverage, whether it's a bottled water, soda, coffee, tea, juice, wine, whatever, is almost entirely water, right? So beer is 94% water, 5% alcohol, and less than 1% is the chemicals that make odor, color, flavor, and mouthfeel. Same with wine, same with juice. Juice is 93% water, 6 to 7% water, and less than 1% is all the chemistry that makes vitamins, flavor, odor, color, and mouthfeel. And so if that 1% is all that you need to ship to make beverages, why don't we distribute the manufacturing of beverages and put a beverage printer in every home, and then ship the 1% that you need to differentiate water into nearly any other beverage. And that's kind of the idea behind this business called Canna. It's a molecular beverage printer.

### Human: I love this job. It's so awesome. And it is like every time we have these conversations, they get just a little more advanced. And this comes from two things. One, an actual conversation I had with our president, Mike, where I was like, but I love this company. It's so interesting. And he was like, you know what, this company is interesting. But the calculation you have to make is if we don't do this, will we have enough money to put more money into this? Like it's, you know, and so we started to have this really interesting next level conversation, not just about investing, but about budgeting. Right, right, like budgeting your investment dollars. And so then friend of the pod, Jason Lemkin had this really interesting thread on Twitter earlier this week, analyzing his first solo VC fund and sharing some lessons. And one of the things he talked about was almost exactly this, like, when, how to use your reserves, which first of all, we should cover what a reserve is, how to use it, and then when to recycle your returns, like almost like how to budget the money that you have to invest.### Assistant: Okay, so we need to have some definition of terms here. Yeah. So when you raise a fund, let's say his $60 million fund, you might put out 4040 two thirds of it into primary investment. So you put 40 million, let's say he did 20 companies, 2 million each. And he's got that 20 million sitting here, of those 20 companies that he invested in, which ones break out, and then you have a chance to put more money into Well, you know, as we always talk about, there's going to be, you know, 5% of your fund might be outliers. So in this case, that means one company, but let's just say there's two. And then there's two, let's say there's four that you think could be the breakout, you're pretty sure of this one, the other three are looking really good. They're raising subsequent rounds, he got that 20 million. You invested it, you know, in these companies, let's just say at a $20 million valuation, now you got some at 100, you got some at 250. Those bets that last 20 million that you put in is going to be as close to the shorebed as you can get, because you have known this company for three, four or five years, you've watched them grow, they go up into the right. And now you have a chance to do what's called pro rata, maintain your ownership percentage, by putting more money in, you have the right to do that. And therefore, you want to before you harvest these returns, put that in there. Now, when you get an early return, we have a $60 million fund, you can say the first 10% of the money I get back from investments, I can recycle. So I invest that 40 million. Now I'm putting extra money into those four. Okay, let's say I put 2 million into each, I put 8 million in, okay, one of the other companies gets bought, it's a five x, I get, you know, whatever $10 million back. Well, let's just say I get $6 million back. Okay, I have in the documents, the agreement with my LPs, I can recycle the first 10%, in his case, a 60 million fund with 6 million. Now I have 26 million to put in. And the 26 million is going into the best companies because the people who are in your fund, you know, they're looking at a 10 year window, but you always have a couple of investments that come in early. And sometimes they're trickles, like we put 500k into this, we got half our money back, we put 500 250k into this, we got three times our money back, that 750. So like even sending it to your LPS is like, okay, you're sending them like a penny or 5 cents on the dollar, they're like, whatever, you know, or 10 cents on the dollar, that's not why they're in it. they're in it for that long ball, they're in it for that home run my the grand slam. And man, when you put a little extra into the great companies, and I'll just give you the example of something I didn't do, I didn't put extra money into Robin Hood calm. Well, maybe calm we did a little bit later. But Robinhood and Uber, I was just one and done. I was using Sequoia's money as a Sequoia scout, their philosophy was no follow on just, you know, make the investment, we'll see how it goes. If I participated in the sea, the series a that Bill Gurley did at 30 or 40 million for Uber, and it's trading at 60 billion or whatever, still a great investment. Or if I'd done the one that Menlo had done at 300 million, still a great investment. The next round after that was 4 billion. you still had a 15 x in it. So you know, the subsequent rounds we and we all knew Uber was the winner. We knew that was that was the one everybody did. It was obvious. But you didn't have access to buy those shares. And so that's what people are talking about here. So it is a competition to make those primary investments, of course, and you should think about that. But you have to be very judicious with the dry powder and who you're going to bet that's not for you to make people feel good about themselves or somebody. You have to be cutthroat about it. you know, so when the founders you invested in, they're not up into the right, you can't give them that dry powder, you have to say that dry powder has been allocated to the top performers in the fund. And it's really hard. When you believe in somebody, things didn't work out, they're facing the risk of ruin, the company's getting shut down, you say, I would love to give you $2 million extra out of my $25 million in dry powder here 26 million, but I can't I got to put it into my Uber. Yeah, I got to put it into my Airbnb. Well, conversation.

### Human: Dang, so you sound like the most ideal candidate, by the way, let me just say this now, you sound like the most ideal candidate for a startup because I think if you find somebody that is like young, super passionate and ready just to absolute, I always, I don't, I think you might have tweeted something similar to this, how like, It's how, I don't even know how to put it, but you tweeted something. Yeah, what was it about like, I don't think it's bad to like be spiteful. You know what I'm talking about?### Assistant: Um, maybe we should just actually start from like, so I guess we should, we should bring it back. It makes sense. I'm sorry, I'm f***ing up your podcast. No, you're not at all. Don't worry. Yes. I was, I was in high school. Um, I wanted to get into the tech world. And I'd fall in love with startups like HQ, Trivia, and Citizen from a young age. And when you're in high school, there's four jobs you know about. It's like investment banker, doctor, or lawyer. So I was like, okay, before I make a startup, I got to go work at Bain for four years. So I went to a good college for finance. And I was like, I'm going to go do my classic gunner route and go work at Deloitte or something. Anyway, super lame stuff. You just don't know this stuff when you're young. I'm 19. So my first year of high school, my senior year of high school, COVID was already starting then. So my first year of college, I couldn't be on campus or anything. So I ended up just dropping out. I started messing around a little bit in the venture world. And I quickly realized that the parts I like about finance were venture capital, and the parts that I like about venture capital were startups. And so pretty quickly, I was like, okay, I want to go make a leap into a good startup as fast as I can. It took me a long time to find a really good startup. I worked for Justin Kahn for a little bit. I basically helped run his fund, Goat Capital, for a while. And then at the same time, I was just getting into... I was just sort of playing around on the internet. So I would skip my finals, my midterms and stuff, and skip my classes, and I would just... For the two months I was in college, I would just spend it all on Clubhouse, and I would just talk to people. But yeah, I... I spent a lot of time at Venture, and then I was like, okay, this sucks. Venture, as a student, as a young person, is a total scam. I don't have any decision-making here. I want to go build something that I can take ownership of. So I pretty quickly was like, I want to go join a startup. Jordy just picked me up, he messaged me off Twitter, because he saw some of the stuff I was doing, and was like, I want to talk to you about my new startup. And we got on a call, and pretty quickly, we were like, it was electric. We were both like, oh, I'm really inspired by Mischief, I just want to make really cool stuff. And I pitched him this thesis, actually, I was working out for marketing. I ended up actually, I got another job offer. I got a job offer to do product at DoNotPay. And so I called up my mentors and I was like, here's the situation. There's this company that I like that's given me a good stable role and they're a big company. Not big, but they're an established company at the time. They were worth $80 million. Then there's other new startup that literally is like, it was Jordy and Sarah, the founders, they're married. It was their company that just started it. They were in the process of hiring Brandon at the time. And it was like, it was like, so new. And I was like, but I'm really excited about what they're doing. Like, I think it's world changing. And my mentors are fantastic. I have a lot of people like my parents and JD Maresco, David Zhao, these are these people that have just taught me a ton. They're all like, that's great, but you should take the like stable, get your foot in the door career thing. So I ended up, I ended up picking up Hey, but then they, I got like a bad reference check or something. I it was like an awkward process. I The founder of it told me I was interviewing for marketing. And then he put me on a call with like the head of product who I only found out like 45 minutes into the interview was actually interviewing me for a product role. So the whole time I was pitching marketing stuff, I'm like, we can change marketing forever. And he was like, so do you want to do product here? And I was like, Oh, wrong thing. Anyway, it fell through. So I was like stuck. I just got a place in SF so I could work down there for them. And I was like, Oh my God, I don't have a job. I just dropped out of college for this. I have no credentials. I had like a thousand Twitter followers at the time. So I called Jordy. I'm like, I will... I'm sorry. I was pissed off at the time too. I was super spiteful. I was like, I will mess... I will **** up. Put me in coach. So Jordy was like, this is awesome. I joined Party Round May 10th. I was like, nine or ten months ago.

### Human: That does. And it's super our producer chat is actually going insane, because as you're saying that percentage, bitcoins actually up even more than that. It's up 15% over the past five days.### Assistant: Okay, so let's pause on that. The 11% increase would all be profit for him. So he has made if he in this scenario, I don't know that he has this, but I would not be surprised if he has 1000 bitcoins and $25 million in Bitcoin. it goes up 11%, we'll just round it to 10. That's $2.5 million, right? So he has made $2.5 million by losing the million dollar bet. This would be as if I said, I will bet anybody Uber be worth $100 a share. It's trading in like 30 bucks a share right now. Well, I would triple a very large base of Uber shares that I still own. And if I bet somebody $1 million, that would happen, I would make so many more 10s of millions that I would be able to know if it just went up to 60 or 70 or 80 i would make so much money that i could say to everybody i'm going to pay off that bet it didn't hit a million i lost the bet theoretically but i won because i was betting my position so um what people have to understand is in a free society two things uh can occur people can place bets people can talk about those bets. And given social media, those bets can trend and create a dialogue. Now, when I told everybody this relates to the claim, the incorrect claim that venture capitalists called the bank run by tweeting. Now, it's possible that venture certain venture capitalists did in fact cause a bank run on Silicon Valley Bank by telling their portfolio companies to leave. that certainly occurred on Wednesday of Thursday before Silicon Valley Bank was foreclosed on on Friday, and there was $42 million was sent out. And I think there was upwards of 100 million billion dollars was asked to be reclaimed. So you could say that VCs cause that bank run by telling all of their founders, hey, Silicon Valley Bank's got problems. It's been well documented for months. And the CEO is saying, hey, there's not going to be a bank run or trust us on Wednesday night. Again, nothing illegal about doing that. But some people might be able to point blame FECs for that. You would be incorrectly pointing blame on it. You should be blaming the risk management team at Silicon Valley Bank for not managing risk. now here we are a week later. And on that Saturday night, many of us said, Hey, there's a bank run occurring. We need to shore this up. That was after Silicon Valley Bank was in receivership. So let's be clear. Pulling a fire alarm because you see a fire is different than starting a fire. In this case is what we have to ask ethically morally, I think Rachel is, is biology starting a bank run here? Yeah, on the US dollar. And here's the truth. farcical to think that biology as well spoken as he is as popular as he is, is going to be able to take down the US dollar or America, and that he is the reason for this. We need people like biology pointing out when America is doing things, or the feds doing things that, you know, he believes are, you know, possibly going to cause inflation, we need that backstop. Obviously, we did that back. So because the Fed didn't understand, they said inflation was transitory. And SVB was not managing their money correctly according to you know risk management theory so he's well within his right. To point this out he's well within his right to place a bet now you might not like it it might feel opportunistic. The march to a billion users continues for LinkedIn, they have 875 million people using the platform. And with all of these recent layoffs in big tech, there are an amazing array of insanely talented people out there ready to join your team. The stakes are high, you need to make every single position in your company count, everybody has to pull their weight. And there are so many great people looking to find their next opportunity right now let's call it what it is let's be candid here on this week in startups and i want you to get your first job posting for free at linkedin.com slash twist that's all you need to know linkedin.com slash twist the best place to hire somebody amazing and if you've seen those purple hiring rings around people's profile photos that is that person telling you they're hiring and that has created a massive network effect inside of linkedin Go ahead and get that purple ring around your profile photo and then engage all over LinkedIn. There's groups, you can post, you can reply to people, and that will let you find better candidates faster. Let's just pause there. If there's two things you remember from this ad read, better candidates faster, better, faster, better, faster, LinkedIn jobs better, faster. Here's your call to action. LinkedIn jobs helps you find qualified candidates you want to talk to faster. Post your job for free on linkedin.com slash twist. That's linkedin.com slash twist to post your job for free. Terms and conditions do apply. But you know, this apology tweet, where he responded to me early Monday morning, I think, is, you know, I think one worth us, you know, just thinking about. So maybe you could read that one.

### Human: It's like everything all at once or returning to my hot take from yesterday. It's all a house of cards. It's one or the other. Either this Chad GPT thing is total smoke.### Assistant: vapor. I just want to end with my daughter. My 13 year old daughter was really emotional last night because she saw me cry. She was like, Are you crying? And I was like, I'm not crying. But I got the clamp last night. Because one of my favorite films from my childhood was Indiana Jones and the Temple of Doom. is like we're gonna go a little random here. Okay. Okay. Now Temple of Doom you've seen a very dark film. And it turns out Spielberg and Lucas, I think they were both going through divorces or whatever. And people were like, you know, that film dude was pretty dark. And they've kind of come back and said, you know what, we were going through a dark period of our life. And we went kind of dark on the Indiana Jones stuff. If you remember, you know, like there's children, children as slaves being whipped hearts being ripped out of people's chest, it is intense. And it was like a little shocking for people. And we had like a very interesting discussion about K. Hugh Kwan in short round because my daughter started said, is he is that like a little bit of a racist trope when he was in Indiana Jones? Because he talked with a little bit of a broken English thing. And I said, you know, that's interesting. Like this generation sees it as problematic. I said, our generation, I asked my wife, I was like, she's Asian screen. I said, I saw it as like, whoa, there's a Chinese character, a young Chinese character in a significant role. He's the third lead in the film. Essentially, it's like, yeah, k cap Shaw, Harrison Ford, obviously, and then K, Hugh Kwan. And he won a Golden Globe last night. And so my producers will pull this up, and it will end with the speech. he was in everything all at once everything everywhere all at once. Okay, now, I enjoyed that film. It wasn't like, maybe like, top 20 for me, but not on my top 10. But for a lot of people's top 10. But when I saw him in the film, my heart was filled with joy. Because I just thought I always loved this. He was also in the Goonies, I believe. He was Hollywood forgot about him. Yeah. And he gives a speech. the Golden Globes last night. And there is not a dry eye in the Golden Globes. And I had just had the conversation with my family about representation in films and why it's important and how this was like a moment of representation. And we just had this very nuanced discussion about his, you know, English, etc, as a second language. And was that like, know, when people make fun of Asian people and speak, or any foreigner speaking broken English, it could be an Italian person or whatever, just or me speaking Italian or poorly, you know, in White Lotus or something. Anyway, he wins. And he gives the speech of a lifetime. And I play it for my, my entire family. And I didn't realize it. But two tears just came down. I was so happy for him. And he just says, like, I always, you know, was taught to remember who, you know, to be thankful in my life. And I just want to say, I'm so thankful to Steven Spielberg, for giving me a chance. But then I thought, for the last 30 years of my life, I thought I will never achieve what I achieved in my childhood, my entire life will be downhill from here. Wow. And then these. And this video is trending all over Tick Tock. It's trending all over Twitter. It was like going he was almost I think number one last night. It was first or second trend. And I didn't even know his name. I'll be totally honest. I just knew my short round. Because I always when I started at Jones, I thought I started Indiana Jones when I was whatever, eight, nine, 10 years old, I would love to be short round. I would love to be Indiana Jones sidekick, right? Yeah. That to me was like a dream. I think that's why Spielberg did it. He was like, wouldn't it be cool if Indiana Jones had like a 10 year old or 12 year old as his sidekick who would drive him. And they'd let short rounds, the joke of short round is he's short because he's a kid. he drives the getaway car for Indiana Jones in Hong Kong during this like, really tense scene. But he's so short, he ties blocks to his shoes to make a shoe reach the gas pedal. But he can drive a getaway car. Just brilliant on Steven Spielberg's part. And so he gave this speech. And then he says, and these two filmmakers, these two or three filmmakers remembered me from 30 years ago and said they would give me another shot. And they gave him the shot and he wins the golden globe. Oh my god boom And they say it's his first nomination And everybody in the audience is going it's his first nomination This guy's been m.i.a for 30 years.

### Human: Actually, I just I've never heard anybody actually have this conversation. But what is the ethical right thing to do if 100 people right now are talking about, you know, this new pandemic that they're seeing. And it's trying to put together that information to maybe warn us a pandemic is actually happening. There's 100 people talking about it in this region, and they're spaced out at this distance. And this is the qualifier of, of a pandemic starting.### Assistant: Right. Well, I mean, this is something, obviously, one's already seen, you know, from things trending on various, you know, social media and, you know, search queries and things like that. That's already a thing of it like that. I mean, the question of, you know, how private is your particular chat session and your particular, you know, I don't know, psychological counseling session with the chat bot or whatever else? Who owns that? Right. Well, versus what I mean, there's the same thing that happens in your medical stuff all the time, which is, you know, to know in aggregate, what the results what what happens medically to lots of people is a huge societal value. Let Yet, you want to keep the individual records of individual people private. So this kind of... You want the aggregate to be something that can be mined, but you don't want the individual things to be separately mineable. And that's a whole technical can of worms about how you can do that, and to what extent you can do that, and so on. I think the same thing will probably happen here. Coming back to this question of why does the LLM work? What is it really doing? In what sense is it emergent? What's going on? I think the thing that is probably, for me, the biggest kind of a-ha feature of what we've seen with ChatGPT is the fact that probably language is not as complicated as we thought it was. I mean, language is kind of the pinnacle of our species is sort of collective achievement in some sense. And so we think it's a very sophisticated, complicated thing. But we already know there are certain rules of language, like we know, you know, syntactic grammar, we know, you know, a typical sentence as a noun, a verb, an adjective, you know, a noun, it might be an adjective and a noun, things like that. We know this kind of structural regularities to language. Well, I think what's happened is that in these LLMs, what's been discovered is that there are many more regularities in language than we had sort of classified before. So there are many, it's kind of like language, we know from sort of the structure of sentences about nouns and verbs, and so on. We know this sort of a construction kit, that sort of puzzle pieces that you can put together, you can't go, you know, verb, verb, verb, that's not a possible sentence. You know, it's got to be a noun, verb, noun type thing or something like that. So we know that there are these sort of puzzle pieces you put together. And I think what's happened is that there are sort of what's been discovered by LLMs, in fact, is that there are a whole collection of other puzzle pieces that don't just deal with parts of speech, but they deal with little fragments of meaning and language. And there are things that can be put together meaningfully, and there are ones that can't be put together meaningfully. And we have one example, historically, of where this kind of thing was discovered. It was discovered 2000 years ago, which is the idea of logic, which was presumably discovered by Aristotle. And in a sense, Aristotle was doing a humanized version of machine learning. Because what he did, presumably, is he took all these arguments that people made, all these pieces of rhetoric, and so on. And he said, what's the pattern of how arguments work? You know, if you say, all men are mortal, Socrates is a man, therefore Socrates is mortal, that's a certain pattern, you don't have to be talking about Socrates, you don't have to be talking about mortality, you could be that you could substitute in any kind of any kind of thing there. But that structure is a meaningful structure that you can put into something that you say. And he lifted from that this kind of idea of logic, of ands and ors and nots, and this implies that and so on. And that becomes one of these kind of semantic regularities of language. That's one that we know. There are a bunch of others, I think. And the LLM has basically found them. And we've been a bit negligent in the last couple of thousand years not looking for these things. I mean, there was... little burst of interest in the 1600s, but it kind of died off. And then people had, I think people kind of thought it was too hard. And they were a little bit proud of the fact in the 1950s, it became clear that this kind of grammatical structure of nouns and verbs and things, how that works in lots of different languages, and people kind of excited about the way that it had been figured out that that worked. And so they didn't really look for these other things in a serious way. I think so that's kind of the I think that's what's sort of a science fact that was discovered. And in the end, once you know that that's the science fact, it's sort of puzzle pieces being put together, it all seems a bit less miraculous, so to speak.

### Human: it's it's Just like you said I have momentum now, you know from there. I was just at the bottom looking up now I don't even think I'm at the top cuz just like you said move back to goalposts I'm raised the roof, you know raised my ceiling and I'm trying to keep going up.### Assistant: Exactly, and I think doing those three things that's that's a right start, you know, cuz so nothing bad The golden rule treat people as you would want them to treat you you say it in a very Eloquent way that they're an extension of yourself Number two a kind ear and a bit of enthusiasm for somebody else's dreams as opposed to cynicism exactly optimism over cynicism It's critically important. Cynicism, negativity, is easy. Our minds are designed for it, sadly. And we shoot other people down when they say, I'm going to go from packing pickles and selling mattresses to being a lead UI developer. I'm going to buy a house. It's very easy to glaze over and be like, yeah, whatever. Who cares, right? And number three, pay it forward. Because if you do make it, you have an obligation to the rest of the people who are coming up. So don't pull that ladder up behind you. Just turn around and reach your hand down and help people get up that ladder and show them where the ladder is. And that's the point of today's conversation is that there are some ladders. There may not be enough. But there are ladders out there, and I'm not saying everybody has the aptitude like you to be a developer. But there are other jobs, there are other paths to excellence, and we will get absolutely barbecued by somebody on Twitter who says you're just cherry-picking one example, you're just taking one guy who did it, you're talking about LambdaSchool because you got an investment in it, whatever. But the truth is the reason we did this episode is to celebrate you, Chris, to celebrate what you did. And you are a fantastic guest on this program. I have the leaders of industry on this program for the last decade. You are one of the top 10 people that I have enjoyed talking to. I mean that sincerely. And I have had the greatest leaders in the world, the people who created Pixar, the people who created Instagram, the people who created Uber. They've all sat in the seat you're in. They've all had this interview opportunity and had this discussion with me. But you get it, and you did it. And this is the beginning of your story. I wish you continued success. And your attitude towards life, your perspective, your framing of your own situation, for me is, I think, the critical piece. It would have been so easy for you to frame your brutally hard situation as, well, a reason to give up. a reason to blame others. And if you're blaming others and you want to give up, I am not criticizing you. That's not the point of this discussion. The point of this discussion is that it can be done. Right. It can be done and it's hard. And we, I think we all acknowledge that. And Chris, you know, I, I, I found, I found the story very inspiring. I found the episode very touching. I find, uh, your story great. And you know, someday you'll be sitting there, you put in the hard work, you get three, four, five years under your belt working for other people. But at some point, The king will have an idea for a business, and when you have that idea and you build that MVP, you know how to reach me. We'll talk about it, and I will give you whatever time you need and answer whatever questions you have, because you were so kind to come on here and be so honest about your story. And I believe the world is a better place because of you in it and because of what you shared today. Thank you for coming to me, Chris. I really appreciate that, and yeah, I appreciate you having me. Let me know when you're in San Francisco. When you're in San Francisco, let's celebrate that you did it. You did it. And it's only going to get better for you, because let me tell you something. You know that feeling when you open up the 2500? Imagine you had a zero or two or three, because that's the path you're on. Entrepreneurship and technology. Man, whew, I can tell you a kid from Brooklyn I know who, you know, just carrying those buckets of ice, you know, he got there and you're right behind me. It may seem like a big distance behind me. Let me tell you something, the distance you've traveled, to get where you are, that's the hard part. Getting from where you are to where I've gotten, that's gonna be a lot easier. You actually got through the hard part. From here on, you got momentum, you got wind in your sails now. You're dangerous, you're dangerous now. And that's really, it's a four or five years of hard fucking work that you have to put in to get into the room, and sometimes it might take 10 even. But man if you do it and you stop watching television and you start adding skills man You become unstoppable. You're on the you could see it right now Like how is your perspective different now than it was five years ago? What's the view like?