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Remyx AI 8

### Human: On episode 1137, Repl.it CEO Amjad Massad explained AI's immediate impact on developers and if it could ever replace them entirely.### Assistant: 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 good things to think about. And you also want to think about how much money you can afford to lose. And 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. And 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 have 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 to 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.

### Human: Yeah. When, when, um, it's interesting because I mean, I've been in so many Twitter feuds and Twitter blow ups and huge viral threads and so on, which I credit with preparing me someone for what came. Yeah. But then when we followed Brian's example at, at base camp and this just blew up and we were trending on Twitter for like about a day when you see sort of just the, the quantity having a quality all of its own when 20,000 people come at you and call you a racist and a white supremacist, you just go like, you know what, this is helpful, actually, in some abstract sense, because you see things more clearly and you see all the patterns because it's all just flowing in and you go like, Wow, this is a mirror. Let me reflect in this. In which way was I one of those people at other instances in my life? When was I piling on? When did I take this kind of thing where I just saw a shred of something and like, you're the worst person in the world, right? And I thought, you know, that's a gift. Sure. It's not that often we're forced to have that mirror right in front of us and go like, do you know what? I could see myself being one of those people. And it's just like, that's ugly. It's ugly in just the sort of the deepest sense of our basis humanity, just go like letting all that out and flowing it through. I don't want to become more of that person. And that's what I felt through my own use of Twitter, right? I'd see whenever my follower count would just shoot up, it always be on the back of some angry threat, right? Although one exemption, partly, which was his latest thing about Bitcoin, which is actually me saying, like, I got it wrong. Here's why I got it wrong. That was one of the rare exceptions that proved the rule that like it's 99% anger and then 1% something else.### Assistant: All right, we'll get to that one in a sec. Because we both had a very similar turnaround, because we both are questioning of crypto. 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So you're getting stoned. And I'm watching this. And I'm saying this is fascinating, because you were the hero of, let's face it, liberal left woke, you know, that group loved you, because you were a champion of work from home champion of reasonable work. We've had this debate, I've said, Hey, listen, you got to work your ass off to win. You said you're wrong, J. Cal. just another way to do it. And Viva La Difference. I think we we came to some great realizations on this. Yeah, you can have a four day a week company be successful, you can have a six day a week company be successful. But they turned on you instantly. Just because you said listen, at our company, we don't want to have people, you know, involved in exactly what we're talking about their worst instincts, bringing it to work, making people feel uncomfortable, and using company platforms to debate political and social issues at this charge time. And you were very clear, if you want to do this on your own, we super support you. I'm talking about these things on my own. You can join me and talking about them over here. Just not on the company servers, just so if there's somebody who's you know, pro Trump, anti Trump, whatever, pro immigration, anti immigration, it doesn't overwhelm our mission at the company, you presented a more reasonable version, anybody would argue that even Brian Armstrong's, which I thought was completely reasonable as well. And yet they still came here and still destroyed you. I thought you did the most reasonable thing possible. You offered like, everybody, if they wanted severance, they can leave, we understand. Here's the most generous thing we could ever do. I think you give people six months or seven to three months.

### Human: Yeah. Um, so I think my answer slightly changed after the Q and a, um, which is, which is interesting.### Assistant: You don't have an answer now. You don't need to have an answer now for it. But I think it is something for you to be thinking about is can the business model, to Kelly's point, that's what venture capitalists are thinking about. So that's why she's asking that is, you know, hey, well, Can this be venture scale? And you know, if people were paying, you know, $10 per person per year, or, you know, so $100 total, that equals 1% of the total amount, if there's $10,000 in there, let's say it's 10 people, 10, iPhone 14s, or 13s, or whatever $1,000 phones. know, is it that much to pay $10 each? Probably not. And it feels like a pretty good business to pay 1% to do it, or they could be a flat rate. It's a really clever idea. And I could see people really like I like the way you're thinking that people could plug in their own, we want to have a democratic process here. You know, and we need 70% of people to agree or we need eight people degree or we need all you know, nine out of 10 people degree or, you know, seven out of the nine who are not involved in it. Or we want to have an adjudication process, or we want to have a process of if it was a very large thing, what is that called when you go to arbitration, you can have arbitration clauses in there. So many creative ideas here. And it's one of these non consensus, crazy ideas that I've never heard. And those are all really interesting to us and to investors as well. And then the only Achilles heel you have is you're not ready to make the jump yet. And so But I appreciate you being honest about that. And that then becomes for us as a firm pressure, Kelly, do we want to take on that risk that it never becomes never has a full time person behind it, when other folks have to full time people behind it, right? So we got to keep an open mind to that. But well done. Okay, everybody, when it comes to the blocking and tackling of running a tech startup, you don't need to reinvent the wheel. We all know that CDNs are a place where startups can really overcomplicate things. Content delivery networks. You've heard this before. If you're in the tech business, you need to understand you don't need custom authentications or custom code. If you're a startup, you just need to check out cash fly. CashFly is a pure play CDN. And CDNs are literally all they do. And they've been doing it for 20 years. They basically created the category. CashFly makes CDN simple, effective and secure. That's what I want you to take from this simple and secure. That's CashFly. Listen, if you're going to go with a CDN from one of the major providers, you're eventually going to outgrow them. So don't burn your startup credits using a CDN at one of the larger players. Nope, just like cashfly handle it for you they're going to help you deliver your content faster than your competitors which means user engagement goes up it doesn't matter if it's videos mobile apps gaming they're going to help you scale faster because that's all they do that's all they focus on so you want the pure play cashfly will save the day twist listeners get 10 terabytes free forever if you sign up at twist.cashfly.com that's t-w-i-t dot c-a-c-h-e-f-l-y dot com to get 10 terabytes for free forever. twist.cashfly.com. I think, you know, this is one of these situations where you have three very different companies, three very different companies, and you can make a case for each pressure, which one is your favorite? And why? Which one do you think we should put 25k into today?

### Human: So tell me a little bit about how this works, like sort of high level, how do drugs get paid for? You know, where do pharmacy benefit managers sit? and what is the role there for people who don't understand any of this?### Assistant: So let's take a step back. Let's kind of compare it to something that we all understand. So let's start at the very beginning. A pharmaceutical manufacturer begins to make a pallet of drugs and they spend an afternoon and there's, let's just say, a pallet sitting on a loading dock. And pharmaceutical manufacturers, these could be brand manufacturers like Pfizer or Merck, or these could be generic manufacturers like Teva. And what they do is they sell to the next step in the pharmacy supply chain. So they sell to what are known as wholesalers. These are companies that you may or may not know by names of McKesson, Cardinal, and AmerisourceBergen. and they buy the inventory from the manufacturers. Their role is the last mile of logistics. Their supply chain logistics is to provide medication to hospital systems as well as pharmacies. They sell to, as I state, pharmacies and hospital systems, and they have a unit price, and they sell through the supply chain. At this point, it makes sense. We could be talking about cans of soda to sneakers at this point, coming from a manufacturer, selling to a retailer, and there's a markup. But this is where everything starts to go haywire in the United States. The next step in the supply chain is where we have insurance. So you have this in the form of carriers, as well as what are known as PBMs, pharmacy benefit managers. And their job is to administrate a benefit on behalf of a payer. A payer could be anything from a municipality to a school system to an employer. It could be the federal government and they're administrating this pharmacy benefit and you would think it would follow the same step. There's a price of a drug. There's some sort of reasonable markup that we see and you get a drug price. But what happens in this last step is unfortunately the way our system has matured over the last 25 years is all the drug prices in the United States magically disappear. So up to this point, everything has been, hey, if I make a pill for a dollar, I'll sell it for $1.05 and they'll sell it to $1.10. And then you think, oh, so I should get it for $1.15, some slight markup in the supply chain. But all the drug prices disappear. And so, this is the problem, is that there are no drug prices because this last step in the supply chain has really been defined by what's called spread pricing. So, the administrators that, you know, these are carriers and PBMs, what they did is they said, rather than charge you a fee to administrate your benefit plan, I'll just take a little bit in the middle. And it sounded reasonable, like, oh, okay. But what happened is they realized that they had a right to steal effectively because there was no limit to what you could charge. How would you ever know? There's no reference. There's no price point for a consumer other than if you could shop around, it's very difficult. There's over 130,000, what we call NBC 11 drug codes. with based upon different package size, different strength. And this is really, really difficult for people to understand relative price. So when you take all the pricing away, and you leave someone in that last step in the supply chain, I'm administrating a benefit, I can suddenly create any price. And this is where everything goes sideways. And I never understood it because I come from pharmaceutical manufacturing. It's where I started my career off for the first eight years of my career. And then I moved over to the payer side, and I thought everything would behave the same way as I described. You make a drug, there's a markup, and you sell down the supply chain, and everyone has a price. And I would read these contracts with the carriers and the PVMs, and I'm like, why are there no drug prices in this agreement? And no one had a good answer for me.

### Human: Yeah, I mean, I think definitely, you know, Leia having like more of a central role earlier on and those characters being more just generally central to it, I think was a big thing that Lucas had. I've never read, like, Duel of the Fates is the other one that they talk about where it was like the Colin Trevorrow version instead of the J.J. Abrams version, which is out there in the world and you can read, which is a very different direction, but it's still the like. The story of those guys. Rey, Kylo Ren, Finn, First Order.### Assistant: Yeah, I believe it is. It's pretty, pretty great. Okay, it's 2022. And digital ads are not what they used to be costs are increasing attribution is less effective. We heard about that on the show. And targeting is more difficult. All of these things are headwinds against marketing spend being effective. This means marketers need to diversify their media mix. And you can do this with out of home o h out of home advertising. Now you're probably thinking, my god, how do I get on giant billboards and these beautiful painted murals? It's also confusing. Well, ad quick solves that problem. These kind of ads offer great reach higher brand recall and have the lowest CPMs cost per thousands of any traditional ad type but buying out of home is super clunky. You got to get on the phone the data is a mess but now there's ad quick AdQuick.com makes it easy to plan by and measure every kind of outdoor advertising like those giant billboards and the painted murals that everybody loves. Well, with AdQuick, you get robust data sets, fast execution, and accurate measurement across every KPI that's important to you. And AdQuick is a global player in the ad space. So here's a great offer $1,000 off your first ad campaign at AdQuick.com slash twist and mentioned twist to get $1,000 off your first campaign. I am thinking about buying stonks now with the market correction. And I've been looking at Disney, I've always wanted to just start building a position in Disney. And this show, I don't like to give stock advice. But I just think if you could execute on this level, so consistently, I just, I think that these characters, they're going to redo, I believe, this is another prediction from Jacob prediction one. And I'm going to play my prediction on this series in a moment. I'll take my little mini victory lap here. we need to always this is the job of the producers. You're judged based on your ability to find my previous predictions that are correct, and feature them. And then any ones that are not correct, go back into the archive and retcon that and just delete them. No, but I believe they're going to do Clone Wars in some fashion. Then, I believe And I watched a video on the what Lucas's actual plans were for the next three. And he gave them the stories for the sequels. Yes, they didn't use them. The leaking now has that this what happened in the sequels, which makes so much sense when you see Obi Wan, and how they treated lead made her the featured character. The person who was going to bring balance, the force was not Luke. The person who was going to bring balance, the force was Leah. Or, by an interpretation, Leia, Luke, then Leia bring balance to the force, because they're twins. This makes much more sense. Twins, balance, you get it? So, here's what happens. The villain was supposedly going to be Darth Maul. And Darth Maul had an apprentice. And then Leia is running the Galactic Senate and trying to get rid of all the pockets of evil. So now it's kind of the reverse. the Star Wars series, the middle series, four, five, and six, they're trying to get rid of the rebels, she's trying to get rid of the evil Empire remnants of the Empire kind of situation, including Darth Maul, who wants to reconstitute it. And then she uses her power to extinguish this and bring the Jedi back Luke becomes the you know, runs his Jedi order with Leia becomes a Jedi, and they produce a whole new crop of Jedi. And we're back to where we were at the start of the Clone Wars. But it's Princess Leia, who is the featured character in that series. But of course, they didn't go with his story. Does that drive with what you've read? That that would be the theme of that?

### Human: For now, there's another takeaway that high-paying jobs are also having more exposure to LLMs and could be heavily impacted. So basically, the most exposed high-paying jobs involve programming and writing, and those are really, really easy for LLMs to replicate. And the least exposed high-paying jobs involve science and critical thinking, and these are harder for LLMs to replicate. So if you're a high-paying VC that invests in life science companies and you need to use critical thinking, your job is safe. So shout out to Dave Friedberg there. In the context of the paper, it defines exposure as, quote, a measure of whether access to GPT or GPT-powered systems would reduce the time required for a human to perform a specific DWA, detailed work activity, or complete a task by at least 50%. And then it included like a chart that the researchers measured how much exposure different job types would likely have to LLMs. And there you can see a bunch of different jobs scroll down all the bottom. You'll even see like search marketing strategists, which would be super helpful for like our team.### Assistant: So really cool chart to look at just so people understand this chart when it says 100%. That means 50% of the job can be done by chat GPT, or another language model. I think what this doesn't understand here where it says like, you know, oh, this one is really exposed accountants, auditors, news analysts, reporters, that doesn't mean the job goes away. just means the job is going to be massively more efficient. And let me tell you something, there's things that journalists should be doing that they're not doing right now, because they don't have enough time to report on stories like calling the sources and checking the facts. Like, you know, maybe doing some analysis. So what this is going to do is it's going to free up time for people to be better at their jobs. So right now you have a large number of journalists who just rewrite stories by other people. They don't do any primary research. They don't call anybody on the phone. They don't ask people for their opinions. They don't have time for analysis. They don't have time to fact check. Well, if the, if GPT four prepares a lot of information for them, and then they just go right into fact checking of what GPT four told it, that seems like a pretty good use of time. And we have it. And now we have an analogy for this, Rachel. People said when the Wikipedia came out, well, that you didn't need journalists, or you didn't need, you know, college students, because they could just go to college students wouldn't be doing anything with our papers, because they go to the page on China, they go to the page on semiconductors, they go to the page on Taiwan, and get all the relevant facts. Well, all chat GPT is doing is doing that faster. It's going to all the relevant facts and giving it back to you. And letting you hit a button that says make this easier to read, make this like it's written for a five year old, make this like it's written for a graduate student, you know, rewrite this, say it in less words, say it more concisely, be more verbose, right? You've seen those tools where you can in notion or other pieces of software, change the copy that's written. Well, a human used to do that. And they used to collect the facts, cut and paste them from Wikipedia, put them into a document and rewrite them. And I had to like tell, you know, inside.com, folks, I don't want you cutting and pasting, rewrite it, you can get the facts from other places, of course, cite the facts, and then rewrite it yourself. Never use the cut and paste function. All right, well, that's over. So what can you do, you can call people on the phone, you can check facts, and you can spend more time doing higher level functions. So let's say you were writing something about uh taiwan semiconductor and the chance of china invasion invading taiwan and what the impact of that would be Well, GPT four, you can't trust for that output right now. But you could trust it to give you the basic copy to set up the story. Well, now you can call 10 people because you have the time, let's say you had 10 hours to write the story, you can go call 10 people for an hour, you know, a half hour each, and then spend five hours doing original reporting. So that's what this is going to do. I don't think people are going to just start laying people off at their company, I think they're going to do better work. So the sales team will be able to do three times as many leads, which means they should be able to sell three times as much. Yeah, that's what's going to happen is wild deficiency. So this study I think is a little bit to use a word catastrophizing.

### Human: Or the boards and previous investors, because they have some input as well, depending on how the board and governance was structured.### Assistant: Yeah. So it's, it's, it's not a pretty picture right now. Um, you know, the, the seed in a, a stage stuff is still pretty strong. We're seeing, seeing a lot of activity there and that market is good, but for the type of company that you're talking about, right. It typically was like they raised their B or their C or even a D, you know, at these really high valuations. And they raised a lot of money during that time. And, you know, what I, what I'm hearing when I sat in on, on the board meetings is, you know, call it maybe even two years ago or a year and a half ago when folks, well, maybe, yeah, maybe about a year and a half ago, when folks started talking about, hey, maybe we need to be a little careful here. Maybe we need to conserve cash. And that became a big topic of every board meeting. What's our runway? How much are we using? How long do we have? Do we, you know, look at sacrifice growth to preserve cash for a little bit longer and really analyzing different types of proposals and trajectories for the company to figure all of that out. A lot of those companies have been able to use the money that they raised in 2021 to kind of just set on the sidelines right now. The later stage market is largely significantly shut down, right? The closer you get to IPO stage, the less deals that are happening. So the crossover stuff is hardly ever happening. The really late stage stuff is also really slowed down, but even doing like a series B and C, even if you're still fairly far away from, you know, an IPO, they're just more difficult to do right now. Investors are looking for more metrics, um, and, and to make sure like, yes, this is, this is going to be it. Um, What is interesting, right, is like by choosing to kind of take a lower growth approach and maybe conserve cash a little bit more, those companies that are about time, like a lot of them looks like maybe later this year are going to have to go out and start raising because they've exhausted, you know, they're about to exhaust the money that they raised in 2020, 2021. And when they do, they may not have, you know, those awesome hockey stick metrics that folks are used to seeing because they purposefully kind of restrained, pulled, tightened things down and pulled back a little bit. So it'll be interesting to see, you know, how the market reacts to that. But that all being said, right, like there's a whole, there's another dynamic here that's really interesting too that we haven't seen in the past when we've had, you know, one of these type of slowdowns and that's There's a lot of dry powder sitting on the sidelines. Right. So like you look at 2020, like biggest funds raised ever. 2021. Oh, we broke those records by investors raising even bigger funds. And guess what? Even though 2022, half of the year was kind of a difficult year. Funds still broke, you know, fundraising records. But that capital is being deployed at a much, much slower clip than it was. So there's a massive amount of dry powder on the sidelines that want to invest. And at the end of the day, like need to invest, like there's usually time bombs on those of, hey, we got to invest by a certain time period. And you've got the companies now that raised and need to come back to the market for their next fundraising. What we're seeing, though, is a big valuation disconnect between the parties. Investors are like, hey, I'm here, I'm ready to write big checks, I'm ready to jump in. But I think your valuation is not quite what it was the last round. Right. And the founders don't necessarily share that view, right?

### Human: Yeah, there's no question that China has positively impacted the art market. So China used to be uh, you know, get these numbers precisely wrong, but I think 10 years ago, China was close to 0% of the art market. Um, today it's roughly 25%. So there has been a huge influx of capital from, from China. Um, you know, it's interesting in terms of COVID. So we, There's a couple of dynamics that we've noticed from COVID. So one is we had a big question going into COVID whether or not our prices would be affected. We had done a bunch of work with Citigroup at the end of 2019 to look at correlation between ART and other asset classes. We concluded the correlation between ART and the S&P, for example, was 0.14, essentially uncorrelated. uncorrelated to almost every other asset class you can imagine. So our hypothesis was that our prices would not be affected. But this is a black swan event, and we didn't really know. So what we've seen now, after the past two weeks have come and gone, auctions have started up again. Two weeks ago, there were 20 artist records set. Prices were higher than they've ever been. Volume did come down. So we obviously saw volume decrease because auctions didn't occur as much in the first half of the year, galleries were closed. So volume came down, but prices are definitely still increasing. The second dynamic that we saw, at least from a Masterworks perspective, is more interest than ever in diversifying away from the stock market. And I think a lot of online investing platforms have seen this, where investors now are finally saying, I have to do something else with my money other than just keep it in the market, and they're looking for other alternatives. So we've seen just a huge influx of investors come to the platform looking for other ways to allocate to alternatives.### Assistant: When we get back from this break, I want to understand how COVID has hit the business, if at all, and also globalization, because I know that real estate was severely impacted on the upside from the Japanese, the Russians, and then the Chinese getting involved. I'm wondering if there's a pattern there as well with the art world when we get back on this week's startups. Listen, you all know LinkedIn jobs is amazing, but I wanted to start today's ad read with an amazing story from one of our founders in the This Week in Startups community. Now, this is a true story. I talked to the fella, and he had an amazing experience. He's a listener of the show. His name is Aaron Mason, and he is the founder and CEO of a company called Emma AI. He's in the AI business. You all know how hard it is to find somebody in the AI space, a lot of competition. Well, He just hired a machine learning engineer. They started this Monday. I'm not kidding you. This is a true story. He received 110 relevant applications, not like drive-by resumes. Not that nonsense. Relevant. Not people who want you to teach them AI and machine learning. People who know how to do it. And he got all those in only four days with a smaller budget than he'd ever used before. And he got so much amazing value from LinkedIn jobs, thanks to our partnership with LinkedIn here on This Week in Startups. And that just makes me feel great because You know what it's like when you're a founder. You're just struggling and struggling and then you find the right person and it's like a rocket ship. And LinkedIn Jobs is that rocket ship. It's the fuel that's going to propel your startup to the next level. Small businesses have very unique needs. You know that. And despite all this uncertainty, you got to get the right people on the bus and then you get the bus going in the right direction. If your business is ready, to take it to the next level. You need that jet fuel to get you to escape velocity. LinkedIn jobs can help by matching your role with qualified candidates so that you find the right person quickly, just like Aaron did. Can you imagine getting 110 qualified candidates in four days? It's magic. It is the most active community of professionals. They've got 690 million right now, so the billion's coming. Let J-Cal give you the $50 off right now. Go to linkedin.com slash twist. linkedin.com slash t w i s t this weekend startups you get it that's our little that's our little code there linkedin.com slash twist to get the pity get your five oh right now $50 off your first job post now terms and conditions do apply because they're giving the 50 bucks so don't play any games get that 50 and solve your problems right now all right let's get back to this amazing episode hey everybody welcome back to this weekend startups i'm your host jason kalacanis you can follow me on twitter at jason And there's a link in my bio where you can click and see all the different things I do. Our guest today is Scott Lynn, and he is Scott Lynn on the Twitter, two T's and L-Y-N-N. And he founded Masterworks, I think two or three years ago. And I'm not sure how many paintings, how many paintings so far have you securitized, sold shares in, ballpark? Yeah, I think we're on 18 or 19 at this point. Fantastic. And before we went to break, I was curious about globalization and the pandemic. These are two huge black swans, I think. We didn't know Russian oligarch money, Chinese money would become such a factor in the real estate market. on the upside and now maybe perhaps the downside in New York and San Francisco, certainly. Is that why the market's gotten so big? Hedge funds and then maybe money from international places? And then what about COVID?

### Human: when we look at it, is this going to be a slow change? Like, I remember when I got my first loft in New York, and it was the 90s. And they had manual elevator operators, they would take you to your floor in this old building. And I remember the, you know, 10 years later, they got rid of them. And they put in automated elevators, elevator operators as a concept took 50 years to kind of deprecate over time. I think there's like a couple left in America. The Hotel Del Coronado in San Diego famously kept their old elevator and their elevator operator because it's charming or whatever ice cutters I think I've been in that hotel. Yeah, maybe I was like an old guy who's in there. It's the one from some like it hot the famous film and it's quite charming, but ice cutters, refrigerators, switchboard operators, you know, operators, generally lamplighters, all this stuff has gone away. But it took time. So when we look at this, does this feel like programmers are going to become 10 times better? And yeah, we'll just get more accomplished in the world? Or does it feel like this is gonna wipe out swaths of jobs really fast? And then what do you think that does societally?### Assistant: I think some things will go fairly quickly in this particular case, not only because the technology exists to do it, but also because the sort of societal attitudes and sort of, oh, this is going away, so we'll make it go away even quicker because we can kind of already see the future. My guess is that some things will happen reasonably quickly. But, you know, it's always the case that things, I don't know, in my life, I've had the good or bad fortune or something to invent a bunch of things that end up being many, many decades ahead of the current time, so to speak. And so then it's maddeningly slow, how quickly, you know, maddeningly slowly things actually get absorbed. I think this one, because of the kind of momentum that exists right now, I think some of it will go quite quickly. Now, you know, what does that mean? you look at the pattern of what's happened in all previous cases, let's say telephone switchboard operators. know, the fact that telephone switchboard operators existed was a consequence of the fact that telephones existed, which was a technological advance. But then automated switching came in, and you didn't need a manual telephone switchboard operator. But what did automated switching do? Well, it enabled basically the telecommunications industry. And that has generated just an immense range of jobs. I think one of the things you see, seems to be the case is that, you know, look at America, in around even 1900 was still... Well, 1850, it was more than half agricultural work. And the pie chart of what people did was very... There's a big wedge of agriculture and then a few other wedges and they were all quite big. If you look at today, it's much more sliced up. The pie is in much smaller pieces. And I think that's a thing that one can expect to see as more automation happens, more things become possible. There are more niches that people can fill, so to speak. And I think that what tends to happen is when one of these steps of automation happens, it enables things that And it then enables more diversity in what people can do. It isn't because people aren't all just pushing, you know, pushing the plow or whatever, for agriculture. It's like, okay, now we've we've got that done. So now let's look at what's possible. I think the thing to realize about fascinating the interplay between AI, automation, humans, you've got a raw AI. It does its neural net thing or whatever else. But if you say to the AI, what is your goal in existence, so to speak? It has no intrinsic answer to that question. We humans think we have an intrinsic answer. Where does that answer come from? It comes from the whole sort of web of history. It comes from our biology, etc., etc., etc. But we are pretty convinced that we have definite goals. We want to do this. We want to do that. Those goals tend to be things that are intrinsically coming from humans. How the goals get achieved, that's where the AIs and automation and so on come in. So what I think you see happening is that when there's a big enablement of things, what becomes important is what can you do with that enablement. We were talking before about use cases for LLMs. It's like, okay, now we have LLMs. Now we've got to figure out which use cases do we care about. And that's sort of an intrinsically human activity. Because there might be lots of you know, an LLM could just go spinning, you know, random words out and so on. And it might, it might, in some weird sort of anthropomorphizing of the thing, it might have a very happy time just spinning random words out. Humans look at it and say, What the heck is that? We don't care about that.

### Human: That's Fionn Technologies. Suds, thanks so much for the time. Where can people find you and track your progress?### Assistant: Yeah. So the short answer would be no. The longer answer is it's and once again, this is not the these different companies faults, right? It's more that normally the people starting it because it's such a niche thing when I described to you what we built or I tell you about the satellite based platform or any of that stuff. It's like that already exists, right? Like why does that not exist? And so it's the smartest tech people who would be the most apt to build this stuff don't even understand that there is a problem there. And so then it's up to the shoulders of these, you know, firefighters who, you know, right out of high school, they got roped into it, or they somebody you know they're working a normal job and then their house burns down they they're like okay what can we do and they start trying to build the software they start building those relationships they you know have to work through the sales process and most importantly even if they're the greatest coder ever they don't have that venture backing right like they they need to be cash flow positive from day one and so it's a lot of the ambition a lot of the ability to make that impact gets stifled from the start whereas for us it was very intentional like From day one, we're going to build this operating system, we're going to make sure that we're doing everything based off of value creation. And we're going to make sure that we're actually having impact, like tangible impact on firefighting from day one. And so the way to do that is you just have to get this in the hands of people and start like working with them and build that trust. And so we're really the only tech company that's in fires, whereas payments processing or a CRM or Uber, right? Like you can spin this up in five seconds and now bank competition. But that doesn't really exist here because there's such a it's such a small space. You need to be able to actually do the distribution. You need to win their trust. You need to like do a lot of things very strategically from day one that a lot of people just unfortunately don't have that ability to do. And with downturn in the market, the way it's going, I don't really see that unless, you know, like the one of the founders of segment, which sold to Twilio for $3 billion. He recently started a wildfire nonprofit, right? Unless people do that, or there's another great app called watch duty founded by several tech industry veterans. They do great work, but they're all nonprofits, because it's fundamentally not considered to be a venture scale business. and so that's really where our job is to like show hey you know we start the software we build it for governments and we go after governments to show everyone hey like we work santa clara county trusts us the u.s forest service trusts us the eldorado hotshots trusts us right like and then we can collect all this data that's never been collected before on the ground and we can use that for And I'm just throwing this out there right like insurance underwriting for example or for more health based stuff or to understand how is it affecting farms or how is fire spreading differently in different areas and we can really start getting that data mode building and we can start like trying to see what we can do with that data as far as. expanding into other industries. And then over time, if we're truly like this operating system, then it makes sense to open up our platform to third party data and analytics vendors, almost like a Bloomberg terminal. And so that way, our platform gets even better. And you know, we're forcing that standardization across the area, across the industry, which then allows for developers to come in, or allows for people across a variety of different spaces, who are good at one certain thing to really share that with the Firespace. And so we look at it as like, we're building this distribution platform off of which everybody else can come stand on.

### Human: So when all that discipline went out, and we saw in your salary market, we're like pretty standard million dollar packages.### Assistant: standard was getting engineers, you know, out of control, out of control. And now, what people are realizing is, now that the top line is not going up, then the hedge funds or you know, the the retirement funds, people who mutual funds who want to own stocks that grow are saying, you know what, these stocks are not going to grow, they don't have discipline, they're not throwing off dividends, they're not throwing off profits, they're not buying back the shares. there are other options for us. So we went from the number one option, the safe option by tech to a safe option, I'm going to buy some energy, I'm going to buy some dividend stocks, I'm going to buy, you know, whatever it is. And so now the tech industry is going to have to prove it to Wall Street, that their stocks are worth buying. If you're a startup, you need to sign up for notion. notion is my favorite product of the last year. Why do I love notion? Well, I had to make a new system to track all the companies we meet with here at launch launches my investment company, we meet 60 to 70 new companies per week, we put them into a database, I looked at all the SAS software out there, there were people who wanted to charge me, I kid you not 50 100 $250,000 a year. So I said, You know what, I'll just make my own software, a higher developer. Okay, what's the number? 150, 250 a year, even if I went outsourced and I used another country, and it would take me a year to make the product that I want. But we were using Notion, and Notion has databases, and they have these beautiful documents, and they have tables, and all the things I needed. So we made the database of all the companies we meet with. And what we found was we could, with a no-code solution like Notion, and using some other software that connects it by API to the other programs we use, we can make Chef's Kiss, the perfect customized system for ourselves. And we did it. Within six weeks, I had the system up and running. And in the six weeks after that, we perfected it. I think this product is taking over the world. I'll be totally honest. I'm like reading an ad for it right now, but consider this a testimonial. Not all work collaboration tools are created equal. Some, they're gonna help you organize your company's information. Other, well, maybe they'll help you manage some projects. Notion does both. It's one tool for your whole team, and it's so beautifully designed, everyone will want to use it. Stop having 50 tabs open in your browser. Just sign up for Notion today, learn more, and get started for free right now at notion.com. They have the .com. And so when I saw this happen, Molly, I said to myself, I we had a car you and I on this podcast had a conversation. I don't know if you remember this one. But I said would not the logical thing for meta to do in a situation where nobody believes you cut some stuff, buy back your stock, cut the r&d spending a bit and then watch the stock go back up because you're buying it on the cheap and I had owned Facebook shares from I was an LP in a fund that had one of their companies get acquired by Facebook, I sat on a nice chunk of that Facebook shares, I wrote it from 7060 or 70 bucks when I got the distribution from this venture fund, all the way to 115. And I sold it. Reason I sold it Molly was because I just didn't like Zack and his impact. Then I became a J trader. And I said, I want to learn about public equity investment. You came on that journey with me and watched me lose 15% of my money in three months.

### Human: Yeah, so we try to be less of a gating function and more of a training function, if that makes sense. So we train our entrepreneurs on how to fundraise, and then we give them tools to fundraise, but we don't force them all to do the demo day, for instance. I generally like to build products that are valuable because people opt into them because they're valuable, not because you're kind of holding their feet to the fire and telling them they'll be blacklisted from the community if they don't do something. I think that's just absolutely not sustainable.### Assistant: So one is okay. Two or three, great, you have some sounding boards, but probably four or five is not the right number. When we get back from this break, I want to know about how do you make that decision to invest or not to invest in the companies coming out of StartX when we get back on this week in StartX. 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 gonna get sued and you wanna 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 um directors and you can't get great offices for your company if you don't have this e and o insurance stands for errors and omissions really important to have especially in editorial and other um services and any big customer you have using your product is going to want you to have you know 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 going to sue you. And there's plenty of attorneys out there who want to 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 want to get that EPL, you want to get that E and O, you want to get the D and O, and you want to 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 percent 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, Cameron Tittleman is back with us. He is the founder, chairman, head of emissions at StartX. And he started it when he was 20 years old at Stanford. He is a force of nature. I was so impressed when I met you back when, when you invited me to come meet the company. So impressed with the companies, obviously. How do VCs and investors look at your program? Are they really tightly in touch with you, trying to get the inside information on which ones you personally think are strong, or are they trying to get an edge on each other, or do they sit back and wait now for the companies to get past the angel stage? I'm curious.

### Human: But like, other than that car project, is Apple doing a single thing that's not profitable? No, they're super profitable. Like I'm sort of just like, if you don't have there's like, there's the like peer pressure factor.### Assistant: That's the contagion part and Wall Street expects it. So I guess the question would be if the stock is not rising, then that would be the reason. So I think Amazon stock has been getting clobbered. And this will be an effort to make the stock rebound to show Wall Street, hey, we take austerity measures in the bottom line because the bottom line is contracting a bit. So if growth is slow, but I think everybody's now scared of this double dip recession because we did have 2.6% growth in the third quarter. I think everybody expects negative growth the next two quarters. I just don't understand how we're going to have a recession if there's 10 million job openings. I'll tell you a story, an anecdote, if I, if I can, Molly dot-com bust happened and there was a really cool digital magazine about digital filmmaking in the nineties and, uh, some blogs in this company and my friend's company. And there was somebody who was like the art director and I was going out with my then, uh, fiancee, uh, now wife, mother of my three beautiful daughters. And we went out for Thai food and, uh, the server comes up and I look up and I say, Hey, oh, I'm going to just make up a name here. Jane. She looks at me and it's the art director from this company. And she looks at me and she said, oh, Jason, Jade, how are you doing? I'm so ashamed that you're seeing me as a server. I lost my job at this, you know, .com. And I looked at her, I said, I was a waiter from the age of 10 years old to 22 when I started the magazine. Uh, don't be ashamed about being a service, like good work. You can get it. And she, she like got cheered up. I stood up and gave her a hug. And that's the humanity that's happening right now is I think there's going to be a lot of people. I wonder if that's what's going to happen right now. That's what I can't figure out. There's 10 million jobs, Molly. Are people going to have jobs? Are they going to take six months off and do like little staycations with their six month severance? Or they make the six month severance last for two years by, you know, making austerity cuts as an individual. So yeah. right now, every potential new hire can feel like a high stakes wager for your small business, your runway might be a little tighter right now, right? And fundraising, certainly that's a little bit harder. So you want to be 100% certain that you have access to the most qualified candidates available. That's why you have to use LinkedIn jobs. LinkedIn jobs helps you find the right people for your team faster and for free. Then you add your job to LinkedIn, and you get that purple hiring frame to your LinkedIn profile. that spreads the word that you're hiring. So your network sees the purple rig. What a great innovation over at LinkedIn jobs. We love all the easy to use tools that LinkedIn gives us. That's what we do our hiring, like screening questions, screening questions, they filter out the non serious candidate. And it's really that simple. LinkedIn is where the most qualified people are. And that's where you're gonna find your next great hire just like I do. And so go find amazing talented candidates today. And you'll understand immediately when you get to LinkedIn jobs why they are rated number one in delivering quality hires versus leading competitors. LinkedIn jobs helps you find the qualified candidates you want to talk to. And they help you do it faster post your job for free. That's right for free linkedin.com slash twist. That's linkedin.com slash twist to post your job for free terms and conditions apply because they're giving you something for free. It's very hard to understand this recession. I agree.

### Human: Yeah. So I argue that you should... Giving pro rata, you should only... You should only ever agree to giving pro rata if you're forced to. In best case scenario, no one should ever have pro rata. But basically, you should, as a founder, you should have... You should always have some amount of the allocation of the next round. Usually, I would argue 10% or more that you get to allocate however you want to whoever's most useful and most helpful to you, the company. And I see this all the time where a new VC will come in and they'll say, no, no extra allocation for any of the existing investors. And when that happens, I send them an email. I'm like, look, I've done this amount of work for this company. I brought in this director of engineering. I brought in this salesperson. And from now on, I'm done. I am no longer working for this business and you will get no more help from me. And by the way, I'm never going to send you another deal again. And so you're taking You take a wartime stance. Oh yeah. Yeah. Like when you do that to me. Me too. Same here. Like if you cut me out of the room. You're dead to me. That I've been in from the beginning. Like. Let's go. I'm, I'm, you're dead to me and we're done. Sword's out. Let's go. And by the way, this company, I, I, I make sure the founders on the email, like, like, I love you, but like, I no longer have an incentive to keep investing in the business, my time and energy, if I don't get to keep investing my capital. And so you... And I think every founder should have the ability to reward the useful angels. And if you're free riding, if you're an angel and you come on board, you write a check and then you just... You're done. You're not helping at all. Well, you shouldn't get any more allocation. So I don't think it should be contractual prorata. I think it should be rewarded prorata. Earned.### Assistant: Earned prorata. I like I like your approach. I think as a founder, that's in your best interest. And for me, as an investor, I take a very simple approach. We own over 5%, we get a board observer seat, we have pro rata, we own over 10%, we get a full board seat. That's basically where I've wound up with what I think is fair. And I make it an option. I'm unique as a early stage investor, I know my value. I know I can bring value to people. And then every time I've had this come up where somebody tries to take away our board right or whatever, or take away our prorata, I just get on the phone with them. In fact, I'm doing one of these calls today or tomorrow, where some new investor, you know, they're putting in 10%, we own 9% or 11%. And they're like, yeah, we don't want them on the board. You know, whatever, no prorata for them. And then I just talk to them. And I say exactly what you just discussed. hey, and I and I tell the founders this, I actually give the founders a preemptive discussion about this, hey, know this, when we get to the next round, somebody might try to screw us. If they screw us, there's only one person left to screw. That's you, the founder. We are in this together. We're always going to have your back. So therefore, when people come to screw us, you should fight for us. Because having us on your board, having us as a major shareholder means we're going to fight for you. And then every subsequent investor should be joining that philosophy, we fight for each other. So this the seed round lead, and the series a fight together to find a series B, who respects the series A and the CEO. And then we all build consensus. And I got to tell you, one of the beautiful things is looking at density or other wins calm, everybody has been respectful. And you know, we you're able to have this great board dynamic where the seed investor, the Series A, the Series B, and then people like, Oh, we don't want to have too big of a board. The lawyers come up with all these, and the Series A people come up with all these, you know, rules. And it's like, A board can be seven, it can be five doesn't matter. But a board of five, where it's three from the series A or two from the series A, you know, is not as good actually, as one from the series A one from the seed. I would argue the seed investors who've been with the company longer, might have a lot to add here. So therefore, like everybody chill out and think about the value. I love your framing. It's great framing who's providing value and give them the reward. And you know, the no free rides is great. Now if you're an angel on the other side of the table, If you're not a major investor, you can try to get your within your right to ask for pro rata. But if you're under 5% or 10% of the round, should you really get it? Well, you know, I like when they get it. But yeah, you know, I understand that they they really don't have the standing. And then just have the debate on what a major investor is the major investor rights, you know, generally start at 25% of the round. So it was a million dollar on 250. If it's a $2 million around 500 seems reasonable to me, a 250 k checks a lot of money. So maybe it's 100k, maybe it's 250k. I think you really should, you know, negotiate that in good faith. And I love your approach that anything to add to that.

### Human: Yeah. And now people are publishing so many lists. Michael Siebel and Y Combinator published their directory of black founders. And I mean, on the Opportunity Fund site, we have the 20 companies we've invested in. I mean, if anybody wants to meet more black founders, I introduce you to the ones that we've invested in across different funds. But what I love about it, Jason, if you look at the portfolios, they're not solving like black problems or just black problems or just Latino problems. Like they're solving just really some of the most meaningful problems that exist. And if I didn't show you the founder, you would never know, right? A company called Carbis, this professor out of Georgia Tech that came up with a nano compound to make heat sinks more efficient. And like now it's his compound is on space shuttles and he just raised $15 million, right? Or someone like like Vitable that's doing video healthcare to make more affordable healthcare. There's all these problems that are just fundamental human problems that exist. And there are some companies that are solving problems that are more specific to minority communities. So like Maven is solving the problem around hair extensions or the guys at Squire are solving the problem around barbershops. But there's so many that are just solving problems that are human problems and markets that are gigantic. And so sometimes people are looking for black founders because they're only looking in one place, right? Right.### Assistant: 2021 is looking up. Tons of new beginnings, lots of hope. It's going to be a great year and hopefully great opportunities for you to grow your business. But If you're going to grow your business, you're going to need incredibly talented people to do as a founder, what maybe you're not great at, or you don't have time to do anymore. You need to build your team. You're only going to be as successful as the team that builds your products, interfaces with your customers, and builds the culture of your company. And LinkedIn Jobs finds the right person quickly to fill your positions. And we are going to give you your first job posting free right now. you go to linkedin.com slash angel linkedin.com slash a n g e l angel very easy to remember hiring is super important i'm doing it here at launch just hired a second producer for this week in startups hiring a community manager we hired another support executive for the syndicate we are booming over here And we do all of this by going to LinkedIn jobs. 722 million members worldwide mean business. They keep their profiles up to date on LinkedIn for a reason. They're looking for opportunities and you can post your job with all those great screening questions. And LinkedIn is going to get your role, that position in front of the right people with the soft skills, the hard skills, and all the things you need. The thing I've been blown away with is the quality of the candidates. Very simple linkedin.com slash angel linkedin.com slash angel and terms and conditions apply because they're giving you that free first job posting. Thank you LinkedIn for supporting the show. It's also very interesting. I'll, you know, I can tell you from my side, you know, just watching other white venture capitalists and you know, I'm a seed investor. So I get there earlier and we made a real effort as you know, cause you speak at all our events, you know, doing founder university specifically for underrepresented people doing it specifically for women. And we just changed the ratio of people we were funding. It happened like I think we did it in two years, like just Jackie on my team, doing these underrepresented founder founder universities, a two day event. And these downstream investors from us were like, Where are you finding all the black women to invest in? Like, literally, somebody said that to me, like, Can you introduce me to black women? Because I have never invested in a black woman. I've done 47 investments. And this is what person said to me, I'm just terrified that somebody is going to see my statistics at some point, and realize I've only invested in two women, they were both white women, you know, and I've never invested in a black founder. I mean, it was like a CTO on one team. And there was just abject fear the last two or three years from some people who just didn't have any diversity. And I said, Well, have you actually talked about it or engaged people of color? Have you actually met them where they are? And they were like, No, how do you do that? I was like, you talk to people. They're just like, Oh, is that how you do it? Like, is this not completely obvious to you? Like, why are you not just anytime a black founder, if you have not invested in a black founder yet, anytime a black founder emails you just meet with them. cost you nothing. And then just be as helpful as you can be. And the ratio will change. But if you're not putting any effort into it, you think it's just magically going to change that you're going to have some 19 year old black founders come to you and drop out of Harvard with their idea for a SaaS company, and they're just going to call you like some white guy on Santo Road, it's just not going to happen. It's that's not realistic. Do a little bit of work, right?

### Human: I mean, I think, yeah, countless, too many to tell.### Assistant: Yes. And so that makes total sense. And I would think police would not be giving that kind of information over the open radio knowing that in this edge case, a terrorist organization would be or, you know, professional bank robbers, or a professional mass shooter would have thought out, hey, I'm going to get a scan. And when we get back from this quick break, I want to know examples of the data leading to better policing or better government policy. When we get back on this week in startups. Wish you were in on some of those early and best performing IPOs of 2019 and 2020. I bet you do. Well, with our crowd, accredited investors have access to invest directly, easily, and most importantly, early in private companies. Our crowd investments have IPO companies like beyond meat, and they've been bought by companies like Intel, Microsoft and Oracle. Our crowd's investment professionals leverage their extensive networks to review some of the most promising private companies and startups in the world. If you're an accredited investor, you can join our crowd for free at O-U-R-C-R-O-W-D dot com slash twist and review their current deals with no payment involved until you decide to invest. In other words, you can read about the deals for free. And as you review your deals, you'll have access to our crowd's investor relations team, who you can directly access to talk about your personal investment goals. Yes, they want you to have success. The investment team at our crowd has already invested hundreds of millions of dollars in over 200 companies with dozens of exits already. So here is your call to action. Today, you could join our crowd's investment in MEMIC, M-E-M-I-C. which is a much-needed innovation in the rapidly growing multi-billion dollar robotic surgery market. Sounds fascinating, huh? MEMIC's tiny robotic tools allow surgeons to be less invasive and safely perform gynecological surgeries so women heal faster and have less scarring. You can get in early on MEMIC and other unique opportunities at rcrowd.com slash twist. If you're accredited and interested in investing, you need to join our crowd today. So go ahead and get in there and read those deal memos and pick some great companies. Thanks again to our crowd for supporting independent media like this week in startups. Let's get back to this amazing episode. All right, welcome back to this week in startups. It's our next unicorn series. We did 10 great companies. You may remember Caffeine, Ghost, Loom, Degreed, Zero Mass Water, Cockroach Labs, Roofstock. homebound, and of course, in Citro. What a great season of The Next Unicorns we had. And today, I'm really excited to finally have citizen.com. It's an app. You can download it now if you haven't already. It's a really important thing for you to have on your phone to know what crime is going on around you from public data sources that have been normalized by Andrew and his team. Andrew, I'm curious, when you start normalizing this data and you see the statistics on it, Do those statistics and patterns then lead to better policing and or the relationship between the community and the police? And do you have like an example of that where, hey, there were a lot of burglaries occurring, people found out about the burglaries, people took steps to lock their garages. I know we've had a massive amount of property crime here in San Francisco. And when I lived in the Cow Hollow Park Heights area, there were gangs, literal coordinated gangs going through and using garage scanners to like, randomly open up garages, and people were having three or four garages hit in, you know, four or five in the morning. And that led to people bolting their garages set so that the garage door opener scanners wouldn't do this. I'm curious if this type of thing you've gotten reports back of, hey, this really helped us with policing.

### Human: I'm just saying that was the last time you were saying greatest entertainer. So I'm just wondering what the, what the stack up is there.### Assistant: Like literally on the Mount Rushmore, like watching a Lady Gaga show and then watching Chappelle in a room of 70 people, Molly hold court and just interact with the audience. Hey, what do you do? Oh yeah. Girlfriend. I mean, that kind of stuff. And then he's like, he's talking to people because he started part of his career was here in the Bay Area. He knows the names of the waitresses, the bartender, security, the DJ, he's chopping it up with them. He's like, remember the joke I told 22 years ago in Oakland when we worked at that club, the guy's like, Oh, I got it. And he plays a sound effect. And then Chappelle tells a joke for 20 years ago tells the history of the joke. It was Unbelievable. So anyway, I just like to say, Jesus Christ, I'm grateful for my life. Because not only that, right answer. Yeah. 20 different people are stopping me. Oh, I love this week in startups. I'm a founder. Oh, all in this and that. Oh, I came to the launch festival. just wonderful to have like a minor amount of recognition for our work and some of the other work I've done in my life for people of importance in the world, uh, who are doing great things as well. And so just really wonderful evening out on the town. And, uh, so shout out to everybody involved, leave it at that. Okay, everybody, it's time the NFL playoffs are almost here. And I'm so excited only a few more weeks of regular season football. That means right now is the perfect time for you to download FanDuel. That's America's number one sports book. Check it out right now FanDuel is giving customers a no sweat first bet of up to $1,000. That's right up to $1,000 in free bets back If your first bet doesn't win, just sign up with my promo code TWISTTWIST and FanDuel is the best place to bet. And you know why that is, right? They have all your favorite bets from point spreads to parlays and even my favorite player props. I love focusing in on my favorite players. Makes the game more exciting. I get a sweat. The app is safe. It's secure. It's super easy to use. And of course, you're going to get your winnings paid out fast, which is what we all want. Here are some current NBA MVP odds, because this is one I like to make a bet on. I like a wager. Right now, top three MVP betting favorites are Jason Tatum, Giannis, and Luka. They're all sitting at plus 300. But you know who I got? I got my guy Steph Curry. He's at plus 1000 right now. That means you can bet a hundy to win 1000. So that's it. That's my bet. Sign up today with the promo code twist for your no sweat first bet. Make every moment mean more this season with fan duel, the official sports book partner of the NFL. That's right. But so much news over the weekend. You and I we're just chatting and chatting. And I feel like there's a cultural moment going on in our industry. So as much as Chappelle is trying to navigate that, I realized what we're doing here is important work, because we have to navigate some very dicey cultural issues. But we're all humans. And humans share a lot in common. And we fight over little marginal things. But the truth is, we all want to wake up in the morning, do good work, see our families, have a laugh. And so the work here is important, because we can help people navigate it. So let's talk about the absolute cultural war and disastrous, violent, insane, deranged culture war in technology. Welcome to the show, everybody.

### Human: Okay, or and I'm encountering a new archetype that kind of like the pissed off founder, like the one who's like, if I I know what I want to build and if you would give me the money, I would build it. Yeah, that's it. That is a delusion. It's also what I call my son, right? Like, I'm like, are you fifteen? I mean, bless. I understand that they feel like they're in a mobius strip, right? Like, I could do this but I don't have the money and you won't give me the money until I do it and I'm like, yeah, I need you to do it.### Assistant: A super naive like approach which is like, I would like to be different than everybody else and what it assumes is like, we can read their destiny. Yeah, if you were Luke Skywalker, or Obi Wan Kenobi, or Qui-Gon Jinn or whatever Jedi, we would sense the metachlorian and know that you'll be a great Jedi and just give you the lightsaber and you don't have to train. It's like you don't get the lightsaber day one. Yeah, you know, like you have to pick up some rocks, you got to try to levitate some stuff, you have to feel the force, like, it's going to be a process here. That's why accelerators exist. That's why going to your friends and family and asking them for the first 50 or 100 k So like you really have skin in the game, or maybe you work halftime, and you work on this with sweat equity. But in a hot market, sweat equity, friends and family goes away. Now that we're going into a recession, you're going to see a level of resolute you know, dogged founders who either work as a consultant three days a week, you know, 3040 hours a week, and then work on their startup 5060 hours a week, and they're putting 100 hours in. And that will be the one you're like, wow, they're still doing three days a week consulting for Facebook, you know, doing 30 hours of coding for them and And they're doing their startup the other four days a week, right? For me, when I meet them, I'm like, Okay, yeah, let's, let's stop the consulting, I'll give you the money to get you those other three days a week back, take one or two of them off. And then let's put, you know, get you on your startup, you know, 60 hours a week instead of whatever. And so, yeah, that's what pre seed is. And it's basically a way to say, I don't want to do any work. I want to get money. I don't want to ask around your friends and family. I don't want to do the accelerator or anybody's accelerator. I just want to skip the line so to speak. I want to skip the training. I don't want to stretch. I don't want to do the weights. Just put me in the game coach. I want to be a starter. And now a word from our sponsor, Better Health. Listen, the startup crime can be really overwhelming. We all know that. And a ton of people in our industry are dealing with burnout. And you know what? Some of them might not even know they're dealing with burnout. But you know the symptoms. You see it. You're on Zoom. Somebody is fatigued. They have a lack of motivation. Maybe they're irritable. It's the worst, right? And we associate burnout with work. But that's not the only cause. You ever try to raise kids while running a startup? Trust me, it's not easy. I'm sitting here, I'm working so many days, and everything starts to blend when you're a remote worker, you don't get to see people, maybe you're not out as much. Well, BetterHelp Online Therapy wants to remind you to prioritize yourself. talking with someone can help you figure out what's causing stress in your life. Better help is customized online therapy that offers video phone and even live chat sessions with your therapist. So you don't even need to have your camera on if you don't want to. And better help is much more affordable than in person therapy. And you can be matched with a therapist in under 48 hours. So here's the call to action. It's very simple twist listeners can get 10% off their first month at better help.com slash twist. That's better he lp.com slash twist.

### Human: Okay. And then explain the talk to me about the innovations that were being worked on there.### Assistant: Yeah. I mean, what I'll say is that I kind of mentioned historically the way the field has developed and I can maybe take things back in history a little bit further just to give some context. So, you know, the origin in a way which just to give some deep perspective is, you know, the 20th century was when biology really discovered the electrical nature of communication in the nervous system. And that's what we were talking about earlier. And the way that scientists and doctors interrogated the brain and nervous system was with electrodes. And an electrode is just a device sometimes it is a wire, sometimes it is another kind of conductive material that allows you to either touch or come in close proximity with the part of the nervous system, could be the brain, could be a peripheral nerve, could be a spinal cord that's generating electrical signals. And up until the late 20th century, there was no real standardized manufacturing process for manufacturing those electrodes. And neither was there a really standardized way of processing the signals. And so it's not like in audio engineering, you know, there was a, there was a whole industry that standardizes the manufacture of microphones and, you know, equipment for amplifying and processing sound and filtering it and recording it, you know, there are standards and, and known equipment that you can buy that didn't really exist. very much until the late 20th century. And what did exist was relatively large scale devices. And let's say on the scale of fractions of a millimeter, okay? So, that's large in neuroscience. Lots of human hairs, yeah. A ponytail. So, when I say large, it's still relative. And then in the late 80s, early 90s, what I think was really a turning point for neuroscience and for what became the field of brain-computer interfaces was the development of a device called the, what's now called the Utah electrode array. And that was a micro array of tiny little electrodes spaced at a fraction of a millimeter from a part, approximately 100 of them. And they were made using the same manufacturing process, same microfabrication process that is used to manufacture microchips. Okay, so you could make this electrode array of 96 or 100 electrodes, you could make many of them, they would all be exactly the same. And you could, you could give them to researchers to use, and everyone would be recording using a standardized microfabricated device. And looking back on it, I think that was the moment when Moore's law arrived in neuroscience. Wow. And remind us, I'm sorry, what year this was? The late 80s, early 90s was when Richard Norman developed the Utah Electrode Array. Got it. So then you had the chip. Well, that was the beginning. It doesn't happen all of a sudden like that. But you went from artisanal manufacturer of electrodes to a standardized microfabricated manufacturing technique, and one that allowed high performance microelectronics to interface with the electrodes themselves. And, you know, we are all familiar with the, you know, the kind of concept of Moore's law, the notion that some scaling property could be applied to the technology. And the scalability of microelectronics is what is one aspect of what has powered the the revolution in computing that began in the last century and continues today. That scaling paradigm is essential, and the ability to connect the electronics to the end effector was essential. So that only arrived in neuroscience in basically, let's say 1990. And that paradigm was pushed, you know, into the early 2000s. Remember that, you know, high-performance computing, as we think about it today, the kind of things that enable modern artificial intelligence applications that didn't exist until the mid-2010s. So things that we kind of take for granted, high-performance computing applications that we take for granted, even in things like image processing, you know, did not exist at that time.

### Human: Do you remember those planes? I forgot what they were called. They were like, single, dual pilot plane, they were flying out of Napa, or I went with a YPO group to Napa, it was five years ago, and they had these, they took us to the factory, they were making these like single pilot planes, you can go in and fly them yourself.### Assistant: I the thing that made me crazy about it, you didn't hear my little rant on Friday, but I tried to make the point to people, especially because you and I will know people who will go from having no money to suddenly having a lot right, like professional athletes go through this founders of companies go through this investors go through this, where sometimes you just hit some crazy home run and you can try a bunch of different things in the world that may not have been available to you the very previous day. And you got to be thoughtful about this. And I think there's like, I was thinking about it over the weekend. So a number of conversations about this. This toxic wealth syndrome, where people take increasingly risky behaviors, I think a lot of it has to do with chasing dopamine and chasing Instagram photos and status. some combination of this. And this chasing of dopamine is particularly dangerous. You know, if you look at people's tik tok behavior, they're literally getting the funniest moment in a Sopranos episode or the craziest moment in a horror film, the craziest, whatever, sexiest most dopamine releasing moment. And people are chasing dopamine, and they're chasing status on social media, and people taking selfies on cranes, right, or climbing mountains without ropes. All this behavior is starting to become like some dystopian science fiction film. I think demolition man was the one where they were involved in like a game show? No, Running Man was the game show. Running Man where Arnold Schwarzenegger is doing all this crazy stuff to kind of, you know, reduce, I think, his sentence. And I think we're in like a Running Man era of people are like, Oh, I can go on to, you know, Nassar or whatever and get $1,000 gold stake and it's a show and I put it on my Instagram. Great. Nobody's harmed, no harm, no foul. Oh, I can go on the edge of the Grand Canyon. Oh, I can hop the fence. Oh, I can with the tiger on the other side of the fence, like people are doing increasingly stupid things to get some dopamine hit, or some release on Instagram. This is not a way to live life. And then the pinnacle of this, I don't know if you saw this Vinny was this is so tragic. A bunch of kids were on a boat celebrating their graduation. And they're going I think they went to Florida to the Caribbean. And they dared this kid to jump in the water. In the middle of the night. on the Caribbean in shark infested waters. He jumps in, turn up their sharks in there. He, he basically, they see the kid like dart away. I think he saw the shark and he darted away and there was no way to get him. He went out into the undercurrents of the sea, probably eaten by sharks. And I had this discussion with my 13 year old. And I was like, this is why you don't make crazy decisions. And you have parents because your frontal lobes are not fully formed yet. Hmm. the love of God, teach your kids, show them these videos of kids doing stupid stuff that ends terror terribly, show them them so that they can understand life is precious and don't do stupid things. And as adults, you supposed to protect your kids. And I you know, listen, I don't want to speak ill of the dead here. But if you're a parent, and you take your child on a submersible experimental anything that's dangerous, And then they put, hey, this is an incredibly high risk behavior. And then you put the word experimental in front of it. No, I'm not taking my kids heliskiing. I'm not taking them down to the Titanic. And if you put the word experimental heliskiing, or experimental and Titanic together, that should just be alarm bells going off, protect your child, protect your children.

### Human: Absolutely and I think as a founder the temptation is there when you watch like the WeWork documentary and you see these success stories that these companies are raising based on being very generous with their projection and in facts and data but I think the lawyer in me the litmus test is this if you present an information that is in any way not completely accurate and an investor may make a decision whether or not to invest based on that information better make sure that that information is very factual otherwise it's gonna it may come back and bite you in the biggest way but also this industry or tech is about integrity and I think anyone optimizing for short-term round or whatever else it may be is not looking at things perhaps correctly### Assistant: It's a great question. I am very serious about this now because I've had two companies get investigated one by the SEC one by a local jurisdiction, because investors complained. And in one case, it was because they had people listed on their website who no longer worked at the company. Now the charitable and they had also had I believe the other claim in this instance was they had people listed as partners who actually weren't in an active partnership or customer relationship. They might have had talks with them. So in both of those cases, you could say charitably, well, they met with the company. So they were in partnership discussions, I guess. But it would be better to separate those out and have one slide. These are paying customers to these are customers who are unpaid on a trial. And then these are ones we're having a discussion with. It costs nothing, nothing to be a little more clear. And then second, you know, okay, you're you didn't update your team page? Well, if it was one out of 10 people, that's one thing, but if it's three out of five, okay, now it's something radically different. You know, 60% versus 10%. And is it, you know, the CFO, and the chief product officer and the chief marketing officer are no longer at the company? Or is it an intern is no longer coming? It's a very big swing, right? And so I think If you are saying, I project that we're going to 10x the number of customers, and here's the technique we're going to use. It's very clear, you're it's a projection, you put that word in there. If you're talking about reality, just be super clear. And what I always tell them is, The opportunity to invest in this company at this valuation, which is a lower valuation is because you have not solved these problems yet. You don't have a CFO yet, you don't have a lighthouse customer, you only have seven paying customers. You know, that's why the valuations five or 15 million. If you had 70 customers, the valuation might be 40 million. So just own it. And I really beg of founders to never ever do anything other than tell the truth and be as candid and as honest as possible. Because investors understand the reality of performance versus valuation in a matrix. The more performance there is, if you're investing in Netflix in year 15, that's very different than investing in Netflix in week 15, or month 15. So or quarter 15, as it were, all of those are going to be different profiles of performance and just own it. But I would say I have, I would say one out of five when I am looking to invest. I would say maybe half of them actually, when I'm have yet to invest, I feel are massaging or outright not being upfront about the reality. And I have to tease it out of them. And then what I train them in my accelerator, or when reading their monthly updates is to just be super clear. I'll give you an example. Somebody was doing their using annual reoccurring revenue. ARR. And but they weren't a subscription service, they were a one time service. So I said, Well, you really can't take, you know, December's revenue and times it by 12. And like, well, that would be my annual run rate. And I was like, Okay, then say and explicitly say annual run rate, I've times each month by 12. instead of making it look like you're, they were making it look like their $10,000 a month was $120,000 a month, because they put December 120,000. You know, there are like little moments like that, that can be explained away. But what I tell people is the second you have to explain something, you failed in your mission as the CEO to be 100% clear.

### Human: Okay. I know, I can't wait to hear the analysis of that part of it. So Zendesk has agreed to be acquired by an investor group in an all cash transaction valuing it at about $10.2 billion. And desk, of course, is that customer service, customer experience software company, and notably turned down a similar acquisition earlier this year, that would have been a $17 billion acquisition.### Assistant: Yeah. And so now they're going to get acquired. And what this shows is so just to pause for a second, being a public company, you have this incredible benefit, you can freely trade the shares, your employees can benefit from those freely trading people join your company, they get RSUs, restricted stock units, they get to participate, the public has this great interest, you know, everybody gets to buy your shares. When you're private, only a small group of people get to buy your shares. And you don't change the price, you know, you know, whatever number of days a year 250 days a year. So there seems to be like this incredible benefit to being public, until the public markets values you so poorly, Molly, that a private player says, you know what, I'm gonna take this huge pile of cash I have here, this company is so undervalued, that I'll just take it off the market, clean it up, fix it, optimize it privately, and then put it back on the market. So this always was confusing to me when I was younger. Like, why are these companies going public and private and then public again? And then who are these people taking them private? And what happens is, people are studying the market, they look for an asset that they think is dramatically undervalued, that they can put effort into optimizing and make turn into a money printing machine, and then eventually have another exit. So this is to me, a really good sign of bouncing along the bottom, my prediction has been three to five quarter recession like environment, everybody knows a recession to sequential quarters of negative GDP, we had one who knows what you two is gonna look like, maybe it will be flat. But essentially, we know this is going to be a down market, I predict three to five quarters, which means sometime in the first quarter of next year, in all likelihood, we would start to see things, you know, maybe not spike or surge, but at least feel like we're in a growing economy. Again, as we work out all this stuff, this to me is like an early sign of that. So early signs I've been telling people pay cuts at companies. So we seen the layoffs we've seen hiring freezes, we saw hiring freezes layoffs, then rescinding offers, right. And remember, each one of those feels like a little more gnarly, like, Oh, my God, you just rescinded an offer, the person quit their job, they're coming like, that feels really bad. How about you show up for work in the bus, like, by the way, everybody's getting a 20% pay cut. And if you don't like it, I understand if you want to leave, but I'm now challenging you to go find a better offer in the market. it's really hard for a manager to do that. Like, can you imagine the morale head of you tell everybody they got to take a 20% pay cut when there's 8% inflation, yada, yada. That's going to be the next piece to that'd be the next shoe to drop. And so this is another shoe to drop, which is, you know, I started by Peloton, like maybe this company goes private, or, you know, company gets bought because they have so much cash. Like BuzzFeed is making is I saw BuzzFeed this weekend was like $215 valuation, but they're making three or 400 billion. So when these kind of disconnects happen, where you can't understand the logic, that's a sign of a real bottom. And it doesn't mean you're gonna go back to the previous highs, that's not what's going to happen. But it does mean you could start to grow from this point forward. So this could be a really interesting sign that a SaaS company is going private, taking off the public market. So just mark my word, you may see two or three more of these.

### Human: I've been dealing with business insurance for three decades. I am on the board of a bunch of companies I watch people who don't have insurance, get themselves into trouble all the time. Switching providers has always been a nightmare. It's too expensive takes too much time and often it doesn't even guarantee better coverage. But now You can make switching radically simple with Embroker. Yes, Embroker is the perfect destination for industry-tailored commercial insurance. It's business insurance specifically for startups. Embroker's single application helps startups get four quotes, one, two, three, four, for four lines of coverage in just 15 minutes. They connect you with one of their expert brokers for unmatched service that goes beyond your policy. And listen, Embroker is such an amazing product. I use it. A lot of my startups use it. It's so easy to use. So try Embroker today. Thank you so much for supporting this podcast for so many years. But what is your goal going forward? Do you want them to concede and give you the name? Do you want a million dollars? Do you want to be moderator again? What would make you happy? What would be success for you after taking this action?### Assistant: There's lots of things that I consider success. Reddit knows of things that I consider success. There's a lot of things that are in factually incorrect, some of which you just cited. I don't know where some of it is. It's interesting to think about the news that like you have you have some sources. I've always been aware that sometimes like the news gets something wrong and then everybody just kind of takes it. And it's like, And it's weird because I can't go out there and correct it because by correcting it, then I'm actually making statements that I then have to stick to. You know, it's Reddit knows. We've been in talks for years. Here's another thing that's kind of tricky, right? Reddit comes out of the flying gates and says, look at this guy lining his pockets waiting for the IPO. Three years he's been waiting in silence, right? Like how convenient. It's so funny to me because it's like, dude, you really want to play this card? Reddit... The moment that Reddit could oppose my trademark application, the instant they could oppose it, they started opposing it. So I've been in court battles with them for years and years and years. And I've just been moving about my life, building my career, doing all sorts of different things and projects and just trying to move on and racking up my lawyer fees. And out of nowhere, last September, something changed with them. They're like, yeah, we're just kind of tired of this anymore." And for some strange reason, they're the ones that got in a hurry. They're like, we'd like to just kind of speed things up over here. We're just trying to tie up loose ends. And so, they're the ones that decided to take me to the trademark court. So I said, hold on, hold on. Okay. Now, you're in a hurry. Now, I've been trying to say this for years. This is mine. And this isn't cool, right? Anyways, and so, you know, so then I ended up reaching out to them. And I said, I still have a lot of issues. And a lot, you know, I suffered a lot of damages, a lot of grievances, we need to figure this out, people, you guys never reached out to me for clarification, or comments or anything like you ghosted me entirely never gave me a valid reason for my removal, like it's just, and, and they just, you know, anyways, so I so I said, Alright, well, If you really want to do this, if you really want to go to court, we can play this game. But I'm going to give you another chance. Let's go mediate this thing. I don't want to do this. And I swear, I look forward to the day that we go to court because then I can actually show everybody how much goodwill I've had throughout. So you try to settle this with them amicably? You want to know how good I was behaving? Reddit has this rule that said you're not allowed to use alt accounts, right? You know, alt account is like where you can do, you know, you have two accounts. Yeah, sure. Yeah. Okay. Everyone has. I refused to use an alt account on Reddit. Not that I had much interest in going there in the first place, but I'm banned from Wall Street Bets because the moderators banned me. So I can't really do anything there anyways. But I was like, you know what? I'm going to play nice. Because I'm hoping that at some point, I can show Reddit I was behaving nicely. And and they'll understand, like, I was on my best possible behavior. I have access to the media, I have access to like podcasts, I have, I've had an opportunity to really air my grievances publicly, and I chose not to. And.

### Human: That is the perfect setup for the second part of Sam Bankman Freed's activities here, which is that through his other venture FTX, he has agreed to provide a different distressed crypto lender BlockFi with another revolving credit facility $250 million in this case, and then Coindesk reported that Anthony Pompliano, otherwise known as Pom in the crypto world, is trying to gather a group of investors together to put together an alternative rescue package for BlockFi because they say FTX's $250 million credit line would quote effectively wipe out all BlockFi shareholders, including Morgan Creek Digital. So there's some mechanism by which if BlockFi takes full advantage of this $250 million line of credit from Sam Bankman Freed, he'll own everything.### Assistant: Yeah. So when you get into a distress situation, the most recent money in becomes the most senior money, all the other money will get wiped out, moved to, you know, common share. So let's say, you know, they had raised block five had raised 500 million in their series a when they were valued at 4.75 billion. if nobody offers them any money, and they're going to go out of business, and Sam says, Hey, I'll give you this 250 million, but it converts into equity, you know, at a, I don't know, $500 million valuation, since nobody else will put money into this thing. Yeah, that I own half the company, but all the other shares then convert into common and they get wiped out or, you know, severely pushed back. So this is what we will see in startups as well. And this is when we talk about a down round or a recapitalization in the industry commonly known as a recap. A recap can occur, Molly, where you just basically define new terms, we're going to give 90% of the company to the newest person for this 250 million, that's what they're offering us, everybody else goes down to 10%. So I've had these situations. And then your only recourse is to beat the worst deal out there. The worst and only deal this this horrible deal. If you won't beat that deal, what you're saying is I won't eat it. There's like a certain baseball auction to this, which is like, okay, I'll pay 250 cat $250 million to own 90% of this. Now you could say, Okay, I'll pay 251 into own 80% of this, I'll give a better deal more cash, less ownership. And then the board can take that deal. But if there's no other deals, and the clock is ticking, the other shareholders have no one to blame, but themselves. Yeah. And yeah, I mean, this is what happens in a really tight market. And this is why I remember everybody was saying sitting on cash, Oh, you know, if you sit on cash, you're stupid, because you got to get it into the market. If you don't have it in equities, stack paper, people stack paper. Yeah. And that's a true statement if the market's going up. And you know, there's inflation and printing all this money. But in a market where everything collapses, man, having cash can be really a nice asset to buy things. I'm going to be very quick today, you need to understand what cyber insurance is. Obviously, this covers hacks, which happen more than you think, especially in these crazy times, you want to be protected. So you want to have your cyber insurance set up. If you don't have business insurance, you failed one of the first steps of being a founder and having investors, you need to protect yourself, you need to protect the downside and startups should look no further than a broker. Embroker's technology saves you time and money. Prices are up to 20% lower with better coverage than incumbents. Go from sign up to quote and purchase in just 10 minutes. When you work with Embroker, instead of the big incumbents, you're not dealing with these large, slow corporations. And sign up with Embroker takes days, not weeks. The process is totally transparent. There's no opaque pricing. There's no annoying incumbents standing in your way of just GSD. You gotta get stuff done, okay? And let's face it, these slow incumbents, they're not going to get it done. Okay, so to instantly buy custom built insurance for startups, go to in broker.com slash twist, e m v r o k e r.com slash twist. And while you're there, you're gonna get an extra 10% off I kid you not by using my code twist TW is T.

### Human: Yeah, perfect. Yeah. In way too real news, snap shares as of this moment, I believe, are down over 40%. Today, this is a one-day drop on negative guidance that the company issued after hours yesterday. CEO Evan Spiegel warned in a note to employees that I guess must have been leaked. I don't even know if this was like a deliberate release on Snap's part, but warned in a note to employees that the company will miss its target for revenue and adjusted earnings for Q2. He wrote, today we filed an 8K. Okay, so they did file an 8K. Yeah, sharing that the macro environment has deteriorated further and faster than we anticipated. When we issued our quarterly guidance last month, I guess Evan has not been listening to all it. As a result, he said, while our revenue continues to grow year over year, it is growing more slowly than we expected at this time. And then this internal memo leaking and the AK cause shares of other social advertising platforms to drop metas down 9% Twitter down about 4% Pinterest down 22%. But this one day drop by snap on, we should say again, a report of growth, right, just growing.### Assistant: Yes, is a 45% drop. So this is showing massive, massive, a massive lack of faith that this can be turned around. I mean, people are saying the company's worth half as much. And yeah, 45 46%. I'm trying to think of the last time I saw a one day drop like that. Now, of course, Coinbase, I think is perhaps the company that got walloped the most in this cycle or amongst the most, I think they were down 86% from their peak 85 86%. So that's truly extraordinary, right? Yeah, you know, hundred billion dollar company or whatever it goes down to 14 billion what's going on here. But yeah, these are these are extraordinary, extraordinary drops. This is where I think you'll start to see boards of directors, investors, and the executives that companies start buying their own stock back, either as individuals as companies or investors, because if stocks become this low, and you know, you're looking at it, and you know, you by default have some inside information when you work at a company. So you're not allowed to sell into the best of my ability on that insider information. But if you're confident in the business, I think you're allowed to buy the shares. So you know, it's really the timing of the selling of the shares that gets people in hot water with insider trading, I suppose there could be insider trading for people outside the company who are buying shares in the company, right, they find out there's going to be a deal and they know it's going to go up. But for people who are insiders, they're allowed to buy shares in their own company. I don't know what the rules are exactly. But if the stock goes down 45%, and they're sitting on, you know, some billions of dollars in cash, might make sense to start a buyback program and reduce the number of shares in the pool. Therefore, the earnings for each share goes up. Yeah. And so that's going to be this massive trend. I think that's when we know we're going to be getting out of this is when you start seeing those those share buyback programs. We've got some exciting news for this week and startups listeners right now. We're going to give one twist listener $1,000 in Squarespace credits. We want to show off the best web design from all of our listeners in the this week and startups family and it can be anything an amazing landing page a feature flow a design aesthetic. Here's how you can apply you just had to show us your space.com and that's going to redirect you to a tweet from me at Jason. You reply to my tweet with a short video, image, link, gif, or anything that shows off your space. Then, my team and I will feature the best submissions here on This Week in Startups. I'll pick one winner and give them that $1,000 Squarespace gift card. Now, your product doesn't need to be built on Squarespace, but yeah, that's going to help a little bit. We've received so many awesome submissions. Check out this submission by Twitter user Steph Nass called OpenVC. You can find them at openvc.app. Basically, it's a global search index for VC funds by stage sector location and check size. For example, if you're a Sweden based enterprise SaaS startup with early revenue looking to raise between one and 5 million when you put all that information in your search, and it will give you a list of firms you should reach out to. What a great idea. Nice job. And don't forget, you can get 10% off at squarespace.com slash twist by using the promo code twist. Let's talk about this word here macro environment. Yes, not blaming the team. He's not blaming the product. He's blaming the macro environment. What is your interpretation of macro environment? What is he talking about?

### Human: Alright, everybody, our friends from Microsoft are here Tom Davis, a senior director at Microsoft for startups, and you're a former founder. So Tom, tell me the Microsoft for startups founders hub. What is it? And what are you offering startups run us through the bullet pointed list of all these incredible benefits.### Assistant: So I'll give an intuition first, uh, before I go into the answer here, I think the way to look at it is, you know, if I want to be of, I want my kid to be a famous violinist, what do you do? You don't start them at 20 years old. You start them at four. Right. Um, Arguably, if they're going to be a virtuoso on violin, they're probably not going to be a finance virtuoso, because they're going to put a lot of time and effort into making their brain very specialized toward that task. Even with everything that biology has given us in our brains, we still need to specialize to be really good. So right now, we're at the very beginnings of this. Yes, you can talk about, I can build a model that can do a lot of things. It's going to be a Jack of all trades and actually not a master of anything specifically and that's okay there tasks where i want something general right if i want to. I want to take over multiple tasks that maybe people do or find mundane i maybe want something general for that and those general models will work for that but i really start getting into health care. being a co-pilot for a doctor or a nurse or a co-pilot for an investor, then I need some really kind of specific knowledge. And it's very difficult to make a general model do really well in specific tasks. That's one. The economics of building a general model that could potentially be very good at every task start getting kind of out of hand. I mean, just the training of itself gets very expensive. Then, because that model itself has to be so large, serving that model just has very unfavorable economics, especially when we're talking about compute being so scarce, right? Training and inference compute is basically the same kind of chip. So now I got to start thinking about, well, all right, if I want to actually serve this model to my customers, I need to think about the economics of serving that model. So I think we're going to be in a world where there are going to be some large general models and they serve some set of use cases and the cost to serve them is justified. There's going to be a whole tail of multiple expert models that are much smaller, that have much more favorable economics. Maybe you're very good at particular tasks and not as less good at other tasks. Like if I'm building something that's going to do customer support, I really don't want it to philosophize by the why Rome fell. Right. It just doesn't need to do that. It needs to talk about my products. It needs to, it needs to get the user, you know, to fix their problem ASAP. That's it. Right. I don't want it to do anything general. So I think this is what we're gonna see is this world where everything's kind of coexisting and solving different problems. We're already seeing that now. I mean, I talked to the founder of a company called Perplexity AI, which is doing like, kind of, you know, search and, you know, finding knowledge across different sources using LLMs. And they're doing a whole bunch of different things. They use every possible model they can to best serve the task that they have right so sometimes they use a general model to do filtering any specific models to condition the output the way they want them. So i think we're gonna see this world where everything kind of coexist which is gonna be a bigger market our bet is that people constantly building experts on their domains is gonna be the bigger bet and the other one will be consumer thing. Maybe it'll be different. I don't know, but I think in this world that's coming, we're going to see just a proliferation of all of these capabilities out there and the markets are going to be enormous. So I it's almost like not worth sweating the details right now.

### Human: Sure. So in the book, I suggested that these companies like Microsoft, Google, Amazon, you know, pursue something called alternative certification. And what that is, is I'm not sick. That if let's just for example, you want to get a job, Microsoft's looking for employees in their HR department. And what I suggest Microsoft do is say, which tests, which courses, which certificates can you get in lieu of a college education? Which can you pass or do well on which tests, which certificates, which courses can you take in lieu of a college degree? that we will consider for a high paying job in our HR department. I'm not suggesting that Microsoft make tests. I'm not suggesting they administer tests. I am just suggesting they set standards. And if they set standards of what are these tests, what are these courses? You know, McKinsey has, they could be literacy tests or certificate programs or, you know, Imbalance together with McKinsey has set up game based tests, which supposedly tell you how good you are at decision making and critical thinking skills. Doesn't matter what these tests are, just has to correlate with what they think will make a good employee, but not a college degree. Once they set these standards, it'll set up a whole ecosystem of supportive services, online resources, tutoring services to help people pass these are we already proved with charters and the best district schools that with the right support, these kids can do it. So it's not a question of ability to 10 over 1110 out of 11 who are not getting college degrees. So what can we do for them? We say, look, these are the courses, tests or certificates that you need, and we will consider you for a high paying job at HR instead in lieu. And they don't have to make the test. They don't have to administer. They just have to say what are they are. And then capitalism will take over, there'll be an ecosystem developed of supportive resources, I said tutoring and online resources, they'll be rated like Uber drivers and Airbnb rentals, you know, so people will know which ones to do, you don't need any government involvement at all. And the cost will be much lower. And we can short circuit we can run around, you know, we don't play Tiger Woods and golf, we don't worry about the college degree. These 10 out of 11 got screwed in the current system. How can we do an end run? And I talked about how in Africa, with no resources about a cell phone company that set up, you know, these are a cell phone company turned into a $3 billion business that got sold a few years later in and they sold cell phones in countries that don't have roads that don't have electricity. So who's buying a cell phone? Well, they figured out how the locals can afford 25 cents rather than walking three days to the next village to sell their crop, it was worth 25 cents to pay for a phone call to see what the prices were. So they could start with a little bit of money to build cell towers, they had to do rudimentary roads to get to the self towers and bring electricity and jump started the whole thing. And so once there's a buyer, so that we they found the buyer, the 25 cents it was worth people, they scrounged up 25 cents to talk on the phone. And now there's a buyer, these big companies, Amazon, Google, Microsoft are now saying we're the buyer, pass these exams, pass this certificate program. We're buyers. Now the supportive system sets up and it's happened at so many, you know, I quote Clay Christensen many, many times of how this happens, about how disruption happens. And this is exactly how it happens. You know, the Apple computer when it came out, as you know, probably a lot of your listeners know, cost about $2,000. It couldn't compete with a $200,000 mini computer. that needed 10 engineers to run. But eventually it kept getting a little better, it ran on a little different track, and it was eventually able to compete. And so I would say that this alternative certification over time may not be able to compete with college degree right away. But I think very shortly, it will be. And all we need is the jumpstart from these big companies. And I think a lot of other companies will take the standards set by Google, Microsoft, JP Morgan, and use those standards for themselves. Hey, this makes a good employee if they pass these exams. And I think we can sort of do an end run around the current system.### Assistant: When we get back from this final break, I want to talk about the solution that you came up with, which is absolutely stunningly brilliant. 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It turns out global water supplies are under attack from toxic algae blooms and that makes some water on drinkable blue greens proprietary EPA approved technology eliminates that toxic algae from poisoning the world's water resources. So you can get in early on blue green. I just invested in Syabra, which is an AI enabled platform that uncovers online disinformation and defects. I think that's a cool idea, right? We're gonna need to get that solved. So I put a bet and I went to rcrowd.com slash twist. To review the deals, I found that deal. And there's no payment involved until you decide to invest, which is amazing. You can just read all these deal memos, you can peruse, get in there and just read all the deal memos you can. And our crowd has some great deal flow. And I just made an investment there for the first time. rcrowd.com slash twist. Joel Greenblatt is with us. The book common sense, the investors guide to equality, opportunity and growth. You talked a little bit about a solution. uh charter schools obviously are a solution they've been ankled uh and people have fought them and created so much red tape for them i mean the de blasio stories you go into and i mean this guy is a complete disaster i mean i'm not gonna make you say it but just as a former new yorker living in california now and i'm watching this crazy behavior i mean they really tried to scuttle every single charter school they said if they broke 250 students then they had to unionize but they they and they kind of made double rules for them where they couldn't get around that and they wouldn't give them space even though there was unlimited space available and then forcing them to add administrators and all this cruft I mean, not only were they, de Blasio and this cohort, content to create a terrible product, they were actively trying to destroy the innovative product. I mean, it was, it's just dark. I'm going to leave it at that. Let you read these stories in the book. And again, we're going to keep our eyes on where the puck's going and a solution and not playing Tiger Woods at golf. We're going to try to get them to the chessboard. And the chessboard for you, as you pointed out before the break, Google, Facebook, etc, et al, they all are under a bunch of scrutiny, because they've been so successful, I want to get into that. And if we should break those companies up or not, in your mind, I have strong feelings on it. But you said, hey, they need specific types of people and they don't care about college credentials anymore. They used to be obsessed with it. They now care about skills. And that seems to have burned a little connection in your mind. Explain it.

### Human: Is it? Carrie.### Assistant: You haven't experienced it yet. But preshy poo got a little tasty poo, as did Nick. Preshy poo. Because we sold, we had an opportunity to sell some shares early in one of our breakout winners. We took the opportunity to do that. And the way it works in venture, just to tip cards, and this isn't, I don't think, in the episode, but you know, if you have carry, which in a media job, that doesn't exist, you know, NPR, or, you know, CNET, or, you know, the ringer, or maybe they get stock and I guess, some modest stock and people get various, you know, types of equity, bonus may a bonus might be more aligned, but it's not like unlimited upside of owning equity and high growth startups. And so, you know, pressure was able to, you know, get a little taste of one of those unicorns. And then But we only sold 20%. And you invested over four years. So he probably got a percent, like 25% of 20%. So then that means 25% of 20% would be 5%. So he has 20 times that amount, backloaded. And then I said, and he was like, Yeah, there's a lot of money waiting for me as I invested. And then I was like, and that's but one company. What if you wind up having three of those? Now it's three times. Now it's 60 times what you've already got. Now, what if those companies 10x from here, which is a possibility. Now it's 600 times what you have. And he had never thought about it that way. But that's really what you have to think about. You know, these companies can 10x. I think it also go down to zero as well. That's generally don't go down to zero, but they could also lose 80% happening. Zero sometimes happens. But anyway, I think that's a long term Well, it also keeps you around. And one of the great balancing things I think is employment in this country is what they call at will, but it's at will for both parties. You know, if you think it sucks to work here, you can walk at any time. And if I think you're not pulling your weight, we can fire you at any time. And that's one of the great things about the American economy is that we have kind of taken what's best about America, the freedom, dare I say, cancel for that. And we actually codified it in employment, which is you're free to do you can free to walk out the door anytime you want. And you're, you could get cut anytime, as well. So it just wish healthcare worked that way, Molly, where the healthcare wasn't tied to employment. that would be the big win, because because healthcare is tied to all the entrepreneurship, all of it would allow people to move more freely, you know, a lot of people you don't experience with young people, but you and I experienced this morning with children and families. You know, if you the first thing you have to think about when you're changing jobs is healthcare. Yeah, what's my health care situation going to be? How do I get that work that out? Oh, what was my health care before? And it's like, should we really be making people think about that in 2022? Like, there should just be a base safety net. This is really and you know, who agrees with this? Paradoxically, everyone ironically. Oh, David Sachs. Yeah, you know, my, my, my best friend, one of my best friends in the world for a long time. And you know, people are like, Oh, he's crazy, right wing, whatever. And it's like, He's believes in, you know, universal health care.

### Human: Oh, God, so much. I mean, really, I am. I've always been a solutions oriented person, which is why I was drawn to the idea of client, right? I'm just like, wait, we have tech, like fix this. Tech has saved humanity every other time fire wheel, penicillin, but now no, it's through the roof is through the roof. Like I spent the whole time at this conference being like, I can't I don't remember the last time I loved a job this much. It is so thrilling. every single day to talk to people who are just like, Oh, I have an idea for this. Instead of I have a complaint about this, or I've like, taken apart all of the ways that this could go horribly wrong. And granted, yes, I did ask about the I am legend thing. The coral because Yeah, it's a diligence question. No, what could go? But like, to talk about what is possible instead of what is impossible. Yeah. Like that all by itself is just, it's game changing.### Assistant: I think it's destroying every day. Yeah, I think it's the disjoint between I think a lot of members of our society, especially influential ones on Twitter, is you've got one group of people, you know, who see all the potential all day long. Yeah. And then when I was a journalist, at least your email box is firing off, like, hey, you know, this company's screwing up, hey, this bad things happening in the world, why aren't you covering this? Why aren't you covering this? And you're just inundated, and I'm not making a judgment call, because we you and I have done both jobs. And so now there's like, it's not just me, but you also have an experience of really what's incoming to a journalist, and I have sympathy for this as a journalist, you can get pretty negative. Yeah. because all it's like being a police officer, you know, like, if the police are getting called, it's because something's bad has happened in somebody's mind, they call 911. They're not getting called, because they're like, Oh, my God, this person got an A on their report card, we're having a party, want to come over? It's like, no, somebody did something terrible, or it's the worst moment in their life. Come try and help us mitigate the worst moment in this person's life. Kind of what journalism has turned into in a lot of cases. It's like, know, hey, this company screwed up, hey, you know, this failed. And I just encourage people to, you know, try to find that balance, you know, and there's a good point for us to just bring up if you go to the syndicate.com slash climate, Molly and I are now running the syndicate together, just like my syndicate, the syndicate calm. And we're hoping that if you're accredited investor, you sign up. And if that coral company sounds interesting to you, like our firm might put 25 50 100 k into it as a seed investment. And then we might have 250 k or 500 k left over, on average, the average syndicate investor, and there's 9500 members of them in my syndicate. think 3000 in the SAS syndicate, and you know, the climate syndicate, hopefully will grow to 1000. That's a good number to sort of get started with deals is when you get to 500 to 1000, you'll have enough folks to if 10% choose to do a deal. The average check size is only 7000. So if you're a rich person or an affluent person making over 200,000 a year, you can look up the accreditation laws will help you with that you can sign up the syndicate.com slash climate, we're gonna make a bunch of bets most are gonna fail. then our hope is one out of 10, one out of 20, maybe return more than 10x or 20x. That is the name of the game. Only invest money you can afford to lose yada yada. But if you're a rich person, I'm guessing a $7,000 investment is like a third of your vacation when you you know, buy business class tickets. So you're kind of and you can place a bet as small as I think our minimum is 4000. And we let people place you know, if they ask, and there's room, we'll let them place as little as 1000. So for an accredited investor, that's, that's a nice dinner with a couple of friends. Yeah, typically, or that's, you know, one night in a hotel, if you're staying at a nice hotel. So I'm excited about that as well. Hopefully, we'll have our first deal, March, I think would be a good goal.

### Human: And you're like, we just distribute these players massive wealth redistribution. Exactly.### Assistant: Yeah. And just so people understand, when we see the people who have the biggest piles of money, doing significant cuts, you might talk about a riff here, we're talking about 30%. Okay, Bill Gurley said five to 10 is not you're not going to feel 15 to 20. You do. Now we're talking 30 here. These are significant rifts that are going on here reduction in force. Yeah. And if the big companies are also doing rifts, I believe Apple's basically done a de facto riff. I don't know how many people left the company because of the three day a week thing which started in last month, I believe. But you are going to see a lot of people in tech looking for jobs. And when a job description goes up, you might have instead of like, nobody apply or a bunch of green people apply or know, we candidate supply or no candidates play. Now you're gonna start to see like, people competing for jobs. It's going to be gnarly 2023 is going to be a bit gnarly for startups. Fantastic. You might have somebody who made their money and got their options at Apple or Facebook. And they're like, you know, I'd like to earn some equity. And I can work from home instead of going to Apple's office. Yeah, I don't care. Pay me whatever you want. I already made my already made a couple million bucks. I'd love to work on a startup. Yeah, I'm equity driven, not cash driven. So The people who used to be equity driven and want to own a big piece of a startup, you know, a couple of points, you know, at the founding of it or something. They were like, I'll take the points and the cash. I want you to match my Apple offer anyone catch and I had people come to me like I raised like a million five and this person wants 400,000 because that's their RSUs at Facebook or whatever. And they hit the jackpot and they got in early. And I'm like, Yeah, you can't hire them for that. Like, yeah, that's not possible. Like, you don't offer them 150k like maybe, you know, like, you're a seed stage company that you've who do I hire? I'm like, get creative. And that's when people started hiring in Canada, Uruguay, Ukraine, like that. This is why people got creative. And this is the great thing about founders, they get creative. Now you might be able to hire somebody in San Francisco Bay Area, you know, somebody living out in Utah, whatever, who worked at Apple, and they're like, yeah, I'll take a flyer. So this is going to be great that now the now the industry builds back up. And the talent goes to the remaining projects. So now what we're going to see also, Molly is the consolidation of talent. So let's say half of the startups that let's say, you know, in a given year, 20% of startups go away. Okay, now it hits 40. Right during this terrible time, like accelerates, people can't raise bridge rounds, you get a bunch of companies hit the wall, they can't raise a bridge round. most talented people from those can't get jobs at Google, they go work at the other 60% of startups, they want to work at a startup, let's say they prefer being at a small company, those folks now you get consolidation. So the stronger, the rich get richer, the strong get stronger, basically. So the strongest startups get the best talent, and they get them at a better price. That means whoever makes it out of this is going to be hard core teams with like great benches, it would be like taking the NBA. And you're like, you know what, let's go down to 18 teams. Right.

### Human: And it seems like there are A thing for the founder to do is to ask as many questions as possible about what type of CVC they're dealing with, right? Because there definitely are some that are strategic, full stop, like Unilever Ventures, which invests in a consumer product, let's say, or CPG. There are some, I think, that are financial, that are pretty separate from the parent firm, that are set up as an additional kind of, you know, possible risky asset, power law, revenue generator. if it's one of those, and it's aligned, but not strategic, you could imagine that then it would be fine for a founder to take that money. But it does seem like it's a it's a caution. It's a cautionary tale for founders.### Assistant: So right, cash and customer and potentially building a business development relationship. I will typically stop the founder when they bring me these. And I say, Hmm, you're going to take money from somebody who doesn't care about the return, but does care about the intelligence that you can provide them about what you're learning. do you feel about that? And they're like, well, I can't close the round, or they offer me a higher valuation. And I'm like, okay, would you rather have on your team, somebody who's aligned with you, who wants to see the stock go up in as pure as a fashion as possible without any constraints? Or do you want to have the fox in the henhouse, who's watching this growth, and then taking that information and then applying it to how it impacts their core business? would you rather have? You want the rabid aligned person next to you? Or do you want the person who maybe has a misalignment and that becomes a discussion on boards, right? And it's typically a when, when would you want to do this? When you're at the moments before going public? Well, these companies can go buy your shares in the public market if they're so interested. So it doesn't really matter in the last year before you go public. it does matter dramatically in the early years. And then if you do do this, you want to have them have no information rights, maybe top level information, right. So you really want to drill down and understand that they're not going to get a board seat, they will not get an option to buy the company. Sometimes desperate companies will give rights to CVC is that they shouldn't like a board seat or information or granular information, customer information, you know, and so if you do take this, ask yourself this question as a founder. Am I taking this because I can't clear market with the best investors in the world? And why can't I clear market with them? So I'm going to this, I don't want to say second tier, but perhaps compromised group. And why am I potentially it's not always but potentially letting the fox in the house. One of the first things I do before I invest in a company is I look them up and I check on their SEO. I want to see if they understand how to get that free traffic from search engines. You know, one of the most basic things you can do to drive free, consistent traffic and make it easy for your customers to find you is SEO. And a lot of people, it's it's a little scary for them, right? They think it's like a black art, they don't understand the basics of it. A lot of the basics of it is just very technical content and basic blocking and tackling. And so we got to call our friends over at smash digital smash is hyper focused on SEO, and they specialize in high end link building. This is not a generic digital marketing agency, they only focus on world class SEO founder Travis also an investor, and he started smash digital to help grow the businesses that he runs and invests in. an in house SEO expert, I would say going to cost you 75 to 100 k a year, and you're going to still need a budget to make great content to try to get people to link back to you for that content to send signal to the search engines that you're worthy of traffic. Well, smash starts as little as 3500 a month and for a limited time, smash is offering free audits for twist listeners at smash digital.com slash twist. That's right, you're gonna get a free personalized video audit of your startups SEO for free smash will map out the exact steps you need to take to outrank your competitors. Again, they're gonna do it for free to try to build that relationship with you and show you they're good at what they do. So go to smash digital.com slash twist smash digital.com slash twist.

### Human: It seems like this is the ethos.### Assistant: Yes, and what I've learned about humanity is a lot of people just don't have any ethos. They don't care. There are people out there who will steal people's tips. There are a lot of people, humans in the world, who just don't care about any other one. They just care about themselves. They're very selfish and I think unethical. So yes, while I agree that the royalty should be enforced, and I'm very pro royalties for artists in particular, I think that the problem comes in when you move an item from yourself to another wallet. If I want to move from one wallet to another, there's no royalty, but it looks like a transaction on chain. Like I can move it from MetaMask to a ledger and I shouldn't be paying a fee and there was no price. So I guess the real question, so if you and I do a transaction like that over the counter, I say, hey, Jay, you want this Moonbird? You say, yeah, Vinny, I'll give you 10 ETH. It's like, great. She sent me 10 ETH to this address. I seem to remember that address. There's no record of that transaction taking place and therefore it's not royalty due because I can How do you do it? It's the same as in the offline world if you and I trade on a pair of sneakers, and we have friends who trade sneakers. They'll give you one, you'll pay for it, and then there's no transaction fee to the original sneaker or developer, owner, designer, whatever. I guess, in the real world, what we're trying to do, in the Web3 world, we're trying to create this notion that it's all or nothing because even though we don't accept in the real world that physical objects change hands all the time and there's no royalty being paid, we think that we automatically have to have a royalty because you can now track everything. It's not that simple. Now, let me give you the counter-argument here. I think that the royalty fee should be lower than 8%, 10%. I think it should be at a point where it's almost de minimis. So let's call it sub-5% to the artist or 3% or 3.5%. Let's just say 1%. Let's say 1%. No one's going to care at that point. We're not going to go around the corner, try and do a deal to save a hundred bucks, even on a 10 grand thing. It's just not worth it. But the artist gets paid. So the 8% in this world is just as bad as 30% in the Apple world. It's a big enough number that people are willing to work around and get work around. So let's argue that the market is saying, we don't like 7.5%, 10%, maybe even 5%. Let's move to a 3% royalty, which people... The same as credit card fees, people will pay that. That probably would mean that less people would work around the system, because the cost to work around the system and the effort is more than the fee that you're going to pay. I also think that you can't take a view that you have to have this thing universally enforced. What you should do is say, look, the ethos, the spirit of what we're trying to do, is that we collect the 3% royalty. If you want to work around it, that's fine, but you're just depriving the artist of his revenues, his incomes, whatever else. And then the platforms, Magic Eden, OpenSea, should just, honestly, by default, the same as eBay, everyone else, say, look, we're going to just honor the artist's request based on the smart contract. And if you transact through our platform, we're going to deduct the royalty.

### Human: I'm going to go ahead and say Keith knows what he's talking about when it comes to also for also forced the only other company in this space to completely redo their entire business model fire their CEO to try to compete. Oh, which company is that? You might have heard of Zillow. Someone.### Assistant: Now, I want to end with a new special feature for our quarterly update with Keith, this is our quarterly check in. And this is a new feature we call Keith dunks, just the best dunks from Keith, since we last spoke to him. One of my favorites here. This one's good. This is so good. Teddy Schleifer is that his pay pronounce it? He's, I think, a trust fund kid. He's my understanding. And he writes about wealth. And he is super woke. And he's a journalist. And he always asked me, Can I say something off the record bad about my friends? That's all the DMS he sends me. And then I tell him, Teddy, here are three companies that are doing great things in the world. Can we talk about these three not Robin Hood's mistake or, you know, Uber's mistake, but no, he always wants me to sell out my friends and my investments, which I don't know why you keep asking me to do that, Teddy. And Teddy says, Imagine being a resident of Miami during an economic crisis, and a global pandemic and your mayor is taking a moment to brag about his Twitter engagement. Because Mayor Francis Suarez sorry for getting his name wrong earlier. shared just how much engagement he's had. He added 50,000 followers. I think this is a great sign that the mayor actually wants to connect with their constituents. and keith comes in from the baseline like john starks and he sees elaine and here it comes the dunk imagine being a snarky journalist who has no clue what his constituents want boom next tweet i love this one i mean this is this is late stage journalism at its best it's just they are so anti capitalism, so anti progress, so anti entrepreneurship and progress. They look for every chance to dunk on people and my god, you destroyed him. Here's my next favorite. You have so many good ones. This is a great one. Eric bond runs a He wrote I think he runs the hustle fund. And he does PSA no one cares where you live are moving to in the midst of Keith and other folks talking about how great Miami and Austin are. And he says it's, it is only the topic at double asterix every single board meeting, let alone most dinners from Keith. And Eric says, I'm sorry to hear that he throws some snark, he throws a little elbow in the paint. And Keith decides, well, I'm gonna have to muscle this kid. Well, each of his companies more successful than anything you've ever worked on. Eric falls down, blood in his mouth, you're probably right. Thank you for speaking your truth, tries to put a little jab in there. Eric with a fraction of the success of Keith and Keith decides there is only one truth. It is the best CEOs on the planet who are debating this not the mediocre ones. Game over. Savage so savage. Next one. These are just so good. Keith Parker PT decides he wants to get in on the smoke. And Keith continues the discussion. I serve on 16 boards and at least half the companies are seriously evaluating planning to move. This is true. Every single board I'm on I'm getting CEO saying, are you staying in the Bay Area? Should I move here? What's the talent like in Salt Lake? I mean, and you have no choice but to talk about this because your employees have left. Parker says, I have a portfolio company with real time data on real estate sales. They live in realtors in boxes. It may be demand increases in the future, but smart people make reasonable arguments there. But it's bonkers today. Keith says wrong. I know more about residential real estate than probably any one person in the US. Which if you built a $17 billion company and under what was that open door was five years, six years, say six from launch. six from launch to 17 billion.

### Human: Yeah, it's a whole it's a mindset.### Assistant: I think it would be enough to return two times your fund. So your whole fund, your whole not your investment, not yet, you need to have investments that can, you know, if you're going to take the time to invest in them, they got to return double the fund. So let's say your fund was $100 million fund, and you planned on having 30 names in it 30 companies in there, and you are on average going to invest 2 million in each of those companies, that's 60 million, you have some management fees coming out off the top, know, maybe that's, you know, 10 million. And so then there's 30 million left to invest in the big winners. So the top five get another 6 million, something like that. Anyway, you put all that together, Molly. And each of those 30 companies has to have a chance. And let's say your average ownership was 10% each company, those 30 companies, those 30 names, Uber, Instacart, DoorDash, whatever you invested in Airbnb, each one of those has to become worth your position has to become worth 200 million, your position is 10% 200 million times 10 is 2 billion. So in other words, you got to hit a $2 billion outcome order to double your fund with each of those investments. So you can start to think of the multiple if you invested at 50, you would need to have a 40 x. So I would say for a seed venture fund, they're looking for typically like that 50 x 20 to 50 x would be good. 40 5060 x is where you're doubling your fund, and you're returning two times your money with one of the investments, which is what you need to do at some point, you got to hit a winner. big winner. And so that's why this business is hard. And if you double the size of your fund, okay, now you need to hit, you know, either 100 x, or, you know, you have to put more money into each company, you know, it just becomes harder and harder. You have to be able to find companies that are willing to put that money to work, which is also kind of why the billion dollar funds or $2 billion funds become really unwieldy. And they have, they have smaller returns than the bigger funds because you need to hit gigantic outcomes like $10 billion unicorn. So how many $10 billion unicorns are there. So this is what the major LPs are looking at when they examine our funds or other people's funds. What are the chances of you hitting another Uber? What are the chances of you hitting Dropbox or Airbnb? Okay, well, we know because we know the funds that did hit them, because we have all the data because we're all bees in those funds, too. Right. So if it can't hit venture scale, I think you need to take a deep pause and say, why are we wasting a bullet on this, we got a certain number of bullets in this gun, you know, we're going to try to hit sniper shots here, we don't want to just shoot randomly in the air, we got to make everyone count. That's why venture capital can seem very cutthroat. Yeah, at least the most disciplined people, they don't want to make willy nilly investments to feel good about themselves, etc. And when you do see them do that, that's why it stands out so much. when somebody does make like an emotional investment in something weird. You're like, why would you waste a bullet on that? Like, what are you doing? Are you not disciplined? And you know, this is where this whole debate comes from venture scale. Is it venture scale? Can it return 40 times my money 20 times my money 100 times my money?

### Human: So we have the most data around childcare, so between the ages of zero and five. Sure. And, uh, you know, what we've seen on the, from a childcare perspective, cause we're all over the country. So our average is, you know, can they're, they're all over the place, but roughly you can go from about $30,000 a year to $70,000 a year. A little bit more than double creating, but you know, we have providers. who are making, who can make $150,000 a year running a childcare program. I've talked to, when we launched our micro school solution, I've started to build relationships with existing micro school providers all over the country to learn more about sort of their businesses. And I've talked to folks who are making $200,000 a year running micro schools in clearly affluent areas. But there's a lot more upside that you you have, you have access to running a micro school.### Assistant: When we look at this, there seems to be a room seems to be room for entrepreneurship to emerge here where teachers can become entrepreneurs through your platform on wonder school itself. And then I'm curious what the profit would be for somebody who is a teacher who left know, and started a micro school, what would their little home business look like at scale, you must have some examples of this. So I'd love to hear about some people who actually built a business and what that looked like for them as an entrepreneur. We get back on this week in startups with Chris Bennett of wonder school calm. Let's get down to brass tacks, everybody. LinkedIn Jobs is giving you $50 off your first job posting. If you're not familiar with LinkedIn Jobs, well, it's the best hiring platform in the world. It's that simple. We've had so many great testimonials from within our portfolio of companies, from you, the audience, and we love getting audience testimonials. Aaron, who is the founder of Emma AI, was looking for a machine learning engineer back in July and he received 110 relevant applications get ready for this in only four days with a modest budget he got so much value from job posts to offer accepted in only a few days think about what a win that would be for you and your team if you could fill that really sticky, hard to fill position in just four or five days. Well, that's the truth. LinkedIn does it all the time and they have over 690 million members worldwide. And you're probably allowing people to work from home and remote now. So you can fill jobs like I am in half to a third to a quarter of the amount of time. And you're going to do that best by using LinkedIn. LinkedIn jobs is the most effective hiring platform in the world. We all know that hands down. That is the truth. so get 50 bucks right now 5-0 waiting for you at linkedin.com slash twist tell your friends tweet it uh share it with everybody on your team get 50 bucks off that first job posting linkedin.com slash twist again linkedin.com slash twist to get 50 5-0 from your boy jcal uh terms and conditions of course apply because They are giving you 50 bucks. Thanks again, LinkedIn jobs for solving problems for me and my portfolio companies and supporting this week in startups, which is super important for founders everywhere. Thank you. Hey, everybody. Welcome back to this week in service. Thank you to our partners who make it possible for us to employ I don't know six or seven people on this podcast full time. to make three great interviews a week. If you love this podcast, I asked you to do one thing, go to iTunes and write a review about how much you love it. And then if you do that, and you send us that review, you send us that review, you can just DM it to this week and startups on Twitter at TWI, or you can email Nick at launch.co is the producer, we will possibly send you One of these beautiful Yeti cups as a thank you or a mug. We have this beautiful swag. We don't do it one for one because we can't buy reviews. But sometimes we see a review and we send somebody something nice. They say something nice about us, we send something to them. So anyway, it's not perfect correlation, but you never know. You might get one. Chris, when we when you look at the entrepreneur, so I look at your what you're doing very similar to what Uber did in creating entrepreneurs, or Airbnb created entrepreneurs or Etsy created entrepreneurs through an infrastructure in a marketplace that allowed them to do business and find customers. what does a successful micro school teachers business look like do they have ten students at ten k each or twenty k each do they make twice as much as they did when they were teacher twenty five percent more is it the same but they get more control what does it look like

### Human: I'm getting myself a bottle of that Don Julio 1942 for my birthday. I'm a big tequila fan. I'm writing that down. Hold on a second. Are we still going to Top Gun?### Assistant: And you know what this also shows is that there are paths to unravel some of the the negative effects of social media. And the amount of time you spend online is driven, I think, by these algorithms. And so maybe if you choose to not have your content selected for you by the algorithm, And you select your own algorithm. And when you turn it on, just like when you turn on a browser, it says, you know, would you like us to be the default? Or in some cases, I think Google did the power move of like, what would you like as your default search engine, they know that the best so it's 90% of people going to do it, but you could pick DuckDuckGo as your, you know, you know, search engine, if you were so inclined, which is pretty good, from what I understand, or bang, isn't it for years. So you know, there you have it, like, there could be a, when you sign up, it says, Hey, do you want the default YouTube algorithm? Or here are some popular algorithms made by other users. And this is a Disney algorithm. The people at Disney imagine that like as an opportunity to do the same thing, though, like, it's just gonna end up in the same place, one made by the EFF, it could be one made by common sense media. So I don't know if you use common sense media. Yeah. And this is a tip for everybody, just type in the name of the movie common sense media. And actually, it's kind of like Google auto completed for you. So I went to see what's the new Jared Leto, Morbius. And, you know, I went, I took another kid who was a friend of my daughter's, and they're both 12 ish. And I was like, Morbius, Common Sense Media. And the parent was like, Oh, my God, is this like, really scary? Like, it looks really scary from the trailer. And I was like, Well, Common Sense Media says it's 12 years old and above. And so God bless the people at Common Sense Media. I mean, I really actually need to join this and donate. I'm gonna make a note to do that. But anyway, they, and I gotta say, I don't know, this is a two star movie. I thought it was great. I always see this. I loved it because I thought it was like a very unique character in the MCU, the cinematic universe. And I also thought like, wow, Adam Newman has a future as a, you know, anti-hero. I kept, you know, like I kept getting I kept hearing him say, Rivka. Rivka, no. I'm not going to drink your blood. You drink the blood you like it. Bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye bye Drink it. Drink your tequila. You take a shot of tequila. I drink your tequila blood.

### Human: What do we do when we invest in companies, you're taking a bet on a person? I mean, at the early stage here? I'm making a bet.### Assistant: Yeah. So you're making a bet. Okay. And if you're making a bet, you got the right answer. You're selecting a winner, or you're selecting what you think is a winner, and you're trying to increase their chances of winning by giving them capital and then being in alignment with them. So what we do is we anoint people and we pick winners. So then you have to ask yourself at the company you're at, are you doing that behavior? Or are you supporting somebody who's doing that behavior? both of them are valid. And are you making sure that you get credit for that work? So how do you get credit for the work? Well, the way you get credit for the work is if you're doing meetings, like my associates do 15 meetings a week, if they and we record them, we ask for permission, hey, can we record the zoom? Now, imagine you find the next Robin Hood uber calm, and you were the first person at your firm to interview them. Now you have that interview, and you have your notes from it. nobody can take it away from you ever. Now if the company invests in it, when I had Doug Leoni on he talked about the different people at Sequoia who actually found the great companies they invested in, and who were the first point of contact. Now did they get sole credit for that? No, the brand of launch or this weekend startups or the syndicate may have brought them in. But you made sure you shepherded them from when they applied for on deck or somebody applied for our accelerator to the point at which we wound up getting on the cap table. And that is super valid. You don't get 100% credit for it, but you should get some credit for it. Now, if you found them at a demo day that you went to on a weekend, great. And so it really is how many startups Can you write coverage of how many can you meet? How many zooms can you record, keep them in your hard drive, and be able to tell your bosses, hey, listen, I met with in the first quarter 150 companies in 16 weeks, I did 10 a week. And this quarter, I'm trying to get to 12, you know, whatever, I'm going to I'm going to up it to 15 a week. And I'll do 180. And by the way, of the 180, these are the 10 that I was most enthusiastic of these five actually got series A's, and we missed those. So you're basically betting on yourself and doing your own money ball and money ball yourself. uh and i never did that for myself other people were doing it with my track record like other lps and other people watching me do it but i do it now i like to see with my team who finds the good nuggets and so just essentialism if you want to be an investor it's about finding great companies and placing bets so don't forget that and then you gotta get credit for it and you're a person who likes to write and you're a good writer being able to write and communicate well is more important than anything in life like literally your ability to communicate your ability to write to speak converse to network trumps everything just to be clear it trumps everything you could be a complete utter moron but if you had the ability and i'm not describing myself here but let's face it, I'm not writing the code or building the hardware or building rocket ships over here. I'm talking my way into deals. I'm communicating to people and networking with people to get my name and get a slice of that cap table. And that's really what it's about. And you're a great communicator. So JJ, you're going to do fantastic. And the job is going okay on on deck. Is it like an internship or it's a full time gig?

### Human: And then also you're seeing a shift in the market from companies with huge pools of very valuable data. Like look what happened with Reddit, right? They went from a free model to a pay-to-use model. From their perspective, that makes a lot of sense because, hey, our data is now so much more valuable with the huge rush to make these models that we're a for-profit company, we need to make some money and here's an asset we could leverage, right? So you also have to know how is the market moving, right? And so there, They want to get permission. They want you to pay for it, right? Rather than coming and taking it without their understanding. And so, going back to your initial question, though, you know, as long as what you're doing is sort of measured in steps, like the challenge is, if you do a test, and maybe you don't ask permission, and maybe you take some data, you run the model, you see how it works, you're like, hey, this is great. Let's keep doing it. If you get to a point down the road where someone sends a cease and desist letter, you don't want to be at a point with your product development where you can't put the genie back in the lantern, right? You want to be able to stage how you're using the data in a way so that if you do run into a claim down the road, you can kind of, I'll say, hide your tracks a little bit if you can, right? And sort of be able to take away maybe the data that they're complaining about from your product without completely ruining how it works. And so just thinking about contingencies really, I wouldn't necessarily go out and ask permission each and every time, even though that would be the legally correct thing. I think pragmatically for startups who are resource strapped and have to be a little bit scrappy, sometimes you need to take a little more risk. And all I say is just take that risk very calculatedly.### Assistant: thoughtful, I you know, this is I think, great advice. I can give really granular examples here. People want to do all kinds of things with the things with the archive of this weekend startups and all in. And one of those things a couple years ago was, hey, I want to make clips on tik tok. And we had a couple people wanted to do clip shows. And I said, Yeah, I tell you what, and they contacted me, is it okay? I said, Yeah, if you're a fan of the show, and you want to do a couple of clips, you know, go for it. Just always link back to the original episode. And just say that, you know, you're not the copyright holder, the copyright holder is whoever. And, you know, let's check back in a year or two and see what where it's at. Now, some of these things have become big, but and they're not monetizing. So I'm like, okay, fine. And then in some cases, if they want to monetize, I might be like, well, what is it making? Just keep me informed. If you're making $10,000 a year or less, and you're putting hundreds of hours into this, I guess I'm okay with it. You know, it's promoting the show. But then I had this one group that was taking the entire episodes And then using AI to put them into sections, clipping them, and then putting ads around them. And I said, no bueno. This is not fair. And, and they were doing it with Tim Ferriss and some other folks. And I just told Tim and other folks, like, hey, do you know this is happening? And they were like, this is BS. And I said to the person, listen, if you want to not put ads on it, and you're using the original mp3 file, I'm okay with it. And you give credit. And you link back to the original show in the interface. And their interface was always like, this week in startups next episode, where this week in startup, you know, and no links back to us where they would make a tiny little link. And this is where I think, you know, if you wanted to do an experiment, okay, do it. But think about the person who put the effort into that content, and how you could be fair with them linkbacks credit using the original mp3 files, a very subtle point here, but we get the data on that person listening to it. If you rip the file and put it on your server, I don't know how many views you're getting. My advertisers don't know I don't I can't cookie the person if they're have cookies turned on. So I like your strategy here. You can take a little risk. You can do a little experiment. I think turning off monetization on these things is also critical and framing them as an experiment and taking feedback in good faith. Super important. Yeah. Alright, listen, this is incredible. Get a good lawyer if you're doing this, because it's going to lead to a lot of discussions, man, I just sent you a link in the in the chat. Craigslist has gotten judgments against people. I was reading this headline here, Craigslist garners $60 million judgment against rad pad in scraping dispute. I think just be careful, if you're doing this kind of stuff, that this could be the end of your startup. Pragmatically, you raise a half million dollars or a million dollars, and you're coming out a tech stars or Y Combinator or launch accelerator, and you get hit with one of these. That's it. game over for your firm. You have seen this happen startups get crushed with the legal bill freezes future funding. So this could be existential be the end of the line for your startup.

### Human: let's talk about the user complaints and prioritization of them. Because how do you know, when you're running something at scale like this, that this is something that's annoying, but necessary? Like, you can't throw a party in an Airbnb? Yes. Like, I had my old home, which I was thinking of keeping, and I had an Airbnb. And only one time in a year was there a party thrown there. You guys handled it great. Like, there was a little bit of damage, insurance picked it up. But you know, like over and over again, it has in the documentation, do not throw a party here. Do not throw a party. You can't throw parties. So how do you know when something is like, you know, just this is a deal breaker for people who are hosts. This is a deal breaker for people who are going to choose a hotel or an Airbnb to run an Airbnb or not run an Airbnb as a host. And these are like minor annoyances, but they come up frequently. So there's like a certain amount of suffering in each thing, right? Yeah. And I'm curious how you prioritize the suffering to alleviate it, because you're also mitigating and arbitrating between these two groups of people, the hosts, who can't be burdened so much that they don't want to be a host because it's arduous. And then the people who are leaving the home who don't want to have to do an hour of chores when they leave, like it's reasonable, put the dishes in the sink, but you have to mop the floor or take out the garbage. Okay, maybe taking the garbage out is okay. How did you prioritize that?### Assistant: No, no, it's really just, you know, probably broadly like there's stays, 80% of stays are short term, 20% are long term stays defined by longer than 30 days. So that's kind of like an in between, it's an extension of the core. And then experiences, which has been kind of like an in between zone, because it was, we thought it was going to break out before the pandemic, and then we had actually shut it down or pause it. So, it's, we're in a process of, we're going to reboot that. And we do, and just to be clear, We have some big ideas coming. We have some really huge ideas that I think will expand Airbnb way beyond travel, way beyond our core. It's going to launch next year. But I'll tell one more story. You know, I feel like companies, you know, like there's certain companies you like root for them. Like a lot of people love their Tesla car and they like want Tesla to come out with a truck. A lot of people love, in 2006, how many people wanted Apple to come out of the phone? A lot. And the reason why is we all loved our iPod. How many of us want a gateway to come out with a phone? Probably not many. And so I like to tell people, we have to have permission by the customer to do something new. And we only have permission to do something new if they love what we currently do. And if they're complaining on Twitter about upfront pricing, about having to do chores in the checkout, about customer service taking too long, then we don't have permission. They don't want to do something new because they're going to think we're going to bring problems to that category. So I told the team, I said, we have some big ideas. AI is going to unlock so many of them, but we don't have permission to do new things until people love our core service. So we're going to basically create a blueprint of every single thing people are complaining about. So we created this storyboard of the end to end experience. Then I got basically blueprinted out with the team all 150 screens on the app, every user policy, all 72 user policies. Now each of these user policies are as many as 100 pages long, right? Like who gets a refund, when, and imagine Jason, you're a call center worker. Airbnb just hired you, now like two customers in different languages. are in a dispute, and you're adjudicating between 70 policies that are as many as 100 pages long. That's a perfect example of AI. Anyway, this is an opportunity where we realize, okay, we created this blueprint, and then we map tens of thousands of social media posts. millions of customer calls, and all these interviews with customers. And we put them on the blueprint. We looked at what is everyone upset about? What do they want fixed? And based on this blueprint, we were able to go stage by stage in the end-to-end journey and prioritize the top issues. And we said, we're going to get through every one of these issues before we do something new. And that was the whole premise of today. It was basically fixing what people wanted. And then we had one more thing. We're like, we got some unfinished business. This idea of people staying with each other in their homes, The original idea of Airbnb, it's kind of like the Volkswagen's Beetle or Nike's running shoes or Apple's iMac or whatever, the original car, original product. I said, we got to revive that. We can't, we got to get back on the highway and we got to like reinvest in this core idea before we do new stuff. And so that was kind of what today was about. And hopefully if we're successful, people feel like we listened.

### Human: So this is something that's fascinated me for about 20 years now, but it was always really hard to do that because data collection in biology involved weeks, months of wet lab experimentation by people sitting there and pipetting and moving liquids from one tube to the other. And so, if you got a handful of data points, you felt lucky. And now that world has changed and we are in a position where there has been a set of tools that have been developed by bioengineers and cell biologists that all of a sudden give us the opportunity to measure biology at unprecedented fidelity and scale. And that is just an incredible opportunity for people to bring that suite of tools together with tools from machine learning and data science to solve problems that are at the core of society, at the core of making the world a better place. I think there is opportunities like that across multiple domains, I think it could transform agriculture and crop growing. It can transform the environment in allowing us to create organisms that clean up our oceans, for instance. And importantly, from what I want to do, it allows us to understand and transform human health by making better drugs that help us deal with diseases that are currently intractable and cause tremendous amounts of pain and suffering and death because we haven't had the tools to really probe into the biology and figure out how to fix them. And that's really what we hope to do at In-Sitro.### Assistant: Alright, listen, if you know anything about me, I like to place a bet once in a while, a friendly wager, and one of the most interesting platforms I've seen in the space is Kalshi. K-A-L-S-H-I. Kalshi. This is a regulated exchange that offers financial prediction markets on everyday events. They've created a new asset class. It's called event contracts. The contracts let you trade on specific events. You know, we've been talking about CPI here and inflation, the print on all in on this week and start ups. Well, you can place a bet essentially on what next month's CPI will be or whether specific legislation will pass or what global temperatures will look like at the end of the year. Now, why would you place these? Well, these might be important hedges for you. So here's how it works on Calshi. you earn $1 for every correct position you own at the market's close. For example, if you have 10 yeses in a market, you'll receive $10 when the market settles if the outcome is yes. You can also sell your contracts before the market closes if you are already in the money. If you're watching the video version, you can see one of the hottest markets on October 18th. This is yesterday. which was the upcoming October CPI print. The current forecast is point six higher than September's print. So you can see how the contracts get cheaper, the higher you go. I want you to know this is a federally regulated exchange sign up at calci.com slash twist to receive $25 after trading 100 contracts. That's right, they're gonna give you 25 bucks for trading 100 contracts. I'll be on the trading as well. Hey, a l s h i.com slash twist. Okay, later in season two, we had cockroach labs co founder and CEO Spencer Kimball join the show. That was episode 1098 in 2020 August of 2020. That was right in the middle of pandemic, huh? It's kind of scary times. If you remember that that's when we were talking about Oh my god, the election is coming up. Will we get the Trump vaccine? vaccine came after the election and was all that was the summer of the vaccine. When are we going to get it just as a little time capsule here we were talking about outdoor dining. Remember that when we could all leave our houses and they were going to let us eat at diners outside. Oh my god. So risque, but also felt so great to be alive when you when you first went out to a restaurant, you felt so great that they were going to make you food after just a couple of months before being on your doorstep wiping groceries with a mask on and just scared to death that you are going to get this crazy virus and Oh, Lord, we've come a long way since then. So So they make cockroach DB, which is an open source cloud SQL database, basically, it helps companies and app scale faster, be more resilient. And, you know, databases latency is really important. How quickly can you query the database? This is a competitor to stuff like Oracle, you know, other database companies. The last round before Spencer joined the show was an $86 million Series D at an 800, almost $900 million valuation. Since then, they've raised two more rounds of funding. They did a series F at a $5 billion valuation in December of 2021. Just a little more than a year after being on the show. So the customers include Comcast, Hard Rock and All Saints 5x plus valuation step up since joining the podcast. Let's roll the clips. I'm going to break it into two questions. Talk about serverless, explain to the audience what that is and why that's important to people. And then explain what what do we look like in 2035?

### Human: All right, now let's turn this around. Are you starting to see startups, did you see startups emerge during the pandemic? And if so, were they purely virtual enterprises where there was no office?### Assistant: Yes, yeah, yeah. I mean, most startups do no office anyway, or like a WeWork space. So that is par for the course, I think. Maybe it's 50-50. But yeah, and I never thought, the reason I moved to San Francisco from Los Angeles, which I candidly preferred in terms of lifestyle, was Because I wanted to be the number one angel investor in history. And I thought, well, deal flows, their founders want to go there. So then we move the accelerator in March, we cancel the in person accelerator in the middle of, you know, week six of, you know, 12 weeks. And we realized, Oh, this isn't going back. Do we just pause the accelerator said, Well, screw it, let's try and see if we can do a virtual accelerator. So I said, Okay, let's provide more value. We made it 16 weeks. And Mark, we had three times as many qualified people apply because they could because they could they don't have to travel. So if you were in Australia, and you wanted to come to the accelerator, we made people move here for and so did YC. And so you know, that means half the people would just say no, and half would say yes. And even in the United States, we had people commuting from New York, sometimes that families, you know, gets a little bit hard, but people found it worth it. I've done more investing in the past year during the pandemic than ever. And the quality of the companies is going up, and they're more efficient, and they're more focused. So a very interesting thing happened, we would have a very relationship building, theatrical, you know, dramatic presentation of your deck. And we'd all get together in a conference room and have coffees and lattes and kind bars and, you know, all kinds of Pete's coffee pulled in for $6 a pour over. And we'd sit there and you know, it's a two hour affair. And, you Then we realize, oh, there's no way we're investing in this in five minutes or 10 minutes. And then we're like, okay, we got to go into diligence and the diligence is a disaster. Now what happens is nobody wants to be on zoom, you know, for more than 20 minutes for a meeting. So everything comes to you in a nice, you know, as an investor, a nice easy package. Here's what we're raising. Here's our term sheet. You know, here's our metrics. And we do all the diligence first, take a quick meeting. And then after we made the decision to invest, we're like, you know, what would be interesting. if we met you in person and went for dinner or went for a walk. And so I have the 50 or 60 companies I invested in the past year during the pandemic. I've never met them. I've never met them in person. And you know what, great companies that maybe these people are going to be weird, and they would have failed the in person test, who knows. But you know, I think it takes a little bit of bias out for the people who are just really performative and great at pitching, you know, and who are six feet tall, and, you know, have perfect hair. I'm this I'm don't take this personal, Mark, of course, I mean, you're tall, good looking at the great hair. But I'm saying like, that does, you know, we do have bias, and it does impact people. We see that like people who are taller, will get funded, right, people are taller will get, you know, elected easier. So this kind of bias is being sucked out of the system, and it's becoming more of a meritocracy, which is always good.

### Human: Yeah, it's kind of like the Joker, right? It's like, yeah, Gotham, you need a Gotham City for the Joker to emerge, right? Like, Joker didn't create Gotham City, Gotham City was kind of created the Joker, right? It gave him the platform that his unique skills could be realized in. And I think it is a very interesting moment in time. I feel like watching authoritarians around the world continue to shoot themselves in the foot. Xi Jinping, Putin, North Korea, you know, pick your dictator, can never keep it together. They can never keep their society advancing, they always that, you know, unlimited power always corrupts. And then you look at the United States is like, well, Trump's got 70, you know, felony counts, it's three more cases, like, he can only serve two terms, like is what's the chances he's gonna like change the term limits? going to be dead soon. Anyway, is there some like successor to him that is like a natural one? I don't think so. But there is something going on where people feel they've been manipulated by the system and lied to. And this trust in people you were supposed to believe in, like, if you look at trust in media, trust in politicians, trust in teachers, trust in clergy, whatever they do these like Pew Institute does all those trust surveys. I mean, it is plummeting to the point at which people have more trust in like Jeff Bezos, or Amazon, they trust Amazon more than they trust Biden or Trump or any political politician or the New York Times or CNN or Fox. why on earth would you trust Fox? Why on earth would you trust the New York Times if they've chosen to pander to either extreme? So that's the one I'm trying to get my head around. And it's front of mind because we I got some criticism and blowback for platforming RFK, Jr. on all in. And we had this interview on facade, but it's okay if you didn't, but, you know, it was like, probably his first big podcast appearance. And I thought it was very interesting that know, when I said, when I described his theories as like, well, he's got some kind of conspiracy theories around these vaccines were like, he's not a conspiracy there. So I'm like, okay, but he does think things that are against the science is like, well, what if the science is wrong? And I'm like, yeah, that's possible. So the best thing I can think of is, yeah, do the debate, debate the guy who's pro vaccine have the and maybe more speech, maybe more long form conversations. I feel like that the the antidote for what's happening right now is experts on long form podcasts. I know that's a bit narcissistic since I have two pockets. But there's something about these long form discussions amongst experts that I think is allowing some group of people to navigate this manipulation. What are your thoughts on people who are trying to find the truth? And what process you should use.### Assistant: We like, we don't, we take for granted how much our society's stability is based on shared trust in kind of truth making institutions like academia, you know, and academic papers, uh, and you know, uh, you know, statistics and FBI, you know, and yeah. And, uh, and then the media. Um, and then the, uh, the trust that what the government says is true. And so. That creates a shared reality when people can all kind of trust the same sources and it's like an anchor that the whole society can kind of at least hold onto it. Not the whole, there's always going to be people who don't trust those things, but the percentage that says, you know, Rush Limbaugh used to say, you know, there, there's like the four. pillars of deception in the country. And it was something like the things I just said, it was academia, you know, science, media, and the government or something like that. And you know, there's, you know, maybe, I don't know, maybe 10, 20% would agree with that. Today, that percentage is way higher and it's partially, it's coming from two ends. It's partially higher because the people like Rush Limbaugh saying that are, there's a lot of them now and there's a lot of people who believe them. Also, the institutions have become less trustworthy journalists ethics. And, and, uh, has really, you know, if you look at the, the, you know, it's, I'm just reading this new book, uh, the outrage machine by Tobias Rose Stockwell, really good book. Um, and he, you know, he talks about there used to be there, there's, there's hearsay and rumors and, and, and the things you hear, and then there's this funnel. Um, this, this funnel of verification and this, this process of, of that, that, that's, you know, a well-trodden process, professional journalism. And that's a funnel. And by the time it comes out, uh, it's, it's, you know, you can trust it. It's been verified. That funnel's just gone. It's just, you know, first of all, a lot of people getting their info right from social media from people who don't even pretend to have any, don't even know what journalistic processes. But the professional journalists aren't professional anymore. So many of them are just, you know, throwing out, you know, clickbait headlines that are totally biased, that are totally, um, they have a political agenda. They're not balanced and they, and they will lie and they'll admit facts. And so it's just a, that's a really bad thing for our society, um, to have, uh, these truth, truth making things, uh, Lose trust. And so, um, would I put you back to your point? Long form podcast. I think that what people do turn to is podcasters and individual voices that they, they, they do trust. And I think that in the absence of being able to trust CNN or whatever, I think that people will turn to long form podcast type stuff. And and letting an expert go on for a while not these bite size pick bait things i think it is like maybe one of the best ways to actually kind of continue an honest discourse that's actually informed and that can. You don't move they can kind of create a actual consensus down the road so. Yeah, I think that is a good thing. And I like that the society, you know, the internet allows us to adapt, maybe new things will spring up, or maybe it'll be like the Red Scare. And some of this craziness will pass, and these institutions will start acting a little bit more professional again.

### Human: But I thought about that, too. And I don't think that we should apologize for that, because frankly, what I think it was, all of that is true. And it was what it really was top to bottom, a sad story. It's just a sad it was a sad situation. Yeah. And it incorporated so many sad things about society. And that's true. And also, everything has been so hard. that people needed a diversion. We needed a diversion. Yes, like we just needed it. And I and it is awful to say that we use that sad situation as a diversion. But we did because we needed to talk about something else for a minute, because it is hard to live under the shadow of like, recurring pandemic, thermonuclear war, you know, pending recession, like it's hard. So that's why celebrity gossip exists.### Assistant: It sounds I just more of that more of that, please more of that, please. Yep. And I think, you know, what we're now going to get to is motivation, and people knowing that this opportunity exists. And that's the next bridge. And that's what I'm really looking for a startup in. is since all the materials are out there, we are investors in brilliant.org, I highly recommend everybody check that out. It's also like 100 bucks a year. We're also investors in Dexter learning, which does remote schools. So we have a couple of bets in this space. We also have calm and Steezy musician for music. We'd like these consumer subscription education plays that sell directly. But there's one piece that's missing, that I am hoping somebody in the entrepreneurial community will take a look at, which is the motivation to get on this track. Because every time you talk about these things, there is a group of people who doesn't know this exists. And they don't know how it leads to a career. You know I'm saying? So let's say you're the kid in Brooklyn, you know, like me, you don't have rich parents, you don't know what bankers do, or VCs do, you've never met a banker or a VC. How does Jason Calacanis in sixth, seventh and eighth grade at McKinley junior high school getting a fights know that there is a track to become a VC, I found it through journalism, eventually had to, it was a lot of hustle I had to do, and a lot of luck. And that piece, if somebody could take the randomness that I experienced in my career, and make it into not random, like, how to how do I become successful as a startup, where it just took somebody who was not successful and was like, I know nothing about how to make a life. know, I'm 12 years old, totally. And then they just said, Okay, go here, go here, go here, go here. And hey, we'll sit in a room with you or a chat room and help you move over there. I got that could change everything. So this is a great startup. But I'm still looking for more on tomorrow's show. I just want to give a little preview. We're going to talk about and I don't know how to frame this. I need your help, Molly, but I want to train people on a trend they don't know about. So catch me up. on web tunes tomorrow. So for Wednesday show, we're going to do catch me up on web tunes. If you don't know, Tacoma is a Japanese web tune. You know, app that's part of, you know, a big trend that's going on in Asia, and they've achieved monthly revenues of close to $100 million. This is an incredible trend. And tomorrow, we're going to unpack it for all of you. Thanks so much for tuning in today. My final note on the day is, you know, on that, the smack we talked about and this nonsense. There's a lot more important things going on in the world. And if somebody is suffering from having a mental breakdown, which is I think what we witnessed, I don't know where you wound up with all this. But I just like this person has obviously mental issues that are acute. That doesn't mean I forgive anything they say. But I, I hope that we can get back to the bigger issues in the world, climate change, education, wars, dictatorships, entrepreneurship, hope and let's forget about stupid like a person who you know he's super entitled perhaps suffering from mental illness acting out that's my closing note on and if you have feelings on it but let's get back to work on. Yep. I almost feel guilty that we indulge ourselves talking about it so much.

### Human: I mean, like a stock market kind of like a stock market, but yeah, But with less insight into the performance of the company.### Assistant: Yeah. And, you know, you have all of these unicorns that, you know, are private companies in tech. Most of these facts work with tech companies, obviously, that's what the public was interested in. That's the inventory people want. So crunch base has over 1300 unicorns. They represent over 7800 $780 billion. Okay, so you put those two numbers against each other. you know, there's basically almost a SPAC for every one of these unicorns, if some of them are not in fact, unicorns. And so you I think, as an important question, like, why would people not want to go public, like, it's a great way to get money, you get that money. I think the problem is, it could cause chaos for your company, because now your company is publicly traded, you have all the expense of being a publicly traded company. And now you have all the scrutiny and then your employees are looking at a $1 or $2 share price and your company's worth 500 million or a billion and in a private markets, it was worth double or triple that. And you could quietly build without scrutiny. So the scrutiny works both ways, you know, getting all that attention could result in liquidation. The other thing that's going to be very interesting here is, I think maybe it's another counter theory if the market does, you know, I believe the market is bouncing along the bottom right now. And you know, yeah, we could still pull back 20%. We could pop up 20%. It's going to be like this sort of bouncing along the bottom phenomenon as people try to figure out which companies are going to survive, which companies are going to thrive, and which ones are going to shut down. Maybe there's a case that some of these unicorns are actually pretty strong, but they can't get private market funding. And actually, they can cut better deals with the promoters because if the clock is ticking, the promoter loses the $10 million it costs to set this up. And that's got to sting a little bit and all that work and time, maybe they could go and negotiate harder with the SPAC promoters, give them less carry, give them less shares. Yeah. And basically have the upper hand, because if these are all running out, then the they can grind these promoters down to whatever they want. I think if you're a strong company, when you're public, so The market is, you know, this is one of the great things about a free market is it kind of sorts itself out. And even in a down market like this, there's opportunities. And so this might be an opportunity for some company that wants to go public to use one of these facts and that money sitting there and but without consumers wanting to buy these companies, you know, you don't have the the bag holders, right? And so you don't have the buy side, which means, you know, the stock is just going to slowly get liquidated as all the insiders who are working at these companies who are early investors clear their positions might be a great way to start investing. I mean, if, if you think about it, if these, if all these companies were public, these unicorns, and they're all trading below value, you can freely trade them and have liquidity. It's like a really cool feature. I mean, people have it. Well, people have talked for a while, Molly about having a public exchange, a more fluid exchange in private companies. So what if you could trade private companies every month? So on the 15th of the month, you know, every private company stripe, etc, had an offering and a price was determined. And, you know, everybody could just trade in and out of it. What if that happened weekly? Well, here, what if it happened daily?

### Human: And I met I met a guy who that's what their company does is private market valuations. Maybe they did this one. But so okay, so but just to sum up, so the investors do not get diluted here. This is specifically about this internal valuation so that presumably when and if Stripe goes public, employees are in a better position and I would imagine that this must be in preparation in some way for an IPO. There were like rumors in the spring that's going to go public any minute now.### Assistant: Yes, so a 409A valuation is a valuation that is done by an independent appraiser. And it gives you a fair market value for a private company's common shares. Okay, so there's a lot to break down here. You have an independent party, say, hey, your common shares, the one owned the ones owned by the founders and the employees are worth this amount. Now, why would you do that? Well, because the preferred shares are the name of the shares bought by investors. So when that 600 million was put in at 95 million, those are preferred shares preferred shares in a stack of share classes go on top of the common shares. Now, when a company goes public, and the exit is clear, or it gets bought, the preferred convert into common and there's one class of shares typically and it goes public. oversimplifying here, of course, there's a lot of nuance. But why do you need to put a value on the common shares? Well, the preferred shares have a series of rights that the common don't have. So when they put that money in, they get a liquidation preference. So if the company were to sell for about 600 million, the preferred shares, we get 100% of that, and the common we get nothing. They might get a board seat, they may get information rights, they might get the ability to have pro rata and buy more shares, they may get to approve a sale down the road, they may get to approve the change in management, right, depending on how many preferred shares you have. So the preferred are the professional investors buying into a company. Now, why does that exist? Well, those investors need to have some downside protection, because they're putting money at work. And so 99 times out of 100, a company has this structure, there have been some companies that have sold common shares to investors, but it's very rare. So you do this because there's no way to actually know the value of the common shares because nobody's bought them. They were given to people. And that price is the price employees have to pay for the Molly. So when they execute their share option, so you go to work at this company, you're the CTO, and they give you 2% of the company, you've got $2 billion worth of shares, but you know, maybe in the beginning, you have but 200,000. you want the the fair market value of the common shares to be low. So employees get to get the gain when the exit happens between the four or nine a valuation and the eventual exit. Typically, the four or nine a puts the common at 20% 30% of what the last preferred was. So here, this is just a way since the market has changed, and valuations have come down to make sure the new employees don't get a sky high valuation. So this is in the this is done strategically, and fairly, by the way, to correctly appraise what the common shares have in terms of value. Sometimes a company, Molly, will be running out of cash, they have less than a year of cash in the bank, and they're not making money. And the fair market value of the common if there was $20 million invested in the company, and the company is only worth 10 or $20 million in the public markets, you know, in terms of what people would pay for it, not the public markets, literally, but in the market, then the common might be worth 5% or 10% of what the preferred shares are worth because the company has the risk of ruin. And so these 409 value evaluations are done by these firms, they get updated yearly, they used to cost $10,000 to do now they cost 500 to 2000 to do for early stage startups.

### Human: We have a client basis. Yeah, we have a concept for just SaaS companies that we use for our valuation. That's down 54%. Right? Where The Dow Jones is down nine, just to take the really large, right? So it's a, it's really, um, and of course we have to, even this market, I feel like there's two segments of it, right? Because there's a COVID and then kind of this kind of post COVID period. Um, so we talked about how there's got two segments of that 99 period different, but even here, right? Like I remember in March when COVID hit getting on the phone with our investors, and basically making a few predictions. One was, we don't think we're going to deploy a lot of capital in the next two years, or at least the next year. In fairness, I think I said the next year because we didn't know how long COVID would last. We expect liquidity to be very constrained. We expect the operating performance of our portfolio to be pretty challenged because the economy was shutting down. it's amazing, I was over three, right? I was about to say, wow, you missed one. Yeah, like you don't hire me as a predictor. And so because COVID had these impacts on spend that I don't think any of us really anticipated, right? Now, the interesting thing is, I was wrong on those predictions. But I think what we ended up what we are also ended up as a market being wrong on sometimes is we, we took some of those behavioral changes, and kind of extrapolated them out into the future. Again, I'm going to use an example of a company we're not investors in, but Peloton. We got to the mindset that, oh, it's great to work out at home. I guess everyone's going to work out at home all the time, or it's great to have Zoom so people are never going to get together again. turns out that actually, people like to interact in person turns out that people actually like going to gyms because it's social. And so I think that a lot of these behavioral e commerce, obviously, people went to e commerce. And we said, Oh, this is structural. Now, it's just a portion of the population is not going to go back to stores. Well, it turns out that people actually like going to stores. So some of these behavioral changes that we were wrong that demand was going to go down really quickly. And of course, you had the backdrop of a massive government stimulus. And we kind of have to talk about that both as it relates to fiscal policy, but also as it relates to monetary policy. Because you started with I think you said speculative asset bubble or something like that. You can't underestimate the impact that the rate environment that we've been living in has had, the magnitude of the fiscal policy that's gone into the system. We hit a lot of topics there, but there are two elements of this current.### Assistant: period. Yeah, we learned something, I think, from that pandemic, which is, you know, when you're trying to figure out what the impact is going to be, the complete absolute shutdown, created a bunch of pandemic businesses, do those behaviors stick with us? Or are they transient behaviors? You know, you're going to find out seems like remote work, we still going to have a larger number of remote work. folks. So yeah, real estate, commercial real estate is going to be impacted for some extended period of time. But yeah, going to the gym, I think people still like going to the gym and socializing. So Peloton, maybe got a little overheated. And then this wildcard, what happens when you drop just a large amount of money and you airdrop money on every citizen, and they have access to Robin Hood, Coinbase, FTX, whatever it is, to buy stuff. And they're sitting at home with nothing to do. You can get these very weird behaviors. And now we're trying to parse those out. 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. you also get this weird behavior of people coming into your business. And you do a lot of like series B series C investing, I think, since you have large funds, you had a bunch of, let's call them venture tourists, you had a bunch of people playing the role of late stage venture capitalists. Tell me about how that impacted your business when we'll mention specific names here. But some people come in and say, Hey, what Devin does is super easy. we're going to just take what Devin does and other late stage folks, and we're just going to copy it. We're going to give 20% more money than they do. We're not going to require a board seat or governance. And we're just going to drop 50 million into, you know, whatever a company or two a week. for a year at the top of the market. Take us into that moment where the venture tour showed up and then started competing with you. And let's face it beating you on terms in many cases. And founders are like, well, if they're going to just airdrop us $50 million $100 million at a crazy valuation, we're taking it. Talk about that moment in time and then what it's left, you know, because it's left kind of a hole.

### Human: I totally, I definitely agree with you. And I think, first off, shout out to Zara from Republic. She was on a previous episode. I think she would actually be a phenomenal contact for people to reach out to. Zara from Republic, previous episode, previous segment, excuse me, of OK Boomer. Anish and I actually both went to one of her dinners and it was so tasteful. It was an Iftar. It was my first one, which was quite incredible. We had a bunch of good food and the conversation was really awesome. I got to meet a bunch of people on the Republic team. This wasn't like a hiring event per se. It was just to kind of like connect other people from the Republic team to people in other industries. Really well done. And another person that does events really well, is my boss, Jason. Jason is notorious for having really good events. Even when I was able to help out with the All In Summit, which passed last month, we were able to talk about things like how to punch up the event by doing things like say there are two different rooms, make sure one of them has a lot lower music than the other room so people were able to converse. Because people were... There was somebody there I know in particular, she went. She's like, I'm here on my scholarship. I am on a sabbatical. I left my job and I'm doing my adult version of abroad right now in Miami. And I've decided that this is a good place to network for work. And I'm like, this is actually so incredible that Jason was able to think like kind of two steps ahead, and like really put these intentional spaces around the after after parties for these events, for the talks, so people were able to converse. And I think it's great. Last night, I talked to a ton of people about hiring. And mostly they were asking me if I knew other contacts for hiring. So if anyone's looking for a job, let me know because there are a ton of companies out there that are hiring mostly bigger, due to, you know, bunch of changing things, which is great. But unfortunately, the event that I was at that we were talking about hiring was a club. It was Tao for an event for the Inbetweeners NFT. And an awesome DJ was there, Blondish. She freaking killed it. Not necessarily the place I want to be having a discussion though about, like, oh, do you know any young software engineers? That's really not conducive to those kinds of conversations. And again, I know those places aren't necessarily... That's not what they're meant for. But that is something I think that I wish more companies in general, whether you're in the Web3 space, whether you're in NFP, whether you're... I don't care if you're Brex. They have a ton of events at the corporate credit card. It doesn't matter who you are. I think having intentional spaces to foster conversation are really important. Because you can go to Tao any day. But when are you able to converse with a bunch of people that are interested in the same thing as you? You know what I mean?### Assistant: But I think that the events that I've been able to really foster connections at have actually been sort of the more sit-down settings, or if not sit-down, even a room of 20 people. Maybe you do have dinner and drinks around, but you bring together a curated group of people where there are overlapping interests, whether they're in the same field, whether you may be considering them as potential hires, or they just have overlapping interests. and you facilitate actual conversations and you play host, right? And I think sometimes recruiting in this field, especially on the venture side of things is kind of a long game. It doesn't happen in a traditional, you know, I'm going to just give you the first interview, and then like three interviews down the line, you're at your off site, right? And sometimes it does. But I think if you're using these settings to really see candidates in different ways, and just get to know them and be comfortable with them and see how they interact with one another. I think providing environments and situations in which you can just have them talk to each other and you get to talk to them, they get to talk to members of the team in a relatively organic way. Obviously, everything can be kind of curated, kind of guided, if you will. But I think let's say you have a small happy hour. And I've seen a lot of these where you do dinner first with a smaller group of people, maybe it's like 20 to 30 to 40 people, and you give them enough time before dinner to chat with one another. And then you do do a sit down dinner so everyone gets to sit down. um it's not crazy loud and they can talk to the person next to them and then after that um have a larger more open kind of happy hour drink setting where maybe some other members of the community come and join and you get to facilitate more conversations that way and i think just organically if you as the recruiter are trying to talk to specific candidates just over the course of the night you will be able to find time to speak with them and hopefully it's not a really busy or loud environment that you're able to get in some really valuable conversations. You get to see how they interact with other members of your team. And it's a little bit, you know, just more organic. And it's a little bit more conducive to having such conversations than in a loud club environment. And I think a mix of those or, you know, even brunch kind of settings, just like smaller curated settings where there is I think events like organizing events is kind of an art, right? Totally. If you put together like the different factors that can make it more conducive for the kinds of conversations and interactions you want to happen, that is what is important. So if you're optimizing for really assessing different candidates for roles that might be people facing or social, And you're like, hey, I want to see how they are going to interact in these settings. And I also want to make sure that they have an opportunity to talk to different members of the team, how they talk to other potential candidates, how do I curate events that, like have different variables that make it more conducive for me to observe those things or for me to have those conversations that I'd like to have with them in a relatively organic way. So I think being mindful about how events are curated and how events are thrown, and being very intentional about it is important because given enough money and resources, you can just throw a party. And it's very easy to be like, hey, happy hour send out invites to like, everyone on this list will have alcohol will have food come through. But that doesn't necessarily like make for the best setting if you are trying to be intentional for a specific purpose. And I think we when events are very curated and very thoughtful, it's very clear.

### Human: Danny Kennedy, Chief Energy Officer at New Energy Nexus. I could probably go on all day, but that's such a beautiful place to end that I just have to call it. Well, Danny, you can find at New Energy Nexus. And then where do we find you on Twitter if people want to hit you up with all the ideas we've thrown out today?### Assistant: It is true that there are a lot of investors that want to chase those easier pieces of this. I'm guilty of this. My first business that I started was the company that pioneered remote solar design, which was a software solution to the problem of truck rolls going out the houses to do the engineering quotation drawing. We just didn't want to spend that money. to just get a quick and dirty sketch at the time. Now, it's the best way to do it and it's ubiquitous. We use satellite and aerial photographic images to do the design engineering across the solar industry. So, software can help and software will help and is in other charging infrastructure and other pieces and there are great investments to be had there. But I think you won't obviously solve it all and you won't chase down all the deals if you stick with that thesis. You know, there are hard things to be done and people have to do it. It's often these really innovative blends of hardware, software, like full stack stuff. You know, like one of my favorite companies is out of Australia called Infravision using drones to do line stringing on high voltage transmission, which is pretty remarkable tech. But it also starts getting into the sort of grid enabling technology solutions, which is a software problem around how you route electrons around grids. You might have heard that news story over the winter break that there's a solution in the Northeast that could get 60% more juice out of the grid with God, just because we don't use it fully. But if you can be smarter about it, then you can run more traffic through the streets effectively. However, to be smarter about it, you have to have intelligence on the wires, you have to have systems and sensors and stuff, and that all reported back. Infravision are really doing amazing things with drone technology in order to build that intelligence and that capability on an incredibly old bit of kit, which is the American grid, for example. So, I think that's, if you're a software investor wanting to get into climate tech, maybe that's your entry point, is those bits that bring the intelligence layer into the hardware layer, which is ultimately what we're talking about. I mean, last thought from me, Molly, for you and this entry is, don't give up on this. This is not going away. This tide turned over the last year or so, and it started to rise and people are realizing it's gone from 6% to 14% of venture capital. And it is going to go to bigger and bigger numbers, because it is what the world needs. And venture capital was invented to try to do hard things and solve big, hairy problems. And that does mean we are going to have to get better at doing not just software and SaaS solutions, even though those businesses might be legit and make a good return and a fast buck. But we're also going to stick with the other ones, a bit like, you know, digitization when we think about it, you know, way back in the nineties, I think when you first started reporting on tech was all about, you know, how it's going to disrupt all these categories. And then there was disappointments and waves of hype and speculation and stuff. But now we do realize digitization really has crept into every corner of the globe and has disrupted every segment from media to music to whatever and is now in every geography. And so too, that's going to happen with low cost electricity from clean energy. It's not just electricity in the grid and spilling into mobility and making our cars cheaper, better, faster. It's going to be making our buildings smarter and better to live in. It's going to make our industry more efficient and profitable. It's going to make our lives and everything better and investing in that is your mission if you choose to accept it.

### Human: Yeah, and it's you have an idea of what you're going to make next month if the economy, you know, stalls, you don't have to worry about selling some $800 device and people going on, maybe I'll push that out six months and I'll buy it later. They're paying a buck a day or in the case if they buy a two year membership or a one year membership, they're probably paying 75 cents a day seems kind of reasonable if you care about your health, or if you're in any way. sort of, one of these optimization people. Now you had Amazon wanted to invest in the business, they decided to compete against you. How did that wind up going?### Assistant: Yeah, I think you'll appreciate this. I mean, in building a startup, I think you want to be careful how many things you actually try to innovate around. And I never thought our business model was going to be one of those innovations. But it actually turned out to be one of the most important changes that we made to the company. So it was 2017 that we first launched to consumers were $500 high end hardware. And we found that I'm the people who bought who were staying on it for a long time. I'm so we didn't have the same drop off rates that you experience with say i'm maybe a fitbit or a job on the challenges that face those businesses but we had a different problem which is that not that many people were buying. You so. We start to ask ourselves is there a different business model here that's more product first there are a few other things going on at that time one was that fitbit was a public company. And a really brilliant distribution business, right? Like year over year, they were five xing the number of units that they sold. But in many ways, they they won the wrong game, because people would take them off and wouldn't pick put them back on. And so they weren't as product or retention oriented as I thought they should be. At the same time, there was an up-and-coming business called Peloton, which was a subscription business along with hardware. That business was getting valued at 10 or 20 times their revenue, I realized, whereas Fitbit was getting valued at, say, one or two times their revenue in the public markets. Do you want to grow up to look more like peloton or fitbit, do you want to grow up to look more like a subscription business or a hardware business? Along with that, there was this question of, is a one-time fee even the right way to think about health monitoring? If you think about someone's life, it evolves a lot. The reason that you may buy a health product or a fitness product today could be quite different in three months or six months or 12 months. And so we thought that also the best way for a product to meet a customer's needs would be to evolve over time alongside that customer. So all of those reasons led us to Whoop being a subscription. And we essentially launched Whoop as a subscription in May of 2018, and it created this pretty amazing growth engine for the company. Now today, you can sign up for Whoop in a few different ways. One is you can buy an annual membership for $240. So that's the equivalent of 20 bucks a month. And to be clear, the hardware is included, and we make continuous software and analytics updates. So, you know, six months ago, someone signing up for whoop had no idea that they were going to get a stress monitor that was going to show them how their stress evolved in real time. They had no idea they were going to get a strength trainer that was going to measure the muscular load of workouts. But those are features that we launched in the last six months to our members as part of their subscription. Right. So no one charge on that and just you get it. You get it. Yeah. And so it's made us a better business too. And I would say a company because It puts us in this position of constantly releasing new features and analytics at a really rapid cadence where is products that were competing against my opinion are making a mistake of holding back. There innovation for twelve months from now twenty four months from now so that you buy the next hardware. Yeah. So we're in a continuous cycle of improvement and they're stuck in an annual cycle of improvement. And so I think it's an advantage to our business. And then of course, we now have this recurring revenue, which is much more attractive.

### Human: hundred percent. I think that your point resonates with me that I feel like venture, especially in the last year or two, was turned into a little bit of a high school lunchroom in the sense that you had a bunch of new kids, new freshmen in the at the school and they were trying to figure out what their place was. Like anybody who's trying to figure out their place in a much bigger community, you saw a certain level of assimilation. I think that was towards more negative things like not doing diligence, rushing into deals, co-investing just off the base of who you were co-investing with and not anything else. I think a lot of people felt a certain level of imposter syndrome maybe over the last year or two, and to combat that, the only thing that they could really do to validate their newfound position in this ecosystem is to be like, oh, yeah, well, I invested alongside the best crypto funds in the world. We've done deals with Andreessen. We've done deals with Sequoia. But if you were to ask what the thematics behind all that was, there's no real there's nothing really there. And so I think that what you've seen is a bunch of people assimilating into these negative habits that were kind of propagated by all of this money that was poured into our ecosystem recently. And that has just become a death spiral for a lot of people. And I think you're going to see a lot of these funds, these 10, 15, $20 million funds that were given to a first-time manager who has some tangential relation to technology far, far away. I think that you're going to see a lot of those turn into zombie funds. Yep. One in dozen. Yeah. Yep. Totally.### Assistant: it's a really astute observation, especially for somebody of your age and generation. Like I think for some reason, you took this job more seriously than maybe some other folks. And, you know, if you watch any of the shows, we were we crashed about we were the Theranos one, but these were amazing shows. I as super pumped, I couldn't get into it, but it was it didn't click for me, I'll say. for whatever reason. But there's always some people in these stories who are around the table, we say, you know what our unit economics or this is an issue, whatever. And they basically get run over. And they're the person at the party who's like, you know what, like, maybe we shouldn't light that couch on fire in the house, or, you know, like, somebody who's pumping the brakes and just trying to keep things safe. kind of becomes the killjoy, right. And I think a lot of people want it to be popular. And they and they they substituted, like you're saying in high school being popular. know, but then they were conformist. And then they developed really, really bad habits. And now we're to see the opposite. Now is the age of the builder. Now is the age of real businesses, product market fit. And I have committed now to doing twice as many investments. I'm working twice as hard now, as I said, we did 57 first round meetings, and I'm trying to get that number to 70 meet 70 new companies a week. get them in our database, and then start tracking them and see where in their lifecycle they are. So we can make these investments. I had a company that was, you know, I don't wanna say demanding, but was demanding, you know, let's just pick a number 30 $40 million valuation. And they came back and I kid you not like closing around in the you know, $10 million range. And this is in a matter of weeks. So the market has shifted dramatically. If you're in the startup game, you've definitely heard of intercom before. And you've used it because you know, when you're at a website, and the little chat bubble pops up, that's intercom, you know it, you use it, you love it. intercoms platform can help you engage and support your users through personalized chat like experiences. And these are so powerful. We've all used them. Over 25,000 companies are doing these kind of interactions every day. When you provide great customer service, that means less customer churn, less customers churn, you know what happens your LTV goes up lifetime value, your company becomes profitable, you get a bunch of investors, you IPO, your team makes a bunch of money. That's it's basically what happens and it all starts with intercom. So if you're an early stage high growth startup, you can get access to intercoms early stage Academy today at a 95% discount. Join the program today at intercom.com slash early dash stage. Or you can just email them startups at intercom.io. Tell them you want to try the software and that you heard about it on this week and startups. And on July 20. intercom is hosting another hybrid event in its CX for growth series. This event is called localize your customer support experience and will feature experts from intercom link tree and localized talking about when and how to prioritize customer support in other languages and regions. It's a great topic. What are you seeing in terms of earlier stage valuations, people were investing 25 to 50 million pre product market fit, they were investing 50 to 100 million at a 200 times revenue. So 500k in revenue could equal $100 million company. What are you seeing now?

### Human: Half a billion is for real. That's for real. Yeah. It's the 200 with the Children's Privacy fine is based on COPA, the Children's Online Privacy Protection Act that is $275 million. And then the second fine is 245 million for these illegal dark patterns, which are things like deceptive signup tactics, like saying, oh, you'll get a super cheap deal in the first month and then jacking up the price or encouraging you to keep subscribing or making it really hard to unsubscribe. In the case of actually Fortnite, they said that they use these tactics where they actually even sort of threatened people who were trying to cancel, like, oh, you'll lose your access to the game forever. Oh, yeah, they obscured cancel and refund features to make them more difficult to find. And then according to the FTC, when Epic agreed to unlock an account, so they would if customers disputed these unauthorized charges with their credit card companies, allegedly Epic would lock their accounts. And then even if they agreed to unlock the accounts, then they would say you'll be banned for life if you dispute any future charges. And then she said this led to hundreds of millions of dollars in unauthorized charges for consumers. And then in terms of the COPPA violations, I think that was about collecting personal information from children.### Assistant: Is that the fancy word neologism? Like a new word that was created? neologism? neologism? I don't know the pronunciation, you know, this concept of deceptive design, dark patterns, as they are called in the industry, is a neologism. So this has existed in UX for a long time. It's deceptive design, some people call it. Some people call it a dark pattern, a dark design. Dark pattern is the term. Now, it is a deceptive design pattern. It has got the goal of confusing the user and to make mistakes when they click on things. We've all experienced this. If you've gone for a gym membership, or you've subscribed to the Wall Street Journal specifically, you've been in these dark patterns. If you've used one of Mark Zuckerberg's pattern, I was trying to turn off notifications in Instagram, because that new feature we talked about yesterday, the notes, and it allows you to turn all notifications on at once, but you have to manually turn them off. If you want to like granularly turn them off. Those are designed dark patterns. They're things that are designed to either bait and switch you or to misdirect you. uh, or to shame you in some way right misdirection The rich motel is part of this where like to keep you inside of a particular product And I just want to point out, you know, um the cognitive dissonance for the journalism industry I I was like when I heard y'all, uh talking about this. I was like, wait a second Put it aside kids which you made that point in our private chat unsubscribing should be as easy as subscribing. And I did a search for Wall Street Journal unsubscribe on Twitter. I'm the number one two and three results. So go on your Twitter right now. And just type in like Wall Street Journal unsubscriber answer as well. Oh, that's hilarious. Wall Street Journal story that we were talking about. And it is the worst unsubscribe in the in the world. And they make you call on the phone to unsubscribe and you can subscribe when you're you when you're online. And they and they do deceptive ones like the $1 introductory price and then it pops up to another price. So literally journalism media is the worst offender in all of this. And it's really like, I think as journalists hate this, because it makes journalists look really stupid, when they have to admonish people for doing deceptive stuff, and their publishers who they report their editors report into, are doing the most deceptive stuff in the world on the other side. I asked the woman on the phone, this is like, I'm trying to unsubscribe from Wall Street on the make a call the phone, I said, Can I ask you a question? I subscribed online, why can't I unsubscribe? And she's like, Oh, that's for security reasons. I said, May I ask you another question? I understand you're just the operator. But taking my money is where like their damage could be done. In terms of fraud. If you're taking my money, that would be like concerning to me, I'm asking you to not take my money. And you're saying you're not doing for security, shouldn't you do it the other way? And she's like, it's a fair point. I was like, Don't worry, I'm not recording this. But let's pull up the first paragraph here. This first paragraph of the Wall Street Journal story is the most epic sub tweet, as you pointed out in our private chat. I would like you to give a dramatic reading of this journalist. Can I get the journalist's name here? I scroll up a little bit. This is a journalist Katie Dayton, Dayton, sorry, Katie Dayton. Yes, I can see it there. From December 1 2021.

### Human: Yeah, no, that makes a bunch of sense. Okay, so that the data is hard to come by. However, Mr. Beast posted a fund dashboard based on Tick Tock and said he had 200 million likes in 2021. 1 billion views on Tick Tock, but only made $15,000. Okay, 1 billion views equals $15,000. So you get $10,000. Yes. So Charli D'Amelio has 133 million followers. She makes she earned 17 and a half million dollars last year. That was TikTok's top earner. But like many creators, like lots of creators have discovered they need to diversify away from just streams and likes. And so a lot of them have merch. That's how Charli D'Amelio is making all of her money, her clothing line and promoting products in TikTok videos and other ads. That's also the case with Instagram. Instagram doesn't have a fund to pay creators directly, or at least didn't, I think, for a long time. They mostly make money through these influencer and merchandise deals. But if Charlie D'Amelio, who uploaded 322 videos in 2021 and racked up 2 billion likes and 10 billion views, if she's earning money at the same rate as Mr. Beast, she would have earned $150,000. Makes sense.### Assistant: So there we need to do some back of the envelope math like we are prone to do here. We need a thing for that, by the way, like, don't we need a little like a sound effect for that, like a calculator calculator, like, or one of those old, tiny registers. Remember the ones we go? And then you hit the enter and it changes. So we need that kind of thing for a little speciality. It's 2022 and it's a great time for you to start your own online business or a blog. And Squarespace is the answer. From websites and online stores to marketing tools and analytics, Squarespace is the all in one platform for you to build a beautiful online presence and run your business. It's not just about a beautiful marketing brochure online. It's really your core business now. And with Squarespace, you can publish content, promote your business, announce events or new projects. Plus, you can sell actual products and services and so much more. They have beautiful templates by world-class designers and powerful e commerce functionality built in. And of course, everything's optimized for mobile. So if you're looking at it on a smartphone, a tablet, or a widescreen monitor, it's going to be beautiful and perfect every time. And they've got built in SEO. So you don't have to hire some consultant who disappears on you and charges your arm and leg. They just built it in. plus free and secure hosting. You don't have to go find a hosting provider that's built into Squarespace and they have 24 by seven award winning customer support. If you need help, you get help. If you don't need help. Well, great, but you always have it there when you need it. And trust me, there's gonna be at some point, maybe not this year or next year, but maybe two or three years from now, you need some help. You want somebody to pick up the phone, don't you? Or to respond to your email, where they're going to do that 24 seven. So go to squarespace.com slash twist for a free trial. And when you're ready to launch, just use the offer code twist to save 10% off your first purchase of a website or domain. And congratulations to the team that went public in 2021. An amazing journey for a hardworking, incredibly great group of builders. You have my respect and we love the product. And thanks so much for supporting this week and startups. We really do appreciate it. So when I was on YouTube, I was part of their creators program. I wrote a famous piece like I don't want to work on YouTube's farm no more like Maggie's farm for Bob Dylan. And I was just like, you know, this, they take 55%, or they give us 55%, they take 45%. It's just going to be really hard to make this into a sustainable business. And that's become true. But you still make millions if you're a top creator, or hundreds of 1000s, or 10s of 1000s. Yeah, so people have figured out how to make it work. But the CPMs, the cost per 1000 views that you can charge an advertiser for, it tended to be somewhere between two and $7 net to the creator. So if you got 1000 views, you made two bucks 10,000 views 20 100,000 views 200 and a million views $2,000. So a million view video on YouTube could make two to $7,000 in advertising from YouTube and YouTube. It was very low at the beginning was sub $1 and then it slowly went up as they got more advertisers and they increased the number of ads. So what's the big complaint on YouTube?

### Human: Yeah. Yeah. And, um,### Assistant: You know, we we put $2 million back into restaurants in the southeast, like we'd helped a lot of communities. And so the natural next step was, all right, let's take this network and let's build QR code menus. Let's build food delivery services. Let's, you know, take take over like this entire like logistics network and like really dominate and bring this digital transformation forward. And what we realized there, or what I realized was just that it's not very fulfilling, like there's plenty of people already trying to do that. And as Jason's friend, Chamath likes to say, push a button, get a weed brownie delivered $10 billion valuation is just not, not something that was really exciting. Right. And so I was really looking for what I I get to see all this tech out there, like, where do I really want to be focused? And it was one like, I don't actually know how to build a company, right? Like, I didn't have the time now, I'd like to think I've learned a lot. And so it had to be what is something we can get people passionate about, right? Where do these executives, these investors, these seasoned people that have the opportunity, especially in 2020, before, you know, when we're just getting started with all the money printing, they can go anywhere, why do they want to come work with me, right? And so It had to be something mission driven. Second, um, I finally got to see what fast like hyper growth looked like when we went from seven businesses in Clemson to 1300 across the Southeast in five days or five weeks. And so it was like, how do I, how do I get that again? Right. And you need a large market. You need like something where it's trillion plus dollars, something where tech hasn't really penetrated. That was the key takeaway. It was, let's force this digital transformation. So when you look at that, you're sort of left with like nine major industries, right? It's like real estate, transportation, education, shipping, healthcare, climate, space, AI, and your insurance. And out of all of those, like only space and climate are even remotely exciting, at least for me. And then space doesn't really have a lot of it's a lot of hardware and climate is, you know, also a lot of hardware. But within natural disasters, I was like, wildfires are bad. I think you can agree with that everybody else can. They cause a lot of damage, and I want to live in the bay. And so I think I can get people passionate about this. I think it's existential enough that If I solve this problem, I will feel good about myself. And while also, you know, there's that potential for if we create enough value, that revenue is downstream of that. And so it just was a very logical step by step thing of like, let's build tech for fires. And obviously, AI, like machine learning, I just think that is the future, that's everything will be automated. And so it was like, let's build something at the intersection of AI and wildfires. And so the first iteration of the company was an intelligence platform, where we took satellite based imagery and told built software for the lifecycle of a fire. So it was, here's where a fire is going to start, here's what to do about it. here's where a fire is, and here's where a fire is going to spread over the next 24, 48, 72 hours. And that just didn't have that market potential, at least then. And so we had to really pivot to where can we make the most impact, which is how we after a lot of customer discovery, arrived at building Fionn maps.

### Human: Oh, we think that there is really great, wonderful, creative things to do in the kitchen, like cooking the food. And so we think that that's where people should be working, because then that creates a better guest experience. And the reason why Dishcraft started was because so many people came to us from the restaurant industry and said, we can't hire for this role. And when we do have a dishwasher, they churn out within 30 days. And it takes us forever to find a replacement. So please, can you automate it for us?### Assistant: Hey, everybody. Welcome back to This Week in Startups. I'm your host, Jason Calacanis. And I've been your host for over a thousand episodes that you can go watch at thisweekinstartups.com. And we like to do a little series here on the show. And one of them that we did was the rising stars of SaaS. SaaS is software as a service, but as we are prone to do when we do these kind of little mini series, if you will, is to maybe open up the aperture and allow you to think about SaaS in a different way. And one of those ways is to think about software as a service as hardware as a service. And our next guest is doing something really fascinating in robotics. the worst job you could ever have. I believe in the modern society. Having done this job in the 80s at my dad's bar and my my baby brother, Josh loved this job. I hated it. I was front of the house. I was a busboy and a waiter. My older brother Jamie was a bartender and a waiter. But my baby brother loved to be a dishwasher. Nobody I've ever met since has enjoyed being a dishwasher. It is the worst job in the world. Now, I know there are many precious snowflakes listening. Socialists all who believe that we have to be really careful, really careful that we don't lose jobs. Oh, no. What if we lose jobs? Newsflash. The human spirit and society has so many problems to solve that getting rid of brutal, hard manual labor is a good thing. We shouldn't try to protect protect backbreaking labor. We should try to automate it and move on. If you have any demented strange feelings about this. You're probably just a young person or a socialist maniac who has not figured out that when we got rid of telephone operators, those people got jobs. When we got rid of bank tellers giving you money. When we got rid of people literally dragging plows and replaced them with horses and then replaced them with, you know, the ice engine. Life got better for many people. So, getting rid of dishwashers. literally eliminating that job, I believe, my personal belief, would be a noble thing to do, just like cleaning bathrooms. If somebody could come up with a way to automatically clean bathrooms, it'd be great if a human never had to do that again. My guest today is the CEO and founder of a company called Dishcraft Robotics. And she has been working on this issue. She may not have the same feelings I do strongly about eliminating backbreaking manual labor to let people do other jobs that we need. But welcome to the program, Linda. Pulio. Did I get it right, Pulio? You got it right. Oh, thank the Lord. OK, you heard my rambling anti-socialist communist craziness, because every time I talk about automation, because I'm such a rabid capitalist on Twitter, the echo chamber that nobody should pay attention to, I get absolutely demolished because the socialist and Bernie bros have found me and they attack me. How dare you want to have self-driving cars and all this stuff? How do you feel about it? You're working on and we're going to get into all the details. But this is the number one issue that comes up in your life is, oh, my God, you're going to eliminate this job. And there's this many millions of people who are dishwashers. How do you feel? Do you feel like more like I feel that we should eliminate these jobs and move on to higher level things and they'll always be other jobs? Or do you feel like there's a zero sum game here? We're going to eliminate all the jobs and nobody's going to have anything to do.

### Human: It could be a great investment. Right. Exactly. Like, that's true.### Assistant: Yeah, yeah. But you know, the good news is his motivation is very much a it's obviously not financial. Because if you were to look at what what's in it, what would be if you if I were to give you three companies to invest in Molly, Tesla, SpaceX, Twitter, Yeah, rank order, which one you think will have the greatest returns in the coming decades? It would be you could argue Tesla or SpaceX. Right, exactly. And then a distance 1000 would be Twitter, right? I could see Twitter doubling or tripling in value, especially under Ilan, who, you know, is a product genius, obviously, and a great leader of companies. Some might argue he's the best right now on the planet. So you know, doubling or tripling is nothing when compared to what could happen with SpaceX and Tesla. So it's, he was very clear in his TED discussion with Chris Anderson today, that this had nothing to do with that, which is great. And then he was very clear about his intentions. He is, I think, like many of us in Gen X, or older, believes in free speech as a fundamental, very important aspect of society, and that there are laws around free speech, and that those should be followed. And then he was also very detailed about saying, Hey, listen, what the algorithm and shadow banning and all the stuff that's occurring in private in secret at all these companies, Facebook, Instagram, Snapchat, tik tok, and of course, Twitter, all of that should be open sourced, the algorithm should be on GitHub, everybody should be going through with a fine tooth comb and detailing. This is what the algorithm is actually doing. And I would like to opt out of the algorithm or I'd like to pick another algorithm, which was something that Jack has, you know, former CEO and co founder and creator of Twitter has talked about. So I guess that's a good place to start, which is the overall motivation, which I can tell you firsthand is true. He cares about this stuff deeply. And that is the reason for wanting to buy this. The other thing he said was he wants to bring along as many as the shareholders as possible. So it's not like he wants to own and control the whole thing, you can have 2000 investors in a private company, And so what he would like to do is, he's been pretty clear now in this TED talk is let's take a private and bring all of these investors along with us as many as possible. Because then that would lower his burden of having to come up with the cash to cover this. And obviously coming up with the cash to cover this, you know, might mean liquidating other shares or, you know, raising money against us. There's a lot of mechanical ways to do this or giant hedge funds that would love to back in Elon. I can tell you like, not from and to be clear, I don't have any inside information here. But there are plenty of large hedge funds who love the idea of taking a company that is mismanaged, which I think we'd all agree, of all the big tech companies, Twitter has been amongst the most mismanaged and, you know, not grown since IPO. In fact, I think it's trading below its IPO price, or maybe it's just around its IPO price. Somebody fact check me there. It's been a lost decade for Twitter. Yeah. I think that is super relevant here. Hey, Tom Eschbacher is here with us again. He's a senior sales manager at LinkedIn Marketing Solutions. And we're talking about their amazing report today in startup marketing, as well as how to use LinkedIn to grow your startup as an angel investor. I like to see revenue early and often from startups. How can LinkedIn help with that?

### Human: It's like a little protest. It's I'm gonna do exactly the work you're paying me for, and that's it. Right.### Assistant: No more than that. And here's the thing, great managers have figured out how to do this. So I'll go through my steps of how to be a better manager and do this, because I'm going to write a follow up to my SOD EOD. You need to have people who are self motivated. And then you need to have each everybody in just everybody has to be accountable to each other, not up and down, but left and right. Just be accountable to each other to do the best job you can. I'll get into that in a minute. But I think what's going to happen that people don't understand is that the people who fight for work from home, you better be a high performer, because what you just did was you are now competing with the globe. And managers previously did not know how to manage people off of, you know, out of offices. Now, all managers do know how to manage people out of offices. Now, some are bad managers still. But But they know how to look at output, they know how to write a spec of work, they know how to share your calendar, time blocking, all this stuff is becoming top of mind for people. So then something happened to me, I was looking to hire SDR, sales development reps. And then I tried magic again, which is just another like Fiverr, Zirtual, we were investors in Zirtual before I went under. And I was able to hire through magic for 10 bucks an hour, 15 bucks an hour, virtual assistants, and they're doing the work that would have cost an American previously 3040 $50 an hour in America, in an office, not counting commutes or any of that. I'm just counting employee plus benefits. Yeah, these employees don't get benefits, they're outsourced, and they're on demand. So if you need 100 hours this month, and none, and I've done this now for a lot of tests, you've seen me do it. And it's working beautifully. So a whole category of work that I would say would be 50 to $70,000 jobs are now on demand jobs. And I think we probably spend $1,000 a month 12,000 a year for what I would have spent previously 50 to $70,000 on hiring a job for. Yeah, got to let that sink in. That's going to just keep happening. And people are doing this now for customer service. They're doing it for sales development. They're doing it for design. So designers now offshore in South America, developers in South America cost half a third of what they do in the US. The counter argument, of course, is well, that's always existed. not really. Two things didn't exist. Those workers. Yeah, it didn't exist at scale. Those workers were not getting the phone phone calls from top companies, because the top managers had the luxury of hiring, you know, American workers who wanted to come to an office that they could bond with and build their little organization, they could have their designer and their SDR and everybody here. Now managers are like, I don't need another headcount for that. I'll save my headcount for, you know, a real heavy hitter. Yeah. Or instead of having these three, you know, B-level players, and it's not B-level, it's a sort of like commodity work or, you know, what becomes rote. this is going to take the entire average of salaries down to a global average, and the global average or up, right? Like, let's not up if you're out if you're in America, it's going down, normalize, it's going to normalize, it's going to normalize. But I'm just speaking from an American perspective.

### Human: Yeah. NVIDIA has made a couple of investments in recent AI startups, actually. They invested in Runway, which we had the founder on the podcast, suite of generative AI editing tools. Cohere, whose founder is going to come on the podcast. They're basically building like a B2B LLM and a couple more AI startups. One of them is called CoreWeave. Have you heard of this company? No. Okay, so educate me and the audience core weave is interesting. They are the company that's actually helping inflection deploy these 18,000 GPUs. They started as an Ethereum mining company back in 2017. So this is this is like a genius pivot. They put together this big cluster of GPUs to mine Ethereum. when crypto was going like this. And then at some point over the past few years when it started to go like this, they pivoted from crypto mining to basically being a GPU cloud provider. So if you go on their website, you can look at, they have all the Nvidia GPUs ranked like this and the top ones are the most expensive and you can rent them on an hourly basis. It's like such a great business. Yeah.### Assistant: If you think about what crypto did really well, it was build infrastructure and build these federated or, you know, networks of computers peer to peer architecture, just like Napster did previously, or scour. Travis's first company before Red Swoosh, etc. So CDNs and peer to peer Kazaa, Skype was peer to peer, all that stuff is kind of in the same wheelhouse. which is how do you take a job and put it out across a large network. And that's what GPUs do or Tesla's supercomputer that they've built is doing. So this is a really great pivot, obviously. And we're seeing that across the board. I think if you are a crypto person, and you don't consider pivoting right now to AI, and you've got like a really great tech team, kind of crazy, because consumers and businesses were open to hearing about crypto solutions, right? Everybody was like, Okay, yeah, tell me more. Tell me more about NFTs. Tell me more about blockchain. Tell me more about permissionless, you know, currencies, tokens, and people heard it and were like, too complicated. Not enough value for the end user, whether it's a business or consumer. Now you juxtapose that with AI. I don't know if you saw the link I shared with the sales team using chat GPT for and Bruce O'Brien was, you know, giving them some advice on how to look up potential sponsors. I won't say what the thread was, but producer Brian on the media side of our business was telling the sales team, Hey, look here, I made you a thread of how to get all the sponsors of other events. So when you sell sponsorships for the all in summit, Here are some people who sponsored other events and it put it in a table for them really nice and clean. So I think that is why, you know, people are falling in love with these language models and tools so quickly, is that they just make you faster at your job. And it takes out the are I find it takes out the most arduous, repetitive, boring parts of your job sifting through Google links. sifting through Google links, formatting stuff into a table, tagging a blog post, whatever it is, you know, doing some basic research and it's getting better and better. So if it gets 30% better a year, which I think is a pretty low benchmark, man, as I've said, hiring freeze across the board, we're 19 people in our company and I feel like we're doing the work of we're doing more work than when we were 23 or 24 people. Yes. And this is going to be what rebounds the entire economy, not to go on a total tangent, But if people are concerned about earnings, as I said on the all in podcast many times, and I got a little bit of pushback on this. kept saying, like, well, you know, if your earnings go, if your revenue goes down, if you cut your spend, you can actually keep your earnings the same or better. That's math, baby. It's just basic math. And, you know, I think Chamath was like, yeah, that's not easy to do. And I was like, it's not easy to do, but you can do it. And then all of a sudden, Facebook, Twitter, Microsoft, Google layoffs happen. And you're like, wow, they took the medicine fast. And I think that was all CFOs and founders just saying, you know what, I don't want my stock price to crash. I want to have good earnings. And so who cares if we cut 10 or 20,000 people if we have 80 or 100,000 doesn't make any difference.

### Human: this doesn't happen too often, you know, for in the developed world, bankruptcy, usually there are bailouts, because you can print money. But it is possible if nobody wants to buy your debt, that this could result in a spiral, probably in the frontier markets, it happens frequently. And in emerging markets, the next level up, it happens sometimes. And then even in America, we've had municipalities famously in 2013, Detroit went bankrupt, right. And I remember this, because Vinny, I was buying during the last financial crisis of 2005 to 2007, I started buying muni bonds that were revenue backed because I thought the market was overheated. And I just said sell all my equities, I want to buy 100% muni bonds because they're backed by revenue. So there's revenue backed muni bounces municipal bonds, then there's revenue back revenue back long and short means they're backed by some revenue stream, typically a bridge with a toll, or it comes out of the tax coffers first. And so I tried to find out if municipalities had ever gone bankrupt. And it was like such a short list. It's usually like some small podunk town, where like, there's one light and somebody got hit by a car, and they sued for $100 million and got 25 million. And that's double the budget for something.### Assistant: Let's talk about the mini bonds and the whole bond world. But I'll get that in a second. Let's look at this tweet from James Butterfield from coin shares. Okay. The trading volumes unbound to BTC was 10x plus I think 12x where it is on an average day on Monday when everything collapsed. So what does that tell you? People in Britain were buying Bitcoin. a billion dollars in a day, a billion dollars a day, net buying. And that's why Bitcoin spiked to 20,000 something yesterday. And then it pulled back. And the reason it pulled back is actually not what people think it is. So So my theory on this is, you're going to find people in these foreign countries and hundreds of billions of dollars fleeing capital fleeing the fiat markets because of the collapse and people, it doesn't have to all leave, it just need a small percentage of it needs to say, I'm going to go put diversify and put some into crypto 5%, 10%. And that's enough to move the market significantly. It's fascinating. What happens when you have these spikes in the middle of a bear market is people who need liquidity and cash are selling into the spikes, and there's a lot of bear market selling absorption that needs to happen. When that finishes, when all the people who are going to sell in these levels sell out, and maybe some at $20,000, $25,000, et cetera, you're going to have a shortage of Bitcoin. And Bitcoin, quite frankly, is the gateway drug to crypto. It's what everyone, the majority of people are going to buy if they get into crypto. This chart is very telling. Let me tell you the second reason this thing goes, I wouldn't say parabolic, but it starts going on a run, is a lot of the pension funds, and the reason the UK is doing what it's doing right now to save them, is they weren't happy with 2%, 1%, 0.5% yields on bonds. Nobody was happy with that. So what did they do? They went and leveraged up their portfolio. We'll never see a 25% dip in bond prices. I mean, come on. These are government bonds. Let's take on 75% debt at low prices, half a point, 25 basis points, whatever. Let's buy up more bonds, which obviously push the yields down. And they were debt-laden, but they were juicing their returns for their holders, right? And we're seeing this unravel, not just in the UK, just like canary in the coal mine. This is a global phenomenon. If you wonder why bond yields went down so low last year, because debt was free. It was like, well, if I can get 2% on bonds and money is free, I'll just take as much of it as I can. And we levered up the system. And now we're seeing an unraveling, and we're going to see a collapse. So my prediction in the next 90 days, probably, I'd give it up to six months, a G50 country will go into a debt spiral. Yeah. And that money is going to flow out through crypto. A large portion of it flows out through crypto. And then there's a domino effect. If you see this happening in the UK, and You're in Italy or Greece, and you see the signs of it happening there. How do you prevent run of the banks? You limit withdrawals. You start telling people, you can't take money out of the account. We have a liquidity issue. You scare the heck out of people. We've seen this happen in Cyprus. We've seen this happen. many times. You're being ridiculous, Vinny.

### Human: It's been around for quite a while. But see, the thing is, is that just because of the way that most interfaces function, it's not really like necessary or a feature of the interface because the episode or say, say the podcast cover art is so small in most interfaces because it's just kind of a, you know, over glorified spreadsheet that it's not really something that's, you know, useful to the user even in terms of navigating. But You know, our feed really features it much like Instagram. And of course, we are going to be reaching out to podcasters to really encourage them to take advantage of that real estate, because that image actually does tell a compelling story. And, you know, Netflix themselves have done a lot of tests, and there's a lot of value in selling your podcast, you know, specifically that episode with an individual piece of art. It does tell the universe, you know, the listener something about it. So, um, but to your point, yes, there's ways in which we want to start surfacing that those chapters and those topic segments. Um, and there's going to be some user user education around that because it's not something that's, um, really available to people right now. And, uh, we are working through a user experience that we hope is going to be solving that, that issue. But right now, the current beta doesn't include that. The current beta is really just kind of the MVP experience of scrolling through a feed of content that's generated for you by the AI. And very soon, we're going to be releasing Search on iOS as well as other features.### Assistant: amazing. Okay, listen, tremendous success. Thanks so much for having us involved. Yeah, you've been able to raise a little bit of money. And we'll talk about that. But at the end of this, I'm going to interview two more founders. I'm going to ask you about the business model and raising money as a group. So stick with us. And next up. Another amazing investment I made in the past year or so. This company is called depth. And you can visit the company at shop deft. The founder's name is Zack Hudson, and they are building, I kid you not, a new search engine to compete with that old one. You may have tried Google, but this search engine is specifically designed around e commerce where, in my personal opinion, Google is bought and sold. Google sells all of the inventory now above the fold when you do some kind of commerce search you need only say you know noise cancelling headphones and when you do that what you'll see is they give you that top row it's all ads so i'm looking at it right now i just typed in noise cancelling headphones while we're on the show five or six links up top all paid for Who knows if they're good or not. And the ad button that tells you it's ads is so tiny, that it's literally the smallest item on the page. under it to links for bows that are ads. In other words, when I do it on my browser window right now, I see but one link for noise canceling headphones and it's Best Buy. In other words, it's worthless. This Google search is terrible. It's bought and it's sold. And of course, I already know Best Buy has headphones, there is literally no help here. It's just garbage, pure, unadulterated garbage. And you wind up just doing a bunch of clicks and making a bunch of money for Google, but you don't get your problem solved because Google is doing the money grab company was founded in 2019. And their beta launched in December of 2020. They finished in second place during the launch accelerators 23rd class. And if you're wondering what that means is we have the investors who come every week tell us their number one, their number two, their number three startups. Why do we do that? Well, we like for the investors who are coming to pay attention, and to see all seven presentations. So it's a way to make sure they pay attention to all seven take notes to pick their top three and be present. Now most of them do that. But I would say one out of every 10 or five judges, you know, might get distracted with their email or something like that. And their VCs and they're busy, you get the idea. So I just asked them when they come to the accelerator, hey, be focused, just please, for one hour, on the seven startups, we get that mutual buy in agreement, and they give their one, two, and three, what it also does is it gives the founders an idea of what each of those investors is most interested in, if they don't like consumer apps, well, they're not going to vote for found them, or they're not going to vote for death, they're going to vote for the b2b companies. And that's good for the founder to know, because you can then eliminate them as potential targets for your fundraising round. So they've raised a little bit of money. Post accelerate, I've been lucky to invest in the company twice. And they had a little bit of revenue last month just starting to ring the register. It's very early days, they have 400 monthly active users. And last month, they did 3000 in revenue. Welcome to the program Zach.

### Human: So these were really, really early days for AI models for dialogue generation. Those were sequence-to-sequence models, so really just the first models that ever were built to recreate some sort of dialogue. So they were really low-fi, so they weren't very good quality. A lot of that was kind of like a coin toss. However, because we trained on his text messages, it really did feel like him in many, many cases. It wasn't a great quality, it didn't have fantastic memory and so on, but it did feel like you could go back and say something and get a response in a way just like Roman did when he was alive. To me, that really helped me with grieving, mostly because it was the first death that happened to me. I was still in my 20s. No one that close to me died before. We lived together here in San Francisco. We started companies together. We're really, really close. And so, for me, it was very striking that when someone passes away, there's kind of nothing really happens. There's a funeral, but then after, very quickly, people stop talking about that person. I just didn't expect that he will be almost gone from my day-to-day life so fast, and I just wasn't ready to let go. I think this is similar to, you know, in some religious traditions people spend a dedicated period of time grieving, like they say Shiva for instance or something and here in the western tradition we don't have that anymore that much. So for me that was more about remembering him, making a tribute, um I was thinking more if I could write a song I would write you know I would have written a song if I could write a book I would have written a book just like I don't know Joan Didion did for her you know husband and daughter so that was more where I was getting inspiration not making a clone and putting it in the attic but it did feel a little bit creepy in the moment and I was scared that it might be creepy no one else did it before so for me it was a little bit scary.### Assistant: Yeah. And I, I guess some people will write a book. Some people write a song, like you're saying, make a documentary film about their parent that has passed. I mean, there's different mediums to, uh, memorialize and you pick the medium of a chat bot. So there's no judgments there. I don't think, I think it's a fascinating thing to do. And like anything else, we can become obsessed with somebody who passes. I've had a couple of friends who've passed unexpectedly at young ages and It's Yeah, I mean, it's the nature of what we have to deal with as humans. All right, we all know the one thing that separates great startups from the good ones is product velocity. What does it mean product velocity fancy term, right? You got your product and your velocity speed, the speed in which your product improves. So can you ship updates? Can you release new features? Can you do bug fixes? Can you iterate on the interface? Can you solve problems for your customers? And can you do it quickly, because you're not alone, you have competitors, and your customers have choices, they may solve their problems by writing their own custom code, or they might use your solution. This is what startups are about how fast can you get that product velocity going? And so, you know, how do you how do you supercharge it? Everybody says, Okay, yeah, we want to go faster. But you got to go faster, intelligently. And Crowd Botox is going to help you do that. They're your CTO as a service, basically, they provide you with the most optimal architecture to get your product to market as fast as possible, you'll have access to an on demand product manager and developer talent, and they will help get your app into production 10 times faster than conventional development. Crowd Botox can work with your in house dev team, or you can just have them work independently. and you own all the IP, you own all the source code, let the folks at CrowdBotics supercharge your product velocity today, no more waiting. Get a free build plan at crowdbotics.com slash twist. That's a $4.99 value just for the twist listeners. You get that for free. That's c-r-o-w-d-b-o-t-i-c-s.com slash twist for a free build plan. So then I guess the question becomes, putting aside death, and celebrating people's lives and having Romans bot be able to talk to people and maybe, you know, just like looking at a picture, you could look at a picture and daydream about your life with that person or go through your camera log or previous chats. It's just a little bit more interactive. I guess the question becomes, what is the point of providing this service now proactively to, you know, I'm guessing it maybe skews younger, but I could also see older people who are lonely, giving an avatar is this meant to make people less lonely? Is that the mission here? Is it meant to make people better at conversations? Because it seems like there is a group of disaffected young, dare I say men, who maybe don't know how to communicate, as well, because they've mitigated their relationships with the world with video games and pornography and this incel movement. What is the point of all this from your perspective of the creator? Do you want people to have meaningful relationships with this avatar? Or do you want them to have meaningful relationships with this AI chatbot, whatever we're going to call it? And then go out into the real world and take those conversational skills and take those empathy skills that have been sharpened in the app, and then have actual real world relationships. What's your what's your goal as a creator?

### Human: So I've been trying to strip that away and just say, can you play the song acoustically for me? Where's the acoustic version of the song? Here's a guitar. Yeah. No microphone, no post-production, just let me hear the lyrics and the song and let me take a look at it. And so I've been trolling indie hackers as well as Pioneer Labs, which I think is super cool. And I had the founder also on the pod. But tell everybody how the site works.### Assistant: Yeah. Maybe it's best to start with a little bit of a history of what IndieHackers is. So it's a community. The people on IndieHackers, as we've been discussing, are people who, I think, prioritize freedom above everything else. So they are in it for the glory. They're not trying to blitzscale their way to a unicorn valuation. In fact, they don't really even want to have investors or any sort of boss telling them what to do. What they want is to gain their financial independence, usually on their own terms. And that means they want to have creative freedom to do what they want. They want to work on their own schedule, whatever hours, whatever months of the year they want to work, from whatever location, with whatever people they choose to be around. So it's all about freedom. And these people were all hanging out on Hacker News four or five years ago, and kind of like these little discussions that would pop up every few months. What's your one person SaaS company? How are you making money online? And there wasn't really any other place on the web where you could go to find out these stories. And so I was one of these people. This is what I wanted to do as well. And I would go there religiously. And I would just devour every story of the Peter Levels of the world or the Josh Pickfords who had these bootstrap businesses to try to figure out how they were doing it. Eventually, I realized, hey, this is an unsolved problem. There are clearly many thousands of people just like me who are trying to figure out this information, and there's just no place for them to go because the tech press has basically got a monopoly on all startup stories, and they only care about the giant, glitzy, B2C, well-funded startups. And so IndieHackers got its start actually as a tiny little blog. V1 of IndieHackers was a blog with 10 posts on it. And every one of them was an interview with a different bootstrapped founder, usually developers. And they would all share, here's how much money I'm making. Here is how I came up with my idea. Here's how I wrote the first lines of code, got my first customers, just completely transparent, giving back to the community because someone in their history had helped them get started. And I think that was really the backbone of IndieHackers. But it was only a blog for maybe a month. Within a month or two, I built a community forum. There's also a mailing list. And now there's a podcast as well. And today, the community forum is front and center. So if you go to IndieHackers.com, you've got a giant thriving forum. There's 140,000 members. And these aren't like the peanut gallery. These are people who are actually building businesses. Right. And they're asking each other questions or helping each other out. And there's a bunch of ancillary, supplemental resources where people can share their stories. So there's groups in these communities where people who have similar interests can help each other. So for example, we have the largest no-code group on the internet. 17,000 indie hackers are part of that group. And they share their stories and tips about no-code tools and no-code startups. We've got a giant directory of about 12,000 products. Indie hackers can say, this is what I'm working on. Here's my timeline. So you can go read anybody's history of all the steps they took to build their company. And most of the products on there are transparent. So they'll either plug into Stripe and share their revenue numbers, or they'll just type in their revenue numbers and share with everybody. Yeah.

### Human: Okay, well, that gets me to a bonus question. Can I sneak in a bonus question? Of course. I have recently talked to founders who have said that they closed around, and maybe are raising a next round, but that we can invest or someone can invest or they're asking other people to invest on a safe note, like as a tweener in between. And so in some cases, And this has come up with several different founders. And it made me wonder, and each one has involved a different case. But in some cases, like it seems like a way to let an investor into a round that's already closed. Yeah, like, oh, if you just want to put some money in, great. We'll spin up a safe note for you at our last valuation. Super. Sure. Yeah, that's happening a lot. That's a lot. Yeah. Or the there's, we will spin up a safe note for you right now, because we're opening our next round. But it's taking a while because the term sheet negotiations are going on. And we're about to run out of money.### Assistant: So when you're raising around, as a founder, let's say you've raised your seed. And let's say for argument's sake, you raise a $3 million seed at a 12 million post or a 12 million cap, and you know, you gave away 20, whatever is 25% of the company, now you want to raise again. You say, you know what, I think we deserve a series a going to try to raise 7 million on a 35 million post a 28 million pre we had the 7 million get to 35. Nobody wants to lead it. Because maybe they're not leading rounds right now. So you say, Okay, we're gonna but everybody hasn't done their capital call. They haven't done their capital costs. Yeah. And they don't want to take down 7 million to to lead you around with five, they're going to do five of the seven. They don't want to take the 5 million. They don't want to ask their LPs that family office to put in their money. So they say, Yeah, you know, then the founder says, Well, wait, I got all these people who are angels or seed funds, or, you know, or venture funds, they don't want to lead the round, and do a price round and put in 5 million. But they said they'd like to top off and that 12 million round was really nice. believe in the company, I don't want to go to 35 million. So maybe we could do a $15 million note, I put in 1.5. I don't and then I don't have to take that capital call down or we pass the hat. I got 500k in coffers right now. You got two other investors, J Cal and a syndicate or you're going to do a crowdfunding site like Republic, you think you can get 500k there, you got five angel friends who want to put 50k in each, and you do a pass the hat, what's called a party round. And people will pursue these in parallel. And I advise founders to do this. If they're having headwinds against the price round, start the note. And you just do a rolling note, you can leave those notes open for a year if your board lets you so you can just say, Hey, we're gonna leave the note open. If you like somebody, we add them to it. And then we don't have to do additional paperwork. It's not the best hygiene for most VCs. They like to close it quick. So nobody else gets in at the price they did. But we're in a different world. Now. The reason people wanted to close these rounds is so that the escalation and the markup could happen. So they could tell their LPs, hey, look, we got a markup. Now people aren't thinking about markups. right? Because markups people are like over them. We're into survival mode, right? We want this company to survive. So it's not a zero. Yeah. So any money in is good. Yeah, you want to come? I've been telling a lot of founders. They're like, Hey, we did this last round with you at 20. J. Cal, you put in a million, you already own 5% you own whatever 9% get this other group that wants to put in 1.5 at 20. And I'm like, Great, we'll stand pat. we'll go from 9% down to whatever, we'll we'll be diluted a couple points, we'll go to 8.5%. I'm not so worried about the percentage of worried about you still being here.

### Human: Yeah. Um, I'm gonna come back to that, because you mentioned that the privilege, what happens if you don't have that? Like, you know, how do we translate this advice for the startup founder on the shoestring sleeping on the couch, who may be experiencing some of these things, like you were in college, you described the college experience of some ways seeming like just like a partying college guy, but who was on the edge of collapse, you know?### Assistant: Yeah. I mean, I think it's such a hard question. It's such the right question. I got a note a few days ago from a woman who said, how lucky you are as Latino woman, like how lucky you are that you can even tell the story from your perch of success and as a man and as a white man or a half white man. Um, and she's right. She's right. And I think I was sharing it cause I, I don't, I didn't really know how to process it other than to be like, you're right. And someone shared with me like, yeah, exactly. Like if you have privilege, you got to use it so that it can cascade. And, you know, I think, We need to develop pathways for disclosure that aren't inside the organization that someone works, because it's often not going to be safe. You may not trust your boss or your company or, you know, HR. And so I think we've got to find a way to do what the mental health community does, which is have people who have norms and rules of discretion, where they can't share things back that companies are paying for. And there is an ecosystem on the mental health tech side that don't quote me, but five years ago, what I heard was five years ago was a hundred million in venture capital went into mental health tech. And last year was 5 billion, which I'm like really excited about that because that means talent and capital is chasing after these opportunities. And hopefully, a lot of those companies will be monetizing through working with the Fortune 500, Fortune 1000 companies who can help change the culture. So that if I am a manager at PNG, and I feel totally like I can't share my battle with bipolar disorder at that point, I'm not calling out PNG here, but you get it, that there is a resource, you know, that I can go and begin that mental health care relationship with. That the company is funding and i think we have a reimbursement problem in addition to it being hard to find help mental health care the out of pocket is too high. So we offer things like dental and vision insurance right but what about brain insurance so. I think we need to offer people pathways to health and self-care that don't require them to have to make some kind of a scary bet with who they talk to and who they seek help from. To the entrepreneur on the sofa, I would say, raise your round and then tell your investors later, which is to say, vulnerability doesn't mean going all the way and right away. You know, vulnerability is strategic. There's power in it, but it is also potentially unmooring and destabilizing for the person hearing it because we're not all ready for it yet. So I would like to think that it's something that you could share, but I actually would share it after as a part of a get to know me and maybe have it be a get to know me that isn't such a surprise because you've alluded to it or like previewed it. And so I think we have to stage disclosure situationally appropriate. What I would say is a real problem is if you are that entrepreneur on the sofa, not getting help elsewhere, right? And I've told everyone, just charge your company. You create a mental health stipend, $2,000 a year per employee, give it to everyone. And when you have three people, that's you to the two of you and you know, your first employee, you can afford the six grand. Because if you don't fund your own mental health care, there is no company anyway. Yeah. So just make the make a micro investment, whatever, make whatever enables you to get the care that you need.

### Human: Well, it's interesting, there's another data point that we should throw in there that the market cap now, even though they're half as many publicly traded companies, as and even less than that, when I then when I got started, there were even more, the market cap of those companies is much larger than the market cap relative to let's say GDP or something like that, then when we had more companies, they were just smaller. So the market cap, the total market cap of the market is actually bigger on a relative basis than it was 20 years ago, when there were twice as many companies to choose from. And if you like to look for bargains, I'd rather have more choices, and especially more small cap companies where people aren't looking. So I think that has impinged on, you know, smaller investors but the S&P 500, you know, there are over 3000 publicly traded companies now in the US. The S&P 500 though is approximately 90% of the market cap. of the entire amount. So the remaining 2500 companies are only 10% something along those lines. So, you know, when we talk about the numbers, that's that's really how it stacks up. What I think is a shame to be honest, is the high cost of being a public company, you know, it costs between two and $4 million to be public. So if you're a small company, you want to go public and you only have, you $10 million in sales or $20 million in sales, you can forget about it. You have public company expenses of $2 or $3 or $4 million a year just making all the filings. It makes no sense. And even if you had $10 million in profits, I'm not talking about sales, $10 million in profits, you also can't be public. That's 20% or 30% of your You know, net income, it also doesn't make sense to be public. And that's a real shame, because they've tried to make some changes, it's obviously hasn't been effective. And that's why you see a shrinking of the amount of companies so much regulation has let small companies not be able to access the stock market in the way they should. And that takes away dynamism and a lot of other things that the public markets could. So I think there's a lot of over regulation there. I think they've tried to make some corrections with all kinds of different things. But I just you know, now that you're giving me someplace to complain, I would complain about that, that I think that there should be outrageous.### Assistant: How do they differ in terms of skill set and also timing? Because I'm just taking an assumption here. It feels like before the quants and a large number of people participating in the market, retail investors, which we saw in the dot-com era up until the Great Recession in 2007-8, and now we're seeing again because of this little company I invested in before they launched called Robinhood, which now has 15 million traders or something like that in the market. How do these strategies differ when you get over participation in the market at the same time as the number of companies that have gone public gets cut in half? These are outside factors that must impact how you play your game because you're not playing your game in a vacuum. There are other people at the poker table. I want you to answer that question when we get back from this quick break. Why is SOC 2 compliance critically important? You hear it all the time, SOC 2, SOC 2. Well, if you don't have your SOC 2 buttoned up, you can't close major companies as partners and as customers. It's that simple. And guess what? Vanta is going to give you $1,000 off your Vanta compliance process. And this is something that's very important. What they're going to do when you get your SOC 2 with Vanta is they're going to continually test against technical and non-technical SOC 2 requirements. And they also have partnered with over two dozen auto firms who have been trained to file SOC 2 reports directly in Vanta. On average, the Vanta customers get their SOC 2 compliance in just two, three, four weeks. Compare that with three, four or five months without Vanta, and you understand why everybody's going crazy about it. I just had a twisted listener, John, email me. He's got the drone startup, Kitty Hawk. You may have heard of them. They're very famous. and he says Vanta was essential in helping them get SOC 2 compliance up and running. And he loves their tie-ins to Google, Slack, GitHub, and AWS, which are all essential apps that run Kitty Hawk's awesome business. Vanta, again, is giving Twist listeners a $1,000 discount on their subscription right now, and I know many of you are taking advantage of it. V-A-N-T-A.com slash Twist, Vanta.com slash Twist for $1,000 off. Okay, let's get back to this amazing episode. Welcome back. we have a really big deal of a guest on the program, Joel Greenblatt. Now, I didn't know him and I feel stupid that I didn't know him because I'm not into the public markets. The public markets I find so confusing because there are these stocks that act weird. And I don't understand it when these companies get so big and they start doing all this funky accounting. All I know is three or four people in a room, they have a good product and I think they're smart, I make a bet. But you do this very different thing in a market and a casino where you have outside influences. And before I went to break, I was thinking about these two outside influences in relation to the two types of investing you have. And I guess we could vector them in a two by two quadrant here and go through it, which is number of market participants in a market in relation to the two investment strategies, both of which are really one's bargain basement, I guess you could talk about finding bargains, and I guess the other one would be buying great businesses. When you put those against a small number of companies in the market, and a large number of people wanting to participate, that's got to screw things up, right?

### Human: Yeah, so for a layperson, when you type a question into chat GPT, or I guess Google's Bart is out, we see Poe from Cora, so many different language models are being released. What is actually happening under the hood when we ask it? Hey, I have some salmon. And how should I prepare it? What are my options? What is it doing actually behind the scenes?### Assistant: Well, I mean, it's doing something incredibly mundane. That's very surprising that it can be as human like in its output as it actually is. Because, you know, in the end, what it's doing is it's saying, you've typed some text, I'm going to continue that text. the way that the statistics of text on the web and in other places that it's been trained from works. So it's kind of like, if you're just dealing with letters, if you typed a Q, then there's an overwhelming probability that U comes next, in English at least. And it's got a much more elaborate version of that. And the thing that you might think, well, you just count... If you've got some phrase, you just say, how many times does that occur on the web? And what's the typical next word when that occurs on the web? That in and of itself doesn't work, because there just isn't enough text on the web. There might be a trillion words that you could find between the web and books and things, but that's not enough to be able to give you sort of statistics on what's the next word after the best thing about AI is or something. There aren't enough occurrences of that that you can statistically work it out. So you have to have a model. And the thing which is interesting, surprising, is that this particular model, that's the idea of a neural net, turns out to give you results that are very human-like. that when it has to work out, how will it extrapolate from just the pure statistics of what's on the web? It extrapolates in a way that's somehow similar to the way humans do it. And I think that in the end, that's because neural nets actually work very much the same way as the wiring in our brains works. And the history of this is back in the 1940s, people knew that brains had neurons and there were Well, we now know there are about 100 billion neurons in our brains, and they've all got these little electrical devices, basically, where each one is connected to maybe 1,000, 10,000, whatever other ones. It's a big, complicated mass of sort of wiring, neural wiring. And that was what people started doing, was thinking about, well, what's the kind of formal representation of that? What's the kind of mathematical way to represent that? That was invented in 1943. And at that time, and in the 1950s and 1960s, people were like, well, what does it do if you have five neurons, if you have 10 neurons, if you have 30 connections between neurons, and so on, and didn't do anything... A few things that were somewhat interesting, but didn't do anything terribly exciting. Turns out when you have 100 billion neurons, 100 billion connections between neurons, a few million neurons, that turns out that you can capture a lot more of what actual brains do. And it wasn't obvious what that number would be. It wasn't obvious how big how much data you would have to train with, how big the number of neurons would have to be to get human-like behavior. The thing that is the other critical point is there is enough text now available on the web that you can figure out the statistics. You can train the neural net well enough from that text that it can produce things which are a good match to what would be the human-like way to continue that sentence, so to speak. That's kind of...it is sort of remarkable that these systems are basically just writing one word roughly at a time. And yet, just by the way the sort of statistics works out, the whole essay or whatever ends up being coherent.

### Human: had a somebody I'm trying to remember who it was. They said the best VCs, the best board members act as shock absorbers. And the best founders act as shop shop shock absorbers for the company. Hey, you got hit. It's really hard. You got to take the punch. You got to take this, you know, bad beat, you got to get back up. And you got to set reality for the team. So let's talk about setting reality. last year or two, what has life been like setting reality and being a good board member being a good investor? We described, hey, in an up market, got to be thoughtful. Sometimes people are sometimes people aren't both sides of the table, the name of your amazing blog. Now let's talk about a down market. What have you been trying to do? What has life been like for Mark Zuster, upfront ventures, and the portfolio over the past 12 months?### Assistant: So, thank you. Look, if you think about people like Sequoia writing RIP Goodtimes, if you think about David Sachs and the information that he put out when COVID first happened, like wartime CEO of Ben Horowitz, I think the service that VCs can provide to founders when the crisis period starts is this. Not just age and experience, but when you're dealing with 20, 50, 100 companies, you see the patterns before an individual entrepreneur. So an individual entrepreneur, let's say you raise money and you've got two and a half years capital, you may not quite realize just how permanent the capital markets have changed and how it's going to impact you in a valuation perspective. We realize it because we have three companies raising capital today. And so we're like, Hey, we see the trend. We know what life looks like for you in 15 months. And so we want to bring that forward. And so I'll just give you this Jason, which is if I take SAS companies, SAS companies were trading at in November of 2021. Okay. Not that long ago, 26 times next 12 month revenue. Twenty six times and again when you're a founder and let's say you know your first or second time founder you don't even know what that means like what do you mean twenty six times next twelve month revenue like why is that relevant to me i'm a startup. Can you say ok look. Eventually, you're going to either IPO or be purchased. And the person who's going to purchase you is going to have a public equity price, most likely, if not, you're going to IPO, and you're going to have to face public investors. And they're going to care about metrics. So one of the metrics they judge you by is either EBITDA, earnings before interest and taxation, and depreciation, or, or they're going to judge you by revenue. Okay. So let me give you some context. We hit 26, November, 2021. Today, it's at 6.2. That's how far public markets have come down. That's why late stage capital markets are going down so much. So you're like, holy 6.2. That's terrible. The market's surely going to double or triple, right? Cause we were at 26. Well, let me give you the data over the last 20 years. The average is 6.3 20 year average. The 10 year average was 17 and a half. So it had gotten out of whack. Um, and it's probably not going to stay at 6.2. So somewhere we think somewhere between six and nine times NTM is where it's going to settle out. And then late stage investors, if I think I'm going to exit at, let's say seven times NTM, I'm only going to pay 15 times NTM. If you're growing so astronomically quick that I pay 15 to get in, I sell at six and I still make money. Right. So David Sachs said publicly, I can't remember where I read it. He said, well, if your last round, you raised it a hundred times NTM next 12 month revenue, you've got to grow by seven X. You've got to be seven times bigger than you are today to raise it 15 times NTM. So what he's saying is cut your costs. lengthen your runway and make sure you have the time to grow to seven times bigger than you are today, or you're going to raise a down round. Okay. And I'm telling you 15 is still amazing relative to what markets are valued at, but, but that's also bigger than what the markets pay.

### Human: That's it.### Assistant: Because this film, I'm allowed to have my opinion. I'm allowed to have my opinion. He can have his opinion about mine. What I'm embracing here is what I'm learning through this process is that top 10 lists and film criticism is the greatest, greatest honeypot in the world. I'm leaning into it. This is tied with Top Gun Maverick for the picture of the year. This film Wow, going to become not only this year's number one film across the board or tied with Maverick in my mind, not only will this be number one or two on everybody's list, etc. When they make the top 10 films of this decade, this will be on that list and it will be high on that list. This film will age in it, and its importance at this moment in time will grow. Now let me explain. And we're not doing spoilers right now. The film is about a problematic Cate Blanchett, who as a female, lesbian, abusive, horrible, but brilliant conductor, let's leave it at that. That's not going to spoil the film for you. This is all revealed in the first couple minutes. It's you know, it's in the trailer. She puts on a performance that will be the best performance of her career. And one of the best performances in the last 20 years in any film. She's extraordinary. And the filmmaking is unbelievable. There are memorable scenes in this, there are monologues, there are two sentences, there are moments that we will talk about and debate at dinner parties all year long. And that's one of my criteria may not be a Oh, Scott's, I don't understand his criteria, obviously flawed. But my criteria is, if you were to watch this film as a group, how long would it stay with you? How many hours after the film would you want to talk about it? Just like the White Lotus season two, which last night at dinner, I had dinner with a bunch of besties, you know, eight people, everybody had seen season two of White Lotus, they couldn't stop talking about it for the first hour of dinner. specific scenes, specific moments, what happened. This film is 100x that to White Lotus in terms of its importance and relevance. It will be dinner party discussions for hours afterwards. And what I love most about this film is that it challenges the viewer. It is not straightforward. Even the critics, the mighty critics who lord their lists upon us and tell us who is number one and who is number two, they can't make sense of this film. It's so hilarious to me. It is so is it proves the point that this film is so important, that you have one set of critics saying that this is this is the absolute pinnacle of the discussion about an artist creating great art versus the behavior and the human being of the artist, whether it's Bach, or it's, you know, Kevin Spacey, pick a horrible human being who you know, Harvey Weinstein, the artist versus the art. the social the power of social media the generational difference between gen z gen x and boomers is all on display here the power dynamics identity politics everything is absolutely meditated on here but they don't spoon feed it to you you must take it in and interpret it for yourself and that is the brilliance of the film tar and that is why It is number one tied currently with Maverick. I will need to see both films again to make my ultimate decision. This is the goddamn film of the year, I believe. And Cate Blanchett wins the Best Actress and A.O. Scott is absolutely drunk asleep at the wheel for making it number six behind Neptune Frost. Neptune Frost is number 60. It's like this being number one.

### Human: I want to have a longer conversation about marking in our BC Sunday School. But yes, what it shows is that the contagion, you know, the virus is spreading, if you will, if you will forgive a really unfortunate metaphor. Yeah. That, you know, rumors of a downturn have not been exaggerated.### Assistant: It's just crazy. The story you're referring to, to refresh everyone's memories, the SEC charged three Twilio employees with insider trading. they were like engineers. And at the time, we had a similar comment, which is like, if you work at OpenSea, and you're the product manager, you must be making six figures, you own equity in the company that might be worth millions of dollars, potentially, you could just buy if you actually did understand NFTs, you could just buy them after they were released to the public, because you probably still have enough information. And you could just use public information, right? And you could disclose I'm buying this NFT, I have an affinity for it. after on day two of trading, who's gonna if you if this person bought these on day two of trading? Yeah, could anybody complain? I don't think so. That would be like, I work at Nike, and I bought the shoes after they were for sale for two days. But I just, you know, I wanted to own a couple pairs of them, as opposed to I think there was a Nike person who was actually stealing the Nike shoes and front running them in that market. So front running a market, front running a market, using inside information to front run the market, painting the tape, wash trades, all this stuff is going to be coming out. So this will be a parade of malfeasance that we'll be dealing with for some time. In other news today, fidelity is marking down its share of startups. So when you're in the private investing business into an audit every year, you know, you may or may not mark stuff down that you've invested in at a certain valuation. When you're one of these more public, larger entities, I think you have to do this quarterly. And so fidelity according to information compiled by our friends at Bloomberg has marked down some private market investments. So this is a judgment call they make based on what's happened in the public markets, they start marking down investments they made in private corporations, we all know Reddit had filed to go public. Fidelity marked them down 36%. They mark stripe down, but 13%. And Instacart 48%, which I think Instacart had taken that medicine themselves and repriced their employee options. But And so if you look at dollars per share, looks like Reddit peaked in q three of 2021 at $62. And now it's at $39. They're actually because these are going to be public companies are obviously talking about the actual share price now $125 for instacart now down like $62. So wise thing to do and just more indicative of the medicine being taken Molly. So that people can then not keep crashing. And if you reset the peg, and you say, Hey, here's where the number is. Now we can go up again. So you take this hard medicine and, you know, hey, your house, sorry, your house isn't worth what you thought it was, right is what's happening here in these public markets, it happens quicker in a public market, it happens instantly, because it's an open market. And crypto, it's a 24 hour market happens instantly. And private companies, these type of investors, the fidelities of the world have to report, they have a higher reporting in their funds, because they have large other institutions in there, I guess. And they do it quarterly. So this is just more proof that public valuations that are reset are impacting private companies. But you'll notice these numbers are slightly lower than what happened to public companies, which down went down 50 to 85%. So you don't see 50 to 85% here. Right? Totally.

### Human: How do you find community? If you're over 21, I guess we met in a WeWork. So WeWorks and co-working spots are very cool places. Actually, we met in a Dare for.### Assistant: Yeah. Tell me your thoughts. Yeah. In general, I think like a good place, I think you should just get to a city if you're young and you're a technologist or you're building cool things. I think then first decision is like where you want to go. SF, Miami, New York. I'm very biased. I lived in SF for about eight months. It was great, but I, yeah, I don't really have any hate to SF. I think SF is really cool when you're young. I know there's a lot of like people hyping up the crime in SF right now, but it's like, if you're young, you know, like just carry some pepper spray, hang out with a bunch of like Find find friends that can fight. No, i'm kidding. It's really not that bad. Um But uh, new york is my first love. So I I love new york. I think a lot of people should come here I think miami's cool. I just no one gets work done in miami I also like every time I go to miami, there's like a ton of drama and that goes down So I just like to want to work in miami. I don't know new york's great. You guys should come to new york um, but yeah dropping out is like is a is a little bit of a a unique situation because you do you do trade off a lot of like I guess I would say like social life and anytime you have to make a decision around college, it's like, it's like, okay, credentialing, um, credentials, connections for business connections for like friends, like your relationships. And then like, how does this actually help you in your career? Um, I think credentialing in general in college is stupid because college is like a fallback plan. It's like basically like, Oh, I don't have a job. I need a college degree to like get a job. But that's a fallback plan. You're planning for the worst case scenario where you can't get hired. And I just don't think many people, especially in tech, a lot of people in tech are trying to do insane things with their life. I'm risking my entire life on the one in a zillion chance that I can be someone who makes something absolutely great. I'd say that chance is higher now that I work at Party Round. No, I'm kidding. Yeah, don't live your life for fallback plans. That being said, it's great to not have responsibility. I'm 19 and I live like I'm just in my mid-20s. I didn't really have an option because I wasn't going to have any community at college anyway because it was in COVID. But I think people nowadays do really consider the situation deeply. It's nice to not have a ton of responsibility. It's nice to have a period in your life where you don't have to just be an adult and college is great for that. I personally hated college. I didn't like being just like a normal person. Like I was just a guy there, you know, like I, I think it's partly because I'm, I'm very like, um, uh, dude, maybe I'm just like a narcissist. No, I'm just like, I believe in myself a lot to a fault. And so it was like having this sort of dissonance when you get to college and just being like another guy there was like, I was like, this sucks. I do not want to have just, I don't want to be normal. So I was like, I'm going to go and I'm going to go and gamble with my life and try and try and do something great.

### Human: But speaking of accredited investors, there is a limit. And I have a lot. So QPs call me.### Assistant: That is so ubiquitous It's like it's a win no matter what like it's it's such a fascinating thing to do glad to hear you say that sofia because the way I look at it is lean in and girl boss both of these Okay, and I have three daughters. So I care very deeply about this it came at a time where people were like women tech industry. And both of them, I think, gave permission in different ways. You know, one is more like, I think, you know, what Cheryl was doing was saying, Hey, listen, if you're in that board meeting, if you're in that meeting, and you're one of the few women not forget about being a founder, forget about being the boss, just you're a woman in the tech business. know, stand up for yourself, stand up for your thoughts, you know, own it, lean in and take responsibility for pushing things, right, is my interpretation of it. And she was sort of saying, like, she didn't lean in enough, and she wish she had. So she was trying to pass it on there for you. quote, unquote, nobody like me, you know, not from the Ivy League. It's those people, and this informs a lot of my investing. It's those people who are, you know, outsiders who actually make the biggest impact. If you just look at the history of this, we remember Zach and Bill Gates, you know, dropping out of Harvard, because it's so notable, and it's seems like such a great poetic story. But what you'll find as an angel investor for anybody listening, who chooses to do this, is it's people who have skills who want to change the world who are irritable and unsatisfied. And, you know, maybe not the most balanced, but who also are obsessed with customers and products to a point that they want to change the world. And I think that book and just even the term gave permission to a lot of people like you were saying, and you get those DMS. And so the critics and all the nonsense does not matter. What matters is the legacy, the legacy is amazing. And the legacy, it's just starting. I mean, you're still very young. And this, the big thing that I see in our industry is a lack of people with check writing ability, who are not white guys from Harvard and Stanford's business schools. And that's the revolution right now. I was talking to Molly on this week in Starbucks about it just the other day, of how now it's 16% of decision makers wants that in venture are women. Still, you know, whatever, a third of what it should be, it's got a triple, but it'll get there. And I think the way to do it is to start your own fund. So it's to give me money. Well, bottom line, if you want to see the change in the world, I actually think this is important for rich people. And I've had this conversation, especially not just with women, but women of color, you do a lot of people who should they virtue signal all day long on Twitter, they, they put a Black Lives Matter, you know, BLM, or, you know, some shown of support, and they're supporting the next thing. And the next thing, they don't write the check. You got to write the check if you actually want to see the change to happen. It's not enough to just tweet or retweet or like, take a checkbook. I'm stoked for you, Sophia. I think you're gonna be amazing at this. Thank you. And anybody who's a founder, go to trustfund.vc.vc slash invest.

### Human: Maybe I invested some of your your deals. Let's see. Let's see.### Assistant: Yeah, I think it's well said. It's a really important thing for people who are founders. Great job. You brought some great demos. We talked about some great news. For folks who are running businesses, I want you to drop everything and go to weightroom.com and sign up for Vinny's service. And then I want you to come up with the three things you like best, and the three things that suck. And then I want you to add mentioned Vinnie Vinnie would remind everybody Twitter handle at Vinnie Langham on Twitter at Vinnie Langham, and give Vinnie Langham some I'm sure he's Vinnie at weight room calm, give him some feedback on his product, what can be better, what's great. And let's get him some early beta users here. Finally, we are doing Foundry diversity. Again, on starting is I guess this is our 12 week course is starting again, July 31. And then October 23. What's our founding university course? It's 12 weeks, it's basically free. You pay 500 bucks, Vinny, when you start the program. If you come to all 12 Monday sessions, you can miss one probably just ask for forgiveness. But if you come to all 12 talks, we give you charge you back the 500. Do you know what our completion rate is now? Our graduation rate? 100% 90, 94%. When we gave it for free, it was like 5%. So it turns out if we you give us 500, we pay you 50 bucks every time you come to the course, essentially. But what's happened is, we've had about half the more than half the teams that come to this. And we try to have builders come to this 250 builders come to each cohort, we do it four times a year. Half of them were more aren't even incorporated. We watch the progress Vinny, and we give 10 to 20 people in this program $25,000 checks as investments from us. And we become the first investor in your company, which is something I always have a lot of pride about doing being the first one to put 25k into these companies. If you want to join us apply by going to founder dot university, you can have an idea we want you to be a builder. So UX design developer, growth hacker, can be a copywriter marketer, but you got to be a builder, we don't just want idea people or you can be an ideal person operations person with a builder. We give preference to people who are two person teams. So go check out founder.university. And if you want to read the deal memo for my fourth fund, we got a lot of plugs here at the end. I tried to share Vinny the deal memo that I send to like top LPs because I like people to read my deal memo how I'm thinking about how I'm going to deploy the fourth fund and you can read it at launch.co slash memo. Launch.co slash memo, you can read the launch fund for deal memo. This is my strategy. Now, why would I give the strategy away, Vinny? You're probably saying we're not in competition in the early stage. So that's why Combinator, Techstars, nobody's really in competition. Pair VC, Sequoia's got their new, they're experimenting with a new accelerator type program. all these companies need 2030 40 investors in their first two or three rounds of funding. So we're really not in competition with anybody. We're in collaboration. So go read the deal memo. And if you want to be an LP video, you an LP in my funds. I don't know.

### Human: Are these companies do RSUs now, Vinny, as well, right? Options are a lot more limited in publics.### Assistant: Yeah, but they have to believe, to both of your points, they have to believe that that RSU that they got for free. So a restricted stock unit is a gift. You don't have a strike price on it, so you don't have to worry exactly where it is. But you are saying, hey, I'm getting this at $105 or $10, whatever it is today. I'm here because I wanted to double in the next three years, and I'm going to come in on the weekends and work nights and give up my life to make it triple, so that my million in RSUs or my 500k RSUs over the next three years turns into 2 million, and it could be life-changing money. That's not going to happen. Here's an interesting chart to take a look at. This is a comparison of Google's CapEx versus Facebook's now the top line you see here, we'll pull it up for the audience. So this is up to q2 doesn't include q3. I'll give you two threes in a moment. But as you can see the top green line and the top blue line, those are the the revenue for Google and meta. I'm not going to call them alphabet and meta. I'm going to call it Facebook. Google's green, Facebook's blue. So you know, you got more than two times the revenue with Google. And then you look at their capex. Oh, my Lord, the capex for Facebook slash meta is, you know, the same essentially, as Google's with so much more revenue. And then if you were to look at actually what happened this quarter, Google's capex in q3 was 7.2 billion. It was less than Facebook's. But its revenue is 2.5 times Metis capex is blowing out. And this includes like finance leases, hardware, all the stuff they're investing in 9.5 billion. Oh, my Lord, it's going up capex just keeps going up on this business. So there's he's spending like a drunken seller. Are you sick and tired of huge SAS bills? I know I am. And switching between 10 different platforms every day. It's chaos. SAS churn is real. And you need to check out Odoo to reduce SAS burnout. Odoo is a suite of business apps. That's basically the only software you're ever going to need. And it's a great way to cut costs and be more productive. And listen, we all know it's a crazy market out there. You want to extend that runway because hey, listen, it's a down market right now and you're going to have to survive. That means you're going to have to make every dollar count. So you need to check out Odoo. All of your SAS apps will run on one platform with Odoo. So you have one customer support rep, not 10, and they have 40 main apps and 16,000 apps from their open source community. You know, important stuff, sales, marketing automation, HR, website builders, and so, so much more. And Odoo will only charge you for the apps you use, so you get more done in less time, and you're going to save a ton of money. Here's the best part. Your first app is free forever. And Odoo is offering a $1,000 credit on your first implementation pack. That's odoo.com slash twist for $1,000 off odoo.com slash twist. What are the chances that Facebook meta beats Apple in terms of dominance in VR slash AR. So if we're sitting here 10 years from now, no, no, you got to split the two up.

### Human: You mean make a crap ton of money?### Assistant: Well, yeah, one is just the smart replication of things. I mean, there's a few bits to unpack there. In the interest of the new investor coming into the space, I'd offer a couple of observations. One is that I don't think I would have said silver bullet with solar, but sort of silver buckshot. There's going to be a number of things, but the big slug that sort of takes the animal down is probably the solar piece. PV is the one that, according to the International Energy Agency at the end of last year, projected now to do 90% of new additions over the next five years to grids around the globe. That's the train you want to be on. And the businesses that do that deployment are going to be you know, in some places, sort of mom and pop shops growing up, growing large, doing three and 10x type stories. There are others that are going to do much more than that. Businesses that finance them, that provide the SaaS solutions to their smooth operation and engineering and execution, maybe even better multiples. So you want to work out how you're going to engage in that. But then there's also to your question about what the lessons are in the States. How do you find the company that's going to take rooftop solar to the commercial and industrial segment? No one's really done that in the United States. There's all these big stories like Mosaic, which is doing, I think, one in five residential solar loans right now. Sunlight Financial and Goodleap and these other companies that do the residential financing of the solar rollout that's happening and will ultimately touch 80 million homes in America. That's their total addressable market. And they've done about two or three, I think, at this point. So they've got a lot of headroom. But no one's done a sophisticated scaled version of that for CNI in America. So there are companies we're supporting like Orca Financial, which has just started to do that commercial and industrial segment. And it's a pattern recognition game, right? You know, people that were in at the ground floor on the solar leasing and solar loan business, were involved with Mosaic and others, are now migrating all that knowledge and institutional learning, and it's the classic serial entrepreneur trip and taking it into the CNI segment, which is almost as big as the residential segment. How many small shops and warehouses and distribution centers, and you name it, could go solar in America, many tens of millions, and they will need to be financed. And the company that corners that and banks that is going to do really well. And then, just to go back to the point you made about most of your syndicate is probably going to be looking at the US, I'd encourage you to challenge yourself about whether you can get comfortable with going outside the United States. By the numbers, I think of that banner year we had in 2021 with venture capital flowing into climate tech, about two-thirds of it, I think 65%, was in the US. Well, the US ain't two-thirds of the world, is it? Neither by population, nor economy, nor by energy transition, like we talked about. The big numbers are happening in Asia. Why aren't we investing in Indonesian solar companies? There's going to be much better stories there in terms of growth. And it's because of prejudices we have about Indonesia and emerging market risk and whatever. But we've got to get over those in order to, A, make the climate solutions happen at scale and contribute to those communities taking this on and succeeding. And B, if we actually want to, you know, ride this wave and take it all the way into the clam bake.

### Human: Open AI launched GPT for last week and it's definitely scaring some people including the CEO Sam Altman. And if you want to use GPT for right now you can only access it by signing up for chat GPT plus which costs $20 a month.### Assistant: I am paying for it. I told everybody on my team, they can go pay for it. I literally had the sales team had producer Nick do a explainer to a little demo of chat GPT for because we're doing this launch angel summit again, this is where we get 100 angel investors to come together, we're going to do a live taping of all in at it should be great. And we play poker and a bunch of angels and seed funds get together to trade notes. And I was like, who would you get to sponsor? And a summit of angel investors and seed funds and it was like i would go for banking including svb. You know america whatever i would get law firms like wilson cincinni i would get insurance providers like a broker i would get cloud providers i get a bs in azure. And literally it gives me an answer of who to target as sponsors. for the angel summit that included people who had previously sponsored the angel summit i was like well that is the sdr function in sales we call that sales development rep i think is what it stands for and those are people who warm up leads right so now you can use gpt for and ask it hey who should sponsor this week and start so i want to do an ai conference who would be great speakers and then you can Think about what the topics would be at your AI conference and all that stuff in that brainstorming that would have occurred in a meeting rachel. Now can occur in gpt for and you'll probably get seventy eighty percent of what would happen in the meeting with five people. And if you had hired a producer for your conference. probably will do 70 or 80% of what the producer would have done, or producers on this very podcast. So what does that mean? It means you could have instead of having three producers, you could have one maybe, or instead of maybe instead of three, you could have two right now, which doesn't take a genius to realize that when we are writing notes for this very podcast, or sales executives are looking to find leads, you'll probably that function will go away. And you could have one producer producing three times as much content or one salesperson reaching out to three times as many Contacts for sales in other words human efficiency is about to 3x and you can see that with githubs pilot or other Folks who are writing code the code demos for chappy gpt4 are extraordinary Why is it extraordinary? Well, that corpus of programming is a very tight corpus of very repetitive activities. What does that mean? It means if you were writing a modern app, you would have a login screen, you'd have a delete my account screen, you would have a change my password screen, you might have a feed like an Instagram or Twitter feed, you might have a GP turn on my GPS and tell me my location feed or function, you might have a messaging function, like you know, DMS on Twitter or on Instagram. Well, those that codes been written, it's open source, and it's been indexed. And it's been indexed at a specific location, GitHub, and it's got a lot of participants over there who have edited and they're open source projects. Therefore, something like a language model can really process that easily. Just like images have already been processed for so many years, perhaps decades, that it's very easy to say, Hey, make me a Jedi. We know what a Jedi is. And then have them instead of using a lightsaber have them use I don't know a crossbow or a bow and arrow like it could make That pretty easily because it's a corpus with images or code That is narrow and easy to iterate on and then do reinforcement learning on so everybody will be three times more productive

### Human: Yeah, I think that's fair.### Assistant: I love your now playing screen. I'll be totally honest. I love that I can very quickly change the speed. I love your forward and advance. But I just think chapters is, I would love for chapters where if you clicked on them, it opened to a transcript or it opened to a rich transcript with links. what do you think of dan clips and are you thinking about clips because we are doing a lot of work on doing clips on social media and as you know i put in my second reply on twitter the advertisement for that podcast to give them extra play i want you to talk about clips of podcasts when we get back on the screen All right, this deal from Vanta is so good, I want to start my ad read with it. Vanta is giving our Twist listeners, think about this, $1,000 off their first SOC 2 by going to vanta.com slash twist. That's not a joke, $1,000 off, Vanta, V-A-N-T-A.com slash twist. So, why is SOC 2 compliance so critically important? Well, If you don't have your SOC 2 buttoned up, you can't close major customers because major customers have security concerns and they should. And if you already have your SOC 2 report, don't you want to make it easier to maintain it year after year after year? Of course you do. Well, Vanta's software continuously tests against technical and non-technical SOC 2 requirements. They partner with over a dozen audit firms who have been trained to file SOC 2 reports directly within Vanta. On average, Vanta customers are SOC 2 compliant in just two to four weeks. Compare that to three, four, five months if you're not using Vanta. You'd be crazy not to use Vanta. I just had a twist listener. You guys and gals are so good to me. You tell me when you use the products and you always use those promo codes. Super important. Well, I had John Hegranes, who's the founder and CEO of a drone startup. It's called Kitty Hawk. everybody knows that they've raised a lot of money super important company uh and he said vanta was essential in helping them get their sock to compliancy set up and maintained and he loves the tie-ins with google slack github and AWS, which is really essential for Kitty Hawk's business. Use Vanta, people, and get that $1,000 off just like Notion, Lattice, User Testing, and hundreds of other successful companies who got their SOC 2 reports with Vanta in weeks, not months. Unlock those sales and give your employees all that time back in their calendar to work on more business critical assignments There's so much you got to get done right now use an expert that expert is Vanta and they're giving twist listeners $1,000 off their subscription at Vanta comm twist. I don't know how long they're gonna keep this going So I want you to take advantage of it right now Vanta comm slash twist. All right, listen podcasts are taking over Why are they taking over? I'm gonna ask my guess in a minute. My humble opinion is man social media is just a place for fighting and bickering and just bots and stupidity uh in the overwhelming majority of the noise but when you want to have a long considered conversation like we're having now podcasts are such a reprieve from the the inaneness of uh social media and the lack of depth and we kind of get back to expertise and boy do we have expertise today dan granger runs oxford road which is one of I don't know, what are you, one of the top three agencies in podcasting? I mean, you kind of pioneered this all.

### Human: I think I went to one party there when it first opened. Yeah. It is like nothing you've seen in your life.### Assistant: It's two floors of event space with stairs between them, vaulted ceilings that look out on the back. And this, there is no Google Salesforce tower, there is no, well, there is the Apple campus. This is what pharaohs do. This is what kings do. Kings build castles, the pharaohs built the pyramids, the elite executives build a temple, an object in the world for their disciples to come. Now look at the, uh, Apple campus. Look at that beautiful ring. We'll pull that up next. Then look at Facebook's, uh, Geary designed a building in, uh, East Palo Alto with the walking roof. Totally. Imagine you as the Pharaoh or queen. Imagine Molly being queen and you built that. Yeah. Look at that. Beautiful. Now imagine you're. Cleopatra and you build that. Imagine you're the great pharaoh and you built that. The Taj Mahal. And nobody goes there. Nobody goes there. And it's crickets. What does that do to the psyche of that person? People are humans. Look at the Geary building that Zuckerberg built. I'll tell you what happens on the inside. When you get rich and powerful like this, he had tens of billions, hundreds of billions of dollars laying around. And you're like, what can I do with these stacks of money? I can buy my shares back. Okay. Whatever. Not particularly joyful to buy some shares back. Who cares? Like some numbers on a spreadsheet change. But when you meet with Frank Gehry, or you meet with whoever the architect was, and they say, here's a possibility. And then here's another possibility. And then they got the secret possibility, the third option. They don't tell you, this is how the architects make the money. They give you the two options. And you're like, whoa, the pharaoh sits there. And then the architects have this, but this, you know, you said 2 billion, and this is five. But this is, you know, if like, you know. This is what the real Pharaoh would do. This is like, we start with like something insane and then of course we get pragmatic. And we get the person to buy at the end. One more time. Tell me more. And then all of a sudden. know, whether it's in Qatar, where they built all these incredible stadiums for the World Cup, whether it's, you know, Benny off at this tower, or Steve Jobs with, you know, he didn't, I don't know that he lived to see it, you know, the campus, or Zuckerberg, whoever it is, it's their Taj Mahal. It's psychologically, even if they admit it or not, psychologically, it grinds you that you built the temple, and the temple is empty. And they want people to come to the temple, and they want them to learn the religion. And this is at the core of this debate. And you know what, all the young disciples, you're going to come to the church, you're going to go to church, you're coming to the temple, or you're not going to work for the next two or three years until the cycle starts anew. And then phase three or four of the cycle will release again to you getting to pick what you want. But for now, you're lucky. I've been talking to some people out there about jobs. And they're like, I got six months. And then some of the people who got laid off three months ago, they're like, I got three months and they're out there looking for jobs, not looking good for white collar. That's grim.

### Human: It was a bit growth. Imagine, right. I mean, there's even a magical universe in which if if the economics are not in play here, your Wikipedia Like I tell people all the time that Wikipedia is actually my most trusted news source, like Wikipedia and weirdly Reddit, right? Like when you have competing incentives that are about like Wikipedia is devoted to truth and not money making. So can it be gamed occasionally? Will you go there like 10 minutes of every day? Is it totally inaccurate until it gets fixed? Possibly. But at the end of the day, the incentives for Wikipedia are truth. Yeah. And so if that it and like, I'm so fine with the conversation where we say the incentive for Twitter should be truth. And it should be un meddled with conversation. I'm like, here for that. I'm all right, let's totally deserve for that.### Assistant: I'm just I'm on like a very weird sleep schedule. And my dyslexia is going crazy. Anyway, we're getting a problem. I think what they should do is when you're somebody who's been brigaded, they should build an algorithm and offer it up to you. That's the anti brigading algorithm. So once you're brigaded, if they said we highly recommend you put on only your followers can reply by by default, would you like to make this your default Molly? whoever's getting brigaded on a regular basis, they could have actually solved the problem. Why don't they solve the brigading problem? To solve the brigading problem lowers engagement. Yep. And it lowers the scumbags, the fieriness, the outrage machine, that is what build which was one of Twitter's few growth areas. Brigading is nothing to do with free speech, which has nothing to do with growth. Yes. But you could stop brigading and you could make the place. I guarantee you if Elon controlled Twitter, it would be 100 times more sustainable, delightful, less toxic for people who are currently being brigaded. And that's trans people, women, people of color, he would solve that problem in 10 seconds, because the easiest problem to solve in the world, as you pointed out, as we've kind of beaten to death here. It's an economics based decision, totally not a moral base or ethics based decision. He's going to make that decision based on moral and ethics, which is the scumbag shouldn't be allowed on the platform. And he's a proponent of verifying people right now. What is verification about on the system? It's about anointing. It's about anointing celebrities, journalists, notable people, order to get them to feel special when they use the product. Great. They get the blue checkmarks. Now we give light blue to anybody who puts in their credit card. And we put the name of the credit card. This was my pitch from 10 years ago, I shared the tweets with my old blog post on it. If they made the very and obviously, Elon is very supportive of the same idea. And I think he came to it himself. I don't think he's got it for me. Which is verification should be available to everybody. If you have a verified Twitter then and if you had multiple clients, Molly would could come on and say, you know, I'm being particularly harassed right now. And they got rid of a lot of the bots, but there's still some scumbags left on the service. I'm going to check the box that I want verified by Twitter anointed and light blue verified by a credit card that's not a burner card. And the name on the card and the type of card visa. J. M. telekinesis was the name of the card. And yes, that can be faked. but it's it's work to fake is on my profile page, verified how verified by a phone number, verified by an email and verified by a credit card that had this name on it. If you put up those roadblocks to being verified, and then if it costs 10 bucks, or 100 bucks a year, or 50 bucks a year, whatever the half the price of Spotify, Is it worth it for people to pay for that? Of course it is. And does everybody have to pay? No, you can be free. But then when Molly Wood says I'm being brigaded, whoever's being brigaded, turns you off. Now you've got a revenue stream that I think would generate 300 400 $500 million out of the gate. Yeah, but it wouldn't do the growth thing.

### Human: And when you go to overtime.tv on the web, it's a corporate website. It exists and it manifests itself as a YouTube channel or series of YouTube channels. Am I correct?### Assistant: So right when I started Overtime with Zach, I was working at Endeavor, William Morris Endeavor, the big Hollywood talent agency. And I was running digital. So I was building the first influencer creator talent department. Eventually, we had almost over 100 different YouTubers and digital talent we signed. And anything that was digital, podcasting, virtual reality, influencers, kind of came under my purview. And at that time, we bought IMG, which was the biggest kind of sports rights seller in the world. And then WME became WME-IMG. And I quickly kind of moved into sports as the digital guy. And in working in sports in 2014 to 2015, I worked a lot with the different leagues because they were all represented by various talent agencies. And And the leagues at that time were kind of getting hip to this idea that there was a whole generation of people out there who consume sports in a really different manner. So they were aware of a couple of big trends. Audiences in their teens and 20s were not watching three hours of a live game. They also liked to use social media. They didn't have cable. They didn't pay for cable. They had distractions. They could play video games. They could go on Snapchat. There were many things they could do. And one of the biggest ones was that young audiences were, in some sports like football, choosing their favorite team based on playing Madden rather than based on the city where they grew up in. In other sports like basketball, kind of aligning with players and following players, if you liked LeBron, Miami, Cleveland, LA, that's where you moved. Those were really disruptive. It was disruptive from an audience standpoint in terms of you know, the ratings and television and it was disruptive from a standpoint of how are you going to sell out your hometown arena in 10 to 15 years when all those people are fans of other sports or they don't go to live sports or otherwise. And so I kind of looked at that And I thought, as somebody who is not in that demographic, wow, those are some pretty seismic shifts in the audience. They kind of mirrored this idea that here I was representing all of these YouTube stars, some of whom had much bigger audiences than the traditional talent that the traditional agents we're representing so you had a kind of that schism happening on both sides and yet you know what was gonna fall in the middle and i just thought this is a once in a lifetime opportunity, where somebody's gonna come out and they're gonna create an entirely new let's call the sports network and i don't really call the sports network anymore but at that time it was easy to understand. It was easy to say, you know, you can imagine this is like ESPN. Imagine you dropped it on the ground and it broke into 50 pieces and we aggregated those 50 pieces and that's over time. But it's for a totally different generation. And one of the interesting things to me as somebody who kind of studies all this is how much technology drives culture. So if you think about the early 60s, it was really AM radio and AM radio had sonic limitations. You know how it sounds. It's monophonic and otherwise. And songs were short. And all of a sudden you had FM radio and FM radio was like crazy and freeform and like guys would play the whole album. Like there were albums I grew up with where I knew every single song on the album because they played every song on the radio. And that was transformational. There would be no rock and roll music in the same way without FM radio. And I'd say there'd be no overtime and no transformation in sports without all the various social platforms.

### Human: Yeah, it's a good question. I think, you know, to tackle the question of like, what does it mean to do it at scale, which is, you know, really what we're talking about here is like, what do you have to do at scale for the energy system? I think, you know, there's some crazy numbers, if you think about it, it's the energy systems, the largest market in the world, like, you know, just oil and gas, publicly traded oil and gas companies largest in the world are only a tiny fraction of the entire energy market. And so to solve climate change, we're talking about replacing trillions and trillions of dollars of energy infrastructure with something, something that doesn't emit where what we have today, we know we have to get rid of it. And so that's the level of market opportunity that all of the clean tech sides are going after. And what Fusion really allows you to do is you basically can build a machine that's big enough to power like a town. It's not like a machine that's like power an entire region or city. It's like the size of the way we power our stuff today. It's like you go and you see a gas plant. It's like, oh, you put a Fusion machine there and you get rid of the pipeline and you get rid of the smokestack. And that machine, if you know how to build it, its fuels are equally accessible to everybody. So it's a machine that makes power from, you know, effectively nothing. And so it's like a complete reimagining of the way we do energy. Like, like one way to think of it is up till now, we've done energy through like hunter gatherer style, like we have like rooted around the ground. You like dig or you like wait to trap the wind or the sun, right? And what this is, is like, okay, build it. If you got the blueprints and you got the tools to build it, you can build it, you can run it and you get energy. And that's a really, you know, that's like, why is fusion in all the sci-fi? It's because that's profound. And what we're trying to do is to try to make that into something that then can be, you know, a product, right? It's not a giant international project. You know, good luck to them. That's great. But it's something that it's not quite like put in your basement, but something that you could put into the existing infrastructure as we turn over the infrastructure to clean energy.### Assistant: Got it. And they're spending $20 billion on the eater project more. Yeah. Wow. That's incredible. And so if you succeed in your mission to make the magnets better, you could potentially upgrade the magnets in what they're doing, or they could leverage your technology or you'll be building is, is I guess the question is, and you can answer this on the other side of our quick sponsor break is How many of these, and at what scale, do we need to build them? Will there be one per country? Will there be one per state? Will there be one per city? One per neighborhood? What is the footprint in 20 years of fusion reactors in America and around the world, if you succeed and we get back on this, we can start off Hey, everybody, I want to take a minute to thank in broker for sponsoring this week and startups and supporting us all year long. What a great company. And it's very simple. You need to have insurance. I don't know how many times I got to talk to you about this. You have to have insurance for your company. It's time to grow up. and it's time to save money and to do it online quickly and easily. Brokers technology will let you save a ton of time and a ton of money. Prices are 20% lower and you get better coverage than all these crazy incumbents who are slow. That's not what you want. You want cyber insurance so if you get hacked, you're covered. You want DNO insurance, Directors and Officers. So you're the officers of the company, not like police officers, officers as in executives and directors are the people on your board. You need DNO if you're going to have a board, if you're going to have officers in a company so that if something happens and you get sued, you're going to be covered. And Arizona mission insurance is called E&O. This means if you make a mistake and major customers are going to ask for E&O insurance if they want to buy your product. And finally, there's Employment Practices Liability, EPL. So you're gonna talk to your attorney about cyber, DNO, ENO, and finally EPL. And the best place to get insurance today is that in broker.com slash twist, E-M-B-R-O-K-E-R.com slash twist, where if you use the offer code twist, you will get 10% off. They do a great job. They do many of my companies. In broker.com slash twist, get that 10% off using the offer code. twist. Hey, everybody, welcome back to this week in startups. Bob Munger is here Commonwealth Fusion Systems, CFS energy, CFS dot energy. So when we left, and we were talking about God, the eater is I'm pronouncing that correct eater it er, that $20 billion project is going on. They're just getting, I guess, they're 70% of the way to having the plasma flowing, which means it works. You're working on the magnets to make all of these around the world. better. So if you succeed with your magnets, I guess you become the source of magnets or you're making your own proprietary reactors. Is that the business model here? What's the business model for you? And then how does it manifest in the real world? When you and I are in our 60s or 70s? I'm not sure how old you are. But you know, we're 20 years from now, 30 years from now. is there going to be one of these in everybody's backyard or in everybody's delorean or tesla or is it going to be like one you know per country or

### Human: Yeah, about 80 to 90% of our funding comes from corporate funders. The rest come from governments, individual, high net worth individuals or foundations.### Assistant: Yeah, high-paying jobs that have massive triple-down effects. I know people get triggered by trickle-down for obvious reasons, and they're not wrong. But it is true if you have somebody who's a high-wage earner, they're going to spend a lot more money, because they have a lot more money. It's just basic math. They're going to be pouring more money into an economy, and these are very high-paying jobs that then tend to create other jobs in the world or other investing in the world. When we get back from this quick break, I want to know who are the last three or four winners, and how do you track if you're doing it right because you don't have returns and IRR and multiple on cash invested as your benchmarks and as your key metrics. What are your key metrics at the Mass Challenge 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. And it puts your job post in front of qualified people who meet your requirements. So you can find the right person and you can fill critical roles quickly and properly with a talented person. Here's an example. Takeoffs.io is one of the companies we invested in and they build an AI enabled building materials marketplace. It's a really cool product. And last year, their CEO Chris was trying to hire an AI artificial intelligence engineer lead, which is really difficult. There's a lot of competition for these. It's a very unique skill set. Well, he used LinkedIn jobs to find a perfect candidate after hearing about it here on this week in startups. And he got a candidate with a PhD in computer vision. And that employee has been with them for over a year. And he has rolled out several major projects. So here is your CTA the old call to action when it's time to hire and find the right person. LinkedIn is there to help. 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. All right, it's our power of accelerator series special 10 part series where we're looking at all the different accelerators out there. They come in different flavors. There are the traditional ones, where you just put in 100k 150k for six, 7%. There are ones where they're virtual. And there are others that are contest based like the mass challenge. There are global ones or local ones and everything in between. Today on the program, we have the CEO of the Mass Challenge, Siobhan DeLay, and she was just telling us about 2,000 startups graduating the program in 10 years, 150,000 plus jobs created. And I would like to know, how do you know, as the CEO, and I guess you have a board and you have funding, I guess, from corporate sponsors or the funders of this?

### Human: One thing I think that's interesting about these three shows, looking at them together, Super Pump, its critique of TK and Uber and how he ran it was like it was so aggressive. He had this wartime posture and he was really bending the rules or breaking the rules to go after his competitors.### Assistant: ultimately, when you look at the business of at or the the entrepreneur, Adam Newman, it's really the perfect case of what gets you here does not get you there. The first stage of a company, when I was looking at it through the eyes of, you know, a CEO founder myself, and also a capital allocator and watching, you know, 300 investments go through some versions of these things. he's that perfect first stage, manifest something from nothing. And when he gets green desk up and running, and he convinces people to, you know, you're gonna he has that scene where he's convincing the first person to buy a desk, and he's like, you're gonna you're gonna meet your partner here, you're going to do this here, you're going to do shots here, you're going to drink, you're going to meet your wife here, that kind of manic energy to just manifest something in the world. and his salesmanship is amazing. But then you see that he never shifts gear, and we're only three episodes into it. But by the time summer camp happens, and I remember when summer camp happened, I had multiple people tell me in the industry, like, Oh, my God, they basically ran, you know, a drug filled insane sex filled version of Burning Man in upstate New York. And people were like, it was awesome. But it was like part of the company. So it was a little bit weird. So I was getting all these reports back back then. And what gets you to, you know, raise that first round to get that product market fit that raw energy, enthusiasm, blind faith in your ability Well, then you have to shift gears. And that's when you have to be like, you know what, we probably shouldn't be drinking at work. And maybe we should pay people more. And maybe we should bring in some adults to run the place. Instead of just having a bunch of kids here. And you have to have some professional management. Because once you get to the first second location, you got big, big problems, you can't be running a court, there's no there's no world in which you can have a corporate version of Burning Man. It does not exist. No. Listen, when you're a founder, it's fun to trade your craziest stories with other founders. Recently, Balloon CEO Amanda Greenberg, one of Lunch's awesome portfolio founders, told me how Vanta's SOC2 solution helped her save an important deal in the final hours. Balloon, if you don't know, sells SaaS productivity and collaboration software, and when they needed 10 documents in place within 48 hours to close a very important SaaS deal, well, Vanta saved the day by supplying customizable templates and helping them through the process to close. So if you don't have your SOC 2 tight, you can't close these major customers, and Vanta's gonna really help you get that done so quickly and so easily. Vanta's compliance software makes it easy to get and renew your SOC 2. They continuously test against technical and non-technical SOC 2 requirements, and they partner with over two dozen audit firms who have been trained to file SOC 2 reports directly within Vanta. And on average, Vanta customers are SOC 2 compliant in just two to four weeks. Compare that to three to five months without Vanta. And guess what? Vanta's gonna give you $1,000 off right now. So, get the $1,000 off at vanta.com slash twist. Once again, Vanta, V-A-N-T-A dot com slash twist for $1,000 off your sock too.

### Human: San Francisco's new source for new ideas and thinking. When we get back from this commercial break, for our sponsors, we're going to beg you for $10 and make you feel good about how precious you are in supporting National Public Radio.### Assistant: I mean, I can fake those kind of voices, right? That's not what works. Authenticity is what works. And I think that's what we've seen on YouTube is these personalities. You can say what you want about them. Are they vapid? Are they stupid? Are they immature? Whatever. They work. They work. They connect with an audience. And that's really what it's about. Katzenberg will go on to do great things. He made his money already. Meg Whitman will go on to great things or retire and go into politics. She already made her money. There was a lot of dunking going on on Twitter, I get it. But it's not a tech company. So don't dunk on it when you compare it to Airbnb or other companies or and please don't. I mean, if you look at there are no Snickola and Quibi. These are not tech Silicon Valley companies. These are media companies or companies funded by people outside the industry. They really have very little to do with what happens here in Silicon Valley every day at its best. And somebody was dunking and saying like, Oh, all women got $2 billion in funding and Quibi got 1.7 million billion. And I was like, well, then what you're saying is women got 3.75 billion because Meg Whitten is the CEO and co founder of this. I mean, even if she was hired as the CEO, she was there before launch. She's a co founder. I mean, anybody who is the top position before launch is a co founder. Let's be honest here. I thought that was unfair. It wasn't funded by Silicon Valley. So to actually even compare it to Silicon Valley funding, we fund, we don't fund at 1.75 billion of clips. So it's a ridiculous way to do it. That would be like taking the funding of the Avatar series, right? Like the new, they're doing three new Avatar films or the Lord of the Rings. And you know, or Game of Thrones and apply that to what we do here in Silicon Valley, we that's not how we invest, we put 100,000 $200,000 into accelerator companies, we then put 500,000 to 1.5 million in a seed round and a series a 5 million 10 million series B, I mean, we let founders get rewarded, and we allocate capital based on performance over time. Sometimes that gets a little out of hand, sometimes it gets a little ahead of itself. Sometimes people raise two rounds at once, there can be all kinds of dynamics that occur, but never do we invest 1.7. $5 billion in a sheet of paper. No, no, no, no. Au contraire, mon frere. That is not what happens here. So please don't bucket this into the funding. It's just a naive way to think about this. Anyway, good luck to Katzenberg. I'll see him at the poker table. I'm sure someday soon. He is super competitive. He is a great poker player. He is a great executive and a great human. I don't know Meg Witten personally, but You know, listen, you tried. Move on. I got my Mahalo. You got your Quibi. Everybody's got their, you know, really ambitious startup that didn't make it. You hit the wall. It's all good. Don't worry about it. It's all good in the hood. All right. We'll see you all next time. And thanks for tuning in for another emergency podcast on This Week in Startups. Okay. See you next time. Bye.

### Human: No pun intended. Sorry. Notable.### Assistant: But again, this is struck more structured. Yeah, data here. So they're structuring it by giving you like that. I don't know what you said, but like turn your brain on kind of situation. What was the word you use when it gives you the mental model of here are all your choices how to think about that? use some term of like, hey, this is engaging your brain. And so here we go, we're looking at this. And so this isn't a place to make other jokes or be publicly replying. This is a place only to do this structured kind of data. So here it says, this thing needs more rating. So here are the comments people put on Elon's tweet in there. Don't go too fast here. Go back up, please. I'll tell you when to move down. Got to admit, here's the note got admit, their third basement was killer though. um don't know what that's yeah i guess so right let's keep going uh so this is where someone is abusing their note privilege to put a funny comment on the tweets there are many conspiracy theories about the freemasons and this is a joke about those theories the etymology of free is disputed but it doesn't mean they refuse payment for their work oh my god This is so useful. This is showing it being super useful. Yeah, there somebody is literally explaining to people who don't understand Ilan sense of humor, the joke, like all all people how much to get as a lot of times when I make a joke, and listen, I'm, I'm a funny guy who makes good areas that are very understandable. When I make jokes, sometimes I will put the laughing face. In other words, I laugh at my own joke, right? At the end, I put the smile just so I don't get a flood of replies where people take the joke seriously. Yep. And then when people Yeah, when people refuse to understand it's a joke, because there's four hilarious rolling on the floor laughing emojis, I will reply with the absolutely perfect animated gif of Superman looking around like this. And he's flying and then somebody put the the word the joke. Yeah, the joke moves around, but Superman can't find it. That's showing even Superman can miss a joke. So anyway, this is a perfect example of somebody unpacks this for somebody. Next, let's scroll down another little bit here. So we would click Yes, that's helpful. See anything you'd like to improve. There's nothing to improve here. This person nailed it. Amazing. Amazing. And so great. Here is a birdwatch screen. We're gonna go I think this is the third screen we're on here. And birdwatch says we need your help. rate these notes chosen for you. Okay, so let's pause for a second here. If you're not watching the video, you can go to youtube.com slash this weekend, you would search for the May 6 episode, go to the videos, and you can just sort them by date, go to the May 6 episode, fast forward a couple of minutes in, and you'll see these actual screenshots. Or if you're on Spotify, we're part of the video thing where you can just if you turn your phone sideways, I think it turns the video on. And then if you're on Apple podcast, you'd have to search for this weekend startups video, we have two feeds, one's audio and video. Okay, Now, rate these notes chosen for you. Notes on these tweets need a more diverse range of feedback and your point of view could help decide if they're helpful. This list refreshes regularly. So this is notable.

### Human: You like the experiment? Yes, actually, I will say thumbs up to experimentation. Implementation to me seems complicated, but I think it's just because we haven't seen it in the wild. And we're bouncing back and forth between the mod view and the public view and the this and that. So but yes, bravo for trying everything to make this thing better.### Assistant: You might not realize it, but you've probably used intercom before, you know, when you visit a website, and that little chat bubble pops up, and they help you with any question you have. Well, that's intercom. I literally used it this weekend. It's the best way to connect with your customers. intercoms platform helps you engage and support your users through personalized chat like experiences. and over 25,000 companies use it every single day, I kid you not, because they want to foster their relationship with customers. They want to covet those customers. And those customers have great things to say. In fact, here's a testimonial from Twitter. It's almost like all websites I visit with that intercom chat button, I instantly associate them with great customer service, just like intercom intended. So if you're an early stage high growth startup, you can get access to intercoms early stage Academy today at a 95% discount. Join the program today at intercom.com slash early dash stage or email them. That's how cool they are at intercom. They'll just email them. Startups at intercom.io. How easy is that? By the way, you can register for intercom's next customer experience for growth webinar on May 18th by clicking on the link in our YouTube description or the episode page. Great job intercom. I would say you kind of nailed it in there. To make it even more succinct. The communities that really have great moderation is when you select people who truly care about that community and have great intent. So it really is in who you select. It is. And so how did we select the mods for our YouTube chat, which have the ability to ban somebody time somebody out that you know, they have like God powers in our chat. Yeah, we can't sit there when we're on air and do it. But you know, I'm a I'm a mod for next fan TV. How did I get that privilege? They saw me there every night. And they heard me dial in and they saw my contributions. And they said, Jake out really cares about the next he's been here for 20 nights. He's commented on 20 games. Yeah. let's make him a mod. We saw a beard script, we saw Zen Prophet, we saw folks who showed up every day for youtube.com such this weekend. We said, yeah, it's obvious who should be a mod. And if they did a bad job, we would take them out. So you kind of lightly met, you pick people in the community who truly care, as you pointed out, and you empower them. And I guess you got to, you got to monitor them, make sure they don't go rogue. And there could be some going rogue. But I think this is an interesting idea. Some people might say, just no thumbs on the scale, just let people interpret for themselves. Yeah. I don't think that's helpful. Other people might, you know, see, here's the problem. If you hire a bunch of fact checkers, there's a certain group of people out there who are just unbelievable liars and another group and they don't care about their lies. Like they're like lying is trolling to them. So it's kind of fun. And there's one side who uses lying kind of as a sport, like a blood sport. And there's another group that uses framing and words as their sport. I don't want to tell you which side it is, but if you watch politics. There's one group who uses framing and emotion. And then there's another group that just uses straight up lies and trolling to great effect.

### Human: And we'll be at the forefront of that is I'm really interested in the humanitarian stuff, because having watched the Uyghurs in China and the internment camps, a lot of our information came from satellite images, I wonder if you were part of that, or you can speak to what you're able to tell about remote regions where maybe humanitarian crises are going on.### Assistant: So i'm not a scientist by training and so there's probably a couple of other folks in my company to answer that question more intelligently but we look at that as saying what is the actual impact of these events and so you know a few years ago when you had hurricane harvey came in and really smacked the coast of texas i've got a lot of family there my jimmy our founder went to ut and so We looked at that and said, look, we're a geospatial software and analytics company. We should be doing something about this. So in a period over a weekend, I called my lobbying firm in DC. They also were based in Texas. And we said, we think we've got a way to track the water extent and damage of Hurricane Harvey across Houston. And it wasn't just from the humanitarian side of things, but it's like, we overlaid oil storage tanks and other other infrastructure. And we said, based on our analysis, 30% of those tanks are under two meters of water, you've got a huge environmental problem developing here. And we actually took that to the governor's office and said, we'll give this to you for free. And maybe use that for your emergency response and other other applications. We've done some, some work supporting Cal Fire, unfortunately, it's really close to where you and I live. up in northern california and oregon and other parts of the west coast. Looking at the movement of fire not just using satellites by the way we've also done anonymized kind of geolocation tracking. Of groups of these mobile devices to look at what's the impact of these events is the disruption to these events permanent. Do you see people leaving areas and not coming back do you have what's the impact of the economy and the infrastructure. We actually did some work with the governor's office in California at the early stages of COVID with people being compliant with shelter in place. And so when you said the beaches down in Southern California that people were violating some of those shelter in place, we're actually helping kind of track that to say, hey, you've got a problem here or you've got a problem in this part of California. So we did some of that work with Google and some others. So it's a developing, unfortunately, it's a developing area. I don't want to call it a line of business. But it's, it's evolving rapidly. If you and I said five years ago, we had some really bad fires here that this would have been happening five years to today, we probably said that's not going to happen. But it is and it's probably gonna happen next year, five or 10 years on top of that. So we wanted to lean into that. And it's a big humanitarian and pieces as part of our mission as a company, of how do we how do we develop the technology take all the really smart engineers we have in the company and and develop solutions ideally solutions that you can put into the hands of folks that are either fighting these initiatives these issues whether they're firefighters or first responders or policymakers and say this is what we see kind of on a long term basis. And the beauty with some of the access of all that content that I mentioned, we like twenty five years of history so you can go back in time and say what's changed. Over the past five or ten years due to either economic or infrastructure development or kind of the environmental impact as well to help people take better decisions on a go forward basis could be a deployment of. relief funds, deployment of development funds, really thinking about where you should build and not build. And so there's, it's, it's, like I said, it's an evolving, evolving issue.

### Human: It's cheap. This like this is such a really important point we optimized as a species and as a planet. so that when a new iPhone comes out, or AirPods, whatever it is, you can get them in, you know, you put your pre order in, you know, right after the announcement at the Steve Jobs keynote, or, you know, the Apple keynote, and then it ships from directly from China with your label on it. And this, they don't have to keep a ton of inventory. And that was Tim Cook's big gift, right? Like he was he was a savant at supply chain, and just in time. for drugs and PPE and things that we need water, you know, Clorox wipes, we got to keep these things on in stock, both at our houses at the distributors in factories everywhere we have, we cannot do that. Let me end on since I got you warmed up, and we're now in the final couple questions here. And we're going to have you back on because you've been a great guest. I want to talk to you more about stuff. relationship with China has always been, you know, I don't want to say challenged, it's been actually wonderful for the last x number of years that we've actually engaged each other. And we've gotten to know each other. And there's been a lot of upside to that. There's a this golden arches rule that I guess, free, Thomas Friedman came up with in the world is flat, or whatever his book was. I I forgot the name of it. Where if you have McDonald's in two different countries, and they both have McDonald's, they don't go to war with each other. It's like never happened. So this engagement has been great. But there have been some rough parts in the last couple of years. And it feels like there's a little bit of tension, the NBA, you know, Daryl Morey says, you know, we're gonna fight for human rights, or just an innocuous retweet or something, whatever he did, you know, saying he stands by Hong Kong, all of a sudden, the NBA is kicked out of China, and then we're making movies and the ending of movies is being impacted by what the Chinese government thinks, tick tock, etc. But we need to figure out this relationship. So what can you tell us, as somebody who has a working relationship with China, about what you hope for the two countries and what you believe is the path forward with regards to our view on human rights, their view on human rights, our view on democracy, their view on a society that is it's called the Chinese Communist Party, the CCP, like, these are two different styles of country working together sharing some form of overlapping capitalism. What do you think of it? And and how should we look at it? What do you know that we don't?### Assistant: I think that it's incredibly important to understand other cultures. I actually lived in China for 2 years when I was 25 and 26 years old. I learned Chinese. I spent 3 hours a day studying Chinese. I learned a lot about Chinese culture. And I'll tell you that Chinese culture is the most different from Western culture that I've encountered. I want to keep meeting more people and go up to the north of Norway or whatever and meet the reindeer farmers. I'm sure there are other people. We'll leave that possibility out there. I don't know. But of all the cultures I've encountered, by far the most different. And I would encounter this every day that I was there, where I'm just like, I would just see the world in a fundamentally different way than the people around me. They're far more group oriented than we are. We love to be proud of our individualism. We're proud of who we are as an individual. I see myself first and foremost as an individual, not as a member of a group, a family, etc. That's a Western mindset. The Chinese, the first thing is being part of a group. It's just a really different worldview. I think it's hard because we're so proud of our culture. We're so proud of being individual. It is very hard for someone who's only been exposed to one way of seeing the world to actually just understand a different way of seeing the world. And China has a really, really violent history. Thousands of years, but really for the last 150, 200 years, going back to the Opium Wars, and a little bit before that, where the Qing Dynasty had started to become less stable, and a lot of warlord warlordism, stuff that you can't imagine. I mean, Chinese Civil War, I've read some of it, it was pretty, pretty brutal. The Chinese Civil War took place at the same age, Chinese Civil War, they don't call it that was the Taiping Heavenly Rebellion. I forgot the name of that exactly took place at the same time as the US Civil War. We talk about the US Civil War is like the most bloody thing of all time. 500,000 people, Americans died in the Civil War. 25 million people died in that war in China. Unbelievable. Right. And so we're not used to that world. And so we want to apply our lens of saying like, hey, you should have, you should embrace our values. You should embrace these things. But we don't know what that leads to. in China. I think it's a little dangerous for us to just try to impose that. I say, first and foremost, what you said in the beginning is true. We've got to understand each other. We've got to find mutual beneficial exchange. Trade is a great path towards getting the business communities uniting at least that, hey, let's have peace, let's have harmony, let's have good relationships here so we can mutually benefit from doing business together. Then, of course, we need to understand their history and have a lens. The opium wars, the US government, United States, and it wasn't the government, but US companies did 20% of all the opium that was shipped in to China during the opium generation. We literally forced their ports open at the force of a gun and insisted that they take our drugs. Imagine if the Mexican cartel came with gunboats into San Francisco and said, no, you're going to take our heroin. well, then we would say for that we'd be pissed off for like, now we have to now we have fentanyl, right?

### Human: you### Assistant: question. I do think chat, I think language learning models advanced ones are on the cusp of eliminating the bottom third of information work in the world, maybe the bottom half. So I think within the next five years, the bottom half of information work will be done by language learning models. Just like 80% of driving right now can be done very safely highway driving by autopilot. Yeah, you know and full self driving. And then it just depends on us getting comfortable with deploying that. So how many people have cars that have full self driving that can do adaptive cruise control and lane control on the highway, I would much rather right now, drive on a highway, if you told me I could pay, you know, $10 per 100 miles to drive on a highway that only had cars with full self driving, you know, which is adaptive cruise control and lane control, let's say, would pay that I would pay a premium. So I would pay 30 bucks every time I went to Tahoe, or did a 300 mile drive to LA, I would pay that 30 bucks to go the 300 miles to LA, you know, in a separate highway only with those cars. And then that would subsidize everybody having one of those cars or retrofitting cars to have it. Why would I do that? Because the safety would be unbelievable. Now, would I do that on the streets of San Francisco? Would I do it on the back roads of Lake Tahoe? No, I don't think the technology is perfected there. I think there's a lot of random things that could occur, like snow, ice, lines, those highways are just not maintained properly, where those roads are not maintained to the way highways are. So let's take that same analogy to language models. Would I want to just read an article right now on an important issue, like trading a stock on quarterly reports? Or would I want a human to do it? I would want a human to do the quarterly report thing. Now, would I take an article right now on how to ideas for a 10 year old's birthday party? Sure. Like, what's the downside? Give me 10 ideas for a 10 year olds party. Give me 10 jokes. There's no harm if I read the jokes and they're bad dad jokes and two are good and eight are terrible and don't make sense. I'll just take the two. If I get 10 ideas on what to do for a 10 year old's birthday. Fantastic. I take the 10 ideas. Two of them were great. Oh, do a pirate ship thing. Oh, go to the beach and hire somebody to collect shells and put nets out and identify fish. Oh, it sounds like a great idea for a party. A birthday party. Great. I can then evaluate it from there. But I wouldn't take stock advice on should I J trade Amazon at this point, because as we've seen, probably not a great idea. So they haven't folks. That is what I believe will happen. And then I think, yeah, if I think the bottom half of startups or bottom third of startups won't be necessary, because language models would do that. But I think those same founders will find something else to do the next higher level thing. So if in the example of the birthday parties, well, okay, here's the 10 birthday party ideas. Two of them are good. There'll be a startup that will be a marketplace of people who could throw birthday parties, event planners, et cetera. And they will be even better parties because they'll have more creative ideas and they'll come together quicker for a lower price. Just as one example.

### Human: It is kind of interesting how there is even in a down market always bubbling, because like, I brought up climate tech, and you brought up AI. That's a, that's a group like a little bubbling bubble right now, it sort of feels like. And so one of the things that was discussed at this conference a couple of times about the investing space and how much money there is, I was kind of gratified, because I've been hearing this, you know, these whispers about how like climate tech is still really competitive, and valuations are still higher. And there's like a lot of, I don't want to say tourist money, but there are a lot of new funds. Yeah. And new investors, such as myself. Yeah. What happens when kind of like crypto or SPACs, like a bunch of bad things may get funded here? Correct. And then what does that do to the category? You know, do I have bad timing after all?### Assistant: Sure, it really does happen from time to time where you have irrational exuberance, from the capital allocator side, and perhaps even over funding and not enough entrepreneurs. So if the balance if there's only a small number of entrepreneurs pursuing a vertical, let's say it's like the stable diffusions and the open AI eyes of the world, you know, AI kind of creating images and words, there are a small number of opportunities to place a bet there. People are enamored with it, because the technology when you see somebody use Dolly or stable diffusion or GPT three, you're like, Oh my god, that's incredible, right? So you want to place a bet, you're sitting on a bunch of chips, and everybody wants to place a bet in the same space, there's more supply of money. There's a lower supply of companies. So therefore, demand for those companies is really high would be the best way to say it. And so since demands high, the price goes up, because entrepreneurs are smart, and they want to have a marketplace, and they'll go for the highest price. So what do you do in that situation is you have to be disciplined, because if people overpay for a company, early, then the company has to do what's called build into the valuation. So to give an example, if companies pre product, they don't have a product completed, they don't have a product in market, those are typically valued 10 million and under, they could be an accelerator, they could be seed invested, so 10 million and under. then they have a product in market and they have some people using it. Okay, now you could see them getting 10 to 15 or 20 depending on what amount of traction, right? And you can put a multiple of cash on it, like how much revenue they're making. But just broad strokes, let's say under 10, if you don't have a product over 10, if you do have a product, well, what happens if there's so much demand that to win a deal? a VC says, You know what, I'll just give you credit for what would happen in the next round in this round. So what would that look like? Well, instead of investing a million at a $10 million valuation, I'll give you 2 million 20. So I'm still buying 10%. But I'm paying twice as much for it. Why would a VC do that? Because there's competition, and they want to get in on the deal. What should you do if you're one of the people who doesn't get in the deal? Well, you just wait, because they're going to need more money. And in order to justify the $20 million valuation, they're going to need at least a million dollars in revenue, 20 times revenue, maybe 500,000, if the market's really hot 40 times revenue. So you can just wait it out, wait till I hit 30 or 40 K in revenue, build a relationship with the founder and say, Hey, I see that, you know, you now hit a half million to a million in revenue, probably a good time for us to talk about maybe doing your seed extension or your actual series A, is that something you might be interested in? And they're not going to be able to say, well, give me 100. Because people are gonna look and say, well, you have half a million in revenue, that would be 200 x, that doesn't make any sense. So we have gravity will eventually bring all of these companies and valuations back down to earth. And you just be patient.

### Human: Amazing. And incredible for investors in this space, employees, etc. But one wonders, Why didn't why wasn't slack able to you mentioned, it's sort of in passing, but zoom just skyrocketed. But slack did not during the pandemic, their revenue has grown 50% year over year, that's a high growth company for sure, on a smaller number. But isn't it a failure that slack could not remain an independent company? Or is it success that they were able to just cash out? How do you look at it? And why didn't they grow?### Assistant: Well, I have thought about this a lot and written about it a lot recently in general. First of all, I'm a huge fan of Slack. We chatted about it the first time you had me on your show. You were a HipChat fan. I said Slack would be bigger. I was all in on HipChat. We had some fun. I had some fun. I've been a fan. You know, at the first SRA annual ever, the only speaker I didn't know was Stuart Butterfield. I begged him to come when Slack was doing six million revenue. I'm an OG fan, right? Yes. And I think Stuart is the kind of person we all want to work for. Someone that deeply cares about people, that cares about inclusion, that cares about doing the right thing, that cares about product, right? He's a mensch. He really is. And I have no criticisms, only admiration. But what I have learned, now that there's so many SaaS, there weren't any SaaS companies at a billion in ARR when Slack was found. Now there's a ton at a billion. Zendesk's at a billion, HubSpot's at a billion, Xero's at a billion. We can go on and on. Slack's coming in a billion. And what we've learned is the ones that approach a billion and don't have, a second product line that's equally as big, slow down. Ultimately, there's only so many consumers. Now, there are exceptions, but even Zoom, I would say has two product lines, B2C and B2B. Right. And yes, schools and families. Zoom's at 3 billion, but the pure old Zoom is only at a billion. And that Zoom is adding phone to get bigger because the old Zoom isn't big enough to get to 10 billion. It needs to add phone. right phone yeah phone is like literal phones yeah a huge zoom has two big pushes enterprise and phone and then there's this weird thing that other than revenue market i don't think eric ever wanted which was this the yoga and the jazzercise side of zoom and schools Yeah. I mean, it's great, but, but so, and the ones that slow down the drop boxes in the box. And I love that you and I love these products, but they, their growth rates are slow. The survey monkeys, they start to slow into the teens, 15, 16, 18. And that's the death knell for a high growth company. You're not a high growth tech company and you have, and you look at folks like Viva, you know, Viva was this pharmacy around that spun out of Salesforce and other great success, but their vault product, which is where you archive, uh, compliance-based content. The Vault product's larger than the Pharma product today. It's larger than the initial product. Look at Twilio. Twilio's at $3 billion in a rocket ship, but it's added SendGrid. It's added Segment. It's added Call Center. It's added a whole bunch of things. If Twilio had just been Twilio, that lovely API we love, it was never going to get to $10 billion, and Slack didn't do it. And Stewart could do it. There's a great team, but I think culturally, they didn't want to do it. And I think you have to decide, okay, guys, are we going to reboot our company? Are we going to reboot our company and be more or should we be the slack arm of a bigger company? And I think it's a logical choice for that reason, because there's only one product.

### Human: Actually, any of us could read them by pretending to be a Vanderbilt. Um, but yeah, no, I mean, I think you're absolutely right. Like even the, even a high level assumption that China could eventually invade Taiwan is not, never should have been off the table. And so this, like cutting off these avenues of dependence is really important, but it is interesting that we're restricting these exports now before all these plants have been built. Right. Like right now we have a lot of promises Intel said it would do $20 billion worth of plants in Arizona, but they, they take years. to spin up a decade away from full production. So the fact that we're restricting exports now is a little risky because of China in return said, okay, well, you can't have any chips from here. There's still TSMC, which is in Taiwan, which is still you know, in the clear. And that's Apple's biggest. That's where Apple makes all its chips, and then tons and tons of companies get their chips from TSMC. But if China did invade Taiwan, and all of a sudden TSMC was like, not exporting to us.### Assistant: Yeah, we could have hard drive shortages, we could have an issue. phone shortages. I mean, this is one of these very challenging problems like energy chips and energy seem very analogous. And the same with pharmaceutical drugs. Now, when you look at each one of these, each country has a different challenge. We're so lucky here in the United States that we found fracking and I'm not saying those are good things. I don't want to see like, you know, some state, you know, fracked and poisoning their water tables and all that kind of stuff. I think we have to do it very intelligently. But the fact that we're not sitting here one worrying about winter, like Germany is, is is really important. And I think this road to resiliency is something every country has to invest in. And this is something like on a bipartisan basis. that we elected Biden to do. He was supposed to be like this old guy who came from a different era where people could work with somebody across the table and go, you know, disagree with them about, you know, some, you know, cultural issues or whatever stylistic issues, but hey, it's in all Americans benefit from energy, resiliency, chip resiliency, and pharmaceutical lower prices. And so that's great to see that they're working together. Finally, these incompetent morons in Washington are getting something done together. Well, for the American people, like we need to be resilient on chips. We need to be resilient on pharmaceuticals. We need resilient on energy. Let's go. Yeah, let's go. I don't want to deal with any of these dictators anymore. It's like this overhang of anxiety. And how great would it be if we're like, yeah, we don't need your chips. We don't need your drugs. We don't need your masks. And what this requires, you know what the other shoe that has to drop here is, we have to take our immigration system. And we're going to need to overhaul it to make sure that we have people to work in these factories, you know, and some of them will be automated, of course, robotics, we get it. But other things require humans. And so we're gonna need to let some people in. If we have too many job openings. These days, every new potential hire can feel like a high-stakes wager for your small business because we are living in turbulent times, so you want to be 100% certain that you have access to the most qualified, elite candidates. That's why you need to check out LinkedIn Jobs. LinkedIn Jobs helps find the right people for your team faster and easier. they'll do it for free and you can add your job and the purple hiring frame around your LinkedIn profile to spread the word that you're hiring. They've got tons of simple tools over there at LinkedIn jobs to make screening questions easy so you can find the candidates who really want the jobs And of course, you know, they have the skills and the experience all out there on everybody's profile, people voting for what skills people have to validate that for you. I don't have to explain how awesome LinkedIn is and all these features, you know that because you're on it every day. And this is why small businesses rate LinkedIn jobs number one in delivering quality hires versus leading competitors. LinkedIn jobs helps you find the qualified candidates you want to talk to faster. And did you know every week nearly 40 million job seekers visit LinkedIn, that's right post your job for free at linkedin.com slash twist. That's linkedin.com slash t w i s t to post your first job for free terms and conditions apply.

### Human: Yeah, I will quickly, you know, pitch in here. I think it was Alan did mention about the curriculum, I think the timetable of the curriculum was also very accurate. We had the products just getting started, as we started founder university. some of the information on, you know, how to utilize maybe some, some no code applications if we needed it, or some, some marketing tricks that could utilize all of those were taken by heart and helped us get to where we needed to. So they were greatly appreciated. And I, I love that there's a program like this to help all the founders that are out there, 20, uh, 250 at a time to benefit from it.### Assistant: know, the like, I think we hear this a lot, Kelly, hey, I knew a lot of what's in the curriculum, I knew 60% of it, I knew 70% of it, I knew 50%, whatever it is. But what you don't know, you don't know, that could either be a huge opportunity, or it could be something that could scuttle your startup. So we've really tried to look at this is one of the benefits of having over 10 years of investing in portfolio, we know what's working in the field, it does change, some things are timeless, other things are not timeless. You know, certain tips, tricks, strategies, they might change, strategies might not change every 10 years. But tactics might change every year, or every two or three years, you know, some Tick Tock, or Google search, or product hunt as a tactic, all these tactics could change over time, which you know how to use these things. And so, really great that we have this organic living document, what we learn with our breakout companies that are going public, or, you know, are reaching a billion dollar valuation or raising $100 million that informs the curriculum that we've put together. And so as a but a couple of examples, just making sure people have their accounting you know, dialed in making sure people know how to pitch their company and understand how venture capitalists and C investors make decisions like these things are really important for founders to know. God, you know, so much of the advice I you know, I find out there is low quality. But we've really tried to do is find you know, from our first principles and our experience, and then also what other really successful people are saying, and we get to have a lot of them here on this week in startup. So we can point you to this week in startups episode, or, you know, a tech stars blog post, or a Y Combinator video, you know, we don't have an exclusive on knowledge, we'd like to point to the best information we can find, and that founders tell us has been the most effective for them. So fantastic. All right. And I think we'll make that a wrap. Nicely done, Kelly. And we'll be doing some live events. Did you guys get to come to any live events yet or no? Yeah, okay. I owe you a live event. We're going to be having more of these. I'm going to try to do things with the alumni in New York and in San Francisco on a regular basis in San Mateo. So we'll look for more in person events. We'll always have the remote option. People like to do the remote thing. A lot of people are you have maybe have jobs in there. We do it at night. So it's an hour and a half Monday and Thursday nights. And so you know, you can still work your day job while you come to founding university when you go to launch accelerator. you should probably be full time by that time. So we have a tolerance for people who are moonlighting and doing this as a side hustle. And hopefully we can help be that bridge with that first 25k check. Go to founder.university. Find out more about the program. Kelly, thank you so much. You're working really hard doing a great job where I should say, you impress you're doing an acceptable job. It seems like you've checked the box of acceptable performance. So congrats. Really great job. I'm really pleased with the quality of the companies. We're really meeting great founders early. So that makes me very happy.

### Human: Well, we don't just have one copy, because one is the wrong number. But yes, actually, a lot of the data, it's about 60 petabytes of data. So peta is what comes after tera. Tera, peta. 60 petabytes, and if you go into the building, which is this gorgeous building with pillars, and it was an old Christian science church, and you go into the great room with the hall, the beautiful, and in the back, there are actually servers that have lights blinking on them. And so it's kind of like open stacks of a library. You can actually see, you never get to see somebody's servers, right? They're in the clouds or wherever the heck that is. And it's this, they're beautiful. And one thing I love about it, I've been building supercomputers my whole career. The thing about this one is the lights actually mean something. Every time a light blinks, is somebody either uploading something or downloading something from the archive. Right. So, I think it's just glowing books. So, it's books that are glowing. If anybody's reading that book anywhere in the world, then it glows. Anyway, it's beautiful.### Assistant: Hey, when we get back from this quick break, I want to know how you think about software. Obviously, software gets written, and then copies are on floppy disks back from the 80s and 90s. And then today we have apps, but then apps get kicked out of the App Store or the company gets shut down like path or another company. And then where does that app go? Where does that software go or video games that existed, and the ROMs are gone. I'm curious, when we get back from this commercial break, how you think about archiving software itself. We get back on this week in startups. From websites and online stores to marketing tools and analytics, Squarespace is the all-in-one platform to build a beautiful online presence and run your business. With Squarespace, you already know that you can blog and publish content as you like. You can promote your business, announce upcoming events, do special projects like I do all the time, and Of course, you can sell products and services of any kind because they've added all that e-commerce functionality to Squarespace's gorgeous, easy-to-use designs. And they have amazing, beautiful templates done by professional, world-class designers, so your website looks like you spent $250,000 on it, not just $25 a month. They have this incredible e-commerce functionality that I've talked about, and everything is optimized for mobile right out of the box. So if somebody's got a gigantic phone or a tablet or anything in between, a desktop, a laptop, it's all responsive, beautiful, elegant design that's been tested over and over and over again to be perfect. That's the beauty of investing in a Squarespace website, is that they keep adding features, but they keep the price the same. And we did Remote Demo Day. I asked my team quite effervescently, Get me a website right now for remotedemoday.com. We need to fund companies during a pandemic and bing, bang, boom, zip, zip, zip. It was up and running in just, you know, under a day. And thank you, that was us writing copy. So here's what I want you to do. I want you to go to squarespace.com slash twist for a free trial. And when you're ready to launch your website, I want to make sure you use the promo code twist. You have to use the promo code twist, and then you get that 10% off your first purchase of a website. For domain, as you know, Squarespace has been supporting this podcast, I think for close to a decade, they've been with me from the beginning, they've been on the podcast, they've supported everything I've done. And I really appreciate the team at Squarespace. What a great product. What a great solution. What a great team. Congratulations on all your success, by the way. And if you're out there and you're looking to build a project, to do e commerce special project event, blog, whatever it is, you know what to do go to Squarespace comm slash twist. Okay, we're back with Brewster cow founder of the internet archive, internet legend. And we're talking about backing up our legacy and backing up the world's knowledge, not just searching and indexing the world's knowledge like Google does a great job of but actually making sure that that knowledge is stored and saved for all time. Just out of technical perspective, is all of this on EC2 on servers, or are they at servers in that Internet Archive building in the Sunset District of San Francisco that I drive by sometimes? Where are the servers and the hard drives?

### Human: It also sounds like you're describing and you do describe in the book some mistakes you feel like you made as a leader because of what was happening in your brain. And you mentioned, for example, trying to build a software company out of a pants company. Can you dig into that a little bit more? Like, tell us how it impacted the direction of the business and maybe ways that your employees weren't aware.### Assistant: Yeah, I mean, picture 2007. Some time ago, 15 years, we were at a stage where there wasn't really a proof point of a brand that had been built internet driven. There was actually even a debate where was clothing even going to be sold online in a meaningful way. You know, Amazon fashion didn't exist. I know I sound like a dinosaur here. But we saw this company Zappos, its own leader with a with a future, you know, tortured mental health story. selling shoes, and selling shoes online. And that was a category that people said, well, no way, because you have to try shoes on, the sizes vary, half size, the width. And they figured it out. And they figured it out in part by out assorting the competition by offering more sizes and styles, which you can do if you're aggregating demand. on a national level in one store, and then second, and just as important, great customer service and customer service policies. So our insight when my brilliant co-founder started selling men's pants out of Trader Joe's bags on the campus at Stanford was, why don't we just build this brand digitally from the ground up if the future is the internet? Any commerce and the pushback was like no one is built a brand online. First and of course i was music to my ears because i wanted to do something that others had done. Will fast forward five years and we discovered that the software the software solutions available to building a e-commerce brand were just not acceptable they were good we kept switching. And so we I think correctly identify that there was a need for the entire ecosystem of new brands that were coming to life. So much better software stack and platform. And so I convinced our board that that was an awesome opportunity. And we raised enough money and we opened an office in Palo Alto, our company, the company was based in New York City at the time. And we opened this technology office and we put a bunch of money into it. And we hired 20 great software engineers and data scientists and UX folks. And we woke up two years later with just total show on our hands, where we had the New York office that was like, Hey, we're building a brand over here. What are we doing over there? And we had the Palo Alto office, it's like, we're inventing the future of e commerce. And Bonobos is the first brand that we're going to serve. And so we ended up with a situation where we had two distinct tribes of people within the company who each thought we were doing different things. And companies are hard enough. Startups are hard enough, as everyone listening knows, when you already are trying to do one thing. When you can't disagree, when you can't agree on what that thing is, and when it's more expensive, and when two different kinds of cultures are required, it can become a disaster. And of course, it turns out, there was an entrepreneur in Canada that had the same idea. And, you know, Toby built Shopify, and it's now $100 billion plus thing. And it makes sense that he built that because he's a software engineer who built a company. that was focused on writing software for e-commerce companies. And so I think the hypomanic part of that for me was seeing an opportunity doesn't mean that your company or you are the right person to go address it. And if you have a delusional level of self-belief and the ability to cajole and conjure these narratives to life that other people can believe in, you can not only start a company with that skill set, but you can sink one too.

### Human: We actually just did, I think this is our most recent episode in the main acquired feed. We had this awesome interview with this guy, Anthony Gonzalez. He was my business school classmate at Stanford. He's a congressman, so he's in the house. He just has the most amazing, incredible story. Played in the NFL, played at Ohio State, played in the NFL, got touchdowns from Peyton Manning, got hurt and went to business school with me. Started, was COO of a startup. and then ran for Congress and has been in Congress for the past few years as a Republican.### Assistant: Yeah. So when you're public, it's one thing when you're private, it's another. I just got a new Dell laptop and it is awesome. This thing is a monster. It's high powered. I can play Windows video games that people have been telling me about because I'm into real time strategy. I've got a giant monitor and it is so snappy. I'm looking at all Dell monitors here I got my new Dell laptop. If you're a founder, you need Dell and you need to apply for Dell for startups. Here's why you're going to get access to a team of expert IT advisors. And these experts are going to give you custom solutions to make your tech stack world class. And they're going to give you access to capital for building out your tech stack. They're gonna give you great discounts. And we love Dell. I give every employee who joins me here the beautiful 39 inch ultra sharp curved monitor and here at the ski house. I bought a monitor So when Nick and Presh come up here to work, they have they can plug their Dell laptop in boom, easy breezy, lemon squeezy, they're up and running with a giant monitor. Here's your call to action apply for Dell for startups today and get an additional 10% off all Dell latitude laptops. Those are the award winning ones that everybody loves is also the Alienware ones that I love just head to dell.com slash twist de ll.com slash twist that's dell.com slash twist. Thank you to Dell and the team over there for making great products and supporting startups. I think this is the thing when we look at securities law. And we look at what's happening in crypto I'm very happy about the SEC finally engaging with the crypto I want to know your opinions and saying, Hey, we think these are securities, and you need to clean this up. I too believe their securities, but I do believe they could have they need to give specific guidance on this maybe a little more upfront, as opposed to in the review mirror with enforcement. But also, maybe we can think about this as a group and say, well, maybe employees should be a carve out to be able to buy shares in company and shouldn't count against the limit. they should be able to buy a certain class of shares that don't give them like complete information rights, like a major investor. And if as long as they buy under $5,000 a year, or 10% of their salary, it's totally fine. So they can do up to 10% of their salary, based on or their whatever their taxes were for the average of the last two years, they can do 10% of that 20% of that. So you don't have the risk of ruin there as much. But But then Uber drivers, Airbnb drivers, I don't know whatever company you and I invest in, we all invest in, they could offer that to people. So I'm doing this on inside.com. We did an equity crowdfunding on Republic, and we did one on seed invest. I have all those emails, there are a lot of our readers and putting in $100 $200 $500 on average, we're going to put a top hat next to their names that inside.com on their profile pages. And when you go over the top hat, it's gonna say investor in inside.com. And I think that's kind of like the fun of it is that you could have, you know, public, you could be have investors, what is your take, David, on all this crypto stuff going down? I know you were crypto curious. I don't know if you ever consummated.

### Human: That's amazing. And then one last question, I promise I will let you go because we also talk about investment on this show. Talk to me about cost and business model, the manufacturing process you've described, you know, I mean, I know from just semiconductor manufacturing, it's a clean room situation, unbelievably expensive, expensive boundaries. How, what does it cost to produce one of these layer seven devices? And what will it cost on the other side of things?### Assistant: No, no, don't get me wrong. This is already amazing. It's a huge lift. It's tremendously exciting and I think very, very high impact. Everyone here at Precision believes that. I just you know, since we're talking about in a sense, you know, this, this podcast is about strategy and ways of thinking about startups and the world of new technology and medical device development is high risk enough. And we want to take as much of the risk out of that development process as possible, or at least to quantify it to the extent that we can, and to take on the risk in as small bite size chunks as we can. And so, you're right, there is a lot that is unknown about the brain and we try to deal with the parts that we know the most about. And so, when you ask, you know, what will we be able to learn? What will we be able to learn from this device once it's cleared for use in human patients? And the answer to that is I hope that we learn a ton. I hope that we, you know, are going to be delivering both a diagnostic tool and a scientific tool to the community that will teach us all kinds of things. And certainly, you know, the last generation of electrodes and electronics that were delivered to that were made available for clinical use, we have learned unbelievable things, you know, really, really, I would say, transformative things. You know, if you think about you know, 50 years ago, what the first generation of electrodes was able to teach us, it taught us about where language was located in the brain in great detail and all kinds of detailed things. And I think that we'll learn a ton when we can basically what we're providing is a tool that will provide sub-millimeter resolution electrical information from the brain. So, it will provide a window that will allow us to see the active brain in real time kind of at a microscopic scale. So, think about you know, looking at the brain under a microscope but actually being able to see how the brain is computing, not just being able to see what the brain looks like. At the same time, you know, when we think about the clinical applications that we're designing around, we try to design around those areas of brain physiology that we feel we know a lot about. So, you know, one of the patient populations that we're designing for are patients with various forms of paralysis and that includes paralysis of the limbs as well as paralysis of the articulatory muscles of speech. So, in a sense, aphasia and certain forms of inability to speak are also forms of paralysis to the extent that it's the articulatory apparatus, the mouth, the tongue, the pharynx, pharyngeal muscles and so on that cannot move. And all of those muscle systems have have spatial representations in the brain. And we basically know where they are. But being able to interface with them at the scale that we're talking about, we hope will enable unlock functionality for patients with those kinds of disorders that has not been possible with, you know, with lower resolution electrode systems. So for example, understanding the detailed structure of the articulatory muscles of speech or the fingers and where those lie on what we call the motor cortex of the brain. only electrodes to the scale that we're talking about can really interface with the neural structures that give rise to function in those subtle aspects of the body. We kind of know where they live, but we need sensors and computation that are on the right scale to interface with them. So that to me, those are some of the more exciting applications that we're looking to develop in the years ahead.

### Human: And so there's almost like a double whammy of improvement for us, let's say, because like you said, you get six swings at the bat. And you have given these companies some training, making them potentially more likely to succeed.### Assistant: Could be fomo could be naivete remember founders, self select for charisma. And that could be Adam Neumann. And that could be, you know, Elizabeth Holmes, or it could be Travis or bride from Airbnb, you know, so they tend to be super charismatic, which means a new investor will be like, Oh, my God, this person is going to change the world. Their, their presentation deck, Their enthusiasm like they could put you into that reality distortion field where you're like, well, this is going to be a billion dollar company So it doesn't matter if I pay two four six ten or twelve million or fifteen million, right? It's going to be worth a billion. So i'm going to make a hundred times my money no matter what I have goosebumps Exactly. Yeah. Yeah. Okay. Gotcha. What you want to do is have some sort of discipline now, where would you actually make this bet? on somebody at a high valuation with no traction. That's that little gold line there. And that is serial founders, founders who have done it before. So if Evan Williams comes to you, and he's done blogger, and he's done Twitter, or jack comes to you, and he's done Twitter. And now he's doing this new idea for point of sale system square that you put on the top of your phone, you slide a card, it's a you know what, this person's been to the rodeo before. This is Steven Spielberg. This is somebody who's had hit films before. I'll if you were in Hollywood, you would bet on Steven Spielberg's next film without even reading the script. In fact, people do they give them a 10 look deal a five picture deal. Because you know, the person is that good. So that's the little exception there. But for somebody who's never done it before, and then has no skill, no track record. Why would you do that? You would want to invest at a lower valuation. And what does that mean? Well, let's say it's a $12 million valuation, and the person's never done anything before. But we could invest in six of those people in our accelerator for the same amount, you would take the six swings at bat versus the one. Does that make sense? Yeah, gotcha. When you go to a when you go to an accelerator, you have no experience, or you have little experience in startups, you're going to an accelerator to get more experience, to sharpen your blade a little bit to be more investors to meet other founders and network. So we have the launch accelerator. So Foundry University, for us is the top of the funnel. Actually, this weekend starts is really the top of the funnel, right? We'll watch it. then eventually maybe some of them go to found university and the next stage down. Okay, you're starting to make a bit of a prototype, come to launch accelerator will give you $100,000 for 6%. Or it's I think 125 for 7% at Y Combinator. That implies about a $2 billion valuation, which is very low. But you're going to that 12 week program six in our case 16 weeks, and you're getting that halo of, hey, Y Combinator, or J Cal, or whoever has invested in the company, tech stars, they had a filtering process of downstream investors go, Okay, if you filtered one out of 101 out of 50, we'll pay a little more for those companies. And we're going to give them extra attention, because we know you put them through your incubator.

### Human: Exactly. So they're tightening their belt there. With their subscription revenue, and that includes things like Prime, audiobooks, music, that was $9.2 billion for their revenue, which was up 13% year over year and up 3% quarter over quarter. And then finally, this is the really interesting part, the ad revenue, which I'd love to hear you talk more about. $11.6 billion, up 19% year over year, up 21% quarter over quarter. So Amazon's ad business is just absolutely destroying it. They're doing crazy well.### Assistant: Yeah. So this is really interesting. The advertising businesses at Uber, and the advertising businesses at Amazon, these are new entrance into advertising. And when you look at them, what do they have in common? Well, you're very close to the transaction. And so when you do a search for, I don't know, some product, you need a ski helmet. If I go do a search for a ski helmet, you can be sure that people who make ski helmets are going to want to intercept me at the moment, I'm really considering buying that now where the two places where I'm definitely considering buying it. One is Amazon and one is Google search, right. And if I do a search result, the first one, the first three results are actually the first four results right now I'm looking at Amazon I did I actually it's five. So it's the first row has find way some ski helmet provider and then the first results first four are sponsored and the first organic one is in fact, the fifth Interestingly, one of the advertisers is the Amazon choice. So they're the Amazon choice. This outdoor schema master has an Amazon choice logo on it in the sponsored one. So in order to become to get a lot of reviews that ranks you higher. So now you're forced just like on Google search, If you don't buy google ads, you're not going to get good SEO. So you have search engine marketing SEM leads to SEO search engine optimization. That's what's happening now on Amazon. It's the same exact label. If you buy ads, you get more people to purchase it. If more people purchase it, you get more rankings, you move up in the organic results. So to be number one in organic, you're probably going to have to spend money on the ads. So it's kind of confusing. Like if you're number one, in organic, why would you buy ads? Well, you're one of the first five. And you're the sixth or the fifth or the sixth after the ad. So which is what you see people will buy their own names. And they'll be in the first three results on Google. So it's kind of impossible to have a vibrant business if you don't buy those ads, and it's 100% paid for already. So what do I mean by that? If you Rachel look at Amazon service, they're already built their service. The ad business is just all profits. I mean, with the exception of maybe some de minimis amount of technology to serve them some developers to build the software and a sales team, although much of this is probably self serve. this is going to be an extraordinary high margin business. The same is true for Uber, which will report next week. Uber when they put ads in there, and you probably have seen them. You're in a taxi, you're in you're in an Uber or you're ordering food and you have this NFL ad they're telling you about the game tonight. It's kind of you can't miss it. You have to look at it because you have to see your taxi coming your captured audience and think about the data Amazon has on you or the data Uber has on you. If you're a commerce business, the amount of data you have is extraordinary at the same time that Apple is taking away the data that Facebook would have. So these businesses, these ad businesses for commerce companies are truly significant. And for the first time, I was buying some t shirts, and I used Amazon's checkout. Have you used that yet, Rachel, where you use your Amazon credentials? Yeah, put your address in and payment on a clothing retailer or something like that.

### Human: Um, he, I'm ideologically the opposite, but yeah, sure. I understand what you're saying. He would do most favored nation.### Assistant: Yeah, yeah, exactly. You know, and, and, and I think whatever, that's his prerogative as a, uh, as a rich guy who can command an audience. Um, uh, but I was trying to, of course was trying to, you know, I want to talk to him on the record. I think, you know, it's, it's always, first of all, it's, it's really good practice like journalistically. And I think like you, you definitely want to hear from the person. Um, and so so part of the reason to have an off the record conversation is is to is to make the case for that in person and to explain to make to explain, you know, here's what I want to do. Here's what I think. Um, and you can learn, you learn stuff in that meeting, right? Because like you're able to ask questions. Um, you know, I, I think, um, and there's also always a possibility, right? That they come back and say, actually, you know, that was such a great conversation. Uh, max said, you know, I'd love to put it on the record. Um, But uh, but I just thought, you know, I just think like, you know, it's, it's, it's also very good to like just meet somebody face to face. Like you learn, you know, you learn something about them. Maybe you don't learn everything, but like you learn more than you would if you didn't go to the meeting. Um, so, so I would always take the meeting, um, and you know, And of course I was disappointed that he didn't want to talk to me on the record, but I understand. And I knew from the beginning that it was kind of a toss-up. And had, as you said, at the end of the process, had a long sort of back and forth with his PR guy, where I presented all the fact-checking questions, a very long list, and he said he didn't comment. And I think I think that's cool. Uh, I feel like, you know, in some ways, of course I wish he'd talk to me and there's, there are questions I really want him to answer. I hope someone will get him to answer even if they're not me. Um, but I also think that like he's got, he's got his platforms and um, if you want to know what Peter thinks, like you can buy his book, it's a really good book, zero to one and you can watch his speeches and, and, and I did. And you know, that, that's, that of course informed the book and I, and I tried to, you know, use his words wherever I could. Um, uh, and I also think sometimes like asking someone a direct question is not necessarily the best way to learn, learn something. I mean, if you ask somebody like, how do you actually get stuff done or something like that? You know, sometimes some people are very good at like, uh, articulating an answer, but other people aren't, especially people who are kind of introverted. Um, you know, kind of like Peter. So, so I, I feel like, you know, I don't think it's not like I think the book is better for, um, for not, you know, having him on the record. I wish he was on the record, but I also think, you know, it's a different story and it's a story that I still think is valuable.

### Human: I mean, community is the and this is again, this does go back to exclusivity community is the best investment you will ever make. When you build that army, that cares about you, and will follow you for years, decades, even, you know, defend you on the internet, like, yeah, it's, and, and be your friends in the real world, you meet them, and you're like, Oh, we've been having a conversation for 15 years. Like, we just pick up where we left off last episode. It's amazing.### Assistant: Exactly. All right, everybody, as you know, we maybe don't, I launched something called the launch ticker. Like over 10 years ago, I had an associate of mine. Actually, it was Megan from TechCrunch. Megan Dickey. Am I getting her name right? So long ago is when I lived in LA. And I told her I hired her out of school. And I said, I want you to write in a Google Doc, the top news stories, because I'm spending too much time reading tech news. And she would write the tech news. And I would I had a monitor turned on its side. And she would write it in Google Doc for me. And I said, just write in one sentence what happened and it's going to be called the ticker and launches the name of the investment firm says it called launch ticker. And I just paid her to do that. So I didn't have to read the news. And I was up to date. And it was because so addicting, that I shared that Google Doc with 1000 VC friends and other CEOs. And like 300 people read it live. And then I made it into a product, a number of people subscribe to it, it makes a little bit of money every year, we break even on it. And it's called the watch ticker. And it's basically two emails a day. And then tech meme kind of crib the idea where they were rewriting the headlines. So what I told her was rewrite the headlines, take out the spin, and just write it factually. So anyway, what we're doing is we're gonna have the launch ticker become part of this week in startups, because it's been kind of like this little isolated thing I'm doing. So we're going to rebrand it maybe that this week in startups ticker or the startup ticker, I'm looking for some ideas for names. But essentially, it will be part of the this week in startups family. And the launch ticker is going to be where you'll see startup news and Today, we have the top story from there. And this will be our startup of the day. So we're going to do our startup of the day every day in the lunch ticker and here on the pod pipe, which you know, is a startup that helps subscription based companies, think calm calm or fitbod or a SAS company, they help them get what's called non dilutive capital. And you get this capital in advance. So if you have a predictable revenue stream, Molly, like let's say you were, I don't know slack in year one, and you had $50,000 a month in SAS revenue, you could go to pipe and there's competitors to pipe. I forgot the names of them, but we don't need to say them here. What they would do is they'd say, Hey, here's 150,000, your next three months, or here's a year, actually pipe does it is does a year. So they'll sell to other investors on their marketplace at pipe your yearly revenue for 92 cents on the dollar. then you pay it back, that investor gets $1, you get 92 cents now. So you can deploy that capital now to make slack better, or to make calm calm better. So calm, maybe could have just sold $120,000 worth of forward looking subscriptions and not needed an angel, right? It's really, really cool. Yeah, clever. And so it's a very cool company. It's been doing well, it became worth a couple of billion dollars. And a number of bestie friends of mine, I think sacks is an investor

### Human: It does seem like Zuckerberg has been influenced by Peter Thiel in an outsized way. Peter obviously liquidated his Facebook shares. He doesn't think Facebook is the most important company in the world. He's been pretty clear about that. Yet, Um, he still seems to have his ear and he seems to have walked him into the White House and created a pretty chummy relationship. And it does seem like Zuckerberg is taking a page this very week, maybe even yesterday when we're taping this over from Trump's playbook, which is never apologize, go on the offensive attack the messenger, which is what they're doing with the Facebook whistleblower today. So what do you think the impact Teal had on Zuckerberg is obviously Teal had a big impact on Sean Parker, a friend of mine. Yeah, who obviously had a big impact on Zuck. Do you think Zuck is actually a Republican? Do you think he actually voted for Trump? Do you think he's more aligned with Trump than, say, Hillary? I think that um,### Assistant: Okay. So I don't, I think that Zuck's politics are pretty hard to parse. I would guess that, you know, um, his politics seem to be, uh, Facebook. Uh, it's like, uh, Facebook is political view. Um, share price, but I do think, um, But I do think that Peter has had a really important influence on him. I mean, I think the business influence is very clear, right? Like you can see the ways and Zuckerberg has talked about this, the ways in which kind of Teal's view of building startups had an impact on Facebook. And I think you see in the kind of Facebook, like move fast, break things like that, that spirit, I think comes to some extent from the PayPal mafia. And I think you could even, you're probably going to think this is a little crazy, but I think it's not like, I think you can draw a line by some of these, from some of these provocateurs that Peter has been around to Zuckerberg. I mean, Zuckerberg is in his own way, not all that different from like, you know, Keith Raboy or something like he's, he's like sticking it in the eye of Harvard. Remember, you know, he was, he was fighting with Harvard over this, um, you know, whatever the precursor, the Facebook precursor. And like, he's totally like another one of these kind of like, You know bad boys right like and i and i think i'm ceo bitch is a card a hundred percent yeah so i think there's that and i think um it's pretty clear that okay so maybe not pretty clear it's like clear as mud that he has somewhat his some pretty libertarian views i mean we've seen some of them come out basically in terms of the way he thinks about um you know, speech and like, like what is Facebook's responsibility to society? I mean, it seems like he basically thinks that the answer is none, um, or, or something close to none. Um, and that it's important to, to take that position in order to maintain freedom or, or, or something, something along those lines. I think that is, um, probably has a lot to do with Peter's influence. Um, uh, and, um, as you said, I think that Peter played a really important role kind of in the Trump era with, with Zuckerberg. So, um, Zuckerberg if you go back to 2016 right he was getting hit really hard over this like kind of mini This is like a really stupid story, but like it was a big deal at the time the trending topics thing Yeah, they had like created this little sidebar and no one was even looking at it, right? But like it but but it got spun up into a big to-do in conservative media and And conservative media, I think, rightly sense an opportunity here to like, you know, in kind of like the classic sort of Breitbart, like, let's let's let's try to move the Overton window kind of thing to sort of after Facebook and say that they were going, you know, discriminating its conservatives. And that became politically very salient. And that would have been really bad for Mark Zuckerberg. Because Donald Trump, as we know, is not averse to meddling in the business world. He likes to shake cages, swing a bat. Exactly. takes everything personal. Zuckerberg says, to me, it's, you know, it isn't the kind of far right, right? It's like mainstream, you know, like Glenn Beck is as far right as I think it may be a little wacky.