China's AI Push Sounds Alarms, Airplane Seat Debate, Chris Best Joins | Ferdinand Dabitz, Kaiwei Tang, Steven Schwartz, Katie Roof, Zavain Dar, Chad Edwards

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Today's Tuesday, July 21st. We are live from the TVPN Ultradome, the Temple of technology, the fortress of finance, the capital of capital. Let me tell you about ramp.com, time is money save. Both easy to use, corporate cards, bill pay, accounting, and a whole lot more in one place. We got a sponsor, Collab, Privy teaming up with Ramp to launch stablecoin accounts powered by Privy. Congrats to both teams. We also have some other news from Ramp folks coming on the show later this week. Very excited to chat with them. Anyway, China, China, China. China is in the news.

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But first, should we go through the lineup?

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Yeah, please.

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We have Ferdinand Debitz from Augustus coming on to raising $180 million Series B at a billion dollar valuation. Kai Wei from Light Phone is launching A two.

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They're calling it the dumbest dumb Phone. It's our dumbest dumb phone ever, actually.

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Less.

1:03

It's a less dumb phone. It's a smarter dumb phone. It might be the smartest dumb phone. We'll see.

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And then we got Chris Best from Substack coming on to talk against his war on slop, partnering with Pangram. He's the best excited about that. Then Stephen Schwartz from WAP Live in the Ultradome on launching their new wop cli. And then the Roofinator. Katie Roof, the new editor over at Business Insider.

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We got Katie Roof. We got the paywall set up.

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And we do have a paywall. We have a paywall here.

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And the Golden Scoop.

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Can we get.

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Can we get a camera over here? There we go.

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We're busting down the paywall for Katie

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Roof today with the Golden Scoop. So keep an eye out for that. Then we have Zavane from Dimension. Sorry. And then Chad Edwards capping it off with a cool $450 million raise at the end. So stay tuned, and let's get into it.

1:39

Fantastic. Well, top American execs are sounding alarms on these models.

1:57

Let's give it up for top American.

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There. Yeah, let's give it up for the top American AI execs. The White House is divided on how to respond to recent advances in Chinese AI has weighed crackdown measures. We talked about how this was coming. It is interesting. There's a lot of, like, hurry up and pedal to the metal and then pull back and then ban the American model? And then are we gonna ban the Chinese model in a similar way? And lots of contradictions. Lots of insider baseball. Everyone's critiquing everyone else. Lots of interesting takes Also just some interesting data about what's actually going on with these models. How advanced are they? Where do they come from? How cheap are they to make? What are the economic impacts in America? But the Wall Street Journal has a nice little roundup here we can take you through. So Silicon Valley and Washington are debating a multi billion dollar question. Should American companies be able to use Chinese artificial intelligence models? They certainly have been able to. Hasn't been a problem for years, but now they're getting stronger. OpenAI and anthropic executives are sounding the alarm about the rise of cheap AI, particularly powerful new models produced in China, suggesting that they will lead to, quote, a dystopian AI future and present unacceptable security risks without regulation. And that is the point of debate. Are you on the side of dystopian open source or liberating open source? The George Hans Frame Some analysis Some analysts who study the AI industry say the two companies which are preparing for public listings in the next year, they just want to eliminate the competition. The emergence of highly capable AI open autonomous AI systems including Moonshot AI's Kimi K3 model and Alibaba. Alibaba's Quinn 3.8 Max and Alibaba is actually a massive investor in Moonshot. They have their own anthropic Google over there going on. Alibaba is like very much the Google too in the sense that they have a large position there which were released in recent days and viewed favorably by investors and users has turned the AI race on its head once again. Kimik 3 was also competitive with US models on some benchmarks. The debate over the new models which are quote open weight but not yet they're about to open source them. We'll see what happens next week. Allowing users to download and customize them with company data for specific tasks. Very, very good, very useful. Coincides with division in the Trump administration about whether to take steps to limit the use of models in the United States. Quote, one probable outcome of an open weight model dominant world is full AI communism, which is precisely what China proposes. Rather than a market product, AI is a public good which will ultimately be provided by the state as a kind of digital public infrastructure. Dean Ball, OpenAI's head of strategic futures, said in an ex post Friday. Dean Ball made it to the pages of the Wall Street Journal. Now the AI communism is just at the model level. Like there would still be a bunch of like a lot of people who are long compute, long NEO cloud. They say like this is where the value should accrue. The data centers will accrue a reasonable margin and they will still continue to make money. And so it's not that this automatically leads to nationalization of COMPUTE in any way. People would still be paid, but the margins might be lower is at least the formulation here. So Ball, a former Trump administration official, called such a scenario a dystopian hellscape, and he said he expected the Trump administration to make moves toward reducing the use of open source models. Ball later clarified that he wasn't advocating for the United States government to discourage Chinese AI. He also highlighted a central challenge with the AI race. Top tier AI companies raised billions of dollars to pay for the vast computing resources needed to continue improving AI systems. If everyone uses AI systems that people largely don't pay for, there would be no way to finance continued frontier AI development. Ball, who started at the company earlier this month and focuses on policy and Strategy and OpenAI have said his comments don't reflect the company's official positions. He's just posting the company has developed its own models, own open models, and Chief Executive Sam Altman had previously said that OpenAI's past approach of only developing closed tools was unwise. Other top AI executives have warned that open models present huge risk since developers and policymakers lack control over how they are used and modified. A lot of risk of cyber attacks, a lot of risk of annoying spam attacks. The cyber thing is very concerning and annoying if that really ramps up. But the good news is that the closed source models have been available to cybersecurity firms and a lot of big major companies. The finance industry for example, has had access to Mythos and GPT Cyber for almost six months. And then just today Google announced a specific model Flashlight Cyber, I think so they're trying to offer a similar capability but really go down the cost curve because a lot of the cyber tools there was incredible breakthroughs with Mythos GPT Cyber, like great benchmarks on those but could be very expensive we heard I think wasn't it? Nikesh Arora said he I think he spent like a million dollars to find some zero day bug and it was like totally worth it. But that's expensive for smaller companies that might just need it would be great to just be able to go to a cheap cyber tuned model, get approved by Google and say hey, just go and read every line of code and just let me know if there's anything that's obvious and that could be good.

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Yeah and just be clear. They released 3.5 flashlight and 3.5 flash cyber so it's not Like Flashlight Cyber.

7:43

Okay, but Flash is still cheaper than the big model, right?

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There's like the pro and then there's.

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And so I have to imagine that if you given the choice, if you're like a mid sized company and your choice is like go beat down the door to get into Project Glasswing to spend $5 million to have mythos read every line of code or you're like, oh well, I'm already a Google partner. I have a really solid business relationship with them because I've been buying ads and I have Google Webmaster tools set up and I just want to go set up Flash Cyber, not Flashlight Cyber. I imagine that the cost would be cheaper because they fine tuned this model for this a specific thing since they are benchmaxing or whatever semianalysis called them. But that's useful in this case, right? So Anthropic CEO Dario Amadei for years has warned about the risks of powerful and open AI systems, saying in a recent Bloomberg interview that having AI models with advanced cybersecurity capabilities that are free to download could be harmful. He said it's a serious concern. Use of Chinese models, which are far cheaper than US counterparts is certainly surging at US companies, prompting some investors to question the staying power of top model makers such as anthropic and OpenAI. The current US open source frontier is starting to catch up with China's. On Wednesday, Thinking Machines lab, led by former AI technology chief Miramoradi, released its first AI model as open weight. Nvidia's Nemotron 3 Ultra is starting to see traction. That's interesting to hear. I haven't heard nearly enough buzz around Nemotron. I know Jensen has been investing in it. He's also investing in a lot of, you know, up and down the stack.

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I've been hearing buzz about the name. John.

9:29

Nemotron's a good name.

9:31

O tron.

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Why?

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Very cool name. People are, you know, there's, there's some talks bubbling, people are saying it's, it's, it's one of the best names for, for a family of models ever.

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What comes after Ultra? Isn't that what the. Didn't Apple first do that with the, the M4 Pro, the M4 Max, the M4 Ultra. So we got to come up with an even better word for what happens after Ultra. Giga, maybe Hyper and then Exa. You just keep going down the Terra. All the Terra's like land. That's a different one. Anyway, the market's faith in Anthropic and OpenAI continuing to build more capable models that push the frontier. AI frontier has been at the heart of the boom, helping justify trillions of dollars in spending on infrastructure in the coming years. The threat that new players will vastly undercut what they can charge for advanced AI push down some tech and AI company stocks prices. Last week, David Sachs, the venture capitalist and White House AI advisor, suggested that he read Ball's post as a confession to a regulatory capture strategy. Sachs and others have long seen calls for AI regulation by companies such as Anthropica's efforts to use new laws and policies to stymie competitors. The weaponization of regulatory uncertainty as a competitive tool should be completely unacceptable, he said. Security focused Administration officials in the past year have considered a slew of measures to crack down on Chinese AI companies developing open models. People familiar with the discussion said they have weighed on they've weighed adding the businesses to trade blacklists, security warnings on Chinese AI companies, and a potential executive order targeting open models. So it does seem like even though Tyler Cowen, we were going back and forth with him about this, about like can you even ban it? You can't really ban anything in the land of the free. Like the solution to piracy was not really to ban piracy. Like you can still torrent things, but it's just so easy to use Apple TV and Spotify and Netflix that most people just wind up just paying $5 $2 for a song or $10 a month for something that it effectively killed it just because the product experience was better.

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This morning our Treasury Secretary Bessant was on Fox and said this administration supports open source models, but what we do not support is IP theft. If we see especially that overseas models are stealing from our great companies, we have the ability to sanction them because of this theft. So it will be if the admin does take serious action here, I would expect that to be the line of reasoning where they could just sanction the companies behind these models, which I imagine would prevent it would create a real opportunity for American open source. But you would ultimately see a lot of these NEO clouds unable I imagine to serve the traditional Chinese open source models. I imagine that even open router would probably have to, yeah, maybe stop supporting that.

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But again with an open source model like how do you even define it? Because if there's a research paper and then you go and implement that and you train it or you take it, you fine tune it or you use the data to bootstrap your own model like just like where, where in the supply chain, how many steps away do you need to be to like not count on there, you imagine. I mean didn't Perplexity do like a 1776 deepseek very quickly? They did a fine tune. I think you did a fine tune on Deep Seq as well.

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Wow.

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Yeah, it was like using sparse autoencoders. I did it first, so.

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And what nationality was the model that you used as the base?

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Well, it was Deepsea. It was Chinese.

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Wow.

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Confession. You can go now.

13:23

Yeah. People are already angry at Bessant's comments in our saying. Funny that he's not mentioning that yesterday US judge approved Anthropic's one and a half billion dollar copyright lawsuit settlement or. I don't think they. They. I think they settled that they were in possession of books that had been torrented or basically acquired unlawfully. Yeah, I don't believe that.

13:26

Acquired unlawfully. Sounds like they stole the book. I think they bought the books.

13:55

No, no, no, no, no. I think this was. No, they separately they bought a bunch of books, trained on them and destroyed them.

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And that just made people upset because. No, that was books being destroyed.

14:05

Of course.

14:09

I think those were rare. Like rare rare books.

14:10

The Ilmenitis collection was destroyed. Rare PDFs.

14:13

No, but, but I believe so. Judge William allsup of the U.S. district Court for the Northern District of California issued a preliminary approval of the settlement last year after ruling that Anthropic had illegally downloaded and stored millions of copyrighted books. And the settlement was signed off on by a different judge yesterday. The Payout will deliver $3,000 per work across an estimated 500,000 works shared among the authors and publishers who hold rights to them.

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I have more here, but first I'm going to tell you about FIGMA agents. Meet the canvas. Your AI agents can now create and modify your FIGMA files with design system context. So Nick Carter, who we love, former guest of the show, he says, I haven't seen one person from OpenAI or anthropic address John's argument here. Quote, the point is simple. The US government does not owe either of the large labs a business model. I think that's accurate. That's true. The U.S. government doesn't owe any company a business model. It's a free market. It's a free country. If the economics of selling tokens don't work due to distillation, cheap clones, Chinese AI magic, the American enterprise and consumer will be a. Okay, that is also true. The American consumer and enterprise will be okay. Flooding the market, dumping all this stuff is great for consumers. It's great for Enterprises, cheaper products are great. The question is the US government actually does kind of owe the reason you pay taxes that actually does pay for the FBI who go and find spies. And so if the allegation which has been sort of toyed around with some of the lab leaders at some conferences, like off the record, and then it's like made it to the record, I don't exactly know where the allegations stand at this point. But if the allegation is, look, there's a spy here who's stealing code and exporting it to another country or even the distillation which is in violation of terms of service and it's a geopolitical debate because it's an international company. That's the reason why you pay taxes to pay the government to actually help fight on your behalf. Because if it's OpenAI stealing from Anthropic or vice versa, they'll just walk across the street and serve them papers and be like, we're suing each other. This is what happened with Apple and OpenAI. They're going to solve that in the court of law, which is of course paid for by the US taxpayers as well. That judge who oversees that and decides that case will be paid for by U.S. taxpayers. That is an amenity of the U.S. government. And a similar amenity is when someone is violating your terms of service or actively stealing from you, you actually can engage the US government. So I agree that the US government doesn't owe anyone a business model. But the US government does sort of owe the ability to chase down something if it is truly illegal and there's no other recourse like just hey, we're turning off your account because you're not abiding by terms of service. But the rest of the point is good and the knock on effects are good. He understands the value to the American consumer of cheap goods. He understands the value to the neoclouds and other token factories. All of this is fine. But I just thought that there is a line there that some people on the inside have been stronger about. There's been a lot of debate on is this distilled? Is it going to say It's Claude or ChatGPT? You know, it goes back and forth. There's a bunch of examples. It's always hard to chase down. But that's why we have like a real process to hunt that down. Anyway, there was some news about like whether or not Kim Ek3 is distilled. Tyler, can you take us through this Lisan Al Gaib post? Because I want to know what this chart means because it seems important to this discussion.

14:49

Yeah, so he didn't actually make this chart. It was from someone else. But basically this shows a bunch of models compared to another, and it's like the kind of semantic similarities between them. So it's like if you use similar kind of diction or phrases, stuff like this, you just like pump the model a bunch of times and you kind of can tell what's similar to each other.

18:11

Yes.

18:28

And you can see in this version, it looks like Kimiki 3 is very similar to Fable 5, Fable 5, and

18:28

then also Opus 4.7, Opus 4.8 and Sonnet 5. So they might have gotten tokens from like all four of those models sort of mix together.

18:35

Yeah.

18:42

Also I think this exact example, I think only like a few prompts were used. It's not like super involved. It's also like this is very much just like correlation. This is not like proving that they distill or anything. They could have just used similar post training techniques or something like this.

18:42

Totally. But notably, GPT 5.4, 5.5, 5.6 share very little similarity to the anthropic models and vice versa. The anthropic models don't seem to be correlated with the OpenAI models, although the OpenAI models are correlated with them, with each other. So 5.6, Luna looks pretty correlated with 5.4 because they probably were like, well, we're building on the shoulders of the work that we've been done. And it's the same thing with Anthropic, where Fable has some of the same flavor as an opus or a haiku. And that makes sense.

18:57

That makes sense because people have been saying, oh, maybe those models were actually distilled from the big Mythos pre train.

19:35

Right.

19:42

Yeah.

19:42

Or Fable is like Mythos class, or vice versa. You have a bunch of users that are doing rollouts on Opus, trying to vibe code different things, and you take all that training data and then you feed that into Fable. And Fable sort of like picks up on a lot of that because that's what the user said. Wow, you really did a great job on this Opus. Or you did really poorly. It pulls that out, but it's still learning the textual similarity. Well, people will go back and forth on this and debate the level of distillation and also what the punishment for distillation should be. Should it just be a slap on the wrist or should it be something bigger? It's obviously.

19:42

Yeah. So Bill Gurley's chiming in on Besson's Comments. He says if there has been theft, that suggests a crime has been committed. But I'm unaware of any lawsuits being filed. Filed. No company should be allowed to declare infringement without education. I'm not convinced a court would call using a product as its designed theft. There is a reason this is being lobbied in D.C. instead of the normal court systems. The only thing I would say here is like distillation against the terms of service. And I think that suing Chinese companies is. It would be a complete and total waste of time. Ask anyone who's built a product that's been knocked.

20:22

I disagree. Incredible.

21:03

Ora Farm.

21:05

If you personally serve Xi Jinping, the next time he's in San Francisco meeting with a world leader, you show up

21:07

to the have been served.

21:19

You show up to the UN serve the world leader. There's something about that that's, that's extremely bold. But no, I agree with you. Very difficult. I don't even know if you went to your law firm and you said hey, we want to sue this Chinese company, how they would trace that down. Also deeply ironic and deeply unsympathetic suit. Right? Because the general populace feels like AI is all theft and it's all been stolen from the public commons or the public Internet. It's like distilled on the Internet. We all did all these, we all made all these websites and now they all have been distilled into this into these like frontier models. And then you're saying, oh well, like the distillation stops at the frontier lab. So not going to have a lot

21:20

of sympathetic so someone responded to Bill's post with it with a similar point to the one I made and said the reason there hasn't been any lawsuits is that a trial would take years assuming you can get a Chinese company to participate and the game will be over by then. China steals ip. This is obvious. You don't find many any instances of US companies suing Chinese companies in US courts. Bill Gurley fires back with a screenshot from ChatGPT saying here are 10 clear examples. The first five were filed in US courts. Okay, you have Motorola Solutions was a US plaintiff with a Chinese defendant of Heitera Communications. This was Chicago Federal Court in 2017. T Mobile came after Huawei Federal Court in Seattle 2014.

22:05

T Mobile throwing down the gauntlet.

22:56

Huawei employees copied and took parts from Capi. It's phone testing robot.

22:58

Sure.

23:03

Cisco sued Huawei. Let's give it up for Cisco. Let me actually tell you Cisco accused

23:04

Huawei of copying Cisco's critical infrastructure for the AI era unlocks seamless real time experience and new value at Cisco.

23:09

Continue.

23:15

Cisco accused Huawei of copying router source code, command line interfaces, manuals and patented networking technology.

23:16

That's what I'm talking about. Textron Innovations the correct use of the

23:23

US Government DJI in federal court in Waco, Texas home to a fantastic wave pool. Textron alleged alleged DJI drones in France patent covering flight control and tracking technology and there's a bunch of other examples.

23:27

Yeah.

23:42

ASMC amsc, the American superconductor company. He's one shot by Chinese American Sinovel Wind Group.

23:44

Okay.

23:54

Anyways, you want to give us lots going on here.

23:56

Two of our former guests are chirping at each other on the timeline. We talked to Jim Cramer at the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. We interviewed Jim Cramer at the New York Stock Exchange. Great time. He's going back and forth with George Hotz, another former guest of the show. Jim Cramer says we must not let our companies use these Chinese models to save a few bucks. OpenAI and Anthropic are correct. This is vital national security. Please read Bing West's just released Cat 5. I respect the Chinese people greatly but these companies are run by the PLA for heaven's sakes. George Hotz fires back under the tiny grad handle. He says is this a joke? I'd be happy to use Anthropic if they put their weights on hugging face like the Chinese. American tech companies are rent extraction machines that have lost the plot. No point continuing to defend them. They need to change if they want to win people back. 474 likes on that. The open source community is coming out strong anyway.

24:00

Meanwhile, China is also thinking about export controls in the Financial times apparently Alibaba, ByteDance and keep going back and forth on M. Is this the Ministry of Communications? Don't know M O M of Com Help me out there. Tyler Mofcom Mofcom Talk to AI companies including Alibaba, ByteDance and ZipU on limiting the transfer of key data for the training of their models overseas probably as well as allowing their model weights to be downloaded.

25:03

Or Ministry of Commerce probably their Department of Commerce.

25:39

That seems more like it. China would still let overseas customers access the models and services, but it sounds like they're leaning towards not making the weights open. We're going to. We're going to see with the new Kimi K3 if they actually release the weights next week. Dean Ball says. Wow, two days in a row where things I said are likely to happen seem likelier to happen from two adversarial countries. Almost as though my analysis was right and as though people should not have deliberately misinterpreted me as making prescriptions. Huh?

25:42

You gotta take a victory lap for Dean Ball. He called it. No, he. I mean, he was saying, like, I don't necessarily agree with this, but just from his experience, this is how things might play out. And people were very upset with him about that.

26:18

Raj in the chat says, ministry of Commerce, People's Republic.

26:30

Yes, it's their Department of Commerce.

26:34

That would go hard on a business card. It would anyway.

26:36

So you're trying to make a new business card, fire up Codex, design it there, have it printed, have Codex do everything for you. Fantastic at creating custom things and then running them off to special printers. Codex, of course, is a powerful workspace for getting work done with AI agents. Whether you're writing code, analyzing data, creating content, or automating business workflows, Codex helps you move projects forward from start to finish.

26:41

Finish the great slop wars. Slop wars continue. Let's pull up this video from Substack.

27:02

Substack. We got Chris Bass coming on at 12:15. It's just an image.

27:09

They say today Substack is launching an AI detection feature via an integration with Pangram. Going forward, you'll be able to scan posts, replies and comments on the Substack app to see an estimate of how much of it was written by a human or with AI assistance. We care about this at Substack because it gets to the core of our mission to build an economic engine for.

27:13

This is going to be bad for Tyler since he's mastered the ability to write exactly like an AI. What was that sentence you wrote by hand that was like, according to studies. You're absolutely right. And you just threw in every possible AI ISM and got flagged 100% by Pangram. No, I think people will enjoy this. The revealed preference is probably that people care if it's good and they enjoy the content. But we'll go back and forth and debate it with Chris Best today and see where all of that is going. He wrote a post against Claude Fishing. He doesn't want people to be disingenuous about their process. Now, do you think that Substack writers should admit when they hire, essentially, ghostwriters? Probably, because sometimes you start a brand under a name. Like, not Every post on Bloomberg.com is from Michael Bloomberg. In fact, none of them are. They're all from other people. But they Disclose. This is from some writer. This is from Joe Weizenbault.

27:33

Right.

28:52

But some new influencer brands have grown even in the pre AI era. I had a writer on my team when I was doing YouTube videos where I would write something, he would do a draft. We kind of go back and forth. I'd put him in the credits, but I wouldn't like, kick it off with

28:53

like, hey, just so you know, says book authors don't. That is certainly.

29:09

That's 100% true. Some book authors will put like, this is written by this person and this person. It depends on like the aura of the ghostwriter. Some ghostwriters actually do get credits in the book. But yes, most book authors, like Tom Clancy, I think, passed away and is still producing books. There's a number of writers where their, their individual brand grew so big that they can. You can have a new business. Yeah. They become their own brand.

29:13

And so, yeah, I would, I would imagine that 30% of the books in like an airport bookstore are just 100% ghostwritten and probably.

29:37

Yeah.

29:46

Don't disclose it.

29:47

I do think it should be possible to get to the truth if you hunt hard enough. But I don't necessarily need you to put it front and center. So let's say that the next Tom Clancy book, they hire someone who's effectively a prompt engineer and they're writing it using AI I would like to be able to, you know, look in the back of the book and see a paragraph that discloses that. But it doesn't need to be on the COVID On the COVID It can just say Tom Clancy.

29:49

Yeah.

30:21

For a substack author or creator. Just put it somewhere.

30:21

Yeah.

30:27

That you have a team of people that help you create your work.

30:28

Well, Dave Eggers took to the Financial Times saying that no one is going to read AI books. He's of course, the author of the Circle. He's an American writer, editor, publisher. A heartbreaking work of staggering Genius is his 2000 memoir, bestseller finalist for the Pulitzer Prize. He says, gullible and ridiculous. No one will read AI novels. I think people are already reading AI novels. So he. Maybe he means like no one who's cool or no one who he likes or something. Let's read through a little bit of this Financial Times article. Dave Eggers offers a hand so I can clamor aboard his 23 foot sailboat moored in the shadow of San Francisco's Golden Gate Bridge. It's a grand setting with few frills as we sit on the stern a meter apart. Fuel cans and fishing nets at our feet. There's no one around to disturb our conversation. The nearest toilets are Port a Loos, a short bike ride away. The birthing fees are negligible, making it one of the cheapest places places to live in uber wealthy Silicon Valley. I hadn't thought of that. Sailboat. If you're at a tech company, this has got to be the next big lock in trend.

30:32

Antonio Garcia Martinez did this. He did in his book Chaos Monkeys.

31:43

I'm not, I won't be satisfied until I see LARPers posting images on Twitter being like, hey, I just moved to San Francisco. I'm building the next one person $25 billion.

31:46

I'm finding a houseboat in San Rafael.

31:57

Yeah.

32:00

How much for 1000? It actually works out to $1,483 a month. Apparently if you finance it through boat Trader.

32:00

Goodbye.

32:10

It's only about $200,000 to live in a 2022 houseboat.

32:11

2022, that's a brand new houseboat.

32:15

Yeah. So you have to think about the. Yeah, the slip fees, but you could easily come in, have your own house on the water.

32:18

No, the average one bedroom rent in San Francisco is like two grand, three grand right now.

32:24

Yeah.

32:29

You could have a whole house. And a boat.

32:29

And a boat. It's amazing. This is the hack. If you get a job in tech and you're printing, making six figures.

32:31

Wow.

32:38

Move into a houseboat.

32:39

Let's pull this up.

32:40

Is this an option in la? Should members of the team be doing this? Should we, should we recommend this to

32:42

look at this brand, Almost brand new 2024 La Mer Modern 1136 foot houseboat. We have a video here.

32:47

Well, Dave Egger says they call it a $10 dock with a million dollar view.

32:56

Look at this, John. This couple thousand bucks a month, this

33:02

is where the next great startup will be born.

33:07

Yeah, sure. Garages are out. Garages, house boats are in.

33:09

And also like oh, take your shoes off. It's natural to take your shoes off when you're on a boat, you know.

33:12

Right.

33:17

Let's get boat shoes. Wear boat shoes.

33:17

The Lemaire Modern 11 offers reliable performance and strong power with two Yamaha 25 high thrust engines providing a 50 horsepower. It's two cabins and one head ensure overnight comfort for extended stays. How about year long stays? How about a decade long stay? The boat's design includes an upper deck terrace with flexi teak flooring enhancing its appeal for relaxation and entertainment. And might I say locking in standard features such as air conditioning. We have Air conditioning on our houseboats with reverse cycle heat. Heated floors, LED lighting. Heated floors, LED lighting. The inclusion of foam filled composite floats and galvanized steel subframe ensures durability and stability.

33:19

Did we just talk about the housing crisis? Send this to Sagar and Jetty immediately. This is seasteading. This is the teal thesis. Everyone living in houseboats just more.

34:04

Boat Trader.com is saying that this is amazing. Modern houseboat would come out to just $2,259 with only $52,000 down. I promise that we have no financial relationship with boat trader.com.

34:14

yeah.

34:30

Even though I'm making a pretty strong pitch here.

34:31

Yeah, I love it.

34:33

I'm tempted. Maybe we should. I mean, you can. I'm finding another a 2021 for only 99,000. Only. Yeah. Only $100,000. This comes out to $738 a month.

34:36

That is cheap.

34:51

That is.

34:52

They're giving houseboats away, John. When I moved to San Francisco, they're giving them away.

34:52

We live in the tenderloin. Three people and it was 1500amonth. How many people do you think you could sleep in there? Given that one of us slept in a closet and the other one slept in the living room. So there was only. It was a one bedroom. Technically we had three. Three dudes in a one bedroom. 1500amonth. So equivalent to $500 a month. Do you think you could fit two people in there in a $700 a month houseboat?

34:56

Oh, for sure.

35:17

Yeah.

35:19

So we're finding. The team is finding slip fees around LA. For 700 bucks a month you get

35:19

a everyone's got to be houseboat vaccine. Imagine just borrowing.

35:25

You can get this houseboat for only $600 a month.

35:28

This is elite. This is the future. We must return to the ocean. Return to the sea. Anyway, Dave Eggers thinks no one's going to read AI books. We can move on tldr. We got distracted.

35:32

Sorry.

35:45

But congratulations on the sick houseboat. It sounds amazing. The article is actually funny. It goes into a whole thing how he. He was like chirping with Sam Altman

35:46

goes to welcome to the houseboat. The business of buoyancy.

35:54

The president of propellers. I love it. The presidency of propellers. Should you recline your airplane seat? What do you think? People are going back and forth on this.

35:58

Brandon Duck says, I don't remember subscribing to this channel, but I've been listening for 10 minutes. I'm having a good time.

36:10

Welcome.

36:16

Last name ducks comes on. Just laugh.

36:17

Yeah, make it. Make Sense. Make it make sense. He's just like, I just happen to be here for the duck section of the show.

36:20

Andrew says, I'm gonna need a double wide houseboat. Lol. Bootlegging, distilled anthropic models on the houseboat.

36:27

There we go.

36:34

We're living the dream.

36:35

This is crazy. Okay, so should you reply, should you recline your airplane seat? There's a central investigating the central dilemma of our time. Joshua Rothman in the New Yorker wrote a piece. Imagine this scenario after a long drive to the airport. You've just taken off for a 15 hour flight. Where are you going? 15 hours is so long. How long was the flight to Austria from LA?

36:37

I think it's like 12 hours. I think you're going to the Middle East.

37:01

You're going to the Middle East, Maybe. Okay, you're in coach and a family of three is sitting behind you. A man, a woman and a toddler. They seem nice. But as the flight continues, the kiddo grows restless. He kicks your seat and pokes her toys into your shoulder. Stop that, you hear the father say. The toddler incredibly quiets down. The cabin lights dim. It's time to sleep. Yet just as rest closes in, you sense motion. The seat in front of you is reclining. You watch as it comes all the way back. Now you feel cramped with someone else's seat in your face. You also notice some stiffness in your shoulders. Your fingers caress your own recline button. Surely the reclined upon are entitled to recline. Just as you start to lean back, you hear a clearing throat. You turn around to see the dad who fixes you with his gaze. Excuse me, he says, would you mind keeping your seat up?

37:04

I think it's game on.

37:51

They put the button there. They would just take it away.

37:52

Yeah, I think, I think I've always expected everyone to just recline.

37:53

Everyone reclines. Everyone has the same amount of space. It's the conservation of space and the whole.

37:57

It's really hard to make the argument that the vertical seat is more comfortable than the recline seat.

38:03

Exactly.

38:07

So I think everyone commit to comfort.

38:08

Everyone commits to comfort.

38:10

And then chat is sharing the real alpha. Stand up immediately when the flight lands.

38:10

Have you seen those meta Ray Ban

38:17

videos where people sprint to the front?

38:18

It's so rude. The guy is like, like, you know, he's like. As soon as he goes beep, he just bolts and passes everybody and gets to the front. Very rude. I don't think you should do that.

38:20

This is antisocial behavior. I don't Think you should recline your seat? How is it antisocial because you're infringing on some. Just because you can do it doesn't mean you should.

38:30

But they put the button there.

38:38

Horrible take. Their horrible take.

38:39

That's like, don't use the bathroom on the. On the plane, they put the bathroom.

38:43

My entire life, even as a child, I was looking up, waiting for, you know, the seatbelt sign to, you know, to be up in the air, the seatbelt signs off. You recline your seat, everyone reclines.

38:47

Everyone reclines.

38:58

All good?

38:59

Yeah. What about ordering a Diet Coke on a plane? If I'm sitting next to you, will you order a Diet Coke or is that antisocial behavior? Because there's a percentage chance that you will spill that Diet Coke on me, thereby inconveniencing me the most. Pro soda. If you really care about me, you should not order anything. You shouldn't eat anything. You shouldn't drink anything. You should sit there in your unreclined seat, perfectly upright, silent. Don't make up.

38:59

That's completely different.

39:26

Okay. What's your stance on JBL in the airplane?

39:27

Little petty rob.

39:31

Oh, jbl.

39:32

I do think that could be the next trend.

39:34

The big question is, are you bringing on your smart portable speaker, maybe from an open AI? Are you bringing that on the plane and talking to it the whole time? Is that offensive?

39:37

I think that's deeply offensive.

39:52

Have you seen when a band is traveling and they start playing on the plane?

39:54

Have you seen these videos?

39:58

No.

39:59

That sounds cool, though.

40:00

I'll send you one.

40:00

That would make me jump.

40:02

So this all started because in 2014, 5:38. We gotta have him on the show, Nate, obviously. 538 asked around 1,000 flyers what they thought about reclining their seats. 41% of them said that reclining was rude. So they lost. It's not rude.

40:03

It's over.

40:21

59% said it's fine. I guess if it was just binary. That number seems to have risen, though. In 2020, Eric Jones, a math professor who writes about travel statistics on the website the Vacationer, conducted a similar survey and found that 77% of respondents objected to recline. Wow. Sheep, Sheeple. Over here, we got sheep.

40:23

I think you should be able to recline if you're, like, dressed nicely. If you're wearing sweatpants, then you don't get to.

40:43

You don't get to recline.

40:48

Sort of a conditional recline.

40:49

Yeah, yeah. Should kids be able to kick the front. The seat in front of them as much as they Want.

40:51

See, that's something I will pull. I will totally put up with. I'm totally fine getting kicked in the back by a kid because as a parent, it's so brutal as a parent, as a kid to be on a plane. They're locked up in the plane. That's miserable. And just. Just tough it up. You're reclined. You have multiple inches of padding. Unless you got Ronaldo back, you're gonna be fine.

40:56

Order that hot pizza pocket. Live life in the permanent underclass. Live a little, for God's sake.

41:17

Yeah.

41:23

Let's pull up this video and video we got now. All right.

41:23

Oh, this is so good. I love this. Like, this is so antisocial behavior. This is so breaking the social contract. But it's also just such an elite performance that you gotta respect it a little bit. This is a crazy. That getting around that woman is crazy, crazy, crazy work. I can't believe this.

41:29

I might.

41:51

If I'm really in a hurry, I might go one seat forward. Like, sort. If I'm on the aisle, I might sort of, like, make sure I get the first position. Pole position. I think that's fair.

41:51

Chat wants to know if the plane is in free fall. Would you recline a little on the way down? Engine failure, I think.

42:04

Yeah, that's fine. I think that's fine.

42:15

Okay. So you would be rude to your neighbors in this sort of stressful, potentially terrible, life threatening moment. You wouldn't mind being rude to your

42:17

neighbors in my final moments. That's when you would choose to disrespect me, Tyler. Not when I'm living life, having a Diet Coke, enjoying myself. You're fine then. But when I'm on my last breath, that's when you decide to add insult to future injury.

42:29

Yeah.

42:44

Weird.

42:45

Wow.

42:45

I don't get it. Make it make sense.

42:46

Wow.

42:48

Make it make sense. Coca Cola rebrand. We got to talk about the Coca Cola rebrand. There's a bunch of things. There's so much good news today. Coca Cola rebranded. And there's a video of this, and people are saying it looks like a tobacco brand. I want your brand review. Coca Cola unveiled a new global brand identity. It's not technically the Marlboro font.

42:48

Flights crashing in five minutes. Can you recline your seat back, please?

43:12

Ridiculous. Pull up the video of the Coca Cola rebrand. I want Jordy's brand review. There we go. The most recognized brand. This is huge for me.

43:21

Wow.

43:46

They did it. They finally did it.

43:46

Serif's border radius. Zero sharp edges, full bleed. It's right to the edges. And people were expecting it to look extremely boring, sans serif. Sort of an Apple ripoff. We can pull up this post from Fabrizio Rinaldi about what he was expecting to show sort of where things have been going in rebrands, high fashion. Let's pull up Fabrizio's rendition of the Coca Cola rebrand. Wasn't this something that you would expect? But instead we got something much more.

43:51

Minimalism is out and out for a while. Maximalism started ripping early last year off a small base, but it's coming back.

44:26

It does sort of look like Marlboro. People say it's not technically the Marlboro font. It's not the Marlboro front. It looks a little bit different, but.

44:35

But it's pretty close.

44:44

But also, I mean, incredible alpha in the fact that Marlboro effectively hasn't been able to advertise in 30 years. Like, it's a storied brand. They clearly put an incredible amount of effort into developing the brand. But it's vague enough that even a big brand like Coca Cola can sort of rip it off and be in the clear. Like, besides a few. Yeah, yeah.

44:45

Tyler says fridge cigs for the win. They're leaning into. A lot of people are. Yeah. Saying they're leaning into the fridge cigarette concept.

45:06

Yes.

45:13

Smart.

45:14

Okay, other other movie news. Point Break. Have you seen it? No, but you will be able to see it because it's being restored in 4K and it's being re released in theaters this summer for its 35th anniversary. Highly recommend it. Keanu Reeves. Fantastic movie. Patrick Swayze. It's such a good movie about a bunch of bank robbers who are also extreme athletes. It's super sick. You'd love it. Maybe that's the next movie you see. Maybe we can make it happen. Even this year. There's another story about restomods from the factory. Companies are going back and offering the actual manufacturer. Do you want to just describe for everyone what is a resto mod and then what are the critiques of it? Like, take me through the TJ Parker critique of the restomod. We've talked to him about it. What is when someone says restomod, what are we talking about here?

45:15

Okay, so resto mods can look like a lot of things. There's like a range, but at the most basic level, you're taking classic car and you're trying to not necessarily make it feel like it is a product that was made in the year 2026, but you're trying to make it at least feel. Sometimes they do that, but you're trying to make it at least feel like it's somewhat fresh off of the dealer lot.

46:05

So I'm restoring it, but I'm also modifying it a little bit.

46:33

Yeah, well, there's range, so there's some resto mods that are just. They're restoring it to a new condition, even though it's an older vehicle.

46:37

And when you say used, you are restoring it. Typically, this is individuals who want this car, they go to another company that is not the maker of that car, and then they say, I would like to purchase a Porsche 911 resto mod. And it's from 2003, but it drives. Everything's been restored. There's been some modifications. Maybe it has CarPlay heated seats. Maybe they've updated little things here and there, tweaked the exhaust. So it's not original. It's not fully. Just purely restored. But what's happening now? Because there's an independent business, sort of unauthorized. What's happening now?

46:48

Yeah, there's a. There's a huge. There's a huge spectrum to it. So some might just be making the interior a lot nicer, you know, basically restoring the engine, updating the transmission, things like that. All the way through, like adding features and functionality, like CarPlay all the way through sometimes, like redesigning the entire interior to make it almost a new car. So there's some resto mod companies that will just partner with the best automotive designers in the world to just almost fully redesign the car. And they're basically just keeping, like they're keeping. Keeping. Everything is being turned over to some degree, except the fact that from a regulatory standpoint, it's still the original car.

47:24

Right.

48:07

And so that helps you. That helps to make it easier for restomod company to make a new car because they don't have to go through all the.

48:07

That's what Tyler has. He has a 2014 Jeep Grand Cherokee Restomod. It is beautiful. It's amazing. Everything about that car is fantastic. That's why it's so popular. It's taste be it.

48:17

So Singer is one of the most prominent companies in this category, but they become so popular that manufacturers are saying, hey, we want in on the action.

48:29

Who wants in on the action?

48:41

And so the newest player, Range Rover.

48:42

Range Rover.

48:45

Let's pull up this video if we can.

48:45

And classic Range Rovers are having a huge moment. There's a piece in the journal about it. Look at this. And people have been clamoring for the analog feel. People have gotten sick of the endless buttons. And this is a way to go back to a 1993 Range Rover Classic, but have it drive as reliably as a brand new car.

48:48

I'm super excited about this. My number one pet peeve with restomods historically is they take this beautiful classic car and then they fix it up and then they put their logo on it.

49:13

Oh, yeah.

49:25

And I, like, I saw a vintage Bronco that had that. Just like somebody applied this sort of logo to it in the end that just said vintage. It's like, I don't need you to tell me that this vintage car is vintage. Yeah, right. You could just make it look like the original version of it. So anyways, I'm super excited for more. More manufacturers to get into this space. Yeah, the category is growing quickly, so I think even the, you know, many of the restomod players will still do quite well.

49:26

And this seems super bullish for Range Rover as a company. Like they say, check with your local retailer or Land Rover Classic. You imagine that a lot of people will be drawn into showrooms for this. Will they leave with a 1993 Range Rover Classic that's been restored from the factory, or will they buy something new? Because they're like, yeah, maybe I want that, but that'll be my weekender. And I just need something for the.

50:03

The family.

50:27

So I'll just buy something more modern or new. Like, it's just another. It's almost like a halo car, like, for. Just to bring people in, don't you think? Like, if you're driving by an Audi dealership and you saw the R8, you'd go in, maybe you wind up with an A4, but, you know, it drew people in. It brought. Yeah, it brought aura to the brand. This does the same thing. Just seeing more 1993 Range Rover Classics in perfect condition on the road will make a 2026 autobiography look cooler and feel cooler. And so that's beneficial to the whole company.

50:27

Yeah, and it will be. It'll be very interesting to see the way. The way in which manufacturers approach this category. The criticism of a lot of restomod companies is they'll take, like, they'll basically take a, you know, $20,000 car, do a little bit of work to it, and mark it up like $200,000. And that doesn't feel great.

50:59

You know what feels great? Running a business on Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on Social on Marketplaces. And now with AI agents. And we have our first guest of the show, Ferdinand Dabitz from Augustus. Let's warm up the phone.

51:27

He's back.

51:46

We got some big news. You raised some money.

51:50

Welcome back.

51:52

You absolute dog.

51:52

You absolute dog. How are you doing? Give us the update. What's going on with the business? What's the news?

51:53

No, yeah, I'm feeling good. I like this car stuff. By the way, I have a 2009 Land Rover.

52:00

There we go.

52:08

Cool.

52:08

Myself.

52:09

That's a great car.

52:10

So that was cool. No longer for gustas. Yeah, we raised some money. I think one thing we always liked about the bank thing is that it felt so hard, right? And was this like.

52:11

And now you're making it look easy.

52:24

Yeah, you are making it look easy.

52:25

I wanted something that felt hard so I could make it look.

52:27

To make it look effortless, right?

52:31

You are making it look effortless. I remember when we hung out, I think it was at the end of last year during the holiday season. You were like, yeah, I'm working on this thing. And here you are less than a

52:33

year later, $180 million Series B, $1 billion valuation. Tiger Global's in. You got a bunch of other folks in. What actually did unlock the new round, like what's the progress of the core business?

52:46

I think it's a great question, right? I think probably these three things that were and are still exciting about the business, right? I think that the first thing is just this big idea around dollarization and Augustus is built to dollarize the world. And I think people have really started to understand that that's a super important thing, right? And I think over the last 20 years we've seen a trend towards de dollarization effectively, right? Like if you look at the distribution of the dollar globally, kind of like traditionally distributed through these clearing banks, these correspondent banks. That chart goes down and to the right. Like the number of clearing banks has just fallen off year over year. And people were kind of excited about it, right? Because post 911 people said, okay, it's kind of risky to distribute the dollar and be a bank in Latin America, be a bank in Middle east, be a bank in Africa, you probably don't want to do that and so should be super expensive and so on so forth. People from a macro point of view start to regret that. And I feel like, okay, actually it's kind of great if people use the dollar all around the world. I think it increases dollar demand, it's anti inflationary and it's also this Incredible instrument of soft power. The first thing we do when Russia goes to Ukraine is we take them off swift and we shut off their dollar clearing. And this is amazing thing where we don't have to send the tanks and the boys. We can influence what's going on. And so there was this idea like, hey, should we maybe revert that trend and build a modern correspondent bank, a modern dollar clearer that can dollarize the world and provide high quality dollar access to places outside of United States? I think that was the first big idea that really made a lot of sense from a policy point of view. I think it enabled us to charter this bank, but I think also private capital markets were able to buy into it. So I think that was the number one thing. I think then the second macro thing was this idea AI bank. If you now build a modern correspondent bank. What does that mean? I think so.

53:00

I like the sound of it. I like the sound of it.

55:04

I think it kind of like it makes sense, right? Like I think the global economy is on this like consistent investment thesis to that every major industry is going to be transformed by AI. And I think Augustus is genuinely one of the few assets companies that has exposure to doing that for banking. Right. Because Augustus is a bank itself not yet conditionally approved, as you guys know, but and is also kind of young enough and cool enough to be a legitimate technology company. Right. And so we felt like they felt this like legitimate opportunity to take this very operationally intensive business dollar clearing correspondent banking, where Citibank has tens of thousands of analysts in the wire room that go for the payment file and do the reconciliation and payment office and take it and just automate a bunch of it and turn to a better business for customers with better economics. Right. And so that felt I think pretty good. And then I think the first thing was just the progress that the team has made over the last year or so. Right. We got the U.S. national bank conditionally approved. I think we're the eighth company in history, not history of United States, eighth company since 2010, younger history to kind of get the conditional approval. That was a big one. And then we're already kind of big on euro clearing, right? We scale a couple of billion euros for some of the largest fintechs and if is in the world. And that business was also growing very fast. And so I think these things coming together felt like a good moment and kind of resulted in that round. I'd say is my little play by play.

55:08

Awesome.

56:32

Do you have something?

56:32

No, go for it.

56:33

I mean you mentioned that we are on an upswing of dollarization right now and that feels like a narrative violation because over the past two years we've been in this period of de globalization. Tariffs, there's international conflicts. I don't love it, but I could totally imagine a lot of international countries saying, well, we're going to pull back from our relationship with the United States because they're levying tariffs all over the place and seem to be adopting an America first strategy. What am I misreading about the international climate that's actually driving increased dollarization in 2026?

56:36

Yeah, I think it's less empirical as in this is actually happening. It's more like normative. Do we want this to happen?

57:19

Sure.

57:24

Right. And what kind of world do we want to live in? And I think people are starting to come around to this idea that we want to live in a dollarized world. And that wasn't always a given and I think it wasn't even a given last 20 years. As I said, since 911 I think correspondent banking has been increasingly unattractive business and people said stay away from banking. Non US financial institutions don't do it. And I think the wind is changing on that a bit. And then I do think that the administration is actually much keen on dollarization that people give them credit for.

57:25

Right.

57:55

I think all the work that the Trump admin is doing on stablecoins for example is largely driven by dollarization thesis.

57:55

Right.

58:02

This idea that if we can more effectively distribute the dollar abroad, it's good for the United States. Right. Because instrument of soft power and increases dollar demand and inflationary. Right. And I think that they're like that. There's real school of thought in the admin that's big on this and I think this is in a way like a policy and byproduct of that as the public private partnership that is a national bank. Right. It's not just a normal company. It has to live in these regulatory moments.

58:02

Amazing. Well, congratulations. Keep up the great work. Incredible update hearing from you in just a couple months. At this pace, you're making it look easy.

58:29

I'm great to see you making it

58:37

look easy to see.

58:38

Have a good one. Let me tell you about MongoDB. What's the only thing faster than the AI market your business on MongoDB? Don't just build AI, own the data platform that powers it. Our next guest is Kawei Tang from Light Phone Co founder and CEO. How you doing?

58:40

Hey. All right, thanks for having me.

59:00

Welcome to the show.

59:02

Great to have you.

59:04

We Were debating this earlier, do you. So first let's start with an introduction and then I have a bunch of questions about the correct terminology for this category.

59:04

A lot of people call it dumb phone, but I call it simple phone.

59:15

Okay, so you don't like the term dumb phone.

59:18

Yeah, I mean, you know, your phone gets smarter, you actually get dumb for it. So we, you know, the phone, the phone need to do what the tool does for us, like hammer a screwdriver.

59:21

Right?

59:32

Yeah, it does that for you and you put it back. You don't swipe your hammer for five hours. Sort of hammer company can make money. So that's exactly how we design light phone and all the tools inside the light phone.

59:32

Okay, so a minimalist flip phone is the newest product. Talk us through the evolution. How do you measure demand? Why flip phone? It's very nostalgic. I love the idea, but what was the broader thesis?

59:43

Yeah, I mean we've been doing this for 10 years. I think back in 2015 we were in the incubators at Google created for designers and through talking to a lot of VCs and successful entrepreneurs, especially app entrepreneurs, we realized that everyone's bragging about how much time attention they get from their users. That's why they're successful. They could categorize, analyze the data and sell the data to the highest bidder. That's the whole attention civilian economy. And I just don't like that. I don't want to see advertisement. I don't want people to know where I am 24 7. But I love technology. I want modern technology without the civilians attention economy built in. So what we're trying to do is offering a device that has all the modern utility tools but without that business model built in to maximize your attention. So you could call somebody, text somebody, get a direction home, listen to music, taking notes, you know, QR code reader. But no one's trying to maximize your attention so they can make money. Same idea. Like we're not trying to ask people to give up technology. We're trying to say, hey, we all have different shoes, different car, different jacket. Right. You can use different tool at a different scenario. Right. Tool for the time. And that's the essential idea of lifelong. Be intentional about your time. Don't waste it on social media. When was the last time you or Anyone else spent three hours swiping the TikTok and you snap out of it? I feel so good about myself every day.

59:57

Maybe I'm on the Internet three hours every day, but you, Yes, I am the exception. To the rule I am the screen time.

1:01:35

So assume people listening are with Verizon or an AT&T or maybe another carrier. For the light phone, do you have to get basically an entirely separate number? Is there a way to use the same number of.

1:01:43

Yeah. Is this something where I think it's maybe Chris Williamson talks about this like the cocaine phone and the vegetable phone or something like that. One phone with all of the crazy apps on them and then one that's like essentially a work phone. And when they carry that phone it's like brick. There's a whole bunch of different trends. But can you actually run like a single number with two phones?

1:02:00

Yeah. I mean that's healthy, right? We always need a balance. You could. There's different way to do that. You could turn on call forwarding. You could physically remove your SIM card on your smartphone and put it into your light phone. You could also utilize service like T mobile digits that give you two numbers. Sorry. To SIM card tied to one number. It's a different ways to utilize light phone as a secondary phone or primary device. But we actually seeing more of our customers using light phone as their primary device now. Especially younger generations. Yeah, I was in the. Yeah, I was in the event in New York that a group of young people that promoting real life experience and the performers in front of in the stage and there was a woman in the crowd like taking. Took out her smartphone and tried to record the performance and everyone's booing her. I think this is no longer short term. Not a retro feeling that. Oh just temporary feeling good about retro technology. I think this movement started by the young people, the Gen Z or younger is here to stay us the AI as the, you know, 5G iPhone 45 keep getting bigger and bigger. I think this, the other side of the movement is going to get bigger and bigger too. And we're trying to give options that it can opt out.

1:02:23

What would it take to add Instagram reel or maybe even like prediction markets? Well maybe you could make it discounted if people commit to doing prediction markets enough.

1:03:45

Yeah.

1:04:00

Preload 10k.

1:04:00

The phone is free as long as you're trading sort of a gambling phone. $5,000 a month. No, no, but, but I paid a phone more.

1:04:03

More.

1:04:10

Seriously, how are you, how are you thinking about AI features? Because I imagine you're, you're. There's this tension between. AI does give you the potential to interact with your devices in new ways. Right. It's. It's cool to be able to like, you know, dictate to your to your devices. That's gaining a lot of popularity right now, maybe later than a lot of people would have expected. But then on the other side, I can imagine that a lot of your core users to date like hate AI and they're trying to get away from it.

1:04:11

Yeah.

1:04:45

So how do you kind of thread the needle there?

1:04:46

Yeah, I mean I always said that, you know, AI is a tool, it's a software program that's very helpful and we should treat it as such. Meaning that we, when we started lifelong, it's not because there's a new technology being invented. So we designed product for that. We design product because we seeing people frustrated, anxious, stressed out, not happy with the smartphone, social media, but there's no way out. I think the same logic applied to AI or this program, these tools, it can be really useful, it can be helpful as long as it saved my time. So I you're free of my time to do things important to me and make me happy. I think that's a good outcome. However, you guys probably know like with AI tool, more people work more hours. You've been notified all the time with the things that are happening. So I think treating this particular technology as one of your tools and design and use accordingly is the way to go. And we're not anti AI per se, but we do see the sentiments among young people towards everything AI. The big tech push on AI, the discrepancy, the gap is getting bigger every day. As I witnessed it going to tech conference, the potential of AI is being praised. You go into this, you know, this, this real life experience that young people started, Lyte Club, they don't, they don't care about AI. We've been interviewing flip phone users in a new product we created called Life Flip. The flip phone that we just announced today. We'll be interviewing different flip phone users for, for the last six months. The one, one thing they never bring up is AI feature. No one wants an AI button on their phone. I mean I have no doubt it's very helpful. I have no doubt question that can be the future technology that save our time to do things for us and we can move on quickly. But I just don't think it's being designed as such at the moment.

1:04:50

Take us through the business side, the business model, the customer acquisition funnel. This is a product that I feel like it naturally generates a lot of organic earned media. It's fun talking to you about this and all the knock on effects of, of phone use. I imagine every product reviewer reviews it like there's Probably a decent amount of attention that effectively comes for free in this category. But what does the actual scaling of the business look like? Are you doing like direct response ads on Instagram reels to get people to uninstall? Are you Adam Mosseri's worst nightmare?

1:06:51

No. So as a matter of fact, we don't utilize advertisement. We don't pay social media to promote light phone. So the last 10 years, all our growth are organic. From word of mouth, from press, from celebrities are using light phone, including Aaron Paul from Breaking Bad, Pete Davidson, Ed Sheeran from uk. We have a lot of people that resonating with what we're trying to do and support it and spread the word of life. So the last 10 years, we grow every year 20% to 50% without any advertisement. I think it's only human that this resonates with a lot of people.

1:07:31

Yeah.

1:08:12

Talk about the decision to include podcasts. I know some people that are addicted to both making and consuming podcasts.

1:08:14

That's a tough one. I think every tool that we designed follow the same principle. I could summarize into three principles. Number one, no advertisement. Number two, every action, no user take

1:08:28

as a clay, we have ads, but we have. What about, what about ads and podcasts?

1:08:39

Yeah, that's the way, that's the way.

1:08:44

That's how you get in front of the light phone users is you got to just advertise.

1:08:46

Here we go.

1:08:53

Well, so similar to how we design music tool, right? Like it's not a Spotify. We design it as an MP3 player that you intentionally create a playlist for you to calm down, for you to be creative, for you to get into certain mood using that tool as the tool. Yeah. Spotify podcast. I'm sorry, Podcast the same way we're seeing as an educational tool. But I, I get it. Like loophole might be advertisement in the podcast, which we cannot control.

1:08:53

But I like the idea of an old school MP3 player. There's something very satisfying about actually curating an intentional playlist. Loading it up for a different moment. Like it is. Yeah, it's a special, special moment.

1:09:20

Well, everything intentional makes things special. Everything that you intentional doing, make that experience special. The object designed for one purpose. Make it special too.

1:09:32

Yeah.

1:09:42

How do you think about what does success look like for light phone? Like is like a million. Is a million people globally that use and love their light phone and get a new one every year. When you make it newer, faster, lighter, longer battery life.

1:09:43

Now plan obsolete is not something that we're interested in. The last 11 years. We introduced three phones in light phone two. We still have users using them. We're still selling them. It's been six years. We stand behind our product. We upgrade the software, we upgrade. I'm sorry, we repair light phone locally here in Brooklyn and that's what we're going to do. We're not asking people to buy a new phone every year. There's no need. There's no reason to buy a new phone every, Every year. When's the last time you upgrade your hammer camera?

1:10:01

Hammer.

1:10:34

Oh, hammer.

1:10:35

Hammer. Well, we have to do it.

1:10:36

We actually, we have a gong mallet that we upgrade a lot. But yes, I take your point. It is a tool. I like that. Don't do you hit it.

1:10:38

Well, we're pretty rough on our, on our gongs.

1:10:48

Yeah. Upgrade them a lot. But for the average person, one hammer is a life.

1:10:51

No, it's a great.

1:10:56

It's a great.

1:10:56

It's. No, it's a great. That's a great point.

1:10:57

Well, congratulations.

1:11:00

And, but, and yeah, I was just asking that because I feel like it's, it's. Phones are somewhat like cigarettes in that people know that they're bad, but they're just so good in some ways for some people at some times. But I was gonna say, even if you have a million people that are just like, you know, like true, true believers that are willing to make certain sacrifices in terms of like some features and things like that, you could still have a really thriving business. And it feels like, you know, it's not a billion users or bust here.

1:11:01

Yeah.

1:11:41

20, 28% of Gen Z are strongly interested in acquiring a nan smartphone. 26% of millennial interested in getting announced smartphone. 12% of Gen X. Interesting.

1:11:42

Getting non smartphones Gen X values. I think this trend is not going to stop.

1:11:55

Yeah, it's going to get bigger and bigger.

1:12:01

Well, thank you so much for coming on the show. Congratulations. Very cool dot com. You, you can go and pre order one. It's available for pre order and the lite flip is shipping April 2027. Thank you for coming on the show. Great to talk to you soon. Have a good day.

1:12:06

Cheers.

1:12:21

Goodbye. Let me tell you about Crowdstrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. Our next guest is the best we got, Chris Best, the founder and CEO of Substack. Welcome to the show, Chris. How are you doing? I'm doing good, man.

1:12:21

Thanks for having me.

1:12:39

The great slop wars, yes, have entered a new era.

1:12:41

It's not just nice to talk to you. It is amazing.

1:12:45

It is the best.

1:12:48

It is the best to talk to you. Tell us about the slop problem on Substack. What is the shape of the problem? What motivated this? Take us through the new product. What's the state of the union in the slop fest? The state of the trough, state of the drop.

1:12:49

I mean, the place I started with this, I've had the experience that I think a lot of us have had. Not on Substack, but just on the Internet in general. I'm scrolling the timeline, I'm reading stuff and sometimes I just have this experience or I'm reading something. Sometimes it's by someone that I think I know, sometimes it's something and I have this kind of Invasion of the Body Snatchers experience where you realize you're sort of reading something that was actually just pure Claude.

1:13:06

Yeah.

1:13:31

Purely generated. And it's kind of, you know, makes the experience reading on the Internet worse because you're constantly wondering, you constantly have to wonder, is this real?

1:13:32

Yeah.

1:13:43

Am I actually reading something this person believes in or, you know, did Brian Chesky get hacked or whatever is going on?

1:13:44

Yeah.

1:13:50

So like I've been feeling this. A lot of the people I know who spend time online have been feeling this. And then the guys at Pangram did this study because they've been running this browser extension right. Where they have their own browser extension you can install and you can just have stuff labeled. And they studied different platforms and they found that on some platforms, like I think LinkedIn, 40% of the long form text is generated by AI. And you know, in my view it's not the case that all.

1:13:51

I would have expected 90, but yeah, 40 is a lot.

1:14:16

Well, you know, a good point here is not, not all slop is AI. You know, LinkedIn. Even pre. I had a lot of. Had a lot of stuff on there that's, you know, maybe not the best.

1:14:23

Pretty sloppy sometimes, depending on your perspective.

1:14:33

I mean, some people like it, that's fine. And I think, you know, they had substack coming in about 10%. I started looking at this, I started thinking about this and to my mind the problem is not people using AI. The problem is when you have kind of the deception that comes with. I'm expecting that I've got a real connection to a person and I'm actually reading something that's written by no one.

1:14:36

This photo is my experience when I realize I'm reading AI text.

1:15:02

Yeah, yeah. This is the moment you realize and the moment you Realize that's when I think of this as clod fishing.

1:15:07

Yeah, yeah, right.

1:15:13

It's about the violation of expectation and it's the fact that you realize and then you're like, oh, this changes the experience that I think I'm having. And it's so I'm not against reading AI text. I read AI text all the time.

1:15:14

Yeah. When there were those rumors that like OpenAI was thinking about a social network and it was still really, really early, I was like, I would love to be able to subscribe to a feed of Tyler Cowan's deep research reports because I know he's using these tools. I know he's coming up with really interesting and creative prompts, probably asking about what's the food like in this random town internationally. And like, I would like to learn what he's learning. But the whole premise of that would be that I'm just getting a link to chatgpt.com and people do share these around, but we haven't really, because we're not in like the link sharing world. People haven't actually coalesced around like, yeah, I'm just gonna share you a link to my deep research report. But sometimes that would be better than you took you copy and pasted and you forgot to put the. Is there anything else you'd like me to help you with? Or whatever.

1:15:24

Or you left it in and you get these same emails that leaked the prompt to you.

1:16:13

Yeah. And so I can imagine that there's probably a really banger substack out there where the journalist or the writer is going to say, look, I'm going to go find an interesting fact or I'm going to give you a roundup and I'm going to do the work of prompting and fact checking and making sure that this AI instantiated newsletter is high quality and high quality.

1:16:17

The example that I always give is like if Alex Heath was using AI, uses AI often. Yeah, he's talked about it. But like Alex Heath using AI, I'm like, great. I, I'm, I'm not subscribing for the, the like writing. I'm subscribing for information, the facts that he's finding, contextualization plus the takes and like his point of view on that.

1:16:39

Yep.

1:17:04

And if he's just ramb. If he just like finds the facts and then does dictation and just kind of rambles for 10 minutes, turns it into something that is, you know, short and.

1:17:05

But the disclosure is important, so.

1:17:17

Right. Yeah. The way you can tell that's good is because the disclosure wouldn't ruin it for you.

1:17:19

Totally.

1:17:22

And we have all takes on the platform. We have everybody from, you know, Sam Crist read a piece recently that said, if you let AI do your writing, I will come to your house and kill you.

1:17:23

That's a death threat, I think.

1:17:31

I wouldn't be able to tell. I can tell. And then, you know, we have people that are doing the thing you're suggesting that are. That are using these tools to like. Slop is not something made with AI. Slope is something that nobody believes in, they didn't actually care about.

1:17:32

Right.

1:17:43

If you just go and say, hey, write me a thousand viral LinkedIn posts, make no mistakes.

1:17:43

That's slop. Yeah.

1:17:47

If you spend, you know, if you're doing this deep thing where you're going back and forth and you're doing it. I talk to a bunch of people who do this on the platform and they're worried about slop too. Because in a world where you get a bunch of things that are like low effort or like zero authorship stuff masquerading as somebody's careful work, it drowns out the actual careful stuff.

1:17:48

Yeah.

1:18:08

You can have a platform where like the good, high effort, thoughtful things get out competed by people just like spamming the zone with stuff.

1:18:09

Yeah.

1:18:18

And I just think that's going to be. I think that's already a real problem on some platforms. It's not a huge problem on Substack yet, but we kind of want to make sure that we're just, you know, keeping the bar high and having. Giving the people who are making stuff they believe in the chance to win.

1:18:18

Have you seen any like generational divide between how publishing AI writing is perceived? Because there's been a number of VCs, at least over on X, that are. That are maybe, maybe in like the back half of their career will they'll just publish an essay that is like incredibly obvious. That it's just like, you know, they maybe didn't. They maybe had like a couple key ideas that they gave the model and then they just took the output and just published it. And they'll usually get kind of dunked on. But it seems as though the author was not even necessary or the author was not necessarily even sort of aware that there's like a negative perception or that it's maybe obvious to other people. Have you seen anything? Like, have you seen a divide at all or is it just sort of random?

1:18:31

I think we're in a period where these, there's like new norms that are getting figured Out. It's not clear what the rules and expectations are. And there are. There are people that have wildly different ideas of what good is. I don't think it's purely generational. I think there's people on all camps. To me, the thing, you know, I think that anti slop is a pro AI stance.

1:19:27

Yeah.

1:19:45

Right.

1:19:45

You don't see Sam Altman or Jerry Amade writing, doing these, like, Claude posting things. And it's not because they don't believe in AI.

1:19:45

Yeah.

1:19:52

So I don't think that it's a. It's an.

1:19:53

Like, I think you can be incredibly in favor of maximally using AI to. To do research and be a. Be a, you know, even a thought partner and edit your work and help you think of even new ideas to encourage, include. But it's like. But it's about. It's about ultimately. It's about ultimately creating something that's worth people's time. Right. That they couldn't have just gotten by asking the same question to the same model, at least.

1:19:55

Right.

1:20:31

Claude is great, but if I want to talk to Claude, I can just talk to Claude.

1:20:31

Yeah.

1:20:34

And if I'm reading you, it's because I want. There's like, something else. I mean, another way to look at this. You know, you gave the example of, like, what if Alex Heath were making this really thoughtful thing? I would love that. I think everybody has an example of something where they're definitely cool with it. Everybody's talking to AI. It's valuable. On the other end of the spectrum, do you remember the guy when the sort of open claw was in its fervor, that was famous for having the bot text his wife. He was, like, answering his wife's texts. And like, I think almost everyone can look at that and be like, okay, that's probably not legit.

1:20:34

Yeah.

1:21:02

And then there's a whole bunch of stuff on the Internet that kind of falls in the spectrum between, you know, thorough research reports with AI PROs, all the way to like, you know, having. Not having to answer my wife's texts. Like, if I'm going back and forth in the comments with you, what's the expectation? If you're writing a piece, what's the expectation? Does it matter? Is it different if you're writing a personal story versus a. I think these things are all, like, new norms that will have to get created. I don't think we at Substack have all the answers. And so this is why we're kind of leaning as a first step. We're like, hey, let's just have some transparency. Let's make it so that readers can scan this text if they want and have that information and do with that. You know, make their form their own judgment.

1:21:02

Yeah.

1:21:39

How do you think, how do you think writing is changing for writers who don't use AI? I've noticed personally, I've been writing video essays in the pre ChatGPT era. Then all the models were not really great for a while. Then I started doing daily essays on substack. Got accused of using AI even though I wasn't. Sometimes we pass them through AI to just fact check and grammar correct. And then that gave it the AI flavor. And so I made the decision for, with the team to just like not proofread them basically. And so I will often be doing research in a bunch of, of different AI tabs and collect information, but then I'll go and just complete stream of consciousness, nonsense, grammar, all these weird twists of phrases like I'm just speaking out loud. And I think it's remained like I'm getting less and less AI accusals, I guess even though I'm like, I just writing daily. I think you're going to get accused of using AI because it's so obvious that you would save a lot of time by not actually going and doing the work. But I'm wondering if you think that that is just a unique thing to me or if that was.

1:21:40

Well, it's not even just a problem with writing. I've noticed on YouTube there's creators that, that, that I used to love that would make like history or geopolitical content or just like weird niche content, even car content. And now I have that same experience of like ripping the headphones off because I realized that somebody that used to put like all this energy into like writing these great scripts and telling these stories, you just start hearing the claudisms in the video. And even though they're just like making an output, making a script and then reading it, it's still like coming through and you can still tell that, that they didn't put craft into it.

1:22:59

Yeah.

1:23:38

And so I've seen on YouTube there's creators that are just like in the description or even in the introduction of the video saying, and to be clear, I don't use any AI in my videos. And again, even as somebody who's very pro AI, I find myself like, I feel like a little bit comforted hearing that because of all the bad experiences where I've gotten three minutes into a video and realize like, okay, this person is just Reading a script. That was one prompt.

1:23:38

Yeah.

1:24:08

And we added this to the feature we launched too. So if you, if you're writing something on stubs, like, you can set like a. How I make this statement where if somebody's scanning your thing and it can say, hey, I never use it, or, hey, I use it in this way, or even, you know, hey, I use it extensively. But here's the, here's the perspective I'm bringing. Here's what you can get from me. I think it's. I think, and I think this is true. No matter how it gets more true as an AI gets more powerful. Yeah, right. One critique is, oh, I don't like it because it's bad, because it's like a clotism, or because it's just like detectable. But I actually think the underlying thing is like, am I getting a human perspective here? And the more powerful the AI becomes, the more important it is to know that. Because if I'm not, it might still be great. But again, it's like, if I want to talk to Claude, I can talk to Claude. The question is, like, what human believes in stands behind, has the perspective that I'm spending my time and energy ingesting.

1:24:08

Yeah.

1:25:00

The other, the other thing with Substack is like, you're paying for a media product when you subscribe to someone, but you're also paying to, in many cases, at least personally allow somebody to pursue a life's work. And if, and that to me is like part of the sort of like, social contract that you have when you subscribe to someone, which is like, you know, I am, in a small way, I might be one of 10,000 people, but I'm allowing you to ditch your job and just pursue, like, an understanding of this industry or this market or whatever. And so that's also like, if somebody just decides one day, okay, I'm kind of done with this whole independent writing thing, I'm just gonna slop it up for as long as I can and people will churn. But that would be violation, at least in my view.

1:25:00

Do you think your recommender system will naturally sort audiences into what they like? So if there's someone who's subscribing to more AI generated substacks, they would get recommended into that and they would be satisfied with that. Is there going to be like a barbell effect here where you imagine there's like power law creators who use no AI, Power law creators who use all that?

1:25:56

I. I think there will be some of that. And I think these, these Tastes will change over time. But something I've noticed in myself and in people I talked to about this is a lot of these things are kind of an acquired distaste. Right. It's something where, you know, a few years ago, maybe I wouldn't even recognize this as being different. And now I sort of have that skin crawling feeling. I think more people, not everybody has developed that already, but I think more people will develop it than have today. But then, look, I think ultimately, you know, our perspective on this, we're pro freedom. We're not sitting here telling you what tools you can and can't use. We're not sitting here telling you what you can and can't read. As long as you're making the decision, you know, as your best self, what do I value? What do I want to spend my time and money on? We're happy with that. We want to kind of help people do that. And so if, you know, if there are places where people are, you know, paying for AI stuff and it's the stuff that they want and the person may like, we think that's great. As long as it's, you know. Yeah, people are doing it with their eyes open. They know what they're getting.

1:26:19

Yeah. It's funny like how I would certainly pay $5 a month to just get a feed of Tyler Cowen's like chat CBT prompts, right? Because I'd just be interested to fall like, I would just be interested to like sort of passively learn about. And I'm surprised no one is like, you know, figured out a way to create that kind of product yet. What do you think is like the. Is there an AI writing product that is overtly AI that's actually been a massive breakout hit and that they've fully disclosed that this is AI generated, but it still works any that you're aware of.

1:27:16

You mean, are there examples of texts

1:27:55

like, I mean, somebody that made a substack and it's like, hey, this is $5 a month and I'm just going to give you breaking news and analysis on these types of topics. And it's all AI generated. And like actually have as anyone built

1:27:58

a real business, the equivalent would be like demon flying fox on YouTube. He's the one that did the Harry Potter Balenciaga. He is like an AI first video creator. It's very clearly disclosed there's a number of Instagram accounts where like the whole thing is like imagined AI futures and they are creators, but they openly use use AI. I'm wondering if there's a version of that for text or substack.

1:28:13

That definitely exists. And that's the thing that I believe in. Right. The idea of like an AI. Like an AI powered creator.

1:28:37

Yeah.

1:28:43

The way I think of this is like, AI gives you superpowers and it just also gives you new ways to be annoying on the Internet. But if you're, if you're, you know, the A. And AGI is not supposed to stand for annoying, but the like. Okay, if you're saying, like, I have this perspective and I'm using these tools, like, like I think that Harry Potter Balenciaga thing is genius, that's great. It's genius. And I don't care that they used an AI tool to make. In fact, it's great. It's like, it's a new way to express the thing.

1:28:44

Yeah.

1:29:09

And we have, we. Actually, there is a bunch of that on substack. There are people who are doing analysis, people who are sometimes writing things in other languages. There's people that are like, writing and like, English is not their first language, but they have some important analysis or they're like, you know, they're doing some deep research or they have some perspective and, you know, the final prose is generated, but they're transparent about that. I think that is great. The deeper question to me is like, do you actually have to have a human artist behind the thing? Like, if instead of that, if. Instead of I've used AI tools, if you're kind of doing the thing of like, hey, you know, generate 1,000 viral posts, make no mistakes, or generate 1,000 viral bots that each do 1,000 viral posts, make no mistakes. And my view is like, that may be compelling, but that's not going to be valuable over time because it's going to be. There's going to be no differentiation. It's the thing of, like, yeah, talking to Claude is great, but I can talk to Claude if I want to talk to Claude.

1:29:10

Do you know of any historical comps to this conundrum that we're in as citizens of the Internet? Like, was there a period where authors weren't real authors if they used a typewriter, you know, you had to write it with a pen or it was frowned upon. Or is this just like a novel experience?

1:30:02

I found when I was looking for the art for the announcement post, I did, I found a reverse example from history, reverse clod fishing, which was the mechanical Turk. Do you guys know the story? It was supposed to be a robot that plays chess. And so it was supposed to be like, A magic strong chess playing AI. But the trick was there was actually like a chess master kind of like hiding in the bottom, just sort of. It's the reverse of having the, you know, having that realization of you're absolutely right while you're reading something.

1:30:28

Yeah, yeah, it's great. Well, congratulations on the launch. It seems like it's going really well and we're huge fans of Pangram and the team over there, so those guys are great.

1:30:55

They're excited.

1:31:06

They really are.

1:31:08

Yeah.

1:31:09

Yeah.

1:31:09

In two more minutes before you leave, what. What can people expect out of Substack for the rest of the year? Like, are you, Are you?

1:31:10

Yeah. How's the business doing in the age of AI, broadly? Like, there's a narrative where it's like, oh, people would just talk to the AIs to get information. They're going to spend no time on substack. And then there's another one which is like, you'll be ten times more efficient because all your software engineering can be automated. Like, what. How is the business actually changing?

1:31:17

Business is doing well. We're growing. You know, the way I think about this is I think as you get sort of plentiful, you can get anything from the. You can get any content, the value you have, infinite. Kind of like things that you can spend your time on. The value of the trusted human connection and perspective goes up. And as long as we can have the platform reward that, as long as you feel like, hey, you know, like, even if you're reading Tyler Cowan's prompts, the fact that, you know, have some idea of Tyler Cowan as a person and have invest some faith and trust in him is a fundamentally valuable piece in this new world. And we actually think this is, again, it's like if you take sort of a pro AI stance, you can also have like a pro human culture stance that thinks that we're going to be able to make that even more valuable.

1:31:34

Yeah, that's very cool. Well, congratulations. Thank you so much for coming on the show.

1:32:26

Great to see you. Always fun.

1:32:30

We'll see you soon.

1:32:32

Cheers.

1:32:32

Let me tell you about console. Console builds AI agents that automate 70% of it. HR and finance support, giving employees instant resolution for access requests and password resets. Our next guest is here with us in the TVP ultradome live. How you doing, Stephen? Welcome to Stephen, co founder and CEO of wap. How are things going with.

1:32:33

Things are going great with wap. Thank you for having me here. It's super cool.

1:32:52

Yeah, welcome.

1:32:56

Yeah, it's a crazy time for the whole world right now. And you know, I think a lot of the work we've been doing over the last several years is now coming to light in a way where there's a bunch of themes converging and you know, you have, I mean you have all in conjunction with AI. You have a lot of people trying to figure out what they're going to do for work, what they're going to do with their jobs. You have an existential question of how to get value accrual by spending money on tokens. And I think a lot of the infrastructure we've built is trying to answer a lot of that. So things are going well and exciting times.

1:32:58

At its best, you're bringing small scale entrepreneurial opportunities to people at a very, very broad basis.

1:33:33

I think that's one way to look at it. I mean we grew up, my co founders and I, building businesses on the Internet, piecing together a ton of different platforms and, and at times we'd have like three or four businesses running at once and we were always the weird ones. No one else was doing that and now it's pretty normal. And I think we are trying to build a platform that if we could go back in time, we would be addicted to as a 15 year old. And I think that technology is there now where there is virtually no excuse to not have a really awesome income stream, especially from starting a business. And yeah, so I would say, and it's pretty cool.

1:33:40

I want your reaction to this take from Aporia about Gen Z entrepreneurship. They say Gen Z entrepreneurship increasingly looks like running a portfolio of asymmetric coups rather than betting on one serious long term project. They go on to explain that half the people I meet at beach clubs in Saint Tropez and Marbella are doing again exactly this one year. It's crypto, then an Amazon brand, then an AI lead gen agency, then solar panels or some subsidized renovation. And this was the interesting line. I used to think this was unserious entrepreneurship, but some of them have become genuinely good at it. Their real business isn't crypto, AI or solar panels. It's being early.

1:34:21

That's one of my favorite takes I've heard in a long time. And I think that the reality is the businesses are getting so ephemeral that one week it's a jewelry store, the next week it's a education program teaching people how to use a new AI tool, the next week it's a UGC marketplace, and then the next week it's a agency that's Selling data to labs. So the amount of trends that people are tapping into to start businesses is through the roof. And when that happens, you do get what resembles a portfolio. Almost imagine like a crypto portfolio. But if you look at our new homepage, it actually looks like a crypto portfolio, but it's not tokens, they're businesses. And it's completely up to you to drive the business income up. And we try to figure out ways to tell you exactly what to do next in order to do that. So I think that's a fantastic. So it does feel like an exchange. And yeah,

1:35:04

if you were able to talk to the, you know, take you today and you have the younger version of yourself, what advice would you be giving on where to start trying to make money on the Internet?

1:35:57

I would simply look at what is working on the Internet today and copy it.

1:36:10

So when you were getting your start, it was trading sneakers and maybe having some bot tracking supreme drops. What was it then? What is actually happening now?

1:36:17

Well, I think that your question's interesting because you said if they want to make money, that's one thing and if they. When we were building businesses, it was never really for the money. I mean my co founder Cameron dropped out of high school at 15 years old and had virtually unlimited money for a 15, 16 year old. I think the only thing he bought was a Tesla. And other than that he would wearing flip flops and T shirt and be working all day. And it was never really about the money exactly. It was always about we have a hoodie. It's just building cool shit with your friends. And I think that is much more the spirit that we get excited about. And in many ways we want to make it actually not about the money and take out money from the equation. People don't have to worry about money, but the advice I'd give to young

1:36:32

people, that's sort of the unique luxury of being a teenager where it's like if you hit it out of the park and make $5,000, you feel like the king of the castle.

1:37:15

Yeah, totally. It goes a long way and you have a lot of time and you just have nothing else to do other than to experiment with different businesses. And it's after roadblocks. What are all the kids supposed to do? And I think that's how we approach it. Trying to build a very gamified arcade version of entrepreneurship and pursuit of building products for other people.

1:37:26

Talk about looking at what works and what's making money on the Internet because I feel like there are layers to that Onion. Sometimes by the time I'm seeing Instagram reels of somebody driving a supercar and they say they made their money on Facebook ads, like the Facebook ad arbitrage might have closed and that person might now be selling a course to get you to sell a course to then sell Facebook ads. There are like four levels of abstraction. What is the correct way for young people to actually go and find the real opportunities and not the things that have been abstracted into LARPs at this point?

1:37:43

Yeah, well, I think the infrastructure in every single one of those businesses is always the same. So when you go and experiment with one business and then you go to the next one, a lot of that carries over. And I mean, what I would suggest is we try to do a very good job on wop, showing which businesses are actually working really well and which models are working really well. So my advice would be to go do that. But I think it's ultimately just try to experiment as much as you possibly can and don't feel like you're wasting a lot of time because the only real risk is not doing anything. And my probably overarching advice to young people would be just to try things out and see what happens and fuck around and find out, if you will. So I think that's very. That's the spirit of where we are now in businesses and how ephemeral everything's getting and how much experimentation you see when you open your Twitter feed. And that's a good thing. It floods the market with competition. It floods the market with people that are trying to differentiate ever so slightly from the prior iteration. And that ultimately brings a lot more value to end consumers and makes everything cheaper and makes everyone a little bit more money. So I think that's a pretty good thing.

1:38:24

Talk about the clique.

1:39:30

Finally we have a CLI. Yeah.

1:39:34

Why is that important? Websites are pretty good. APIs work in many ways. What's the point of the CLI?

1:39:36

I think people have historically found WAP to be relatively confusing of a concept. And I think the reason for that is because the UX that we've built

1:39:43

made me feel like a boomer. I was on there. I was trying to spin up content rewards back in the day, very early with the show and I was like, I feel old.

1:39:51

Yeah, I think like the UX we've built has never really caught up to the API we've built.

1:40:05

Sure.

1:40:09

And I think that we're, we're a very fundamentally API first company. We have a very engineering led team and that results in a Fantastic API that has. I mean, when you look at the functionality that our API supports, it is literally every single thing that you could possibly need to programmatically run a business. That's payment acceptance, it's ad creation, it's money movement. You can even find people in the real world to do labor for you, clipping and whatnot, all via the API that is very difficult to build a UX around. Very, very difficult. And the CLI allows all the functionality to be brought into your terminal and to be called from any agent via API. And that results in way better experience. So the CLI is very cool.

1:40:09

Hypothetically, if I start. The three of us start a hair care business together. Since we have wild hair, there are a number of steps that I'm going to take to promote my business. The classic one that I would go to WAP for might be clipping. I might film a whole bunch of content. You film some videos about your hair care routine. All of a sudden we have an idea of a business. I like it. It's a style. And we want to take that to social media. So we want to engage with WAP broadly. Now I could use an AI agent to interact with the API, the cli. Does that just make it easier if I'm doing the programming? Or is there a world where I'm actually finding a programmer on WAP to help me with that side of the distribution?

1:40:55

So the old adage is that ideas are easy and execution is hard, and we're seeing that be flipped on its face in real time. And I think that what we actually prefer is that, you know, there's a saying, this also, like, every business begins with a secret, and a lot of times the secret lies in the execution. But we want the secret to be all about the idea. So we want the extent of that launch to basically be we want to start a haircut business for tech people with crazy hair. And that's the whole business. And every other part of the execution is handled.

1:41:38

Sure.

1:42:07

And that is a way better world than what it is today, where you actually have to think through everything from even making content, the developer. That's all semantics. It shouldn't even be a conversation. So that's what you get at the cli. You can literally go to the SWAB CLI today, say, start a haircutting business that's meant for tech people with crazy hair. Get me some customers. And you could go so far if it was localized, to say, find me a person to cut the hair, and the CLI will end to end. Do that via any agent that you want.

1:42:07

Okay, cool.

1:42:36

Are the youth hitting it big with SMB? AI transformation? So everyone knows the big, big consulting shops are

1:42:40

real about this. It was like, if you want an SF90, go to someone's real estate listing and like take photos, turn it into a beautiful website, go sell it to the real estate agent for 500 bucks. You're like, go to go tour a $30 million property that they're trying to sell, but they don't have a nice website for. They're just on MLS. Make a beautiful website, sell it to them for 500 bucks.

1:42:52

Yeah, even.

1:43:14

Even back in our day, something like that, you could. Even when it was easy to build a website, there were still business owners. I remember, I remember, you know, like a friend's parent at one point was like, if you can build me a website, I'll give you 500 bucks. You just find a template for like 20 bucks.

1:43:14

But that's time people don't want. Want to prompt themselves.

1:43:31

Yeah, yeah. I mean, that is, I'd say what it looks like to find all these hyper niche markets and call them arbitrages and then capitalize on them and go to the next one. And there are so many more than anybody can remotely imagine. I mean, I remember when, I guess eight, ten years ago I was making websites for people and doing that exact tactic. And now it's like you have all the leverage in the world and it's basically limited your creativity and grit.

1:43:34

And now you can just go. So you can find 10,000 small businesses in your state, let's say make them a brand new website, show them the website and say, do you want this? I'll give it to you for 200 bucks. And I think a lot of them would be like, looks good, I'll send you 200 bucks. Even though you just ripped it with like Codex or whatever agent you're using.

1:43:58

Totally, totally, totally, totally.

1:44:17

Talk about ads. WAP ads. What is the shape of that product? How does it fit into everything else?

1:44:19

Yeah, I don't know if you guys have ever ran meta ads before, but it's a pain in the app and it's very difficult to go on and navigate simply the UX of that platform. And that's coming from like, for us, we grew up running meta ads to Shopify Store. That's all we did. And when we look at our platform and our merchant base and what people want to accomplish on it and how we believe that the more vertically integrated it is, the easier it's going to be for agents and for users to use it. The next obvious jump was to say, okay, people are earning, I mean now 400, $500 million a month on the platform and almost all that money is spent on ads. And because of that, why don't we let people programmatically run ads immediately after getting the payment? You don't have to wait any days for it to settle. You get all the data and what's working can iterate on the fly. And it's not just meta that you're running ads to, it's actually the whole Internet. And that is the ads product that we have available in. And it's pretty cool. People like it and I mean that's a very, very fast growing product.

1:44:24

Take us through your reactions to all the trend pieces about clipping this year.

1:45:26

Better late than never.

1:45:32

Yeah, so what I'm referring to is like there's been a number of trend pieces sort of like breaking down the clipping economy heavily driven by some of the kick live streamers, like the Clavicular, among others. Others that sort of crossed the chasm and got profiled in the New York Times. And so there were knock on pieces about this idea that you create a lot of content like we do on a three hour show, we clip it, or you do an eight hour, 12 hour live stream, you clip it. And your business has been very integral to that boom. But when did that start for you? Like when did you realize the power of clipping? Like how has that evolved?

1:45:34

Yeah, I think people overestimate how intentional we are about some of these markets, markets that have come up. And I think it more happens to us because we have such a good API and it's just a platform and people come up with all these crazy business models, they explode, people exploit them and then it becomes so saturated that it's actually not even that cool anymore. And I think what's happening with clipping is it is still a very, very, very powerful instrument because of how much money is going into it, because of how inherently like so much value can be gained by brands and companies, et cetera. You're going to have a lot of bad actors and people trying to exploit different people and all sorts of different bad stuff. And I think that's where a lot of the what people are potentially saying on the pessimistic side of clipping, on the optimistic side of clipping, we look at it as yet another way to earn income on the Internet for a huge amount of people and especially if they are not sophisticated enough to potentially start a business, yet they actually start with clipping. And that's a very great way to learn how to make content, learn how to help other businesses create real value. And all the payments infrastructure, it scales super well so that people can actually earn a sustainable income by doing something like clipping. That can be extrapolated to data labeling, can be extrapolated to tennis coaching, can be extrapolated to all sorts of things that we're starting to see on our platform. Other platforms integrate and pay out via our Rails, which is simply creating more ways like clipping to earn money while still hopefully being value accretive of two businesses. So that's what I would glean from clipping.

1:46:08

Have you talked to any legacy media organizations about clipping? I'm thinking of like Fox News produces so much content. Local news produces a lot of content. Abc, NBC, cbs. Like there are basically content farms that are effectively live streaming. It's a very different motion from. For these organizations, would you recommend they get into.

1:47:35

Yeah, I mean, our focus is trying to build the infrastructure and the platform

1:48:01

and whatever happens, happens.

1:48:04

Yeah, whatever happens, happens. I think as long as it's by our terms, safe. And I think in the context of a local news station, they're very under resourced typically.

1:48:05

Sure.

1:48:13

And if we can make it so easy where they actually can couple clicks or even one click or even one prompt spawn a bunch of clippers to amplify their media, that's great. As it stands today, it's a little bit too difficult. And I think that's where you have agencies fill in the gap and create these, fill these arbitrage opportunities.

1:48:14

Sure, sure.

1:48:31

How would you rate sentiment among WAP users? Is there because WOP users are not necessarily reflective of all of the next generation of entrepreneurs and people that are starting careers, it's certainly selecting for people that have higher agency. They're trying to figure out how to make a living online or just make, as you say, make cool stuff with their friends. But is there a feeling that there's a ton of opportunity and that now is an amazing time to be coming online? Or is there at all the same kind of Vibe session that you see among people, maybe college students that are trying to find jobs and feeling like vibe session.

1:48:33

Oh, like the Vibe recession?

1:49:16

Yeah.

1:49:18

Oh, yeah. Okay. I thought you were mashing up Vibe and obsession. You're obsessed with Vibe.

1:49:19

I think that the sentiment is overwhelmingly positive, like beyond optimistic. And I've actually never seen it to this level. I think where you look at a lot of the people that call themselves Entrepreneurs, people that build are trying to build a business. WAP users are unique because likely they're going to be earning money and that's very different than trying to launch a vibe coded app and praying for users. So I think that what we see is that when we talk to our users and businesses on the platform, either at in person events or via our chat on the platform, they are so excited about building their thing and they're actually equally as excited about experimenting with other businesses like we were talking about earlier, because it feels like the possibilities are completely in your control. You have so much opportunity right now. There's so many micro markets that can be tapped into and exploited arbitrage wise. And I think the young kids realize that and they're going crazy right now. I don't think there's an apprehension at least in our user base as to what they're going to do post AI. I think that that's a very exciting thing for them and they feel like they're grabbing by the horns and taking control of their destiny, which is exactly what's going to happen.

1:49:26

What's the state of WAP enabling sort of human in the loop AI companies? I'm thinking about your partnership with Replit poke cal.com, it feels like there's a potential to launch something that the agents aren't quite there or it has to interface with the real world in some way. But if you can bring some extra humans to bear in a particular workflow, especially for consumer, there's like an opportunity to build businesses there.

1:50:36

Totally. I think one of the largest markets that is being talked about but perhaps not enough is just the demand for data right now is so crazy. And when you look at especially developing countries, one of the most lucrative ways to earn money on the Internet is by submitting data and by recording themselves do day to day tasks. And I think if you look at the broad base of human in the loop applications, especially around money, of course you can start a business, you can sell your time on Cal.com, you can build a really cool website on Repl.it and build a business. But if you want to think in the clipping construct, and perhaps you can think of clipping as act one of this, there is a lot of things people can do that AI can and that largely pertains to data. There's a huge crisis right now, I think where people are realizing that the AI doesn't actually have the level of original thought that is needed to lift anything off the ground. And what are they doing. They're spending billions of dollars to get people's ideas. And that is not, I mean, in some way that does economically get to the person, but I think we can do it even better. And the human in the loop we view is actually the most critical piece of any business in any a real economic output because it does start with someone's idea and creative ingenuity then versus an AI being low. Let's build a business that does haircuts for tech people. That's not necessarily, I don't think gonna happen anytime soon. Maybe it does now because it's already out in the ether, but. Yeah.

1:51:05

Last question. How's the business growing in 2026? What's the financial plan? Do you want to raise more money? Do you want to raise a bunch of money?

1:52:32

IPO3Company well, I think we, we want to deliver on our mission and I think it's, it's the most confidence we've ever had that we actually can. And I would say there's going to certainly it's going to require investment and there's clear prospects. We're exploding internationally right now with very little real motion that we've established intentionally internationally. And we're under invested across the board. We have a very lean team still. The growth has been really record breaking. I posted a tweet last week. We're underwater right now. It's really crazy. We can't go five minutes without something crazy happening in a good way or bad way. And I think it's part of building a business at our scale. So growth is phenomenal. I don't really know if I can talk about a lot publicly, but, but

1:52:41

you can, you can say whatever you want. You can give us all the numbers.

1:53:33

Yeah, yeah, yeah. We're accelerating growth at a pretty massive, massive scale. Yeah, yeah. I mean, if we were doing 400, $500 million a month in earnings and I mean, a lot of our takers are public. You can do the math. It's getting a lot more serious and we take that responsibility. We don't take that responsibility lightly.

1:53:35

That's amazing. Well, congratulations on the progress. Thank you so much for coming on and breaking it down for us. We will talk to you later. But for now, we will bring in Katie Roof. She is the editor of Business Insider. We're very excited to have her joining the show. It's time to bust down the paywall. Jordy, you want to do the honors?

1:53:56

That's right.

1:54:15

We got to bust down the pay wall because we have Katie Roof here. We have a Physical pay wall here. I'll bust it down.

1:54:15

Do it, John Bus.

1:54:21

There we go. You know her from her scoops. Many paywall busting scoops.

1:54:27

We built a real paywall here in the Ultradome for you.

1:54:31

Yes, for busting down. Well, welcome, welcome to the show. How is life? How is the new gig?

1:54:35

Well, good to be here. I just started the new gig yesterday, so so far so good. I got through a new higher orientation. Okay. And ready to get scooping?

1:54:41

Yes. Of course, we won't ask you how you get your scoops. We all know signal DMs, probably. But what is the shape of Business Insider these days? How do you fit into the organization? And then I want to talk about where Business Insider is going editorially.

1:54:50

Sure. So I know Jamie Heller from when we were both at the Wall Street Journal. She oversaw all business and technology coverage there. And she's been brought in to be the editor in chief of Business Insider, where she's changing the direction towards more scoops and original content. That's partly how I fit in. You know, stuff people would actually pay for. And so, yeah, some part of that new direction, that new chapter for Business Insider. And I'm also part of a new program for the parent company, Axel Springer. I'm in the Global Reporters Network, which is a network where I team up with Politico and our other stuff sister publications. We just acquired the Telegraph in the uk we own a lot of stuff in Europe. So, you know, whatever, whatever they acquire next, my stuff will appear in those news outlets as well.

1:55:07

Take us into, into a scoop. I want to know, I want to know how often you're working on a story and there's other reporters chomping at the scoop. What is that? What is that process? Like, how much time do you have for a lot of these stories with, with how quickly AI is moving? I can imagine you, you catch a whiff of a story, you're chasing it down sometimes, hopefully most of the time you get to it first, but then other times it's a, it's a dog eat dog world. It's a dog eat scoop world out here.

1:55:59

Right. It's true. It's gotten a lot more competitive. You know, these days. I feel like back in like 20, 20, 2021, I could get most of the scoops and I still get a lot of them, but there's a lot of reporters now doing what I do. And, you know, being first is harder. But I think the key is to not just go after things that are rumors that are widely circulating. Because everyone can hear about that. Some of my biggest scoops have actually been predicting what happens next. And I will, I'll just ask around about my theories. Like with this company, buy this company, I don't call people up and say I heard this, if anything, hear this. But if I'm having an extended conversation with them, I just throw out a lot of scenarios. And then sometimes they're like, you're right, this company is buying this company or this company is going public or they're raising, you know.

1:56:33

Yeah, yeah, that makes a lot of sense. Can you talk to me about in regards to the paywall, the business of media these days, how is the, you know, original reporting, scoop driven journalism versus opinion versus news aggregation actually changing? And are we firmly in the AI is affecting the business or are we still just seeing knock on effects from social media and just a screenshot of something can change the business model?

1:57:22

Well, I think original reporting matters more than ever because regardless, you know, technology can change in the format in which we tell our stories can change. But people are always going to want to find out what's going on in the world. And I think, you know, the reporters like myself who've been fortunate to make the decision to double down on human skills instead of just writing skills, we have, you know, we still have value because I do things that maybe AI is not doing by having a network of people asking questions that they weren't planning to share and informing the public of that.

1:57:52

Do you think any tech CEOs or people with potential scoops would ever talk to an AI reporter who's digging for a scoop?

1:58:25

Well, I mean, yes, if it's something they really want out there. But the reality is, you know, people think that most of these stories are things people wanted out there. It's usually they were kind of neutral. Like if usually people weren't like trying to leak something, but like reporters were asking, they're like, oh yeah, you're right. Like that's usually how it goes. And so, you know, AI, you know, unless they, you know, proactively want to plant something which would be almost more like pr. What PR does the PR pitches then yeah, I think it's, it's not the same.

1:58:35

How do you clock when a story's been planted? There was, there was a story about Colossus biosciences raising at between 20 years $30 billion. And to me that might be true. That just screams like they planted a story. Because I don't, I'm just going to say it, I don't know that many institutional investors that are sort of clamoring to invest in Colossus Biosciences. And it's a way. My theory is that it's a way to signal to potential retail investors that were open for business.

1:59:08

Yeah, this round's getting and hot.

1:59:44

This is something I think about all the time. I mean, I take accuracy super seriously. And, you know, as much pressure as. As there is to be first to the news, I think it's much easier to destroy your credibility than it is to build it. And so I always try to think, does this make sense? Do they have an agenda here, like, to be misleading or dishonest? And, you know, I used to say to some people, sometimes reporters past jobs might hear about something and they would be like, company X wants to be worth 10 billion. And I would say, well, I also want to be worth 10 billion. Can they. Can they get the 10 billion? I think that's the real question. And so I think that you have to. Obviously, people have incentives to use us to manipulate public opinion. We have to be savvy about that.

1:59:45

Do you think with how dominant tech is generally now, it feels like it's a bigger story. We see it, you know, tech has moved from the business and finance section of the Wall Street Journal Journal, the front page more and more. Not every day, but, you know, just today, Chinese AI models raise alarms on the front page. It's international news. Is that. Do you see that as driving Business Insiders tam, essentially, like, is the TAM for technology scoops and private markets news going even bigger now?

2:00:29

Yeah, you know, and I think that's absolutely true. I think there's a lot of curiosity out there about AI and the money behind it and how it's going to change things and. And transform the world. And so, yeah, I think that's part of why, you know, there's so many news outlets have been doubled down on getting more venture capital and AI reporters, because I think that there's broad appeal, even if you're not an investor that's standing to make money off of this AI boom. You're curious to see where it's headed.

2:01:03

Yeah. And then last question for me, I'm interested. I mean, we love Business Insider, we love business. We consider ourselves bit of insiders ourselves sometimes. But I'm wondering where you want the brand of Business Insider to go and where you see it in a few years after, you know, you've been on the job for a while.

2:01:32

Well, from what I understand is, Jamie, I'm not running Business Insider. I have A fancy title, but Jamie is running this into. She's got, you know, she's really made a big difference already in bringing right now to us.

2:01:53

You're the CEO of Axel Spring. Okay, do.

2:02:08

You're out.

2:02:12

Katie Roof's in. She's got the scoops that we know and love and so sorry.

2:02:13

So you know, she's already played a major role as our editor in chief in bringing they. They've doubled their exclusive content. I think it used to be 40% and now it's 80%. And so I think that, you know, I'm part of that strategy where they want to just build upon on that.

2:02:21

Fantastic.

2:02:39

Well, congratulations, congrats on the new role and thank you for. For all of your work over the last couple years. Contributes to talk about.

2:02:40

We couldn't do the show without you, so thank you.

2:02:49

Thank you so much. I really appreciate the shout outs.

2:02:51

Of course. Cheers, Katie, we'll talk to you soon. Let me tell you about public dot com investing for those who take it seriously. Stocks, options, bonds, crypto, treasuries and more with great customer service. You know who's not public, but you can still read the financials of. Is the German nightclub Berghain. Is that how you pronounce it? Bergen, Berghein, Berghain. Berghain, Bergheim.

2:02:53

I always sort of mumble through it.

2:03:18

Yeah, maybe they should have the Axel Springer corporate retreat there. That would be a good option. Sharing this. Yeah, it's in the Financial Times.

2:03:20

Read through it.

2:03:29

Okay, so basically, Ara Kharazian, the economist, lead economist at Ramp Economics lab over at Ramp, says today I learned German companies have to publish financials even when privately held. We can talk about, like how much of a nightmare that is, but this club. Bergein, Berghain, Bergain. I'm all over the place with this pronunciation. Anyway, $1.4 million or euros in net profit in 2024. 414,000 in annual rent. 355 employees. You can just go look it up.

2:03:30

4,000 what?

2:04:05

14. €414,000 in annual rent.

2:04:08

Okay, that's more like it because I've been. I've only walked by it.

2:04:13

Mm.

2:04:18

But it is a massive building and I thought you said 14.

2:04:19

And the financial Times has a whole deep dive into the nightclub.

2:04:21

But.

2:04:25

Yeah. So let's talk about the implications. Yeah, let's talk about the implications of small business revenue being public. One terrible for course bros. That's why they have to go to Dubai. LARP.

2:04:26

Yeah.

2:04:38

You know, if you're LARPing around in London.

2:04:38

Yeah. And you're saying, oh, I make so much money in real estate. I remember there was a YouTuber who did. He was above board. He actually did a tell all on CNBC how I make money, Millennial money. Some segment they did on him and he's like, I'm a real estate guy and I make $10 million. And he broke it down and he was like, I made $300,000 from real estate, $9,700,000 from YouTube. And it was because he was making so much money with this great media business that he had, that he actually was. And he had good advice about real estate, but he wasn't running a real real estate firm. He was, you know, a real estate associate who created a fantastic YouTube channel that was equally impressive or maybe more impressive. But as we were talking to Stephen about, you know, like, how do you know what's working? Well, apparently in Europe, you can just look up the financials of every company and know, oh, well, they have high margins. I should just copy them, Right?

2:04:40

Basically, yeah, I looked at investing in a company in the UK and yeah, you could. I got the financials, but then they were like, yeah, you can just look this up and confirm. Confirm it with. You can do basically like a records request.

2:05:37

Yeah.

2:05:50

But yeah, it'd be very interesting if we had anything like that with startups.

2:05:51

Right.

2:05:56

Because every time there was a big funding round, people, business. How does this make sense? How does this make sense?

2:05:56

Although it does seem like it's on some sort of delay, it's only annual reporting and I know, but still, imagine

2:06:03

when that reporting comes out and they're like, wow, this $10 billion company only did $10 million last year, which would

2:06:11

be happening for some of our private markets. Unicorns. That would be a huge deal to dig into the numbers. Although, you know, even the, even the massively successful event back companies have complicated financials. The disclosures would.

2:06:17

I just think it's crazy. Berghain, as this, like, you know, cultural institution is only putting up 1.4 million euros in net profit.

2:06:31

Well, Selah Underscore has a take, says companies like this club don't really exist to deliver a financial profit. They do absolutely drive social capital to those involved in ownership. So. So perhaps you are owning a stake in this institution to meet people, do business deals at the club, meet other people.

2:06:42

Sam says we need to LBO and franchise asap.

2:07:02

That's a good idea. Anyway, IMAX is in Trouble. Loosely. The 70 millimeter IMAX that has been running 247 at the Irvine Spectrum for the Odyssey overheated Today, Bill Hunt shares some extra news. Says the scary thing here is that IMAX can't build any more new projectors. This was reported earlier. They apparently don't have a complete set of the engineering blueprints. Most of the engineers who designed them have retired or passed away and the parts supply chains have long since dried up. That seems like a bigger problem than the blueprints. You got to be able to one shot a bunch of IMAX blueprints.

2:07:06

Can you just like take it apart?

2:07:48

That's a good, that's a good point. Yeah, you should just be able to take it apart, take a picture of every part and then figure out how it works. Codex to fire it up. So the goal for the foreseeable future is to upgrade and keep all of the existing projectors running for as long as they can. This is the true RE industrialization project. We were wondering like what's the next Android? It's the next imax. That's what we're looking for. Somebody cranking out American made 70 millimeter IMAX projectors. That's the real goal. Big news out of Google. Logan Kilpatrick, friend of the show, says say hello to Gemini 3.6 flash. We talked about this a little bit, but there are some benchmarks here. We love benchmarks designed to be higher intelligence, more token efficient and with a new lower price. Based directly on development feedback, 3.6 Flash continues our progress towards models that are deeply usable in real world scenarios. Congrats to the whole DeepMind team over there. Say this model is much more efficient and spends a lot less tokens to deliver better performance. And also the big news. He said we have started our most ambitious pre training run yet for Gemini 4 and are excited by the progress. I think that there's a lot of is Tebow trolling him with hoping it finishes one day too. Wow, that's a spicy post. Crazy but I mean the last pre train that came out of Google was interesting. It had a different flavor to it and they did. The initial responses, they were a little more terse, a little tighter. I enjoyed poking around with Gemini. I thought it was fun. We're counting on you Logan. Good luck.

2:07:50

Before our next guest, we have a post from Shiel Mona.

2:09:28

What'd he say?

2:09:30

He says very cool idea. Vacation with an artist, travel the world and learn new skills like ceramics, street art, bookbinding via a mini apprenticeship. 3 to 10 days with master artisans. In many cases you stay with them too. This got me thinking. What if you could vacation with someone. That was one shot by AI.

2:09:31

That sounds terrible. I would like to vacation with a capital allocator at the Yellowstone Club and the Amman. Do a tour of the Iman. You can do this, but not on a website. You have to know them personally, I think. But I'm surprised this isn't an.

2:09:52

It sounds. Hey, this idea sounds crazy. Vacation with a capital allocator. But there's probably a price, right? It just might be. It might just be egregious.

2:10:06

Maybe 20% of equity in your company. I'm interested that this is its own website. Vawa Vacation with an artist. It feels like it's direct. Directly in line with the Airbnb everything app roadmap. The idea was that you would be able to go. Anyway, we have our next guest in the waiting room. Let's bring in Zaven Dhar from Dimension. He's the founder. Welcome to the show.

2:10:16

Here he is. Guys, how are you? What's going on?

2:10:38

Give us the news. We gotta hit the dog.

2:10:41

The newest size Lord.

2:10:42

The newest size Lord. The capital allocator.

2:10:43

Boom.

2:10:45

Oh, yeah. He just hit it himself. That was. That was good. Good alignment, great stuff.

2:10:46

How much did you raise? We didn't even get the number.

2:10:54

We just went around 800 million.

2:10:57

800 million.

2:10:59

I'm sorry that you couldn't, you know, hold together the last 200 million short

2:11:01

maybe 800. Who's counting?

2:11:07

Close enough. Close enough.

2:11:10

They're over a billion six in assets, so.

2:11:12

That's right.

2:11:15

It's a good start. It's a Good start.

2:11:16

Dimension three. 800 million at our legal hard cap. So I think we went out for 700 or thereabouts. Legally, we can't raise more than. Than a.

2:11:18

They'll put me in jail by res anymore.

2:11:27

We all know there was. We all know the demand was there. We all know the demand was there. Yeah. Talk about fund one and two. Since it's your first time on the show, what. What got you to this, you know, Monumental fund?

2:11:29

Yeah.

2:11:42

Fund one, 350, that was a 2022 vintage. Fund two was 500, that's a 2025 vintage. Just about 12 months ago, we started the firm. My co founders, Adam Nan and I would spend the last decade investing across the Union of Life Sciences and Technology. Fundone was very much so at the intersection. So companies that were equal parts tech, equal parts life sciences. Fund two, we started to expand more. So the Union Fund three, it really is the frontiers of science and compute. So companies that are touching Silicon Next Gen GPUs CPUs for ML and AI architectures all the way through ML infrastructure and then on the science side, world models, NEO Labs, you know, really kind of pioneering both physics but also biotech and next gen medicines as well.

2:11:42

Do you think we'll see a coalescing of business models in the next generation of tech enabled bio companies, biotech companies because we're, there's an opportunity to be sort of really full stack, train a model, use it to develop a drug, take that drug all the way through the FDA approval process, use AI to write the applications and go back and forth and then own the intellectual property all the way. That feels like a lot of different capex muscles flexing at the same time. But maybe that is the future. How do you see it actually playing out? What's the, what's the common pattern?

2:12:32

You know there's a. My, my co founder Adam is Australian and he's, he has a want of saying horses for, for courses which for I think the North American audience here it means to each their own more or less.

2:13:10

So we're going to start using that for our North American audience.

2:13:21

Horses for courses for courses big in Japan or for example Chai which is I think you maybe had Josh or Jack on the show in the past. They announced the round that we helped to co lead with Index and Sequoia and Kleiner last week. They are very much so doing the latter when you describe selling their services as a SaaS product into pharma. On the other hand we have companies like New Limit that are developing similar ilks of technology but doing so with the express intent of developing their medicines end to end and one day actually commercializing medicines that affect aging and longevity.

2:13:24

Are aging longevity the hot topics because they're so universal or do you think you'll see more of the. I don't know if I'd call it the traditional biotech playbook but there's often this, you know, there's a whole pipeline of biotech companies that are targeting like there's 5,000 people that have this rare disease and it still turns into a billion dollar acquisition. And it's this odd pattern that doesn't really ever make it to the front page of Time magazine, but obviously has an impact, but both financially and medically on those people that were suffering from that disease.

2:14:02

I think both extremes are true. Earlier this year Revmed had a very stunning phase three result for their lead drug affecting patients with pancreatic cancer for the rest of humanity for 1000 years from now, 2000 years from now if you have pancreatic cancer, you should have a somewhat effective treatment. And that's really based on a biotech based in California that in the last six months developed and kind of show that clinical data. And that's stunning. Of course, pancreatic cancer that's not as prevalent as aging, which everybody has, or maybe obesity or something. At the same time, we are, I think, witnessing a revolution of what it means or a re underwriting of what it means to be diseased and even something like obesity or maybe 10 years ago or 15 years ago. Pharma and biotech, frankly, they didn't invest in these areas because they didn't consider it a disease. They consider it a behavioral problem.

2:14:39

Sure.

2:15:30

Today it's considered a disease and it's the largest drug on the planet. You're seeing it in areas like aging and longevity, inflammation, immunology, depiction. If anyone has atopic, derm or eczema, it's one of the largest drugs on the planet today. Twenty years ago, no one would touch that because diseases that were skin related weren't considered serious enough. So we are starting to see, I think, a redefinition of the types of areas where biotech and pharma can actually plan.

2:15:31

I'm sure you got asked this, you know, during the fundraising process, but what's your overall world view on investment opportunities around peptides as a category? You know, basically drugs that, that people are taking somewhat recreationally now, but have a bunch of different benefits that have, that are in a, you know, sort of continuous gray area. But what's your outlook on the category? Because there's billions of dollars of revenue there. There's some really interesting, exciting, at least indicators that they can have great impacts. But what's your view?

2:15:55

I take the red and the yellow shots on Monday and Tuesdays and the green and the blue shots and Fridays and Saturdays. And my wife doesn't.

2:16:36

I'm kidding.

2:16:42

I would not recommend this stuff to anybody. Look, there is a history of peptides and hormone mimetics as drugs. GLP1s Glyph ones are in some sense those. Exactly. Whenever you're sticking anything into yourself, you want to actually know what it is. You want to make sure that there's no impurities in it. We don't understand the biology, the mechanisms in many of these cases. And so I think even the scuttlebutt that you guys and I am probably hearing about the effort, efficacy or effectiveness of the SF tech community or the New York kind of tech community taking these things, my suspicion is that's probably more placebo than not. I'd be very careful about doing any of this. I certainly wouldn't myself do it, nor would I let my friends and family do it.

2:16:44

How do you think AI affects sort of like, I don't know if we call it repurposing drugs, but. But the big glp, one breakthrough for obesity was originally a diabetes drug. And there's been a few examples of drugs in history, many examples actually, where it started as a heart medication and it became erectile dysfunction drug. And it feels like in an age of AI, even if you don't get the super intelligence that can just imagine the cure for cancer, you at the very least could potentially test every drug against every indication, maybe more efficiently. What does sort of like cross application of biotechnology look like in the future?

2:17:32

I think two things are true. With ML and AI, we are better able to understand the root cause of disease, mechanism, pathway and kind of the industry nomenclature. And with a better understanding of mechanisms and pathways, we can repurpose molecules, whether they're biologics or peptides or small molecules, against those where we know that they are known to be effective. The other, which is simultaneously true. Historically, we have the vast majority of known targets for disease biology have been, quote, unquote undriggable. And so it's not a question of taking a shelled acid from Pfizer or Novartis or Lilly. It's a question of we just don't know how to design the molecules to actually perturb those proteins intracellularly or extracellular literally yet.

2:18:14

Sure.

2:18:59

My suspicion is in the next five to six to seven years with the companies in the, in the modes of the chais of the world, for example, we will have technologies to perturb what we want to perturb. And so we'll both be able to repurpose when there is a shelled asset against kind of our new knowledge of biology, but then also leverage generative AI and ML to create molecules to protect biology where maybe the shelled assets don't quite yet exist.

2:19:01

What letter are you most proud of and why?

2:19:26

Z. It's a good letter.

2:19:30

No, no, I'm talking about your letters. I'm kidding. Underrated letter.

2:19:32

In terms of letters that we have

2:19:41

published from dimension, yes, you published some beautiful letters, but maybe it's an idea. In a letter the chat was asked,

2:19:43

yeah, the what if we're right letter that was actually, you know, first written as a letter confidentially to our partners and LPs in Q1 of this year. As part of our annual 2025 recap. And we, we anonymized part of it. We took out some parts of obviously the financial information and decided to share it with the broader kind of entrepreneurial tech and science audience. I think it resonated with people, I think especially in this moment in time where there is so much tension geopolitically and technologically and from a class and labor perspective. So many things, so many things are happening and there's a lot of tension. And to maybe take a step back and say, hey, what, what's the good that's happening? If we're right in developing these technologies and sciences, how does that bend the arc of humanity and society for the better? That was fun to write. I think it got a groove with a good audience and so we're pretty proud of that. I think more people can be espousing and writing and you know, that, that sort of stuff.

2:19:50

Last question. How many cups of coffee a day do you drink? There's new reporting this as a 5.

2:20:45

15.

2:20:50

Good for you. 15?

2:20:50

Really?

2:20:51

Are you a coffee maxer?

2:20:52

I have my fridge cigarette.

2:20:55

There we go.

2:20:56

Cheers.

2:20:57

There we go.

2:20:58

Cheers, man. Yeah, I try to limit it to probably two or three. If I do have a cup of coffee after four, I'm probably watching until 2am okay.

2:20:59

So. Well within the healthy limit. Healthy guy working on health and AI. Well, congratulations on the fund.

2:21:07

Thank you so much.

2:21:13

Congrats to you and all your partners.

2:21:14

Yeah, on an absolute generational run over there. Would love to.

2:21:17

Looking forward to meeting more of your founders.

2:21:21

Yeah, we'll talk to you soon. Have a good one. Let me tell you about Railway. Railway is the all in one intelligent cloud provider. Use your favorite agent to deploy web apps, servers, databases and more. Well, Railway takes care of, of scaling, monitoring and security.

2:21:23

Up next. Up next, we have Chad Edwards.

2:21:39

We'll bring Chad in in just a second. Briefly, I'm going to tell you about this interesting screenshot from Reddit. An LLM stenography tool. Steganography tool. How do you pronounce that? Kind of neat with how the EU is trying to gain access to all communication. So basically you use an LLM to transfer transform your text messages, secret messages, they look normal, but in fact there's a decoded message. So on the left it says message to Bob. I got coffee downtown and it's actually pretty good. Thinking of what to make for dinner. Want to come help me cook? Overdid it on the soup yesterday though. And that is actually secretly encoded to mean they caught Matthew Last week, because he spoke against them. Explain how this works, Tyler.

2:21:42

Yeah, so it's not. The LLM is not actually doing the encrypting. Basically you encrypt it first using some standard process and then you get the output of that is like some ciphertext,

2:22:27

like a lookup table, basically or something.

2:22:36

So basically you encrypt it, you get something that looks like scrambled, like a scrambled string and you basically hydrate that. You have these bits and then you basically use the bits to determine which token you're going to use in the LLM. You basically need to use an open source LLM.

2:22:39

People are using John Exley in the chat, have been doing this for months, sending coded messages to everyone. Well, it is very cool though. I thought this was a cool idea. I think it's a cool demo. I don't know that it's wildly useful, but for certain people that need to send secret messages back and forth, go ahead. Also, they're calling North Korea noco, like it's the cool trendy part of town. I thought that was a funny post. Anyway, we have Chad Edwards from CUSP AI in the waiting room. Let's bring in Chad Edwards, the co founder and CEO. How are you doing, Chad? Welcome to the show. Thanks for having me.

2:22:54

Yeah, doing very well, thank you.

2:23:30

How are you doing? You raised some money. How much did you raise?

2:23:31

Look at this background.

2:23:34

How much did you raise?

2:23:36

That's the UK as a semiconductor chip. We raised $450 million.

2:23:37

Congratulations.

2:23:43

Anyone?

2:23:46

Anyone? I've heard of investors. It's a murderer's row. You got Jeff Bezos, you got a bunch of other folks in, right?

2:23:46

Yeah.

2:23:56

Kleiner Perkins, nea. There you go.

2:23:57

Congratulations. What are you building? Break down the business.

2:23:59

Yeah, so at cusp, we're building essentially a search engine for materials, so a generative AI platform where you can discover entirely new materials. And of course, it's not something we think about in our day to day lives, but everything we hear and talk about day to day, such as the pursuit of intelligence or the energy transition or the climate crisis. If you boil all of these things down to the fundamentals, there are material science problems. And for example, a semiconductor chip is around 60 different plus elements. It's 99.99 pure silicon. And so if we can come up with a better way to discover new materials, we can come up with better chips, we can improve the efficiency of solar cells and we can also work on climate technologies to leave the world a better place. And so they're kind of the core Focus areas for our company.

2:24:03

Yeah.

2:24:46

What's the most underrated new material?

2:24:46

Probably most room temperature superconductors, I would say. What do you think?

2:24:50

Yeah, I mean, there's a few teams now pursuing room temperature superconductivity. It's kind of the holy grail of material science. There's still some pretty interesting physics to be figured out along the way, but if someone can crack that, then the implications are huge. So yeah, let's see.

2:24:56

Is there a power law in applications of advanced material science broadly like battery technology would be by and far the biggest market if you could unlock that. Or is it sort of distributed? And there's so many applications, there's not necessarily one that you'll be focusing on in the short term.

2:25:08

Yeah, I mean the opportunity space is absolutely enormous. We could be sat here talking about the chip industry or the energy industry or climate. There's just so much opportunity out there. But I think what we've seen as a company is the semiconductor industry have basically pulled us by all four limbs in the direction of semiconductors. So we didn't set out to build the company as a semiconductor company. We've kind of built a platform that was horizontal and we felt the market pull in that direction. And again, it boils down to the very fact that with everything we're now seeing in AI, there's a real demand on the chips to be more performant, have higher energy efficiency and all of that fundamentally boils down to better materials. So if I had to pick one. Semis.

2:25:27

Yeah. So I mean, obviously huge market. Semis, massive market. Any application you have there will have huge demand. What is the capital intensity of the business? I mean, you raised $100 million Series A last year, now 450 million. Do you have compute costs, training costs? Is this just to hire the world's best material scientists? Is there a big data acquisition bill that's coming? What is the use of capital over the next two years look like?

2:26:07

Yes, obviously we're nowhere near the kind of frontier model LLM type expenditure. We don't need to train huge models like that. We train more domain specific models. And as part of that, of course, our three big kind of cost centers would be people. So hiring the best people in AI and machine learning, which is what we've been able to do and retain those folks. And we've seen some of the salaries that go around the world for people in that category. Now computer is another one. So we have a very big partnership with Nvidia and they're part of a Big announcement that we made yesterday. And then third and foremost is data generation in an experimental sense. Of course, we have to ground all of our work in physical experiments. And so we have a network of labs globally now where we generate data for us to train the models.

2:26:38

Would you vertically integrate there at some point to close the loop, build your own material science lab where you could prototype new materials and test them?

2:27:20

Yeah, I'd say never say never. But at the moment our thesis has been we can move much faster if we have a network of existing labs around the world. We can tap into them, we can get going very quickly. They have domain experts in those labs that know an awful lot more about the specific domain and we can't easily replicate that. And a lot of our customers, customers also have their own labs. So yeah, our model so far has been work with existing labs and customers that have labs and that allows them to move faster and us to move much faster. But who knows, maybe one day we say, hey, we're going to build a lab in a certain domain.

2:27:31

How do you think about value capture? It's very easy for me to imagine how you would create value for your customers, but if you help somebody discover a new material, that the application of that material could be worth billions of dollars, how do you make sure that it's a fair trade?

2:28:02

Yes, we've taken a very different approach to the business model. In fact, we're I think, genuinely the first to have done this in the world. And when we started the company and we pitched this business model to investors, they said, chad, forget about it. This is never going to work. You're never going to get big corporates paying you royal royalties on materials. And so for the first two years, I made it my mission to make sure that every customer contract that we have has royalties baked into it. So we've now proven the kind of biotech type model works. Now in material science, companies are prepared to pay you up front for the programs that you set up and then they're prepared to bake in a royalty at the end so that as that material goes into production, you can kind of share the upside commercial potential of that material.

2:28:26

Very, very cool. This is what I was asking, asking the founder of Chai Discovery who's doing AI for drug discovery. It feels very right now they just have a SaaS fee I think, but it feels very natural for them to get some type of royalty. They help create a hit drug. It's a win win. Great customer alignment there and it makes so much sense for your business and you end up building basically a portfolio of bets over time. And even if you have a handful of big winners, I can see how that would generate billions over time.

2:29:05

Yeah, exactly. I kind of see my job a little bit analogous to a VC in a way that we have a portfolio of materials and some of our materials are nearer term, they have higher commercial potential and some of our longer term frontier bets. And if we have a balanced portfolio, then hopefully our revenue projections and journey will follow a very, very steady trajectory. But I can also see merits of the approach that CHAI take in having predictable monthly incomes and subscriptions to software also carries your base revenue, whereas the program aspects can be a bit more lumpy. So I could see merits of both approaches.

2:29:41

Yeah. So why not both?

2:30:16

What you're doing, do you think that the next round KPI, or key metric that you'll be underwriting the deal against will be revenue? Or are there more like scientific milestones, benchmarks or sort of promising results where you'll be able to totally justify the next expansion pre revenue? Or do you think that the business will actually grow in the short term with actual revenue generating deals?

2:30:17

Yeah, so we've tried to kind of go against the grade in that a lot of deep tech companies take forever to get to revenues and so we've tried to be very commercial. Very early on. Before this, I built a quantum computing company which is kind of one of the most extreme versions of pre revenue. And so yeah, I've tried to be very, very commercial in this company from very early on and everything we do is grounded with paying customers. But I think I've also given up predicting when the next fundraise will happen because in every race I've said we're not going to race for another six to 12 months and then a few months later we've been preempted and there's a round coming together. So I don't know exactly what the next metrics look like.

2:30:50

Well, congratulations. I mean, I can't wait to talk to you in a couple of months when the next round happens. It'll be any day now, but you're always welcome.

2:31:28

Very, very cool business and business model and looking forward to the next conversation.

2:31:36

And what a great, what a great group of partners with all the companies that you've worked with. It makes so much sense. So good luck and congratulations. We'll talk to you soon. Have a great rest of your week.

2:31:40

Cheers, Chad, you too.

2:31:49

Goodbye. We have one last post. I want to go through. Ramp launched a model router. Braxton loves it. He says Ramp launching a model router is God tier product expansion. The winds are blessing it. The market is exhausted with token maxing proliferation of new models Sovereignty. This is the first time I've looked at a launch and went, wow, this might be the start of a new core product. Yeah, there's been a bunch of speculation about this, but it makes a lot of sense. RAMP's promise is to save you time and money. The CFOs are increasingly annoyed by token routing. We talked to Eric Lyman about this last week. Are you using the craziest Frontier model? Burning millions of tokens to answer the weather? Maybe that should have an expense report attached and so very, very exciting to see where this goes, how they roll it out. I know it's in alpha with a number of customers and I believe that the product's actually available to non ramp customers as well. So you can use their product exclusively.

2:31:51

Yush says going after everything time and money touches.

2:32:55

I love it. I love it. Anyway, thank you for tuning in. We will see you tomorrow Wednesday at 11am Pacific. Leave us five stars on Apple Podcasts and Spotify. Sign up for our newsletter@tbpn.com and we love you. We love you. Goodbye Clash. Banging the horse.

2:32:59

Sa.

2:33:27