SPEAKER_00: We don't focus too much on coming home after a long mission, to be honest.

SPEAKER_01: You know, it's anywhere from a few hours to potentially a day plus for the small vehicle. And then we're going to be announcing some bigger vehicles where you'll see much extended ranges. Also, the vehicles are fully modular. So you can kind of break it down and put it in a backpack right now.

SPEAKER_02: And the kind of benefit of that is you can add like an extended battery pack and stuff like that to get an additional range. But wow.

SPEAKER_04: So the SEALs could have these in a backpack. They land in some gnarly area. They send this thing out, it gets them a bunch of data.

SPEAKER_06: Then they can, it helps enhance the mission or they could make something go boom. Yeah. Yeah.

SPEAKER_09: It's a possible use case, or you could be a researcher hiking some remote lake and throw it in there and find Loch Ness Munster.

SPEAKER_10: Yeah, yeah, exactly. It'd be incredible legacy for the company, save Taiwan, find the Loch Ness Munster.

SPEAKER_12: I mean, either of these would be extraordinary accomplishments.

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SPEAKER_20: Hey everybody.

SPEAKER_22: Welcome back to this week in startups with me again, Alex Wilhelm. I'm Jason Calacanis. We're here to talk about technology and it seems like American dynamism and even Chinese dynamism

SPEAKER_24: is alive and well.

SPEAKER_25: People are building a lot of physical things in the real world and we're going to get into it today with a lot of robots and a lot of vehicles.

SPEAKER_26: It's coming fast and furious, huh?

SPEAKER_28: Alex. It's coming fast and furious. And I'm just very excited as a consumer because I feel like, you know, phones have become so

SPEAKER_30: relatively static over the years that I just want something new, exciting, a form factor that blows my mind. Something that kind of brings me that sense of joy that I had when I got my first smartphone back in like the original iPhone days. So I'm optimistic and that feels nice.

SPEAKER_31: All right.

SPEAKER_24: Well, before we get to surgery robots and robots running through the woods in a completely

SPEAKER_25: new format that I had never seen before from China, these robots chasing you through the woods in a dystopian hellscape.

SPEAKER_33: Um, let's talk about, uh, let's interview our first guest here, uh, and, uh, talk about what he's building.

SPEAKER_34: Yeah. So today on the show, we have Nelson Mills, one of the co-founders of a company called Vaten Systems that's spelled V-A-T-N.

SPEAKER_30: If you want to look it up, they are a company based here in Rhode Island, very proud to say,

SPEAKER_28: and they are working on underwater drone technology that will have both defense and commercial applications. And the company was just in the news because it raised a $13 million seed round led Jason by DYNE or DINE ventures. Nelson.

SPEAKER_06: Hey, Nelson. How are you guys?

SPEAKER_43: Great to be. Um, thanks for having me on.

SPEAKER_06: Maybe we could pull up a video, uh, and some images of what you're building and you can just walk us through it here for the audience. Show us what you've built and walk us through.

SPEAKER_45: So right here, you're seeing, um, our engineers out testing and, and working through, through

SPEAKER_01: the vehicles themselves. So we are seeing here as a man, portable vehicle being carried by our CTO right there. And now it's running through the water. Um, but you know, our first product we call the, uh, Torsk on the commercial side or the Skelmure S6 on the, uh, um, defense side. And it's, uh, six inch diameter, really lightweight and a fraction of the cost of existing options with the ultimate goal of really building them at scale, which we're going to start next

SPEAKER_48: year and making it easy for one person to deploy a whole bunch of these, um, and yeah, really control, you know, a multitude.

SPEAKER_50: So these Torsks look like torpedoes, but these do not have explosives in them.

SPEAKER_25: They look like a little missile, but I noticed the person putting them into the ocean from a dinghy. Uh, they look like they were in a Zodiac needed only pick up two handles and drop it in the water. So they are apparently pretty lightweight. They look like they're about six, I don't know, seven feet long. Yeah.

SPEAKER_22: And, uh, tell us about what the mission is for the Torsk T O R S K.

SPEAKER_55: Yeah. So Torsk is our, uh, our commercial variant, um, mainly carrying sensors.

SPEAKER_01: So it could be anything from side scan sonar to passive acoustic to other forms of environmental, uh, monitoring, uh, even like cameras go, you know, collect data on the seafloor, whether that's for, you know, say offshore wind oil and gas, um, you know, Noah go. Collect environmental data researchers, but I'll be honest. 95% of our focus right now is defense. And we're really working on, uh, the scale near S six, which can also carry a variety of payload. Some of them are similar, you know, sensors, but we, uh, at the end of the day, built the

SPEAKER_02: truck and it's up to the customer to, uh, decide what, what payloads they want to implement and deploy on the vehicle. Right.

SPEAKER_28: And are there other defensive applications, apart from just putting an explosive at the tip of it, as you would in perhaps a traditional torpedo Nelson?

SPEAKER_34: Like, are there, I don't know, can it like launch stuff on its own out of the water, like smaller drones? I'm curious what you can put into it.

SPEAKER_09: Yeah. I mean, it's really the bounds of your imagination.

SPEAKER_01: So we we've done sensors, just go like, look for objects, clear beaches. We've put on, uh, various electronic warfare modules. Uh, so make it look like a decoy, whether it's an underwater decoy or pop up on the surface. And suddenly it looks like there's a ship there. There's a whole, whole bunch of use cases where it still makes sense as a, you know, an intritable system, right? That you, you, the military can send it out. It can go do a non-kinetic effect or collect some data, and then they don't have to worry about risking people's lives to get it back. And that's really kind of the big motivating factor here is that our, our underwater systems are way too expensive.

SPEAKER_28: Break that down for me, cause I'm presuming that this is usually a defense contracting boondoggle. So what does, um, the military variant of a Torsk cost and how does that compare to an existing system that you might buy from an existing defense prime?

SPEAKER_01: Yeah. You know, our, our price point is around, uh, 75 K. Um, and you know, for a defense prime, you'd be looking at 500,000 plus dollars for an equivalent system. Yeah.

SPEAKER_69: So are they just stealing our money?

SPEAKER_01: I think there's just like a ton of inefficiency built into the, the system and their approach to it. And you know, the kind of whole cost plus contracting methodology. Right. And this is really what, you know, defense tech is about. It's like upending kind of that methodology. And then also like all those underwater systems, like the underwater drone market is 10, 15 years behind other drone markets. Right. And you know, they're all come out of research. It's like a researcher built one of these. And now they're trying to build a few a month, but it's never been built for scale production. They haven't done the things necessary in order to get the cost down. And from day one, we're, we're going to build thousands of these, and we're going to vertically integrate the key components that lets us significantly reduce our bomb. In addition to just like the sheer quantity.

SPEAKER_28: Jason, this company has some of the fastest product velocity I've ever seen used one of your favorite things. So a year ago, they were just deploying their first AUV and now they've already moved from prototypes to fully operational systems, which I thought was incredibly impressive speed.

SPEAKER_22: Yeah. And what a great price relative to what military contractors spend on similar devices.

SPEAKER_76: And this speaks to how conflicts are changing. You have people using drones in the field, quadcopters. We've seen that in Ukraine. We're, we're hearing about it in a possible conflict with China over Taiwan. So not having to recover the tusk is a main feature of this. It can just be used to collect information. If the enemy captures it, if it sinks to the bottom of the ocean, it's not as big of a deal

SPEAKER_25: as a, I don't know, a hundred million dollar plane or $25 million boat or whatever it happens to be. Yeah. Or a billion dollar sub or a billion dollar sub. Right. Yeah.

SPEAKER_24: And so these things could collect what a sub could collect. How deep can it go? What's the range like? How is it powered?

SPEAKER_66: Yeah. And I'll, I'll, you know, be upfront. It's, it's not a direct equivalent for a sub, but, um, you know, what we're doing is

SPEAKER_01: focusing on the top 300 meters of the water and really producing effects and collecting data on littoral and kind of the top, top part of the ocean environment. There's a lot of people who go deep and that's another way we really save money and differentiate ourselves. Yeah. That's, that's kind of the, the primary, primary focus there. And there's really, yeah, like a big opportunity. And if you control just underwater, you basically control the surface. And that's generally like our philosophy, giving the military, the tools to spread kind of control, I guess, control or power underwater. Um, and we really like, you know, we're building something like a hundred drones a year, maybe underwater drones a year in the U S right. Like, uh, in terms of actual military drones. Oh yeah. Yeah. Total.

SPEAKER_82: That's a pathetic number.

SPEAKER_28: That's like backyard numbers. Uh, but going back to the depth point, does it go only going to 300 meters? Does that allow you to go faster underwater? I'm not sure about the, the result of more water on top pressure.

SPEAKER_85: And if that slows down travel and also increases in efficiency in terms of drag.

SPEAKER_09: And it doesn't necessarily limit the speed you can go, but it is another kind of a differentiating features is that we, we go a lot faster than a traditional UUV.

SPEAKER_01: We don't go as fast as a torpedo, but we live in that space between UUV and torpedo and can really conduct a variety of, of missions. And we're not, we're not limiting ourselves to, to just one. Your typical, uh, UUV right now cruises at like three to five knots. And, you know, some of our vehicles can approach 30. What, what is the UUV unmanned underwater vehicle, unmanned underwater vehicle.

SPEAKER_76: So that's the category UUV you're making one that goes particularly fast. So this would go faster than, uh, a ship would be able to go or a submarine.

SPEAKER_91: If it was on the surface or similar, it depends on the, the, the ship. And, um, you know, there's, there's, we have, we, uh, yeah, ships in the U S military

SPEAKER_01: that go really fast and subs are, are quite fast too. We're not necessarily trying to go after that. Think of like the kind of effect of the, you know, the PRC is 10,000 maritime militia vessels, right. That are just like basically armed fishing vessels. Like what do we do about that?

SPEAKER_97: Hmm. They, they're not fast.

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SPEAKER_107: Now that we're on the CCP and their Navy, they've been really increasing the size of their Navy.

SPEAKER_06: And I guess that's part of the premise of your company. So I was just curious if you could educate us, the audience as well, just on the state of the

SPEAKER_107: tonnage and the number of vessels and the type of vessels that China is investing in. Because obviously they've got a pretty large southern coastline there.

SPEAKER_22: And that area is the South China Sea, I guess, is a big debated area where we think the next

Chamath Palihapitiya: major theater of war could occur. So maybe it's just broad strokes. What are we dealing with?

SPEAKER_66: Yeah, I'm not necessarily an expert on the CCP's Navy, just to be upfront. But, you know, the U.S. Navy has significantly more tonnage.

SPEAKER_01: But in sheer number of ships and kind of spread in massive ships, the CCP has been building rapidly. And, you know, I think one of one of the issues we have in the U.S. is like if a conflict happens, we can't produce our ships, our core systems fast enough. Right. So what what is the solution? And part of that, you know, the thing we can build fast enough or we'll be able to build fast quickly is is drones of all sorts. Surface, underwater, air, etc. But there's really no no platform manufacturer of underwater drones in the U.S. right now. And that's what we want to be and want to do. Right.

SPEAKER_28: So where are you going to build them? Because I know you're based in Portsmouth, Rhode Island, and I'm going to say Rhode Island as many times as I can on this episode, just because I'm proud. But I'm curious if we have enough space and industrial capacity in our little state to actually support, you know, making thousands of these a year. So do you have to expand elsewhere in the U.S.?

SPEAKER_01: Yeah, we can we can build thousands in Rhode Island. And we're planning to like we're already we're already working on it. I think, you know, as you approach larger maps, we probably will start to work with other states, too. But, you know, Rhode Island's an awesome place to be. There's great infrastructures here for for manufacturing, actually, and for defense. So, yeah, we're excited about it.

SPEAKER_116: To explain that we build submarines in Rhode Island.

SPEAKER_28: So we have a lot of the, you know, boat contracting world set up here. People don't know that now they do. Yeah, I'm very excited. Yeah, exactly. And my other question is about tonnage versus swarm. So you told Jason that the U.S. Navy has more tonnage. I presume that's mostly held up in our aircraft carriers, which are enormous and nuclear powered and so forth. But just as a drone can take out a main battle tank, I presume that an underwater drone can, you know, undercut the power of a heavy traditional weapons system. So does the ability to build lots of these underwater drones obviate the concern that we have about American shipbuilding capacity compared to China? Because it seems like this is a better, cheaper, faster way and doesn't risk our sailors' lives.

SPEAKER_86: Yeah. I mean, it's part of part of the solution, right?

SPEAKER_01: You know, I don't think we're getting rid of main warships anytime, anytime soon. And they, you know, have a significant place on the battlefield. But our goal is that we can take our warfighters farther away from the action with our vehicles. And we've seen how effective they can be in the Black Sea, right? Like that's been, you know, kind of a battle lab of maritime drones. And they've been mostly using surface vessels, which are, you know, a little bit more prone to interception and they still had great luck against these, you know, multi-hundred million dollar systems, you know, destroyers and et cetera.

SPEAKER_123: Could we say like a GoFundMe to buy stuff from Vaughton Systems if we can send them over to Zelensky? Because, you know, I'm in, I'm in for 50 bucks.

SPEAKER_48: Yeah. I have to consult my lawyers on that one. Yeah.

SPEAKER_22: So talk to us about raising money for defense tech, because this seems to have been something 10 years ago, the entire technology industry was maybe, or the majority of the technology industry and venture capital industry wasn't going near this. And then they start Andrew's success and some other hardware successes, SpaceX, obviously being the tip of that spear. And now all of a sudden venture capitalists are like, hey, there's something here. It's not outrageous to give $13 million to a crazy team in Rhode Island to think that they compete with government contractors. So maybe you can talk just a little bit about the climate around defense tech startups and

SPEAKER_129: your experience raising.

SPEAKER_09: Yeah, no, I mean, there's no better time, I think, to raise in defense. And I don't think it's going away anytime soon, might reduce, there might be a little bit of a bubble, but I think the core of it is that defense is here to stay as a category in venture capital.

SPEAKER_01: But you're right. I would argue even like less than 10 years ago, I can remember, I mean, I was an investor before this and 21 even, yeah, like 21. I don't remember anyone talking about defense, right? I think the Ukraine conflict and seeing the impact technology can have there is really what threw on the kind of afterburners or whatever on this segment. I think Andrel did pave the way, but they were the lone voice in this space for a long time. Other people might have been doing defense contracts, but it was kind of something you didn't talk about, right? It's like, oh, we're doing this, but we don't want to tell our investors or anyone else, right? Or something like that. But yeah, that's completely the, the switch has flipped and I think it's great. I mean, I think there's going to be a lot of companies and funds that, that, that fail in this space, but that's venture capital, right? Like, uh, there's going to be a lot of great success stories and there's going to be companies that fail through no fault of their own. There's going to be, you know, companies that fail for through their fault and every, uh, every which way.

SPEAKER_22: Well, I mean, it, it is, I think if we're going to win the war and I hate to, you know, wax poetic here about capitalism, like I'm prone to do, but in an authoritarian government, you know, a dictator can say, uh, I'm going to just take these million people, put them in a slave camp and tell them to build what I want them to build. And that seems like a really amazing feature for their society to be able to use imminent domain and unlimited unchecked power to just accomplish goals.

SPEAKER_24: And then, you know, you, you look at a democratic process, which is quite messy because we've seen in the last week or, I don't know, last decade. And so we can sit here and say like, oh my God, we're wasting time. We're wasting him. But freedom and capitalism, democracy plus capitalism feels so messy and chaotic.

SPEAKER_107: As you just described, Hey, a bunch of these companies are going to die because they're incompetent, but also through no fault of their own. But a bunch of the smartest and brightest people who are given the job of capital allocation,

SPEAKER_24: meeting with all these teams and saying, Hey, which team do I want to back and why? And then those teams trying to convince those people, Hey, here's our strategy.

SPEAKER_33: And here's what we've done. Here's why we're the best team to, to bet on that. Basic competitive, dare I say, selfish, uh, approach that you believe you actually have the best solution and you believe you can bring the best team together and you can beat the other competitors on the playing field. You know what? That's very hard for a dictator to deal with because you can put a gun to people's head and say, build, but the motivation is going to be fear as opposed to a motivation, which is

SPEAKER_24: opportunity and pride and competitiveness. And that's just absolutely. I know it's out of fashion to say this, but competition and excellence is pretty awesome.

SPEAKER_22: And I just want to applaud you for, for doing this. Uh, you could probably do something easier as a venture capitalist and start a company and you were in investing before this, but I think that this could be, you know, what you're doing this entire movement. This could be the difference between democracy increasing and democracy decreasing in terms of the number of people who are living in a system where they're allowed to vote and

SPEAKER_24: they're allowed to argue over their votes and did their votes count and how should their vote count, we are so narcissistic and entitled that we have no idea how great it is that we can sit here and pick a leader and we can sit here and debate our voting. It's just a beautiful thing.

SPEAKER_140: I don't, I don't know if there's a question in there, but I, I, I, I just felt like I needed to get that off my chest. But yeah, I agree completely.

SPEAKER_01: I mean, part of the reason we beat the Soviet Union was because of the failure of their command economy, right? And our ability to, to innovate and, and, and grow and, and outspend. It's the same thing here. Like I, I always say that like defense technology is necessarily about winning awards about preventing the next war, right? It goes back to like a fundamental Sun T quote of like, don't conduct a war until you know you can win as long as we're innovating and putting the best technology on the field and can show that we will be a really tough opponent. And they don't know if they can win. Our adversaries don't know they can win. Then there won't be a war, right? At least I don't think there will be.

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SPEAKER_28: On the war point, there's two things that I want to make sure we hit on before we let you go, Nelson. One is autonomy. I know that you guys are building something called Instinct, which is going to be out

SPEAKER_75: in 2026, which is self-driving for underwater drones, I believe. And then also we're talking a lot these days about swarming technologies, usually in the air, but also now in the water. And I presume that autonomy underwater is going to be clutched to actually having these drone swarms in the seas.

SPEAKER_09: Yeah, so Instinct is actually just our inertial navigation system.

SPEAKER_01: And 2026 is it's released as an independent product, but it'll be in our vehicles much sooner than that. I mean, it's already in our vehicles, but we do our full stack of our own autonomy and our own swarming software, right? Really single agent and multi-agent autonomy. And underwater is a space where it's autonomy first, right? Like we have no way to control these vehicles, like if they're fully autonomous, um, once they go underwater, you can't, can't really communicate with them. You can send like stop or like a new command or something like that, but underwater comms are really limited.

SPEAKER_76: So it's, it's kind of cool with that, um, tragedy with going to the Titanic.

SPEAKER_24: Um, most of the time when you send something into the deep water and you go a thousand feet deep or more, you, you can't communicate, I guess, unless there's a tether or there's some technology that lets you send a text message underwater, explain to the audience.

SPEAKER_107: I mean, we obviously understand there's a density of water. It's hard to send signal over the air. It's pretty easy, but the density of water makes it near impossible. So what's actually occurring there when you try to communicate with one of these things and it's a thousand feet down.

SPEAKER_150: Yeah.

SPEAKER_01: So we, we use, um, kind of off the shelf acoustic communication technology. It's just scale to a comms for short. And with that, you can send, like you said, text messages, it's like kilobytes per second. Um, and you're typically range limited one to eight kilometers. Now there's some really cool technology and startups in the space. And I think that's going to improve quickly, but at the same time, like you run up to some barriers in physics, right? Like there's really cool, like light-based comms underwater, but you know, you're talking about 100 to 200 meters. You can stream video, but like you can't, can't take it very far. Um, um, just the diffraction of light and water, you run into the barriers of physics. Honestly, I think it's like good for us as a company because, you know, we can't pretend or we can't start with like, oh, this is operated. Like from day one, we have to be autonomous and yeah, you're going right to level five.

SPEAKER_151: There is no safety driver.

SPEAKER_22: There is no mission control specialist with a joystick who can take over for these things when they're at a certain depth. But I assume they can talk to each other, you know, uh, easier than talking to the services on the surface on some missions. So that is kind of interesting that they could create some sort of a mesh network. Perhaps if you add 20 of these things and each were at different heights, they could communicate

SPEAKER_76: with each other. And then the final one could communicate in a, in a, in a faster way with the surface. Yeah.

SPEAKER_155: Yeah, exactly. You hit the nail on the head. You know, one can be on the surface and act as that relay or an unmanned surface vessel,

SPEAKER_01: or even a manned surface vessel can act as that relay to underwater and communicate with a swarm or a mesh, mesh of the vehicles. And the vehicles themselves can also act as a kind of an underwater comms relay. That's really hard, hard to jam. That's another kind of our, of our use cases. Lots of interesting things you can do, um, on that, on that front. And, you know, we do use the a comms for the vehicles to coordinate among themselves too.

SPEAKER_111: And that's kind of how long of a mission can they last for? Because there was a cell drone company. I remember, I think Chamath maybe had invested in it.

SPEAKER_04: It had solar. It was a surface base vehicle. They could go all around the planet.

SPEAKER_22: I'm sure you've seen it and collect information, uh, with yours, I'm assuming there's some sort of battery pack in here, but how long is this thing going to be able to go for? And then if they complete their mission, can they go to the surface charge up with some

SPEAKER_24: solar and then come home eventually? How does it work?

SPEAKER_00: Yeah. Um, we don't focus too much on, uh, coming home after a long mission, to be honest, but, um, uh, we, you know, it's anywhere from a few hours to, uh, potentially a day,

SPEAKER_01: a day plus for the small vehicle. And then we're going to be announcing some bigger vehicles where you'll see extended, very much extended ranges. Also, the vehicles are fully modular, so you can kind of break it down and put it in a backpack right now. Um, and kind of benefit of that is you can add like an extension.

SPEAKER_02: Added battery pack and stuff like that, get an additional range, but, um, wow.

SPEAKER_04: So the seals could have these in a backpack. They land in some gnarly area. They send this thing out.

SPEAKER_06: It gets them a bunch of data. Then they can, it helps enhance the mission or they could get something. Go boom. Yeah.

SPEAKER_09: Yeah. It's a possible use case, or you could be a researcher hiking some remote lake and throw it in there and.

SPEAKER_10: Find Loch Ness Munster. Yeah. Yeah, exactly. It'd be an incredible legacy for the company.

SPEAKER_12: All right. But save Taiwan, find the Loch Ness Munster. Exactly. I mean, either of these would be extraordinary accomplishments.

SPEAKER_165: Yeah.

SPEAKER_34: I want to do one more question, Nelson, before we let you go, because you just mentioned size and I'm very curious because what you're currently building is cool.

SPEAKER_28: Cause you can carry it around. It looks like a torpedo. But how big will gen two and gen three be of what Vaatn builds? Because I'm curious if this gets to like half sub size.

SPEAKER_85: Yeah.

SPEAKER_167: We're not, we're not going crazy big, um, but more will be released next year. You guys can have me back. I'll tell you all about it next year. I'll have you back when you, uh, debut it.

SPEAKER_04: Listen, continued success with this. It's a super important. And I think just, you know, as Americans, it's just a great feeling to know that there

SPEAKER_22: are teams who believe in protecting the country and protecting democracy. I know some people are, you know, at this, we're all for peace, but peace through strength is, I think what this is going to take.

SPEAKER_06: And we all know full well nukes, uh, you know, are one level of deterrent, but man, if we get into one of these serious conflicts and we have to, we, we need to have a different

Chamath Palihapitiya: type of equipment for the same theater, but it's going to be a very different movie. Isn't it?

SPEAKER_01: Yeah, exactly. We've been living in, uh, Pox Americana since, you know, since World War II and we need to keep that going. Yeah.

SPEAKER_111: Yeah. Peace through strength.

Chamath Palihapitiya: Uh, and, uh, we'll see you soon, Nelson. Thank you so much for coming on. Thank you for having me on. Yeah. Continued success.

SPEAKER_22: Oh, and are you hiring right now?

SPEAKER_172: We are hiring a ton of people.

SPEAKER_22: So what's the, what's the difficult position? Cause you know, we, we always do a good job of helping people find elite talent.

SPEAKER_09: Yeah. I mean, if you're an amazing, uh, inertial nav engineer, guidance, navigation, pro engineer, you know, come email me, you know, check out our website.

SPEAKER_173: There is somebody listening who knows somebody works in guidance and, uh, who

SPEAKER_111: would love, love to live in the Northeast, Rhode Island, an incredible place. Uh, awesome.

SPEAKER_174: We have a great GMC team and looking to add some, some awesome folks to it. Awesome.

SPEAKER_111: We'll talk to you soon.

SPEAKER_177: Well done. Talk soon.

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SPEAKER_107: I just love this new format we're doing where we, we get these, uh, entrepreneurs on real quick, talk about what they're doing and then get right to the news. This format of, you know, interview, then getting into the news.

SPEAKER_185: We get to be super efficient for those of you who listen three times a week, four times a

SPEAKER_57: week. Yeah. It's, it's funny though. Cause it always forces me to, to learn a lot while we get these people on prep them, go

SPEAKER_30: through the graphics, figure out the technology. And then I do all this work, Jason, to know good questions to ask, to help explain to the audience. And then what I do is I go off script and I try to explain ocean physics in the middle of my question about drag and make a complete horse's ass of myself. No, you don't.

SPEAKER_76: You don't. I mean, one of the great things we can do here, I think is, you know, get people information

SPEAKER_22: efficiently. And, and I think the American dynamism movement, and, and if you listen to this pod, you're just going to understand the trends because that's what we do for a living is just try to understand where the puck is going and skate to that place. What you're seeing here is hardware is hard. However, venture capitalists are starting to learn which hardware categories could build a sustainable business.

SPEAKER_24: Now, if you're in the consumer space and you build something, that's a commodity, like a

SPEAKER_22: webcam, it's going to be very hard for you to compete against what will eventually happen, which is the same factory in Shenzhen that makes your nest camera is going to make literally a $29 version of what you're selling for 299.

SPEAKER_76: And they're going to take the bottom half of the market. And they don't care if they have a 5% margin and you're trying to operate with a 50% margin, 30% margin, et cetera.

SPEAKER_06: But VCs also know that platform companies that have customers with deep pockets and complex problems, you know, those are more sustainable. And so I brought up density, we had them on the show recently, Andrew, with the hockey

SPEAKER_107: puck called the waffle that does people counting, but they're building an entire platform. When you build an entire platform and you solve a really important problem, which is like

SPEAKER_06: understanding the density of space and how space is used, this is a lot at stake, your company will survive.

SPEAKER_24: But when they started that company density, Alex, they were at a Phil's coffee in San Francisco, just counting the number of people coming in and out. And the potential application was knowing how busy it was, which by the way,

SPEAKER_06: Google does now by just tracking how many phones go into a location. You know, it's not spyware exactly, but it's not exactly not spyware. They know how busy a place is based on the number of Google maps, people who just entered it. So your, your data is being put to good use. So, you know, I don't know if you've ever seen that. I have the little chart on, uh, how crowded is the place that was original vision of density and it got solved by, you know, uh, the Android operating system, having Google

SPEAKER_107: maps ubiquitous, putting all that aside, it hardware is hard, but if you pick the right customer and you have the right VCs, they can help you manage it. And that's what we're seeing here. Only 13 million to start a defense contractor. Oh, yeah. It's pretty amazing. But when you think about it, how many people do you need? And that's the second trend I wanted to build up, you know, hardware is hard, but is one trend. Okay. We all know hardware is hard, but there's a caveat there when it's, when it's possible. The second piece is commodification of sensor technology, you know, the cost of the batteries he's putting in there are really cheap because of electric vehicles and Tesla, Tesla's vehicles and electric batteries in there are very cheap because of iPhone batteries hitting scale. And iPhone batteries are very cheap because, uh, previous to those laptop batteries got better and better. So you can watch laptop batteries give way to electric vehicles, give way to iPhone, and now give way to these. He doesn't have to do anything in GPS batteries and, you know, with 3d printing and a team, you can, and we have a company desktop metal or investors in, uh, that lets you do 3d printing of metals and all kinds of different fabrication. All that technology is now getting to the point where prototyping the stuff and even building commercially viable things can happen at much smaller scales with less investment.

SPEAKER_28: Yeah. And I think the margin point is super critical because your webcam example is great. There's very little margin left there. Desktop computer monitors. Dell has crushed that very little margin, no point going after that. But when he told us that these same technologies cost $500,000 from a major defense contractor and they're doing for 75, that's a hell of a lot of margin to go attack. And what did Jeff Bezos say about margins? Well, there are opportunities if you're attacking them.

SPEAKER_204: So yes, your margin is my opportunity was the quote. Yeah.

SPEAKER_28: Yeah. I'm really excited about this, but let's get the hardware theme going. Yeah, please.

SPEAKER_30: Jason, you have found a plethora of interesting bits of technology in the last couple of days. We have compiled them and we're going to start with my second favorite, which is LG's new stretchable screen. Now, if you're not familiar with stretchable screens, it turns out these have existed for a while, Jason, but they only had like 20% stretchability. Now LG's can do 50% stretching from 12 to 18 inches.

SPEAKER_116: I think this is super cool, but I wonder how expensive it is to make, but I think it's awesome.

SPEAKER_207: You know, the, the reason I shared this was because they're really starting to make progress on monitors and, uh, screens.

SPEAKER_06: And if you look at the foldable phone movement that went from being like science fiction to, you know, every time I go to a meeting, especially in the middle east, by the way, people had these

SPEAKER_76: because there's, um, Android is loved in the middle east one. And number two, uh, there is a status culture. Um, these are incredibly high end consumers who love to buy the latest gadget.

SPEAKER_24: They're incredibly tech savvy. They're very plugged in. And I noticed so many people had the, I think it's, um, Samsung. And then the pixel had the ones that open up, but then also have like a third screen on the front.

SPEAKER_107: I looked at that and I demurred when I saw the price, like these were like two grand. Yeah, that's a lot to, you know, get like another screen that, you know, whatever. Anyway, putting that aside, I think the foldable stuff is kind of gimmicky. What it's getting close to being interesting. What I like about this is I believe this is going to open up wearables in a major way. Yeah. So whenever they show these, the thing I think that's going to really be interesting is when you have a jacket or a bangle, you know, like, you know what a bangle is? Yeah. You ever heard of a bangle? Yeah. It's like a thick bracelet. Yeah. Yeah. You know how you look at your watch, you get this little tiny screen, but imagine if your whole forearm give you information or you held it. I'm, I'm holding my palm up now. And so you and I are in a conversation. I've got my, my hands in front of my face right now for those listening.

SPEAKER_24: And I'm looking down at my arms. You're going to have AirPods in to talk to you.

SPEAKER_22: You might have glasses on to interpret the world and you might on your jacket. Why couldn't Apple make a jacket? They're really into fashion now, right? They made these very fashionable wristbands.

SPEAKER_24: They made a jacket that had an iOS screen where you could get your, just your notifications and just swipe them back and forth. This is coming. And you know what? If you, if you want to look it up, there's military applications for a long time. Discreet communication, covert communication without breaking reality communication.

SPEAKER_107: And this is happening in AirPods right now. I told you the story of these AirPods fours have a game changing feature of all game changing features. It says notification from Alex, from Slack production room, read it. And I go like this and I nod. And when I'm on my hike around the ranch in the morning, when you post the docket for today, I nod and I, it gets read to me, this is fascinating. I don't have to take my phone out of my pocket and I'm getting informed and I'm still doing my

SPEAKER_76: hike. I think this will be the application for these is going to be really curving these onto either furniture or clothing. You can have like a really, a lot of interesting applications are coming for this technology.

SPEAKER_28: I think it's ready to cars. There are people are going to wrap their car and you know, these flexible screens and they're going to be incredibly loud and annoying and not tasteful. And I'm excited about that because I love crass.

SPEAKER_30: We just put a flagpole on our house, uh, just because we wanted to, but why do I have to swap out my flags? Why can't I just have a flag made out of, you know, screen and then have it do whatever I want. So I'm very excited about this. LG is a South Korean company. If you want to look more into this, there's notes all over the web. Hard recommend. Um, Jason, why don't we next talk about the robot you teased? Cause I feel like we shouldn't leave people hanging, but there is a robot that is a dog shaped, but acts a little bit more like a quad.

SPEAKER_69: You might drive around the ranch.

SPEAKER_22: This is super interesting. Uh, what we're seeing here is from deep robotics. They announced a new quad route model quadruped quadruped. Oh, okay. There it is. Quadruped. Yeah.

SPEAKER_24: So there's a quadruped.

SPEAKER_76: What's interesting about this one is it's got wheels. It looks like the dog one that walks around that we've all seen a million times from Boston dynamics. Other people have it.

SPEAKER_24: Yeah, but this one has the ability to stand upright and roll down steps. And literally this thing can just fly down a mountain, you know, on a trail with rocks that a mountain biker would need to have some dexterity to do.

SPEAKER_107: And I guess because of the way it's designed and the flexibility can go extremely fast, uh, and flip itself over upright. It can lower itself to get better aerodynamics, et cetera. And again, back to warfare, you can imagine. You know, these things chasing a platoon and boom game over. I think it's going to be a staple in warfare. I don't know other use cases for this. If you can think of them, I would think search and rescue is going to change forever because you could probably drop this from a helicopter.

SPEAKER_33: Now imagine somebody is lost in the woods or somebody has been injured, a plane. You could drop 10 of these things in 10 different ravines and just tell it, search. Yeah.

SPEAKER_107: If you find a human, take a picture and send your GPS coordinates and, you know, finding people lost in a forest fire and sending firefighters out, that's over. You just send 10 of these things in. Yeah. They're going to be able to search for 24 hours, 48 hours. And, uh, if you lose a couple to the fire, no big deal. You lose a couple of firefighters. That could be somebody's mom or dad or brother or sister.

SPEAKER_203: So yeah, I just think this has got a really, some interesting missions. Again, when we talk about these technologies, I like to think about what's the mission.

SPEAKER_28: Yeah. What I love about this is it's a combination of stuff we've seen. So you're right. It is essentially like the Boston dynamics robot dog, but with wheeled feet, which makes it able to

SPEAKER_30: flip over and turn around, which makes it kind of emulate those old children, children's RC cars

SPEAKER_75: that had four big wheels and could flip over and didn't matter which side was pointed up. It's kind of like a combination of like advanced military technology and children's toys brought into one package.

SPEAKER_28: But Jason, these are just back to the Vaatan example, mobile sensor platforms, like basically whatever you want to do with them, they can go out and do it for you because they're not restricted by

SPEAKER_30: height gaps. You know, if they run into a log, they can just go over it. No need to even worry about balance.

SPEAKER_28: I think it's really awesome. And if you're curious about deep robotics, I did a little research. They are based in Hangzhou and they're actually called something else in Chinese, but they go by deep robotics on the English web. And I don't know how much they've raised, but they did disclose a B plus round series B plus, which I think translates to a series B extension, but mostly the information on them is in Chinese.

SPEAKER_234: But I hope after this viral moment, we do learn more about the company because certainly I hadn't heard of them and now that I've seen them, I want to know a lot more. I love it. Yeah.

SPEAKER_235: It's a pretty cool stuff coming out of China.

SPEAKER_06: And interestingly, it dovetails with our, with our, our guest Nelson earlier that how war occurs is going to be how many of these, uh, swarms can you build, not just how many of the units, but like if a swarm equals a hundred of these, how many hundreds can you build? And, uh, that's the new tonnage is the number of swarms. And if you could swarm, can you imagine 10,000 of these things landing on the beaches in Taiwan? I mean, this would be crazy. Um, and I was, I was looking up, you know, famous battles, right. And, uh, you start thinking about landing on the beach in Normandy. Sure. Or, uh, some of the other Pacific battles that were notable, uh, with the Japanese, these things would have changed everything, uh, about those.

SPEAKER_107: And so that's, I don't know what you think, but it, does this mean less humans die? Can we just send our robots to fight each other? You're, you're a fan of the science fiction. What did science fiction people think? I hate to put you on the spot. I know you got a lot of knowledge in space, but again, I'm filibustering to give you a little time. But, um, do more or less people die when we build these swarms and robots?

SPEAKER_28: Well, you're essentially asking, uh, will more civilians die? Because if we replace individual soldiers with robots, yes, that will limit, in theory, combatant deaths. But if we have a robot swarm versus robot swarm battle in the middle of a town, civilians are going to get shot to pieces. So I, I think, yes, in terms of limiting, uh, the military casualties, people in the army, the Navy, the Marines, et cetera. But I don't know if this would actually limit overall loss of light. On the science fiction point, uh, two things come to mind. One is the Asimov world of robotics and the rules thereof. He wrote famously, the three rules of robotics. None of that applies here because that is all about how robots cannot harm humans. Whereas here, I feel like we're talking about how robots will be able to impact human conflict. So I don't think that applies. The other thing that comes to mind is the forever war, which is by, um, I'd had to look this up, Joe Haldeman, uh, which describes how humans will handle not just future conflicts, but also future interstellar conflicts. And the lesson from that book, at least as far as that author put it together, was that humans would remain pretty central to, to human warfare. So I'm sure there's other examples than science fiction universe, Jason. Those are the two that came to mind first, but I think it's still an improvement to have robots killing robots with some civilian casualties than to have humans killing humans with some civilian casualties.

Chamath Palihapitiya: I know that sounds a little macabre, but I hate to, um, give any spoilers here if you were going to read Ender's game, but isn't the concept of Ender's game is a bunch of video

SPEAKER_06: game playing kids, uh, are playing a video game that actually mimics a real world space battle.

Chamath Palihapitiya: And they're doing it remotely.

SPEAKER_243: Yes.

SPEAKER_28: So the end of that book is Ender Wigan, uh, the protagonist going through a series of what he thinks are simulations that are tests of his not leadership abilities, but, um, tactical prowess. And then it turns out at the very end that he has been leading human ships in, in fights using a technology called the Ansible, which allows for instantaneous communication anyways. Yes. And there's other stories that have a very similar bent. So people have been thinking a lot about how we can take humans out and put robots in either autonomously or with human direction, but we only have one planet, you know, right now. So I, I do hope that even as we build cooler weapons technologies, we use them to, uh, pursue

SPEAKER_234: peace through strength and not, uh, a adventurous war. Yeah, nobody wants to start wars.

SPEAKER_22: Um, and I, I, I do think showing that we're making these things is, will be enough to avoid most conflicts. And, you know, when we drop a bunker buster somewhere, it does seem like people tend to get the message. And I, I think that's a, part of this right now, and I'm not a warmonger, but if somebody invades another country and you drop a big piece of ammunition, they tend to pay attention.

SPEAKER_76: And if I could tell you, man, if you're these terrorists must be after what we've seen in the middle east of late with the pagers blowing up, you know, like, I don't, I don't know that I want to join a terrorist organization if they can get to me so easily.

David Friedberg: Right. Yeah. Well, also I was blown away by that story for the cybersecurity element, the long-term planning,

SPEAKER_30: but also I was just blinking. I'm like pagers is this 1984?

SPEAKER_57: Like that, like the choice of technology that they had picked, they must've picked because it was low tech. Right.

SPEAKER_04: I think they picked it probably because they went on a website, literally, I think they

SPEAKER_24: went on like Alibaba and looked for a private paging network that they could leverage thinking they were smart. And I think the backstory here was they knew they were buying pager technology from somewhere

SPEAKER_22: and they either intercepted it at the order in China and infiltrated that company, or they

SPEAKER_76: infiltrated it on route, i.e. maybe those came in a container ship to a port and they figured out a way to unbox them, put the

SPEAKER_06: ammunition in them, seal them, rebox them and have them delivered, which is like an interesting message. If you, you know, want to know how hacking occurs. Three letter agencies pretty good at intercepting your iPhone order.

SPEAKER_107: And then your iPhone comes to your house and you unpack it unknowingly.

SPEAKER_33: It had already been unpacked and repacked with a chip in it that is taking pictures of your screen independent of the OS operation. They can put that in there to literally take pictures of your screen, pack it up and through a separate radio that's been put into your phone, send screenshots of your phone.

SPEAKER_107: Yeah. Lest you think there's not an easy way to do this because you're using, oh, you know, whatever, signal, et cetera. Yeah. There are many ways to intercept something you could put into the average keyboard, a keyboard logger. Sure. You think you're unhackable and like literally every keystroke is being sent to somebody.

SPEAKER_28: So the way this was explained to me back in the days of Snowden, the NSA leaks, and when we learned quite a lot about our domestic capabilities in, uh, in digital surveillance was you can try to keep yourself secure and you, the individual can do a pretty good job. If you're smart, you know, strong passwords, password managers, VPNs, you know, the standard array of things. But the other thing I was told was if a sophisticated nation state wants to surveil you, wants to hack you, yeah, you're pretty much screwed.

SPEAKER_30: Anyways, surgery robots, you found an awesome clip from John Hopkins university that shows off robots that have watched other surgical robots from tasks and can then mimic them with pretty insane precision.

SPEAKER_28: And I have to say, I went into this little segment thinking that I was going to hate this and not want it, but after actually watching, I think I'm going to be fine getting robot surgery in 10 years.

SPEAKER_223: Yeah. What's really interesting about this is these robots were trained not to pick up the needle.

SPEAKER_22: They watch just a hundred hours of footage of people doing surgery.

SPEAKER_265: And so for people watching, don't worry, this is a piece of chicken that they're doing surgery

SPEAKER_22: on, or it's a fake piece of plastic that they learned to do surgery on. And what you're seeing here, pause it right there.

SPEAKER_76: If you, if you don't mind. And what you're seeing is there's tying a knot in surgery, right? And so they're using pork loin here.

SPEAKER_06: Uh, and, uh, when, when it's tying the knot, they tried to distract it. And so if you just scrub backwards, just a wee bit here, um, what you'll see is a

SPEAKER_33: screwdriver comes in and this is tying the knot and it knows to tie the knot based on having watched movies before of surgeons working. It did not ever see a screw come into place, nor did it know a procedure for dropping a needle.

SPEAKER_107: In other words, somebody did not write code, a language model, an LLM of some type consume this information, processed it, and it learned to ignore interference. It also learned when you're looking at this again, don't worry, this is not human flesh. It doesn't look better than it's chicken, man. It still looks a little, uh, and if you, if you scrub backwards, there's another scene here where it shows side by side, two different cuts of meat. There it is. And like one's chicken, one's pork loin. The chicken is got a bunch of marbled fat on it. The other side is pretty lean. The pork, the cut of it. I'm getting hungry now. Yeah. And what's interesting about this is again, it was never trained on how to

SPEAKER_06: do different cuts of meat and different views. It just figured that out.

SPEAKER_22: And so we will have a surgeon, a robotic surgeon, right? In the, in this robotics has been going on for decades where they can do very tiny things with robotics. Now it's going to be whoever the greatest surgeon is in the world will become, uh, studied along with the other 20 great ones in each field. And there's going to be one surgery robot that they'll make 10,000 of and send to 10,000 cities.

SPEAKER_24: And every city will have the greatest surgeon.

SPEAKER_22: You used to have to go to a specific city to get surgery. Uh, and now it's going to be one amazing pilot flying all the planes in the world.

SPEAKER_107: One perfect surgeon doing all the surgeries in the world and one perfect driver driving all the cabs in the world.

SPEAKER_06: All of those professions will be replaced a hundred percent with AI. And if you're not paying attention, it's happening a little faster than people think.

SPEAKER_28: Yeah. The other place I think this fits in really well is places you don't have surgeons. Like if you're on a gun, a container ship, right? For across the Atlantic journey, that takes time. Can you get a helicopter to come get you if you have a problem? Probably not. What if you have an appendicitis? Well, wouldn't it be great to have an onboard surgeon that knew how to do the top, I don't know, Jason, 150 procedures. Like, I don't think they're going to be doing the most, you know, complicated stuff to start, but if you could do even just the big things that come up in commercial industrial settings, that's huge and lower costs. That means you can take them around the world, bring them to markets where doctors only come in for like visits to do work and so forth. So it democratizes care, makes people more safe, seems to be kind of awesome. And also has made me a little bit less interested in eating the chicken breast for at least three

SPEAKER_123: or four days, because that was kind of gross.

SPEAKER_235: What you bring up back to science fiction is literally my favorite sci-fi film.

SPEAKER_111: I don't know if you knew this, but I think my favorite science film, you know, after blade runner in prometheus, one of the, um, yeah, such a good film. Isn't it I like it what I love about prometheus is, uh, you know, it sort of explains where the,

SPEAKER_32: um, engineers came from and what their motivation were in prometheus.

SPEAKER_107: There's a scene to exactly your point when they're going halfway across the universe. She's pregnant spoiler alert, not a baby. It's not a traditional baby. And she gets into a bio pod. You can see her programming the pod. So she's got something growing inside of her and she gets in there and does a manual procedure.

SPEAKER_33: And she's talking to the computer. This is literally becoming what we're seeing out of John Hopkins.

SPEAKER_107: Yeah. They're showing a robot learning how to do surgery from videos of other surgeons. And as you're talking about, you're on a ship, something happens. You need to, I think we'll probably stop it here.

SPEAKER_75: The best science fiction film though, Jason, I think it might be sunshine. The 2007 film about restarting the sun. If you haven't seen that hard, fantastic.

SPEAKER_92: Isn't it? Yeah, that was a, a really great one. There's an IPO filing. We should just at least mention it.

SPEAKER_107: And because it's was done quietly, but this is a big one, folks. I, I, again, don't want to like, uh, make the show too political here. But I think that this, the timing of this is related in some ways to the new found business optimism that we talked about on the show would happen if Trump won doesn't mean you have to love Trump doesn't mean I'm endorsing him, but he has signaled to the market that there'll be less regulation and the good times will roll.

SPEAKER_30: Here we go. So we're talking about Klarna, which is a Swedish buy now pay layer fintech giant. Uh, for those of you who are product nerds, more than financial nerds, Klarna does a lot more than just BNPL today. They have their own card, they built their own shopping app to help people actually do commerce and they're moving Jason into, uh, banking with something called Klarna balance. Anyways, the point is they're widening the aperture a bit, but everyone knows them for their BNPL, uh, work. This is a company that went up to a $46 billion valuation back in 2021, only to see it crash

SPEAKER_75: down to like 6.7 billion in 2022.

SPEAKER_30: But Jason, I've been tracking this company nearly quarterly, thanks to its disclosures. And it's had a pretty strong financial glow up. And now it has filed privately to go public comma, everything you're saying is true. And I think the reason why it's filing now is not just optimism, but also because some of its

SPEAKER_28: comps, a firm, PayPal, and Sezzle have also appreciated greatly in the last two weeks.

SPEAKER_196: Okay.

SPEAKER_06: So fintech has boomed, whether it's crypto Robin hood coin base, a firm, uh, Max Levchin's, uh, company that does buy now, pay later. Um, I think Klarna was the original version of that.

SPEAKER_76: And so that whole category people believe, Hey, maybe the financial, uh, regulations will be lower. So something like buy now, pay later would have less regulations or, you know, your.

SPEAKER_06: The ability to charge people a late fee on an account, not that Klarna necessarily does that. I don't know if they do or they don't, but those type of things are that kind of regulation is going to be removed or more fluid. So all of those things appreciated massively. I saw my Robin hood shares went way up. Yeah. Um, and I had bought doge. I've only bought two cryptocurrencies in my life. Doge at like, I think 19 cents. And I was a loser for many years on that trade. And now my money's doubled.

SPEAKER_22: And then it's 40 cents. Not bad.

SPEAKER_76: My wife put the Bitcoin trade in. We were all talking about it constantly.

SPEAKER_06: And I had some Bitcoin, the place we had, it got hacked and the, the, those went away. Um, but then the one she bought at a hundred dollars a share a hundred dollars a coin. We still have nice coin broke $90,000. It's going to be a major trade for our family.

SPEAKER_111: I can't believe that, you know, um, this is happening, but here we go. And I, you know, uh, I, I wonder what's going on here.

SPEAKER_28: Yeah. I have a lot of questions about the, uh, depth and, um, uh, honesty of a lot of crypto trading.

SPEAKER_30: Cause there's a lot of wash trading and other sorts of, uh, manipulation. Yeah.

SPEAKER_28: Yeah. At the same time though, um, I think with stuff like Bitcoin ETFs and now, you know, we're seeing Ethereum ETFs as well. We're also seeing, you know, uh, stable coins like USDC and they've also have a, a Euro coin, a Euro stable coin. It really does seem like there's an open door now to experimentation and trying things. I will just remind everyone that Andreessen Horowitz wrote about, uh, their kind of crypto thesis recently, and they are very optimistic, but they cautioned that there's still work to be done. Just electing somebody doesn't change the rules. There's still probably need for legislation and so forth. But I do think that the expectation of reduced regulation and therefore the ability to charge higher fees, more frequent fees, and just take more money as a FinTech player is driving the share price appreciation at a firm, et cetera. And what that does, Jason, I know you can explain this better than I could, is it makes Klarna able

SPEAKER_30: to go out at a higher valuation for free because it's comps have been repriced by the market. Sure. So it can probably sell for a higher price.

SPEAKER_06: You know, whoever the last investors in have like probably some downside protections in their documents when they made the investment.

SPEAKER_196: And I think the last investment was at 14 billion or something, if I remember correctly.

SPEAKER_76: And if you look at that valuation, maybe the public comps would have been 5 billion or 10 billion.

SPEAKER_06: And so the people who were the last investors probably said, yeah, let's just keep building. I don't want to go public convert. When you go public in the weeds, technical thing, everybody converts to common shares. Everybody has the same class of shares. So if they have protective provisions in their shares that say, hey, we have some downside protection, we're guaranteed to get our shares out at a, at this valuation. And if we don't, we get extra shares that creates an untenable situation because let's

SPEAKER_107: say they bought, I don't know, 5% of the company. Okay. They put 750 million in at a $15 million valuation. They own 5% of the company. When it goes public, they need to have.

SPEAKER_06: Depending. I don't know if this is the case here, but it wouldn't be uncommon for them to say, when we go public, we have to have 5% of the shares at a minimum, or if they had a liquidation preference, maybe they have to have double that 10%. Well, if the company goes public at 5 billion, cause that's the comps of the other companies and they have to have 10% of that.

SPEAKER_107: Now you've got a little bit of an issue, right? Because they paid 750, but you know, how much do they have to own in order to have $750,000? They've got to own more than 10%.

SPEAKER_274: They've got to own like 15%, right?

SPEAKER_50: So it's just, um, which would be dilutive to the other shareholders. So now you've got the standoff.

SPEAKER_76: And that's one of the things that's being worked out now as the market comes up or people get tired of being stuck in an investment. Maybe they say they're willing to come to the table and negotiate that down to get their liquidity.

SPEAKER_28: Can I tell you though, why I want to be full throttle optimistic about this,

SPEAKER_30: but I'm actually a little bit concerned and not talking about Klarna. Cause I, I've been tracking Klarna for a long time. And honestly, I think they've done a great job cutting their losses, reducing their operating expenses, getting to break even profitability and reigniting growth. Shout out to them. It's been a really good job and I'm going to give them points for it. But my concern is that it took a market that was already compared to historical norms, expensive, an election of a business friendly candidate, at least in theory, and then an appreciation from that point to get Klarna out the door and filed. And that means that the number of things that have to line up to get the public markets rich enough to get some of these unicorns out are kind of rarefied. And what happens if things go down by 10%? Does that mean no IPOs next year Jason?

SPEAKER_42: I'd cry.

SPEAKER_107: Uh, I think it's just the overpriced ones that raised at sky high Zerp valuations. That'll be stuck in this indigestion.

SPEAKER_06: Uh, and there they'll be stuck in customs, basically, as they try to, yeah, get through,

SPEAKER_196: uh, and get their passport stamp. The other thing I'll note is, um, who were the group?

SPEAKER_06: Riddle me this. Who were the group of people who showed up in this election in a way that hadn't previously shown up young men, young men.

SPEAKER_33: Okay. What are young men like? Uh, to do a vodka. Yes. And they actually don't drink as much as they used to. Uh, they like gambling on crypto.

SPEAKER_24: Oh yeah. And they like draft Kings. If young men showed up and young men own crypto and we're in this afterglow. Mm-hmm I think there's a bit of euphoria going on right now, perhaps even mania. And people are buying doge. They're buying Bitcoin. They're buying Robin hood. I wonder if what we're seeing is the young man trade.

SPEAKER_06: Why MCA young man, you don't need to be down young man, your cryptos up off the ground.

SPEAKER_71: Okay. So draft Kings has appreciated from, uh, pretty much 36 bucks short of 42, but it's still

David Friedberg: down on a six month basis. So what is it on like a month basis? Cause it kind of became clear.

SPEAKER_107: Trump was gonna win about a month ago.

David Friedberg: 11% in the last, uh, one month of trading.

SPEAKER_311: Okay.

SPEAKER_06: So that one hasn't appreciated in the last month. How much is Bitcoin appreciated and how much has Robin had appreciated? Those would be other ones to look at.

SPEAKER_30: And so literally 30 days ago, uh, November, uh, let's do Monday, November 4th. Robin hood was 24 bucks a share today. It's 33 bucks a share. That's relatively sharp gains. Bitcoin. I have a seven day number right in front of me is that 24% in the last seven days, it's probably a little bit more over 30 days, but a lot of appreciation.

SPEAKER_28: There's, there's a flip side to this though. There was a really interesting article about, I think it was like sports betting in Brazil

SPEAKER_30: that you can now do on a mobile basis. And there's a lot of people who are loan sharking people to lend them more money to keep gambling.

SPEAKER_28: And they're paying like 400% on those loans. Anyways, the, the gist is yes, people love this stuff, but it, it, it does remind me a little bit of the, the 2021, you know, mania.

SPEAKER_315: Remember when stock X, the, the shoe reselling company was like opening more and more facilities. Everyone was into collectibles.

SPEAKER_317: And NFTs, right?

SPEAKER_32: What was the big NFT company that became worth like 10 billion dollars immediately? Uh, Bored Ape Yacht Club. And that was part of Yuga Labs. Yuga Labs became huge.

SPEAKER_76: And then there was a S a website for trading them, a marketplace for trading them that also became, got picked up on this.

SPEAKER_321: Open sea. Open sea. Yeah. Open sea.

SPEAKER_06: Right. So all of those were like going to be like tops trading cards, plus, plus, plus, plus, plus, and, uh, the bottom fell out, I think in that market. Big time. That would be when, you know, mean is fully returned.

SPEAKER_107: If the price of board apes or those pixelated, I think crypto punks, the original crypto punks. Yes. Yeah. Thank you. You know, all this stuff. That's why you're here. Crypto punks. And yeah, the Bored Ape Yacht Club, man, just shows you like, we've lived through a literal

SPEAKER_251: tulip mania. That mania was so sharp and so amazing.

SPEAKER_28: And people really thought that it had tons of staying power. I think that the current mania has more legs. I think sports betting will have a longer lifespan than the NFT realm. So I don't know if it gets up to the same. Why do you think that?

SPEAKER_330: Oh, because people have been betting on sports since the Roman days.

David Friedberg: I mean, we've been raising chariots in an oval and now we just call it NASCAR. Right? Well, and it's connected to a real world event, right?

SPEAKER_76: So there's something. Yes. There's entertainment value to it.

SPEAKER_22: And that I think is what was missing from the NFT stuff is there's no entertainment value to it. Like, um, the closest thing to an entertainment value to it was when they did those drops

SPEAKER_251: where they mutated. Do you remember that concept? This was the famous, you can use multiple slurp juices on one eight tweet.

SPEAKER_28: Yeah.

SPEAKER_30: That everyone was talking about. Um, can I just say though, and I look, we on this show are generally, I would say net bullish, right? We're optimistic about the future. Optimistic cautiously. Yeah. Well, I'm trying to not, but the point is I'm not bullish on NFTs that of that variety.

SPEAKER_28: And so I, I'm kind of glad we've left that speculative moment behind, but I am optimistic about more people owning equities and bonds and maybe blue chip cryptos. If you want, uh, we have a little exposure through the fidelity Bitcoin ETF.

David Friedberg: Oh, so you're happy about this appreciation.

SPEAKER_234: I, I did have a funny moment when I announced on my sub stack that I was going to buy some Bitcoin on a regular basis, just to have some of it in our portfolio. And then the next day dropped like 10%, you know, I'm really interested to see, you know,

SPEAKER_22: my understanding of residential politics is, and these new administrations is you tend to get whatever you're going to get done in the first two years, not the last two years.

SPEAKER_24: And then when you do get stuff done, you tend to get. One or two things done as an, as an administration, you, you kind of can't do everything.

SPEAKER_06: And so if we look at the promise set, crypto is one of them fixing immigration is one of them, uh, reducing government, the department of, uh, government efficiency, doge that the VEC and

SPEAKER_107: Elon are going to run apparently, uh, as advisors for some number of months, 18 months or something.

SPEAKER_06: And they're going to create a leaderboard. I love this idea. And I actually punched up the leaderboard idea on X. I said, they should make a leaderboard of not only the people wasting money,

SPEAKER_107: who get caught doing it, uh, and name and shame them if they're doing corrupt stuff. And then on the other side, the heroes who actually say, I know of waste, like, not exactly whistleblowers, but hey, I knew we were wasting money. So I got rid of, uh, this real estate nobody's using at the FBI or the department of education or this, uh, and I thought like, this is a very innovative thing, but I wonder how much they can execute.

SPEAKER_06: Are they going to get one thing done, two things done, three things done? And what would those things be? Is I guess the real question and then what impact they'll have.

SPEAKER_344: Yeah.

SPEAKER_28: Tariffs is the other one. Yeah. Well, crypto is easy. I think all you have to do is take Gary Gensler out, put in someone who's pro and stop suing people and it's kind of off to the races. So that to me seems to be pretty doable also through executive actions seem to be pretty likely.

SPEAKER_75: John Thune just won, um, the gavel in the Senate. He's the new Senate majority leader. He is relatively anti-tariff. So that can be difficult to get through Congress on the doge point.

SPEAKER_28: What I'm curious about is how much they're willing to make Republicans mad, because to make an example that I, that I always come back to, we have a lot of M1 Abrams tanks, NBTs, main battle tanks, and the army at one point in time, wanted to reduce the number of NBTs they had in stores because they didn't need that many. Well, what does that mean to the congressional district where those tanks are stored?

SPEAKER_30: So it ended up that the Congress told the army too bad, you're keeping the tanks. So, you know, there's, it's not as easy as, oh my God, look, I found these bureaucrats and they're all playing solitaire in their cubicle. There's a lot of thorny political and local issues that are going to come up.

SPEAKER_28: And $2 trillion is an enormous cut.

SPEAKER_22: So I don't know. Uh, who knows? I mean, in that number, I wonder if that's per year or in this administration, we do 2 trillion

SPEAKER_76: in cuts and it's 500 billion for four years or it's 200 billion for 10 years. Cause we've kind of set this in motion. I think any progress on this, it was my number one issue.

SPEAKER_22: I hope that government wasteful spending becomes the issue that the Trump administration succeeds on and that they're known for. And I hope the thing that they're not known for just my personal belief, folks, is that they

Chamath Palihapitiya: don't get known for mass deportations of hardworking immigrants to have no problem getting rid of the

SPEAKER_22: criminals by all means, but I do think that could wind up creating so much chaos. I'm, I don't know if you've have this in your community or whatever, but there is a sense of dread and concern right now amongst a number of people I've spoken to about the deportation concept,

SPEAKER_06: this mass deportation. And so, uh, I don't know if it has an impact on our industry in any way, but I do sense that people are concerned. They're going to lose a nanny, a housekeeper, a restaurant worker, any of those frontline workers could be lost. And then people are confused because Americans won't take those jobs.

SPEAKER_196: And then who's going to fill them, right? Right.

SPEAKER_354: It's going to be heavily inflationary on the labor cost side.

SPEAKER_30: Jason, are you, uh, I'm going somewhere with this role of me. Are you religious at all? Um, I grew up Catholic. I am spiritual, but not religious. Fair enough.

SPEAKER_28: I grew up Lutheran. Um, and now I'm an antitheist. I'm taking it a little bit further than you have, but yeah, you know, I was raised in the, the American Christian tradition. And one of the things that was, you know, drilled into my head very politely by reading the scriptures was the importance of being kind and loving to your neighbor. Yeah. And to me, we can debate policy points and use of the national guard and sanctuary cities and all this. But I feel like we're failing that test in this conversation. And so the sense of dread that you are outlining, it meshes with how I feel about it, because I don't think that people who want to get their way on this issue in the Trump administration, Stephen Miller and so forth, are, uh, care. Right.

SPEAKER_234: About their neighbors.

SPEAKER_111: I think they're, they're vindictive. America is for Americans and Americans only was the quote. And I just thought to myself, well, isn't that the opposite of everything I was taught?

SPEAKER_107: America's for immigrants to come and make a new life for themselves if they work hard. And so. Yeah. Sorry. I mean, this actual liberty doesn't have a middle finger.

SPEAKER_364: Yeah, I, I kind of still believe in it.

SPEAKER_107: I do want the people to come in legally. Of course. I, I do think this will become the debate of the next two years is how do we do this compassionately and thought? Yeah. And so, you know, we'll, we'll be tracking this immigration issue because it does impact, uh, the business in the industry massively.

SPEAKER_06: I think one of the thesis or a thesis that I've been hearing is there is a belief that there is going to be massive job destruction, uh, because of AI and that we are suddenly going to go from this 4% unemployment to 14% because of AI.

SPEAKER_22: And I just described it with surgeons, so I can't be, uh, two-faced on this issue. I just said, there's going to be like a lot of surgeries being done by robots and a lot of self-driving cars and a lot of pilots that are autonomous. Now that could be occurring 5% of the work a year for 20 years. Who knows? And then there's going to be more consumption. So who knows how it nets out, but I don't know what you think of that theory, that people want to export, uh, 15 million people because they want American companies to be forced to

SPEAKER_06: weigh raise wages, uh, uh, ostensibly a good thing in order to fill those positions with Americans who are about to lose their jobs as truck drivers, as cab drivers, as cashiers, as perhaps

SPEAKER_107: even knowledge workers or even professions like a surgeon. Ah, well, it's going to be, but this is a system, right? We're talking about a system. Yeah. Not one component. There's a massive system here. What do you think of this theory?

SPEAKER_28: Well, uh, one of the biggest professions in the United States is driving trucks, right? If you look at the most popular professions across many states, truck drivers are very high up there. So let's say we turn to all autonomous trucking, which I think you and I both think is the direction we're going in and you take all of those people, which were by the way, Trump voters, ironically, and say, okay, well, we're going to, you're going to go now be short order cooks at restaurants and you're going to get paid mostly in tips. And you now work these hours. I don't know if, if there's going to be a direct translation of AI eliminated jobs. And then those will be willing to take jobs that historically were staffed by immigrant and migrant labor. There might be some really tough gnashing of teeth about that. I don't know if that would be politically palatable. And so I wonder if there's going to be, uh, an extension of the current populist movement, if you will, into protectionism. And I think that does nest under tariffs and so forth.

SPEAKER_30: But if you export people, drive up labor costs, add tariffs, you're going to have a wage price spiral, which is not popular ever. So I, I don't think this is going to be a non-disruptive next 10 years in our economy.

SPEAKER_28: And I hope that the people we have in leadership are technocratic enough and empathetic enough to be intelligent about change while also realizing that we're talking about humans inside of a system and not just robots inside of a system.

Chamath Palihapitiya: Sticking with my abundance goal, I want to see us have 500 million Americans in the country in 10 years and 10 new cities that can house 15 million people. Each I'd like to see us grow the population dramatically and have 10 new cities, maybe 20 with five to 15 million people in each in our lifetime, like literally a Manhattan project to

SPEAKER_22: build the, a number of Americans and the number of cities here.

SPEAKER_376: We, I think we should be growing.

Chamath Palihapitiya: I think we should be growing massively and we should be ambitious about that.

SPEAKER_234: So I could not agree more big America is, is my thing. Cause I am, I remain wholeheartedly into the depths of my souls, my feet and American believer.

SPEAKER_378: So that's my politics.

SPEAKER_207: There you have it folks. Uh, this is a captain nuance along with captain America here, chopping it up.

SPEAKER_22: The robots are coming and a new weapons technology.

SPEAKER_32: And hopefully, uh, yeah, we make sense of it all and we'll be tracking it here three days a week on this week in startups. Bye bye.

SPEAKER_380: And don't forget on tomorrow, we're alive, not on Friday, on Thursday, this week.

SPEAKER_381: So if you're a fan of move to Friday. Yeah.

SPEAKER_30: Right. And tomorrow, just to give you a teaser, by Combinator just dropped their new request for startup list. We have this, we are going to go through it and handicap our ideas. Talk about some leading companies. It's going to be a blast. Jason, I'll see you tomorrow here on the show. All right. Peace out everybody.