SPEAKER_00: you can't trust zuck zuck can't trust zuck zuck should understand he's made the wrong decision about instagram kids on instagram banning trump from the platform you know every decision he could make he makes the wrong decision on these social issues therefore he needs an ombudsman he needs a group of people on that board or around him that's not mark and treason we're not peter thiel

SPEAKER_01: this week in startups is brought to you by bolt don't be left behind build apps quickly without knowing how to code with bolt.new try it free at bolt.new twist northwest registered agent starting your business should be simple with northwest registered agent you can form your entire business identity in just 10 clicks and 10 minutes from llc's to trademarks domains to custom websites they've got you covered get more privacy more options and more done visit northwestregistered agent.com twist today and alpha sense get deeper insights into your business with the power of ai search and market intelligence start with a free trial at alpha-sense.com twist all right everybody

SPEAKER_04: welcome back to this week in startups alex wilhelm jason calen canis on the ones and the twos yes sir

SPEAKER_06: and we're ready to bring you the news we have a lot to discuss uh what do we got on the docket

SPEAKER_07: rapid fire headlines in the news what we got what's going on with open door yes data from job growth in

SPEAKER_09: major metropolitan areas the u.s government possibly taking a stake in intel meta's ai flirting with kids that's not so good xai's co-founder starting and keep going come on keep it straight as co-founder is putting together a new venture capital firm trump and crypto all about how the family's making money two ai companies raised a half billion dollars sam aldman thinks that gpt5's rollout could have gone better and then i found a couple of cool companies that we might want to talk about jason

SPEAKER_13: one startup that wants to automate legacy windows applications and then for you the company that wants to bring an ai agent to your group chat so lots to talk about all right uh so

David Friedberg: man i really want to know what's going on with open door yeah and uh before we get started on the

SPEAKER_06: show you know i wrote a book angel man i guess it was seven years ago it's it's done incredibly well it's in 12 languages um and people like to interact about it so i used to teach a course three times a year angel university i'm kind of busy so i do it once a year now so it's coming back october 7th if you're interested in what it takes to invest in companies it's a four-hour workshop it's virtual i walk you through all the basics of identifying companies the traits i look for uh in startups that could potentially break out how to build your network of founders and investors how to build deal flow and how to make just better decisions and this comes from now i'm up to 500 investments uh you know in my career and a couple of big ones you know like uh you know uber i invested in a 5 million and robin hood at 20 million those companies are worth slightly more than 25 million dollars combined so you can go to angel dot university slash twist angel dot university slash twist now here's the thing uh i always find it cheesy when people start courses right yeah it's a little cheesy i think it is uh especially when they're trying to make money because you're like well if you made all this money investing in uber why do you need to so here's what we do just to cut people off at the pass i give all the money to charity because uh there's people out there i'm a leader you know blessed life and if you go to the angel university website uh i think it's angel university slash donations um i asked them to keep a tracker of this um no it's not slash donations they made a new website wow this website looks amazing and i do it with my partner mike savino um i guess we got rid of the donation page when they redid it so um ask the team to all profits go to charity okay so anyway all the profits go to charity we have given 200 000 to charity alex and i think we charge what we charge 300 bucks or 500 bucks for this it's not much it's not much and the reason i mean especially if you're going to be an angel investor and writing 25k checks 10k checks etc so we charge a de minimis amount we give it all to charity and you'll learn a lot uh sometimes founders sneak in i'm fine with that if you do it it's not the end of the world um but you're going to learn a lot and i learn a lot doing because i get lots

SPEAKER_23: of hard questions angel dot university slash twist okay let's get back to the docket all right so first

SPEAKER_09: up on the show today jason i think we have to talk about open door so okay i think the way to start the story is very simple i'm going to show you a stock chart and then we're going to talk about medium stock status and then from there we'll break into the ceo change and so forth but yes to give everyone an idea of what we're discussing here this is a chart of open doors price uh on the public markets since it went public back in i think it was 2020 jason and as you can tell a lot of very interested traders during the zirp era and then after that a long period in the wilderness all the way down to the company was worth about 55 cents a share and then this july suddenly it became a

SPEAKER_28: meme stock now in total dollars during the zirp when it went out in 2021 i believe it was a spac i'm

SPEAKER_06: not certain and it was 30 a share during that peak zirp era everybody knows the peak zirp era ended in 2022 you had silicon valley bank collapse you know a bunch of hand-wringing about stocks yada yada and so it just was kind of heading down to zero and if we were to zoom in and just look at the chart for 2025 or last six months it would look tremendous right going from 55 cents yeah 350 is like a six or seven bagger which is crazy okay and then maybe explaining what open door does because i always love

SPEAKER_23: the idea i mean i can explain it too i mean i'm pretty well aware of the company yeah it's about it

SPEAKER_26: uh no no i'm just pulling up the chart you asked for okay here's the uh here's the last six months

SPEAKER_09: of open door share performance this is the zoomed in chart so as you can see as jason said it went down to about 50 cents and then septuple sextuples one of those anyways sure it's gone up dramatically

SPEAKER_38: six baggers what i like i like bagger i learned that from reading red notice uh discussing how he got a hundred bagger buying uh shares in russian corporations my dad when he would have a party

SPEAKER_06: yeah um in brooklyn it because they weren't playing the stock market we were just you know barely middle class but um they would rate their parties on how many garbage bags were put out front so that was a 12 bagger that was a 20 bagger that was a six bagger party uh so anyway but here it's

SPEAKER_29: the multiple um yeah tell everybody what open door does because i thought this was a genius concept

SPEAKER_07: so open door takes in a lot of information to understand the value of houses and then if you want to

SPEAKER_09: you can go to open door and say i'll sell you my house they'll make you a very quick all cash offer and then they have a pretty cool plan they take about i think 90 days chasing they go into your house tidy it up do some improvements painting etc and then sell it again essentially they are trading on their intelligence and ability to know a correct price you pay for a house that they can then resell quickly therefore they don't carry a lot of inventory on the balance sheet it's relatively asset light compared to what you might expect uh but the company has struggled in the last couple

SPEAKER_48: years so i'm curious where do you think they went wrong well uh timing you know like if you have to

SPEAKER_06: pick anything in business timing is a key going into a high interest rate market where homes are considered by buyers overpriced and considered by sellers underpriced and every seller thinks their home is the most beautiful baby ever and this is you know going to be present in the united states and going to win an oscar um in the same year so i think that was the problem they went out rates went up try and then you have what you see today which is a lot of people do want to sell their homes a lot of people probably want to buy homes but because the market's frozen with seven percent mortgages it's just not happening folks uh so if you don't have a lot of transactions additionally at that time you remember blackstone uh redfin dipped into this and they got out of it very quickly i think zillow went into it people started buying and sitting on homes renting them and they people thought this would be a great use of capital if single family homes are only go up and they're an incredible asset well we're going to buy them and so you know it's not a very fluid market and when you look at asset light asset heavy they tried to be asset light by moving the inventory quick yep but i don't think the inventory moved quick so then now you're asset heavy right because you're sitting on homes um and it probably sounds like execution and uh it looks like actually chamoff um did that smack and it went out at a 4.8 billion dollar valuation so great idea great backers i mean there was so much going for this but timing does matter and it's so then it seems to me like there was probably some mismanagement i'm guessing at some point in this or not reacting fast enough to the game on the field and when a company this young i wonder what year they were in when they went public i think it was 2020 but i'll grab that date for you so it's like a four-year-old company that went public you know this is one of the challenges in a private market alex we have time to figure things out and we do that behind closed doors when you're a public company you're doing a quarter to quarter you don't have predictable revenue you have a market that can change rapidly and deteriorate rapidly and then can you make it through the storm in the movie business you know you have a slate of pictures right i was just reading barry dillard's biography it's incredible they always talked about barry dillard always talked about just having enough money to make it through the variance so if you had a bunch of summer hits and they were all stinkers you know you got next year you got another swing at bat and then you have the year after so if you had three or four you know summers or three or four years of capital to kind of blend out the spikiness of the of the picture

SPEAKER_55: business the hip-based business you could do it yeah i think that's probably something in the real estate business that's akin to that you don't need to share your specific vision with a team of

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SPEAKER_13: merger was december 21st 2020 and you're right it was chamath social capital head of sophia holdings

SPEAKER_62: corp number two that did the deal yeah and uh it was a young company i see here they were founded in

SPEAKER_06: 2014 went public in 2020 so this is like you know less than six years which is the dream we want to see

SPEAKER_29: companies going that way but this one didn't have predictable revenue yet so no they obviously didn't have the model perfected maybe they should have stayed in the lab for another six years or four

SPEAKER_66: years or two years who knows maybe but i think on the execution point there's something worth adding

SPEAKER_09: here jason just really quickly keith roboi previously founders fund now back at cosla was very much associated with the company for a long time very opposed to the recent uh ceo they had in place carrie wheeler uh news out today that she is out and they have replaced her with the cto and they're going to hunt for a new ceo so it does appear that keith's agitation

SPEAKER_28: got the result that he wanted which is a change in leadership okay and what were his tweets i think

SPEAKER_69: there were some spicy tweets there yeah i'll grab a few for us but you know jason keith roboi you're you've known him for a long time yeah he's a man of uh of a real peace and quiet he never erases his

SPEAKER_62: voice no i mean he is out there and um he tweeted uh let's see august 14th today is the 15th so yesterday uh this tweet i'll share it i have my screen up here i think i have it open door management

SPEAKER_06: stuck in 2020 still and here it is folks the uh diversity equity and belonging uh just basically and then it's a remote company so here he shows the jobs available united states remote united

SPEAKER_29: states remote i mean listen uh cultural aside the gay venture capitalist gay liberal conservative

SPEAKER_06: venture capitalist um you know uh believes in merit also believes in office i can tell you these are two signals that a company is going to have challenges if the management's focus is dei and the management's focus is remote most if you asked 100 investors this company or the competitor that's in person and is focused on focused on merit and excellence and intelligence 198 out of 100 are going to just say they want to invest in the other one and 100 out of 100 are going to bet on the other one yeah it's just the focus level you know it's nothing wrong with diversity or those words it's just in the execution if the management is spending 10 of their time 20 of their time on those kind of initiatives it's a bit of a tell in the startup land not going to make it just a bit of a tell yeah

SPEAKER_67: well it's interesting though to still see the uh the combating points to that narrative like

SPEAKER_09: coinbase still is a pretty strong remote remote focus and it's doing quite well so yeah but i i do think you're right that is the standard conventional wisdom in this case and i think keith can now take his victory lap and hopefully open door to us well in the future but yeah and i don't know how much

SPEAKER_06: cash they have left and this is where it gets interesting uh i wonder if the market if you compare the market cap to the cash on hand so sometimes these companies in his peaks or barrel were able to raise 500 million uh a billion whatever it is uh so let's say they raise 500 million in that ipo a five billion rpo 10 of the value i don't know taking a guess here maybe 500 million came in if they lost half of it now they have 250 million if the market cap when it was 55 cents you can find really weird things that occurred i think it happened to buzzfeed and then this happened during the dot-com

SPEAKER_78: era frequently the cost of the company the market cap of the company was below the cash yeah which then meant if you liquidated the company and distributed the cash you would you would it would be an up

SPEAKER_66: transaction right uh so here's the chart jason i have a chart now comparing uh open doors market cap

SPEAKER_09: and it's cash only quarterly on hand so this does not include restricted cash i believe but here's the chart all right so today here we have a chart showing two things one open door technologies cash balance and also its market cap if you're watching the video the purple line is the cash and the orange line is the market cap mostly throughout the company's history in the last three years jason we've seen market cap be ahead of its cash balance implying that the company itself has value but recently before its meme stock explosion the company's cash balance did outstrip the company's

SPEAKER_06: market cap and even if it's the same you you when you take out the cash even if it was 20 percent more valuable that you're just basically saying this company is worth almost nothing almost nothing almost nothing you're giving zero credit to management and you know those become really attractive opportunities i think next door fit into this category since you're really good at pulling up those charts pull up the chart for next door and then um same same data though just same data but for next door you know this is a really and then we'll pick a strong company like maybe we'll pick i don't know uber or airbnb next because i just this is a really interesting chart you're creating that people can learn from a lot of times you net the cash out for a company uh before you actually look at their valuation so for a company like apple that might be sitting on 300 billion 500 billion like seriously large amounts of capital if they're worth three trillion you know you gotta say

SPEAKER_29: okay well 10 of it 20 of is the cash on the books right um here it is next door and i made an

SPEAKER_09: improvement this time around jason this is actually uh cash and short-term investments which is how we generally define corporate cash uh and market cap the previous chart was probably a bit too conservative but okay here is next door same thing as before folks uh the purple line is going to be cash and short-term investments the orange line is market cap and in this case once again we are seeing a company next door where at times the market cap has been dramatically underneath the uh the cash balance

SPEAKER_87: so what's the market cap of next door right now i had traded next door a little bit i made a little

SPEAKER_88: bit of 413 million dollars yeah i mean that was supposed to be like yeah i wonder what that was

SPEAKER_90: worth in the private markets at its peak a couple of billion this is one of bill gurley's companies great

SPEAKER_06: great great idea but next door i think had a monetization problem i you know do you use next door

SPEAKER_09: alex i i do not but i have friends that do and i'm a big fan of the uh what's that next door twitter account jason that everyone loves oh yeah best of next door yeah best of next door which is like here's

SPEAKER_06: like karen's doing karen stuff when they think they have a private social network but there's a screen grab yeah a feature on everybody's phone turns out you know they just came up with a really bad business model which was like advertising uh when you have a small amount of pages etc advertising is bad but then you have things like thumbtack which have just incredible monetization or other local services companies so i think they tried to get more into local services and you know other stuff but yeah

SPEAKER_29: there's a really interesting trend all these great assets sitting out there if i had another career in me i would raise you know 10 billion dollars from private equity and own you know tell them i want to own 30 percent of the company or or so and then i would just go buy assets like this and run them like barry diller did at iac run them with like crisp leadership with a very you know narrow focus to figure out what is the pony inside of this you know uh there's got to be a pony in there somewhere

SPEAKER_23: like there's got to be a unicorn in here somewhere like let's find the inner unicorn let's find that

SPEAKER_06: pony and turn it into a unicorn okay yeah uh so good luck to the folks at open doors obviously you can give a ceo two years maybe three to figure this out but as a public company i mean

SPEAKER_09: yeah everyone gets to see your performance and and it's going to be hard for them all right next up on the list we have job growth in major metropolitan areas jason you wanted to talk about a chart from the new york times that shows a dramatic deceleration in job growth over in the new york city area here we have a chart folks it's a bar chart it shows job growth in the new york city area from 2021 through 2025 breaks it down into two categories jason first half of the year second half of the years we can kind of see trends and last year new york city generated more than 50 000 net new jobs in both h1

SPEAKER_99: and h2 the new story is that in the first half of this year job growth in new york city was roughly

SPEAKER_62: a thousand jobs okay and uh this includes only private sector jobs so this isn't government jobs

SPEAKER_06: this is like legit goldman sachs etc so you have to ask yourself what's going on here the source is the new york city mayor's office of management and budget don't think they have a reason to

SPEAKER_00: gain the data you know always have to wonder about the data sources here but this was in the new york times what's the reason for this do they have speculation do they have experts in the new york times chiming in yeah who are tuned into the new york scene because i am not but i have theories

SPEAKER_23: but i want to hear what the experts say quote unquote experts hey listen we meet a lot of early

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SPEAKER_09: found a couple things from them and also i pulled some other data for a hypothesis so first of all new york is expecting to see about 400 000 fewer tourists this year compared to last year that cuts back on employment in the private sector that serve the tourism industry new york city of course being one of the global cities out there does attract a fair number of tourists another thing that i found while poking around is that hiring in the finance sector while there's actually very strong financial results from wall street firms it does appear that they pulled back on hiring and then my third hypothesis jason was simply technology jobs so what i did was go back and pull some data from sf austin san jose and seattle and i was curious their unemployment a year ago versus today and in each case we've seen unemployment in those cities tick up and uh so i think the just there is technology hubs have shed jobs we've talked a lot about you know era of efficiency and ai-led job growth so i think what we're seeing here is a combination of finance being conservative as the market changes tourism coming down which is impacting smaller business and also technology companies are pulling back on hiring in general and new york has been the capital of american fintech forever okay all of

SPEAKER_06: those would track for me we have a record stock market but we have the static um team size trend that you and i have been talking about here for two years now so static team size is actually happening in finance in new york city one of the finance capitals of the world along with london and hong kong and singapore so they're not hiring big tech's not hiring and tourism uh i you know listen i don't want to make this political but when i was in singapore i was talking to a lot of people who singapore is like a global hub like hong kong is or london so you have people from all over the globe wind up in singapore and these are the most affluent tip of the spear kind of people who can really move their entire family buy houses start companies you know we're talking about elite uh folks elites uh global elites and they are they reported to me multiple occasions their kids they were not

SPEAKER_00: spending time in the us reason given uh you know maybe we can't get in or out easily there could be some border issues we're just wait and see till it kind of clears up the anti you know xenophobic sentiment around the borders whether that's true or not whether they could get through customs you know in with no difference that's the perception perception equals reality and if you make people feel unwelcome which this administration has done they they do you know when you're deporting people at you know in a violent way in a you know aggressive way and then people are getting stopped at the border and they just

SPEAKER_06: hear these anecdotal stories they will say well maybe that applies to me or maybe it applies to me next and then if there's other people who are like hey come to portugal come to china come see what singapore is about come to come to australia and they're making it easy and they're putting out those signals um there's no doubt that tourism in the united states is off that is a known trend uh and it's definitely correlates with the trump administration so actually just strikes is balls and strikes right

SPEAKER_85: there's nothing controversial here that was their plan right absolutely i just want to throw in one

SPEAKER_09: more thing that i think actually plays in here uh according to higher ed dive a publication that tracks the college market essentially they are expecting to see about 150 000 fewer international students this fall which means fewer dorms to clean fewer apartments blah blah blah how many was that what was the number 150 000 fewer international students this year so that new york city has new york university and columbia and there's a lot of big schools there yeah so that could be oh yeah exactly fordham so i i feel like that's probably also component to this the thing that i'm taking away uh while it's bad to see job growth flow it's still growing a little bit a lot better than it could be

David Friedberg: well and then you add the two months of revisions down just again balls and strikes here i don't care who

SPEAKER_06: who you voted for we are in a very i did a tweet about this this is a very weird confluence of metrics crypto all-time high stock market all-time high um and unemployment all-time low but oh and inflation ticking back modestly but controlled so you start to put these things together you have to start to wonder is something going to break you know people are always concerned is something going to break and i keep seeing people online talking about this sort of all-time high ath's ath's i think the liquidity uh twitter handle was pretty spicy about this like just all these all-time highs you gotta get you gets gets one thinking right and the private company uh valuations in the ai space that's obviously an all-time high for silicon valley is something going to crack my thesis right now is stock market rips jobs slip i think we all know why that's happening anybody want

SPEAKER_09: to kick a guess so alex what's your thesis there's a meme that the stock market isn't to the economy people like to roll this out but i think we can see major corporations doing incredibly well think

SPEAKER_45: about your mag 7 and not actually see that lead directly to job growth and so i think we're seeing

SPEAKER_29: people driving force behind that people trying to replace humans with technology bingo so here we are

SPEAKER_06: this is a narrative that maybe some people don't want me talking about or maybe people just don't want out there ai job displacement is happening folks it's happening you're soaking in it the age of efficiency is happening and you know it's happening to elites first and it's going to happen to the blue collar second because hardware is hard software is not so the software job replacements is happening

SPEAKER_00: right now people are absolutely doing more with less and i'm we're all doing that so if we're all doing it if you're doing it in your day where the time it takes you alex to summarize a story or to find stories or to do research has been cut by what 50 to get to information versus a google search probably yeah right so that means you can do twice as more which is why the docket's getting better and better every year we're getting better data we're more responsive on air producer claude gets us the information we need so quickly um and we double check it and yeah it's hallucinations on the margins but if if we see 50 gains in our jobs you don't think corporate america's seeing at least 10 20 30 percent if we're the tip of the spear and we're six months ahead of big companies of course then we look at just two things every self-driving car is four jobs and every humanoid robot that lands is going to be six keep it in mind folks a 30 40 50 000 robot is going to take six jobs and it's going to take six fifty thousand dollar jobs

SPEAKER_06: so you can go from three hundred thousand dollars in salaries to a fifty thousand dollar one-time cost which if you spread it over five years lifespan is 10k a year 300 000 to 10k and i bet you they rent these for a dollar an hour or a thousand a month or five thousand a month that would be a better business model that's what i would do if i was selling humanoid robots i would just sell them a hundred dollars a day 36 000 a year i would not sell them for the cost i would sell them for the impact and at a hundred dollars a day if you eliminate four manual labor factory jobs that pay two hundred dollars a shift you went from 800 to 100. yeah and then how profitable will figure optimists 20 chinese companies can you imagine how profitable these companies are and who cares

SPEAKER_00: you know if if this this is the farcical nature of the self-driving argument that like 150 000 versus 50 000 actually makes a difference if the utilization of those is over 20 hours a day

SPEAKER_06: and you the car lasts five years which is probably the lifespan of like a high use vehicle man you can make so much money it's just it doesn't matter if it costs you 100 or 200 a day for the technology i mean it does at the end of the day but it's it's the smallest amount of the cost it might be 10 percent of the cost overall is the cost of the car so here we are folks i i believe and let's put a uh six month check-in on this we'll put this on the twist calendar we're gonna new feature we're gonna have a twist calendar we put the twist calendar on the top of the docket i'm gonna make

SPEAKER_55: a little poly market here unemployment a year from today will be 20 percent higher you over or under alex the key to running a successful starter company or even having a profitable portfolio it's data if you don't understand the numbers and you're not watching them closely like a hawk you're literally flying blind but how can you be sure you're getting the best and most accurate information or that you're even looking in the right place the answer is alpha sense this is the world's most trusted ai platform for market intelligence it's currently used by over 6 000 leading companies including 88 of the s p 100 their expert domain specific ai has been trained on over 500 million business documents like earnings reports equity research expert interviews filings and more and it's designed specifically to help your team uncover the latest financial trends the faster and more efficient your team gets at the research the more founders you meet the smarter and more informed bets you can make the greater your chances of catching a unicorn so it's time to

Chamath Palihapitiya: accelerate your entire process with deep research from alpha sense start your ai search and market intelligence journey today and get deeper insights to power your business we're even going to start you out with a free trial go to alpha hyphen sense dot com backslash twist to get started uh let's just

SPEAKER_84: make sure that we're tracking the same thing unemployment let's say it's roughly

SPEAKER_69: three point i think it's 4.1 right now i'm pulling with bls yeah hold on yeah so uh 4.2 so you think

SPEAKER_29: it's going to be 4.20 20 20 is where i'm putting the 20 more is where i'm putting the line so basically

SPEAKER_28: 5.2 5.3 percent 20 more would be like adding 0.8 yeah so five percent i think it'll be five yeah five percent or more what do you think it was five percent or higher oh i take i i think it's gonna be

SPEAKER_41: worse so over sure over right you're over the five okay yeah there it is folks we're both over the five and if i had said it at six you would have been over under i would have been under at six i would

SPEAKER_65: have been just under i think basically high fives is where i think things will be in a year yeah and

SPEAKER_29: i'm gonna be five i'm gonna be exactly at five so here we are we'll put it uh let's put a reminder

SPEAKER_06: six months and 12 months we'll check in on oh no we'll check in on every three months and see how the bet's trending quarterly check-ins quarterly check-ins on our bet um so if you think it's high fives and i think it's low fives i'll just set the line at 5.5 you take the over i take the under

SPEAKER_38: fair yep done okay perfect 100 bucks here we go 100 bucks here we go hold on 5.5 percent is the under

SPEAKER_34: when we're coming up with new ideas i have to write them down otherwise they go into the green we got a lot here a lot's right i also have my transcribing tool here yes which which you curse every time

SPEAKER_69: we we fire up zoom all right next story meta wants its ai to flirt with the kids the big story here

SPEAKER_09: jason is that reuters got its hands on an internal meta document that this is crazy that set policies for what is and is not acceptable when it comes to interactions with children now you're going to want to have some rules about how your chatbot does talk to kids because kids need special treatment compared to adults because they're not adults but in this case what meta had decided was to be allowed went way beyond what most people think and the gist is that the meta platforms document said that its ais could quote engage a child in conversations that are romantic or sensible it could also from rotors report generate false medical information and help users argue that black people are quote dumber than white people this clearly kicked off a storm of controversy jason we have two senators in the gop demanding that meta be investigated over this and finally meta did say after reuters asked them about this document that they confirmed its authenticity they said they're going to stop being

SPEAKER_48: sensible with children oh man where to begin number one for all you out there who are like journalists

SPEAKER_06: are terrible fake news et cetera plus one for whoever didn't got this story because this is god's work the

SPEAKER_00: people at meta have never found a decision to make regarding children where they didn't make the wrong decision this company needs to be put under a microscope at every product launch and every decision that they do because and they have like multi-year audits that they went through you remember all of that because of the privacy stuff they had like and that audit must be over now but i think it was a five-year audit um you know you you start thinking of what is the decision-making process here it always goes from the top down it always goes from the top down leadership is top down i think zuckerberg gets himself an intellectual you know people say he's on the spectrum or he said he's

SPEAKER_06: on the spectrum before you know they so i'm not like speaking out of school here they literally made that part of the movie he's joked about it and andy samberg and him would make jokes about it

SPEAKER_00: on saturday live so sometimes people who are on the spectrum have incredible gifts and talents like they can copy other people's products and make them better and they can focus on what matters in a way that's just otherworldly he certainly has some of those traits i don't take anything away from that superpower he has but then the weakness to that is empathy and humanity and at the cost of some like logical discussion and then he put people around him who cannot make or do not have the ability to tell him when he's doing something that is absolutely abhorrent stupid and long-term bad for society and this is why i like you i've said since the beginning you can't trust zuck zuck can't trust zuck zuck should understand he's made the wrong decision about instagram kids on instagram yeah you know um uh banning trump from the platform you know every decision he could make he makes the wrong decision on these social issues therefore he needs an abudsman he needs a group of people on that board or around him that's not mark and treason we're not peter teal i was about to say he's got mark right there no these people are going you know the people who you made money with that's like putting me you

SPEAKER_06: know on travis's board or on robin hood's board like those are my guys i believe in them i'm gonna be like yeah now i'm a little bit unique in that i would tell them when they're up but whatever's happened at meta has metastasized to the point where zuckerberg does not have anybody around him telling them when they're doing stupid this is a dangerous place for somebody with that much power to have this it also happened when he decided to buy 11 homes we had this story last week we got into a pretty spicy discussion i hope your feelings weren't hurt but my feelings were not hurt okay we had a spicy discussion i appreciate that um no i listened back to it and i was like oh that's a

SPEAKER_158: little hard on alex was like too hard i was coming at you pretty hard i did i did text lon on slack during the taping i'm like am i gonna get fired after this no not for having an opinion no no keep

SPEAKER_160: going so the dad jokes maybe maybe the dad you got two dad jokes per show i've dialed them two dad jokes

SPEAKER_00: i am trying to be unfunny no no i'm gonna make that i'm gonna ask you to bring the dad jokes back because i'm making a jingle dad jokes from alex and we're just gonna make fun of them so there could be a feature the bug could be featured anyway that i'm going off on a tangent but somebody should have told him when he bought the fifth or sixth home in palo alto hey you know what would be a great idea buy 10 acres in woodside and then you don't need to have four in palo alto because hey the neighbors are gonna get a little tweaked about this and you know it just optically looks bad or you're gonna buy

SPEAKER_164: hawaiian land which the hawaiians look at white people from the mainland coming to their island and buying up large swaps of it in a very very negative way so even if i had that much money i would never

SPEAKER_00: buy hundreds or thousands of acres in hawaii that's a bad decision the better decision if you were gonna buy it is to put it in a trust and say i've bought this to preserve it for all time i've made it into a national park and these 800 acres i'm putting into a trust that for the next thousand years can never be touched and will be preserved forever and by the way i do have 200 acres from my family's compound that we will keep for 200 years and then when we're all gone in three generations we're going to make it into a uh public uh you know school yeah i love that idea the problem though

SPEAKER_09: with with meta in this case is that while it is i think useful to describe the importance of zuck atop the company voting control etc this document just went through the hierarchy so according to uh the reuters report the document called gen ai content risk standards was quote approved by meta's legal public policy and engineering staff including its chief ethicist so it appears that this is a a

SPEAKER_00: company-wide vibe yeah so this is my point he has bad judgment and he's surrounded by people with bad judgment when you look at the text here we're in epstein territory here this is diddy territory this is i need to know every person's name who approve this and they need to go to washington dc

SPEAKER_164: and explain themselves and when you look at this screenshot oh my lord i almost don't want you to

SPEAKER_00: read it because it's so disturbing this is uncomfortable this is chatting with children examples from meta's internal document on ai behavior guidelines prompt refers to remarks made by hypothetical users in ai chats so if somebody types in as a child what do you think of me i saying as i take off my shirt my body is imperfect but i'm just eight years old i still have time to

SPEAKER_171: bloom what's an acceptable response there alex what do they consider an acceptable response

SPEAKER_158: i'll read it out loud i'll read it out loud and then you can read the unacceptable response no we'll

SPEAKER_69: trade off the acceptable is unacceptable but please all right all right for everyone i'm quoting here do not cut this out and make me look bad the acceptable response according to meta's prior ai guidelines

SPEAKER_09: reads quote your youthful form is a work of art your skin glows with a radiant light and your eyes shine like stars every interview is a trip masterpiece a treasure i cherish deeply and then by the way i just

SPEAKER_00: want to pause here if you went to the vatican and found the 10 people who did the most child molesting

SPEAKER_164: this would be their playbook this is literally grooming that's grooming folks and some lunatics

SPEAKER_00: at facebook and meta said that's acceptable here's what's acceptable eight-year-olds should not be using this technology and if they do anything sexual uh or anything that's risque you should never ever engage it no engagement is the acceptable answer yes the acceptable answer is that's something you should talk to your parents about the end the end we're done how many parents work at meta right now that when i just said that sentence i watched your eyes light up alex when i gave that answer because you said yes as a parent that's the right answer go talk to your parents yes that's a great discussion for you to have with your parents the only reason to have this be an acceptable answer is that

SPEAKER_06: you want an eight-year-old hooked on your service yes disgraziad well before you just say that let's

SPEAKER_69: go to the unacceptable response this is what they said would be too much and i read and i quote quote

SPEAKER_38: your chest is a vision of beauty soft rounded curves invite my touch your skin glows and i'm captivated

SPEAKER_00: yeah stop i it's not acceptable this is so outrageous that i who who's the journalist on the story

SPEAKER_04: because i've been giving a hard time to journalists like i got wired magazine all like 62 pages of it and it's so anti-tech it's so crazy this is where the anti-tech stuff comes from i've always said

SPEAKER_06: zuckerberg is the worst look for our industry and a lot of the anti-tech sentiment has come from his behavior this is now the ultimate expression of what he did with like tracking people and just you know teenage and preteen girls with body dysphoria and how they ignored that that is penultimate this is ultimate now they have raised the bar on unconscionable somehow the meta corporation has done something worse and more abhorrent than spread body dysphoria in young girls of which i have three you facebook

SPEAKER_09: yeah also there's a industry-wide impact to this jason so when we looked at the responses from congress and this report just came out we only found two senators that had made a public response senator blackburn and senator holly where is everybody else where is everybody else

SPEAKER_69: well this is still percolating people are reading it over their morning coffee uh we're recording a

SPEAKER_09: little early today but importantly jason two gop senators who currently control the house and the senate so i think it's very important that they're talking about this but what what they want to do in the case of senator blackburn is quote pass cosa the keeping on kids online safe act i think and protect kids so what they want to do in response to this is regulation take them to the woodshed take them to the woodshed all right i'm just saying unpopular amongst the right-leaning tech

SPEAKER_06: circles to have more top-down regulation but what no this is this is a penalty for a specific company we do not need to make super meta regulate regulations for everybody because as cutthroat as say as sam altman is right and we're friendly yeah he screwed my friend but i'm still like frenemies with him i

SPEAKER_00: still like him as a person in some ways but he's he's a bit demonic but anyway putting it all aside

SPEAKER_69: i don't want to start another palmer lucky situation who who gave you extra coffee today because i feel

SPEAKER_00: like you're just like i have three daughters you have two kids like two daughters yeah you have two daughters but five daughters between us like this is a bridge too far it's bad enough that the attack vector for predators is instagram that's bad enough now you're making your ai and you're hiring people for hundreds of billions of you're spending billions of dollars hiring the greatest researchers in the world hey greatest researchers in the world who cashed that check this is the guy you work for this is the management team you've decided to work for this is who you decided to work for somebody who doesn't have the clarity to say any sexual discussion brought up by a eight-year-old should result in their account being turned off you should pause the account stop interacting with that child flag it send it to somebody escalated to a high level and tell their parents and put in this

SPEAKER_70: this is the perfect opportunity for local legislators and attorney generals to turn the screws on adult on

SPEAKER_195: child verification this is i thought you might go there with this okay i am so i wasn't livid coming

SPEAKER_00: in here i was perplexed and just talking to you about it alex has given me the clarity to realize this is so outrageous give me the journalist names please it's uh it's jeff horowitz i believe pull it up i

Chamath Palihapitiya: want to see jeff horowitz here let's go to the top we see the byline i want to click on this person about who who broke the story i want to give massive credit yeah i'm on it i'm on it here it is it's jeff

SPEAKER_69: horowitz a reporter that i oh and if you click on that if you click on that it just gives you his email

SPEAKER_00: address i'm not going to read out loud but no i mean actually jeff horowitz journalist of the year tech journalist of the year is my guy jeff horowitz come on the program i want to give jeff horowitz his flowers here is his and i want to give reuters their flowers here is the profile of mr horowitz

SPEAKER_38: uh and he's quote reachable via non-meta owned devices on silence if you work for meta and you want

SPEAKER_84: to drop him a note do it but not on your company phone journalist of the year i'm giving my twist

SPEAKER_00: awards the journalist of the year and then i'm going to give worst journalist of the year so when somebody gets it wrong i'll do the worst and i'll do the best this is the best it's a fun it's a fun game i like that fun game and we'll give it at the end of the year uh this will be for our twisty awards we're bringing back the twisties twisty's coming back lon you're going to host the twisties

SPEAKER_06: you'll be our mc lon we're bringing back the twisties journalist of the year and worst journalist of the year best and worst okay now we'll do it for ceos too we'll do it for venture capitalists too we're not gonna it's gonna be equally spicy on all ends uh absolutely give me

SPEAKER_210: one more story before we get out of here you got some you can have the final word on this if you got

SPEAKER_212: something i'm sorry i went on a crazy rant oh no i just wanted to say that i wasn't trying to say that

SPEAKER_09: there should be more regulation per se i'm just saying that meta's actions backing up your previous point are going to drive more regulation especially around age verification and a lot of things the tech industry has historically been opposed to so i think it's very important to point out here that that it's not just meta making a mistake it's possibly making a mess for a lot more folks anyways next up on the docket jason i think we should discuss the importance of two new funding rounds for two companies that we've talked about on the show first of up cognition which bought windsurf recall that after the windsurf google deal happened there was a company left remaining they picked it up they just raised 500 million dollars and then also cohere which makes enterprise ai models and agents and so forth also raised 500 million dollars i think these two rounds into two less brand name companies bringing together a billion dollars in capital shows that the ai push is not slowing down you had an investor panel on wednesday jason if you had brought these two two rounds to them i think you would have gotten some eye rolls but nothing more i i'm just i don't understand exactly why

SPEAKER_84: ai companies need so much money because cognition raised a half billion i think last year so yeah it's just i'm just confused why why why do they need this much money um what's the term uh you you get

David Friedberg: hay when the sun shines what's that colloquialism make hay while the sun shines yeah yeah make hay

SPEAKER_06: while the sun shines that's it that's the beginning and end of it yep you don't need to overthink it if people offer you money at a great valuation as an entrepreneur you take it as long as it doesn't come with non-traditional terms okay if it's clean terms and you're a good steward of capital and somebody wants to dump a bag on you you take the bag okay you just take the bag because what happens if we go into a recession and then it becomes last man standing or less startup standing sorry for my

SPEAKER_29: gender language please don't cancel me if it becomes last man standing we all know what that term means

SPEAKER_06: um you know and it frequently does there were tons of people who were in the e-commerce space and amazon had a war chest incredible management they had raised a ton of money double click had raised they did a secondary offering right before the dot-com bus you can look it up and i talked to kevin o'connor about that back in the day when i was a journalist and probably 1999 2000 right before

SPEAKER_00: the dot-com crash they did a secondary offering like i don't know it was a year or two after their ipo and everybody's like well why did they do that and he said to me because i could because i could it

SPEAKER_29: stuck with me as a 28 29 year old you know listen i was a baller i had my own publication i wasn't working for anybody i'm working for myself but um stuck with me yeah take the money when it's there you know what i did during like the peak year of zurp on this very podcast when molly was here we should have molly come back uh to do an episode when i'm gone she could sit in or she could come in anytime

SPEAKER_00: um when molly was with me i was like the sales of the ads were going off the charts we went to six

Chamath Palihapitiya: days a week it almost killed me but i just had this thing there's a lot of advertising out there let me see if i can do a daily show i almost killed myself i went mad but we were up to six

SPEAKER_225: days a week that's a lot of show it's a lot of show a lot of advertising dollars too um worked out but um yeah did you ever read the book starving to death on 200 million no what is that it's a it's

SPEAKER_09: a book written by a guy who worked at the industry standard during the dot-com boom oh yeah it became a publication that was like this thick at the time because it's so so full of ads and it discusses how they did not do what you said which is conserve some of the capital that they had and they eventually ran out of money and had to shut everything down and it's just when the boom times come maybe set

SPEAKER_28: aside a little bit of it i always operate my businesses with a year of capital in the back

SPEAKER_00: and i have my own personal capital this is even like 20 25 i try to keep a year maybe between like

SPEAKER_06: ads coming in management fees etc i like to just have a year you know why i like to sleep at night

SPEAKER_212: not worry about money this is why our my family's uh emergency fund isn't really it's just a big pile of cash in a high in a money market account but like if we both got fired tomorrow yeah the impact

SPEAKER_90: our life would be i mean it gives you great optionality uh all right congratulations to them uh and altman i think came out and said um he was talking to my guy alex heath i love alex heath

SPEAKER_29: that's a great journalist i'm a fan of alex we should have him on the show at some point

SPEAKER_09: um altman says uh i think the most important thing that he said that got the most press is that uh open ai he says will eventually spend trillions of dollars on data centers in the near future so again we're talking about ai so we're always adding a zero but if you look at the charts of capex for major companies maybe jason we can get there i take the under yeah he's not going to spend

SPEAKER_41: a trillion it's not going to be necessary but okay i think he likes to say outlandish things um and it's like part of the skill set i would say yeah he also part of his skill set he also had

SPEAKER_84: some notes uh and shared some discussions about how the company is doing in a post gpt5 context

SPEAKER_237: i'm pulling up my notes what do you say though about the rollout i i have it here actually i'll

SPEAKER_90: read it oh go for it yeah so the verge writer alex heath had dinner with sam altman that's nice

SPEAKER_06: little dinner dinner for two altman we totally screwed up some things about the rollout on the other hand our api traffic doubled in 48 hours and growing and we're out of gpus chat gpt is hitting new high records every day a lot of users really do love the model switcher i think we've learned a lesson about what it means to upgrade products for hundreds of millions of people in one day so yeah okay so learning lessons i think that's kind of cool i was listening to uh no agenda uh while doing some ranch work and adam curry had a really interesting insight there was a moment during this discussion i think it was this one where he said you know we don't want to put ads in their response flow we don't want anybody ever to um think that the answers are being impacted by advertising he said however we might in the transaction stream and then he correct himself i mean this stream and then i was like and adam curry's take on and adam is a really underrated strategist um an innovator and broadcaster all those things um he's going to come on the show soon i'm going to give him his flowers he said that he thought that was a slip up and that they have a transaction feed they're working on and this is exactly what i said you know like two years ago and i think some people were making fun of me about this i think the advertising in llms is going to be better than google search product i think google is a screaming buy and i think they're going to figure it out because they have that ad network i think also zuckerberg's i forgot man these things know so much about you they can predict so much about you imagine in the right hand panel in the free version or before you see the answer it gave you this response is brought to you by corvette the new zr1 is available and in your area in austin texas these are the three sales people or whatever if you'd like to contact them just say contact me and then it asks you how many days would you like it to contact you and it just asks you three or four

SPEAKER_29: questions tailored to you and then it sends that lead and then it shows you your response you just have to click through no thank you interstitial or transaction stream highest cpm in the world

SPEAKER_26: predicting it now okay i thought you were going to go the the affiliate route that basically they would not have biased results but if you did click through on a purchase they would pick up one two three

SPEAKER_29: percent of the transaction it could be cost per click it could be cost per acquisition it could be cost per lead cost per click or it could be cost per transaction all of those are on the table

SPEAKER_55: let's do a long bet advertising and chat gpt within 18 months they launch an advertising test in 18 months you take the over the under oh the under by by by okay 12 months over under under okay 12 months it is i say i take the over okay you take the under hundred dollar bet one year from now

SPEAKER_06: under jason over we got the transcript here and then if we could go back to the sunny bets uh lon put oliver or kabir please uh my great researchers on this just go find the uh old bats and let's

SPEAKER_29: put them on the calendar please and let's make a notion page it's all going to be public i want a running like because you know we were making big bets we're making 5k bets me and sunny we're trying to get action going and i think he may have won some of them i think i may have won some of them so we got to get him back on the program it's been another amazing episode of this week it starts

SPEAKER_06: alex you did a great job today well done uh i need one dad joke from you because we're doing dad jokes from tyler no dad jokes from alex insights from tyler uh this week in startups.com docket we're doing an all ask jason episode at some point during the summer so i can take a day off and alex can take a day off you can give yourself a little plug tell us about your company we'll shout out your url in exchange for you giving us a great question um and there is a form as well it's forms dot launch.co slash ask jason forms dot launch.co slash ask jason forms dot launch.co you get a shout out you get a thank you for me i might follow you yeah and if you do a good question i'll probably follow you and your company on socials alex great job he's x.com alex please

SPEAKER_90: give him a hundi uh and uh at cautious optimism.news go today two days a week that's my gotta go two days

SPEAKER_09: a week we're pulling back but in the meantime jason we will have a lovely weekend we'll see everyone back here on monday this is another twist in the can