SPEAKER_00: so there's two individuals um who are digging a tunnel on the other side of the tunnel are a bunch of diamonds the one guy is walking away when he has but one or two strikes left with his pickaxe to get to the diamonds the other person is feverishly trying to get there i'm not giving up folks i am not giving up other vcs might be giving up i believe we are on the precipice of the greatest

SPEAKER_02: super cycle in the history of business because what ai is capable of doing if you can own you

SPEAKER_00: know these companies and help grow them now and they are as efficient as they appear to be trending towards the amount of earnings that these companies could have per individual is going to start looking more like i don't know google's earnings apple's earnings or only fans which is to say tens of

SPEAKER_03: millions of dollars per employee not hundreds of thousands right this week in startups is brought

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SPEAKER_03: all right everybody welcome back to this week in startups he's alex wilhelm i'm jason calacanis and we talk about startups technology and we'll delve into media politics as it relates to those other topics and alex i understand there's some breaking news yeah so we were literally just sitting down

SPEAKER_17: getting our mics turned on and the financial times reports as of seven minutes ago jason that open ai's chief technology officer mira marati is leaving oh yeah hello hello that's interesting so they have an

SPEAKER_03: unlimited amount of capital they have a massive lead and the cto has left the building yes that's a

SPEAKER_02: breaking news story so whenever we have a breaking news story we like to speculate what are variables

SPEAKER_23: what's the context around this we know open ai's raising at 150 billion like five or six billion

SPEAKER_03: dollars i think was the target of that raise so they have unlimited capital to pay this person but there was also a secondary where people could cash out and when people cash out large amounts of money sometimes they'll have an existential crisis all there or or they will just say well i'm going to call it a career those there are those there's two variables there there's also unlimited funding uh for new startups so that person might want to be in the number one position that's another possibility uh and then there are other startups that already have been formed that are looking for ctos who could make a better offer or there could be some uh thing that happened that led to them being pushed out fired or disagreements those would be the top potential categories so there you have it folks it's going to be somewhere in that zone in all likelihood or it could be personal god forbid personal

SPEAKER_23: tragedy you know need to address something in the personal life um you know a sick parent or something

SPEAKER_29: so well any indication of why they're leaving as i run through all possibilities and you try to

SPEAKER_16: news i hope i filibustered enough no no no you're good um she said there's never an ideal time to step away from a place one cherishes yet this moment feels right our recent releases of speech to text and the latest models uh mark the beginning of a new era uh that was made possible by your

SPEAKER_17: ingenuity and craftsmanship she wants to quote create the time space to do her own exploration uh i

SPEAKER_16: would bet you lunch which is my favorite wager jason that uh i bet she and sam altman disagreed about stuff my impression of watching sam do business for a while now is that he gets his way and you're either on board with that or you end up leaving but i mean ilia left and john shulman left and now miros out and it's becoming increasingly at the top of the pyramid the sam altman show even more than

SPEAKER_33: it was before so that's that's that's my vibe is she can was she considered a co-founder or not i

SPEAKER_03: didn't know if she was considered a co-founder in terms of her title or when she came in i don't think she was considered a co-founder um she also had that terrible moment on tape where they asked her the training data it's the same individual yeah yes yes and she she became a meme where she gave like

SPEAKER_37: a grimacing face like they were like did you train off of youtube and she said i probably if i answer

SPEAKER_40: that question i might get fired and or trigger a lawsuit but i'm an honest good person so i'm gonna

SPEAKER_29: grimace which is what an honest good person would do if they got caught with their hand in the cookie

SPEAKER_16: jar this reminds me a lot of when a company does something bad and then they just cannot admit that

SPEAKER_30: they did it so did you see the boar's head meat fiasco in the u.s oh no i mean i know boar's head

SPEAKER_03: because i grew up on the east coast it's a roast beef and you get your liverwurst you got all the good

SPEAKER_16: no more liverwurst they're out of that product line and they closed the factory because uh they were inspected by the fda and they found listeria uh meat on the walls just basically everything you

SPEAKER_17: don't want to see them yeah and they responded with uh we care so much about our customers we uphold their value i'm like no you don't just tell me all right we were too cheap we made a mistake

SPEAKER_16: we're going to spend more and do better i'll respect that much more than just being grimaced at if you will but anyways mira she's out and um well bad news for open ai fans i guess well um it does seem

SPEAKER_50: like that organization now has so many people uh and so much capital and so many users and so much

SPEAKER_03: revenue that i wonder if one person can you know coming or going actually will change the fate of the

SPEAKER_16: organization i don't suspect it will yeah that's fair i wonder also if you know if i was the cto of an org and she was there since 2018 so not a co-founder but a very long tenured employee at the company um if i had been there for what is enough six years and we started off as a research group we got larger increasingly commercial and then suddenly you're in the process of raising six and a half billion more it's probably less doing code and more doing meetings than she might want to do and i kind

SPEAKER_34: of respect that if it's worth 150 billion and she was a cto and she had but one percent of the

SPEAKER_03: company would be worth 1.5 billion 10 basis points would be worth 150 million somewhere between those two numbers is probably what a cto would get um now yeah if he was an early stage startup because this had a very weird beginning and weird corporate structure you know the cto if they were a co-founder

SPEAKER_53: would own you know it was four co-founders they might own 10 each after dilution 20 each in the beginning um as a hired gun cto brought in later low single digits so you know if she had one one percent she's a billionaire and she might have been able to sell you know whatever 10 percent of her holding she might have taken down 10 to 100 15 million to 150 million and be sitting there saying you know what there's more to life than this and yes it could also be maybe sam feels that uh they uh the organization out grew hard for all those reasons and when you get a wishy-washy kind of

SPEAKER_02: statement like that it sounds like she might have been pushed out yeah well more to come on this

SPEAKER_16: reporting just dropped i couldn't not bring it up on the show if you want to build beautiful software

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SPEAKER_17: news we have for everyone today is a change to compliance rules in the realm of ai that might impact startups you had me look into that i have it for us a possible m a comeback hot startup rounds that indicate a return to valuation normalcy and then thanks to the group text generation tool belt and interesting data on how the youth are changing up how they approach the labor market all right first up

SPEAKER_16: though uh department of justice compliance jason these are now incorporating ai into kind of the best

SPEAKER_17: practices i have a lot of thoughts about this but i'm curious why you flagged it for the show today

SPEAKER_53: you know i just saw people talking about it and there was a wall street journal article and i was wondering why the department of justice was talking about ai as a potential risk and that compliance officers and compliance programs needed to be involved in that so compliance as everybody knows or maybe doesn't is typically in a finance organization let's say you want to make sure that

SPEAKER_03: you're doing things by the book it's kind of like the legal department and making sure you know it's kind of legal adjacent and it's like operations but more serious operations so compliance might be i don't know something silly like well when we make a trade there's a document and it's signed and this level of person needs to approve a trade above this amount of money so that we don't have some rogue trader you remember that story of the rogue trader who was trading well above their uh limits you know on some desk and then they get flipped upside down because they were doing

SPEAKER_23: something that they weren't supposed to be doing the compliance officers supposed to check that

SPEAKER_03: yes so i'm wondering why ai came up on their radar if it's pre-emptive or reactive and there's something happening in organizations that requires compliance okay so it turns out there's this thing called the

SPEAKER_16: evaluation of corporate compliance program guidance doc and what it is is a series of best practices and if you're a company that has to deal with compliance which is most of them i'd say then if

SPEAKER_17: you follow this document and you make a mistake the government will say well look you did follow the best practices something went awry we are not going to take you outside and hit you with sticks we might fine you but probably no one's going to go to jail and so when they expanded this document to include some stuff on emerging technologies which really is just focused on ai what this does is it means that companies that want to use ai products will have to then take ai compliance into um essentially how they do business to prevent getting in trouble for it now uh there's a bunch of stuff here i'm not going to run us through this i kind of summarized it down to three things in the realm of risk management so the first thing is are companies that use ai quote keeping tabs on potential negative or unintended consequences and working to mitigate the potential for deliberate and reckless misuse so that that doesn't sound onerous to me it sounds more like know what you're doing and don't have no guardrails

SPEAKER_16: that doesn't scare me too much and um then two more things that really stick out to me one was are companies certain that quote the technology is used only for its intended purposes so don't build

SPEAKER_17: something that can do very bad things and then just ship it out there and then go whoops us and then finally uh how is accountability over the use of ai monitored and enforced so that's kind of i think the key bits nothing here strikes me as as you're not going to get like lena con level angry about this jason um but i do think for startups that are selling ai you know mediated or predicated

SPEAKER_16: products are now going to have different conversations when they do sales and that's kind of what stood

SPEAKER_50: out to me here is if you're a startup you need to answer this question yeah if you're working in finance you know maybe hipaa you know uh health information yeah you you have to be thoughtful about how ai is

SPEAKER_03: applied so if you were to put a language model into a hospital or into morgan stanley or something or blue cross blue shield and you did it in a non-thoughtful manner and it resulted in people's information being leaked or i don't know a prescription prescription being given that shouldn't or financial advice being given that was wrong or if somebody not getting a mortgage because your algorithm and your language model didn't correctly assess the risk or you know they gave a mortgage to somebody that was too risky all of these applications when they hit the real world have consequences self-driving pretty obvious i was using 12.5 today and was very impressed

SPEAKER_02: um you know it still needs an intervention it's not ready to take the steering wheel out neither is waymos but it's you know we're in the autonomy end game as we've talked about here and it's one of

SPEAKER_00: our themes yes but there's a lot of compliance there right hey make sure you record things and keep

SPEAKER_23: track of interventions then you start going down to the next one which is health care maybe people are getting a prescription or they're getting a diagnosis you know way down there is grammarly or the new writing tools that we talked about inside of um the ios beta 18 for the iphone 16. i guess the ios

SPEAKER_00: is a different version than the phone so i think they're on ios 18 iphone 16 ai that apple intelligence as we showed you know if it puts the comma in the wrong place i don't think anybody's going to get sued

SPEAKER_02: no oxford comma or not you could be annoyed but you're not gonna get sued so but if you put the

SPEAKER_16: comma in the wrong place in a financial transaction and add some zeros by mistake uh you could be in a lot of trouble for example i think the hippo point's great because the thing about unintended consequences stood out to me as you can't claim ignorance so for example if you had an llm that sat atop hospital data and allowed i don't know doctors to ask your questions about patients cool if someone who wasn't uh allowed to access the data asked it who's the most obese patient in the hospital today yes well you should have some guardrails around that and that's why these rules don't this

SPEAKER_00: didn't terrify yeah it it just seems like we're now got the regulators aware that ai is being implemented in 2024 and will be implemented and they're just saying by the way we're aware that

SPEAKER_100: you're aware that we're aware that we're all aware that this is happening and so since we're all aware

SPEAKER_03: don't screw it up uh pretty pretty basic stuff i think for founders you know it's very interesting when you work with young founders alex because for a period of time when this came out i had a lot of

SPEAKER_00: people coming to me saying i'm going to do ai therapy so i'm going to have an ai do therapy with a person and i was like well you know some of the people have therapy you know they might want to i don't know cause harm to themselves or another person yeah you know or they you know there's all kinds of like really bad things that can happen like how are you going to deal with that they're like oh we're going to put a disclaimer i'm like you're going to need to talk to a lawyer about this first like probably several lawyers i mean if you want to do you know characters and it's for fun

SPEAKER_02: and i'm talking to hannibal lector and you know it's like uh or i'm talking to a marvel superhero that's one thing but if you present it as hey this is your companion or this is therapy that's

SPEAKER_00: where i think you got to be thoughtful because maybe these things get trained on hey what are famous psychologists and and what do they think maybe it's outdated maybe it's not applicable maybe we've realized giving this type of advice to this type of person could result in this outcome that nobody wants to see so again just because a new technology doesn't exist doesn't mean you can just apply it to everything recipes yeah and you know i don't know um writing uh and tier level one support are

SPEAKER_53: different than health care and finance so just be thoughtful everybody yeah and you know i'm just

SPEAKER_96: thinking about this it actually it's very reasonable to presume that if we're going to use a computer or an

SPEAKER_16: llm to do a medical function that it would be held to the same standards as the humans that do this and humans have to carry malpractice insurance and you know like there's relatively rigorous credential in there because we've learned all regulations are written in blood as the old saying goes um that we need to have some rules here so in fact maybe from that perspective jason these rules are light um compared to where we're seeing ai um applied so consider these a minimum but not a sufficient

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SPEAKER_23: there was some good news and uh you know when i hear mna i just think oh man i miss it i miss those days

SPEAKER_16: when companies got bought well i was dpi yeah so i'm almost a little perplexed at our at the doom and gloom about mna jason because you and i talk about this week in week out it's a big deal venture conversation founder conversation but there has been a good number of deals so this week we saw zoom in uh which got sold to uh salesforce for 450 million dollars so a half billion dollar transaction and um ctec reports that it sold for a price that was higher than its last round so presumably everyone did okay and that comes on the heels of salesforce spending 1.9 billion dollars to buy own so a couple of big deals from the crm giant this week also vista private equity said that they're going to buy smartsheet um ibm's buying cuba cast databricks bought tabular and then there's a bunch of other deals so just preparing for this little rip it didn't seem that bad so what am i missing from these news stories compared to kind of like the experiences of

SPEAKER_120: vcs well um you know we happen to have a chart here uh and so if we pull up the chart uh small deals

SPEAKER_23: um we got a lot of small deals occurring i think that's because these companies are out of money uh and the valuations got ahead of their skis and vcs no longer want to fund them therefore these are shotgun m a company is not going to get more funding the valuation is lower by i think in the one example you gave 75 lower maybe than the previous valuation that it got sold for so you'll have something that was worth 2 billion sell for 500 million or a billion sell for a billion and um you know it is a sign that uh the venture community probably didn't want to keep funding these and the deal structures and the overhangs were too complex to let a deal go through so what i mean by

SPEAKER_03: that is company stops growing it's growing 10 a year they've got 500 million in revenue it's no longer a high growth company therefore as a venture capitalist if you have dollars to invest would you rather invest in a company that's proven it's growing 10 year over year with some hope that it could break out that has all of this weird cruft on it and you have to have a lot of negotiations to do a down round to uh cram people down to do a uh pay to play deal so previous investors don't participate in this round they lose it all for a business that is sideways or even worse low growth now you've got this like oh my god we've proven we can't grow and uh you get some fire sales because vcs don't

SPEAKER_00: want to touch there's too much hair on the deal is i guess the the term people use so that then a sales force could come in and clean up maybe they say hey that's a billion in revenue let's say the company has a billion in revenue and this other company is trading for you know x times dollars uh and the vcs just want to get their money out you could start to see these situations where

SPEAKER_23: you have a clear path to get your money back as a vc and move on to the next investment that's that's a lot of what i'm seeing a lot of vcs are saying you know what yeah i like this company it's making 100

SPEAKER_03: million i just don't want to come to these board meetings anymore it's too hard it's not working

SPEAKER_23: and i have other investments that are growing if i put 10 million into this if i put 100 million into and i can get back 10 million plus or minus you know my original investment i can give it back to my lps i can recirculate it put it into other investments that are high growth

SPEAKER_03: yeah and this is the doggy dog world of venture in a market that went through something as cataclysmic

SPEAKER_23: as post-zerp and and that's what you're seeing is these distortions on top of distortions lena khan you know a chilling market with her approach so you have like a double distortion kind of going on here

SPEAKER_81: and it's going to take time to work this all out yeah so okay i got a couple questions for you first of all let's talk about growth rates that are sub venture for different sizes because a 500 million

SPEAKER_16: revenue base former startup that hasn't gone in public yet uh can have a lower growth rate than one that has 100 million so let's let's start around there what's the minimum growth rate needed for a everything else held equal normally quality sas company to raise more venture capital if you look

SPEAKER_103: at the public markets you'll have companies like uber airbnb google apple grow at 10 to 30 percent

SPEAKER_00: 20 30 percent in the public market on large numbers is considered high growth yes in venture 50 100 200 percent year over year growth is high growth so you're at 10 million next year at 20 you're at 20 million this year next year at 32 this would be like the high growth numbers when you start getting down to 10 or 20 percent growth people start looking at a five-year chart compounding if you're growing 10 a year it's going to take seven years to double the revenue it means the valuations not going to change dramatically so you don't have like crazy market pull like airbnb and uber did in those early days where every quarter you were growing 20 or 30 percent quarter over quarter and so you want to get out

SPEAKER_23: of those investments and start focusing your limited amount of time on investments that are growing faster and um you know the the overhang is the other big issue people invested a lot of money at a high valuation and now you put that growth rate on top of it nobody wants to put more money in therefore the

SPEAKER_138: management team says okay we'll go for break even so they get advised hey you're going to run out of money nobody wants to invest so you go for break even you then start hitting break even but you're growing slow and then everybody complains well you're growing slow why should we give you more money and you're like wait a second which is it are we investing in this business investing is another way say

SPEAKER_23: of saying losing money going down the j curve for a brighter future and people got so scared during the post zerp collapse that they actually probably steered towards break even so much that they became low

SPEAKER_00: growth or no growth companies and then the outcome is you know a sale at one or two times revenue yeah

SPEAKER_14: i actually i have the charts for what you just said i'm going to screen share here and uh so here we go uh this is uh from the bessemer cloud index this is revenue growth rate for public cloud companies over

SPEAKER_16: time uh you can see that there's been a little bit down and then after everyone was told to get profitable growth rates rapidly decelerated at the same time over the same time horizon trailing 12 months uh free cost low margin shot right up so you can literally see the trade-off between growth and profitability here it's super vibrant but jason i want to narrow down the point about um growth rates because i want to know how fast they decelerate as your revenue base scales because of course when you're a series a series b company triple digits you want to triple for a couple years and double for a couple years but if you're at 50 million a year in revenue today it would would 40 percent year over year revenue growth be enough to keep you in the venture game okay keeps you the

SPEAKER_41: venture game for sure yeah and you know there's always the hope of new products there's always the hope

SPEAKER_23: of uh acquiring other companies and increasing margins landing and expanding so there's a whole series of hope and and really if you think about building a business building any enterprise your it is a fight against pessimism and um trying to steer the car into the turn as opposed to going

SPEAKER_00: off the track right and you have to really have this blind belief that hey if we get to a certain amount of liquidity in the uber or airbnb network we will have a great experience so wait times will go from 15 minutes down to five and under people will become trusting that they can get a lift or an uber in time or that their food will come in time so they don't they stop going shopping and they

SPEAKER_03: say i'll just door dash it there's never a situation where a person in a modern city in america or around the world you know 15 years after the the creation of uber feels like i'm not going to be

SPEAKER_00: able to get a cab nobody has that fear anymore 15 years ago it was that fear that led to the opportunity but you needed to invest in having enough liquidity in the supply in order to have that happen so we hoped we hoped liquidity would arrive and then we hope consumers would become addicted to it we hoped that you could raise the price of it once all of those hopes became reality now you've got a money printing machine and you saw the same thing with airbnb will people let people stay in their apartment will people take their extra apartment their second home and or they keep their home and instead of selling it they put it in the airbnb inventory and then they go buy another home because they did well for themselves and they keep the original home that was like a lot a lot of the big airbnb win was people had like some i don't know let's call it a one bedroom and then they had a family but they

SPEAKER_23: had paid for their one bedroom or they had a tiny mortgage on it and they were like yeah i'm gonna buy this you know house in the suburbs but i'll keep the apartment in manhattan and i'll put in the airbnb inventory or whatever that was kind of the magic that you had to squint and really believe that somebody would do something as crazy as that and it happened so it's the triumph of hope over pessimism that's

SPEAKER_34: really what startups and entrepreneurship is so i i want to tell you um how important it is that now

SPEAKER_16: ubers are like running water because i was at the uber launch party in chicago so this is back when there's black jobs only and they only had like three in the city at the time literally just paying black job drivers to be there you know right they bought the supply yeah which is to be clear smart but like there was like three or four ubers live in the city at this time and it was so cool because i was the only person who had uber at my university because no one else went to that thing um and then i recall years went by uber became more you know pervasive and lyft became big and all this and i remember one time i was flying into i think it was san francisco and i'm like oh i don't need to worry about transportation at all even if i'm landing at 2 a.m because this is going to work and that that

SPEAKER_146: unlocked for me new locations too like i the world felt much more reachable and i think that's by the

SPEAKER_148: magic moment that's so hard to get to but oh my gosh is this sweet once you nail it i mean uh it

SPEAKER_37: just happened to me with apple pay you know i i i misplaced my wallet uh and uh my my spouse uh did

SPEAKER_23: me a favor of like collecting it for me and then misplacing it i have no credit cards i have no driver's license and i was operating in the world without credit cards yeah and i was like wait a second how is this possible i'm like everything's apple pay and i always keep a cup of hundy on me it's my old like it's my upbringing that i got to keep you know a knot in my pocket i always have a little cashy poo um and then even giving tips last night at the valet i gave a tip using venmo i said to him you got venmo you know when i get my hair cut now venmo all all tipping is occurring on venmo now

SPEAKER_138: so this cashless society which we've been working towards is now even a credit card list society you

SPEAKER_00: can and i can leave my home without my keys last night talking about running water i went at the same valet situation where i didn't have a credit card i also forgot i keep the key in the cup holder

SPEAKER_103: my spouse took the key out of the cup holder you see the theme here yes sometimes you're married yes

SPEAKER_159: i'm married and what married people do is they create little problems for each other you know

SPEAKER_162: i do the same for her it's true so i get to the valet i don't have the key to my car i said to the guy

SPEAKER_103: okay can i park it myself he's like this happens all the time go in your app hit start wait here we'll park it we'll even charge it for you um but just don't leave until we're parked got it he parks it just in case for some reason the car couldn't start because you can remote start it it's now parked great now i can leave so no key for my car valet worked no cash i was able to pay the valet just

SPEAKER_00: like a little indication that you know you you start to trust something to the point at which you could

SPEAKER_127: leave home without the keys to your car house because you have codes to do that and rfid and you have

SPEAKER_16: apple pay there's no flaw with this plan whatsoever apart from the fact that i keep putting my phone down and walking away from it like i'm fine with everything being mediated through my phone just because it's convenient like your car should be entirely just an app right that's just easier than

SPEAKER_33: keys if you have a tesla yeah if you have a tesla if you have a super route back like we do it's not sadly that why isn't it what are they doing it's so easy to do come on super outback that's a great car we bought a 2019 super up actually wanted the one because we wanted the bigger engine they stopped

SPEAKER_170: making okay we had to go i'm sure the new one has keyless entry on your phone i mean how could it not

SPEAKER_33: i would hope so i would think so but in the future though everything's gonna be on my phone i just wish that i would stop putting it down and it would go between the seat cushions and then my children would sit on it and then i don't find it and then i'm running around the house okay to conclude this

SPEAKER_16: section yeah yeah uh there's some good news here this is a quarter by quarter breakdown of the same data set we looked at before but look at the last two quarters compared to say the average of the

SPEAKER_17: preceding seven that's better that's actual money and i think we're starting to have a little change

SPEAKER_127: in the wind if you look at q1 and q2 of 2023 q1 and q2 of 2024 looks like it's triple so now it's going

SPEAKER_03: from a base of almost nothing and uh but you know the exit value and the number even and the raw number of transactions is going up so this is great um some of these are aqua hires some of these are inconsequential but uh any sign of life is good and uh you know we'll we'll definitely lena khan's

SPEAKER_185: gonna go that's for sure no matter who wins the election she's done and so um yeah as we talked about

SPEAKER_16: i do think you're right we didn't get to talk about it last time but um the uh the kamala campaign kamala harris campaign is trending towards crypto and uh the biden administration just pushed back some of their own party to approve uh some chip plant stuff so it feels like after much hand wringing the democratic party is is gently scooting towards a direction that i think you'll like better jason i'm just curious if it's gonna have any impact on the election but it does seem that the

SPEAKER_33: complaints have been heard so i agree with you on lena khan being out because what's her constituency

SPEAKER_138: i mean i think you can only hate capitalism so much in america before it works against you and

SPEAKER_03: you don't win the election so i think what they're probably looking at is people liked obama and clinton who were moderate democrats people like moderate republicans as well you know for whatever problems

SPEAKER_29: i have with trump i don't know if you have some problems with them i suspect you might have some character issues with him be kind of weird if you didn't uh just a couple um putting all that aside

SPEAKER_00: he's a moderate democrat as well i mean trump's behavior is as a moderate democrat it's just he pretends to be a mega lunatic conservative because that that's how he wins he got a base he's been a democrat his whole life yes he's pro-abortion he's pro-business you know he just panders to get a base which i think is what happened on the left too i think they pandered to activate a base for a period of time but now when it comes to those swing states what are people in pennsylvania and arizona and nevada do are they extremists these moderates and women who are the swing voters now they're not they want

SPEAKER_03: normalcy normal border normal abortion health care rights you know normal taxation they want normal

SPEAKER_00: and so i think what you're seeing is both of them are just acting a little more normal and mna is normal

SPEAKER_193: i i really appreciate you took that you tatted all the way back into the m and a point that is that

SPEAKER_59: is what 2000 of your own shows will do practice be normal venture capital is widely seen as one of

SPEAKER_198: the most lucrative asset classes in the world go look at the s p 500 nearly every major tech company on that list was once funded by venture capital firms producing billions of dollars in profit in the process the hard truth however is that the biggest venture firms are almost entirely funded by institutional investors like endowments and sovereign wealth funds so unless you knew a guy who knew a guy you and 99 of individual investors did not get to participate in the pre-ipo growth of any of those blue chip companies and it's happening again look at the biggest names in ai for instance almost all of them are still private just out of reach of your portfolio the fundrise innovation fund is finally changing that it's a more than 125 million dollar fund it holds some of the most exciting pre-ipo tech companies in the world and it's designed specifically for individual investors this time you can get in early at fundrise.com twist carefully consider the investment material before investing including objectives risks changes and expenses this and other information can be

SPEAKER_199: found in the innovation funds prospectus at fundrise.com innovation this is a paid advertisement

SPEAKER_16: now next up jason i have some good news which is that the m a return that we're seeing now you have phrased in a lot of companies ran out of cash dealing with some overhangs etc but not everything is cleaning up the trash from the last party it seems that a lot of startups right now that are hot to today are raising lots of money at prices that seem to be much more reasonable so i'm going to give you two examples really briefly and i want you to tell me if i'm totally out to space or if i'm onto something here so first of all what fix they just raised 125 million series e warberg pincus now the valuation jumped up by 50 compared to their 2021 round tc had that number at 600 million so they're probably worth 900 million now give or take and this company grew its arr four and a half x year over year so to

SPEAKER_67: me that's a lot of growth that's not a huge evaluation jump in a company at this age of maturity not being

SPEAKER_23: a unicorn shows price discipline your thoughts yes love it um if the arr is growing four times that's a very high growth company um and yeah they it was probably not that the valuation is low right now it's that it was high back then and so it has been digested you ever um you ever celebrate the thanksgiving

SPEAKER_205: you've been to a thanksgiving and yeah and you get a second plate oh yes yes i i then the pie comes out

SPEAKER_206: and you get the you get the pecan pie you get the apple pie maybe go a little a la mode and then you watch the game and then you go back and maybe you have second and thirds you know and then the next day

SPEAKER_00: friday saturday you're just you're still trying to burn through those galleries maybe you have a turkey sandwich later in the day on friday but you know that's this indigestion uh is what i'm trying to get at here is just we just gorged and so i think that's good discipline it's probably good value and what we really have to start thinking about is can you make money and so you could look at this in chat gpt and in fact i did that earlier um and i've been using the um is it oh four is the uh no it's a new

SPEAKER_211: one oh one okay so the oh one preview is what i'm about to show you here i just i typed this in

SPEAKER_23: earlier um a startup just raised 125 million at a 900 million valuation we're trying to figure out how much money these folks made friends and family invested 100k at 2 million accelerator like mine

SPEAKER_02: or yc or tech stars 125 for seven percent seed investors put 1.5 million at 10 series a 30 million 150 million dollar cap series b at 100 million 1.5 billion a cap latest round was a down around 125

SPEAKER_00: million at 900 million dollar valuation make the cap table this is really complex it thought for 77 seconds wow yeah that's a lot of thinking because i just gave it something like that's many steps you hit the down arrow key here so it's listing disparities building the cap table assessing share evaluations breaking down ownership breaking down ownership determining share dynamics evaluating the terms evaluating i mean it starts telling you all the things it's doing converting the notes initial founder ownership founder shares assume the founder started with 10 million shares representing 100 ownership friends and family put a hundred thousand at two million dollar cap ownership percentage a hundred thousand divided by two million equals five percent correct shares receive five percent of total shares before series a accelerator 125 or 7 ownership okay they have seven percent before series a seed round 1.5 million they own 15 sure enough that makes sense calculating shares before the series a founder's ownership 73 percent because a hundred percent minus five minus seven minus fifteen equals seventy three percent it's not exactly correct but anyway

SPEAKER_23: it starts doing this all oh my gosh yeah and then here the founders after all this owned 50 friends and family owned three percent three point four percent and then i said hey well how much did they how much are there how much is it all worth so the founders are have 50 percent of a essentially a billion dollar company for 513 million friends and family stake 35 million accelerator sake 50 million and then you start seeing you know series b whatever uh long way to say and then it tells you the multiplier 351 x for the friends and family 400 x for the accelerator um it's not counting dilution perfectly here

SPEAKER_00: long and short way of saying um you know it's very hard to make money in these later stages and this is one of the big challenges with let's say um the series a and seed rounds today can you return your

SPEAKER_02: fund can you return your fund let's say you have a 50 million dollar fund it's approximate size of our fourth fund okay you own seven percent of a company you get diluted 50 by the exit let's say even a little more like 60 so you're three percent at sale three percent at sale for a billion dollar company you

SPEAKER_23: hit unicorn status is 30 million okay and uh let's say it hits 1.5 billion sale it's another 15 million so right around 1.6 billion you know you return your fund kind of hard data 1.6 billion company but it

SPEAKER_00: does happen how often does it happen might happen one every 200 investments for an accelerator maybe every 300 investments so you start to realize like even for an accelerator it's hard now you imagine you

SPEAKER_02: invested you know and owned seven percent for seven million dollars just how far you have to get for

SPEAKER_00: that fund and how many names you need to have the elevation of prices at series a and seed has made it very hard for venture funds to get a return it's great for founders but it's kind of breaking economics

SPEAKER_02: for fund managers and lps and so we have to return to some normalcy and that's i think the healthy

SPEAKER_16: part to the story that you're describing today yeah i think normalcy is good um i'm going to bring up one more example of a company that i think is doing pricing pretty reasonably well um torque torq just raised a 70 million dollar series c evolution equity partners we don't know the um the valuation this time but my read here is that's less than a billion because they would have said more than a billion if it was and that matters because the company has crossed the 24 million arr threshold and has been tripling for a couple years and thinks it'll hit a hundred million arr by its fiscal 2026. so here's a company on its way to nine figures in revenue with a sight line to it and it raised 70 million and it's not a unicorn and i think what that does say jason is investors are now saying at the series c and beyond level we are going to start thinking about what your possible like market comp exit is and we're not going to get too far ahead of that because we don't be stuck holding the bag like we are with so many companies that are overvalued from 2021 so it just feels like discipline is not back but

SPEAKER_23: returning maybe it's returning yeah i would say that yeah so i mean 24 million um you know times uh 30 multiplier uh you know it's pretty obviously 720 million dollars that's pretty juicy valuation um 30 times top line revenue it's a high growth company you know in another lifetime maybe they would have

SPEAKER_03: gotten 50 or 100 times right so it would be double that 1.5 billion maybe would be 2 billion and people

SPEAKER_00: were just assuming that they would give the value next year's revenue or the 2026 revenue so we give credit for work not yet accomplished and i think that's where people got themselves in trouble the the tigers that those kind of cohorts came down and said some number of these companies are going to be worth a hundred times what they're worth today so let's just give them credit on average for

SPEAKER_03: you know a year or two of work maybe two years of work and uh they'll fill in the valuation then we

SPEAKER_02: start making money in 2027 2028 this company is being valued on their revenue now so while they may say they have a line of sight to 100 million they're not getting valued at 100 million in revenue times 33 billion they're getting valued probably at 30 times revenue 700 million 800 sure and i think

SPEAKER_17: that's reasonable because you don't get a 30x uh multiple in the public markets it's more like eight but as the company grows its growth rate will come down blah blah blah but from this point from the series c it makes sense that later on it'll be valued like a public company and that's the

SPEAKER_234: important thing because then you can exit you can have an ipo you can have a sale to private equity or to a tech company and then jason gets paid and that's very important for the venture capital scene

SPEAKER_235: i mean if i joke if you if you don't return dpi if there's no distributions to paid in capital

SPEAKER_23: we the industry's over i don't know how to say it more clearly now because there are other places to put money we've talked about this so many times if the lcs can put their money somewhere else they will so the founders um you know they need to do the best job to get the best valuation they can but one thing they could do in terms of having empathy if they do get to the point where they have this crazy marketplace is understand that you know if people are overpaying you for your shares then it's going to come back at some point they probably have downside protective provisions and if they're underwater then they are going to sell your company as we saw on the brief his story and it might not you know be so good for you so there's something here about not gorging and not getting ahead of your skis if you and and you know the way i would explain it you know to somebody who is buying a car

SPEAKER_138: you know like if you can afford uh you know whatever model y and you're thinking about getting

SPEAKER_00: the model x and it's twice as much money and you're somewhere between the two get the model y you know live under your means and be comfortable you don't want to stretch too much and then feel

SPEAKER_23: pressure and i think that was a big part of the excess and everybody said it anybody who'd been

SPEAKER_00: in the industry through multiple cycles warn if you raise too high a valuation and you don't hit it you may not be able to raise capital again you may have venture capitalists who behave oddly on your cap

SPEAKER_03: table yes your board meetings and that's what we're experiencing now so there was a reason those

SPEAKER_16: warnings came you know there's a book called devil the devil takes the hindmost i think and it's a history of various um financial um booms and panics throughout time and the really nice thing to know reading that book is humans haven't gotten any smarter but we haven't gotten any dumber either we're just kind of doing the same things and through bubbles and through business cycles we end up progressing but if you do get caught in the downswing of a bubble it it's going to be absolutely brutal um jason in venture capital terms though if valuations are more reasonable vcs will have less aggressive tvpi growth but if those lower valuations allow for more exits they'll have faster dpi am i

SPEAKER_23: doing that correctly yes that is so great that you have nailed this i mean you're you're you're you're moving from like superficial journalists trying to figure out what's going on the inside to being on the inside and understanding it innately right and and i went through this same journey i'm just

SPEAKER_138: like your big brother a little bit ahead of you on it the dynamic is do you want paper do you want

SPEAKER_23: to feel good on paper or do you want to feel good in reality and you know there's this expression that bill gurley told me at some point that somebody told him which is you can't eat tvpi you can't put that on the table and so you know it might have felt good for example instacart shareholders had a very high valuation and then um that company which i think is called maple bear on the public markets corporate name yes yes which i mean what are you doing just yeah anyway yeah instacart today is worth 10 billion yeah and it's doing really uh well recently it went down it was trading at 22 a share in 2024 um and remember they kind of got pushed out of the nest to they forced them to the ipo because they had been

SPEAKER_02: trading i think their private round was the highest was like almost 40 billion they were very aggressive

SPEAKER_16: during covid um i think apuvra the former ceo was brilliant at pitching the company and raising

SPEAKER_165: capital but i would say from where i said the valuation that he did raise that in the end

SPEAKER_03: wasn't the right one well and now it's worth 10 billion in the public markets as opposed to 40 billion in the privates that's one of the major ones i can remember here and so that is probably

SPEAKER_00: the best example we have of what will eventually happen to your company is there is a voting mechanism and then there's a weighing mechanism uh is i think the way warren buffett said it or charlie munger said it it was graham right oh okay so maybe munger's kept saying it um but the concept here is you know in the private markets we're all voting yeah instacart's a great idea air baby is a great idea coinbase that's killer this is great that's great okay uh robin hood killer idea okay how much is it worth

SPEAKER_23: okay we're not voting if this should exist in the world anymore we're not voting if we wanted us consumers and we're not voting if we wanted to place a bet we're weighing it what is the actual

SPEAKER_138: value of it in reality well the value is what's its growth what's its earnings is it losing money or breaking even and we saw this with uber and airbnb when these things and lyft were losing money people didn't want to own them once they started you know restructuring people wanted to own them and so i feel like i was talking to a couple of people who were in the venture business um this past

SPEAKER_92: week a number of them have left the venture business oh and we had a real heart-to-heart

SPEAKER_23: discussion and the heart-to-heart discussion was i don't know if i can do this cycle again i don't know it's just too hard and i said to one of them you realize that you fought up until this point

SPEAKER_138: and you might be leaving right as the party's starting up again and we're on the greatest cycle of our career it would literally like i'm going to stop watching the nba you know when michael jordan retired you would have missed lebron you would have missed staff you would

SPEAKER_00: have missed all these incredible players you know i'm going to stop watching television you know after hillstreet blues and saying elsewhere is off market you would have missed sopranos right and so you've got to be careful when you quit and right now i think the people who fought through and have not

SPEAKER_258: given up we are on the precipice of working boom exactly it's this name you're literally describing

SPEAKER_14: this meme i had to pull it up this is uh it's the if you're listening it's on audio it's the uh the

SPEAKER_16: mining meme when the person you've got it turns away oh people love to put text on this to make it into kind

SPEAKER_30: of whatever they need but this is what you're describing so there's two individuals um who are

SPEAKER_00: digging a tunnel on the other side of the tunnel is are a bunch of diamonds the one guy is walking away when he has but one or two strikes left with his pickaxe to get to the diamonds the other person is feverishly feverishly trying to get there i'm not giving up folks i am not giving up other vcs might

SPEAKER_02: be given up i believe we are on the precipice of the greatest super cycle in the history of business

SPEAKER_00: because what ai is capable of doing if you can own you know these companies um and and help grow them now and they are as efficient as they appear to be trending towards yeah the amount of earnings that these companies could have per individual is going to start looking more like you know i don't know

SPEAKER_03: google's earnings apple's earnings or only fans which is to say tens of millions of dollars per employee not hundreds of thousands right and that's the i don't know if you've seen that you might be

SPEAKER_00: able to pull it up as we talk here uh one of our great producers can but there's an incredible image now of revenue per employee now nobody ever included only fans because it's a privately owned company but for whatever reason the information about only fans is public i guess they're releasing it because maybe they're releasing it like some private companies do ahead of an potential ipo but um the revenue per employee here uh as you see for apple and you know this is uh i'm not sure when this is dated but it shows you know facebook at 1.6 million and you know apple almost 2 million per employee now you cut 20 of your employees that means those numbers go up 20 and you grow 30 for three years in a row as we talked about with the recurring theme static team size age of efficiency i think we're going to start to see these companies start going on and earnings hair like we've never seen okay now

SPEAKER_16: that is great and because i have the vast majority of my net worth in the stock market which

SPEAKER_17: means that i'm gonna do great if that business super cycle happens my net worth goes up my feet go up i turn off the webcam goodbye jason i'm out huzzah great working with you pal great working

SPEAKER_47: with you three full months and we're done uh no but but a lot of people don't have wealth and a lot

SPEAKER_16: of people might have had jobs that do get efficiency eyes by this thing and retire yeah but we're talking a lot about different generations here on the show we talked about gen bet and one thing that you and i've been kicking back and forth this generation tool belt and it's going um more into the trades than into the post four-year education sector and i wonder if there's a dovetail between the hyper-efficient technology company world you're describing or just companies using technology to become more efficient and folks going back to the world and hitting things with hammers and

SPEAKER_17: if those will nest neatly or if they're going to be a little bit more at odds with one another i'm not

SPEAKER_23: sure but i'm very curious to see what happens to the labor market i think you hit on something here um it is very true that an entire class of knowledge workers with hundred thousand two hundred thousand dollar degrees can only make fifty thousand dollars and then you look at plumbers as but one example we have a serious shortage of plumbers i know this because we invested in a company called blockable and getting plumbers was like a blocker i'm like how is that a blocker you know and it's like

SPEAKER_00: how many people want to work in a industry like blooming quite literally yes you know people would rather be wordsmiths or math wizards and push excel documents around and write words for a living guess what too many people wanted to do that too many people got graduate degrees too many people got undergraduate degrees in you know english lit whatever those were very expensive now you compare that to being a plumber you compare that to being but a handyman what is a handyman cost in your region if you were to hire and i'm sorry for using a gender specific term handy person sounds absolutely stupid well a handyman a laborer who fixes things like door handles and windows and that are misaligned

SPEAKER_03: and annoying stuff what is a handyman cost in your region our foot door recently broke and so our

SPEAKER_16: handy woman actually cynthia had to come out and fix it for us uh she's she fixes everything for us when we break it because let's be honest my spouse and i are the highly educated useless people that we're discussing here sure and i think she costs us she's like semi-retired now a little bit older love cynthia if you see the cynthia you're the best um i think we pay her 30 or 35 an hour for what she does but it's probably a little more task based because she's a key to our house

SPEAKER_273: and she comes over and does things but it's about what our nanny costs per hour i think yeah and i'd say

SPEAKER_138: most place most major cities if you would do this in new york city la or in you know a larger city than

SPEAKER_28: where you are it's 75 an hour whoa for a handy person for a handy person that's straight up if you found

SPEAKER_138: one for 50 you would be thrilled now wow i hate to do math but the math uh people work 2 000 hours

SPEAKER_112: a year yep right for 40 hours a week 50 weeks a year give or take about 2 000 so you can always do back of the envelope math with 2 000. 2 000 times 75 is a lot of money it's 150 grand yeah yeah it times

SPEAKER_92: 50 is 100 and in your case the 35 is even 70 000 now you look at the uh business insider you just

SPEAKER_138: pulled up their chart they have a union you pull up the union salaries entry level it was 46 000 a year

SPEAKER_00: and i think they fought and the union got it to like entry level was 48 or 52 000. so congratulations on your english lit degree and you're going to be a wordsmith and just like you and i started our careers you're going to get 52 000 a year uh you're gonna get 25 an hour and so i think with chat gpt what is

SPEAKER_285: it good at what did we use it for today words and thinking and math right we did the cap table

SPEAKER_286: exactly what we just talked about so ew would you rather is chat gpt gonna fix that door hinge

SPEAKER_103: is it gonna fix my uh you know my my toilet that won't stop running it's not no it's not jason one

SPEAKER_16: thing i when we were out in in um in napa i was talking to uh your brother actually and we were

SPEAKER_171: talking about our our i think our growing up and slightly blue collarish roots if you will you've been around restaurants i grew up with a welding machine you know that sort of thing i i've done

SPEAKER_16: construction you know i've done some concrete work done some rebar tying done some bricks done a lot of shoveling oh man i i i just don't want us to overly romanticize skilled trades which are critical to the economy and should be respected and well compensated but i don't want to overly romanticize

SPEAKER_17: them because it's really hard on you a lot of this stuff is still really really hard on you and

SPEAKER_16: dangerous but i do think you're onto something so i pulled some data to talk about this um just to

SPEAKER_17: put all this into perspective according to an angie study 70 of skilled trades people are worried about the trade shortage the trade staff shortage yeah and there was no apprentices they have no apprentices

SPEAKER_47: ah well jason did i find the data point for you on apprentices john can we get the annual new apprentices chart up please i said no idea you were gonna go there that's uncanny there you go uh according

SPEAKER_17: to the department of labor in fiscal year 2021 there were more than 241 000 new apprentices and there

SPEAKER_47: are 22 percent more active today than the previous 10-year average and this chart shows you that there has been some covity ups and downs through the data that we have but it shows an upward swing now contrast this with our historical college enrollment chart yeah i'm gonna guess college enrollment is flat

SPEAKER_138: maybe i mean very close very close so historical college undergrad is the black line peaked in 2010

SPEAKER_23: at 18.1 million up from yeah and this we've had population growth so there's a little bit of that in

SPEAKER_299: there but it's not as dramatic as a start it's been trending down it has picked up according to early

SPEAKER_16: data for 2023 and four but it's still a couple million below so what i'm seeing is apprenticeships slowly growing college slowly coming down and just to put a capstone on this um can we get the first fred chart please of construction jobs in the us thank you yeah wow and so this is at an all-time high and i think this is the series of things that are that are leading people to discussing what will the youth do um my thought is this jason we it's good to have intelligent allocation of labor in an economy that's not controversial but one thing we haven't done i think as well as we could is uh having slightly more reasonably balanced compensation for different roles which is why people who are blue collar often want their kids to go to college to have a shot at a higher income ceiling that didn't work out as well as we thought but if we're going to have people go into the trades i just hope we as a society treat them well and don't treat them as second-class economic citizens i mean the truth

SPEAKER_00: is if you are a journalist if you are you know as an account you know a bookkeeper let's take cpas out of it just go like the rundown like the person who does accounts receivable those jobs are not as future proof they're not as well compensated um they're not as desired and they're not as high growth as manual labor and trades persons and you know i think there's no shame in a trade a trade is amazing and if carpenters and i don't think you do either um and this could be uh a great life for people and then also being entrepreneurial in this regard you know in your town uh which you're in rhode island yes sir right uh 35 an hour you got a nice rate with a friendly uh you know uh handywoman you know new york it might be 75. here's my best piece of advice arbitrage and so geographic arbitrage is another theme that we've talked about here on the show yes and when we talk about geographic arbitrage i'm typically talking about athenawow.com go there and get an assistant and pay 36 000 a

SPEAKER_02: year and they'll train them and it's kind of like the amazon web services of that they'll give you a free month or something uh since you're my pal putting that aside you don't have to go halfway

SPEAKER_138: around the globe here that same trades person was but a handy uh woman handyman would double their rate in manhattan so interesting arbitrage you go get a bunch of clients in manhattan you charge 75 an hour you go to manhattan for do a 12 hour a day do three jobs a day work three days a week put in your 40 hours

SPEAKER_23: in three or four days and take a four and work three or four days take four three or four days off that kind of approach i think is a winning approach because cities too expensive rural areas are you know

SPEAKER_138: sometimes literally 75 less than living the cost of living in a city five thousand dollar apartment five hundred dollar apartment you know like it's not i mean it literally is like that to rent a room in manhattan have a one-bedroom apartment is five thousand to rent a room an hour and a half outside of the city would be a thousand so that's eighty percent less for the equivalent and so you start thinking about that arbitrage eighty percent less costs and double the uh what you can charge or

SPEAKER_112: triple there's something really cool there and you know what's going to enable it the autonomy end game

SPEAKER_78: you're going to be able to take your tesla i just like i said i was using twelve point five point one point two or point two point one or whatever today we're getting there uh waymo we're getting

SPEAKER_23: there if you could just jump in a waymo or tesla or an uber and it drives you and you could sleep or

SPEAKER_00: watch a tv show it's not as exhausting that three hour commute it's not as exhausting and um you know i think there's like something very interesting going on in the economy and and if college degrees at four years i think they're worth five to ten thousand a year that's what i think a college degree is worth i think a college degree should be twenty five to fifty k that's what i think the value it provides in most cases i think it provides it should provide it should be the cost of it should be fifty percent or a hundred percent of your starting salary i like that model a lot because it shows how

SPEAKER_16: far things have gotten out of whack there because the college that i went to university of chicago i i i'm just gonna guess probably cost sixty five thousand dollars a year now just just spitballing out a lot i don't think that's gonna be wrong by more than five k either way and that's an insane amount of money quarter million dollars quarter quarter million dollars post-tax so someone has to make five hundred thousand dollars to pay fifty percent tax on it just that's this is the math i do with it with our child care costs i'm like wait a minute this is actually cost twice as much

SPEAKER_228: yeah i mean i've been there crying that i cry in the corner yes but i've i have a new baby i just

David Friedberg: restarted chasing oh my god oh yeah okay you're sharp today you must have gotten some good sleeve last night because you're you're on the you're on your game today so we're actually crisp back and

SPEAKER_138: forth here with the pick and roll for us today i feel like we're really uncovering some very interesting trends and when you listen to this week and start up you're not just gonna get the news you get some insight on these trends here and this is a very interesting trend there's another data

SPEAKER_16: point though so a listener um boss in barakat he said that plumbers and electricians operate in a very regulated industry you have to be licensed and it can take time to attain that status absolutely true there are qualifications for many things um the fastest growing job in the u.s according to the i think this is the bureau of labor statistics is wind turbine service technicians the second fastest growing job is solar photovoltaic installers and so if you look at just this list right now that i pulled up of the fastest growing jobs many of these do require a degree a certification but they don't always need a four-year degree followed by a two-year masters and so one thing i think we could as a society get a lot smarter at is tying reasonable qualifications at the education level to jobs two-year degrees great you don't need a four-year degree for everything and i think we've gotten too into that so people now feel like they have to take on the debt so there's a lot of inefficiencies in our economy jason that i think we can improve on and that's an opportunity when i

SPEAKER_110: see these problems or you see inefficiencies i always just think what's the solution what's the

SPEAKER_00: startup version of this the startup version of this is somebody creating an online course on how

SPEAKER_03: to start a handy woman business or how to start a painting or a carpenter business all the that could be taught over youtube that could be done in you know a two-week or a three-week course in person

SPEAKER_23: and you could charge i don't know five thousand dollars for that now imagine for five thousand dollars you go to a 10-day course on being a carpenter and a handy person you learn all the basics all the basic tools it's uh 200 hours right do it a month maybe and it costs ten thousand if you're charging 75 an hour you're going to pay that back in a month of work and that's like where you

SPEAKER_138: start actually should be making a calculation about your degree when we looked at that list you brought up

SPEAKER_23: you know some of those jobs paid 150 some of them paid 60. and that's a you know it's like a two to three x range the degrees cost the same yeah the degrees cost the same how is it that a degree will

SPEAKER_138: cost a quarter million that gets you 60 000 a year same school offers the same degree for 250 and it makes you 170 000 a year as a data scientist they have that's the the mismatch and that when there's a mismatch in the economy if you could train a data scientist without a degree and the data scientists

SPEAKER_23: there were 160k i think that data is a little old by the way because i'm not sure how valuable data

SPEAKER_112: scientists are right now but anyway a data scientist let's just say data science is worth 160. sure can you teach somebody to be a data scientist in six months a year like what what's the minimum time and

SPEAKER_138: the minimum cost because colleges are thinking the opposite they're thinking it has to take four years

SPEAKER_112: why does it have to take four years why can't it be done in four months why can't it be done in 40

SPEAKER_165: weeks why can't it be done with an apprenticeship these are all opportunities yeah i think i think

SPEAKER_16: parents want their kids to have this um college experience thing and i've never liked that phrasing i i graduated early because i wanted to stop collecting student debt and go work full-time sooner because i was tired of going the wrong way net worth wise but i think a lot of parents want their children to have the full four years or five in that case there's a failure to launch societal question there that's a little bit distinct but the idea of faster education faster time to value do you start up language i i think is great and i think there's probably going to be a lot of opportunities here for startups to build cool things because there's education there's licensing there is platforms that are being built for the construction industry pro core is a public company now construction tech is popping off there's a lot of really cool things here i'm optimistic that things work out well i just hope that we pay people reasonably because people respond to incentives and you can end up back your point about same degree less income with doctors not wanting to go into um primary care for example and we have primary care deserts in this country because it's not a very well compensated medical part medical profession so everyone wants to go be a derm etc so we're going to have to probably pay a little more for these to get people into them but people are aging out of the trades and we need to have infrastructure we i mean google started offering

SPEAKER_02: these career certificates i don't know if you're aware of this but i remember when uh our friends at coursera i think are the partner with this um and i think coursera yeah it is coursera it's just

SPEAKER_00: right there get started on coursera so google was looking looked at the roles they can't fill and uh this is a google career certificate you can google it and here choose a certificate cyber security data analytics it support digital marketing e-commerce project management ux design learn the skills you

SPEAKER_02: need to unlock reward uh unlock reward outcomes 93 000 plus median entry level salary across the

SPEAKER_00: certified fields 1.8 million job postings and look they have even shorter course offerings ai essentials and agile essentials agile project management so they just said screw it come to google

SPEAKER_286: take a course here and then apply for a job with us or somebody else how brilliant is this it's amazing somebody make a startup i'm i'm telling you right now i'll fund this i'll give you the first 125k

SPEAKER_00: come to the accelerator we'll brainstorm it teach people how to be handymen and handywomen and carpenters you know and come with a course for whatever number of thousands of dollars that teaches them not only how to do with the trade what the most common problems have hey the dishwasher's broke this is broke but also how to market yourself find customers bill them price out the jobs and stuff like that

SPEAKER_138: if you could figure out how to not only provide the supply of handymen handy people

SPEAKER_112: handywomen handy folks jason handy folks thank you you know not only your thumbtack providing a supply of them um that you have to go aggregate you're actually making them yes oh yum yum this is an incredible business if you could go to a website of handy people and it was like these are people we trained and they you can order one right now for this price and you know that we certified them in dishwashers

SPEAKER_23: oh you know light uh electrical work that doesn't require an electrician there are things like changing lamps or you know whatever your ceiling fan that doesn't require mounting a television man somebody

SPEAKER_00: make that website and train those people and then these people are going to go out and make 50 a hundred bucks an hour sometimes they'll do projects um and so this is the kind of innovation

SPEAKER_23: we need in the world um and it's i think for young people don't expect you're getting a job at google you know don't ex don't don't that's not it's not goldman sachs and google and ibm those jobs microsoft they're going to go to a smaller and smaller number of incredibly elite performers and you saw my

SPEAKER_138: message to our company yesterday i did i said i i'm dealing with this personally i said if you want to be remote here you have to be what was the extremely high performance yeah eh i said i am totally fine with you being remote if you're an ehp extremely high performer and you manage yourself

SPEAKER_112: everybody else we're returning to an office i got a little office here we're gonna have four people in at me plus three in austin and my new approach to training people is people who are not yet ehps like yourself or myself or some of the great people we work with they'll just sit next to me and they'll sit in the room and be mentored so i am bifurcating it in real time based on our discussions here and what i'm learning in the world ehps extremely high performers you know by all means remote hybrid you pick

SPEAKER_00: everybody else the other 80 of the world is how i would define it and we saw that with the amazon

SPEAKER_02: story you know you're going to have to you're going to have to either come to an office and be mentored or you're going to have to find your own way in the world as we've discussed right now

SPEAKER_03: just really great trend and we got we got to stick on top if you have any other questions for us we

SPEAKER_16: take one or two questions from the audience and we'll wrap the tenant media fiasco is very damning do you have any thoughts well ccc on youtube jason assigned me to research that the other day and it ended up at the bottom of the show notes in the section that i call cut for time so uh jason

SPEAKER_103: i have a lot of feelings on the tenant media thing again your tldr yeah tldr um there were a bunch of dopey bloggers uh that's a technical term who were offered apparently allegedly very large sums of money and when i say large sums of money they were offered a hundred thousand dollars per episode to license

SPEAKER_110: their what i would call you know what would you say c tier d tier d tier podcasts the epitome of mid

SPEAKER_103: okay so mid podcasters get offered joe rogan level deals they're so dumb they're so mid that they never

SPEAKER_286: question where does this money come from they just take the money they happen to be the same bloggers who believe that the u that ukraine is responsible for putin invading their country as if ukraine and biden went to putin put a gun to his head and said if you don't invade that country and start murdering

SPEAKER_103: people we're going to attack your country these idiots these useful idiots i think is the technical

SPEAKER_00: term sorry allegedly took all this money and the money was given to another i mean it's no other

SPEAKER_138: way to say it i would say they're allegedly i'm going to use allegedly here because everybody should get their day on a court but the people who are at the center of this um and was uh lauren chen another conservative she knew that she was getting russian money from rt and they were trying to get these useful idiots to amplify pro-russian anti-ukraine sentiment these people have all come out and claim they did not know yes i would claim they should have known because you were just given massive amounts of free money if somebody comes to me and says i'll give you a hundred thousand and i've gotten a lot of very big speaking offers that i've turned down we're like hey we got a hundred k

SPEAKER_112: speaking offer now that's like you know listen i'm i've made a lot of money i don't need the hundred k but if somebody offered me a hundred k speaking i'm gonna be like okay well where is it maybe i'll

SPEAKER_23: go you know it's a free money i'll take it uh might be interesting i've gotten these offers from like those charlatan course people you know who i'm talking about like they sell horses and then they try

SPEAKER_112: to prey on people and so i know what they're doing their reputation washing they want me to come

SPEAKER_00: to give a talk with them they take a picture with me then they tell people hey jcals legit and um therefore buy my course in real estate no bueno for me so every time a speaking agency brings me these alex like we have a wonderful opportunity for you jcow hundred thousand dollars you go to florida and you speak about your syndicate and investing in startups and it's wonderful do you want to do it i'm like what's the name of the conference who's the host and then i do a google search and i

SPEAKER_286: look at the names and it says blank blank scan right blank blank scan and then i go to reddit and

SPEAKER_00: i type the person's name and they're like i gave ten thousand dollars to this person to come to their 10x this conference 100x this conference yeah and i got scanned and then other people say it changed my life it's not for me to decide but in other words you should know who's paying you yes these people are pretending they don't um the woman in the middle of it if it's true that she took russian money to do

SPEAKER_23: this i think she that would make her a traitor uh at least if she's an american citizen which i did

SPEAKER_81: not check actually that would make her i think an unregistered foreign agent which i think gets you

SPEAKER_17: in a lot of trouble i don't think we mess around there i think we still have our cold war muscle

SPEAKER_02: wrapped around that bit of the law yeah uh she is a canadian um living in america i don't know if she has a u.s citizenship um but wikipedia says she's canadian and i guess the people who got caught up in this were benny johnson i've seen him on twitter uh tim pool dave rubin lauren southern uh david seems like a pretty smart guy um so they're all conservative i'm nothing else for being conservative but uh there were other people who were offered this money and they didn't take it and the one person who was offered the money who didn't take it i saw them talking about it on

SPEAKER_00: twitter they were like well obviously this was a scam and it yeah and so the the most sinister part about this whole thing i think alex is they picked people who were amplifying this message and then gave them mountains of cash they didn't even have to pay them to say certain things they just found the useful idiots who were saying it anyway yeah and they gave them more money to run their operations which means they can hire more people have better equipment so very sinister on

SPEAKER_03: the russians part very clever what do you think yeah so the only thing i'm gonna really add here to

SPEAKER_16: answer our different ccc from youtube is that there is a lot more free-floating money in conservative media than there is in liberal media this is why talking points memo has a couple of staffers they have to earn their keep they don't have the same collection of people who are willing to put money behind their

SPEAKER_80: ideological background and you know why is that well i was reading um the uh brown indie brown independent

SPEAKER_16: or something the other day and i read the the intro bit it's an anti-capitalist publication from brown students on the radical side of things which i read because i like to read everybody uh but that's why people don't who have money don't tend to fund super lefty things but i think there's enough money in and around conservative commentary if you will that checks of that size were probably large

SPEAKER_34: but not as shocking as they seem to me so they have benefactors and they're used to benefactors

SPEAKER_138: whereas on the left you have advertisers and the left advertisers in the media business tend to be very left-leaning the advertising business uh you know just generally left more left-leaning so

SPEAKER_23: um yeah it all adds up i do think there are benefactors who have agendas who really like to back conservative media and they do it quietly like in the same way george soros might back some things on the left there are the george soros equivalent you know right-wing people who like to fund them so yeah maybe that's the case maybe they're used to getting you know people dropping money on their heads to say

SPEAKER_16: right-wing things anyway yeah there's that's a much longer conversation but i mean essentially i don't believe you didn't think that it might have been the russians is my is my underlying vibe because if someone told me that i was gonna get paid 100k to blame things on ukraine i'd be like huh

SPEAKER_14: who would who would want me to say that apart from some people that you there was a there was a in the

SPEAKER_23: indictment again allegedly um so everybody gets their day in court they said like one commentator

SPEAKER_138: they said to them hey we're not hitting our numbers could you amplify this tweet and then there was some like amplifying of tucker going to the russian supermarket and being amazed that the

SPEAKER_03: supermarket had had coin operated but by the way we haven't had since the 80s because i don't think

SPEAKER_34: you need to pay here but okay whatever um yeah he's an entertainer let's leave it at that but they

SPEAKER_29: were trying to amplify that and then literally the the thing alleges that they were like isn't this a little too on the nose and obvious yeah so shilling i think was the phrase yeah they're like are we

SPEAKER_222: shelling so it's kind of like huh i mean these people are i think it's like these people are

SPEAKER_41: traitors um the people who knew if they didn't know useful idiot or naive if they did know traitors

SPEAKER_16: strong feelings only defense um i i do want to close one more well one more thing my my audience question is uh i i saw that your friend your your bestie went on joe rogan and so um three hour episode

SPEAKER_286: uh i literally did you listen to well funny story um i was having lunch with chamath before i came on

SPEAKER_02: air here we went to cherry blocks we got a beef rib we got some uh brisket and i drove him to the

SPEAKER_00: airport literally as i was taking his bag out of my car the episode dropped he said oh my god the episode dropped he recorded it on monday so quick turnaround there for joe rogan i haven't listened to it but

SPEAKER_02: chamath has been on rogan yes and so good for him and uh it's a three-hour discussion and um you know

SPEAKER_286: i i i like joe rogan you know a comedian who does really great long-form stuff uh and uh yeah enjoy

SPEAKER_34: it i just want to know when when are you going on on the robes wow that's interesting you say that um

SPEAKER_00: seven years ago kevin rose introduced me to him and you know that was when he was only in person i had just come out with my book and we were in a dm exchange and just the timing didn't work i wasn't able to get out to texas because he was only doing it in person right and like an idiot i didn't follow

SPEAKER_02: up but this is when he was just starting his program his very early days and so i don't ask anybody to be on their podcast so i haven't uh pitched him on coming on but i'm in texas he's in texas we have like 20 mutual friends lex friedman elon chamath now so i'm sure i'll meet him at some point and if he wants me to be on i'm sure i will be it's the same thing with tim ferris like friends with tim ferris forever and then you know i never ask people to be on their pods or

SPEAKER_222: anything like that i i just don't like asking i don't know maybe it's my irish upbringing catholic no i i feel you and then just one day you know tim first is like hey it would be an honor to have you on the pod i was like sure i'll come on the bottom we had a great discussion so i i just wait when people think it's a good time for me to come on i come on but i never ask yeah so congratulations to

SPEAKER_16: chamath go look at it yeah hey i just i think you should do it because then uh i could sit down and and uh i'll actually listen to my first three hour podcast because i've never i'm an audiobook

SPEAKER_138: guy so it is like joe rogan is doing an audiobook um and you know he he was very influenced like i was by howard stern uh in the 80s and 90s and when you have a morning drive time show like howard did that is four hours to fill three four hours to fill so you know he was like the original podcast for many ways howard stern so he would let somebody come in he'd interview them then he'd have them hang around for the news on the early episodes of this week in startups i would do an interview and then i would have lon harris and tyler and the guests sit in for the news and we talk about the news so i kind of copied that format uh and uh i enjoyed it um and so yeah uh we we talked about

SPEAKER_23: the uh departure somebody just asked on linkedin about the departure we talked about that in the top of the show so when you get the episode you can do that you can rewind the youtube video and listen to it again he's alex wilhelm we're working on the twist 500 go to twist 500.com if you have suggestions let us know he's alex on twitter slash x i'm jason this is this week in startups do us a favor write a comment tell us what you want us to talk about just say hi

SPEAKER_112: subscribe to the youtube all that great stuff and we'll see you next time bye bye