SPEAKER_00: If you can't get a job and you can make half the amount of money or double the amount of money or any of those numbers in between working for yourself and having a small mom and pop business, you're going to do it. People used to do it. They're going to be doing it again, not out of a function of wanting to necessarily, but as a function of needing to. I think it's going

SPEAKER_01: to be a situation where we're already seeing with college graduates, they don't have jobs. So what are they going to do? They're going to start companies. They're going to try to find a product or service. They can provide to other companies, to consumers and put out a shingle

SPEAKER_02: and try to get money for a product or a service from individuals. And it's going to be every person for themselves. It's going to take a lot of self-reliance and rugged individualists, I predict, when this transition occurs and the transition is occurring. And it's creating a low anxiety in the country. It's creating a low anxiety in households where people are like, I kind of feel like my job's going away. I kind of feel like my cousin's job is going away. I wonder how long I'll even have this job. And the managers are saying, I wonder how long I'm going to have my job. I wonder how long you're going to have your job. I'm also wondering that because if I don't have 10 people to manage,

SPEAKER_04: then why am I here? Why do they need me? If you're not here, why do they need me? I'm a middle

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SPEAKER_10: All right, everybody. Welcome back to This Week in Startups. I'm your host, Jason Calacanis. With me

SPEAKER_01: again, Alex Wilhelm, my co-host. I am reporting from Tokyo. Last time I was in Dubai and before that, Riyadh. The world tour continues. I'm here to make a quick announcement on Friday that we're going to

SPEAKER_13: be doing the Founder University program here in Tokyo, just like we started in Riyadh. Had a great time in Riyadh. 60 great founders building great companies and Founder.University, if you want more information about that, we'll be opening up applications for Tokyo in a month or so.

SPEAKER_19: 30 companies, 50 companies, 60 companies. Are you going to get arm twisted to 75 this time? What's

SPEAKER_10: the idea? We really want to be able to spend time with each company. And so if you're going to meet

SPEAKER_13: with each company every week, you got to keep it to probably 50 or less. Too many companies, it's just not possible, right? And so you want it to be bespoke enough that the founders can ask a question and meet with the investment team and, you know, just get a nice experience. So we don't

SPEAKER_07: want to push it too hard, not too many companies. Well, I was thinking about you this morning because

SPEAKER_24: I saw this story over on CNBC and it just essentially discusses a report, Jason, that shows that a lot of Japanese investors are putting money into Europe. But what a great time then, if there's capital

SPEAKER_07: available locally to Japan to build more companies in Japan. Why not?

SPEAKER_13: This is still the third largest economy in the world, the Japanese economy. So it's a major player, punches well above its weight with a hundred million citizens. And they used to often build products and services for the rest of the world. A lot of the entrepreneurs now, there's such a big market here. We'll just focus on the market here. So it's going to be really interesting to see how many of the founders are building just for Japanese customers and how many are building also for US customers. So I'm excited to get started on that. And I have been eating my way through Japan. Yeah. Here is a tweet from you that has more

SPEAKER_28: exclamation points than a middle school group text. What, what, what is this here? What is a six

SPEAKER_29: banger? What is PST pizza? What are you doing over there?

SPEAKER_13: Well, uh, PST pizza seems to be a great, uh, pizza place. So the pizza here is like best in the world. Some people might say better than Italy or, or New York and it wouldn't be wrong. Um, it's pretty great.

SPEAKER_32: So, uh, when you are a foodie and you go have dinner twice called a bang, bang, I thought that's what you're referring to.

SPEAKER_13: Yeah. And so we started early this morning with a couple of friends and, uh, we, we did two breakfast, uh, and then we went to this really great breakfast place, center, center bakery to have this incredible French toast. Uh, and then we, it just, the whole day went on and all of a sudden we had been to, you know, six and a half places, uh, in the course of a day and it was crazy, but awesome and delicious. Now you don't eat a full meal when you do this bang, bang thing, right. Two lunches, two dinners, two breakfast. And then we went to a vinyl bar, big tradition here. It's really kind of interesting when you think about, um, people wanting to spend more time together. We went to this great, um, a vinyl bar. Yeah. You can see there a picture of it and, um, yeah, there's a Yamazaki, but you see that speaker and that beautiful, uh, Macintosh there. And I think it's a talent. I think they called those speakers. Anyway, those speakers are from like the sixties or seventies and they spin vinyl and, um, you go, it's a very interesting experience. You're not

SPEAKER_01: supposed to talk too loud in the, um, listening situation. They play vinyl. You can pick marbles

SPEAKER_13: from like little jars on the bar. The different colors are different decades. Another type of color is a type of music. So if you want soul music from the seventies or jazz from the eighties, you can pick like different marbles. So you put them down. Um, and then the DJ will go pick from there and there are thousands of records, which records they have, but the, the, the sound systems and the sound stage is just so amazing. Uh-huh. And it's like a new experience for going out. You, it's, you go out, you have a nice cocktail or something and you listen to these incredible speakers. And I've been talking about that a lot, but I got into high fidelity stuff. Yes. Co-buzz and so forth. Yeah. Yeah. I listened to that French service co-buzz, which has the high fidelity of things. And, uh, just the Japanese do everything as perfectly as possible. So I, uh, got to really enjoy that tonight. It was, it was wonderful.

SPEAKER_24: Really, really quickly, Jason, best thing you ate today. And why has Japan or how has Japan

SPEAKER_07: managed to make single malts that actually really do, I think, challenge Scottish, uh, dominance?

SPEAKER_13: I don't know exactly how they got there, but yeah, the, the scotches are just pretty amazing. The whiskeys and, uh, gosh, today I would say the pizza was pretty amazing, but in the morning we had this French toast. That is kind of the greatest French toast in the world as a dish. That might be my favorite. Best French toast in the world. Oh man. Center of the bakery in Ginza. Ginza is like the Beverly Hills. And, uh, they make this really crispy toasty one in the inside. It's almost like it's a pudding. It's so soft and delicious on the inside. It's great juxtaposition. I know it's 11 PM where you

SPEAKER_24: are, but it's, uh, it's 9 0 8 in the morning for me. So you're killing me. All right. Killing you with the French

SPEAKER_07: toast. Yeah. Uh, let's get started. What's in the news. What's happening since I've been on the road? So somehow we have to talk about Catholicism on the show today because Mark Andreessen, a famous investor,

SPEAKER_28: co-founder of a 16 Z the story of venture capital firm that really changed the, uh, fund size game. You might say, Jason, in the last 10, 15 years, uh, has been a fan of memes. Now I'm blocked by Mark on Twitter. So we had Marcus pull some screens for us. Uh, the Pope Pope Leo, the 14th, um, did a post

SPEAKER_24: discussing technology and innovation and, uh, the fact that it carries a ethical and spiritual weight to which Mark Andreessen responded with this. This is a recent meme that came out of a Sydney Sweeney interview. We don't have to get into that. I'm aware of it. Yeah. He's being dismissive, Jason, right? Uh, mocking almost of this. And this led to, uh, growing Daniel, uh, an early Apple employee. And I, I would say a well-known Twitter wag, if you're into that kind of phrasing, uh, responded

SPEAKER_28: quote, don't mock the Pope. And this then devolved into a bit of a controversy.

SPEAKER_48: What is the controversy here is, uh, was he literally, uh, mocking the Pope in some way?

SPEAKER_07: I, you know, it's hard to tell here. So he was using the, the, the interviewer lady meme as a way to,

SPEAKER_28: I think dismiss moral scolds. Uh, the, the context is that the interviewer asked Sydney Sweeney, I believe, you know, I wanted to give you a chance to condemn white supremacy or something. And Sydney

SPEAKER_01: was kind of like, I'm not going to do that. So Mark is saying, I'm going to ask you to explain yourself.

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SPEAKER_28: Well, one, he's been criticized for using the meme incorrectly, but everyone thinks that he's being dismissive. The Pope said that the church calls on builders of AI to cultivate moral discernment as a fundamental part of their work to develop systems that reflect justice, solidarity, and a genuine reverence for life. The context, I think that maybe I should have added, Jason, is that marketing's recent, uh, technology optimism manifesto discussed how any efforts to slow the progress of AI is tantamount to murder because it could harm people in the future that could have benefited from, let's say better drug discovery. Okay. And so I think he's viewing the Pope here essentially as similar to the, uh, lady interviewer, a moral scold and essentially a woke entity. Now, normally that kind of criticism in technology land doesn't generate controversy, but in this case, it turns out there is a pretty strong group of Catholics who are serious about this and don't like it when people mock the Pope, which fair enough. Um, the Pope has also been discussing the need for a common good in business and so forth. So I think he's essentially saying capitalism is not everything. And some American hyper-capitalists got into a bit of a mix about this. Uh, this led to Daniel, the Apple, early Apple employee and so forth saying that quote, Mark primarily funds gambling apps, cheating apps, and bought farms. He does not want you to build things that are good for society. So here we see a moment in which there is an intra technology split over theological differences and really kind of bringing to bear what do, uh, VCs and investors have in terms of moral requirements. We talked about vice clauses back in the day. I actually

SPEAKER_13: published it this morning, uh, on, Hey, like we need to really think about, um, job displacement and nobody wants to talk about it, but let me just, you know, reiterate why I keep talking about it because

SPEAKER_01: a company like Amazon is moving at quite a clip to, uh, get rid of employees, even if they say that they're not, uh, doing it for AI, which, you know, I don't know, Alex, if you've ever seen this before,

SPEAKER_13: but, um, I hate to break this to you as a lifelong journalist, but there have been instances where,

SPEAKER_01: uh, VCs, uh, or even CEOs, dare I say, might say something that doesn't exactly correlate with how

SPEAKER_52: they actually feel. It might not be exactly aligned. All those job cuts, Jason are not just to drive

SPEAKER_64: efficiency and reduce layers of management there to cut costs. No. Or like that they might be AI

SPEAKER_01: related. I think is the, you know, the, the point here, like, um, sometimes when you don't hire people or you get rid of people, it might not just be because AI today is like, did their whole job. It just might

SPEAKER_13: be, it did a third of their job, or it's obvious the writings on the wall that people using AI at the company are going to be able to do 20% more every quarter. So therefore we're on the trajectory

SPEAKER_00: to definitely not needing those people anymore. So we might as well get rid of them now. And we might as well not hire people because as I've said many times, if you're going to invest in something, we're not invested in AI solution to the problem, a technological solution to the problem rather than

David Friedberg: investing in, you know, more head count, which they have to be, you know, theoretically you need to be

SPEAKER_01: a bit loyal to and keep them around. And you spend a lot of time recruiters, hiring desks. Yeah. If you can avoid all that and just use software you're going to, that's it. I just pulled it up on the screen.

SPEAKER_28: You can find it over on Jason's Twitter or calcanist.substack.com. It's called the terror of the great AI displacement. Just to walk people quickly through your argument. Essentially you say that for a long time, people in tech have been saying, Hey, we're going to automate these unnecessary jobs. A lot of them were too early, but it does seem now that the technology has reached the point to which it's possible. And your evidence is quote, the industry knows this time will be different, different, or we wouldn't be spending a trillion dollars on data centers in five years to capture this opportunity. Essentially trust when people put their checks, not their mouth. And then, uh, where will this hit? You discuss factory and warehouse and delivery work, which you say is about 15% of the domestic workforce. 15%, by the way, is nearly one in six jobs in the country and Uber, Walmart, and Amazon have about 4 million people in roles that are applicable there. Uh, further evidence, Amazon's cutting both white collar staff and investing robotics to get rid of future workers in warehouses. So what does the future look like? I think you've said this before on this show, Jason, but quote, no human will touch your package between the time you one click and you or your humanoid robot unbox it. Essentially what we're seeing here is yes, automation is cutting jobs or impacting them. I just don't get why people are being so coy about this.

SPEAKER_13: Yeah. That was why I took the time to write it was because I think people are, um, pretending it's not

SPEAKER_01: happening, uh, or want to say like, we don't really have any evidence of it. But then if you talk to anybody working in corporate America and certainly in startups, they're like, wow, we're getting so

SPEAKER_02: much leverage from this. We probably don't need that extra position, or we can probably just script this with AI and get it done. Now you'll point to obvious instances where AI is not perfect, but I've given this example many times, you know, if you're going to write a job description as a paradoxical example, it's going to do a better job than an HR person. And you're going to sort resumes. It's going to do a better job than an HR person. And people are doing those kinds of things. So it's happening folks. And I just thought I'd write it down on paper here to remind people, look at what these companies and

SPEAKER_00: leaders do rather what they're saying or what to other technologists or other politicians are saying. The fact is you're not investing a trillion dollars in data centers and H100s and paying people $10

SPEAKER_01: million a year. If this isn't going to displace all those jobs, if self-driving is not going to work,

SPEAKER_00: people are not going to invest and build a hundred million self-driving cars, but they are building that many self-driving cars. That's the plan. You could just talk to all the OEMs, talk to Uber, talk to Tesla, talk to Waymo, Baidu. They all have plans to build millions of cars, collectively tens of millions and eventually hundreds of millions. So it's happening. We are going to need to talk about it. I don't know if it's going to be a displacement, Alex. That's going to be so fast that we can't keep up with it or we can. I suspect it's going to be somewhere in the middle and I'm going to write a second and third piece. So if you go to calacanis.substack.com, you can sign up and I'm going to write a second and third piece just to talk about what you can do as an individual to not be one of the laid off people or displaced people, which is a combination of obviously learning how to use these tools and being one of the survivors or starting your own product service, being a founder. Those are, I think, the two cleanest paths for young people. And then also what society can do. And there's a lot of things society can do if we have big job

SPEAKER_28: displacement. Going back to our panel from last Wednesday, we were discussing, I think, how many people are there to found companies and how many great companies are built each year. Your statement there about getting people to go out there and kind of start their own service or business. Do you think we're going to see an explosion in one, two, three person firms that are not venture-backable, Jason, per se, but are just like good SMBs as people become less attached to Amazon or big textile

SPEAKER_00: employment? If you can't get a job and you can make half the amount of money or double the amount of money or any of those numbers in between working for yourself and having a small mom and pop business, you're going to do it. People used to do it. They're going to be doing it again, not out of the function of wanting to necessarily, but as a function of needing to. I think it's going to be a situation

SPEAKER_01: where we're already seeing with college graduates, they don't have jobs. So what are they going to do? They're going to start companies. They're going to try to find a product or service they can provide

SPEAKER_02: to other companies, to consumers and put out a shingle and try to get money for a product or a service

SPEAKER_03: from individuals. It's going to be every person for themselves. It's going to take a lot of self-reliance

SPEAKER_02: and rugged individualists. I predict when this transition occurs and the transition is occurring. And it's creating a low anxiety in the country. It's creating a low anxiety in households where people are like, I kind of feel like my job's going away. I kind of feel like my cousin's job is going away. I wonder how long I'll even have this job. And the managers are saying, I wonder how long I'm going to have my job. I wonder how long you're going to have your job. I'm also wondering that because if I don't have 10 people to manage, then what am I good for? Then why am I here?

SPEAKER_04: Why do they need me? If you're not here, why do they need me? I'm a middle manager.

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SPEAKER_28: months free. This actually is a great thing to bring up right now because I've been trying to figure out what's changed in the last two weeks, but it feels like it feels like someone turned the lights on and we're all still at the party, you know, and everyone's kind of looking around going, uh oh, now what? I don't know if it's, you know, concerns about AI investment that's making everyone freak out or just geopolitical tensions, but it does seem to me that the vibes have kind of turned bad ever since you've left the country. Now I'm not saying you leaving did that, but like you left. And so you, I think you've missed it. Maybe, maybe because you've been in, you know,

SPEAKER_01: no, no, no. I, I, I, I, I made this joke. Like what happened? The AI bubble popped. Sam Altman went on. Brad Gerstner lost Bill Gurley as his, uh, co-host and he popped the AI bubble all in the same week. But I, there was something to be said for that. Um, people were wondering this whole time, like, wait, where, where's the 1.4 trillion dollars going to come from? And for the last two, for the last year, we've been talking about round tripping, right? The first, this shows you how savvy the finance, the tech spaces, when we see people start self-dealing, Hey, I'm going to sell you a bunch of these chips and you're going to pay me a bunch of money and I'm going to invest in your company. But we're like, wait a second, how does that work? Exactly. You're round tripping the money. And so once people saw that chart of how intertwined everything was, that was the first reason to think, wait a second, what's going on here? The second thing people saw was one of the companies opening AI, doing all this weird shenanigans, public benefit corporation, private company, credible valuations. And then they did a flurry of deals all in the same couple of weeks. Remember there was like the Nvidia deal, then the AMD deal, then a Amazon deal, then the Microsoft renegotiating deal. And you start to see like all that renegotiation, Oracle deal came in at the same time for $1.4 trillion. And those, we talked about it here, are those guaranteed? Where does the money come from? How does $300, $400 billion show up in Oracle's

SPEAKER_13: bank account to pay for this stuff? Well, when Sam gave that answer, which maybe he was tired like I am right now, maybe he's on the road, he's exhausted, I feel you, it can happen. And he gave a you know, a little bit of a cheeky answer. Maybe he was trying to be funny and be a cheeky monkey, you know, and say, hey, I'll buy your shares back. But that moment, I think made people think, huh, I wonder if he really actually can pay that $1.4 trillion bill. And if he doesn't,

SPEAKER_101: and Oracle went up, remember that day, Oracle went up 15% or something.

SPEAKER_102: Oh yeah, it was $150 billion in free market cap. Yeah.

SPEAKER_01: Yeah. And you're like, wait a second, does that make sense? And so now people are saying, hey, maybe this isn't all it's cracked up to be. So two things can be true at the same time. Yeah. There is a bubble. This is getting too big. There's a lot of open questions about, can this actually, this build out actually be funded? Is the electricity going to show up?

SPEAKER_02: Are people going to protest the self-driving cars in the street? Are they going to protest electricity tripling or doubling for residential when, you know, some great data center starts sucking down all the power? This is what happens during a massive paradigm shift. I remember during the dot-com boom, these similar questions happens. Would there be a movie industry, a book industry? What would happen to newspapers? All of these things happen. Now, what happened to newspapers

SPEAKER_28: and magazines? They got walloped. There was a lot of destruction. People talk about, you know, like, oh, people were overselling it. But honestly, magazines have been reduced to a couple of

SPEAKER_19: of iterations, even in airports. It's hard to find the economists sometimes, Jason. In fact, it just took a while. Yeah. It was like another,

SPEAKER_02: 15, 20 years. It was a very quick 10, 15 year deflation of newspapers. If you look at the newspaper and magazine revenue chart, it's like this giant bell curve. It just fell off a cliff at

SPEAKER_13: some point. And people stopped using advertising classifieds and subscribing to newspapers and buying them on newsstands every day. Same with magazines. All that went online. And you see the online advertising chart. It's just the two cross each other at a certain point in the 2000s. And

SPEAKER_07: you're like, yep, that's what happened. Here's a version of the chart you're talking about, Jason. It's

SPEAKER_24: not the absolute, the absolute best one. But this is from, I think, some Google information. This just shows the rise of Google's revenue from 2003, 2013, compared to a decline in newspaper revenue. Not exactly correlated, Craigslist, et cetera, but there's what Jason's talking about. Newspapers

SPEAKER_13: and Google itself. And you don't have Facebook in there either. And yeah, as the newspapers go down,

SPEAKER_16: Google goes up. Why? People used to advertise their cars, their classifieds, local car dealership.

SPEAKER_28: Here's the other side of this. So I was thinking about the good and the bad. The bad is people thought the economy probably shed jobs in October and stock market sold off three or 4% last week, et cetera. The good news, Jason, is that GDP growth for Q4 looks pretty hot. We're at about 67% chance of another rate cut in December. It's only a month away. Hyperscaler earnings for Q3, pretty good overall. OpenAI does expect to reach 20 billion in ARR this year. And the shutdown might be coming to a close.

SPEAKER_24: So I would say that, yes, the vibes have gotten kind of crappy, but a lot of the, a lot of the stuff hasn't actually changed and it looks okay. So I'm not as worried as I think a lot of

SPEAKER_13: people are. There's a wall of worry that's growing for people. Consumer debt is high. Interest rates have not come down as fast as people have wanted them to. That will probably happen.

SPEAKER_02: The inflation rate has gone back up to 3%. It was supposed to go down to two. So that hasn't happened. And it had flirted with 2.3, 2.4. We talked about it here. Young people can't get jobs. There's been, there was a flurry of layoffs. So yeah, whenever you have these transitionary markets, one side's going to win the argument. It's either going to be a recession will break out and we'll have two quarters of negative growth in a row. And, you know, the stock market will correct a bit, or we're going to have this choppiness

SPEAKER_13: until people get confident again. If people don't have jobs in the, that the unemployment rate is the one to watch when the unemployment rate is low, which it is still it's 4.X or something 4.4. When you, when you have an under 5% unemployment, you have plenty of people out there with money to spend, we live in a consumer driven economy. So things will be fine. If that gets up to 6% or 7%, that's when you start to say, huh, something's going on here. And people are not spending money. And then people stop buying on Amazon. They stop taking trips and, you know, carnival cruises, you know, United airlines, the gap, everything starts to show.

SPEAKER_24: Visa, et cetera. Yeah. Here's a chart of unemployment in the U S this is via Fred. As you can see, unemployment kind of bottomed out here, Jason at about, oh, I don't know, 3.4% in early 2023. And it's risen all the way up to 4.3% as of August in this data set. Again, the government shut down. Data's a bit delayed, but an upward trend there. Very modest.

SPEAKER_28: Let's say you're a startup and you have less than 12 months of runway. With the current vibes being what they are, Jason, would you recommend that that startup go out and try to raise a little top up or just get their runway over 12 months or be cool, be calm and just fundraise on your current timeline that you had before?

SPEAKER_13: You know, most capital allocators I talk to think we've got another year, year and a half of boom market. Okay. Doesn't mean it's going to crash, but you know, it could be a recession, could be a pullback. So most people are thinking, Hey, we've got a year or two of good times left. What that means is probably pretty safe. If you've got a year of runway and you're getting some reasonable traction, but it never hurts to fill up the gas tank. And you got to play the game on the field. If you've got competitors and they're deploying capital and there's a big opportunity to get customers, you're going to keep trying to grow your company. If you're a nascent company, all that matters is getting product market fit. So it's not one size fits all. If you're under, if you don't have product market fit, in other words, customers are not delighted by your product or service, and they're not spending money on it. Just focus on that. Don't worry about raising money. Don't worry about anything, but finishing your product and making sure it connects with customers, because that's when the actual startup game really starts, you know, where the second half of it starts, there's pre product market fit, post product market fit, just a fancy way of saying consumers are willing to pay or use your product and get value from it. And if they're not, you got to stay in the lab. Now, if you've got a growing business, you know, and it was Uber or Airbnb or Coinbase or Robinhood, and you're paying a lot of money to acquire new customers. Yeah, you can still do that today. There'll probably be money for you in 2026 to keep raising if you're growing, but no business with money in the bank goes out of business. I very rarely see a company with money in the bank. It has happened. They'll just be like, hey, you know, we don't have a business here. We're going to

SPEAKER_01: be mature and return what's left to the investors. Generally doesn't happen.

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SPEAKER_28: product market fit I've ever seen? No. This came out a couple of days ago. This guy, Ayman, he was the former CEO of AppSumo. He grew them, he says, from three to like 80 million ARR.

SPEAKER_24: He was doing a thread of his observations about being in business. And this just made me absolutely die. He writes over on Twitter or X, you don't have true product market fit until it feels like you're wearing a meat suit in a dog park. Keep iterating who you serve and what you offer until that's true. That's a great definition, Jason. And I think it puts a pretty high bar on PMF. I like it.

SPEAKER_13: That's essentially talking about market pull, which is the final stage of product market fit.

SPEAKER_01: If people are calling you and they're telling you how many they want to buy, you go from like calling people and they don't return your call. Then you call people, they take the meeting, but they don't buy the product. Then you call, they take the meeting, they buy the product, they stop using the product. Then they call, most of them buy the product, most of them get value from and use it,

SPEAKER_13: very few churn. Okay, now you got a real business. And then there's a point in time where people are like, I need some of that. And they just call you and throw money at you. And that happened to Uber,

SPEAKER_07: DoorDash is a good example of it. PayPal, back in the day, when PayPal launched its service on eBay, its servers were just

SPEAKER_28: immediately destroyed because everyone wanted it so badly. Amazing.

SPEAKER_142: It's an amazing feeling when you're just selling hotcakes, but it's very rare. And most founders

SPEAKER_13: are just stuck in that, trying to get people to even care, get them to even try it. And that's why startups are not for everybody. It's a really hard slog. The macro stuff, I always try to get founders to not worry too much about. It's good to know about them, especially when you're going to go public later. That's when it becomes into play because you do have to time. When you're a later stage, you have to time deploying large amounts of capital with the eventual goal of going public. So the first five years, you might be getting that product market fit. All of a sudden, you're the guy in the dog park with meat on them getting surrounded and attacked for their product. Then the countdown clock begins. Okay, you got 20 million, 50 million, 100 million, 200 million in revenue. Okay, when does this thing look good enough and has predictable enough revenue to go public so people can get an exit? And that's kind of the second half or the last third of the journey

SPEAKER_145: to becoming a public company. Let's keep moving on. Stay on the startup train here, Jason. There's

SPEAKER_28: a company called Giga that recently raised $61 million in a Series A. There was some relatively mean comments about their announcement video. They did a little clip of the founders talking about their round. People were mean about that. I don't think we should spend a lot of time talking about people,

SPEAKER_63: calling people ugly. They call people ugly. I mean, let's just explain it so people understand what

SPEAKER_101: happened. Two Indian guys did a launch video. They look like developers. They're not like Tom Selleck

SPEAKER_28: and Brad Pitt. Neither are you and I. No, you and I are not getting called by Hollywood. Here's the mean tweet. So what did he say in the tweet? Well, red flags everywhere. Quote, when we hit 10 million ARR, we're going to spend a hundred K on illegal stuff. We're doing X. What does that mean? Like drugs

SPEAKER_148: or Vegas trip? They just left blank there. Okay. Next thing he says is we're doing quote,

SPEAKER_28: something in MRR, monthly recurring revenue. Well, the dashboards in HQ show six X less bait and switch on title, start date, comp, et cetera. He also had two international weddings that he needed them to pre-approve to take time off. They said, yes. Quote, after I signed contract, they said, well, you need to pick who you're better friends with because you can't do both weddings now. One of the founders also said, I chopped off a goat's head in India because it brings good luck.

SPEAKER_24: And then seven days a week in the office, 12 hours a day, no time.

SPEAKER_83: That was a crazy one like that. They were requesting people be in the office seven days

SPEAKER_32: a week, 12 hours a day. That's bonkers. 997, not 996.

SPEAKER_48: Okay. Sure. Yeah. Now it's 997. The lying about ARR is securities fraud. If it was true,

SPEAKER_02: if you were raising money and you were lying about it or exaggerating it, sometimes founders do that. This is all alleged. I don't know if this guy's, if any of this is true, but he did put the offer letter in there. So seems pretty real. Has any other news source confirmed this or talk to this guy?

SPEAKER_13: No, not that I'm aware of. We haven't confirmed that, but he did put an offer letter in there. So

SPEAKER_157: the, the, this is kind of a serious out, these are very serious allegations. Like, Oh, to be clear, this is, yeah, these are allegedly, it's all over the place, but it's very serious allegations to make against the company. The last part of it's kind of what I

SPEAKER_01: thought was some of the most interesting, this guy drove like 24 hours, moved his himself to go there. Now, when you do that, and then he met the founder and the founder was like very dismissive of him or didn't shake his hand or something that I think like really apparently pissed him off enough that he decided to essentially become a whistleblower here. And who knows if this is actually true or not, but it does feel like it is. And the reason I brought it up was because it's, or, you know,

SPEAKER_13: I brought it up when we were talking, uh, in our, uh, production chat room, you have to treat people well.

SPEAKER_01: And if you treat them this poorly and they do something like this and, and if any of this is true, these investors could take their money back. This could have like a cataclysmic series of events. All it takes is for somebody to just send

SPEAKER_77: this to the sec as an example. If you raised money, if you raised money and then sent it to,

SPEAKER_01: and then said, Oh, uh, there's somebody came in and you were making the wrong amount and the dashboard had a different amount of revenue. Somebody's going to want to take a look at that. The sec might be interested in seeing that the people who just invested might be interested

SPEAKER_32: in seeing that. $61 million is a lot of money. Just straight up to, to raise.

SPEAKER_28: Yeah, for a single round. Two things, Jason. One, the Hindustan Times did cover this. Uh, the founders are IIT graduates. I have never heard of that. Hindustan Times. Is that a legit pub? Do you know, have you heard of them before? Yes. Yes. Yes. They've reached out. I haven't, haven't heard back. Uh, also elsewhere in the comments, Jared Steele, the man who shared the alleged quips and quotes from the company, uh, says that other employees have reached out to him. So we may hear from other staff in the coming days. It's just super spicy. This speaks to the, the current moment in technology that this is indicative of how founders are, are, are acting as if there is, um, not holier than thou per se, but like just maybe a, a, a, a strain, a strain of arrogance

SPEAKER_16: to some degree and treating people like Legos versus humans. This is entitlement, I guess, or, um,

SPEAKER_01: sometimes people, when they raised a lot of money, I've seen it happen or they make a lot of money. Sometimes people's character can change a bit or the true colors come out and they act unprofessional or they act obnoxious, whatever it is. You know, all this is alleged right now. Um, and it could be subject to interpretation, but the lesson here profound, this is like a really important one for founders. Um, if any of this is true and they treated the guy really poorly, they wanted him to work like absurd hours. Like it's, I mean, if you're in a startup, obviously

SPEAKER_157: you expect to work 50, 60, 70 hours a week. That's obvious. That's why you're getting stock options.

SPEAKER_13: Uh, and you have that opportunity and you don't have to work there. You can work for another company that requires 20, 30, 40 hours a week. You'd be a consultant. There's many opportunities out there

SPEAKER_63: for you, for talented people. Making fun of people's accents is just unnecessary. And I think it really,

SPEAKER_28: who is making fun of whose accents? Jared. Well, the, the guy who's complaining about, uh, the job

SPEAKER_32: in question, uh, also posted this. Oh, I see. He said, Duelers. Um, I mean, as if that's an Indian

SPEAKER_07: way of saying it, I don't be rude about people's appearance or, or accents. And then your arguments

SPEAKER_08: and complaints hold a lot more weight, but this is how you generate sympathy for the people you claim

SPEAKER_37: treated you poorly. Yeah. So anyway, the thing has obviously gotten, um, ugly as they say in the

SPEAKER_01: business as a technical term, the lesson is for the founders here. Um, the employees are going to

SPEAKER_13: do things. Employees do. Did you see this like crazy video from, uh, Condé Nast where a bunch of people confronted who was in the rap? Somebody pull it up on the producers is kind of related. Not only can founders get ahead of their skis, employees can get ahead of their skis. So as you're saying here, like, you know, saying something that could be perceived as racist. I don't know if

SPEAKER_01: that was his goal with it, but he said dollars. I don't know if that's like making fun of an Indian accent. I don't even know if these guys have Indian accents. They could just be Americans who are, you know, they could be second generation Americans. I don't know if they have Indian

SPEAKER_176: accents either. Condé Nast video, Jason. Yeah. So this Condé Nast video is kind of like related.

SPEAKER_01: Condé Nast workers surrounded the HR guy's office to give him a hard time. It's like 10 people outside his office, like confronting him. And then he's like, yeah, you got to go back to your desk at work. And they're like, well, we want to talk to you. And these guys are all part of a union. They could just have the union do it. You know, like one of the guys is like chasing him down the

SPEAKER_24: hallway and they're videotaping it. Like this doesn't seem that confrontational to me there. Cause I saw the commentary. Are you crazy? Just like, I mean, I don't know. They're not, they're not in his grill. They're kind of standing down. There's 10 people who went to the HR

SPEAKER_01: office as a group is easy to fire everybody instantly for doing something like that. If you really want to have a meeting a hundred percent, a hundred percent, it's like doing a sit-in or something like that. If you're, if you have a union and you have complaints, you go to the union, the union represents you. That's why you pay the union to represent you. You don't intimidate the person by sending 10 people up to their office who don't have a meeting and demand a meeting.

SPEAKER_24: I think the difference here is I'm just familiar with journalists and a group of journalists in the hallways, the least intimidating thing. They're not a violent type.

SPEAKER_157: Okay. I got you there. Yeah. I'm not saying like these guys are going to like storm the Bastille here. Right. They're not going to take the castle. Yeah. I got you.

SPEAKER_36: We're going to hold the little signs that say like, you know, respect us.

SPEAKER_01: Yeah. And if you wanted to go on strike and do a walkout, that's fine too. You go walk out of the building, but you don't go surround the HR guy's office with 10 people. It's just an easy, quick way to get fired. Everybody there gets fired. And I think of them did it rightfully. So like, what are we doing here? You're at work, just work. And then if you need to have a complaint, there's a way to do that. You go to the HR department, you say, Hey, I'd like to file something. I've got a complaint about this. Or you write an email or you talk to your union. Like literally there's these writers that kind of have a union for that explicit purpose. So a lot of this has to do with employee relationships with management. That's what the two stories have in common here. In one, the employees are acting completely inappropriately, you know, intimidating the HR guy who's like, yeah, if you want to do a meeting, this is not the way to do it. 10 on one with your cameras out, like we're at a concert or something. In this case, also you're hiring people. You're asking them to move across the country with like two or three days notice. They have to start now. And you don't even shake the guy's hand or you don't have any spree to corpse here and you don't have like a treat them like a human. What are they going to do? Like if you put people in that position, they're going to take whatever power they have. The power he has here, this Jerry kid, Jerry gentlemen, his power is to say, I think the numbers are bogus. Now, this guy, if he's wrong, if Jared's wrong, he damaged this company severely.

SPEAKER_32: He's got a lawsuit against him. Oh, if he made that stuff up, he's in big trouble.

SPEAKER_185: Yes, slanderous. Oh yeah. Oh God. Yes. Oh yeah. Oh man.

SPEAKER_28: Like this is just messy. $61 million is multiple venture capital funds, chipping in money, each of which has their own legal firm on retainer. So, you know, feel free to slap the bear, just make sure you have the receipts or whatever the quote from the

SPEAKER_07: wire about coming at the king is. They would not, in that situation, the VCs would just

SPEAKER_01: let the company handle. They wouldn't use their attorneys, but they could definitely refer you to one. Sure. The company here, I think what this all points to, which is I think what you were kind of trying to get me to say, is we are at a peak level of entitlement and bubblish niche in the industry.

SPEAKER_13: When you have a bubble and there's one guy at Google getting paid millions of dollars a year and then he's writing spicy stuff on the internal chat. You saw that happening last week

SPEAKER_01: or the employees at Condé Nast are doing what they're doing. This situation, Sam Altman saying he's going to buy $1.4 trillion in servers and data centers, but he's got 20 billion in revenue and they're losing 20 billion a year or 10 billion a year. Like this is peak bubble behavior. We are in a weird bubbly time now. And what people happens when they call it a bubble is like, it doesn't make a lot of sense. That's all that's happening right now. But for your business, everybody else's business, if you have real customers paying you money for a product or service, that's delighting them. We're getting shit done. You're going to be fine. But yeah, and also this might be a company being underfunded. Like what does this company need $61 million for? Exactly. It's a seed stage company. It's a series a company. It seems like it's a new company. And that means they have to hire people and have this unrealistic expectation and do unnatural acts. It does feel like maybe they even have too much money.

SPEAKER_188: It seems like they have too much money. It seems like every AI company with a pulse has too much money.

SPEAKER_01: I don't know what they're going to do with it. Well, no, no. If you had a company that had product market fit and you said, Hey, we're going to expand to five cities, put it in five languages. We're going to hire a sales team in each. That would actually make a lot of sense. But I got the sense this was like a series A. This was a series A led by Redpoint smart folks over there.

SPEAKER_07: Just to give Giga a shout out here at Giga.ai if you want to take a look at it. And

SPEAKER_28: you know, they claim that they're handling quite a lot of calls. So in theory, they have a product that works.

SPEAKER_01: Well, we don't know that we don't. I mean, at this point, like we don't know anything about the company, but you know, that's where I'm kind of looking at this saying, I wonder if this company just has too much money and not enough product market fit. I'm just purely speculating here as

SPEAKER_28: to what's going on. $61 million series A's are abnormal historically. And series A's used to have a certain size for a reason. The series A was the point in which you took your sales motion and made it repeatable, built up your go to market team, et cetera. And you raised 10 million back in the day,

SPEAKER_103: not 61. I just don't know why you need that much money. But hey, maybe I'm old fashioned.

SPEAKER_03: I guess there's a story here. Giga's plan to use some of the capital fund and expansion into more regulated industries, healthcare and finance company deploys its entire system on the

SPEAKER_101: client's own cloud infrastructure using open source models. Okay. Yeah. Maybe they have to buy some on-prem. Maybe it's an expensive service to deploy. But there are a couple of companies out there,

SPEAKER_28: Jason, that do have product market fit and are killing the game. I want to highlight three from the Twist 500. I'm thinking about next year. I'm thinking about the IPO market, trying to think about who might be going out in 2026, early 2027. The first name that I want to bring up is Ledger. They make those little crypto cold wallets, which is very interesting to me. And I thought this was a cool company, but not a venture scale business. It turns out that I'm wrong. So Ledger told the Financial Times that it reached hundreds of millions of revenue this year. They've sold 7 million of their little Ledger devices that are physical. They claim to secure more than 20% of the world's crypto. And they last raised at a $1.4 billion valuation, which means that they have a maximum revenue to valuation multiple of 14X. If it was just a hundred million exactly. So I think this is a very impressive company and could do very well for Molten Ventures, Samsung Ventures, and 50T. And they're expanding. I looked into this because I'm curious, you know, how's a hardware business venture rackable? They're expanding into their own wallets, apps, and cards. But I think it just goes to show the maturity in the crypto space and that there are some really big companies built in it that are not only doing stable coins. Yay. So Ledger, a unicorn that's going to, I don't know, could less whenever it wants. I love that.

SPEAKER_02: If it's doing hundreds of millions of dollars, it is in the bottom end of capable of going public. I wonder if this $60 or $150 stick, and I guess some of them could be even $250, if they've sold 7 million of them at $100 each or $150 each. Yeah. They could have sold over the last couple of years, $500 million, $750 million of these. Oh yeah. Worth of these. I don't know what the margin on that is, 20%, 10% on hardware. There must be some other businesses here,

SPEAKER_202: like a subscription that comes with it, or maybe they get transaction fees. I'm guessing there's some sort of marketplace business here behind it. So that's why I brought out their two cards they

SPEAKER_28: have with MasterCard, because that brings people that hold their crypto on their Ledger devices and their Ledger wallet and ability to spend it in the real world. And as you and I both know, interchange revenues can add up rather quickly. They're a key driver of many fintech companies, your chimes, your ramps, et cetera. So there's a business there. And also I think that because their crypto wallet allows people to stake, and I think even lend their crypto while keeping it secure, there's another fintech business there. But I just think they have a great foundation in hardware, and if they can convert that into a recurring software business as well, Jason, then they're going to be playing on both sides of the bits-bytes divide, and it's great. Yeah, they've been added since 2013. So this company has been around a while. Super cool company. Next up, 1Password, sticking to the security theme. They told, I think it was Fortune or Forbes, that they've crossed the 400 million ARR mark. And that caught my eye because they were at 250 million ARR, I think it was at the end, no, September 2023. So they've grown 150 million ARR in the last roughly two years, give or take. They did that, Jason, while being cashflow positive. So they've grown pretty effectively. They're now at IPO scale, 400 million ARR, that's enough in 2025, right?

SPEAKER_101: Yeah. I mean, most people are saying like a billion is the bogey now.

SPEAKER_13: So the low end is, you know, like three, four, 500 million. And this one is not high growth, it's medium growth, right? Like, so if they added 150 and 250, they added you know, whatever, 75 million a year, it's not like doubling, it's growing 40% a year or something,

SPEAKER_01: still a decent business. I do think there's headwinds against these businesses because I seem to have every single device and browser and operating system competing to store my passwords. Yeah. But it's a business to business business. These tools are being used by small, medium sized businesses a lot. Yeah. Whether it's 1Password, LastPass, other ones. So it's like a business to business SaaS. If these two companies, both of them on the, you know, more modest size when compared to the coin bases, Airbnbs, you know, even the Reddits, these are smaller than those. These don't have a billion plus in revenue. So I think Reddit actually had under a billion too at the start. So these are on the smaller side. It would be great to see these be able to go out and have a chance in the market and maybe they figure something out and they could become super high growth.

SPEAKER_28: The business to business points very good, Jason. 1Password said that they had over 50% of their revenue in 2023 came from B2B and now it's over 75%. So they're increasingly focused on the upmarket versus consumer, if you will. And they said that they have a 70% compound annual growth rate amongst customers spending over 100K. How do you do that? Well, they're working on securing AI agents and giving them identities. So I think that's their growth business and they're competing with startups like Asterix and intro security that are also working on AI agent identification and permissions.

SPEAKER_101: The real reason you have that business to business growth is if your customers are adding

SPEAKER_01: employees or not every employee is on 1Password yet, you're landing and expanding, right? So most people who do a B2C and a B2B business, they'll start out with the B2C. They'll perfect the product. The person brings it to work with them. They tell their friends. Now there's four people out of 100 people at this business using it. And somebody says, I got to get control of this. And then you make a dashboard that allows some IT manager to see everybody who's using it, make sure they have everything backed up, that it's got SOC 2 compliance, shout out to Vanta and all that dialed in, right?

SPEAKER_28: All right. One more from the Twist 500 that is looking like IPO prepared for 2026. Mercury. Now I, I'm actually, I should disclose a Mercury customer in my little business. But they're a technology friendly Neobank, Jason. And what's really cool is they reached $650 million worth of annualized recurring revenue month times 12, not ARX, they're not a software subscription business at the end of Q3. And they were at about 500 million annual run rate at the end of 2024. That means they've added about 50 million in annual revenue, a quarter, not hyper growth, not open AI, not cursor, but very solid. And I did some fun math. So 50 million in annualized revenue, a quarter is adding 16.7 million a month, or for fun, they're adding about $555,000 worth of annual revenue per day. Quite impressive company was only valued at three and a half billion post money earlier this year, Jason by Sequoia feels cheap. But then again, fintech companies, bank things don't tend to trade us off our multiples. I'm just kind of curious, would you buy into Mercury right now

SPEAKER_07: at a three and a half billion dollar post? It feels like they really have a great product.

SPEAKER_13: Everybody I talked to who uses a Mercury bank loves it.

SPEAKER_01: Loves it. It's great. It reminds me in some ways of Robinhood or Uber. Like if you get really good at building apps and you keep adding features, you got that product velocity, you keep delighting the customers, as I always talk about. And it's very sticky. People don't change banks unless the bank pisses them off. I fire banks every couple of years and it's always the same thing. I'm trying to do a wire and I can't

SPEAKER_21: get the wire done. Or I'm trying to wire money to the cage in Vegas because I'm playing at a poker tournament. I can't get it. Or I'm trying to get $10,000 in cash for something. I can't get it.

SPEAKER_01: And I just say to one of my people, okay. And I'm like literally on the CC chain with some bank and I'm like, close all of our accounts immediately today. Because I keep three banks. Like I literally always have three banks, sometimes four when I have every corporate entity. And I'll just put whatever the minimum is in three of them. And then we use one as the primary and have those three as a backup. I keep them warm. Well, yes. Because if you have another situation like Silicon Valley Bank and it's FDIC insured with a certain amount in each, or if a bank goes down, you get locked out of your account. Let's say you happen to have a couple of million dollars in a business. You probably would be a good idea to keep some in the primary and keep some others in the other. Then also if the banks aren't giving you what you need, i.e. like wires aren't going through, or they just are not giving you the customer support, you know, somebody at each bank. Now this takes a little while for an operations person at your company to do, but it's well worth it. So if you have but one bank account at your business, Alex, I'm assuming you have one. For my little company, yes.

SPEAKER_02: Yes. And what would it cost you to have a second, like two hours of your time. So if it takes two hours of your time and you're in year two or three of your business, not a bad idea. Not a bad idea. To have a second one. Now that's for a, you know, a solo entrepreneur. You know, like now if you've got a business with 50 people, you have one bank, does that make any sense? Heck no. What's the old

SPEAKER_63: thing about digital copies? If you have one copy, you have no copies of a file. If you have one bank, you may have no bank. Right, exactly. So something happens to your bank, you got problems. And then it's

SPEAKER_02: also just delightful because when I send that email, you know what happens? I get what I want immediately. All of a sudden it's escalated because I just say, please close, transfer all of the money out of this account to our other bank and close our accounts today. Please confirm when this is done. I literally had this happen. I was, I went to, I went to a bank to get money to go play in the world series of poker. You know, I got some cash in the bank. I need 10,000. Oh, you only take five out. That's the limit. Nothing I can do. Sorry. That's our policy. I said, okay, great. Um, are you the manager? Uh, there's a note. I said, oh, can you get the manager over there? Okay. The manager comes over, two of them. I said, okay. Um, I'd like to close this account. Give me a cashier's check for the entire amount. Cause I said, what? I was like, yeah, I need $10,000 right now. I'm going to play in the world series of poker. I'm late. I got a flight. Close my account right now. Give me a check. The guy was like, one moment came back, handed me the money.

SPEAKER_100: I mean, because there's rules. I don't even, I'm not mad at the guy who's just following policy. I'm just saying that banks are not designed for, um, human happiness. I'll be honest. The guy could

SPEAKER_108: have said like, let me just talk to my manager. Uh, let me see what I can do for you. I mean, if you're in a customer service position and you're yeah. I think it's actually a really good

SPEAKER_28: point to bring up because Mercury, when they talked to fortune about this new revenue milestone, uh, they said a lot about trust because they said they had several customers more than a hundred

SPEAKER_233: million dollars with them. What? Yeah. Mercury. I thought Mercury was like for small mid, mid-sized businesses. That's a large business. We were just talking about going up market.

SPEAKER_28: They're doing that Jason. And so they said like, like, look, we, we need to be very, very, very stable. And that's why they're running the business on a profitable basis. They're both gap profitable and even a positive for the last three years. And they're just approaching this, I think with a different mindset than many high growth startups, because they need to be more in the, in the trust game than the growth game. I think Mercury is, is really a smart company. I wish I could give them all of my money. Uh, sadly, I'm not a VC and I wasn't around five years ago to do that, but a great company, one to watch and another twist 500, 2026 IPO candidate. All right, just real quick before we go, gamma just raised $68 million now valued at 2.1 billion and recent led the round. This is of course for the AI presentation maker. They're at a hundred million revenue, 70 million users and 600,000 of which pay for subscriptions. If you do the math, a hundred million AR, 600,000 subscribers, about $14 per user per month. Your thoughts. Wow. I didn't realize that business was so big. I know me either.

SPEAKER_13: I, I should know this business is so big because I do see a lot of founders using it as their

SPEAKER_01: presentation software now. And founders usually use whatever the best, most innovative product is,

SPEAKER_13: or they usually get the best deal with whatever combination of offering. And so, yeah, that's impressive. Um, and it looks like they have a lot of room to grow. If they have 70 million users and they've converted, but 600,000 of them to date 1%, um, they should be able to get that number to 5%, um, just from the existing user base by, and they may not have been super aggressive in converting them. Sure. Um, so it sounds to me like they could have 3 million paying subscribers soon. And that would be, gosh, five times as much. At least they could be doing 500 million. This could be another IPO candidate. So I was just thinking I should have merged this into

SPEAKER_28: the IPO section because this is a company that could be, I mean, let's be honest, late 2027, probably, but on that path. And I think it just goes to show that the AI boom is, uh, not just open AI, not just data centers. There's a lot of application layer companies doing gamma. I mean, dear God, dude, a hundred million ARR again, 10 years ago, this would have been the breakout company of its generation. We'd be talking about its IPO in revered terms. Now it's just kind of another great success, but I love seeing nine figure startups. Makes me very happy.

SPEAKER_03: Yeah. People are getting to nine figures faster than ever. Uh, and I think a really important

SPEAKER_01: lesson here to think about is taking on PowerPoint or, you know, Google presentations or slides, I guess it's called, you know, in 2023, uh, 2020, you know, whenever they started doing this, you might think, Oh, that's crazy. Like making an AI one, but okay. Make an AI version of Microsoft Excel, make an AI version of Microsoft word. Every single thing with an AI first approach could make something that is just super delightful. And this is just with 50 employees, like 52 employees, it says here. So that means they're making 2 million per employee. Well, that's how they're, that's how they're

SPEAKER_28: profitable, Jason, because they have an insane ARR per head count, but this is the new model. I mean, you know, we've talked so much about the ability of AI to make individual workers more productive and you get more done with fewer people. Well, how about a hundred million ARR with 52 staff? I mean,

SPEAKER_16: that is an efficiency that I think we never saw before. All right. My question for you,

SPEAKER_13: poly market users betting on opening AI's IPO. Okay. And their valuation. It's got a little bit of valuation. They got, they got a little bit of volume going on this one. Yeah. So what do you think? What are they going to go public at? 500 billion, 500 to 750, 750 billion. Did we do a bet

SPEAKER_28: on this already? Jason and I, yeah, you and I did this. We, we set the, uh, the over under at 1.25 trillion. I took the under. You took the under, I took the over. Uh, but what blew my mind was that the, uh, the, the rising category of popularity is wagers between 500 and 750 billion, which is essentially flat from where they are now. Uh, this poly market is set up in such a way, Jason, that you can also bet that they won't go public by the end of next year, but that's going down as a, as a wager while other, um, valuations for a pre 2026 IPO are going up. So people are betting more that it will list and less that it won't. And you could say, Hey, isn't that a, isn't that bullish? Don't people then therefore think that open AI will be IPO ready. I think it's bearish because if people are betting that it's going to go public next year at a valuation that isn't impressive to me, that implies distress and a need for more capital. It's also saying that it's not going

SPEAKER_13: to have an IPO by December 31st, 2026. That's the likely case 67%, which that's problematic if they

SPEAKER_77: need to raise more money for data centers and they need liquidity. You can say that as positive or

SPEAKER_28: negative, depending on how you think about it. Are they going public because they're so strong or are they going public because they're so weak and need the cash? You can kind of see it either

SPEAKER_13: way. Yeah. I think it's, they need to go public because they're going to need to raise that money. They were going to raise 60 billion and their IPO was the whisper number, which is a lot of money to raise all at once. And they're going to need that 60 billion and maybe they raised a hundred billion. So not raising means they don't have $60 billion next year, which means they'd have to raise money from the private market again, which who's going to put money in and at what valuation?

SPEAKER_112: Thrive capital at any valuation, I think is the answer to that so far at least.

SPEAKER_13: I don't think so. I think at 500 billion, I don't know if they come back to the trough again. And they were buying secondaries from employees at that valuation. I don't know that they come back at the trough again. I think people are going to say, yeah, you know, maybe at under 500 billion or at 500 billion they do. But I don't know who doesn't own shares in open AI besides the public, right? Public definitely will want to buy it because it's such an incredible franchise. But I wonder if like private market investors, how many more are left? How many more sovereign wealth funds that want to put 10 billion into this, a billion into this? How many Nvidia's are left that want to put 10 billion into it or 5 billion into it or certainly venture firms?

SPEAKER_28: This does make me a bit concerned. Can I draw an analogy? You know, we talk about startups raising at a valuation that's so high, they become unacquirable, maybe in the one to five billion dollar range. Is it possible to become so richly valued in the private markets that you're essentially

SPEAKER_13: uninvestable unless you go public? Yeah, that could happen where the private market investors, the last ones in have, you know, placed their bet. And the only thing left is retail and, you know, the folks who like to own public stocks, right? It could be hedge funds, it could be endowments, whatever that want public market stocks that they can come in and out of. Perfect example would be Uber. You know, Masayoshi comes in, pays a really high price. I sold some shares to him when it was a private company at that price. And then it goes public after that. And that was like a really interesting kind of dynamic because who's left after Masayoshi-san, the public, right?

SPEAKER_24: Well, and who's investing in OpenAI in 2025? Masayoshi-san and SoftBank.

SPEAKER_16: Correct. Maybe that's an indication. And Thrive is like the last investor before you go public, it seems like now. So

SPEAKER_13: I think this all to me says they're going public. Okay, well. And they're going public in 2026, which makes it weird that 67% of people don't think they're

SPEAKER_28: going public in 2026. Well, you and I have our bet. If they're over 1.25 trillion, I think it was end of first day's trading, then I think you owe me a hundred dollars.

SPEAKER_63: Otherwise, I owe you a hundred. All right. That's another This Week in Startups in the Camp. We'll see you next time. Bye-bye.