SPEAKER_01: another company cut and paste everything you do and steals your idea allegedly after stealing your SPEAKER_00: idea you go public with it i woke up to that post and noticed a very very uh blaring resemblance to SPEAKER_03: our website like they photocopied your website to a level that was absurd i was talking to general catalyst they were going to invest that money into us the first five minutes of the post i was SPEAKER_00: messaged by like maybe three of them saying obvi you need to take this down right now i call another SPEAKER_09: you see by name you you really stepped on the blanket all right everybody welcome back to twist SPEAKER_10: for may 20th may 20th 5 20. it's not 4 20 it's 5 20. summer is upon us graduations have occurred and it's going to be a wild summer the pace at which things have been happening in ai in global politics it is just fast and furious and we help you process it here three days a SPEAKER_11: week monday wednesday friday on twist today we're very lucky because one of the great startup stories of the past 20 years or maybe it's 15 mercury bank is going to be on talking about their latest fundraising and then we're going to tell the story of what happens when you create a startup and SPEAKER_10: allegedly another company from y combinator cut and paste everything you do and steals your idea SPEAKER_15: allegedly and after stealing your idea you go public with it and that strategy this is our two SPEAKER_18: guests today yeah alex absolutely it's going to be an absolute corker of a show uh but jason before we get into talking about mercury and their latest round i think we should pause and discuss our favorite SPEAKER_19: wearable gadget oh well i have a plot here on my wrist sometimes i wear it on the lapel of my jacket SPEAKER_10: you've got it on your wrist too you press the button you hit the haptic red light goes on now i'm recording anything i do i can be like oh we're hiring six associates in training to start out our venture firm this is a true story um and i know i have to catch up with jackie who's doing the hiring process and we have to talk about how we're going to assign all that so i can just say hey uh make sure we put on my calendar that i got to meet with jackie go over the six new hires for the associate in training program and how we're going to allocate them across our you know eight different business units and let's put that on my calendar and let's make some training manuals for it now you know i gave it some basic instructions all those notes when i sync which i can do either through my phone or by just putting it into this little charge pad it's synced and it makes multiple versions of that conversation a mind map if it was a long one like a rambling podcast episode it'll make you notes it'll make you um bullet points action items and of course just a perfect transcript so you get all that out of SPEAKER_18: the box super easy one click yes so you need a plot note pin s if you want to get one p-l-a-u-d dot ai slash twist use the code twist save 10 and while you were talking jason i had an idea i was thinking to myself i'm going deeper on codex from open ai i picked that as my current tool to play with and just really figure out to the studs and i was just thinking why can i bring my plot into codex i don't want to actually do the importing myself work myself and it turns out they have an mcp server so SPEAKER_28: you can just do that so interesting yeah um i've been thinking about that at some point i'm going to connect like either open claude or what's the french one that everybody's talking about now SPEAKER_11: let chat no oh hermes agent hermes agent so my next goal is to connect those two so then i would theoretically be putting all this into my hermes agent or maybe an obsidian locker something like that but yes uh lace chat is uh even better than hermes well the chat is the is the SPEAKER_29: offer it's the chat gpt from mistral and i was just thinking french ai talk to it let's chat okay SPEAKER_18: all right so we're going to bring uh ahmad akun he's the ceo and founder of mercury bank jason we all know mercury it is the i think the leading name in where startups do their banking it has a technology first focus it's becoming a real bank and this morning ahmad you announced that you raised 200 million dollars at a 5.2 billion dollar valuation we love to talk to people right after the SPEAKER_43: news welcome to the show having me excited to be here how long have you been running mercury SPEAKER_45: and how many customers are there now because you know i i became aware of you guys since you SPEAKER_10: targeted startups as your initial um sort of ideal customer profile there and that initial customer profile uh but it's i know it's spread to other categories larger enterprises etc but SPEAKER_48: when did you start this and and how many customers now so we started as and we launched in april 2019 SPEAKER_50: i started the company end of 2017 but actually had the idea in 2013 because i've been an entrepreneur since 2006 and i just couldn't believe how annoying banks were for entrepreneurs uh and every year i was like oh someone's gonna build this idea and then you know no one had so in 2017 we kind of we did it uh yeah early on we were very startup focused now yeah tech still makes up about 25 of our customers but we we have a lot of other kind of digital first businesses so e-commerce professional services things like that and about 300 300 000 businesses all together that's a large number of SPEAKER_45: businesses revenue now i understand um 650 million a year annualized run rate something in that range SPEAKER_53: yeah it's a bit high now that's what we reported kind of uh towards the end of last year and where SPEAKER_50: does that money come from how do you make money uh we have like five or six different revenue sources uh you know we give both corporate credit cards and debit cards to our customers so we make some interchange on that uh when we host people's revenue uh currently we're not a bank we just applied for a banking charter that we go conditional approval for but right now we work with partner banks uh and you know we get kind of ref share on the deposits they host for us um and then we also have fx and a few other kind of fees uh we try to make it like very simple and transparent so SPEAKER_58: most most of the things you do on mercury are free i'm curious why you didn't update the revenue SPEAKER_18: number ahmad because i was going back to your last announcements and you announced the 650 million dollar run rate milestone i think in like november or maybe it was late q3 at 2025. uh it's may it's nearly june you just raised a big round i feel like this is the moment to flex SPEAKER_61: so so allay my concerns that you flatline and the business hasn't grown in in seven months the vcs wouldn't have given me the money if i flatlined alex right that's what i was thinking uh SPEAKER_62: uh yeah calm strategy it's kind of boring but i think they want to have like another news moment SPEAKER_65: later in the year when we got it oh okay okay yeah like another media hit when you hit 800 900 and SPEAKER_45: eventually a billion and i guess that puts you in an interesting position uh you're still uh right below what people say is the benchmark to go public which is one billion dollars but you're you're kind of uh consistently getting closer to that so how do you think about how you want to run this business what do your investors want to do what do you want to do is it time to start considering going public obviously you probably were offered during the spac crazes to flip the company into a spac and you know get public SPEAKER_10: really easily but talk about how you think about yeah public markets now um yeah i think of ourselves SPEAKER_49: like still a pretty young company right 2019 launch uh and so that's like seven years old uh and i have SPEAKER_50: no rush i i really want to build this for the long term like you know we never want to sell the company uh i think that's yeah i think the potential for what mercury is doing is it's unlimited uh so at some point we want to be public and i think it'll be nice for our customers especially to own a part of mercury uh we actually did actually we fund a kind of crowdfunding campaign in 2021 so we had about 3 000 SPEAKER_72: customers actually own a piece of mercury which is nice that they get really uh yeah and they get a SPEAKER_73: nice and these are not these could be non-accredited yeah that was like a fundraising reg cf fundraiser SPEAKER_50: that was completely non-accredited um so i like customers owning mercury so at some point we'll do it right now we're very focused on kind of getting this bank chart alive and uh kind of get through that i also think like you probably want to be in like a 10 billion dollar kind of market cap before you go public so that's my kind of you know get the bank chart alive get to that kind of scale uh but it's SPEAKER_61: definitely in the horizon talk to me about the the process of getting a bank charter i know you've SPEAKER_18: applied for one and you've gotten like conditional approval now i don't spend a lot of time reading the deep details of banking application regulations ahmad i know you do yeah so uh where are you in SPEAKER_43: this process when does it complete when are you uh safe in your status as a bank um it's a multi-year SPEAKER_50: process especially when you're a pretty failed scaled up fintech uh you know we have to update all of our processes and procedures and controls and all these things to be at the level where we can have the bank charter and we're also hiring a bunch of people both last year and this year to uh be in a position to launch uh so yeah it's like conditional approval and then you kind of go through the setup process and you eventually open the bank doors okay so you've identified a real problem and SPEAKER_77: you put together a solid solution and a business model that you believe in so you're all set to SPEAKER_78: launch your new company right not so fast if you want investors and potential customers to take your new business seriously you need to consider forming a delaware c corp and that's where northwest registered agent comes in they're going to give your new company a real identity that means an address for your public filings a domain a custom website a business email and of course a phone number and that's going to take just 10 minutes and 10 clicks they don't charge hidden fees customer service is available around the clock they're not overwhelming your inbox with spam and they make it easy to cancel at any time so get all the advantages of a delaware c corp independent regardless of where in the us you're operating from visit northwestregisteredagent.com twist for more details and the links are in the show SPEAKER_80: notes so what does this bring to mercury because we've seen a lot of neobanks build and grow without having a bank inside their own house right they've used third-party banks and so forth and SPEAKER_18: the model frankly worked pretty well it seemed to abstract a lot of the complexity and regulatory overhead uh you're going for it so i i presume there's a lot of benefits to doing this what are SPEAKER_81: those and what will that do to the the quality of your business you know when we launched we were SPEAKER_50: only nine people and frankly it's just completely impossible to launch with nine people without having bank partners that supported us and really uh whether you know what the reason we were able to go live at the scale we are we are much bigger than our partner banks at this point uh and at some point you know uh you're not like you're you're basically regulated entity we're just regulated by a proxy uh yeah you know for us it's much more important to have that direct relationship and i think we'll actually end up being easier uh not easy but like i think we'll be able to deliver a better customer experience which yeah at the end of the day is what we care about so yeah there'll be SPEAKER_84: sort of control right if you if you are a bank you don't have to ask the bank you're partnered with hey can we do this and that and get their buy-in you can just go straight and do it yeah SPEAKER_72: we'll be focused on our priorities and we can execute against them yeah it's so funny this was like SPEAKER_45: do you watch the tv show industry i choose oh it's an incredible show on hbo it's it's like really about like banking and oh really actually this year in season three and it takes place in the uk um and this year the entire storyline was about a bank charter and somebody trying to get one for like a green energy company and trying and it like all resulted in uh or maybe with season four it all resulted in the the hand-wringing of just how important it is there there's industries like the trailer it the government whether it's the uk or united states they're very uh judicious about bank SPEAKER_84: charters because banks are moving money money uh can be used for nefarious things around the world human trafficking terrorism it's just all the bad things that can happen and then we have seen that that allegedly people claim things like tether uh have become and stable coins outside the u.s have become the place where people do that activity and we want those things to maybe come on shore so and and be more regulated know your customer so you're trying to do all these things right how do you think about stable coins and will they become the default rails for us doing payments between companies and then what does that do for the banking industry yourself do you have to provide that you don't make any money on that or do you make money on it how do you think about all that um SPEAKER_49: yeah i think stable coins have a place uh i think if you yeah if jason is wants to send money to a SPEAKER_50: business or yeah there's zell and like other kind of local rails are like pretty uh simple and most people have access to them in the us uh i think where stable coins work really well is globally uh you know there's lots of people that want access to us dollars and and having a stable currency so having the table coin accounts is powerful being able to send money internationally is still a bit of a pain uh so i think there's some really powerful use cases uh and you know we will probably have allow you to kind of send and receive stable coins uh soon uh so yeah i think it's interesting SPEAKER_93: i don't think it replaces the system i think it augments it uh and and there'll be lots of people SPEAKER_95: that get like a big so you're not going to go buy a stable coin startup as we've seen stripe and other SPEAKER_10: companies do sounds like no not in the current plan but you could launch one right i'm sure these companies are all pitching you on being the rails to have a mercury stable coin um yeah it comes SPEAKER_50: back to customer value i think usdc is like pretty good and that's got a big network effect because SPEAKER_93: people have it so yeah we don't have like a plan to launch our own stable coin uh if we i guess if we come up with like a reason customers really want that then we'll we might do it tell me about the SPEAKER_10: journey from small companies and using them uh you know going back to your more like early SPEAKER_45: entrepreneurial days and trying to find product market fit a lot of young founders year zero of their startup they're not even incorporated they're building and vibe coding a project while they're working at you know some big tech company working at mercury and on the weekends they're working on their startup and uh for those folks explain to them how you first got product market fit with startups why you chose startups and then what you learned from that process you know one thing that SPEAKER_50: was nice about mercury is the first startup i've built that's been for myself uh which kind of made it easier because i had this very specific vision in mind i was like we need wires which seems obvious but actually we were the first us new bank with like wire support uh and you know it needs to be really smooth and you need like multi-user permission so we spent a lot of time we spent a year and a half actually just building it uh and getting you know we went through a couple of bank partners because we were doing new things and there wasn't that much support for it uh but i would say like the day we launched we had kind of instant kind of product market fit uh especially with kind of early stage startups uh and the reason i chose early stage startups and why i thought it would work there is uh yeah they tend to be very product minded they want to use the best tools uh if you you know do well in one part of them like you know what a lot of y-combinated companies use us more than 50 of each batch uses us uh you know you you tend to become like a viral kind of solution uh to the ecosystem uh so you can like quite quickly build distribution uh even though you start early uh and then they grow really quickly so you know we we quite quickly had you know our first seed funded startups and then series a and now we have you know many startups that have raised like more than 100 million dollars using mercury uh so you can start with like a very small set where you can like solve the needs and you know banking is very sticky so as as as long as we keep delivering SPEAKER_93: kind of features and customer support and things like that you can kind of grow to like pretty big SPEAKER_95: companies uh using amad whenever i hear someone talk about like really quick or instant product market fit my ears go up because i'm always curious about how you reach that so quickly SPEAKER_18: and it implies that you had customers very quickly so talk to me about launch getting those first customers in and how you felt confident in having pmf that early because you didn't have a lot of SPEAKER_50: historical data to compare to at that point you know i really thought we'll launch and then you know we'll have that moment and then everyone will forget about us and then we have to go figure out like gtm and like you know that's how every other startup i'd ever done was uh but yeah with mercury we really launched and yeah it was really posted on x and like you know we had andreason horowitz which is our seed investors kind of post about it and uh elad gail and justin khan so we we had like i actually had 60 seed investors i thought it was good to get like the whole as much of the ecosystem as i could get to invest shame jason did not invest uh oh i mean and you SPEAKER_10: guys are buying ads from the beginning i'm such an idiot it's the story of my life like you guys were like oh we're doing startups and you guys were i think you were one of our you i think we were one of your first podcasts that you you know got the word out on and you know it's so dumb SPEAKER_84: every time somebody advertised us on this program i just need to tell them go invest 100k or 250k in that startup because that's what i did with eight sleep and um uh vanta both of those folks were advertisers on the pod i had to get them on as guests because they were incredible businesses independently and then i was just like can i invest and man i miss mercury so i miss that you know SPEAKER_01: gosh i probably would have gotten in at 100 or 250 million it would be a 25x right now uh but i think SPEAKER_117: actually maybe now is the time for me to invest because i have a late stage syndicate how do you SPEAKER_84: think about spvs and syndicates and late stage financing now and allowing your employees to maybe get some liquidity or just using that as a vehicle we just saw anthropic say hey we're going to negate all all these non-cap table spvs but obviously on the other side of the ledger you have folks like claude spacex stripe and previously when there were private company facebook doing very orderly secondary transactions to put primary capital into the company and or let existing employees liquidate so SPEAKER_25: how do you think about that as the founder and these spvs i don't like being draconian about it SPEAKER_50: my thinking is you know if investor invested or employee uh you know vested their stock that like they should really be able to do what they want with it and like you know if we were a public company again like there would be liquidity right uh so we try to make it flexible obviously you know i don't want a bunch of spvs kind of i think the issue with both anthropic and spacex spvs is there's a lot of like liars out there like people like taking advantage of people charging crazy fees so uh there is like some problems in the industry which you know is not great uh in our last year with our series c we did do an employee tender so you know if there's an opportunity we'll try to just make it easier i mean if you're you know if you are an employee and you have a few hundred k it's actually kind of hard to like get access to secondaries secondaries are much easier when you have like bigger chunks to sell uh so we do want to facilitate it but in general we're like pretty flexible about it uh but yeah the spvs are not unfortunately like if it's yeah if it's done by the company it can be like much smoother SPEAKER_78: than like uh people adding a new member to your team is a crucial decision you don't want to rush into a hiring situation that you will regret but if you're a busy founder you also don't want to spend a ton of time in the trenches looking for that perfect candidate instead you need a partner and you need a trusted partner and linkedin hiring pro is that partner how do i know this because i use linkedin hiring pro you want a real world testimony all right here you go we recently hired a new customer success manager they handle all the advertising accounts here on this week in startups and they ensure that we're keeping all of our wonderful partners happy linkedin helped us connect with an amazing candidate right here in austin and he had exactly the combination of experience we were looking for it's magic it's alchemy it's everything for me to find a great team member so hire right the first time get started by posting your job for free at linkedin.com twist terms and conditions SPEAKER_127: apply that's linkedin.com twist so if i wanted to theoretically put five million dollars in for SPEAKER_10: you know like primary capital into the company how would you look at you know me negotiating that with you obviously you just tapped topped off a bit with this 200 million but hey an extra five million is great maybe i can tweet once in a while hey you know i'm an investor um how would you SPEAKER_45: look at that if i wanted to like just i don't know because people have brought up mercury like SPEAKER_132: how do we get on that game today all right jason you get the best let's let's do it is it okay David Friedberg: well this is actually you on the cap table how about that perfect okay so i put five million in SPEAKER_136: five million 10 bips welcome to this 10 bips one percent is 50 million i can get my 10 bips now i SPEAKER_141: should have got it earlier but get my 10 bips now it just cost me 100 more uh listen great job SPEAKER_143: continued success um appreciate your supporting uh this podcast and independent media and banks you're SPEAKER_45: my bank i love using you guys um before you go though how do you think about ai as the ceo running the business and then how do you think about ai vis-a-vis agents wanting to do transactions now there's some new protocols i know coinbase has you know pioneered some of them i think you might have been part of this new standard that's coming out but people are going to want to use agents scary SPEAKER_10: or just obvious like how do you think about agents touching money you know i'm a big like sci-fi SPEAKER_50: guy i love reading and uh watching sci-fi so i always think like what's the future right and i just feel like in 10 years from now like everyone's going to have like a personal agent and it's just doing stuff for them so like i want to i want mercury to be an enabler for that so you know we launched a cli and we already have an mcp so lots of people connecting their mercury into co-work and cloud code and chat gpt and like you know their workflows and we want to be wherever people want to use mercury uh yeah agentic payments people already using mercury kind of virtual cards to you know give a card and like let your agent go go do things so we're going to enable more of that uh and then you know not everyone is like bought into this future yet and we we're we're also introducing features on the mercury app and mercury website so you can uh we launched mercury insights so you can kind of ask questions from your transactions and they'll like summarize things like hey your aws bill went up by 30 are you sure about that that kind of thing and then later later this summer we're launching mercury command where you can do kind of complex workflows like you're like hey pay my landlord 5k and it kind of sets it all up for you and you just click approve kind of thing SPEAKER_10: yeah that's going to be a really cool future when you can just ask questions yeah about what's going on with your bank as opposed to now where banking is just you know really hard to get a handle on what's going on with your money this the easier it can be and just my whoop makes it so i don't know if you're like a fan of whoop you got your whoop yeah like i don't know if you've been watching your have you started using the ai yeah it's kind of fine you can ask a few questions but you know we actually do SPEAKER_50: it's really neat we actually do a lot more than banking now so we started in banking but we have invoicing corporate credit card bill pay uh we just acquired a payroll company so actually like the ai gets even more powerful when you can like do oh uh you can tie it all together and you can be like hey i just hired an employee set up payroll issue them a card set them on expenses and like it just does all of that in like a couple of you know you just say it and it doesn't does it in a couple SPEAKER_10: so now you're going up against like the expensive eyes the ripples uh the peos you know all those SPEAKER_50: folks i'm just like you don't want to sign up to all this stuff like you just want to you know banking is where your money is it's where your finance team is like let's just do everything SPEAKER_10: in one place that's my my thinking yeah and if you get to i remember jerry yang in the yahoo days told me at some point i was interviewing him for my old magazine silicon valley reporter to really date SPEAKER_132: this conversation and i said hey what's like what's the focus now at yahoo and he said the focus is 2.4 SPEAKER_10: and i was like what does it mean he's like if we can get you to use 2.4 services from yahoo you'll never leave i'm like i still don't understand he's like okay do you have a yahoo mail account i was like yes he's like okay do you use yahoo finance or yahoo sports i was like yeah i put SPEAKER_139: the nicks in there i get my schedule and and yeah i have some socks and you know he goes okay so you're SPEAKER_141: three yeah um you're never gonna leave and to this day i have yahoo email account oh you have yahoo SPEAKER_155: finance i thought the story will end with like but it didn't work no i mean i still look at yahoo SPEAKER_141: finance just out of like a creature of habit and the web page is a bit of a mess like it i mean it SPEAKER_45: needs to be really overhauled and cleaned up but it's it's kind of like this archaic yeah but i SPEAKER_50: think the problem there was like it's not like these were interconnected services you know it's with with no like money movement and all of this stuff is just so closely connected that you can really like by doing like you know we also track this like we're like are you using three products or more which is like i think 15 20 of our customers use three products well uh but yeah if you're using them all and they work really well because like you know we we like if everything's a blue box right like if every money movement that you do is like all within mercury uh it gets even more powerful SPEAKER_45: that's that's yeah kind of the value it is um definitely the case with i think robin hood as well you know any of the or uber i think is also having this they they found that people who use eats shopping if you think about eats shopping and driving uh uber transportation has three separate SPEAKER_163: products the people who use two of those three or three of those three are like 10 times more active on the platform so it's also a catalyst once you make that connection they're in the app more so they SPEAKER_164: use it more it makes sense right so if you if you use the expensing in mercury or the invoicing in SPEAKER_10: mercury you're in the interface you see the next product you click on it and your acquisition cost for that person is 0.0 yeah really great uh really great observation and like an important one for founders maybe in later years first couple years kind of stay focused on maybe well i was thinking SPEAKER_50: like now that software development especially with new features we've got a lot easier maybe multi-product becomes like not you know maybe it's like earlier on uh because you can get a lot more SPEAKER_18: a lot faster yeah uh amont can i ask you one question before we let you go which is you raised less money this round than your preceding round by a hundred million dollars and i could read that so many different ways you're just burning less capital etc but i'm curious why less yeah as your SPEAKER_50: valuation went up uh so we've been profitable for four years so this was much more kind of raising money uh not for the money's sake uh you know the bank is fully capitalized etc uh we have way more money than we've ever raised in the bank as well uh so we're really doing it because like you know it creates a marketing moment i get to be on this podcast and uh a few other things uh it's good for acquisitions and hiring uh and yeah it's that's what i was curious is the money earmarked for SPEAKER_18: acquisitions because you guys have been talking about profitability for years now both uh by the way both non-gap and gap to your credit so how many startups are you going to buy over it's not SPEAKER_175: like a big strategy i mean we'll do it uh we do it carefully we've done two so far which two did you SPEAKER_50: do and how did it go so we just acquired central which is a payroll company um yeah it's still right we're running it independently right now and we're slowly kind of integrating it so it'll be like mercury payroll um data this year uh and then we made another kind of acquisition called teal uh which is in the uh book space um you really think about so far like yeah how do we get like one or two years of SPEAKER_93: like uh oh in the case of payroll probably three years of kind of progress and like a category that SPEAKER_10: like is interesting for us to do ah there it is teal a seed stage accounting startup founded by ian crosby and adam saint i think i know them yeah they were the bench founders uh yes yes it is oh wow so SPEAKER_164: are you gonna have like an accounting service for your customers is that the vision nothing announced yet SPEAKER_10: but well i mean it is interesting a lot of people are using probably mercury or your contemporaries and then they have an outsourced um you know a virtual accounting company which they typically charge i think three thousand a month most startups pay two three four thousand a month for these i'm talking about like seed stage series a and it's just a much better way to do your accounting you spend 30 40 50k instead of having to hire you know an accounting firm some of the kind of firms i think are probably in a similar thing but yeah pilot i guess is the other big one yeah and yeah because mercury SPEAKER_50: has all of these kind of core transactions we already auto categorize for you we already push all of that data to quickbooks and you know a lot of the things that you might think of as a bookkeeper you can kind of do automatically and programmatically if you have all that kind of core data within within a service so uh yeah we're already doing a bunch to make that like much simpler for bookkeepers continued SPEAKER_132: success and uh yeah i'll uh i'll dm you about maybe i can get in here and get some of my investors SPEAKER_139: together and get on that cat table yum yum yeah i smell a 10x from here great job and thanks for SPEAKER_10: supporting founders and uh thanks for supporting this podcast i don't know if you're a current SPEAKER_189: advertiser or not but i know in the past i've read some mercury ads and i use it it's a great product yeah thanks for having me highly recommend all right well done when you're a founder and you're moving SPEAKER_125: fast and you want to close a big deal a traditional bank can kill your momentum long approval processes clunky outdated systems not intuitive i mean some of these systems look like they were made in the 1970s and have never been updated not all banks are designed to work for startups we all know that and that's exactly why grasshopper bank was created grasshopper is a real federally charted bank but with the kind of financial tech stack that you'd build for yourself they're going to open your new SPEAKER_78: account in just minutes not days that's a key pain point an integration friendly platform with real time transfers and ai tools that are going to save you even more time all without training your budget on a bunch of unnecessary fees that's where they get you and because you're a valued twist listener grasshopper will drop a 500 cash bonus into your account when you use the promo code twist twist start building without the slowdown at grasshopper dot bank slash twist terms and conditions apply grasshopper is a federally chartered bank member fdic you make a good point there jason i'm a mercury customers SPEAKER_18: ball for my little my little company and you know what i would love is some hand holding so if you're filing your federal you know llc taxes for the first time it'd be great to have someone you could call SPEAKER_10: and ask three dumb questions too this is uh i think the full stack is more achievable the most interesting part of that was when he said yeah maybe it's easier now because software development so much faster to maybe add those next incremental products i think is right um it's just a matter of the distraction customer service maybe it's easier but you still need to think about it and then founders SPEAKER_139: need to be able to keep multiple business units in their head at the same time and then have the SPEAKER_163: enthusiasm and energy to keep growing them so that is now becoming the finite resources is the founding SPEAKER_139: team or the founders or the founder their enthusiasm and energy creative cycles to push something forward SPEAKER_10: as opposed to the blocker being can i get three more developers or you know in the case of these larger companies you know maybe a team of like 15 or 20 or 30 of them to allocate to a new product line SPEAKER_198: and they get the new product line to a revenue level that actually impacts our bottom line and that's why companies like meta microsoft and google don't go after very small niche products too often because even if they put 30 40 50 developers on it and they start making a you know interesting product it doesn't move the needle for them so for them then the founders are like are we still doing that is it at a billion in profits yet oh it's it's at 500 billion in profits or let's say it's at the amount mercury's at oh it's doing 650 million it's got a 10 20 30 margin whatever it happens to be i don't SPEAKER_10: know uh they were like okay that's incredibly boring i guess we should just reassign those 30 40 50 SPEAKER_119: engineers to make people click on you know search ads a little bit more let's put them on you know SPEAKER_84: google flights or google shopping whatever's the most profitable part of the business that's that's why SPEAKER_203: startups get to keep existing and so really interesting future so jason it is summer which SPEAKER_18: means people are getting around the world and i think it's time for a patented jason travel hack all SPEAKER_189: right uh i'm a big fan of athena athena gives you a virtual assistant right three thousand dollars a month you got an assistant they work on whatever time zone you're on i travel a lot right and so i SPEAKER_139: have to book a lot of travel so i made a travel playbook for myself what i do now is whenever there is a potential travel i have instructed them these are the airlines in which order i like to fly this is the pricing if something is within 20 there's no reason for me not to take my preferred SPEAKER_164: carrier which happens to be united right now they're they're like the best out of austin then i have the SPEAKER_208: hotels i like and the type of hotels i like now i like hotels that are funky interesting hip designer SPEAKER_163: i like them in a certain um price range and so i told them hey use monocle cloud or open ai whatever you want to search through content as travel measure eater um monocle magazine the new york times travel i gave them these are the places to look for stuff SPEAKER_139: so then go rank them give me my options call them on the phone get the best price then tell me what the prices are then when i tell you call them up and say hey we're coming to singapore we'd like to stay here we're going to be here for five days i'm booking can you uh match the price we had four SPEAKER_10: options of hotels we gave to this executive the executive being me and i know this sounds crazy like why are you trying to save money well we should always try to save money i said hey just um call them on the phone and say hey you know we have a rate of four hundred dollars at this hotel you're SPEAKER_189: charging 600 wondering if you could match the 400 price or come a little closer for a five-day stay nine times out of ten they're like of course we'll do it for 450 we'll do it for 500 and we book it SPEAKER_139: that saves me the cost of the athena assistant per year let that sink in if you travel 100 days and you save a certain amount of money per day it adds up the same thing with the travel costs of the flights finding these different routes then when i go to the city i like to go to the best restaurants so i told them this is the places to look for the best restaurants here's how uh instagram works and then what i want you to do is when i go to that city i want you to book me a 5 30 and a 7 30 dinner reservation for the entire five days i'm there every day in the afternoon ask me which one i plan SPEAKER_198: on going to and we'll cancel the other and sometimes i get charged 10 bucks a head if i do it too short i'm SPEAKER_139: happy to pay to the restaurant this has made travel so easy for me could i do this with an agent no but SPEAKER_213: an athena assistant who knows how to use agentic technology and you knows how to use these software they become superhuman and all i have to do is explain it to them once i look at the work i iterate explain it to them once a little bit of work iterate that has led to my travel being cheaper better and just so deft i would never ask an american assistant to do this kind of lunacy because they would look at me and be like that's completely inefficient but i have extra hours for my athena assistant so i say to my athena assistant i want to fill those hours they want the work them being a little SPEAKER_84: inefficient is no big deal because the arbitrage between what they're getting paid in the philippines and what an american who will not take the job here i couldn't find people who take the executive SPEAKER_198: assistant job if you try to get an executive assistant in a major city in america it's a 100 to 150k why because the people who take that job are like nobody wants to be of service and do this job anymore what used to be a secretary then became an executive assistant they just people don't want that job and if they do take it they only take that job alex as a springboard to the next job SPEAKER_18: yep so you lose them every 18 months which then is to retrain them which is so much fun uh if you want to get an ea go to athena.com j cal it'll take it right to this page the secret engine behind jason calacanis productivity uh jason is pretty there's my tip gotta say yes i i was i'm glad that you uh SPEAKER_189: um i'm glad that you reminded me to share this tip because i give this tip to my friends when they're like hey i got an athena assistant i heard you talk about it go to athenawow.com as well just athenawow.com we'll send you to that url too uh and uh i think after us talking about it on all in and talking about it on this week and startups they've started to build up their inventory so if you were somebody who was on a wait list if you go to my url uh they'll move you up the wait list because SPEAKER_07: you're a friend of jcow's also if you want to think about this in a different light i was just listening SPEAKER_18: to you talk about it i'm like well it's a little expensive then i was like wait i pay a lot more SPEAKER_225: than that for my nanny right now you know so as soon as i don't need a nanny i'm gonna get an ea SPEAKER_189: 2 000 hours a year uh if it was yeah if it's two thousand dollars times twenty dollars an hour is forty and this is thirty six so it's like whatever it is fifteen six sixteen dollars an hour or something um so it's a great deal for them athena has a little bit of margin in there but not crazy SPEAKER_163: and go ahead and try to hire somebody who is a professional who wants to do this kind of like SPEAKER_215: what would seemingly for an american be tedious boom uh nannies right now minimum in a major city SPEAKER_164: uh i know in san francisco it's 50 bucks an hour minimum yeah yeah it's it's 30 to 40 here in SPEAKER_139: providence so it's a little bit of it so you live in yeah you you live in like a i don't want to say second tier but uh a smaller um well no it sounds like a major city and then there's whatever minor SPEAKER_174: cities what we what do we say like so it's one two three it's correct you're dead i was just pretending to be annoyed but i like living in a tier two city because i can absolutely i mean i live is SPEAKER_189: austin a tier one city or two i guess it's a million people now is it tier two upper end of SPEAKER_18: tier two like chicago la new york city you know like the big team washington dc absolutely so tier SPEAKER_240: two is a pretty wide band and i would be confident at the lower end of it by size austin at the higher SPEAKER_189: end by size but i think they're about the same yeah yeah san antonio's like top 10 i guess it's in population but uh yeah so yeah austin i think is tier two out of i think we're at a million here in SPEAKER_44: population all right we have another guest let's get to work we do next up we're going to talk to SPEAKER_18: our different avi patel from kled now jason this is a company that reached my attention because it was going absolutely bonkers over on x and what avi was talking about was essentially being ripped off by another company and unlike we when we usually see this sort of thing people don't name names they just allege bad behavior or unethical behavior in this case though avi went nuclear by saying this SPEAKER_43: company this venture capital around so let's talk to avi about what's going on and nice to meet you SPEAKER_117: as well tell us what does kled do kled what is your company and what does it do so collide is the SPEAKER_242: first human data marketplace we let anyone upload their personal data and get paid for it um you can SPEAKER_00: think of it kind of like mercore or scale ai except they focus mainly on aggregation or they focus mainly on labeling we focus on aggregation um we collect uh we've collected over 1.1 billion files to date in the last four months alone we get over five million files uploaded to our platform a day have over 300 000 users have it number one of the app store in multiple countries and have raised SPEAKER_163: over 10 million dollars from some really cool investors yeah uh so to explain in plain english SPEAKER_139: there has always been this desire for people to reverse the meta uh model meta collects our information by providing free services like facebook instagram and whatsapp they collect your data you get paid nothing you get a free product uh in return you get to share your images unlimited to your friends you don't have to pay for it but they collect your data you get nothing from that they resell your data to anyone who will pay them anything for it your idea was hey let's get people to upload their data and then you can then resell it and you give them a portion of what you get paid correct SPEAKER_251: yeah i think the the added benefit to that as well is that you can guide participation very easily SPEAKER_03: because you're being very explicit that you're paying people out for it meaning that we just have like a massive gig app with tasks directly from the leading labs um that tells you exactly what we SPEAKER_189: want and we can collect that data but anyone else so this is the wrinkle it's really more like micro SPEAKER_163: one one of our portfolio companies or scale ai where you can say to somebody hey uh we have an llm you would abstract who the llm is but let's say it was open ai and they want to study people who play video games because they want to have better video game content or they want to study people who shop on amazon and walmart you say hey we're going to collect your data for that i assume you do that SPEAKER_00: with the browser plug-in or you do it with we have an app we just have a a mobile app i think it's the easiest form factor instead of going for like experts which actually is typically what most of these labs do we've shot for the general consumer audience we let anyone upload um so yeah we have an app where it's just a full feed where you can see pretty much anything on there from tasks from any of the labs and then you can also upload general data so you can go on there upload your entire camera roll and surprisingly because uh we have again that's what most people do actually surprisingly that data is very valuable um because it's consent driven and right now people like open ai for example are preparing for ipo cannot risk buying bad data that isn't legally licensed right so when you upload on a platform you're giving your 100 percent consent across the board and when you license SPEAKER_258: roms you're confident you're not going to get sued how much would i get paid if i put a hundred thousand SPEAKER_00: images into the system uh depends on the images but if it's on the higher end of quality like definitely 500 bucks um we had a recent uh we had a recent lab i can't name which one that was uh willing to offer a thousand dollars uh for a full person's camera roll um just the selfies on the camera roll actually and they wanted a hundred thousand uh people um and actively working on that SPEAKER_261: contract right now yeah that's a hundred million dollar contract correct yeah the the blocker in SPEAKER_00: that is uh our fraud detection pipeline which no one will ever admit by the way um is what needs to be improved uh we're almost there i'd say another like two weeks and we're going to be at 90 percent um but fraud detection is really hard at scale if you're collecting data from a bunch of different regions you need to make sure duplicates aren't being uploaded to interrupt plagiarized images aren't uploaded ai generated images and then even task specific like let's say the task is take a video if you take out the trash that task requires two hands in the video at all times head down angle this time of day let's say you remove your hand from the video frame for five seconds that task video becomes completely null and void and we have to detect that at scale because the second you get batted to a lab they'll never work with you again so we pride ourselves in SPEAKER_192: in the quality of the data that we provide yeah wow it's such a fascinating business so that would SPEAKER_265: be for robotics uh and real world uh model building is hey we need 10 000 people taking out the trash SPEAKER_268: and we're willing to pay for that and how else are you going to get it so it's a people have had SPEAKER_139: varying degrees of enthusiasm for these businesses we have one micro one that we incubated that's doing phenomenal um and i think it's a never-ending business because models are constantly going to need SPEAKER_163: data and they need quality data verified data bespoke data and they need to make sure that they're not breaking any ip laws and so you as the middlemen for these are responsible for that cohort SPEAKER_139: okay so you wake up one day you've met with a venture firm and a venture firm has backed a company SPEAKER_189: from y combinator with 30 million dollars you've been funded with 10 million you um according to SPEAKER_196: your post that i read had met with that firm that firm had passed uh you know most firms pass on 99 SPEAKER_189: of investments so that's not new uh i guess it was general catalyst here uh who led this 31 million round but this company um is a y combinator company there is a belief in the market that y combinator SPEAKER_139: companies who get that 500k something's not working they get a bit desperate there's a bit of a hacker culture there these are all you know sort of what they optimize for um and they want people SPEAKER_189: who are rule breakers they they're kind of upfront about that and paul graham came up with the question SPEAKER_198: i don't know what the question is on the application give us an example of things you packed uh and sam altman was one of those people who they thought fit this mold now of course we just got over a trial with sam waltman and you know there's all these allegations that he's not trustworthy by his former co-partners put it all aside yeah um they optimize for that type of person if you don't get product market fit the best way to get product mark but he also has it and then be inspired by their recipes SPEAKER_278: and then maybe open a similar restaurant uh a time you most successfully hacked some system to your SPEAKER_198: advantage so you're alleging here avi that they hacked the system to their advantage explain what you woke up and saw and then how you reacted to it and why i want to preface all of this first off that SPEAKER_00: i am very non-drama oriented uh i uh i love competition i'm friends with uh mercore and turing these are my colleagues my partners everything um but the the sheer combination of factors that came together here uh was uh in my opinion absolutely unacceptable and deservingly needed to be called out um and that's exactly what i did i one day woke up i saw a post from yuri from general catalyst who i was talking to extensively we had over five meetings with general catalyst was going to meet him on to the owner of the fund to discuss um a actually the same exact terms of 30 million dollar investment at the same valuation god knows how they came up with that number maybe general catalyst told them to raise the same amount um and uh yeah i woke up to that post i then clicked the website and noticed uh very very uh blaring resemblance to our website um you may put the side by side up i think uh the better the better thing is to scroll and look at the templates the format everything now naturally this is okay um i think tons of people have copied our website and tons of people have have like tried to do the exact model but um then you look at their app a little closely and uh they are not anywhere near us when it comes to the the competition it's not even close the app has 500 000 users supposedly or 600 000 users um and uh 50 of their web traffic is from nigeria uh if people are unaware SPEAKER_282: we had to ban the entire country of nigeria from using the cloud app as of last week because of it and SPEAKER_227: just to uh pause for a second of you yeah if you if we look at these side by side which uh alex is SPEAKER_139: doing a good job of here font color and then section by section a complete ripoff complete ripoff SPEAKER_284: yeah just let me look at this yeah a level of uh stealing you're a legend and that just with the eye SPEAKER_243: test i don't know if these have changed since have they changed their website since you so i i can get SPEAKER_00: into that but yeah they were misleading their compliance practices and now they fixed them uh on their on their trust page so yes uh they have changed slightly but so they copied the exact SPEAKER_163: like they photocopied your website to a level that was absurd i think that's kind of established how does something like that occur did they address that allegation that they have not addressed SPEAKER_00: anything they have not even said anything publicly i don't think they're actually messaging or talking to anyone because i mean that's like an admittance of guilt honestly i don't know how bad it would be if they started talking publicly um but yeah uh anyways the the main point is that yeah look i was talking general catalyst they were going to invest that money into us and we are a way more established app thousands and thousands of ratings on the app store all five star have not been accused of wage theft which is something luel is extensively accused of if you even google the company it's everywhere um and uh yeah 50 of their user from nigeria we had to ban the entire country of nigeria as of last week because of a 95 fraudulent upload rate so what they've done is they only have 113 people in organic traffic each month or 300 somewhere in in that range is what semrush and all the other services are saying the rest is all paid so these guys manually paid to get nigeria which is known to be a fraudulent region to upload to their platform to bolster their user numbers to then look good in front of investors SPEAKER_29: was lol founded after you were talking to gc about raising money for clud yes yes so so they announced SPEAKER_00: it after we were talking to gc um much after they were founded way after we started which was over a year ago now um and uh the last thing i'll point out is they were using delve for compliance right so they were asserting uh that they had socked to gdpr ccp and hipaa compliance on their website i put a second video that not many people saw i think like two million people saw it so i can't say not many but two million people saw that uh showed their website asserting those numbers um asserting those claims and then you go to their delve compliance portal and it only had sock one compliant and sock two in progress so they weren't even compliant with sock two and it's delve in the first place so god knows if the sock one was actually compliant or not probably and just so people SPEAKER_163: know del was the vanta competitor yes that was doing allegedly ai slop sock two compliance destroying SPEAKER_65: their customers allegedly reputation so you had a and this is i guess where you know um ethics and SPEAKER_127: morality matter yeah what did they come to yc with that idea or did they come to yc with a different SPEAKER_305: idea and pivot you know luel luel came to yc with the same idea okay so yeah and we again we've been SPEAKER_307: building in public for a year so every many people have said we've gone i wonder if yc knew that they SPEAKER_00: were they did and the reason why i know that is because uh the day uh we announced our fundraising video they uh announced demos for three exact replica products to kled um i think one of them was SPEAKER_309: actually uh luel as well so um they were very well aware yeah so do you think that y combinator is SPEAKER_95: specifically trying to get companies to ape existing successes as a way to essentially create a series of SPEAKER_108: follow-up hits here is you think this is a strategy or just it might be it's not a i want to say that's SPEAKER_312: not a bad strategy by the way i i have no qualms with that or quarrels with that it's just like SPEAKER_00: uh the last thing i will say is that if you inspect element their site the number counter where it says live users was a manual number counter going up and their heat map was manually set to where people were located so it wasn't actually live or real so god knows if the 600 000 was here just again take all this into consideration and then general catalyst gives 31 million dollars SPEAKER_18: so that's the problem i have you said nepotism i'm curious about why you think general catalyst would go through all the trouble of backing this company talking to you and essentially trying to pull the rug out from underneath you because it seems like a huge waste of time they could have just invested in you and then moved on with life so why nepotism and what was their impetus the reason i SPEAKER_00: say that is uh due to factors that are not actually public i've messaged several people from general catalyst um and i can't say who because i respect them greatly um is uh one of the biggest investors and one of the really big data companies um in their portfolio and is usually the right of passage that you have to meet this one person and and become in their eyes impressed with what you do um and this person actually had no idea luell even existed um prior to this investment uh or any idea about the company um and had nothing to do with the deal um which is very strange to me so i don't know how many people from gc knew about the deal or anything but um it's just very weird across the way it's SPEAKER_18: yeah yeah jason i want to get your venture perspective here you talk to a lot of startups you probably heard every horror story there is uh when you hear all of this to me it sounds like some behavior that i wouldn't do myself but i'm curious what your take is on both yc the startup SPEAKER_196: and its competitor oh yeah i'm prepared to give my judgment as the judge and jeremy and chairman of SPEAKER_164: the internet interwebs and startups as the official judge jury judge dread of these kind of issues i will SPEAKER_320: give my ruling first i'll give my ruling on y combinator why combinator encourages this hacking SPEAKER_139: behavior uh because they know if you were to make a four quadrant chart people who break the rules and who are competent people who don't break the rules and who are competent people who are incompetent break the rules don't break the rules if you're to make those four boxes SPEAKER_163: rule breakers rebels who are competent or incompetent tend to win yeah over people who are not rule SPEAKER_139: breakers now rule people who are somewhere in the middle they'll bend rules they tend to do really well if they're competent but there is a special place in the world for people who are willing to bend and break rules and the problem with that is once you establish that culture of rule bending breaking SPEAKER_198: reinterpretation say airbnb reinterpreting how things work obviously uber i was famously an investor in like they reinterpreted some laws ride sharing laws renting your couch laws hey we're not a hotel we're just renting a room um okay distinction without a difference you know i'll leave it up to you but uh the SPEAKER_213: problem with this is you have to explain to those rule breakers when you invite the rule breakers in some of them will do criminal things some of them will do things that are morally you know unethical SPEAKER_198: and that's why you see yc has to do cleanup uh they i think with that company that was yeah did they SPEAKER_322: yeah they had to remove them from the batch basically removed but that was only after all the SPEAKER_243: allegations they were well aware of all of this probably and just didn't do anything and they SPEAKER_323: initially supported them after it broke too if you recall yeah right so the default stance is always SPEAKER_189: to support your founders that's what they should do that's what i do and then if they did truly SPEAKER_163: do something wrong you know selling your shares back breaking up and cleaning up the relationship is SPEAKER_139: also the right thing to do so i understand yc's position yc should be a little bit more clear on the margins about this specific type of behavior which is blatant rip-offs they've now become known for being the blatant rip-off shop because when you have 200 companies they have 500k each they don't get product market fit i know these founders i know what they go through they go through massive panic of oh my god i'm gonna fail and you get the shame of failing so with your last let's say you did your first idea you spent 300 of the 500k you got 200k left you throw a hell mary you stand up a website SPEAKER_163: really quick you copy somebody else's idea you try to raise money sometimes it works out so now i'll move on to so they should just be a little clear that that's lame don't do it i'm SPEAKER_139: pretty clear with that if somebody comes and applies um and y combinator or any accelerator can't say we're going to just bet on one person in a vertical they there's all the companies pivot like SPEAKER_10: literally the majority of the companies pivot from their original idea within the first two or three ideas when you're at the accelerator stage so people pivot into each other that's all good but SPEAKER_198: they should just say on a moral ethical basis ripping off and stealing and photocopying it's just SPEAKER_213: lame and unethical please don't do it and that's what i say like it looks lame okay now i will move on to this company this company uh looks lame unethical and immoral based on stealing uh the website pixel by pixel is that illegal no can you trademark design and stuff like that yes on the margins but you can't really you know avi can't stop his business and spend correct 10 million dollars on a lawsuit over a website it's just not possible so when somebody does that kind of behavior if you're an investor if you're y combinator if you're gc whoever's investing that is a blaring blaring alarm signal if somebody is willing to do something that's unethical immoral then that means you need to investigate if they are doing other things that are immoral unethical or illegal so as a founder you should never do anything with the appearance of impropriety because it's a blaring alarm signal to double click on everything else you're doing your equity your pay your contracts who your customers are your metrics and sure enough avi alleges a bunch of other things about this startup that don't look good i'm not taking any of those and giving a verdict on them but now gc is being pulled into this it's a bad look for gc the company looks really stupid and now the eye of sorong the magnifying glasses on your startup and every single behavior you do and what i found of the first 400 companies i SPEAKER_198: invested and we had three that were doing things that were in that area of unethical immoral maybe SPEAKER_336: illegal securities fraud pricing of options um making claims when you're raising money that were SPEAKER_213: bending the truth man we had to cut loose from these because when i went to my council i said hey this SPEAKER_198: company said people worked for them who didn't work for them they said okay that's were they raising money at the time i said yeah it's in their deck uh i said they said okay that's securities fraud i said what they said yeah that's the definition of security you're making a claim while raising a security while selling a security to investors that's not true security is fraud i'm like great SPEAKER_213: now i understand this really well we train our startups don't ever mix your pipeline your you know trials with customers if they're on a trial say trial if it's a paid trial say paid trial if it's SPEAKER_198: unpaid trial say unpaid if they're a customer and they're paying say they're paying but don't exaggerate we had startups doing crazy things like taking four years of a contract value and then saying that was the revenue there in this month that's crazy stuff right so let's put that SPEAKER_00: to add to this as well this is this is a human data marketplace right in order to actually win in this you need to grow in the us it's really important and you also have to grow like pretty high like areas like malaysia and indonesia that are like low fraud rate and have good user bases and in order to do that like they they really rely on public reputation the fact that this is something that has been put out there and there's reddit articles and all of that stuff is just not good for the user base in the future it's personal data that's like really like the whole point is your reputation has to be good like otherwise no one's trusting you with this stuff yeah so uh we've Chamath Palihapitiya: adjudicated yc they could do a little better on the margins but the strategy is the strategy SPEAKER_189: then we've adjudicated this specific company now avi i'm going to pass judgment on you i've come here to this week in startups the official place where these judgments are given and i think you did SPEAKER_139: you handled this exactly right i appreciate that man i'll tell you why you know you're not you don't have the resources time or want to waste time on a lawsuit so then what are your other options you can in prison let somebody f with you you can let them you know take your cake from your tray or you know uh spit in your food you've seen all these uh moves and if that kind of stuff happens then you become a prison b-word you become a prison now everybody's going to f with you if you go to the yard and somebody or you get in your meal and they take your cake you got to take the tray you got to smack them across the nose and break their nose and then if you get your ass cake and they jump you fine but at least you stood your ground you had no choice but to stand your ground on this so i think it's great that you said hey listen here's the evidence here are the facts judge for yourself and you called the venture capital firm out and you said hey listen you guys invested in them that's your right if you prefer them over us that's fine but it doesn't feel great to me and i think you need to look at SPEAKER_213: this startup and maybe just check the reality so you did what you had to do you had to defend yourself in the face of somebody effing with you if this is all true the same thing with vanta and the company SPEAKER_139: that was doing the ai allegedly doing the ai slop sock two things right like what is vanta or their contemporaries supposed to do they have to call the company out because they're poisoning the well yes you're in a category this company if what you say is true they're poisoning the well of the same SPEAKER_198: customer base and now what you've done by calling them out keeping it unemotional not being drama just saying here are the facts and now i need to get back to work now i know your company i saw your follower count went up i noticed a lot of vcs started following you i'm assuming some people are interested in like hey you're the high performer and you're alleging this other one is the copycat they've raised more money than you you seem to be the real deal you're alleging they're not maybe people want to put a little more money into your coffers maybe people want to be on your team and now your profile goes up and you get more attention so i think you did the right thing i SPEAKER_00: appreciate that man i do want to say that i did turn down pretty much everyone that asked to invest because i would rather raise my series a on the on the merits of my revenue and numbers because i think that's the right thing to do rather than uh some twitter virality but i'm just glad that the reputation of this company has been properly called out that was the only objective what was your SPEAKER_18: investors response to this because you took a risk right by calling out vc by name you you really stepped on the plank here you could have fallen off i mean people talk a lot about reputation SPEAKER_95: management in the fundraising game so uh were your own existing backers concerned that you were about SPEAKER_351: to kick the wrong beehive for the first five minutes of the post i was messaged by like maybe SPEAKER_00: three of them saying obvi you need to take this down right now i love you but you need to take it down and then an hour later they all said obvi i love you never changed that was a pretty consistent reaction from all i have a lot of seed investors remember i told you like the the SPEAKER_139: founders who win are a bit punk rock they're you know a bit um effervescent like you obviously are signaling that like you're not going to you're going to go down swinging period full stop if SPEAKER_189: they're going to try to stop you if they're going to try to steal from you you're going to go down swinging you're not going to be a prison you're not going to be somebody else's i will say gc is a SPEAKER_358: great firm this is a great i know so it's i said no to so many people so many people because i wanted SPEAKER_139: gc to do our round and then here's meetings here's what i'll say i didn't adjudicate so the judge dread SPEAKER_196: jacal yeah or just you know jacal has spoken here um i will say i'll give my uh i will adjudicate the SPEAKER_139: issue for gc i think gc probably made a speed error here they didn't they they knew the category was emerging they wanted to place a bet there's 20 different companies going after it they picked one SPEAKER_205: and they may have just made a mistake in vetting that company maybe they didn't vet them well enough SPEAKER_139: and maybe the company if they if that company let's say was not um ethical or moral as you've pointed out and if that's all true well maybe they didn't present themselves ethically and morally to gc and gc got taken taken for a ride here gc's in their up in their grill right now saying why did you do something stupid like this why did you kick the hornet's nest here and do unethical SPEAKER_196: things if these unethical things are all true um and it wasn't just random uh that like some ai just SPEAKER_17: made the website for them and didn't i don't have to work with general catalyst or potentially raise money from them so i don't have to be nice uh my view of the firm has gone down dramatically SPEAKER_18: because of this and i've been to gc i've known investors that i've been in their stupid elevator pitching room like this is a firm that i used to hold in relatively high regard but when i see behavior like this and an unwillingness to admit possible are you making a mistake to me you're just not a serious actor and i'm i'm gonna judge you for it like i mean i was messaged by them telling me that SPEAKER_312: they've been asked not to communicate with me at all basically so they don't even want to apologize SPEAKER_18: or say anything on it i i'm you can do better and so i i i i now have moved them down back to our SPEAKER_227: tier rankings jason gc is now a tier three firm for me uh they're a great firm great team over there um SPEAKER_139: i think i'll give them a little grace here that you know they're in an impossible situation right here they their choice now is to throw this person under the bus to you know take their money back who knows SPEAKER_205: maybe they're talking to that for that company and saying hey we want our money back and we want to you know and they're just in the process of settling that they might be you never know just SPEAKER_189: like y combinator initially came out in support of that company uh was it delve i just want to make sure i'm talking about the right yeah they came out in support of delve and then they withdrew their SPEAKER_196: support and i think they just erased the note and let them keep the money i think they just gave their shares back i don't even know if they got their 125k back so yeah uh there it is folks all right SPEAKER_18: all right kled.ai go take a look at it sourcing the largest licensable data sets on the planet avi SPEAKER_189: you're the best thanks for coming on i appreciate it have a good one yeah you got to just put it into your work now that's like what founders need to do is just stay focused on the work these things can SPEAKER_139: make a founder a bit crazy and if you get in these kind of situations what you have to do is channel that energy into the product into growth into hiring into raising money the only thing i disagree with him he's like oh i shouldn't raise money whatever immediately open a note and get those investors on the cap table just open a note that's you know 50 more than your last round 50 SPEAKER_196: less than what you think your series a is going to be so you know if he did the last round of 30 million and the he wants to do the next one at 200 like just at 100 million sure yeah 115 just raise 15 SPEAKER_139: million 20 million start building up your chip stack so that you can go more aggressive and most of all win just win winning is the greatest winning is the greatest revenge living well is the greatest revenge i had some people i was partners with previously on conferences and whatnot they turned out to be of SPEAKER_163: not the moral character allegedly whatever that i wanted to be involved with in the breakup i lost millions of dollars in value in a conference and then i went on to just absolutely flourish with the SPEAKER_117: launch brand so without mentioning anybody's names and all this theoretical stuff like sometimes just SPEAKER_198: getting out of something toxic and moving on from it opens up so many other doors i can tell you just SPEAKER_95: from my personal experience it's much better i think we're gonna see a lot more of this issue though because we talked earlier about you know making software everyone can make more features now when we're SPEAKER_18: talking to a lot from mercury now a vc firm can meet with a founder see a cool idea just go pick some people they know and have them build it and so i think which is and that's not moral that's not SPEAKER_198: unethical or immoral if you saw uber or airbnb being successful you said hey that's an incredible category we need to go for the silver and bronze in that category let's be a fast follower let's build SPEAKER_213: something that's on the margins better let's take the margin out let's change the business model great go for it generally that's not how to win you want to go with the leader but facebook was a fast follower of myspace and friendster and they wound up being a colossal win uh people would um say uber SPEAKER_139: was a fast follower of sidecar even though it was just like the timing was there um but they did follow lyft into ride sharing right because uber was lincoln town cars they saw ride share was coming and they were like well that's illegal we're not doing that and then lyft was like yeah we are reinterpreting SPEAKER_198: the laws and they had no choice but to include that in their product line what people can't do SPEAKER_139: in all of this is people cannot um people can't not do anything if there's a new market you have to go after it that's part of it but what people can't copy is your resilience your self-reliance your enthusiasm and you not quitting the people i find who do derivative startups for the money they wake up on the day it's hardest or the day it's second hardest and they're like you know what this is hard i'm playing for the bronze i quit that's what happens you see it in professional SPEAKER_205: sports sometimes somebody is like super highly intelligent they've got this incredible physique SPEAKER_139: they've got all these physical gifts but they don't pursue it with the level of discipline that jordan or kobe or lebron do and they just don't succeed then you see people with less gifts like jalen brunson on the new on the new york knicks who's smaller than most point guards who are slower than SPEAKER_196: most point guards but he figured out how to be the best point guard in the league and one of the top SPEAKER_387: five players in the league somehow helsey mitchell for the fever same thing yeah you just can't SPEAKER_196: replicate uh that passion and the drive and the resiliency to not give up i guarantee you these companies that are stealing websites and just copying them pixel by pixel not putting their own spin on it they don't have the enthusiasm that will carry them through the downtime still just quit so you just have SPEAKER_388: to understand that and keep going all right now before we get into a couple of news stories really quickly jason let's talk you didn't put up the you had these great images you guys should have thrown them up while i was talking oh it was so funny oh okay that would have been hilarious i was just SPEAKER_94: i'll show everyone now because you brought it up i was just messing around um so it is i am going to SPEAKER_139: if anybody has a case and you need a judge i'm your judge here he is ladies and gentlemen judge jacaldred SPEAKER_09: i like it yeah i look good as judge dread it's not bad here's me there i am oh you you look better yeah you and i should just judge these things we'll adjudicate these we are the law bring us your startup SPEAKER_213: cases and we will pass judgment you know like y combinator is just always gonna have this issue where if you if you route for hackers sometimes hackers take it too far if you say like tell me a time you broke the rules to win which is essentially what they're saying that's what hacking means tell me the time you broke the rules in order to win and then you invest in people based on that don't be surprised if people break the rules in order to win and then some of it might be uncomfortable a former head SPEAKER_18: of the yc community mr sam aldman recently swung by his old alma mater and announced that he's going to give out two million dollars in open ai credits in exchange for equity to any of the companies in the current batch that want it now i think this is going to be done in a form of a safe jason or perhaps a tafe tokens for future equity uh but i think it's a very interesting idea quite a lot of value on offer for yc firms i'm curious what your thoughts are about this and if they should accept it or they SPEAKER_196: should spurn it the most important thing to realize about any of these platforms coming in uh because facebook did the same thing and you can look that up and i made a video like attention to facebook founders i forgot what the offer was if it was like platform credits or whatever but i just did a thing hey facebook uh hey yc founders and it went viral many times over and i SPEAKER_139: said listen you're letting the fox into the hen house facebook is going to study whatever you're SPEAKER_198: building and just incorporate it into the native platform you can't trust zuckerberg i turned out to be exactly right i don't want to be right in these things but as somebody who has experience i can tell you what the platforms all do the platforms study the app layer they pick the best things and then they SPEAKER_395: make them defaults so windows android ios facebook they all do it apple and the question is at what SPEAKER_163: velocity and with what level of you know morality or ethics people would say apple is the most conservative SPEAKER_139: in this regard if you look at when they add something to i message they typically have let other people ring as much value out of that and then they finally add to the apple watch the ability to get a sleep score but for like years apple health is like here are five different sleep apps here are five different meditation apps whatever and then eventually they you know com.com is like a meditation app but they put a breathing exercise into the apple watch okay great so they tend to SPEAKER_163: want to have a robust ecosystem and then do this i don't believe sam waltman is not going to just use this to study and to get a leg up and to buy them which is his want and right he can do that to SPEAKER_139: collect information about these startups now they know that you're part of this so they take those 200 companies the business development group looks at your usage they study your usage they see which one SPEAKER_164: of those companies is growing best remember he was the founder he was the ceo of yc for a while so SPEAKER_139: he knows the value oh yeah and then he will just go to each of these companies let's say 10 of them are breaking out and i'll say hey i want to buy the company he knows so now open ai can buy those companies put them in there or if they don't take his offer to buy them because he now owns two percent of the company already he has some amount of information rights by having that he's got some SPEAKER_198: connection to the companies that's what makes this offer brilliant and dangerous and then he can just say to his team hey look this person went from you know whatever two million in tokens to 20 million SPEAKER_213: in tokens we need to study that company now does that mean they're going to study them um in a SPEAKER_139: unethical way no they can just watch usage go up they need to understand the usage so when they see these 20 yc startups now have their usage go 20x right these are the 20xers they can just say look at their website go hire their people go compete with them and then boom all of a sudden you now have educated sam altman and the open ai team on what's working that's why they're doing this this is an information play this is not out of the goodness of their heart oh this is for them to they don't need the return on the two percent this is for them to get data to steal ideas from early stage startups that's what it is now i'm using the term steel ideas but it's for market intelligence is the way you could say it in the most generous way possible the most charitable interpretation SPEAKER_84: of this is it's market intelligence okay you're stupid if you take this deal i need to to work SPEAKER_402: through a disagreement that i have with you here because i presume that i'm missing something but SPEAKER_95: if i'm in a startup today i'm going to be using probably some amount of inference aka tokens from one of the major ai labs probably open ai or anthropic they're very popular for a reason they SPEAKER_18: have excellent technology therefore a lot of startups are already going to go use open ai's models and give them access to this information without open ai needing to go through all the work of offering them tokens and putting up together all these contracts and so forth so to me the risk is already there jason and this doesn't seem like too much of an acceleration of that risk or an increase to it it sounds more like kind of like subsidized you know api inference for a while so to me i don't see the the reason to treat this differently than using their products commercially without the investment SPEAKER_44: i would study the individual making the offer speaking of charitably put phrases there you go jason no i'm listening sam is cutthroat have we learned anything from the trial last week SPEAKER_139: you know mira leaving her impression of him everybody leaving the non-profit board blowing up this isn't like i'm not making this up there's questions about his ethics or morality his approach to business his cutthroat nature i mean phrase it any way you want the new yorker article is certainly a SPEAKER_163: little bit sensational but people wind up to share yeah to share their experiences they came to me and were asking me to be part of our goals like i you know i i like sam interpersonally i think he's SPEAKER_139: incredibly smart um i don't like what he did to elon i thought he stabbed him in the back i think it was SPEAKER_196: incredibly immoral unethical what he did to him okay you know people do moral they do unethical things all the time okay here we are um so just be thoughtful if you're a founder and this is why i think open SPEAKER_139: source and maybe using anthropic xai or other you know gemini there might be other places that maybe have less of a reputational issue and might be more uh in the acquisition camp yeah then open ai SPEAKER_07: so if a deal seems too good to be true it might be yeah uh last thing on this we made the market made SPEAKER_18: such a big fuss last year over all the work that sam did to get compute for open ai in anticipation of future demand and now they're able to resect codex limits pretty frequently they're able to give out you know what is 800 million dollars in compute credits to yc startups i kind of think that if we could rewind the clock we should have been slightly more positive about the compute work that open ai did last year because it does seem to be today coming good as anthropic scrambles to find any gpu tpu or asic that it can to get its inference through so i think that's worth keeping in mind as we talk about this but let's move on jason you want to talk specifically about a recent union outcome in new york city now hotel housekeepers are going to get a relatively large raise over the next i forget if it's six or eight years but the headline here is that average pay for nyc hotel housekeepers that are part of this union which is called the uh hotel and gaming trades council will see their income rise to Chamath Palihapitiya: over 100k in time your thoughts uh this to me was just incredibly notable about how much a housekeeper SPEAKER_164: in new york city gets paid versus other uh cities other cities are paying 30 uh thousand i think the average housekeeper gets paid thirty thousand dollars he had thirty five thousand thirty nine yeah okay so this is triple and then other cities which would be very comparable to new york they make like 50 SPEAKER_139: or maybe 60. so this to me was like whoa we are been talking about wages and this fear of like not keeping up this is incredibly notable a housekeeper at a hotel in the new york city area gets paid one hundred thousand dollars a year and i was wondering how is this possible and i did just a wee bit of research and obviously a very powerful union um new york city has banned airbnb so there's no competition in new york city without competition um they are kind of getting the highest rates of any city so going to new york city i don't know if you've ever had to go and stay in a hotel but it's extraordinarily expensive yes like a bad hotel is five or six hundred uh an okay hotel is SPEAKER_196: 800 to 1200 and a great hotel is like 1500 a night yes now across new york city jason it has the highest SPEAKER_43: average cost of a hotel at 335 per night and the highest occupancy rate at 84 so this is regulatory SPEAKER_139: capture at its highest level the hotels have basically banned airbnb as a competitor the unions uh know that there's not a lot of supply so therefore if there's not a lot of supply and there's a ton of demand prices go up and then everybody benefits from it and then i looked at what is the what is the number of rooms cleaned by a housekeeper per hour turns out it's like 1.4 yeah and there's a SPEAKER_163: there's an upper limit so they're not allowed to because of union regulations you're not allowed to SPEAKER_196: hit two in an hour uh you're not allowed certainly to hit three so and you probably don't want a hotel room like being cleaned in 15 minutes you probably want a thorough job for cleanliness and hygiene and you're charging a high price so you know it's not like you can have people come to a room and there's dust bunnies or like you know dirt or garbage in the room like you might see in some lower end SPEAKER_139: hotels this is just an extraordinary look at a regulatory capture market and the pricing of it blocking airbnb combined with the demand combined with the regulatory capture the taxes it is just extraordinary what's happened in new york city in this regard they really need to figure out how SPEAKER_196: to get airbnb working in that city uh and how to create more units um they do have they do have have done some experiments with micro units i love that idea yes yeah yes and capsule hotels uh in japan and in other this japanese company you can look it up it just opened their first hawaii capsule hotel SPEAKER_139: and so these capsule hotels are really interesting you can get a room for you know somewhere in the 50 SPEAKER_189: to 100 range when you're stacked in a capsule then they have ones where the capsules are next to each SPEAKER_196: other so it's like a bed with a side table and a door that closes and you use a common SPEAKER_84: bathroom kind of like a hotel um and so i guess this is the one yeah this is it um and really what has to happen for these things to change is competition but new york is you know turning into SPEAKER_44: a non-competitive regulatory capture market and i just thought it was super notable so a couple more SPEAKER_94: data points about this before everyone jumps and tries to go become a housekeeper for 100k in new SPEAKER_18: york city uh the wages will rise by about 50 over the next eight years which works out to about five percent compounded annually uh their prior contract was three and a half percent to four percent and this will move housekeeper pay from about 40 to about 60 by 2034 so by then jason 100k in new york city is not SPEAKER_95: going to have the same bite sure also if you are a family with children in manhattan the median income is 186 and in staten island's 113 so these people will still be earning less than the median family SPEAKER_18: with kids in the city so it sounds extreme but honestly if you want people to do hard labor in expensive high cost of living areas you're gonna pay for them i mean i agree with you on the on the SPEAKER_438: we need airbnb new york city point we also need to build more but i don't know these people do work i SPEAKER_268: don't want to do yeah no it is definitely the future of our uh society that if we're not going SPEAKER_205: to allow immigration get ready for 30 40 50 an hour to be the bogey for this type of work whether it's a SPEAKER_139: valet a barista a housekeeper these seemingly entry-level jobs if we don't have immigration be prepared to experience what new zealand australia the nordic countries have all experienced in this SPEAKER_189: regard which is a minimum wage that's around 20 bucks 25 in those other countries is the max it's SPEAKER_196: ever reached it's kind of 15 to 20 and i have to say and i was just on the prof g uh podcast with uh ed elson i just they invited me prof g didn't show up but ed elson did and we're supposed to have a debate me and ro kanna over the um um wealth tax the seizure tax and uh ro kanna dropped out i think SPEAKER_198: because it's kind of hard to defend uh anyway uh broadly tusk came on and we were kind of aligned SPEAKER_213: in it but we were just talking a bit about solutions to wealth disparity which has got a lot of hand SPEAKER_198: ringing going on here in the united states the upper middle class has massively increased people in poverty has decreased in the united states but it's really a tale of equity owners versus non-equity owners what's happening is i think we should really look and i'm going to get called a libtard and a socialist for just even bringing this up i do think we need to look at the minimum wage as a backstop if SPEAKER_213: we are going to be not letting people into the country it's just naturally going to go up anyway and if you study when they where they did this in other developed countries including english speaking ones that very much model the united states it worked out okay the only place that was problematic was underage workers underage jobs went away because 16 17 18 year olds are not worth 20 an hour they're worth less than the minimum wage so you just need to have like a for 16 to 19 year olds or something a different wage maybe or 16 to 18 year olds it's worked out just fine for new zealand yeah just fine for australia just fine for finland and these other places and if you look at seattle san francisco new york you did see fast food workers jobs get automated they're getting automated anyway it just pulls the timeline by 12 months i think we should really just add a dollar to the federal minimum wage for 10 years just one dollar go from seven dollars an hour to 17 or from 7 to 13 whatever let's make it a dollar for five years and see what happens like would it kill anybody to pay 7 or 12 no it's going to be no difference no difference so just it's even just on an optics base even if most people are not getting paid just on an optical base yes it would look good for our society to say SPEAKER_359: yeah seven's unlivable so let's just add a dollar a year for five years and see what happens we can SPEAKER_95: always reverse it why can't people realize that it's okay to make a little bit less money in the near term to prevent the guillotine from being rolled out as you reformat the entire economy around ai SPEAKER_189: i'm a capitalist but i would like to also not be shot well i mean you bring that up and there is uh this would be an easy concession to make and what they found in those other areas so i i had a preconceived notion about minimum wage which was bad just let the free market decide because you're going to eliminate jobs the second you increase minimum wage i saw this in my portfolio all the companies doing automation the second you raised the minimum wage in these major cities san francisco new york and seattle were the the ones with the most aggressive programs uh you saw automation take off in those areas so i was like ah it's a quick way to retire jobs what actually happened was yes those jobs got retired but there still wasn't enough people to work in these jobs you still had low SPEAKER_139: labor participation because the rates were so low and what happened was you in new zealand australia and these other places you created more consumers it turns out people making under a hundred thousand SPEAKER_163: dollars a year do not save money they spend it and bezos was on cnbc just saying why are we charging a SPEAKER_196: nursing queen set any taxes if they're making 75k a year they're paying 12 000 to the federal government it makes no difference to the federal government 50 of the taxes are paid by the one percent eighty percent are paid by the top ten percent we might as well just wipe out taxes under 75k a year SPEAKER_198: makes sense to me we might as well increase the number of people in the middle class by just slowly i'm not saying dramatically i'm not like saying go to 25 an hour or 50 an hour like these lunatics in california that would be a shock to the system that would cause people to leave you don't want to do shocking things just slowly 50 cents a year for 10 years is five dollars more 75 cents a year for SPEAKER_213: five years you know whatever it is come up with something de minimis not shocking to the system and what you'll see is your cup of coffee goes from 450 to five yep your hamburger goes from eight to nine yep your french fries go from four dollars to five dollars or four to four fifty but you create SPEAKER_29: more consumers who then buy more hamburgers and french fries so it's the old ford model t pay your SPEAKER_18: workers enough to buy a car thing i i do everything you said's right except for the let's not pay taxes are we as a country are watching right now yields on long-dated government debts blow out because there's too much spending and there's too much borrowing and it's unsustainable and we can't afford it so bezos thanks man but off like no we need to have more money coming into government because otherwise jason we're going to be bankrupt in like two years and that's terrifying and no one seems to be that worried about it because i know the republicans are currently in power in washington so we'll talk about it when they're out of power and they can piss and moan about it but like this SPEAKER_139: matters now you know neither party um is going to stop the crazy spending no that's that's what i've SPEAKER_163: come to you know they were going to do doge they were going to get rid of fraud they were going to cut spending and they just move the spending around instead of having the spending on social programs they're just adding a trillion dollars to um you know the military when we were supposed to cut the SPEAKER_139: military we're just going to increase it by a trillion and a half trump is adding more to the national debt than any president yep uh ever has biden added more than any president had trump won added more than any president had in other words every president eight or nine trillion SPEAKER_196: dollars to the debt there has to be some consensus here to stop it or else the country is going to go SPEAKER_18: out of business like like literally like out of business like claps our currency reshake up the entire global order like everyone's like well you know we can't just own equities it's the only way to SPEAKER_189: you know if no matter what happens to our country if you look at google you look at amazon you look at SPEAKER_139: apple you look at uber you look at airbnb you look at coinbase these are international companies that transcend any region or any dollar they're truly international diverse companies sure they might lose a little bit in a seismic you know seizing uh of markets that could occur or devaluing but you know SPEAKER_163: amazon people are not going to stop ordering from amazon or using amazon web services they're not going to stop using their iphones they may buy one every three years instead of every two one every four years instead of every three the cycle could slow down but these companies remain money printing machines just own equities is the advice i would give to my brothers and you know what it's good SPEAKER_466: advice index funds baby zero percent get exposure to the mag 7 and you'll own anthropic shares by accident SPEAKER_43: jason uh let's leave it there but we're back on friday lots more to talk about all right see everybody on SPEAKER_469: friday bye bye thanks for watching this week in startups if you liked this episode check out more if you're a startup founder founder university cohort 13 kicks off this fall it's a 12-week program that provides guidance on building your product launching to real customers and pitching to investors top startups receive 25 000 or 125 000 in investment apply now at founder.university slash twist already have traction the launch accelerator invests 125 000 and connects you with 500 plus investors to help you raise your next round apply at launch accelerator.co if you're an accredited investor looking to gain access to quality deal flow apply for jason's angel syndicate at the syndicate.com we find two to three deals a month and check out this week in ai jason's experts only roundtable with 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