SpaceX Launches Largest Ever IPO | OpenAI Files to Go Public | Uber Cuts 23% of HR

1. 0:00 – 1:17

   Intro

   1. RORory O’Driscoll0:00

      One thing we know about Elon for the last 30 years is when he hears the word more risks, he says, "Yes, please. I'll have two."

   2. JLJason Lemkin0:06

      I think the IPO nominally will be a dud. I don't think it will trade up dramatically.

   3. HSHarry Stebbings0:11

      So what do we have on the cards? SpaceX begins their $75 billion IPO roadshow at a whopping $1.77 trillion valuation. Next, is the future of AI always on as Sam Altman thinks? OpenAI ships Dreaming V3. Next, Apple rebuilds Siri on Google. Thank God. Siri, being what it is, is a disgrace [laughs] as it turns on on my device. And then finally, we have Ramp raising their latest round at $44 billion.

   4. RORory O’Driscoll0:40

      There's always money when people aren't afraid. When things get scary, it's not that money runs out, it's that money gets scared.

   5. JLJason Lemkin0:46

      I'm kind of contemptuous of startups that need to be fat. I'm like, "What's your excuse?"

   6. RORory O’Driscoll0:50

      In any business, there's only two things that happen. People are either making stuff or selling stuff.

   7. JLJason Lemkin0:55

      If AOL becomes the next hot thing, I mean, these guys are fucking geniuses.

   8. RORory O’Driscoll0:59

      Anyone who hasn't churned from AOL now ain't churning until they die. [laughs]

   9. JLJason Lemkin1:04

      Ready to go?

   10. HSHarry Stebbings1:05

       [rock music]

2. 1:17 – 8:50

   SpaceX’s $1.8T IPO: Genius Move or Disaster Waiting to Happen?

   1. HSHarry Stebbings1:17

      Okay, we are back, and what a week it is. We have the largest IPO roadshow in history. We have to start with SpaceX. Um, we're speaking, and this is important to say, Rory's gonna have a fit because we're speaking on Tuesday, and obviously SpaceX is going out on Thursday, and so there is gonna be some time discrepancy there. And so what we say will be able to be scrutinized in intense detail by the time you're probably listening. [laughs]

   2. RORory O’Driscoll1:43

      True. So, so to start with the interesting point, one of the things is there's usually two questions you're asking at this point. What's it gonna price at, and what it gonna trade at? And the funny thing is, unlike 99% of IPOs, the first question's already been answered. Elon has decided that instead of doing price discovery, where the bankers build a book and then they pick the price and they announce the price, you know, right at the end the night before. The IPO pricing typically takes place the night before the trade opens, so then everybody gets to buy who participates in the IPO at that price and then it opens next day at whatever price up or down from that. In this case, Elon has decided in advance of getting anyone's input, um, that the number should be, I think, 135, um, bucks a share, so, um, which values the company at $1.8 trillion. In other words, he's kind of short-circuited the price discovery process and instead, we're not doing price discovery. I'm telling you the answer, and the only question is how much of it do you wanna buy at that price? So one thing we can't get wrong is that, Harry.

   3. HSHarry Stebbings2:50

      Is that a wise move? He's leaving a lot of room for markets to move in between that. That's why you normally leave it obviously as close as you can because you don't want an Iran, Israel, a Broadcom moving markets and then putting you in a precarious position. It feels unwise, but Elon is a master, so I'm, I'm not gonna-

   4. RORory O’Driscoll3:08

      Yeah, I mean, uh, calling someone unwise who's about two days away from becoming a trillionaire is a big call, Harry.

   5. HSHarry Stebbings3:15

      [laughs]

   6. RORory O’Driscoll3:15

      But I, I think what it is is, you know, it, it, it, it's no surprise given Elon. It's ballsy. You've got just way more error creep in. You could be wrong to the high, you could be wrong to the low, you could leave, you know, maybe all the orders flood in, you've left money on the table. Maybe on the other hand, you're struggling to get the orders in, and it feels very high, and it opens down. It's more risk, but the one thing we know about Elon for the last 30 years is when he hears the word more risks, he says, "Yes, please. I'll have two." Right? And this kind of must appeal to him. It's like, "I'm telling you the answer in advance, and I'm taking the risk," and that's how he became a trillionaire. Is it wise? We'll see on the day.

   7. JLJason Lemkin3:50

      Well, obviously it's a, it's a, it's a huge amount of capital, Rory. But it, if it, if it's really only 2X subscribed or over-- I'm not even sure oversubscribed is the right word if it's only 2X, right? Um, plus Elon picking the price, that, that suggests to me it, it, you know, we'll see. That suggests to me it, this, this one will pop. There's just not a, the, you know... I do believe the day traders will drive it up ultimately, but, uh, it doesn't feel like there's a, there's, there's a, there's a, there's, there's an excessive demand at two, at 2X. In most IPOs, it would be, uh, would be ins- almost insufficient to, to, to close the IPO.

   8. RORory O’Driscoll4:27

      Ag- agree, and, but there's two separate things in that, Jason. You're right. I mean, one is the decision to pick a fixed price logically reduces the probability of a pop with no other information because the whole point of the banker process is to pick the price the night before that allows the pop next day, and you simply aren't doing that because you don't have the information. You're right. But then the second thing you added is some information that's come out, which is, you know, to date, the book is two times covered, and your comment is that feels low compared to normal IPOs.

   9. JLJason Lemkin4:59

      I mean, uh, I mean, traditionally, you want 8 to 10X to, to get the deal that you want, but you're not raising the vast amounts of capital Elon's raising either.

   10. RORory O’Driscoll5:07

       Yeah, no, it's hard to get 10X oversubscribed on 10 billi- on $75 billion. I mean, just [laughs] ... So yeah, what you're saying is, I mean, to, to be really direct, what you're saying is you're pricing something on a fixed price that's not taking into account demand, where you're looking for a very large amount of money such that you only have a small amount of coverage. You're right. You look at those circumstances and you say, there's a non-trivial chance that it pops to the downside. Is it 30%? I don't know. But if you think about it, normally bankers bend over backwards to try and have the damn thing pop, right? So they're trying to get a 10, 15% pop, and you know, 90% plus of the time it pops. But still 10% of the time it breaks IPO. They get it wrong, right? Even trying to fix the game, they get it wrong. In this case, they're not even trying to fix the game, right? And you know, time will tell on Thursday night, are they too high or too low? But there is obviously by definition some- Probably lo- higher than 10% chance that, uh, the, the, uh, on the day people go, everyone who put in for it, put in for it, and it's not impossible to trade some. It's just if you use mechanism A that's designed to create a pop and it works 90% of the time, and now you use a mechanism that's designed to be in de- that doesn't have the information to allow you to make a pop 'cause you've done a s- a fixed price, then by definition the probability of it going wrong goes up. That's all.

   11. JLJason Lemkin6:39

       I think what will happen, if that's accurate and 30% to retail, I think the IPO nominally will be a dud. I don't think it will trade up dramatically, but, but I do think, I do think every time there's great news, more satellites in space for SpaceX, more things, it will, it will begin an inexorable rise up. Uh, people will, will be excited, especially if, if the upside is tied to potentially significant revenue, right, as the last announcements have been with Anthropic and Google. I think, I just don't think it's gonna pop that first week. I think there's just, uh, there, there's just not enough, not enough buyers out there in, in this universe, or at least in this galaxy, uh, [chuckles] at this price at 2X. Um, we'll see. I d- I haven't read anything that says those 2X are all 100% binding. I guess if they're all binding, uh, every single order, then I gue- I guess it would lead to a pop, but, uh, typically it's not, right?

   12. RORory O’Driscoll7:34

       It is. I mean, when you submit an order, you know, you submit an order-

   13. JLJason Lemkin7:37

       Oh, you're right. I mean, typically, yeah, maybe they'll all get filled. [chuckles]

   14. RORory O’Driscoll7:40

       Yeah, they'll all get filled.

   15. JLJason Lemkin7:40

       I have it backwards.

   16. RORory O’Driscoll7:41

       I guess-

   17. JLJason Lemkin7:41

       Maybe all the orders will get filled unlike a normal IPO. [chuckles]

   18. RORory O’Driscoll7:43

       I, I, I kinda hate-- I'm gonna step back. I kinda hate that we g- and I, I caused this, so I apologize, got into the technicalities of the p- of the IPO, 'cause zoom out a million miles here, this is amazing. This is an amazing technical company. It's the, uh, the iconic company of its generation. It's gonna go public this week. It's a huge moment, you know?

   19. JLJason Lemkin8:02

       Yeah.

   20. RORory O’Driscoll8:02

       I mean, what do you say to Elon? Congratulations. What do you say, you know, everyone involved? Congratulations. I mean, it's just an wildly impressive company. I mean, look, I, I'm skeptical of the valuation, but step back. I mean, you know, I've watched some of the launches on, you know, on my little Z- on little YouTube, and I'm like, they're just so imp- the whole thing's so impressive. And it's, uh, you know, at the risk of sounding a little, sorry, Harry, at risk of sounding a little partisan American, this really is an only in America moment, right? Where you could... Yeah, I can see your little face, Harry, but, you know, who else is gonna find the capital to take that kind of risk to go for it, right? And, and frankly, also to have a big enough capital market to fund it, a big enough end addressable market to sell to. It's, it's a great outcome. It's an amazing company. It's a real asset to America.

3. 8:50 – 15:51

   Day One vs Year One: Predicting SpaceX’s Future

   1. JLJason Lemkin8:50

      End of day one prediction and end of day 90 prediction.

   2. RORory O’Driscoll8:54

      I actually think it's, on end of day, I don't-- So you really are determined not to let him have his great moment. You just wanted to... See, you're like those commentators in politics who won't talk policies. All they wanna talk is the horse race. All you wanna do is talk the horse race here, Harry, because you know that's what sells. You're such a little media slut. Um-

   3. JLJason Lemkin9:14

      [laughs]

   4. RORory O’Driscoll9:14

      But just to, to let... I, I, I'll, I'll answer. I don't think it's knowable end of day one. I think all three scenarios are equally likely. You know, one-third, it just goes down just because there's weird pricing mechanisms so they don't have demand. One-third, it's flat 'cause whatever. And then one-third, to your point, retail enthusiasm, it goes up. There's no information here. Now, I will make a call, though. I think over the next 12 months, I doubt it will retain this price. There, I will make that step. I disagree with you. So I think fundamental value here reasserts itself. I mean, there's two reasons I say that. One is, again, I always go back to the base rate. The base rate on IPOs in general is, you know, you do see quite a lot dip. The base rate on IPO is more than 10X forward sales, even more dip. The base rate on IPO is at 70 times forward sales. There hasn't been any, but you gotta believe there's a dip. So I think valuation reasserts itself over the medium term, and the probability of it being higher than the IPO price 12 months, in my gut, is lower, significantly lower. So I would say I haven't a clue day one. It'll, it's a tactical thing based on the mechanisms. And I think over the medium term, this amazing company might, shock horror, only be worth one trillion instead of 1.7, and it's still a huge win. So that's what I think.

   5. JLJason Lemkin10:30

      Well, I'll tell you maybe just t-two thoughts. I don't, I don't know what you guys think. One is, um, it would... Listen, there are many great IPOs like Facebook and Google that IPO'd at, with a whimper, right? It would not surprise me if this IPO's with a whimper at the end of the day. It doesn't matter for SpaceX. We will have gen, you know, multiple layers of generational wealth created. Elon will get his liquidity, right? It'll all be great whether it, whether it's a, whether it's a nothing burger IPO or not. I guess it might, uh, hurt, hurt, um, OpenAI the most because they've been so aggressive on their valuations and so aggressive on their capital raise. If that means they have to cut back their aspirations for the amount of capital raise, valuation maybe doesn't matter as much, but they are, they are related. That could be the biggest negative effect. It's just they, they need so much capital too, um, that it just could be, uh, it, it could take some of the wind of the sails out of, out of OpenAI. Um, the other thing I'll just say briefly, I was, before I, I'm, I'm in Hong Kong as we record this, but before I got on a plane, I, I spoke to one of my LPs who's, who's getting, getting lots of, getting lots of cash here, got cash in Cerberus, getting cash in all these other deals. And, um, it does kinda tie to a conversation we had before. It's just the, the expectations are so high now for performance, and I think that will permeate through the ecosystem. And, um, again, I, I think, I do think it's a minor negative. Um, but, uh, but I do think it's something for founders and others to understand that the, it's not a free lunch, right? The bar, the bar will continue to go up after these events when, when LPs are looking for seven to eight X routinely from GPs, which is hard to do, right? Outside of anomalous periods of time The expectations that GPs will have from founders continues to go up. Um, and, uh, you know, uh, you know, w- as this, as this LP said to me, I don't know that little $5 to $8 billion IPOs really make it, make this math work anymore, right? And so we've talked about it, but to hear it from a large LP did, did sort of, it, it echoed in my ears of, of how this, how, how the bar goes up.

   6. RORory O’Driscoll12:30

      I don't think you can take a once in a decade event and start extrapolating it as a norm. I think y- in life you should take this as the once in a decade event maybe-

   7. JLJason Lemkin12:37

      But there's like four or five of these once in a decade events. There's gonna be Anthropic-

   8. RORory O’Driscoll12:41

      Yeah

   9. JLJason Lemkin12:41

      ... OpenAI, SpaceX.

   10. RORory O’Driscoll12:41

       Well, well, hang on. Go back. It's interesting y- you say that, but of course t- the opportuni- the once in a decade... I mean, SpaceX was once in a decade. It was last decade. Reminder here, founders wrote that check in 2008, right? It's now 2006. It's 18 years ago, right?

   11. JLJason Lemkin12:57

       Right.

   12. RORory O’Driscoll12:58

       So, so that kind of huge return... I mean, yes, there's been a 10 X since 2000.

   13. JLJason Lemkin13:00

       When was the Cursor seed check written again? Remind me. Four years ago.

   14. RORory O’Driscoll13:04

       The Cursor seed check, three years ago. Yes.

   15. JLJason Lemkin13:06

       [laughs] Yeah, so maybe they do happen more than once a decade. [laughs] There, they seem to be-

   16. RORory O’Driscoll13:11

       But not at a trillion dollar level, okay?

   17. JLJason Lemkin13:12

       These decades seem to be shrinking. [laughs]

   18. RORory O’Driscoll13:13

       I mean, to be fair though, I think you're gonna have one trillion dollar outcome from the last decade, and two, it looks like from this decade if it all happens according to plan. But my point is, yes, you, you, you probably can't assume 10. You don't run your business on the expectation that every check you write's gonna be a trillion dollar outcome. If you're really smart and you get one, you should say, "Yay," right? So I think $8 billion outcomes will make everyone perfectly bloody happy, right? Obviously, unless you have a $10 billion fund, in which case it doesn't. I mean, that's why fund size, the amount of... Yeah, fund size dictates the level at w- the amount of market cap it takes. It's a Josh Kopelman thing from ages ago, you know, the Venture Arrogance Index, whatever, right? Um, the bigger the fund, the bigger the deal it has to be to make it work. There's nothing surprising here.

   19. HSHarry Stebbings13:56

       Will this have knock-on effects in terms of LPs direct investing more and see an increase in fund investments from LPs? You've got Ohio Teachers who, uh, will make, I think, 10, over $10 billion from their SpaceX.

   20. RORory O’Driscoll14:09

       To be clear, I know you think the entire Midwest is the same, Harry, but I think it's Ontario Teachers, right?

   21. HSHarry Stebbings14:16

       [laughs] Fair enough.

   22. RORory O’Driscoll14:18

       Um, but um, but now at this point you're conflating Canada and America, which is an easy mistake to make 'cause we're making it ourselves, starting with the president.

   23. HSHarry Stebbings14:25

       [laughs] Yeah.

   24. RORory O’Driscoll14:25

       And it does begin with O, and it's kind of in the middle, so I understand your ignorance, but let's go back-

   25. JLJason Lemkin14:30

       Maybe he's just a big fallout player, too. Who knows?

   26. RORory O’Driscoll14:31

       Easy. But the bottom line is, yes, Ontario, Ontario Pension nailed it. I mean, they're gonna make, you know, a, a magnificent return. And there's a bunch of others. It's great. University of Washington, they have a extremely savvy CIO who... And by the way, Washington, Harry, just to confuse you further, is not in either Washington State or Washington's, um, city, but we'll keep that for now. But yeah, look, by definition, these are gonna be the best co-investments ever, 'cause it's the best deal ever. I mean, there's nothing surprising in it. I know some of our-

   27. HSHarry Stebbings15:02

       Our LP is gonna come back and go, those that will get liquidity from this go, "Hey, we're gonna reinvest more and more."

   28. RORory O’Driscoll15:09

       Of course they are. Of course they are. Of course.

   29. HSHarry Stebbings15:09

       And w- and will all that brethren be like, "Hey, we're gonna join this 'cause we want the next generation-

   30. RORory O’Driscoll15:14

       Yes
4. 15:51 – 18:27

   OpenAI Files to Go Public — The Next Mega IPO?

   1. HSHarry Stebbings15:51

      Speaking of a once in a lifetime or once in a decade moment, as Rory very articulately put, another once in a decade moment is obviously OpenAI filing to go public, [laughs] um, uh, not so confidentially. Anything to say here that we haven't covered?

   2. JLJason Lemkin16:06

      The only thing I don't understand is, maybe it's a question for Rory. I, 'cause I don't get it. What, what, uh, uh, I, other than the captain obvious element, uh, what's the point of hedging your bet on the timing but filing? I, I mostly get it, but I don't totally get it, right? Um, yeah, I only half get this-

   3. RORory O’Driscoll16:22

      I, I think avoiding the-

   4. JLJason Lemkin16:23

      ... "Oh, we may, we may want to stay private, we want flexibility, but we're going public."

   5. RORory O’Driscoll16:28

      I think it's actually all they're doing is being smart a little bit and managing expectation finally, right? Which is, I read that as, "We're filing to go public. In a perfect world, we'd love to go public as quickly as we can, but if it's delayed for whatever reason, we don't wanna have a whole bunch of negative stories then that says, 'See, it's slipping.'" So if you preemptively say, manage expectations and say, "We're filing, but we're not committing to a timeline," we're not all gonna be sitting here in late October going, "They said they'd be going public in early November. WTF is going on?" The, the big aha here, and we said it two weeks ago, it's everyone's suddenly gunning for the door. At some point you need the capital markets, the public capital markets, 'cause the scale involved is such that that's where you gotta go, and it- everyone's just hit that point and they're going for it. I think going back to your comment earlier on, does SpaceX... I mean, it feels like the market is very risk-on. I mean, we had that little dip last week, and then everyone got over it in two days, so it's as good a time as any. You know? It- there's no obvious... You keep cranking while you can and see if you can get it done. I mean, I'm sure that they made that caveat of, "We'll take our time," but they made that statement in the press department. My guess is in finance and legal, the mandate is, "Get this puppy done as quickly as possible so we have maximum optionality," right? And so they're, with the SEC... And worth pointing out, by the way, the SpaceX S-1 went through the SEC very quickly, and normally that's a... I mean, I remember when that used to be a painful process with multiple iterations, and it seemed to happen here extraordinarily quickly, probably 'cause we don't regulate anything anymore. So go team. So, you know, um, this may all process through real quickly, in which case, brace yourself for a fun fall.

   6. HSHarry Stebbings18:07

      Rory's on fire this morning, hey? Gosh. I really want to touch on, on something kind of be-beneath on the product layer for OpenAI, which is, you know, Sam Altman's been driving towards kind of persistent and always-on AI. Um, they shipped Dreaming v3, biggest memory architecture upgrade since launch. I'm just intrigued, Jason, in particular, to hear your thoughts on

5. 18:27 – 21:32

   Always-On AI: Is Persistent Memory the Future?

   1. HSHarry Stebbings18:27

      this. Is the future of AI continuous, persistent, 24 hours a day, fabric of life always on in your mind? And how, how do you see this and that?

   2. JLJason Lemkin18:39

      I think we all believe it. Um, I think that, um... And, um, I mean, we can make fun of Apple this week basically, uh, uh, repackaging Gemini and giving up on AI, right? If that's the way we want to view it. But, but that's a little piece of wanting ultimately AI to be persistent 24/7. We, we, we do want this. We already, we already live little hints of it and, um, it, it's pretty silly that AI, for the most part, lives, lives in our browser, right? This-- Which is if you think about it, very dated, very da-da... I mean, it's so dated that we still use browsers. I mean, who would've-- We got to get Marc Andre-- I mean, the fact [chuckles] that we still live in the era of Netscape in so many ways. So I do think it's exciting. Um, I do think as this show continues, the, you know, the whatever we would wanna call it, the tokenopoca-op- tokenapoca- tokenpo-pocalypse, um, I think it will morph into just standard business practice, right? At some point, there's on- the, uh, IT budgets can only be so large. There's only so much. Even if we lay off half of the, uh, uh, you know, unemployment, uh, I mean, employment keeps growing. We're gonna have to manage spend, so there is a conflict. But, um, I do, I do think we're gonna look back in two years and think of this non-persistent AI as, as almost archaic, right? As almost sort of desktop-like.

   3. RORory O’Driscoll19:57

      Yeah. I, I mean, yeah, 'cause you, you threw in a lot there. We, and we, we're gonna have to go to-

   4. HSHarry Stebbings20:02

      Rory, you pulled several faces there.

   5. RORory O’Driscoll20:03

      What?

   6. HSHarry Stebbings20:03

      For the audience listening, Rory's facial-

   7. RORory O’Driscoll20:06

      No, no, no. It's just that, uh, J-Jason, as he often does, covered a lot of different things, and I'm just processing through it more slowly, is that on the, on the memory thing, and kind of what Jason has said, it, it just totally makes sense, right? And the question, yeah, if you step back, you know, you have the core models, and then you have what people are calling all the harness, which is all the stuff around it to make those models effective. And part of that, and it can either be in the, it should be in the model or it could, in theory, be in the harness, is just understanding memory so that you can-- And the impact of that, and I think why Drake- Jason went to the token eco- token economics part of it is, part of the thing should be you should get better answers with memory, and part of the thing, it should be more cost-effective in terms of token, 'cause you're not passing through all the context all the time. You can perhaps... I-I-It's part of a g- I mean, I think a lot of the trend on this harnesses will be adding stuff to minimize your cost on frontier models, and part of that will be having memory, right? It also leads to a better experience, right? I think that I actually just went in and tried to see, um, have it, has it been switched on in mine yet, because it just makes ton of sense. You should know who I am after I, after I look up 58 20VC podcasts. You know, I'm probably here to look at my 20VC podcast research here, guys. So it just makes a ton of sense.

   8. HSHarry Stebbings21:19

      Rory, Rory, most people know who you are now as well.

   9. RORory O’Driscoll21:21

      No, I'm sure, but, but, but the, but does it-

   10. JLJason Lemkin21:23

       Your, your payment

   11. RORory O’Driscoll21:23

       ... 'cause my o- my OpenAI sometimes doesn't. So yeah, it's a really, it's absolutely, it's one of the necessary to-dos, and they're doing it and it's great. Um, I just want to-

   12. HSHarry Stebbings21:31

       Rory, you pulled a face-

6. 21:32 – 25:15

   Apple Rebuilds Siri With Google AI — Smart or Surrender?

   1. RORory O’Driscoll21:32

      ... encourage it

   2. HSHarry Stebbings21:32

      ... you pulled a face when Jason said about Apple giving up on AI with Gemini. You all right there?

   3. RORory O’Driscoll21:39

      Yeah. Yeah, moving on to that, that was an interesting one. Ben Thompson at Stacker, he did a really good piece on it this morning I was reading, is that I think they, to some extent, they're give- in the sense that they're, they're paying Google a billion dollars to use their model as the default model. But reminder, Google pays them tw- I think 12 or 20, I used to know the number, $20 billion to be the default search engine. So it's a minor offset. I give them credit. I actually think that they're making some-- Yes, it would be better if they'd had their own model, but they're making progress on the use cases that just make a ton of sense for the consumer. And I think it was a, you, I-I think the amount of context you have when you're on someone's phone is such that they can, they should be able to deliver a unique and compelling consumer experience for the kind of things they demoed on the thing about knowing context on which Rory. It's like, it's like to your memory comment, Jason, it's like you're knowing which Rory Harry's talking about, knowing your calendar, knowing everything, and deliver a much better experience. Now, should they have been able to do it with their own model? Yeah. But the bottom line is they control the handset. And for the consumer, it's a pretty powerful product. So I think they're in a good position to make progress. I don't think they're giving up. I actually think they're pragmatically saying, "We kind of screwed up on not having our own model, but that's actually not what matters for us, for Apple. What matters for us, Apple, is delivering an amazing experience to our consumers, 'cause if we do that, they'll keep buying handsets. And if they keep buying handsets, we can probably afford to give someone a billion bucks a year," right? So I give them credit for getting their shit together. I mean, you know, it is stunning that Siri is so bad for so long. So I think actually trying to fix it is just awesome. So I, I give them credit for step in the right direction, right? Is my takeaway from it. So the opposite. I don't think they're giving up. I think they're doing what it needs to win coming from behind. And they have a great position. I mean, I think it's interesting. The person you have to think about this a lot with obviously is if you're OpenAI versus if you're Anthropic, 'cause Anthropic has made the enterprise bet and OpenAI, in part, has made the consumer bet. And you know, I like my OpenAI subscription 'cause, you know, I sit at my desk and I do research. But for a lot, I mean, it was a great line, and give Ben Thompson credit, he said, very clear, I've thought it, but he n- hadn't heard anyone say it clearly. He said, "Consumers don't wanna work." There's not a big market for consumers in their non-working life to do a whole bunch of, you know, complex, you know, research or kind of using AI for productivity. They just want, you know, delightful experiences 'cause they wanna relax and entertain. So I think actually You know, the, the consumer space is gonna be a tougher space for Open- The, the enterprise space has really been validated, 'cause an enterprise is all about automation efficiency. In a consumer space, it's about experiences. Apple's well-placed to do that. OpenAI's gotta compete with that and compete with Google and, you know, it's a, it's, it's a tough space, especially if Apple's getting its shit together.

   4. HSHarry Stebbings24:37

      Well, speaking of consumers not wanting to work, soon they won't have to. Uh, Uber cuts 23% of HR. [laughs] Sorry.

   5. RORory O’Driscoll24:45

      It's just to make Jason happy. We can now have Ja-

   6. HSHarry Stebbings24:47

      Sorry, I, I, I'm so sorry. It's, obviously it's people losing jobs, it's terribly sad, but I'm the one who fucking said no great CEO likes HR, and everyone got angry at me, and then everyone starts cutting HR. Anything of note here from Uber cutting 23% of HR, remote work rescinded, three-day in-office mandate, company denies AI played a role despite 95% of engineers using it daily.

7. 25:15 – 27:48

   Uber Cuts 23% of HR

   1. HSHarry Stebbings25:15

      Anything of note there?

   2. JLJason Lemkin25:16

      Well, look, A- A- HR and, um, recruiting, right? Which let's consider them different, are, are the easiest things to cut, right? They're, they're, they're, they're... Recruiting is all, you know, you always, you always see any, any, any, any, any big tech leader stumble a little bit, and they lay off 30% of their recruiting department, where you're gonna, you, you often want them back. I always wonder, I always think this is, uh, I mean, it makes sense on paper, right? Um, the HR one will be interesting. I mean, we've, we've put out a call for someone to report to our AI VP of Marketing, and I've gotten my head cut off a lot on social media for that by people not, it's okay, not really listening to what I'm saying about that. Um, but I do think HR is one of these areas that in many parts of it will be better managed by AI. I think an AI can be a better VP of HR for certain parts of the job, uh, than a biased human. I think there are advantages to having a, an AI VP of HR. Not, not, not, I don't wanna get rid of all of the humans or even lay people off, but, um, it's, it's, a, an AI VP of HR can, can evaluate every single thing you've ever done, every little bit of your work, all of your issues, whether... An AI VP of HR can figure out, hey, maybe it really is your, your idiot boss, Jason. You know, may- maybe it really, maybe that really is the problem. It's not, it's not you. An AI VP of HR can find out a lot of things and process of ask, so I don't... I think it's a, an, a, it's under-discussed versus are- other areas, but, um, it should be massively disrupted.

   3. RORory O’Driscoll26:41

      The big picture question in all these areas is, you know, how much efficiency do you get? My gut, it, it felt, 23%, I doubt everyone is automating and saving 23% using AI in the non-engineering departments, 'cause adoption there isn't as strong as engineering. Uh, do I think there's some? Of course I do. So my bottom line is, I think, my guess is some portion of this is, quote, unquote, "AI automation." I doubt it's 20%, because I'm always calibrating off, you know, what is... I mean, it sound- what percent, it's, it's the Dario number. What percentage of, quote, unquote, "knowledge work" is gonna be automated? And it's knowledge work tasks and then knowledge jobs. Is it 5? Is it 10? Is it 50? As Dario has said. 23% felt like a lot, but whatever. Again, you, what you don't know is how much of it is just too many folks there and they're just partly rationalizing. So it's a data point. I mean, I think the other data point from Uber is far more interesting, right? Which is not the AI for HR, but the AI for autonomous driving, that they continue to make progress on autonomous driving.

8. 27:48 – 29:50

   Robotaxis Are Back: Uber’s Autonomous Driving Bet

   1. HSHarry Stebbings27:48

      Which stat was that, Rory?

   2. RORory O’Driscoll27:49

      No, that's the one you, you'd mentioned. I'm sorry. You'd, you'd me- you'd made a point there that they're, they're actually rolling out some more autonomous driving experience in Europe, in Madrid, I think, right? So, you know, and they're kind of partnering with, I think it's with WeRide or some of the technology providers. But, you know, it's the, the big, I mean, you know, if you wanna talk automation, driving is one of the biggest targets in terms of the number of humans that do that job. And, you know, when you see Uber making experimental progress on robotaxi in Europe, you know, it's something obviously to keep an eye on. It's all worth, it's worth pointing out this stuff is still moving way slower than I think people anticipated. It hasn't been, you know, Waymo in San Francisco resulting in, you know, Waymo's everywhere within six months. It's been a long, steady progress for Waymo. And U- Uber's doing what it should do, which is it obviously, this is exosta- I mean, the Travis Kalanick devotees would say the failure, the, the, the cutting of their autonomous project in 2016 or '17 was a fatal error for Uber. I'm not sure. I think 10 years later they can pick up the thread and, which is what they're doing, and catch up on that, because it's not like the technology tipped like a domino. But I think they're smart to now start, you know, m- pushing robotaxis and partnering with technology providers. And this is the, 'cause, you know, the, the, the question on the Uber stock is always, "Oh my God, is robotaxi existential?" Which is the bad scenario. Or the good scenario is lots of people build robotaxi technology, and Uber's in a wonderful position to be the, the coordinating thing because it's the app we use, and if they just add, you know, 10,000 robotaxis to the fleet, then things continue just fine. And frankly, it's good to see the Europeans do something. I mean, I say this respectfully, Harry, but typically, y- you know, Europe is the slow technical laggard, especially on stuff like that. So go Madrid.

   3. HSHarry Stebbings29:44

      Should we discuss the Revolut 115 billion? Hu- 115 billion,

9. 29:50 – 31:29

   Revolut Hits $115B

   1. HSHarry Stebbings29:50

      you know?

   2. RORory O’Driscoll29:51

      Amazing.

   3. HSHarry Stebbings29:52

      Yeah. Thank you. Uh-

   4. RORory O’Driscoll29:53

      And I, I think you're doing that, I'm gonna push it, I think you're doing that defensively. You felt I was dissing on you and Europe, and you're, you're basically implicitly saying, "Oh, look at Revolut, it's amazing," correct?

   5. HSHarry Stebbings30:03

      Correct.

   6. RORory O’Driscoll30:04

      And it is amazing. And you know why it exists? Because the European banks, unlike the American banks in general, are so crappy. There's a reason that Revolut's worth 115 billion, 'cause the incumbent European banks were fat, dumb, and happy and making margin off their customers. And there's a reason why Chime is worth five billion. Still a great outcome, by the way. That's because the US banks on average are a little more efficient

   7. HSHarry Stebbings30:24

      That's also why NewBank is such a valuable business-

   8. RORory O’Driscoll30:27

      Agreed

   9. HSHarry Stebbings30:27

      ... 'cause there's up market-

   10. RORory O’Driscoll30:27

       Because the, the Brazilian banks were inefficient. I think all these fintechs, they can be... I mean, it really is a fu- I mean, it's proven markets, it's a function of how egregiously priced the incumbents are. And, you know, Europe, especially when it had non-single currency, you had all this foreign excha- of course, you guys aren't into Europe. You had, you know, the FX charges, you had all this transport of bullshit, and Revolut just blew a hole through that. So I, I think it's amazing, and I know you're a big fan of the CEO, and I, I think it's just... I, I wish him all the best, and pound those old-school European banks into the dirt. I mean, at some point we're gonna have to deal with the fact that the largest bank by market cap doesn't do much lending, and that's actually gonna be a real problem in the aggregate, um, because the whole point is, of banking is to recycle savings into lending. And right now, Revol- you know, Revolut's not a long-term lender, but that's, that's by the by. They're killing it.

10. 31:29 – 39:47

    Founder Fundraising Horror Stories & VC Grudges

    1. HSHarry Stebbings31:29

       I'm fascinated to hear Jason's thoughts on this one. What's dominated my Twitter over the last week is Greg Isenberg's original tweet about a horror story of a venture fundraise. It led to a slew, I mean, hundreds and hundreds and hundreds of founders sharing horror stories, [chuckles] uh, including the Cloudflare CEO, um, who said about, you know, his experience with Khosla and Vinod Khosla. Jason, I'm really intrigued to hear your thoughts on this one. I'm sure you have some. How did you feel about this slew of founders bluntly saying how terrible a VC experience they had in certain cases?

    2. JLJason Lemkin32:09

       Well, I'd say a couple things. Um, first of all, I have, I, you know, as... When I was in the most intense phases of founder, I had those stories, too. Uh, I, I really, uh, we forget how, how deep some of these things cut, the slights. Um, the, the fo- folks that are friends of ours now that we co-invest with, I, I thought terrible things of at the time, li- literally. Um, uh, one that we both know really well would constantly use me just to do diligence on another investment, constantly. And, and at, now I'm pretty zen about that crap. To founders I'm like, "Just take the meeting and do reverse intel." Like, if you're just being used for a competitor, then sit down with him and just find out about your competitor, you know. Get, get the exact information. But man, that stuff really, it really burned me. Um, and founders hold, you know... So, so a couple things. First of all, the, the whole thing with, um, the CEO of Cloudflare, just remember founders hold grudges. I still do. I'm just getting over them now. I'm just getting over my founder grudges. So founders hold grudges in a way that VCs actually I think don't because VCs, you miss the deal, you gotta find another bus, right? Having said all that, um, get over it because it's, it's sales. The only thing that to really have a gru- a true grudge on is if you got fired. Okay, that one, that one I think, I think the folks that hate Benchmark, uh, from Uber, I think they deserve to hate Benchmark. I think there, there's others. But if you're treated poorly during the fundraising, get over it. It's sales. Have, have you never sold? This is what I say to people, "Have you never sold anything?" Have you ever, never thought a customer deal was gonna close and it didn't? Have you ever not talked to a prospect where they told you, "Rory, of course we're gonna buy by the end of the quarter," and then you just t- send them 28 emails and 87 texts and the deal never closes? How is it any different selling stock, um, than anything else? So there's a bunch of issues to separate the grudge, the firing, which is a niche issue, and lear- learn to sell, man. G- grow some.

    3. RORory O’Driscoll34:08

       In one sense you're right, Jason, but I think the difference for the found- and I think a lo- ton of what you said, super insightful. The difference is the founder in this case isn't selling their product. They're selling themselves. So I think you're right about one thing. The rejections cut deeper, right? And there's no doubt. Even under my side, I remember, uh, an old, uh, VCR 30 years ago said to me, "You never forget the LP turndowns." And 30 years later he's so right. You remember those people who turned it... It's just a personal thing, 'cause you're not just selling your product, you're not selling Ford cars on the deal a lot. You're selling yourself, and when you get turned down, it hurts. So I totally with you, Jason, is that you do have to grow a pair, you do have to get a thick skin, but I totally get the way founders, even if it's, m- something doesn't go wrong in the process, I totally get it. Rejection sucks, right? And, and as yet, so that's the founder side, and I thought you, you were super sympathetic there. And then just to put the other side of the table, every venture person is in a business where we turn down 99 out of 100 deals that we look at. So rejection is our default MO. It's, and that's why I always wrestle with these ratings businesses, right, you know, the kind of rating VCs. It's doable and I think there actually is appropriate ways to do it. But you do have to remember that the default is a no, and it's really hard to high, high customer sat when 99 times out of 100 you're gonna tell the customer no. It's why no one ever loves the bank that they apply to to lending money, 'cause a well-run bank turns down, you know, five out of six customers. No one likes that experience. Rejection sucks, right? So it's set up for failure out of the gate. Sometimes, you know, in the course of turning down 2, 300 people a year, you get some stuff wrong.

    4. JLJason Lemkin35:58

       What was interesting is Matthew was really upset that Vinod asked him to consider, uh, f- getting rid of Michelle, who we know, who is great, and the CTO, and giving him the shares. Not stealing his shares, which I think was misinterpreted. He made it a suggestion and a pitch. And, um, listen, I, I'm a super fan of Michelle. I would not make that suggestion. But let's step back for a minute. We've all had those meetings with founders where the team is very unbalanced, and would I, am I Vinod at the, it, and would I say it that way? No, but you might know me well enough, I almost would You know, in a different situation. I almost would say that to a founder. I just wouldn't do it during a pitch. I would just say it's not a fit for me. But, uh, I find myself constantly post-investing the only one that would say things like, you know, "What are you gonna do with your co-founder?" You know what-

    5. RORory O’Driscoll36:50

       And really-

    6. JLJason Lemkin36:50

       "She's just, Rory's just not committed enough. He's not getting it done."

    7. RORory O’Driscoll36:54

       Yeah, pick on me.

    8. JLJason Lemkin36:54

       And so I think his directness, uh, it's interesting that it bothered, um, uh, the CEO of Cloudflare so much, but I, in a way it was just his, his read of the team. I think it was wrong, at least for, for one of them, but it, the read of the team. It's part of the job.

    9. RORory O’Driscoll37:09

       And by wrong you mean incorrect relative to the subsequent outcome, right?

    10. JLJason Lemkin37:13

        I, well, I would k- I know Michelle... I don't know Michelle that well. I think she's a, she's, she's a great ex- founder, so I would keep her, but, but the fact that VCs go in and you s- you see that the founders are not equal in ter- not, in terms of their commitment and skill set, right?

    11. RORory O’Driscoll37:27

        And again, uh, don't c- I mean, look, don't come on this w- 'Cause, look, it's clear given the superb outcome that whatever Cloudflare had, it shouldn't have been touched one little bit. It should have just been let do exactly what it did. It's a great outcome, so. But you're right. I think again, Jason, you raise a good point. You go in, you know, you see things and y- especially at the earlier stages, if you think the team is wrong but you wanna do the deal, then, you know, that, that's a really tricky conversation, right? And you-

    12. JLJason Lemkin37:53

        Yeah

    13. RORory O’Driscoll37:53

        ... should be aware of having. And I think just, I suppose when you're successful as Vinod, you're like, "I could take three meetings and slowly and delicately get to this point, or maybe I'll just say it." Now, it's also worth pointing out, he said very clearly he doesn't believe that happened. So I think, you know, I think stepping back, I don't know if it's a useful way to rehash. I mean, the more successful you are, the more meetings you'll have. The more meetings you have, the more likely some of them go wrong, especially if you're direct, and Vinod is nothing if not direct, so stuff happens. I mean, as someone pointed out, he was on the Juniper list for the first... He was on the Midas list the first time for Juniper, and he's on the Midas list this year for OpenAI, and there's 30 years between those two events. So he must be doing something right overall, right? Which is still not to say that on an individual day you can piss people off. And look, I'm sure, I look back across 300, 400 turn downs a year for 30 years. I know there's been some where I wish I'd handled it differently. There's been one or two where literally at the term sheet level I wish I'd handled it differently. It happens. It's not ideal. You know, if, if you're aware of it, you apologize later and say, "Look, I got that wrong," and you just have to move on. It's some element of breakage is inevitable.

    14. HSHarry Stebbings39:01

        I have to admit, Rory, I, I disagree with you.

    15. RORory O’Driscoll39:04

        What?

    16. HSHarry Stebbings39:04

        I, I, I've, I've been turned down by lots of LPs. Uh, the best way to have revenge is that you forget they even existed. And mo- I'm being a dick here, but, like, a lot of them ping me now like, "Wow," you know, when they turned me down when I was 21, like, "Whoa." And you're like, "Who are you?"

    17. RORory O’Driscoll39:20

        Yeah, you, you maybe-

    18. HSHarry Stebbings39:21

        I don't remember

    19. RORory O’Driscoll39:21

        ... maybe early on you'd, early on you remember, but you're right, over time, to Jason's point, you develop a thick skin. And you're right, I d- I remember much less the turndowns in Fund VII than in Fund... Yeah, the first-

    20. HSHarry Stebbings39:30

        Yeah. Exactly

    21. RORory O’Driscoll39:31

        ... first independent fund was Fund III. I do remember in Fund III, our first independent fund, which we foolishly timed literally for the week of the great financial crisis in November '08, getting turned down three times in the space of an hour. So I do remember that pretty vividly, but life goes on.

11. 39:47 – 50:59

    Lovable & Cursor’s Explosive Growth: The New Startup Playbook

    1. HSHarry Stebbings39:47

       Okay, so I- again, big milestones for Lovable and Cursor this week. Lovable, uh, saw literally just before we came on, Lovable hit 500 million of ARR. The number, number was wrong. Um, so at 500 million of ARR with 146 employees. Cursor has hit 4 billion and it's targeting 6 billion at the end of the year. Jason, you're, you're, you're the man of the hour for this one.

    2. RORory O’Driscoll40:13

       You're the coder.

    3. HSHarry Stebbings40:15

       Uh, any thoughts on this? This was unprecedented.

    4. JLJason Lemkin40:18

       Well, listen, I, I, I think there's two different things you said. One was about the scale, right, of, of these companies, right? Which we've talked... I, I do, I do think the headcount thing is something that we're still learning about, right? And so I think when we started this show, um, we were in an area where, where folks were very lean and growing very quickly. But the question was, does this normalize over time? As you approach scale, as you approach 100 million, 200 million, 500 million, a billion in revenue, will, will, will, will startups get fat again, right? Do you just need, uh, do you just need these layers? And I can think of s- a number of hot AI startups that are getting pretty fat, especially on go-to-market teams and others. But we're, we're seeing more and more examples to the contrary. Um, and it is disruptive on many levels if you can stay as efficient as, as these guys are. It is disruptive to investing, it is disruptive to employees because it, it will shrink the number of these great roles, and it will increase comp- compensation, right? To the ClickUp point, to Zeb's point, I'm doing layoffs to give million dollars to a handful of folks. Uh, Lovable can pay its team whatever it wants, right? With 100, less than 200 employees, it can pay whatever it wants. But man, if this becomes the, the steady state for startups, uh, and maybe it was in the old days, maybe in the old days of Microsoft it was true. Um, but it's just so different if they're not going to reflate, is what I think about. Um, and, uh, 'cause it's not a lot of people, man. And it's not a lot... And what people get, don't understand, I know Revolut a little better than Lovable, but they're the same. They're, they're pushing out a lot of code. What, like, one thing you could say is, "Oh, it's easy 'cause they only have one product," right? That would be a comeback that I think a little bit, like, you don't have to have 22 products like Datadog or 7,000 like Salesforce. Well, maybe, but these are pretty complicated products, okay? You've got database, you've got hosting, you've got management, um, you've got SEO you're running. You've got so... They, these guys are push- because it's the most brutally competitive space it is, they're pushing out more features than any of us did our entire lifetimes a generation ago. So I, I don't think we're... These folks are working, uh, they're, they're incredibly hard and they're incredibly productive. So it, it, and it almost, it, it, and, and if, and if you wanna be, you wanna have some contempt with, for VCs tying this together, I'm kind of contemptuous of startups that need to be fat. I'm like, "What's your excuse? What do you need another 200 people for?" And when I, when I'm at a board meeting and a VP says, or they're all C-levels now, right? A C of something. There's no VPs anymore in startups. They're all Cs. And they say, "Well, I could do that, but I need another 50 or 100 heads. I need another 10 or 20 or 40 million." I, I just think that person should go.

    5. RORory O’Driscoll43:05

       The, the, the only comment on... And first of all, broadly agree, but the only pushback I'll make is this, right? You know, we're having the, "Oh, they're amazing that, you know, they can do this with only 146 heads." But remember, if you're spending 50 to 70% of your revenue on intelligence from Anthropic or OpenAI, you, you, you don't have the... I mean, it's a different business, right? You don't have the option to also have 50 to 70% of your revenue on employees, 'cause there's just not enough room in the percentages, right? So to some... I mean, they're just different businesses with different business models, right? They, I mean-

    6. JLJason Lemkin43:39

       They are, but you have the choice of who you invest in or who you work for, right? We, we have, we have our-

    7. RORory O’Driscoll43:43

       No, agreed

    8. JLJason Lemkin43:43

       ... we have our legs and pocketbooks, right?

    9. RORory O’Driscoll43:45

       Agreed. Look, of course. You would pref- And this is actually one of the core challenges many of these other companies are gonna have. If you are one of... If you can be one of the 146 employees, that is, I agree with you, Jason, 100%, that is getting leverage from this AI such that your economics are compelling because you're one of a small group of people making a lot of money in a business that's leveraging technology to have a very high revenue per head count, it means we can pay you a lot. That's a far better place to be as an employee, you're right, than, you know, one of, yeah, 18, whatever it is, 90,000 employees at Salesforce. You're exactly right, because you're not getting leverage from the... You're not getting leverage from the models and intelligence, right? And this is the how much will be labor and how much will be, um, intelligence. This is the kind of what's the split. And what you're seeing, to your point, I'm sorry I'm rambling on this, but it's, it's clear in my head. I want to get it across. In businesses that are using a lot of intelligence, and I'm, that, I'm using tokens as a proxy for that, then small numbers of people can achieve a lot and make a lot. And those are better places to be as an employee and often as an investor, right?

    10. JLJason Lemkin44:54

        Yeah.

    11. RORory O’Driscoll44:54

        Than to be, you know, slogging it out with 10 times the employees, not a ton of new leverage from AI, and yeah, you're, you're stuck in 2010's ground game. Which sucks. I agree.

    12. JLJason Lemkin45:06

        You'd, you... That's what you'd want to do if you could as a founder, as an employee, as an investor. You'd want that. All, if you could, that's the model you'd want. That's where I'd want to go work. I want to go work somewhere where I'm empowered, where I'm, oh, I'm 1 of 172 people at 500 million in revenue. I matter.

    13. RORory O’Driscoll45:21

        To, to your point, Jason, I do think, and I want to call it out, I do think as you start to develop an enterprise motion, and y- you implicitly said it, you're probably talking about the foundation models who are building big go-to-market machines, 'cause they have to, we are gonna see way more bodies. I don't buy... There's not going to be a, an infinite number of-

    14. JLJason Lemkin45:38

        But Rory, I just added, it's not just... I mean, it's the Gore, it's Holde-

    15. RORory O’Driscoll45:41

        Agreed

    16. JLJason Lemkin45:41

        ... it's your Sierras.

    17. RORory O’Driscoll45:42

        When you're selling to enterprise, this idea that 157 people can do it on their own is not going to be true, right? I think for products... 'Cause remember, in the end of the day, someone wipes the table.

    18. JLJason Lemkin45:51

        It's not true.

    19. RORory O’Driscoll45:52

        Hang on. Agree. In any business, there's only two things that happen. People are either making stuff or selling stuff, and if they're not doing any of those two things, they're just, you know, there's just overhead. And to your point, if you're selling stuff via PLG, then you only need people to make stuff, right? So you can be pretty lean. Once you start selling to c- to, as you say, h- to law firms, once you start selling to corporates, then you do end up with a big ass sales force, and one of my theories is that that doesn't change from cycle to cycle. The Anthropic sales force in five years will look like the Oracle sales force, the Microsoft sales force, and the IBM sales force 50 years ago. Because-

    20. JLJason Lemkin46:32

        But, but, but here's the thing. I don't know that that's gonna be true, Rory.

    21. RORory O’Driscoll46:35

        Okay.

    22. JLJason Lemkin46:35

        I mean, first of all, there's... I'll give you, like if, I don't mean to go back to Lovable. If we compare Revolut and Lovable, Re- I know Revolut's hiring 250 sales reps this year, so that's gonna look very much like a traditional organization. Lovable isn't, okay? And it's different DNAs and different goals. But, uh, you know, and the majority of, of, of Anthropic's enterprise sales are not allowed to talk to a human. And so my point from that, and we're not, we can't all be Anthropic, founders are choosing. They are choosing to have leaner go-to-market teams, leaner sale... They just don't want this crap. They just don't want 250 people running around, and they're willing to trade off some marginal revenue. I mean, Anthropic has less than 5,000 employees, right, at, at, at, at... So they're just saying culturally. And, and so I don't think that they're all gonna... I thought they would all look like SAP and Oracle and Salesforce. I'm, we're not s- we're not seeing that. It, it's, it's, it's, we're not seeing that. We're seeing something in the middle where they still want to be lean.

    23. RORory O’Driscoll47:31

        It's not going to be 147 people doing 500 million when it's enterprise sales.

    24. JLJason Lemkin47:36

        But what you might see is, is three to, two to five times the level of efficiency.

    25. RORory O’Driscoll47:43

        I agree.

    26. JLJason Lemkin47:43

        And it just changes the, the culture-

    27. RORory O’Driscoll47:44

        I totally agree

    28. JLJason Lemkin47:45

        ... the headcounts where people are. That's the difference, right? It doesn't really matter whether it's zero or 4X, right?

    29. RORory O’Driscoll47:51

        Agreed. It will be-

    30. JLJason Lemkin47:52

        Yeah
12. 50:59 – 53:25

    Did Elon Pull Off the Acquisition of the Year With Cursor?

    1. HSHarry Stebbings50:59

       Elon have the Acquisition of the Year buying Cursor for what will be 10 times end-of-year revenue? Looks a pretty prescient buy if they're gonna hit target [laughs]

    2. RORory O’Driscoll51:07

       It looks pretty clever. I mean, I, I think what, what we talked about, it was a clever deal on every dimension. I mean, when I was thinking about this, 'cause I'm always skeptical on the valuation, but Elon did such an amazing job of meeting the AI moment. And let me tell you what I mean by that. It's like, you know, you look back and you go, he obviously founded OpenAI, and then all the drama happened, blah, blah, blah. But in the last 24 months, he moved from ground zero to building Colossus, building Colossus 2, failing with his model. But just because he had the guts to show up and spend that kind of money, 'cause to be fair, he does have the cheapest cost of capital on the planet, he found himself with, you know, gigawatts of capacity just when everyone needed it, was able to sell it to them, and then did the Cursor deal also to kind of backfill the space, right? And everything stems from the fact that he had the big-picture conviction that AI mattered, and he was willing to put 30... I mean, it's astonishing, $20 to $30 billion of capital in the ground in advance of revenue because he felt this was the trend to back. And at least right now it looks like a great trend. You're right, prescient is exactly the right word. He found two of his biggest competitors who wanna buy from him. You know, he's getting $2 billion a month, 1.25 from Anthropic and 950 from... No, the other way around. 950 from Anthropic and 1.25 from Google, or the other way around. $2 billion a month. $2 billion a month, $24 billion a year, um, in terms of compute revenue, and then on top of that he has Cursor coming in at the back end to fill those servers. So he is the most efficient core weave with the lowest cost of capital. Now, separate comment, it doesn't mean you have a foundation model, it means you're just a better core weave. But oh my God, did he ma- did he turn a loss into a win in the space of three months. I mean, in January 1st, you could've said, "Look at all those data centers, and you don't have a foundation model. You're screwed." Here we are June 9th, and he can say, "I have a $24 billion c- um, outsource business, and I have this other business that's coming in that's gonna be doing $6 billion that'll run on my servers." I went, "Agre- Yeah, great move."

13. 53:25 – 55:28

    Ramp’s $44B Valuation: Fintech’s Next Giant?

    1. HSHarry Stebbings53:25

       Only Elon. Incredible transition. Um, two private rounds that were large. Ramp raises 750 at 44. We've discussed Ramp a lot. Um, tripled in a year, crossed a billion in ARR, positive free cash flow. And then also Suno, uh, the AI music creator company, uh, raised 400 million at a 5.4 billion, um, teasing first license model. Bond led that one. It was double the previous valuation just six months ago. Um, anything on either of those?

    2. RORory O’Driscoll53:56

       I mean, Ramp, we've said it before, [coughs] the... It, it kind of gets to the Revolut. They'll trade like financial companies, financial services companies, but they will be adjusted for growth. And you know, we always have, we, we kind of do the, you know, when Brex slowed down to, I can't remember what it was, 30, 40%, they sold for 6X, and here we have Ramp. I've heard they're actually as much as 1.25 billion, so they're trading at 30 to 40 times, right? Whatever the number is, right, of that order, and it's all, it's, it's a growth bet, right? And if the growth keeps up, this will be a smart round, and if the growth goes down to anything like, quote unquote, "normalized growth," it won't be. And it's the same bet with Revolut. They're raising at 100 and something. They're doing, what, four and a half billion in revenue, you know, 1.5 billion in operating income, which is freaking amazing. These companies are great. And, you know, banks don't trade at 40 times, 50 times earnings. They trade at 12 times. So on both of them, it's really just... I mean, people always say, you know, "Will this trade like a tech company or like a, a financial services company?" And I always say, "It'll trade like a financial services company, but it will be adjusted for growth." And, you know- Ramp is getting the growth, and they just seem to do a very good job of riding the zeitgeist and, you know, their AI story, their adoption story. They just seem to do a good job on all that. So for now, they got the growth, and as long as they got the growth, the math works. And it's a big town, so we'll see.

    3. HSHarry Stebbings55:22

       Jason, you trying Suno, the music AI company?

    4. JLJason Lemkin55:27

       Um-

    5. HSHarry Stebbings55:27

       You having for your

14. 55:28 – 56:38

    AI Music Startups Are Raising Massive Rounds — Why?

    1. HSHarry Stebbings55:28

       personless office Suno just playing AI music?

    2. JLJason Lemkin55:32

       I do like Suno. I do, I do, I do, I do pay for Suno. Um, it's one of those ones that if I were more cost sensitive, I would cancel my subscription because I think I pay 15 or 20 bucks a month for three songs. Um, and so there is, um, there, there are certain apps that I think they're fragile, uh, for certain users because, um, I'll, I'll pay to continue to pay them, but, but barely. The, but the utility's there, but barely. Um, but, um, you know, it's, it is amazing. I, I don't, um, I'm not maybe, even though I'm a customer for a while, um, end user, I, I ... You know, the, the rate at which that valuation doubled and, you know, the, the, the $20 billion outcome for it, I'm not smart enough to see it yet. So it, it, it, it feels a little bit to me like risk on, right? Because the revenue justifies it, the growth justifies it, the stickiness justifies it, the brand justifies it. It, it, nothing, nothing, you can't lose in AI. Um, but I don't know. We'll see. We'll see. We'll see. We'll see at the IPO.

15. 56:38 – 59:33

    Where Is All This Money Coming From? The Risk-On Market Debate

    1. HSHarry Stebbings56:38

       I just don't know where all this money's coming from. No, I'm, I'm saying with all the IPOs and then Revo- uh, we, you mentioned Revolut again, Rory. Is that targeting 750 million with the secondary sale, um, that they're doing at the 115? And then all the IPOs, we say, "Where's all this money's coming from?"

    2. RORory O’Driscoll56:56

       There's always money when people aren't afraid. Man, there's no money. And you know, when, when it gets scary, as I- I, I always say that 'cause the converse, I, I actually came to my point. I always say the converse is important. When things get scary, it's not that money runs out, it's that money gets scared, right? And in the same thing in a bull market, it's not that more money's been made, it's that people are brave. There'll always be money when people are brave, and there'll be nothing but treasuries when they're not.

    3. HSHarry Stebbings57:22

       How long will they be brave for, Rory?

    4. RORory O’Driscoll57:24

       If I knew that, Harry, I wouldn't be sitting here talking to you. I'd be, I'd be trading QQQ. I don't know. I mean, at some point they won't get brave, but right now, right now it feels everyone's risk on. So yeah, I think people are brave.

    5. JLJason Lemkin57:36

       But we've all convinced ourselves the rules have changed now, right? You can go one to 100 in a year, and so many other things have cha- We, we throw these number, these growth numbers out as if it doesn't require a massive change in externalities to justify them. Like, oh, every- everyone, all the best startups go from 1 to 100 in a year. Um, you should do 1 to 20 in a year is pretty good today. Uh, you want to be doing 5 to 8 by the time you get out of YC. The rules have changed, and they have changed, but there's a limit to how much the rules can change, right? There, there is a, it's called GDP.

    6. RORory O’Driscoll58:06

       Yes, and it's also called human nature. I think that the rules have changed what's doable, but what we do is in the face of these increased opportunities, we all get more aggressive, and we keep on getting aggressive until the only thing that stops us being aggressive is someone gets burnt, right? It's the whole Minsky analysis of, you know, you're gonna do what you're gonna do, and it's going to continue, and the only thing that will stop it is overreaching, and the skill is to figure out when you're at that point. Like, it was funny, last Friday there was a little dip, and you never know why stocks go down when things are overpriced, but, you know, the, the, the, the narrative was, you know, the, um, employment numbers were good, so therefore rates won't go down, and therefore stocks went down. And, you know, in- intellectually, yeah, I, I generally find things don't go to hell in a handbasket 'cause employment is good, right? That's not gonna be how this thing ends, right?

    7. HSHarry Stebbings58:56

       Well, it was because of chip, it was because of chip guidance, to be clear. It was, you know, chip guidance was 16 billion, missed the 17.29.

    8. RORory O’Driscoll59:02

       Yeah, you're talking about, you're talking about Broadcom.

    9. HSHarry Stebbings59:05

       Yeah.

    10. RORory O’Driscoll59:05

        That I got. Yeah.

    11. HSHarry Stebbings59:06

        Which is true, but-

    12. RORory O’Driscoll59:07

        It was, it was some of that, and then it was just some... Yeah. Again, but yes, they, they, they got, definitely got guide- I mean, I think what that, if we're gonna talk about that, all that said is when you're priced for perfection, which is always true, when you're priced for perfection, even a small miss to expectations, you know, filters through very quickly, and that's all that happened there. You know, the semiconductor index is up 100% year to date, um, so it turns out it's pretty vulnerable to correction. Oh,

16. 59:33 – 1:04:48

    The Surprising European Tech Success Story Nobody Saw Coming

    1. RORory O’Driscoll59:33

       well.

    2. HSHarry Stebbings59:33

       One that's amazing, which we may not have comment on, but it is amazing, is Bending Spoons. Uh, this is kind of a roll-up play on traditionally kind of consumer companies. Um, you know, some of their properties are very well known, but, you know, Evernote, Vimeo, WeTransfer, AOL, Eventbrite, a, a very massively executed roll-up strategy. A billion three in revenue, and they're filing to go public at $20 billion, uh, on, in the US. Um, from Italy, I hasten to add. Uh, one of few large Italian success stories, to be very blunt. Um, I thought it was amazing. I don't know if you guys have comment on it, but I thought fantastic c- success story.

    3. JLJason Lemkin1:00:14

       Well, to me, the part I didn't, I didn't, uh, appreciate, and I do appreciate it, is that they turned around these effing companies. I mean, Evernote re-acceler- Evernote was dead, and they re-accelerated the growth of Evernote, right? Uh, with a, with a, a, a fifth of the employees. Um, I mean, it sure, it sure, it sure makes, it sure makes yous think a lot of management teams are pretty suspect if frigging Bending Spoons from Italy can turn Vimeo around, Evernote around, good God. You know? If, if AOL becomes the, becomes the ne- the, the next hot thing, um, I mean, these guys are fucking geniuses.

    4. RORory O’Driscoll1:00:50

       I think I, I did read it in detail 'cause I was super interested, right? And, uh, turned around is an interesting expression, and so it w- so, I mean, what they do, their MO is they buy these things, right? They cut all extraneous expenditure, including a lot of the acquisition expenditure. It's very like, a little ironic, it's like the Vista playbook in enterprise. And then they raise prices massively. So if you look at... I actually tried to figure out the organic growth rate of each en- enterprise, 'cause they gotta... They're growing nicely overall, but a large part of the reason they're growing is they're adding new companies. So, by definition, revenue go up, right? I think they had... I, I ha- I'm trying to find my notes here. I had the growth rate last. It was, you know, stellar, like n- something like 90%, but most of it's acquisition. So you're trying to piece true Jason, you're trying to find out what did they do in terms of growth by entity. That's the next level down. And even then, they get pretty good growth rate, to your point, out of the gate, right? But then you go one level below that. How do they do that? It's mainly price rising. It's very hard to get any sense of unit growth by custom- by individual pro- So, in other words, what they're doing is they're taking Evernote, uh, as an example. It's doing 200 million in revenue. They just cut all the marketing initiatives other than high ROI stuff. So they take out, you know, 80% of the marketing spend, you know, focus the team on features, raise the prices 80, you know, 80% over the course of two years. 10% of the existing users go, maybe 20%. Their net retention is reasonably decent. It's below 100, but it's reasonably decent. So they raise prices, and the people who really want it stay, right? And ev- and it's really hard to grow new businesses, but what it means is it kicks off cash. And, you know, let's get real here. Anyone who hasn't churned from AOL now ain't churning until they die, right? So you can raise money on that. I mean, you know, you've had a whole two decades, people. I mean, it is 26 years since the AOL Time Warner acquisition, right? You've had 26 years to churn off this thing. You're going nowhere, right? So they have very sticky inertia customers, and they stick it to them, right? It's an excellent business. I mean, you know, uh, the big three properties are AOL, Eventbrite, and I wanna say Vimeo. It was interesting. In the top 10 or about 80%, I think Evernote, which I use, is in the top 10, but not top three.

    5. HSHarry Stebbings1:03:12

       You still use Evernote?

    6. RORory O’Driscoll1:03:14

       I don't use it, but I have a bunch of stuff in it, so I paid for another year. I need to get it out and figure out where I'm going. It's a long story, but, you know, I'm not using it. I, I'm using ChatGPT, but I gotta get all my shit into one place. It's a long discussion. It's not important.

    7. JLJason Lemkin1:03:26

       Well, they've, they've increased pricing from-

    8. HSHarry Stebbings1:03:28

       Rory, what was the last supper like?

    9. RORory O’Driscoll1:03:30

       Shut up. Shut up. Um, let's, let's focus on the business. So yeah, I, I, I looked at it and I go, the odd thing is this is a consumer internet version of early Vista Thoma Bravo. Buy those companies, cut the costs, raise the prices, and, um, just, you know, probably tap them out. So the question, is it a great business? Absolutely. Should it go public at 20 times revenues or 15 times revenues? Maybe not, because you are relying on the acquisition for orga- I mean, you're not getting organic growth. You're getting a profitable business and, you know, you probably have to look at the sustainable profit. But it's hard to value it on a growth multiple, and you might be leaning in a little 20 billion. But I think it's, you know, it's a great story because everyone was playing in the enterprise space. What these guys realized is there's similar opportunity in the consumer side, which sim- you know, just as, you know, the whole idea was in these verticals, no one's gonna change their car dealer accounting system because they put prices up 20%. In the same way, you know, the default consumer is gonna stay. So it's, it's totally sensible and orthogonal play to what everyone else was doing, so they deserve the prize. Should the prize be 10 or 20? That's a different question. But yeah, great story.

17. 1:04:48 – 1:06:35

    Should Great Companies Even Go Public Anymore?

    1. HSHarry Stebbings1:04:48

       Does it diminish what we've previously said about the bar to go public today? You know, they... Don't get me wrong, they're, they're fantastic scale. It's a billion three in revenue, which is awesome. But we have said that we're seeing this kind of bifurcation and you need to be huge.

    2. RORory O’Driscoll1:05:04

       No, you've, you've said it. I haven't said it, so I, I don't-

    3. JLJason Lemkin1:05:07

       But they're growing, what, 70 or 80%? What, what have Bending Spoons growing?

    4. RORory O’Driscoll1:05:10

       Yeah.

    5. JLJason Lemkin1:05:10

       I mean-

    6. RORory O’Driscoll1:05:11

       By, yeah, by acquisition, yes

    7. JLJason Lemkin1:05:12

       ... I mean, Rory would know better than me. I'm not even convinced the markets care as much as we think, whether it's organic or inorganic. Salesforce itself is, is the balance of it is inorganic at some point, and then it becomes organic. [laughs] We don't even think about a lot of these products as inorganic or again. I mean, does anybody re- really care? I mean, uh, as, as long as it works, if they can keep finding these targets for the right price, if they can do what they, if they can do what they did with Evernote, which is raise the pricing from $75 to $250 a year on average, right? Um, if they can find enough of these without just running out of affordable targets, going to the founder's, uh, letter, it sounds better to me than starting something from scratch. Just go, there's gotta, there's gotta be 800 unicorns to buy. Just go buy those ones.

    8. HSHarry Stebbings1:05:57

       I really liked his letter. He said, well, kind of finding product market fit is just a continuous mission of luck- [laughs]

    9. RORory O’Driscoll1:06:03

       Yeah

    10. HSHarry Stebbings1:06:03

        ... uh, in some ways, and then the execution machine built after that-

    11. RORory O’Driscoll1:06:07

        Totally

    12. HSHarry Stebbings1:06:07

        ... requires no luck at all.

    13. RORory O’Driscoll1:06:10

        Totally. Absolutely.

    14. JLJason Lemkin1:06:12

        It's just traditionally you bought... The, the, the Constellation version was two at, one to two X revenues, right? Um, I don't know what Bending Spoons blended, uh, price they have.

    15. RORory O’Driscoll1:06:21

        Well, we do.

    16. JLJason Lemkin1:06:21

        And maybe it's not revenue-based.

    17. RORory O’Driscoll1:06:22

        About a billion and a half.

    18. JLJason Lemkin1:06:23

        I just don't know.

    19. RORory O’Driscoll1:06:23

        Yeah. It, this is Constellation for consumer with, you know-

    20. JLJason Lemkin1:06:28

        Yeah

    21. RORory O’Driscoll1:06:29

        ... a much higher valuation, 'cause right now software is under pressure, and this stuff isn't.

18. 1:06:35 – 1:08:58

    Data bricks, Mega Rounds & The Private Market Boom

    1. HSHarry Stebbings1:06:35

       Speaking of big enough to go public, guys, Databricks come out today. No, no.

    2. RORory O’Driscoll1:06:40

       Big enough not to.

    3. HSHarry Stebbings1:06:41

       We're gonna do another round. We're gonna do another round. 165 billion price-

    4. RORory O’Driscoll1:06:46

       At PM

    5. HSHarry Stebbings1:06:47

       ... up from 134 billion earlier this year. But obviously not going public with that announcement anytime soon. How do we think about that?

    6. RORory O’Driscoll1:06:59

       I mean, look, the argument we've said for why the big, um, model providers are going public are they have a huge capital need, right? And, you know, I actually think, I was, might have been Diamond or someone who said, or maybe the Goldman guy said recently there's three reasons to go public. You want capital, you want currency to buy other things, you wanna get liquidity for your shareholders, right? If you don't have one of those three things, then, you know, do you want the hassle? So I think Databricks, unlike these guys- For now at least, may well be in the position where their capital needs are still manageable. I mean, for context, reminder, the last private round at Anthropic was thirty billion, and the last private round at, um, OpenAI was one hundred and twenty-two billion, right? So this is less than-- Oh my God, it's point one percent of the last OpenAI private round. So what that says is, if there's money to fund OpenAI, there was money to fund Databricks private. So they can do it for longer because it's just not the same need. It's a software company, it's not a mo- They don't, quote-unquote, "have to." Now, I personally think you should at four or five billion in revenue at the margin. I think in the end you'll find, logically in the end, the cost of capital should be cheaper in the public markets, but right now it's not. Databricks can get capital at a higher revenue multiple because of their higher growth rate than Snowflake can and on hassle-free terms. I also think the other argument he did make, which is, does resonate a little with me, is the idea that this is just gonna be a noisy year. I mean, you've got, you know, you've, you've got, you know, SpaceX by Friday, you've got the two big model companies by the end of the year. There's just a lot going on. It may well be next year is a clean deal. But yeah, I mean, the bigger hub was they don't need... It, it's just the amount of money you need to build a foundation model is two or three orders of magnitude more than anything else. So the imperative for those guys to go public is just different.

    7. HSHarry Stebbings1:08:57

       All

19. 1:08:58 – 1:15:45

    Lightning Round: The Biggest Stories We Missed

    1. HSHarry Stebbings1:08:58

       right, boys. Is there anything that I've missed that you think we should discuss? Other things that made it to, to the top. SaaS now trades at a discount to the S&P five hundred for the first time in history. Wow, that's sad. Um, Meta weighing tens of billions more for CapEx spend following in the suit of Google. Zuck, attaboy.

    2. JLJason Lemkin1:09:21

       I'll tell you the only, I'll tell you about the one what small one I'll pick just for fun if we're breaking. Um-

    3. HSHarry Stebbings1:09:26

       Yeah

    4. JLJason Lemkin1:09:26

       ... I, I think it's actually a more important story, but maybe it takes time to, to track it, is, you know, Microsoft's new models that it launches, right? Which I think it said they were clear there. I don't know what terms they used. Sorry, I'm traveling. It's in beta. I found it very interesting that the models can't even search the web. So there are certainly use cases where that's not important, but, um, uh, it's interesting to me that you would launch a model that can't, that can't extend its knowl- its, its knowledge by searching the web. It's, it, it's a flashback to when this show started when, uh, basically, you know, every, every... You chat, talk to ChatGPT and everything was, uh, nine months ago, right? I don't remember. I don't-- My memory is only through September 2024. So, um, the only thing that says to me is, um, har-hard to predict whether anyone can, can really... We, we, we think everyone can catch up. We think o- Microsoft can catch up. We think O- DeepSeek and open source can catch up. But if Microsoft launches these models and it, and it doesn't even search the web, um, can, can we really keep up with the pace at Anthropic? I mean, uh, the, the pace of change is so rapid. It's so impressive. Like, so much progress. I just don't, I just can't predict. I can't predict where it will, will play out over the rest of the year next year.

    5. RORory O’Driscoll1:10:38

       But-

    6. JLJason Lemkin1:10:39

       I can't predict

    7. RORory O’Driscoll1:10:39

       ... but you are right, Jason. It, it did matter because it was the final recognition that, frankly, [chuckles] for ages is you can't, for Microsoft to have such a core foundational technology and the, and the way they don't control it just wasn't a long-term sustainable state. And, you know, they and OpenAI are somewhere between an open relationship and actually divorced. I can't quite figure it out. Or they're allowed other partners, but they're still together. I can't quite... But whatever. O- Microsoft needs its own control, and they needed to do this. And you're right, Jason. It, it, you know, the reviews, I haven't used it yet, the reviews are, like, good, but not even as good as the best open source. But my takeaway on it is, you know, well done because you needed to do something. And you-- It's hard to imagine not playing here. And they tell a story about, you know, local use and, you know, range of models and which I read all as some version of, we don't have to be the very best because we know we're not the very best. In general in life, you need to be the very best, but at least you need to be playing. It's a step, it's a step to the goal. And that's why Google is so much further ahead. They're at least in the game. But yeah, this was the end of the period where you could fool yourself even slightly that your plan for, uh, your plan for AI is to partner with OpenAI. That's just not the answer anymore, and it hasn't been for a couple of years for Microsoft. So yeah, m- I mean, onwards from here, my guess is they'll, you know, they will become the next sucking sound for talent and money. And you're right, they need to add the stuff that the other guys added two years ago. You know, can they-- It, it, I didn't, I hadn't thought... It's an interesting question. Can they do the Microsoft thing and grind their way to good enough over three to four years? Like Azure was never as good as AWS, but it was good enough for most of their corporates. Can they grind to something that's good enough in this space over the next two or three years, whereby they're not gonna be as good as Anthropic or OpenAI, but they're good enough for the bulk of low-end intelligence work? I don't know. It's a, it's an interesting question. I mean, they never caught up in mobile. They never caught up in search. They did catch up in, uh, cloud compute with Azure and, you know, who knows here. But you're right, it is the one that matters. I mean, that and the, you know, where are the... I mean, one of the big questions is between Microsoft and then the open source vendors, are the open source vendors especially, is there gonna be a non-Chinese US open source vendor that's kind of even within spitting distance of the frontier models? 'Cause that matters a lot from a pricing perspective.

    8. HSHarry Stebbings1:13:16

       I think there are, there's, there's a lot of open source models today that are within spitting distance, no?

    9. RORory O’Driscoll1:13:21

       Yeah, there are, but mainly Chinese.

    10. HSHarry Stebbings1:13:23

        Yeah.

    11. RORory O’Driscoll1:13:23

        And yeah, the question, and I... Yeah, the question then is, you know, is that sustainable? And a lot of our companies are using them, and is that sustainable? Even though it's open source, is that sustainable over the medium term? Is y- If your only plan is you can download Kimi or DeepSeek and you can, you know- fine-tune it, that's great. But A, some of those Chinese companies are themselves going closed source. I think what happens to a US- what happens in terms of an open source competitor in the US matters, and obviously you've got, I think it's Recursive and Poolside, a couple of- Reflection and Poolside doing that. But that's, that's a- to Jason's point, sometimes you get caught up in the stories, and you, you're the worst for that, Harry, 'cause you just love the gossip. But Jason's right. What really matters is, is this going to be an oligopoly or is it going to be four or five players in foundation model land two years from now? Which is why what Microsoft did matters.

    12. HSHarry Stebbings1:14:16

        I just did a show with the founder of Nabius, and he said the single biggest threat to Nabius is consolidation of models.

    13. RORory O’Driscoll1:14:21

        Yes.

    14. HSHarry Stebbings1:14:22

        If, if we have concentration of model kind of winning, we are in a tough space and we want an ecosystem, not a monopoly.

    15. RORory O’Driscoll1:14:30

        Yes. There's a reason, yes, that everyone other than Anthropic and OpenAI shoving money furiously at anyone else who can help erode that competitive advantage.

    16. HSHarry Stebbings1:14:40

        Now, I just did a show with Aaron at Perplexity, and he said that export controls have actually hurt the US in many ways because it's meant that they've innovated on architecture that they wouldn't have needed to and really built muscle that they wouldn't have had to. And combined with the open source model capability that they have, it's now a competitive threat that's even stronger. It was an interesting discussion. Rory, I have to say, uh, we'll wrap. My mother texted me after our last episode and said that your quote on making money is like sex was the favorite moment of any Trio show that she's heard, and I got about 50 texts from people being like, "That is the quote of the century." [laughs]

    17. RORory O’Driscoll1:15:18

        I've got to tell you, I think it's not in direct format, but there's a version like, there's a version of that either in Fred Schwed's Where Are the Customers' Yachts? from the 1960s, or in Reminiscences of a Stock Operator from the 1920s. One of those two investing books hinted at that, but I always remembered it. So I, I'm not the original author, but I-- but, but, but the books are kind of three to five times older than you are, Harry, so it's kind of like the Bible as far as you're concerned.

Episode duration: 1:15:55