-
Unknown A
There was some SEC notes about meme coins and how we test. Yes, there it is. The securities and Exchange Commission with a Doge dog on it. Okay, here we are folks. We went from too cold right in the Goldilocks zone with Gensler and I guess we're now going into the too hot under Trump maybe. I don't know.
-
Unknown B
So essentially what they're saying is you could launch Jason dollar sign Jason. You could pump it, you could lobby to get Coinbase to list it, you could hold 80% of it yourself and you could dump your bags on the community that bought your token. And that is all entirely copacetic, legal and safe. And to me that is not the case.
-
Unknown A
Everybody can have their own opinion on this. And what makes a great democracy is that we debate stuff. This feels like to me, I'll just say to no uncertain terms that this was written and design to get the Trump coin and the Melania coin out of hot water.
-
Unknown C
This week in startups is brought to you by Paddle. Self serve software is global by default, but selling to every country is complicated. Paddles merchant record manages payment, sales tax chargebacks and refunds so you don't have to wherever you want to take your business, go there with paddle. Go to paddle.com twist to get started with your exclusive listener fee. Free period. LinkedIn Ads to redeem a $100 LinkedIn ad credit, launch your first campaign. Go to LinkedIn.com thisweekinstartups and HubSpot for startups. Smart founders aren't piecing together random tools. HubSpot is a customer platform that thousands of startups used to scale efficiently. Get 75% off plus three months of perplexity AI for free. Go to HubSpot.com startups all right, everybody.
-
Unknown A
Welcome back to this week in startups. It's Friday. We're here three days a week. With me, of course, Alex. Wilhelm. How was your little vacay brother? You have a good time? You play a little poker? You had baby with baguette? It looks like you had a good time.
-
Unknown B
Had a great time. We love going to the parades in the world. If you don't know Mardi Gras, not one day. It's lots of parades across the city. So it's just, it's an amazing time to be there and I did get to go play some 1 3. Jason, you know what, it's a lot more fun to play poker when you can afford a couple of buy ins vs me when I was like 20 and I always had one bullet whenever I went to go play, you know, that's not good.
-
Unknown A
You get a bad beat. You know, you get into a 65, 35 situation, which you always want to be in. You'll take that all day. But the villain hits the one out of three chance and there you are. Now you're out of the game. Which is why you need to play a smaller game.
-
Unknown B
Well, I mean, when I was 20, I was making like $8. That wasn't a small enough game for me at that age.
-
Unknown A
I guess that's why tournaments are nice, because without the ability to rebuy, you know, you get to maybe last a little bit longer, and it's all good. Well, it is a great Friday here, but I do want to address the Palmer Lucky feud. You know, the Palmer Lucky feud is going to keep happening. So here we are. Okay, so I said some spicy things about Palmer Lucky on this podcast years ago. You can just type in Palmer Lucky, Jason Calcanis and you'll find it. Essentially, he got fired from Facebook by Zuckerberg and Sheryl Sandberg. And I think the reason they fired him, he's admitted was he funded something that was, you know, he covertly funded something. At the time is the allegation that was like an anti Hillary campaign. Putting it aside, I said on the program, you know, I think it's dumb to do that because if you're a leader, it's been blow up in your face.
-
Unknown A
They could say it a little bit spicier than I'm saying it now, which maybe I didn't need to be as spicy as I was at the time. And I guess I could have put a caveat on it if the Guardian story, if the Verge story is true.
-
Unknown B
Right?
-
Unknown A
Because now nobody trusts media, so everybody assumes anything the media says is false. But the truth is, at that time, he was fired. And I guess, you know, Maybe in Trump 2.0, Eric, he wouldn't have been fired. He would have been lauded. Right? So times change. But I think my advice to founders stays the same. And the advice I gave to founders at the time was pretty simple. Don't do anything covertly because it winds up blowing up in your lap. Okay, Putting that aside, I did say it a little spicy. And I guess, you know, somebody told me amongst our mutuals, and I got a lot of mutuals with Palmer. He sees me as the avatar of that very, you know, painful time in his life. So he's going to unload on me every chance he gets. Well, it's Friday. The Epstein files were supposed to be dumped as I've explained a gazillion times, when I was in New York in the 90s and when I was going to the TED conference In the early 2000s, I met Epstein.
-
Unknown A
Probably I met Epstein a half dozen times. He would be at these billionaires dinners. He would be a ted, and he would be there giving Marvin Minsky and, I don't know, like all these MIT professors, he was there giving them donations to charity, to their research. Probably have spoken to him for 30 minutes total in my life. Obviously not his type, and never flew on the planes, never went to his island. But I am in his black book like hundreds and thousands of other people who are notable in New York City, finance or tech. So what does Palmer Lucky do today? He insinuates that I'm in the logs because I guess they were supposed to release all this stuff. But it's the same thing. It's his black book. So I'll say it again. I was never involved with Epstein. I was never on his island.
-
Unknown A
I was not involved in all those alleged shenanigans. And there are thousands of other people in his black book. I'm not going to mention the 50 people who Palmer Lucky and I are friends with, who are also in his black book, who are also at the TED conference with him during that period of time. So the feud continues. Palmer's going to dunk on me and his partner posted like, oh my God, I'm going to have a terrible weekend. I guess insinuating like, oh my God, you know, something terrible. Do I look like I'm worried? This has been going on for like literally 10 or 20 years now. Anybody who met Jeffrey Epstein or ran into him, Donald Trump, Woody Allen, Bill Gates, Reid Hoffman, I mean, the list goes on and on. I think none of these people were involved in the alleged shenanigans. It's probably 0.001% of the 10,000 people who Jeffrey Epstein knew or was, you know, at conferences with or in his black book were involved in this.
-
Unknown A
But here we are in the conspiracy age. I will have to deal with this forever. I will make it clear forever.
-
Unknown B
It seems like an unnecessary amount of pick on his part peek on his part. I don't know palm at all, to be clear. And I saw this on Twitter. I was like, haven't we already gone over this? And so I talked to Lon, and Lon was like, we've gone over this because I think we've gone over it together on the show. It's been a while. But I mean, it's not new. And I think there's a lot of Trump supporters throwing stones from glass houses when it comes to certain people that may or not be in vlogs.
-
Unknown A
The real one, and I'll be honest, I don't think, even though Trump knew him and there's like, this famous video of him, you know, at a party with him at Mar a Lago, I don't think Trump's involved in any shenanigans with him. I think he probably knew him. They probably. You know, These guys are 30 years older than me. At that period of time in New York, I was in my twenties, running my magazine. I was kind of notable, you know, not like super notable, but I had a magazine. And, you know, I think he was. This is my theory, I think was like a CIA, Mossad, KGB agent, and I think he was trying to get Kompromat on people like Trump, Gates, you know, anybody who was powerful. I know I sound like a conspiracy theorist there, but that's what I heard from many people who were in the circles was that he was probably some sort of a spy of some type.
-
Unknown A
But anyway, here we are, year 15 or 20 of this for me. I'll explain it every year. I'm an open book. I've never been questioned by any CIA, FBI. I guess I'm not important enough to compromise. I'm a peripheral figure here at best. Man.
-
Unknown B
Jason, I'm so glad that I'm peripheral to your peripheral, because, yeah, you might.
-
Unknown A
Be dragged into this.
-
Unknown B
No, no, I'll go with that. Whatever. But, like, I just. I see I've been close enough to people of note in various types of note that I know that Spain just seems miserable or being of note seems miserable, I guess.
-
Unknown A
I mean, I'll be totally honest. My life is so great. I've got a great family. I've done better than I've ever expected. I get to pick what I do. I have the greatest friends in the world. I get to ski. You know, I ski 24 years this year. I'll probably get another 10, 15 days in. I mean, everything in my life is so great. The only thing I'm ever worried about is, you know, my dad's a little bit sick or what, you know, things I have to do as a parent. You know, that's what I'm focused on. So I actually don't care. And I didn't get Palmer Lucky Fire, to be clear. I think people. Some people think, like I said something on this niche podcast about startups that got him fired.
-
Unknown B
Yeah.
-
Unknown A
No, the end. You know, I'm not in the Epstein playlogs. I didn't get Palmer Lucky fired. Like, let's try to get back to reality, folks. Palmer Lucky got fired by Sheryl Sandberg and Zuckerberg because it was really untenable to be at a Silicon Valley company in that Trump 1.0 era and be a Trump supporter. It's not like today where you could be a Trump supporter and not get fired. At that time, if you were like a high profile person and you were supporting Trump, it was, you know, kind of cataclysmic. Here in the Valley, you can say what you want about it, but that's the truth. I just commented on it. I commented in a spicy way. You can look it up. Anyway, let's move on to some other things to talk about.
-
Unknown B
I wanted to start with the chart because this I think really boils down to a lot of stuff we've been talking about, about startup growth, how quickly startups are expected to grow in the AI era. So take a look at this. And for those on the audio version, this is a chart that shows how long it takes the median company to reach $5 million worth of annualized revenue. Comparing the top 100 SaaS companies on stripe back in 2018 and then the top 100 AI companies that use stripe in 2024. The median time amongst these top hundred companies to reach high million aerodynation fall from 37 to 24 months.
-
Unknown A
Did you know you're required to pay digital sales tax wherever your customers are? Well, no one likes dealing with this type of administration, whether it's taxes or accounting, especially when you're in a busy startup. And that's why Paddle has stepped in to put your billing and your taxes on autopilot. Whether you're launching a SaaS product or maybe you've got an app, perhaps a game, you now can reach billions of people globally. That's the magic of the Internet. It's the magic of the App Store, and it's awesome. And it's one of the things, hey, as an investor, we love too. But this scaling brings tons of challenges like taking payments in local currencies and navigating all those regional tax laws. They're complicated. Plus, you gotta manage fraud, you gotta manage refunds, right? And that's different in every market. And that's a massive headache that's gonna slow you down from doing, you know, important work with product market fit hiring and raising money.
-
Unknown A
So let me tell you, a messy payment stack is gonna eat up all your Time, all of your energy and money. These are big company problems that you're to face even as a small company. And they compound every time you enter a new market. Well, Paddle was built to handle this for you. Hey listen, maybe this is unsexy, but this is what building and scaling a startup is all about. Sometimes you got to do your chores and you need a partner. Paddle's going to be your merchant of record, your mor and they're going to handle payment localization, fraud prevention, tax compliance, customer billing support so that you can grow faster. Hey man, if you need to launch a new country, you're done. You want to get a payment method easy and you want to set local pricing and you want to do it intelligently. One click.
-
Unknown A
So here's your call to action. Wherever you want to take your business, go there with paddle.paddle.com twist to get started with your exclusive fee free period. That's paddle.com twist to unlock your no fee startup period. This is great that Stripe's really significant. We have this problem with data we get from different sources. Data from Stripe is, you know, pretty great data because it's the actual money flowing. And this is what we're seeing inside of our organization, the startups we invest in, smaller number of people ramping revenue quicker if they get product market fit. So this is predicated on getting product market fit. If you don't have product market fit, you can't have your revenue ramp. So just as founders understand that you gotta get product market fit first. What does product market fit mean? It means like you're rushing, really solving a problem that people are willing to give you money for.
-
Unknown A
And if you do, what this shows is you're gonna go a third faster or so to hit those incredible numbers. So congratulations to those companies and thank you to Stripe for releasing it. This is really good for the American economy as well. What this means is the productivity caused by AI seen in AI companies in the most pronounced way. That makes sense because the people who are running AI companies are the first to use AI. So what you can take from this is a non AI company will see similar gains. Maybe not as pronounced, it might not be a third, but it might be 10%. So overall, great for the American economy, great for innovation. And we're not seeing good job implosion yet. We probably will see that in self driving, maybe retail or factory work. But I gotta be honest, like until I see us Alex lose jobs.
-
Unknown B
Yeah.
-
Unknown A
Because of AI and those people not find work. I think I'm gonna stick with there'll be job displacement and we'll be able to absorb those people or new people and net net will be able to navigate this here in the United States.
-
Unknown B
I think that's probably right. I think economies that are very service based. If you think about like the Indian IT sector for example, that could be a bloodbath.
-
Unknown A
Challenging.
-
Unknown B
But I think we're seeing instead of job destruction is instead just caps team size. And I know we talked about this all last year with our static team size theme, but I just want to pull from Salesforce's most recent earnings call, Mark Benioff earnings earlier this week. Jason we won't go through all the numbers but he said we're not going to hire any new engineers this year. We're seeing 30% productivity increase on engineering and we're going to really continue to ride that up. So to me, I think what this means is engineers are expected to be a lot more productive on a per person basis. And so companies are going to delay hiring. They were done this year by five years out and that good. You know, change the labor dynamics to press the prices for engineering skills. And speaking super crassly for startups, that's great because think about how much money they had to compete with when Fang was going crazy.
-
Unknown A
Yeah.
-
Unknown B
Now Fang doesn't want as many people. So there's more brilliant folks out there for startups to hire. To me that I can see a positive light in there.
-
Unknown A
I've brought that up as well. It's a really interesting point. If you don't have five job offers from the max seven plus Coinbase, Uber, et cetera. Yeah. You're going to be more likely to take a startup job, which might mean less revenue.
-
Unknown B
Yes.
-
Unknown A
In the short term, more revenue in the long term because you get to take a chance. There was some SEC notes about meme coins and the Howie test. I think we should explain. Yes, there it is. The securities and Exchange Commission with a Doge dog on it. Okay, here we are folks. We went from too cold right in the Goldilocks zone with Gensler and I guess we were. We're now going into the too hot under Trump maybe. I don't know. I saw this brief note from the sec. It feels like they're crafting the law around the Trump meme coin. If I'm being candid, it feels like, oops, Trump did something. Let's make the law fit it now. Also myself do believe we should redo regulations and people should be able to invest in anything they want through an accredited test. But just for intellectual curiosity here, let's look at the how we test and what the SEC said and just try to make sense of this.
-
Unknown B
Okay, so we put together a little graphic for everybody to break it down. Kind of like the Howie test to define what is a security. And if you don't know, Howie was an old Supreme Court case and it set forth kind of policy for what is a security and what isn't. So what matters, Jason, is that a security or Howie, is an investment of money into some sort of common enterprise, something that people are working on or turn part in.
-
Unknown A
A startup would be an example for sure.
-
Unknown B
Yeah. With the expectation of a profit, which is why startup investing point makes sense. You don't put money into a series B hoping that you have less money. In the end, you want to make money. And a security is something that you expect other people to generate value for that you can accrue to yourself.
-
Unknown A
So if we were to put bitcoin against this, you do invest money in bitcoin. Is it a common enterprise with a central group of people? No, it's by definition distributed and decentralized. Right. There's no one person who can make the decisions for what happens to bitcoin. Right. It's literally was designed in the famous white paper to be decentralized. People do have the expectation of profit when they buy it. Nobody's buying bitcoin just to own some ones and zeros and it's to be delivered from the efforts of others. Okay, now that one's kind of on the bitcoin and jump ball. Right. Like you have Michael Saylor out there pumping it. So it does feel at times like a common enterprise. But the truth is you have no control over him. He could one day wake up and say, no, I think bitcoin's a scam. I'm selling all my bitcoin.
-
Unknown A
Right. I'm going to buy Solana Eth, whatever. So it doesn't feel like bitcoin passes this test. I don't know. Bitcoin does. Wait, Bitcoin does.
-
Unknown B
What depends on pass is positive or negative. Rally test indicates that bitcoin is not a security. The only way I should see bitcoin.
-
Unknown A
As a security that way. So we don't confuse people.
-
Unknown B
Yes, we try to be very clear. And the reason why I agree with you is that mining of bitcoin is insufficiently centralized to me to warrant the idea of common price. If there was one miner, maybe that's a little bit different, but it's not the case.
-
Unknown A
Okay, so the Howey test would say Bitcoin is not a security. The Howey test, if you did XRP as an example, and they centrally control it, it's a company, that company has venture investors that would say it is a security. And I think the SEC did believe XRP is a security. Now, that's a controversial one. But you can say XRP is very, very different. Perhaps they're put the genie back in the bottle in the XRP example. Okay, continue. Let's see if we can thread this needle here.
-
Unknown B
Okay, so that is how we test. That is why we think bitcoin is a commodity versus a security. Now, what about meme coins? Meme coins are something we've talked about on the show, both through the Trump and Melania token launches, and then also recently through melee in Argentina and the Luna and Haktua. Oh, that's right. I forgot about the Hakua coin.
-
Unknown A
I mean, there's like, literally 10,000 coins released a day. So that's in favor of, like, you know, this ruling. Okay, let's go through it here.
-
Unknown B
So the SEC comes out with some new guidance. And this really matters because SEC has been dropping cases. It's been getting kind of, you know, free range to a lot of, I would say, crypto companies and activities that had previously been under the thumb of the sec. So the SEC says, what is a meme coin? It defines a meme coin as a type of crypto asset inspired by Internet means, characters, current events, or trends for which the promoter seeks to attract an enthusiastic online community to purchase a meme coin and engage in its trading. And frankly, Jason, I think that's right. But I want to hear from you. Does that match your understanding of meme coins?
-
Unknown A
Okay, so there is some centralization of a meme coin because there's a website, there's a person who writes the copy on that website, the terms of service, and they own 80% of it, and then they distribute them. Hey, founders, I want to share with you an experience I love. It's when I get an ad that is relevant and not some nonsense. Like the other day I got an ad for a fund management platform, and it was like a new one I'd never heard of. I clicked on the ad because, well, I manage venture capital firms. We scheduled a call with them and it was amazing. How did this happen? Well, I was on LinkedIn because I'd like to share links from the podcast, the Sweetened startup, right on LinkedIn. In fact, we live stream to LinkedIn three days a week, and we had A great audience over there.
-
Unknown A
And I happened to be presented with this fund management platform and it was a direct hit. Like, I mean, talk about hitting the bullseye. If you're in business and you're making a product or service, it's really hard to find customers in the business to business space. And doing B2B advertising is hard. But LinkedIn makes it so easy because, you know, their tools let you target people by job title, industry, company size and more. So this fund management platform obviously was looking for people in venture capital who had a fund size and a number of people, maybe 10 people, maybe 50 people. And they found me, they got me, they split the arrow, Boom, right on target. And there's two things you really need to know about LinkedIn going into 2025. First, they broke a billion members and 130 million. Those billion are decision makers and 10 million of the billion are C level executives like myself.
-
Unknown A
Where can you get to those people? It's really hard. And the second thing you need to know, LinkedIn makes an impact. B2B marketers report two to five times higher return on ad spend or ROAS return on ad spend. You should know that acronym. Compared to other social platforms, 79% of B2B marketing is the best platform for paid media. LinkedIn's gonna let you build the right relationships, it's gonna drive results, and you're gonna reach your customers in a super respectful business environment. It's not a place where people are dancing around, saying inappropriate things or debating politics. No. LinkedIn equals business. Business equals LinkedIn. Start converting your B2B audience into high quality leads today. We'll even give you a hundy a hundred dollars credit on your next campaign. Go to LinkedIn.com thisweekinstartups to claim your credit. That's LinkedIn.com this Week in startups, terms and conditions do apply.
-
Unknown A
Okay, so if we pull up the Howie test again, I'm just gonna run through it from my perspective. With the Howie test, I'm gonna be as intellectually rigorous as I can here. Okay? It's an investment of money.
-
Unknown B
Check.
-
Unknown A
You're giving money two. It's a common enterprise. Well, if the people who released the meme coin own a large percentage of it, that means they have something in common with you and you're working on this together. And the people who are buying it certainly have an expectation of profit because they're sharing charts and drawing on the charts where they expect it to go. And they're using a ticker symbol and it's traded on a platform like Coinbase or Robinhood right next to other securities. And is it to be derived from the efforts of others? Well, I do. That's where we get interesting, because if he was tweeting it, right. Malay tweeted it. So that sounds like you're relying on him to tweet it to get the pump going. So I'm using Malay here because I don't want people to weaponize this against my friends who are in the administration and be like, oh, JK says this, but you know, I'm going to use Malay invested money.
-
Unknown A
People are collaborating on it. People expect a profit, and you expect that other people will keep pumping it. And people are disappointed when the pumping stops. Like when Hawk 2 stops pumping it and gets called out on it or Malay gets called down and stop pumping it. People are disappointed. So for me, meme coins do scream securities. I know.
-
Unknown B
So wait, how did CC get around that?
-
Unknown A
Well, okay, please explain it to me because I just went through the test and Malay coin and Octua. I'm going to leave Trump and Melania out of it. So we have don't have the political issues. Both of those are clearly securities to me. What do you think? Do you think those Malay is a security or not?
-
Unknown B
The Libra token? Yes, but I personally have a wider umbrella view of what constitutes a security. But let's just narrow down to what the SEC says because we can just vet against reality. So one thing they say is any expectation of profits that meme coin purchases have is not derived, I'm quoting here, from the efforts of others. Skipping ahead a couple of lines. The value of meme coins is derived from speculative trading and the collective sentiment of the market, like a collectible. My issue with this is that if my expectation of profit is not derived from the efforts of others and the value is derived from speculative trading, aren't I depending on other people to make me money? Ergo, it's a common enterprise with the expectation of profit into the work of others. That, to me, does not obviate the how we test. And so to me, the SEC's logic here, while popular with folks who like meme coins and want to keep doing this, isn't exactly airtight.
-
Unknown B
And there is an enormous, I would say, loophole built into this. So you said, Jason, that when hoc to a girl stopped pumping her token, people were a little bit mad, but also people were concerned that by piping your own token, you were perhaps making it into security or committing some sort of illegal act. Well, there is a footnote Footnote nine at the bottom of this SEC note and it says, for example, I'm quoting, if the promoter's efforts are limited primarily to hyping the meme point on social media and online forums and getting the coin listed on crypto trading platforms, then there are not likely to be sufficient. It's a Latin word indication to establish that purchasers had a reasonable expectation of profits. So essentially what they're saying is, you can launch Jason Dollar sign Jason, you could pump it, you could lobby to get Coinbase to list it, you could hold 80% of it yourself and you could dump your bags on the community that bought your token.
-
Unknown B
And that is all entirely copacetic, legal and safe. And to me, that is not the case. So there is an exception here designed, I think, to give Trump a legal out. And I think this is not regulation based on a plain text arena of law, which is how I would like to go about things. But instead a carve out for what I would say is the Nile token, not the other two.
-
Unknown A
Well, anyway, you can say whatever you want. I'm trying to be judicious here. Everybody can have their own opinion on this. What makes a great democracy is that we debate stuff. This feels like to me, I'll just say it in no uncertain terms that this was written and designed to get the Trump coin and the Melania coin out of hot water. That doesn't mean I don't think regulation changing is a good thing. So two things can be true at the same time. I do think we need to open up regulation. I do think Americans should be able to buy Meme coins. I do think they should be able to gamble. I wouldn't bet on the Jets. That's a disaster. You know, sorry, Jet fans everywhere, but I bet on the Knicks almost every game and I love it. And I play poker and you play poker, so I am very libertarian.
-
Unknown A
People should be able to do what they want to do. I do think when powerful people with platforms like myself, Haktua, Melay, Trump, Melania, you do need to think about that because the people who might get hurt are your fans and you can only do it so many times just on a practical basis. But also, there is a massive amount of confusion here. If things have a ticker symbol, if there are charts, and if they're trading alongside things on platforms like Coinbase and Robinhood, which. And other ones. And I'm obviously a shareholder in Robinhood and I just have Vlad on the program Wednesday. Great episode with Raoul and Vlad Raoul from Superhuman. Go check it out, you know, I kind of think it quite like a duck, walks like a duck, has feathers like a duck. People are going to be confused. Here's what the regulations for being coins.
-
Unknown A
If it trades on a platform like Coinbase, then there should be an incorporation, it should be a security and those non things should be traded on a different platform or there should be a massive disclaimer when you try to trade them. I traded, I bought a thousand dollars in Trump coins. I lost I think half my money and I did it just to make a point so I could bring it up that I lost half my money on it as a joke with my friends and tweet it. But here's the thing. Those coins I believe will go to zero, full stop. I think Trump will be worth zero. I think when you buy them on a platform like that, it should say this is not a security, this is a collectible. Do you agree you're not buying a security even though it has a ticker symbol, whatever, you know, because there's some freedom of feature.
-
Unknown A
But this is a bad precedent I think to set. I don't think it's a good use of. I think the SEC should really maybe examine what they're doing here because now we're going to have a bunch of other meme coins come out. There's going to be, I mean this means if this is the law now, you can list every single meme coin on Robinhood and Coinbase. Yes, right. I mean that that's the law now. And so just a lot of people are going to get hurt. I'll go back to what I've always said. Have an accreditation test if you're accredited and people explain, hey, meme coins are a new device. NFTs are a new device. Utility tokens are a new device. Bitcoin is, you know, this distributed network is decentralized. And like literally people have to take a test to show they understand what decentralized versus centralized is.
-
Unknown A
Take a test so they understand the how test. Like how is that a bad thing? So why are we focusing on this, carving this stuff out when we could be focused on a sophisticated investor test? I think the SEC is doing this to cover up for what happened with the Trump coin. That's obvious to everybody. Come on. Oh yeah. Are we going to call balls and strike here? Are we going to lie? This is a cover up to make a carve out around that coin. Okay, so here we are. I wonder if this is going to get challenged. I don't know how when the SEC Puts a notice like this out. Can people sue? Are attorney Generals going to sue on behalf of people who lost for hot to a coin?
-
Unknown B
I bet you the answer is no. Because I think if you think about like the broader American left, if you will, I think that this is probably pretty far down their agenda things they're concerned about the moment. So I think it's going to go ahead and pass. And also I'll just say it's popular with folks who have a mistake in the crypto economy. So here is a post from Katie Biber. She's the chief legal officer over at Paradigm, which is a crypto VC firm. And I thought she had a pretty reasonable response to this. Jason. She said that it's quote, refreshing to see the SEC adopt a constrained view of its own power. And that to me is more conservative of a position, small C conservative than I would take regard what the SEC should do. I think that the security situation should be a little bit more aggressive than constrained just because people are always trying to do fraud.
-
Unknown B
But then she follows up by saying quote, fraud is and always has been illegal. And I think that's a good caveat to this. But I don't see how allowing for the meme coin explosion to keep exploding is going to limit fraud. Yeah, so that's struggle.
-
Unknown A
All right. Everyone knows that CRM isn't just software. It's basically the heartbeat of your business. But it can get ugly quick if your data isn't organized and you're dealing with a messy tech stack. That's why I love HubSpot for startups. It's the all in one customer platform. So you don't need a Frankenstein of pools. No. Right now early stage companies are gonna get 75% off and with this one system, you're gonna automate marketing that actually converts. Track your sales pipeline without spreadsheet chaos. And you can manage your customers like the Amman Hotel, six stars all the way. You're gonna get investor ready analytics that tell your story perfectly. And man, when you pull up HubSpot and you get those metrics, you get those analytics, things are gonna go really faster for you as a startup with potential investors. Plus you're plugged into an amazing community of founders who've already tackled what's ahead.
-
Unknown A
They've been around those sharp turns and they can tell you how to navigate them. HubSpot was built by scrappy founders. I know them and they understand every dollar counts. That's why hundreds, thousands of startups trust HubSpot to scale their businesses. Here's an amazing call to action. So generous from my friends on HubSpot. 75% off. That's right. 7 5. Not 7% off, not 5% off. 75% off. HubSpot for startups giving you three months of perplexity AI for free. That's a great pot sweetener. Head to HubSpot.com startups. So I guess two things can be true at the same time. This is revisionist history. Probably not good for our democracy. You're only going to get so many of these as Trump and the administration, I think these things will build up in the American people's minds. So I think you do need to consider that when you're representing all Americans.
-
Unknown A
While many people want to see crypto be legalized and have that great. I'm in that group. You're in that group. I think most people are in that group. Regulate this, figure it out. Create clear guidelines. Gary Gensler didn't do that. But then I think if you are Trump, I think what Trump needs to think about, his administration needs to think about, is you get so many of these kind of inside deals, you know, questionable moves. January 6th, the violent folks. Republicans didn't like it. 80% of the country didn't like it. I think this is going to be up there where like 80% of the country's not going to like this. You can only queue up so many of those before you lose credibility as an administration. And maybe the good stuff you're doing, like, I believe the DOE stuff is good. I don't know if you saw Joe Jebia from Airbnb is working on this very interesting thing to help people retire within two days instead of taking eight months and make it paperless.
-
Unknown A
Like, that's the kind of stuff that we need to hear more about is the Joe Jebiah stuff. And so please, let's try to minimize the number of these, you know, things that feel conflicted, corrupt, wrong. Let's just use the word wrong. This feels wrong. January 6th. Pardons for the people who were violent feel wrong. I don't know about the other ones. Maybe, you know, in some of those cases, those were overzealous prosecutions, but we know that violent criminal should not get away with it. So that's for me, what I believe is that you get so many of these things and Trump's using them up pretty fast here.
-
Unknown B
I don't think a lame duck president who has an imperial perspective on his office is going to slow down and.
-
Unknown A
Then the lawsuits like last time will build up. So then it's going to become such a distraction that I think he's going to just get. Then he loses the midterms. Right. If people feel like you do too many of this and he loses the midterms, then gridlock, then lawsuits and we're back to the Trump 1.0 presidency.
-
Unknown B
Yeah.
-
Unknown A
Let's go to Joe Jabya thing and then bring on our guest.
-
Unknown B
All right, so Joe Jabya is the co founder of Airbnb.
-
Unknown A
Friend of mine, by the way. For full disclosure.
-
Unknown B
What did you guys meet? Tell me that story real quick.
-
Unknown A
He came on the pod and I met him, you know, in circles. He lives here in the same town as me in Austin. And yeah, we've seen a basketball game together. So we're friendly. Yeah, we're friends. I'm considering friends. Yes.
-
Unknown B
That is here is.
-
Unknown A
I mean it's not like a full on bromance. I'll be honest. I would like it to be. I think it's a cool dude. I'd like to maybe have a, you know, maybe extended to a bromance, but it's not a bromance level yet.
-
Unknown B
All right, well, Joe writes over on X.com, everyone's yield. Favorite Twitter. Excited to share. I'm bringing my designer brain and startup spirit into the government. My project at DOGE is improving the slow and paper based retirement process. Since leaving Airbnb in 22, I've been looking for my next design. Josh, I'm paraphrasing and I think nothing more important than improving our government. If anyone else wants to help out, let me know. This is at the U.S. office of Personnel Management or OPM. And I think this is exactly and precisely what I was hoping to see from doge.
-
Unknown A
Okay.
-
Unknown B
I want the government to be more efficient, less inefficient, faster, less slow. And there's a lot of things that we can do. And I do think that having a perspective that the way we have done things might be the wrong way is a good way to approach the efficiencies in government. Jason, you and I are on slightly different sides of the cost cutting approaches and how that's going. But no matter what, we can all agree that taking a paper process that takes too long, digitizing it and making it beautiful, it's a great thing to do for our government and sports. So I'm a huge fan of this and I'm really, really proud of Joe.
-
Unknown A
Yeah. And more of this. Like so to the doe Again, I'm just gonna call balls and strikes. Everybody knows some of These people are my friends and yada yada and associates. And everybody knows I'm a never trumper who is rooting always for the president to succeed. I've been very clear about my positions on all this. I was a double hater this election. Not that I'm the main character here, but I mean on the show, I guess I am. This is my show, but I'm not the main character. But just to put it all in perspective, I understand how people can be absolutely like shocked by how aggressive Doge is being. I happen to agree with it because I got to see it during the Twitter rework and I happen to believe in it. But I do understand it's not everybody's cup of tea. And you might not understand how powerful it is to shut off every credit card and then watch all the SaaS subscriptions turn off and how good that is when you have fraud, waste and corruption.
-
Unknown A
Okay. But this is great. This is great. And Doge needs to do more of this, tell more stories like this. And I think Doge is getting the message. Kind of know they're getting the message. Leave it at that. You did see them say they're give raises and promotions to people who are doing a great job in addition to the layoffs they're doing for people who can't even fill out an email that says what did you do last week? We do that every day here at our company. Every company does a stand up. Anyway, we got a guest. So let's welcome our guests to the program.
-
Unknown B
Jason loves to just to swing by his plane drop like eight grenades out that I want to just that I'm swinging and then. You're fine, you're fine, you're fine.
-
Unknown A
Let's keep it moving. I mean we covered a lot already.
-
Unknown B
I know.
-
Unknown A
I just meme coins Epstein, farmer lackey Doge. I mean we're cooking with oil now.
-
Unknown B
Just don't be starting about poker. We'll never make progress.
-
Unknown A
All right.
-
Unknown B
Brandon Brown. So he is the founder and incoming board chair. Hey, Brandon. Over at Grin. I know you guys have known each other for a while and Brandon is transitioning away from his former role into being a board chair. It's a great moment to talk about different roles that start why you might change up your role. CEO 10 years. Brandon, welcome to the show, man.
-
Unknown A
Thanks.
-
Unknown D
Yeah, happy to be here. Been been fun watching backstage and it'd be a good conversation.
-
Unknown B
Yeah.
-
Unknown A
For folks who don't know, Grin is a really special company. Went to our accelerator. We I'm on the board we invested in. I think we invest in the company three or four times, which is not normal. Usually we will do an accelerator investment, then maybe a seed investment, and then we're kind of done because there are series A investors, B investors, who better that? But we've been lucky enough to invest along the way. The company's done spectacular, gotten to eight figures in revenue. They do a great job managing social media campaigns at scale. And the big question when I met Brandon was, is social media gonna become a channel? Now let's talk about that. You had this thesis that social media would become a marketing channel and an important one how many years ago.
-
Unknown D
And I would describe it social as a channel, but also as like, the new publishers are gonna be people and not companies. And so brands need to understand that and harness it. And that was. I met you in 2017. We started the company in 2014. This is a pivot for us. First thing that we did for the first three years didn't work. Yeah. And then met you and pivoted here and you joined the board. And we've been kind of on the ride ever since. And it's been. It's been fun.
-
Unknown A
Just walk us through that. I guess we have some examples of influencers. And then maybe just for background, we'll talk about how the product works. Then we'll talk about you transitioning out of the CEO slot, which is a big controversial moment in any company. Intense moment. And we'll get all those great founder stories after we just sort of queue up what the product is and why it's important. Yeah.
-
Unknown D
So a big way that consumer brands go to market these days is they work with creators on social. So they're doing ads, they're doing SEO, they're creating a lot of content. But a huge channel is they're sending product to Instagrammers, people on TikTok, YouTube. You can imagine that process, once you start doing it at scale is just incredibly complex. How you find the people, how you recruit them, how you contract with them, how you report on all that. And brands are typically in spreadsheets using a bunch of different tools. They've got a cobbled together team and soon. And so we built SaaS. Kind of like how a account executive in an inside sales team would use something like Salesforce, but they use these marketing managers that brands use, Brynn, to manage influencer marketing and manage these. These creators at scale. Yeah, software product makes that easy.
-
Unknown D
And it's pretty crazy because this is. It's kind of like a common thing in the Zeitgeist. And it's known now, but 10 years ago, this was an emerging thing and had a bunch of problems around it. And so we were one of the first to go solve those problems.
-
Unknown B
So I'm curious how long it took Grin to go from starting this to being ready to help Uber, for example, build its global tech presence. Because that was the case study that I was most excited about you guys have out there. It seems like a big project, big brand, lots of different touch points, and controversial in some markets due to regulations. So what was the boss like building the first project and then getting to the point at which you were ready to help uber go from 0 to 60 on TikTok?
-
Unknown D
Yeah. So, I mean, the company stories, it's been, you know, like all startups, I think, from the outside looking in. Like, you see the TechCrunch headlines and you see the fundraising announcements and it looks like it's a linear up into the right trajectory. But we all know it's never the case from we started the company in 2014, we were working on a different product for a while, realized it wasn't going to work. Pivoted in 2017.
-
Unknown A
Actually.
-
Unknown B
Brandon, pausing you there, what was the moment you realized that the first product wasn't going to work and you had to let it go? I'm sure some founders out there right now are thinking, am I on the right path? Should I pivot? So how did you decide to make that decision?
-
Unknown A
Well, for me, so the first product.
-
Unknown D
We built, again, it's a long time ago, but it was called Jumpstart and it was big youtuber promote, small youtuber in exchange for money. So it was like a collaboration marketplace. And this was this actually before I met Jason and Grin, as you know it today existed. And what I started to realize was that the only creators who were trying to like, pay for growth in this paid collaboration way typically were like trying to hack growth. And they didn't actually shouldn't be paying for growth. They need to be improving their content because the core thing that was actually making them upgrades that their content wasn't great. And so like I had this realization. I was like, oh, wow. Like this product that we're building has a bad customer. These are kind of hobby solopreneurs. They're not really investing into the right things. So we didn't feel like it was gonna be big.
-
Unknown D
And so we changed everything in 2017 and looked at, you know, my background, our core competency as a team, like, where can we pivot and how can we go build Something meaningful and then transitioned into this software for brands to collaborate with creat, which is a pretty big departure at the time.
-
Unknown B
And you've built what is effectively, as far as I can talk about, a two sided marketplace. You have clients. In the end you also work with a lot of different influencers. How has been the social media changes we've seen in the last couple years, how has that impacted Grin's business? Because to me search has lost its primacy. People don't blog as much as they used to, people don't read news as much as they used to. It seems that social media has become ever more important, even if it gets a little straining at times overall. Next. But I mean has that been a major accelerance to the grid business?
-
Unknown D
Yeah, the way we think about it is. So I think a lot of it comes down to like what do you think the atomic unit is? And if you think the atomic unit is the creator, so the person on the other side of the phone or the camera who's creating the content and then the platforms are responsible for distribution. And you could argue this especially on TikTok and with for you like the way that algorithms change. But as long as brands need to organize around creators then like there's going to be a need for a product that simplifies that and products like that. So that's how I think about the changes. Like I think platforms will come and go. Like you know, we've seen kind of wild ride with TikTok. We've, we saw Clubhouse had their moment a few years ago and so I think as long as brands have a need to stay organized around managing creators at scale, like there's going to be a need for products like Grant.
-
Unknown B
Okay, I have a question about that because to me, and I know this is me being an outdated essentially boomer, but when I think about product placement and I think about influencers, I really had this like 2014 Instagram vibe in my head and I presume that that's really not the case. So granted, is it still as effective today in a more commodified social media era to go out and reach out to people that have followings and give them stuff to promote? Because to me the juice has been squeezing that lemon slightly. But it sounds like I'm actually behind and things are getting bigger than they were before.
-
Unknown D
Well, I think it needs to be part of like multi channel.
-
Unknown B
Right.
-
Unknown D
So like, like I still think paid is, is extremely important. Organic owned social for brands is extremely important. But then organic social from creators and Influencers and, and using that as a way to reach the consumer in a really honest and authentic way and then repurpose that content across paid and other channels. Like, that's not going anywhere. Like, that's extremely important in today's world. And I think like this, this product and this company is at like the, it's at the bleeding edge of marketing. Right. And so I'm a marketer, I've been a marketer my whole life. I sell a marketing product to marketers at Grin for, for a long time. And I think at the, at the bleeding edge of marketing, there's always going to be these like, unproven experimental channels that if you can unlock them early, there's like an arbitrage on the reach and distribution.
-
Unknown D
And you know, I would say arguably influencer and creator maybe has reached a saturation point there, but it still is a really important part of the overall mix.
-
Unknown B
Okay, so the branding, eight figures of revenue, companies growing pivot, successful, important market bleeding edge, and you're stepping back. So to me, it feels like you finally reached the plateau of joy in the start of game. Like you've kind of built something that's robust and it's gonna last. And so I guess first of all you're going from CEO to board chair. So tell us why that's the right move for you. And also the timing here just to me seems not in a bad way at all, but surprising in terms of what I tend to hear from CEOs in your position.
-
Unknown D
Yeah, it's a good question. You know, I think like from. So this here's a crazy stat. And Jason, you were along for this ride. I mean, you were in constant communication about this, but we went from basically zero to a billion valuation in four years. So from 2017 to 2021 went from zero to 480 employees. That was an incredible ride. Like, like especially from the early pivot, finding product market fit, scaling really fast. And then 2022, we started hit real headwinds as a business. I think it was macro. You know, I think there were some execution missteps. But at the same time, like, you know, we really started to see softness in the economy. The brand started to pull back. And then when brands pull back, like where they pull back, like they go and they look at marketing variable and then they look at experimental marketing variable.
-
Unknown D
And so I think our category was, was, was affected. And so from 2022-24, I led the company through three layoffs, three riffs. So like a triple riff. And it's pretty wild to have gone from like that explosive growth to then retooling and then realizing like, oh shit, okay, sure, yeah, we didn't go deep enough. We gotta go deeper. And so through that process, got the company to break even with a bunch of cash still in the bank. And I started thinking about succession, right? It's been a decade. Co founder had left and moved on. Like we built a category and an enduring business. But as I looked at what the company really needs, like in the CEO operator seat, you gotta be 150 miles an hour, like if you want to build something really big and meaningful. And so I started to feel like the best thing for the company is to think about how we can get someone with this renewed energy, vigor, someone who can really lead the company over the next three to five years to create the outcome that we're looking for.
-
Unknown D
Found that in the new CEO. I mean he's extremely talented. And so far it's bittersweet, you know, like, like it's, you build something, it's, it's so close to you for so long. It's like in a lot of ways it's your family and, and, but for me it's about like what's best for the business. And then also just being honest about a decade long journey. There's that quote from, from Elon around. You know, building a company is like staring into the abyss and eating glass.
-
Unknown A
Like yeah, actually that comes from Billy, our friend Bill on Twitter and good mutual friend of ours. You know, just from a board perspective, since Bren's being so honest here, I would say, you know, every startup yours like dog years put seven years on your, on your life. So you know, if seven of his years were those dog years, that's 50 years at the helm or for any other employee, right? For the CEO, the founder, whoever's in that pilot seat, you're putting on that much mileage and then you look at during a down market or headwinds like we saw with the Silicon Valley bank collapse and the correction and peak zirk going to peak, it's the end of the world. That was a great swing. And you know, I have to say some founders are able to assess reality. And there was this guy, Warren Bennis, who was on the program that a friend of mine put me in touch with so many years ago.
-
Unknown A
And he said to me, you know, I said, what's the nature of leadership? And he said defining reality. And I think he had been in World War II or Korean War or something. He'd been in service and other people had said this. And you know, what you did really well, Brandon, was, you know, in our conversations and your conversations with the team is you accepted the reality. And the reality was you're not going to like, like, beat that valuation that we got. And the valuation was incredibly rich when we became a billion dollar company. And that the only thing we could do was not say, hey, there's another round coming. That's gonna one of that. We can look at the amount of cash in the bank. Wow, that's a lot of money. We can look at the revenue. Okay. There are people who are customers who are cutting back.
-
Unknown A
They're cutting back the number of seats they spend on Salesforce because their sales team went from 50 salespeople to 25. And so the whole industry was watching this SaaS contraction. And then, of course, if you're looking at marketing and this is an experimental new product line. Okay, what's gonna go first? Well, there's a retreat to what you know and what's the most effective. The experimental stuff you're figuring out. You're figuring out, do I give Kim Kardashian a million dollars or do I give 20 influencers 50, or do I give 200 influencers five or a thousand influencers? A thousand or 10,000? A hundred to market my watch, my glasses, my. My sneakers, all that was being figured out. And of course, in a down market, that gets constricted. Constricted. We saw that in the venture space, the number of venture firms went down a third. I had to look at reality and say, okay, is every venture fund going to be easy to raise and double the last one or quadruple the last one?
-
Unknown A
This is what great leaders do. And I think you did a great job, Brandon. You were always very sober about things, even when things got overheated. And, you know, I hope as a board member, you know, me having a couple of years experience on you and maybe one. I basically saw probably one extra cycle than you did from the dot com era and the Great Recession. You were. How old were you in 1999, 2000?
-
Unknown D
Well, I was born in 85. So what, 15 years old?
-
Unknown A
Yeah, so I was 30. Right. I watched it up close and personal. And during the Great Recession in 2008, you were 23. You're in college. Right. So I had actually experienced those as an adult in the workforce. And so when you did things like, oh, we have a little bit of venture debt, and, oh, people really want to push us to take more venture debt to spend the Venture debt. I just said, you know, I remember pulling you aside at one point. I was like, things don't grow to the moon. Sometimes things can get bad. Like, we should not be using this for Runway. We had a really thoughtful discussion of it. I can tell you some founders who I was working with, Alex at the time, Brandon, they were just like, whatever J. Cal old guy. I'm maxing out the venture debt and I'm spending the venture debt.
-
Unknown D
That is what will take you out.
-
Unknown A
Well, and here's the truth. It did take out two or three of your contemporaries from that time period. And man, I was just like, why don't these people listen like Brandon did.
-
Unknown B
Yeah.
-
Unknown A
And you had a little bit of enter debt. You didn't go spend it on an office or some cockamamie third product before the first one actually had product market fit. It's a great thing to do to say, you know what? Somebody else has more energy. I put 10 years into this. I mentored them. I'll move up to the chairman position. Reid Hoffman did it. Many other folks have done it. And what you'll see is the company will do better and you'll come back even stronger.
-
Unknown B
I want to talk about the venture that thinks a lot of founders are watching this. Brandon, you said that venture that will take you out. Can you just explain to people why it's so risky for the founders out there?
-
Unknown D
I mean, well, you have to pay it back. So that's. I know that's obviously on app lush, but it's like all of a sudden you have a correction and revenue isn't just flat, but reverses. You're tripping covenants and then you don't have cash to pay it back. They have a daca, so they control your operating accounts and then they sweep the account. Wake up one day, you have no cash and your company's gone. Another person on the board was. I liked this comment he would use every now and then. It wasn't you, Jason, but it was one of the other directors. Is that's how you lose the keys to the kingdom. So there are certain things you can do that if you're not careful, will wipe you out. And too much, too much venture debt especially. The other thing too, I would say is like the equity investors.
-
Unknown D
So the venture investors and your equity partners, they have a vested interest in seeing the company succeed. Their shareholders, their owners, debt, maybe they have some warrants, but it's small amount and so they're not typically not working with you.
-
Unknown A
Maybe some of the.
-
Unknown D
Like the venture Debt providers are, but especially the bank banks. The banks are extremely conservative and they're wiping the accounts if push comes to shove.
-
Unknown B
And the covenants part of this as far as I understand venture debt terms is that you can borrow money. When you raise money, Silicon Valley bank with loan you another five if you raise 30. And as long as your ARR was growing at some percentage, they wouldn't take the money back, demand money back immediately. Is that a fair explanation of covenants?
-
Unknown A
Yeah.
-
Unknown D
And so it's, there's something like EBITDA covenants growth rate hurdles like MRR to certain KPIs in the business. And it's fine when you're growing but then I think in certain situations where if you flatline or if you decline. Yeah, it can be risky. The other thing too I want to comment on, Jason, I agree with you about just like pattern matching in cycles like I think think, you know, I heard a mentor told me this quote, I just love it is in any 10 year business period you have six good years, two great years and two terrible years that can put you out of business. And so you need to prepare. And so, and I think it's right, it's like don't get too high in the good times, don't get too low in the bad times. But know that these 10 year cycles repeat. I think for me it's like man, it's so valuable having just gone through that.
-
Unknown D
You know, I wasn't part of the.com or the 08 as we described and I think as I go into the next 10 year cycle because I'm an antsy person, you know, I'm helping at the board level but I'm gonna be doing new stuff. Yeah, I'm just grateful for the experience because I think the pattern matching is real but you have to live through it. Like no matter how much one tells you, you, you know, you have to experience it.
-
Unknown A
I mean I agree with that in order to really take the lessons in, you have to experience it. That's part of Alex, like playing cards like we talked about. If you see your pocket aces lose, you know, or you see your set, you know, lose to a bigger set or a set lose to quads or a set lose to a, you know, I don't know, a runner, runner, flush or straight. There's park analogies here because you can feel invincible at one point in time and you, and then you know, you get worked out. But statistically when somebody like Nate on 538 said, Nate Silver said oh listen, this person has a one in three chance of winning the election. People thought, well, that's not possible for them to win the election. And then the poker players were like, okay, so it's like, you know, you have, you know, an over pair and somebody has, you know, a lower pair, like, or you have a flush.
-
Unknown A
Right. And it was just obvious to people. But you do have to have reps. You do have to see it yourself to really understand it. But it's also good to have mentors who can tell you because you will learn the lesson faster. You can learn these lessons faster, more efficiently, and be aware of them and take them in if you do a little bit research. Brandon, great job running the company. Thank you for your efforts and look forward to being the first check in your next company. You told me, you promised me and you'll promise me here again on the air that I'm your first call when you have your next idea and I get to put the first check in. You agree a little more. You agree?
-
Unknown D
Yeah.
-
Unknown A
No, no, no, no, no, no, no. You have to commit that I'm in the first investor in your next.
-
Unknown D
What a time. Like as an operator and entrepreneur, what a time to just go experiment. Like, you know, I think just the pace that things are changing, it's, it's innovation and opportunities everywhere. And I saw the growth rate graph you guys put up earlier in the show. I think the pace at which these companies are Getting to like 10, 20, 50 million ARR is just crazy.
-
Unknown A
Yeah, you don't get there by accident, I can tell you, because 99% of startups that are funded do not get past 10 million. And the one that does, like you did with Brandon, other people have done it really does take tremendous amount of discipline, effort, a little bit of luck on the margins. But generally, I think, you know, building a great team, being obsessed with your customers and then refining that product incessantly is a pretty good playbook look. Team, product, customer. Brandon, great job.
-
Unknown D
Thanks, guys. Appreciate it.
-
Unknown A
I appreciate you talking to you soon. Just a great founder. You know, there's some people, when you meet them, Alex, I tell people there's like a neon sign above their head. I see it, it just flashes, winner, winner. And so when I meet people, I'm always astounded when I see that neon sign. And with Brandon, I saw it and it was great.
-
Unknown B
We have pulled the clip from the, I think episode 290.
-
Unknown A
Kidding me. This is now when I know we're doing great on our production ability. Yeah, this is good stuff.
-
Unknown E
The first primary task of a leader is to define reality.
-
Unknown A
Define reality. Yeah.
-
Unknown E
That means being very clear head what we're up to face now actually, if you really feel this isn't even ordered, let's say you've been ordered by the regimental. I'm by the company commander. I'm a platoon leader and it's a platoon leader who leads two platoons that lead the charge. Oh, you've been ordered. You're in the army. This is not like in a corporation. It can be a little bit war time. So you can't say, well, I don't.
-
Unknown B
Know if I agree.
-
Unknown E
You know, it's not a time for dissent at that moment. Later on you can talk and, you know, complain about it, but so you've got it. You've got to say, guys, this is going to be a rough one and we're going to do our best and we've got a good battle plan. And here are the issues. You know, you're going to have these disciples over next church people you gotta define. This is true of any institution you're leading. It doesn't mean you sound hopeless because I remember when I was.
-
Unknown B
I think that's a useful point. I like the military analogies. I want to rewind here and point out since when is there Alex 1.0? Another bald white dude. Who's that?
-
Unknown A
That's Tyler Crowley. Tyler Crowley was co hosting and Lon Harris was the newsreader. And that was the trio in the early days. That's in our. I don't what happened. We know what episode this was.
-
Unknown B
I believe this is 219. So if you want to go look.
-
Unknown A
At this is probably year three or four. And you can see I got 10 more pounds of fat on me. And yeah, we did that in Santa Monica. And this is the early days of podcasting. That was probably in 20, I don't know, 14, 15 or something, who knows? But that's Tyler Crowley, who was kind of my chief of staff, but was the original engineer producer of the show. Lon Harris is now editorial director here. He was the original newsreader and worked with me on Mahalo. And so that was the old school crew. Back in the early days of podcasting, I wanted to do a founder lesson today. I think we can get one in and then any other lightning you want to try to get to here as we wrap up the week.
-
Unknown B
Okay, so two options here. One from our dear friend Presh, formerly of the launch team, and one from Matt's perk about where you should build a company. Jason, pick a Direction for us.
-
Unknown A
You can't go wrong with Presh.
-
Unknown B
All right, so here is a tweet from Fresh and I think it does explain a very important concept. So Presh writes over on Twitter, take every 1 star rating personality personally. Don't take every 5 star rating personally. And then Austin Peterson, I've been on Twitter for ages, summarized this and says negative feedback straight to the heart. Positive feedback straight to the team.
-
Unknown A
Perfect. This is just great leadership. These are two people I've worked with for a long time. Press came to work with me, he dropped out of college to work for me here at lunch. And Austin worked with me on inside and investor in his new company. Yeah, just two great entrepreneurs out there getting it done. Negative feedback, very important. The detractors in NPS world are people who give you a six or less on the question, how likely are you to recommend this product or service to one of your friends? And what we're speaking to here is the value of detractors. Hey, the haters usually have. Now there are drive by haters and there are drive by people praising you. And that's what they're sort of getting to here. I think the lesson at the end of the day is you have to not get too high on your own supply.
-
Unknown A
As Brandon just said in the previous segment, you know, and not over index on the lows, but inside of hater comments will be, you know, you're fat, you're ugly, you know, you could do a better job on X, Y and Z. Reminder, you're a fat bastard. And you have to be able to parse through that feedback and find the actual kernel of truth. The haters will make you greater is what I always tell folks. And then in terms of praise is, yeah, I like Austin's feedback, which is, hey, just send it to the team. Team uses praise. And somebody told me, you know, the job of leadership is to repeat the same things over and over again and make people feel 12ft tall. And so that's an actual, oh yeah, it's impossible to be 12ft tall, but you want to make them feel that way.
-
Unknown B
No, no, I think it's well said because I mean, there's various little acorns or Cohens or nuggets of wisdom that we talk about. My favorite is the job of the CEO is make the secretary rich. And I know that's a slightly dated bit of phrasing, but I've always held onto it. But I really do like the idea of parsing out positive, negative feedback and portion into the right things. Because the least effective leader takes praise for the team, gives it to himself, takes criticism of the team, and gives that to other people. Or as I put it, you know, criticism should roll up and praise should roll down.
-
Unknown A
Basically, yeah. I mean, I think it's pretty good advice.
-
Unknown B
I want to point out that this discussion of haters brings me to my favorite meme on the Internet. So I'm just gonna bring up because.
-
Unknown A
I can't help myself. Okay.
-
Unknown B
This is an old historic suite. And it reads, the haters said I couldn't do it. And they were correct. Honestly, a great call from the haters.
-
Unknown A
That's so great. I mean, there is something to it, you know, I mean, yeah, sometimes the haters are right short, or as I call them, the Jaders. Shout out to my guy. Straight bullet. I love you.
-
Unknown B
Brought that back. All right, so, Jack, really quick things, everybody. Waymo announced that they are now at 200,000 paid rides per week up.
-
Unknown A
Fantastic.
-
Unknown B
Keep in mind that Uber did 33 million a day in its last quarter. So Waymo is growing, but remains. Absolutely.
-
Unknown A
It's 200 a week. Right. So 30,000 a week.
-
Unknown B
Yeah.
-
Unknown A
So divide that by 7 to 30,000 a day to 33 million. It's.
-
Unknown B
Yeah, 1,000th as many.
-
Unknown A
Here's the thing. It's going to take time. Everybody wants to talk to me about this because I'm the, you know, the early Uber investor, which is totally fine because I bring it on. And I'm not talking about book here, but I'll tell folks, once again, you know, if you just build a model and you can ask Gemini to build a model. We did that here one time with their deep research product. It's a billion rides a day in the United States. Around the world. It's a much larger number, obviously. United States is but 5% of the global population. It's going to take a long time to get to 10% or 20% autonomous rides. I think in the next 10 years, we could see 20% of rides be autonomous. And at the same time, I think people will take more rides because you'll get cheaper. You'll be able to drink when you ride, you'll be able to sleep when you ride.
-
Unknown A
So the idea, like flight, you know, airplane rides used to be for the rich, and, you know, they were a bit dangerous in the early days and then eventually became safe and cheap and ubiquitous, and routes were everywhere and so just common folk. Anybody could afford, you know, a $49 to $149 anytime fare on Southwest or JetBlue. And it became more common. So imagine that. And cars used to be something only for the rich and the elite. And then you can buy a car now for a couple of grand. So we're going to see number of rides go up and we're going to see four or five players because the number of cars that will be necessary when we did the calculation is, you know, somewhere in the range of tens of millions of cars per percentage point you have ideas, you know, as big as Uber is and the ride sharing businesses and to the delivery businesses, it's less than 1% of rides.
-
Unknown A
Ride sharing is less than 1% of rides. It might be like, you know, 0.8, 1.2. Depends on the country obviously and the density. So the pie is getting bigger. The percentage is tiny there. It's going to take, I think just in the United States, millions of cars being produced every year to just get, just to get that to 2%, let's say. So what will the cars cost? I think Elon's been pretty clear it's going to cost them 30, 40,000 per car. Yeah, maybe they get it down to 25. They did 1.8 million cars two years ago, 1.75, I think last year. So let's take the benefit of the doubt. They do 2 million cars and I don't know, 10% of them go to the self driving effort million.
-
Unknown B
It's a lot of money.
-
Unknown A
And well that's the other thing. People are, you got to really think about that. So let's take 1 million cars and how many rides they could do? They could do 20 rides a day, you know, 20 million rides a day. Okay, that's incredible. Okay, that's Waymo's doing right now with their 200,000 cars. Oh no, I don't have how many cars out, but that's what they're doing. They're 200,000. Long story short, if you put a million cars on the road, which Tesla's capable of doing and BYD is capable of doing, Toyota's capable to. That's $30 billion. It's $30 billion for 1 million cars. We're going to need like 100 million cars. This is trillions of dollars worth of cars, folks. And, and batteries. So I think one of the other issues is, you know, Travis brought this up, the founder of Uber co founder camp. You pointed out like there might not be enough electricity in California right now to charge all the cars to do all the rides.
-
Unknown A
So we got to upgrade that. And how many batteries can be produced? This is not to say it's not going to happen.
-
Unknown B
No, no, no, no.
-
Unknown A
It's gonna happen, but it's gonna take 10 years to get to 20% ride sharing and that means the market grows 20x and I think there's three or four players. Just like in E commerce or commerce generally. It's not a winner take all market because it's the real world folks. It's not one airline, it's not a network effect digital business. It's a network effect real world business.
-
Unknown B
Yes.
-
Unknown A
That's a very distinctly different XY matrix. And if you were to make a four quad quadrant, is it a network effect business, yes or no? Clearly ride sharing is a network business. Is it atoms or bits? It's atoms and you can just look at that to understand the real world.
-
Unknown B
Yes. And they're able to call it. But I'm more optimistic about timeline because we're seeing other companies advance so quickly. So Tesla, which you mentioned, just two quick little news items, they're doing some FSD in China. We're still figuring out exactly what that is, but seeing that pop up for the first time. And also Tesla is working to launch a free self driving taxi business in California which is the 70 before you start charging for it.
-
Unknown A
So I think that's the big win. I think immediately Tesla should partner with Lyft and Uber and put Teslas with safety drivers in them for a year or two and each more with their hands off the steering wheel and prove like Waymo did. Nothing to worry about folks. And then you just can record for people, hey look, we did a thousand rides today and we had two interventions per thousand. So it's like you know, 500 rides before we have an intervention. And of course I have some of the statistics for me driving my car, but I'm not a safety driver. Safety drivers are clearly the first step. Now he did say Elon, that in June there would be people in cyber taxis without drivers. So I think they're going to have this is a prediction. I don't have inside information. I think they're going to have a constrained route like they did for the cyber taxi launch in a constrained area, like they pick downtown, you know, area of Austin, they could very well make that work very easily.
-
Unknown A
So if they pick like a 2 mile by 2 mile area and they just really nail that. Yeah, maybe they don't need to have, have the in car safety drive. They could do that with remote drivers and just have one person watching it. Like people say Waymo has one, what do they call them that's not remote drivers. They had another word for them, operators or something.
-
Unknown B
I think it was operator. But I'd go back and fact check that. But someone who's overseen, that's what I would.
-
Unknown A
If I was running the program, I would have 10 cars with 10 operators remote in Austin, maybe a smaller end. Then I would have a thousand Uber drivers and just give them the model y with the 4.0 package. And I think actually my feedback on FSD is now outdated because I have the Hardware three package Pennywise and hardware with three pack is probably gonna have to be replaced and he's kind of been warming up the shareholders to that. So my prediction right now is Uber Waymo number one, Tesla number two in the short term, then maybe Tide and then maybe Tesla know the number one spot because of their production ability.
-
Unknown B
All I care about is that they're going to be competing and me, Alex, as a consumer does well. And one last note on this. We Ride is Expanding, which is the public Chinese self driving company that lists real estates. They're expanding up in Europe and China. So to me we're seeing competition internationally, definitely here in the US it feels like it's accelerating. And so the Waymo milestone of, you know, new number of paid rides per week is just indicative that I think they're trying to stay ahead of Tesla, which is great. We want them on their shows, we want everyone fighting. April 23rd, New York City. You and Mike Savino are heading down for Angel University.
-
Unknown A
This is a great course we do. I think we'll have 200 seats. We're gonna do it at a dim sum place or Peking duck place. We teach people how to angel invest, we do some live pitches and all the money goes to charity or I should say any of the proceeds go to charity because you know, we do a little marketing on this and we spend a little bit on the dim sum. But we have donated a large amount to charity. I'm very proud of this. And we do our workshop. We try to teach people how to invest in private companies more intelligently. We put you into a private slack community, we give you some models and you can question us and you know, tell us you know what you've learned in terms of their issue. Come to you meet another 200 people who are accredited investors, Angel University to sign up.
-
Unknown A
I think we're charging a thousand bucks and includes lunch and we'll have a little after party. But fun thing to come to if you're independently wealthy, accredited investor and want to hang out with me and I can. It's a lot of fun. We do it once a year. Join us if you want to learn from each other and us.
-
Unknown B
We also have the Founder Fridays city competition coming up.
-
Unknown A
All right, we're going to do a city competition. We did this in the early days of the show. Basically, if you're part of Founder Fridays, go to Founder Fridays Tech, which is meetups for founders. We're going to have each city do their own little competition. So you do a pitch competition between your 8 to 16 members in your community. You tell us which one won your community. So San Diego will battle, Seoul will battle, Sydney will battle, San Paulo will battle, Sauvies, New York, the end. And we'll make a lot of fun about it. It'll be here on the program. So your city will get some promotion and that startup will get some promotion. Go to Founder Fridays Tech to start your own chat. We do this just to help founders. Like everything we do, it's just to support founders and inspire innovation. It's not a complicated formula here.
-
Unknown A
Thank you so much, Alex. It's great to have you back. Thank you. Producer Matty Port and Chris, and the sales team, Matt, Hannah and Jamie, and of course, our co host here, Alex Wilhelm. We'll see you all next time.